Blue Bird Corporation (NASDAQ: BLBD) reported Q3 EPS of $0.16, $0.05 worse than the analyst estimate of $0.21. Revenue for the quarter came in at $189.2 million versus the consensus estimate of $226.2 million.

• Net Sales of $189.2M, down 39% from prior year
• Bus average selling price up 9%
• GAAP net income of $1.3M, down $13.3M
• GAAP Diluted EPS of 5 cents, down 50 cents
• Adjusted EBITDA of $12.5M, down $16.6M

“The third quarter was a challenge as operations were significantly impacted by COVID-19," said Phil Horlock, President and Chief Executive Officer of Blue Bird Corporation. “School shutdowns and shelter-in-place mandates delayed orders through the third quarter and continued supplier disruptions impacted our efficiencies throughout the quarter, We have seen significant stabilization in our supply base since then, although orders have continued to be slow as schools deliberate online versus in-classroom teaching this Fall.

"While working through these challenges, however, I am very pleased with our progress in improving the underlying business structure that is key to achieving our EBITDA margin target of at least 10% in the near-term. We successfully moved to a single shift production schedule late in the quarter, which will drive efficiency and quality improvement. Average selling price per bus increased by more than $7,000, or 9%, over last year's third quarter. The increase was due to a combination of pricing and a richer mix of higher-priced vehicles, including electric-powered buses. I am particularly pleased with our alternative-fuel results, which represents a 48% mix of our year-to-date sales and backlog, and we are the market share leader in propane, gasoline and electric-powered buses, based on fiscal year vehicle registrations through June. Our overall alternative-fuel market share is very strong at 64%. We also continued to make great progress in driving down structural costs with our Transformational Initiatives, which improved profits by $2.3 million in the quarter. In fact, this initiative has reduced our structural costs by about $50 million since inception three years ago.

"We are in a strong financial position with liquidity in excess of $100 million at the end of the third quarter. We have a history of robust cash generation, 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. The challenges that we are all facing are temporary, and we will get through it, taking the necessary restructuring actions along the way.”

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