Blue Bird Corp Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Fiscal 2024 was an all-time record year for Bluebird, with adjusted EBITDA of $183 million (13.6% margin), more than doubling the prior year's profit.
• Backlog at fiscal year-end was over 4,800 units (6% above prior year), net orders 16% higher than prior year.
• Supply chain issues easing, average gross selling price increased 14% in 2024 due to pricing and vehicle mix.
• Produced and delivered over 700 electric buses in 2024 (nearly 30% increase vs prior year) with strong alternative-powered vehicle mix.
• Completed first collective bargaining agreement with USW, renewed engine contracts with Ford and Ram until 2030, and awarded $80 million DOE grant for EV production expansion in Georgia.

Segment Performance

• Bus: Full year 2024: 9,000 units sold, revenue $1.243 billion, average revenue per unit $138,000 (increase of $16,000 vs prior year). Fourth quarter 2024: 2,466 units sold, revenue $323 million, average revenue per unit flat at $131,000. EV sales in full year 2024: 704 units (30% increase vs prior year), Q4 2024: 84 units.
• Parts: Full year 2024: $104 million revenue, 6% growth. Fourth quarter 2024: $27 million revenue, 6% growth.

Guidance

• Fiscal 2025 net revenue guidance: $1.4 to $1.5 billion.
• Adjusted EBITDA guidance: $190 to $210 million (increased by $10 million from prior guidance).
• Free cash flow guidance: $40 to $60 million after $50 million extraordinary CapEx for new plant.
• Expect EV unit sales to grow to 1,150 buses in 2025 (64% increase vs 2024).
• Quarterly guidance: Q1 2025 - ~2,000 units, $300M revenue, $40-45M adjusted EBITDA; Q2 - ~2,300 units, $350M revenue, $45-50M adjusted EBITDA; Q3-Q4 - ~300+ and ~400+ EVs, $400M revenue, $50-60M adjusted EBITDA per quarter.

Risks

• Supply chain still fragile at times, though improving overall.
• Material cost and supply inflation pressures remaining.
• Potential delays in EV order deliveries due to infrastructure setup challenges.

Q: Michael Shlisky asked about EPA program delivery beyond 2027, EV business sustainability without subsidies, and parts growth.

A: Phil Horlock and Razvan Radulescu responded that pricing changes, state/local support, and cost reduction strategies with powertrain providers are baked into outlook; parts growth expected to be low single-digit.

Q: Eric Stein asked about pricing pushback, fiscal 2025 seasonality, and CapEx.

A: Phil Horlock said pricing working well with competitive win rates; Razvan Radulescu explained seasonality due to production weeks; Razvan clarified $50M CapEx is above typical levels.

Q: Tyler Dominguez asked about productivity improvements and product portfolio management.

A: Phil Horlock detailed kaizen initiatives, material management, and throughput acceleration; Razvan Radulescu mentioned focus on propane and EV sales to manage portfolio.

Q: Craig Irwin asked about one-time expenses, order surge timing, and funding continuity.

A: Razvan Radulescu explained one-time SG&A/engineering expenses; Phil Horlock discussed order surge timing around second quarter 2025 and funding continuity confidence; Razvan clarified long-term volume shift due to new facility ramp-up.

Q: Chris Pierce asked about industry share gains, long-term volume shift, and CES search.

A: Phil Horlock discussed industry share gains due to competitor production issues; Razvan explained long-term volume shift to 2028+ due to facility ramp-up; Phil Horlock mentioned board-led CES search in progress.