Blue Bird Corp Q1 FY2025 earnings call

• Achieved near record quarterly profits in Q1 despite having the fewest working days of the year, beating Q1 guidance and maintaining full year guidance. - Strong market demand for school buses with a backlog of over 4,700 buses (representing $760 million in revenue). - Record EV backlog of 765 units, 22% higher than fiscal 2024 end and 82% above the prior year. - Bus prices for combustion engine models were 6% higher than a year ago. - Reinvesting in the business through facility upgrades, lean manufacturing, and development of new products. - Beat first quarter guidance for the eighth consecutive quarter, with adjusted EBITDA of $46 million and adjusted free cash flow of $22 million. - Leadership change: Phil Horlock stepping down as President and CEO, to be replaced by John Wyskiel effective February 17. - Impact of President’s Executive Orders on EPA funding pause and tariffs, but late breaking news lifted the funding disbursement pause.

Bus net revenue was $288 million, down $5 million versus prior year due to lower EV mix, nearly offset by increased prices across non-EV products. Parts revenue for the quarter was $26 million, representing a growth of $2 million or 6% increase compared to the prior year. EV sales in Q1 were 132 units, 74 units or 36% lower than last year as planned. Bus backlog at the end of Q1 was approximately 4,400 units, including a record 17% EVs, and total backlog including EVs stood at around 1,000 units in Q1 and backlog.

• Maintained full year guidance despite executive order impacts. - Adjusted EBITDA range widened to $185 million to $215 million due to tariff uncertainty. - EV sales guidance of 1,000 units for fiscal 2025. - Liquidity at a record $280 million at the end of Q1. - Reduced EV lease prices by $25,000 to move towards total cost of ownership parity with internal combustion engine buses. - Reaffirmed revenue range of $1.4 billion to $1.5 billion and adjusted EBITDA range of $185 million to $215 million.

• Uncertainty surrounding the EPA funding program due to President’s Executive Orders. - Potential tariffs on imported Canadian, Mexican, and Chinese goods, which could affect pricing and EBITDA. - Supply chain uncertainties that might impact production and delivery timelines.

Q: Eric Stine asked about scenarios for high end of EBITDA guidance.

A: Razvan and Phil discussed strong non-EV powertrain sales and potential for higher EV sales.

Q: Greg Lewis asked about EV mix progression.

A: Razvan explained 1,000 EV units forecast with progression in quarters.

Q: Michael Shlisky asked about long term guidance without EVs.

A: Razvan stated multiple growth avenues beyond EVs, including new commercial chassis and Micro Bird JV expansion.

Q: Craig Irwin asked about EV cost reduction.

A: Razvan mentioned $25k price reduction and working with suppliers to drive down EV costs.

Q: Chris Pierce asked about EBITDA range and EV guidance.

A: Razvan clarified 1,000 EV units in backlog and guidance considerations, with late breaking news lifting funding pause impact optimism.