Blue Bird Corporation (BLBD) Misses Q2 EPS by 3c, Revenues Miss

Blue Bird Corporation (NASDAQ: BLBD) reported Q2 EPS of $0.05, $0.03 worse than the analyst estimate of $0.08. Revenue for the quarter came in at $164.7 million versus the consensus estimate of $171.5 million.

• Net Sales of $164.7M and GAAP Net Loss of $0.6M
• Bus Average Selling Price up 9.7%
• Electric Bus Sales up 50%
• Adjusted EBITDA of $7.5M in Second Lowest-Volume Quarter with 1,489 Buses Sold

“We are very pleased with our second quarter performance and results," said Phil Horlock, President and Chief Executive Officer of Blue Bird Corporation. “The Blue Bird team executed well despite the pandemic resulting in the majority of schools operating in virtual or hybrid mode for most of the second quarter and supply chain issues creating inefficiencies in our manufacturing operations; nevertheless, we increased our gross margin by 1.7 pts. compared with last year, despite a 43% drop in unit sales. We are increasingly confident in schools fully reopening for in-classroom teaching as we head toward the next school year, supported by progressively higher quote and order rate activity during the quarter and our firm-order backlog, which is now 15% above the prior-year quarter.

"As we move toward a school-bus industry recovery beginning in the second half of our fiscal year, I am encouraged with our progress in improving our underlying business structure, which is key to achieving our near-term EBITDA margin target of at least 10%. We increased our second quarter average selling price per bus by $8,900, or 9.7%, over last year. We realized manufacturing efficiency improvements, despite the supplier disruptions we experienced, and benefited from lower operating expenses as a result of cost control actions that we implemented last year. Our alternative-powered bus sales mix was 43% in the quarter, slightly below prior year. This decline was entirely driven by the March launch timing of our all-new and exclusive Ford and Roush CleanTech propane and gasoline engines. We expect full-year alternative power sales mix to exceed 50% of total sales, supported by a very strong order backlog for our new and class-leading 7.3L V8 engine, and we are a strong #1 in North American market share in both electric and propane-powered school buses over the past year. The interest in electric buses is unprecedented and our Fiscal 2021 bookings and order backlog has grown 10% over prior year, with second quarter sales up 50% from a year ago. In fact, our total sold units and order backlog since we began production just three years ago, is now approaching 500 electric buses, covering Type A, C and D configurations. With the growth rate we are seeing, and the breadth of chassis and powertrain choices that we offer, we are increasing our focus and resources in the EV business. We previously announced our intention to offer Blue Bird chassis with factory-installed electric drivetrains to commercial vehicle manufacturers and are in preliminary discussions with a number of commercial-vehicle customers. With the new Administration’s proposed $20-25 billion infrastructure-related bills to accelerate the adoption of electric-powered school buses in the U.S. over the next 8-10 years, these are exciting times at Blue Bird!

"With our business structure and margin improvements, we are well positioned to capitalize on the market recovery as schools continue to resume full in-classroom learning. We have a history of robust cash generation and strong liquidity, a culture of winning and leadership in growing segments, a clearly defined margin-growth strategy and an experienced team with a proven track record of delivering results and handling difficult times. As COVID-19 vaccinations accelerate, coupled with the new Administration’s commitment to open schools within 100 days of its term start, we are confident that an industry rebound is in sight, and our increased order rate supports this. We are maintaining our previously provided guidance for net revenue of $750M-975M, Adj. EBITDA between $40M-$65M and Adjusted Free Cash Flow of $(5)-$20M.”

For earnings history and earnings-related data on Blue Bird Corporation (BLBD) click here.

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