Blue Bird Corporation Q1 FY2026 earnings call

• Beat guidance on all metrics for the quarter despite tariff impact. • Order intake was 45% higher than 2025, pushing backlog to 3,400 units. • EV backlog is into 2027, maintaining dominance in alt power. • Completed analysis of automation use cases with a strong return and cost improvement roadmap. • Navigating tariff volatility well, aiming for margin neutral outcome. • Strong Q1 financial results with $333 million revenue, $50 million adjusted EBITDA, and $31 million free cash flow.

In fiscal 2026 first quarter, Blue Bird Corporation's BOSnet revenue was $308 million, up $20 million from the prior year due to increased prices across all products including tariffs. EV sales in Q1 were 121 units, with revenue of almost $25 million. BOSnet revenue contributed a significant portion, and EV sales were a notable segment with a growing backlog pushing into 2027.

• Revenue expected to be in the range of $1.45 to $1.55 billion. • Adjusted EBITDA raised to $225 million with a range of $215 to $235 million (15% margin). • Adjusted free cash flow forecasted to be $40 million to $60 million. • Guidance for EV unit sales in fiscal 2026 is approximately 800 units. • Q2 forecasted to repeat Q1 performance with cost pressures from tariffs, labor, and SG&A inflation, but expects strong second half with 15%-16% adjusted EBITDA margin.

• Tariff volatility impacting costs and pricing. • Potential misinterpretation of EPA clean school bus program rounds leading to uncertainty. • Supply chain and sourcing challenges due to geopolitical tariffs affecting manufacturing and pricing strategies.

Q: Could you give color around how much of margin benefit was from pricing vs efficiencies?

A: Razvan Radulescu said about two-thirds came from net pricing and about one-third from better efficiency and quality.

Q: How are customers shifting regarding EV and diesel?

A: Razvan Radulescu mentioned strong EV backlog with over a thousand units, and diesel had a strong quarter but uncertainty regarding 2027 emission regulations may cause pull forward of diesel units.

Q: Thoughts on propane segment?

A: John Wyskiel said propane has the lowest total cost of operation, easy infrastructure conversion, and strong acceptance in the market.

Q: View on order intake and trends?

A: John Wyskiel stated strong order intake, 45% increase, driven by pricing stabilization and strong state funding for EVs.

Q: Capital allocation strategy?

A: Razvan Radulescu said strong balance sheet allows strategic evaluation of growth and vertical integration, with $100 million share buyback program and focus on new plant CapEx and engineering investments.

Q: Pushback from buyers on pricing?

A: John Wyskiel said while there may be unhappiness, customers recognize need to replace fleets and it's an economic decision.

Q: EV market and commercial chassis update?

A: Razvan Radulescu said strong EV orders supported by EPA rounds and state funding, and commercial chassis first order received with production expected in late Q4 2026 pushing sales to fiscal 2027.