Blue Bird Corporation (NASDAQ: BLBD) reported Q4 EPS of $0.49, $0.14 better than the analyst estimate of $0.35. Revenue for the quarter came in at $281.4 million versus the consensus estimate of $255.55 million.

“The second half of fiscal 2020 was challenging for Blue Bird as operations were significantly impacted by COVID-19," said Phil Horlock, President and Chief Executive Officer of Blue Bird Corporation. “School shutdowns delayed orders and supplier disruptions impacted our efficiencies. Through the fourth quarter, however, we saw significant stabilization in our supply base and manufacturing processes.

"While working through these challenges, I am very pleased with our progress in improving our underlying business structure that is key to achieving our near-term EBITDA margin target of at least 10%. Full-year average selling price per bus increased by more than $6,000, or 7%, over last year. The increase was due to a combination of pricing and a richer mix of higher-priced vehicles, including electric-powered buses. Despite the significant COVID impact on orders, we had another strong year of alternative-fuel bus sales, with a record sales mix of 48%, equal to last year. We saw substantial growth in our electric-powered bus sales this year, with 158 buses sold and a strong growth runway in that segment. Our alternative-fuel market share remained strong in fiscal 2020, led by propane at 76%, followed by electric at 58% and we maintained our position as the undisputed leader in alternative fuels. We also announced the upcoming product launch of our all-new and exclusive 7.3 liter engine, developed with Ford and Roush, which will power our class-leading propane- and gas-powered Blue Bird Vision, described by our tagline, “The best just got better!” We also continued to make great progress in driving down structural costs with our Transformational Initiatives, which improved profits by $14.4 million in the full year. In fact, this initiative has reduced our structural costs by more than $50 million since inception three years ago. In addition, we successfully moved to a single shift production schedule late in the third quarter, which drove efficiency and quality improvements through the balance of the year. We are making changes in our plant, so that by spring of 2021, we will have the same daily capacity on one shift that we previously had on two shifts.

"With these business structure improvements, we are well positioned to capitalize on the market recovery as schools get back to 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."

GUIDANCE:

Blue Bird Corporation sees FY2021 revenue of $750-975 million, versus the consensus of $848.9 million.

"As we look at guidance for FY2021, there is a lot of uncertainty around timing of a return-to-normalcy for schools. Recent news around the approval and distribution of COVID-19 vaccines, however, provides confidence that an industry rebound is in sight. We are providing a wide range for our guidance metrics, which we will narrow through the year as the control of the pandemic become clearer. We are announcing initial net revenue guidance of $750M-975M, with Adj. EBITDA between $40M-$65M and Adjusted Free Cash Flow of $(5)-$20M.”

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