• Revenue: $314 million, nearly the same as last year.
• Adjusted EBITDA: $46 million, with a margin of 15%.
• Net Income: Adjusted net income of approximately $31 million.
• Bus Sales Volume: 2,130 units sold in the first quarter.
• EV Backlog: 765 EVs, 22% higher than the end of fiscal 2024.
• Adjusted Free Cash Flow: $22 million, an increase of $23 million over a year ago.
• Gross Margin: 19.2%, slightly lower due to labor cost increases.
• Parts Revenue: $26 million, representing a 6% growth over last year.
• Liquidity Position: $280 million, a record high.
• Average Bus Revenue per Unit: $135,000, approximately 2% decrease from last year.

• Warning! GuruFocus has detected 1 Warning Sign with BLBD.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Blue Bird Corp (NASDAQ:BLBD) achieved near-record quarterly profits in the first quarter of fiscal 2025, with an adjusted EBITDA of $46 million and a margin of 15%.
• The company maintained a strong backlog of 4,400 school buses, representing almost six months of production, which supports pricing, production stability, and profit margins.
• EV orders saw a significant increase, with a backlog of 765 EVs, marking a 22% increase from the end of fiscal 2024 and an 82% increase from the same time a year ago.
• Blue Bird Corp (NASDAQ:BLBD) continues to lead in the alternative-powered vehicle segment, with a 51% mix of unit sales in Q1, compared to less than 10% to 15% for major competitors.
• The company reported a record adjusted free cash flow of $22 million for the first quarter, an increase of $23 million over the previous year.

Negative Points

• The President's executive orders, including the pausing of federal funding and new tariffs, pose potential risks to Blue Bird Corp (NASDAQ:BLBD)'s business operations.
• The lower EV mix in fiscal 2025 Q1, at 6% compared to 10% last year, resulted in the average vehicle selling price being close to last year at $135,000 per unit.
• The uncertainty regarding the timing of the EPA Clean School Bus program funding disbursements has led to a reduction in the upside for EV volumes for the second half of the fiscal year.
• The newly proposed tariffs on imports from Canada, Mexico, and China could impact Blue Bird Corp (NASDAQ:BLBD)'s cost of goods sold, although the company plans to pass these costs to customers.
• Increased labor costs due to the USW Labor Agreement are now in full effect, impacting the company's gross margin, which was 80 basis points lower than last year.

Q & A Highlights

Q: Given the uncertainty, why did you adjust both the low and high ends of the EBITDA guidance? A: Razvan Radulescu, CFO: We had a strong Q1 and see momentum in non-EV powertrains. We believe reaching the upper range of $215 million is achievable, but higher EV sales than 1,000 units would be needed. The backlog of 4,700 buses and pricing increases give us confidence.

Q: Can you clarify the impact of the executive order pause on EPA funding and its effect on your EV sales? A: Philip Horlock, CEO: We have 1,000 EVs sold or in backlog, with 75% having funding in place. The recent lifting of the pause on disbursements should help resume the Clean School Bus program, supporting our EV sales target.

Q: How are you addressing potential tariffs on imports from Canada, Mexico, and China? A: Razvan Radulescu, CFO: We plan to pass any government-imposed tariffs through to customers. We have already communicated with our dealer network and are prepared to implement price increases if necessary.

Q: What is the potential for propane buses if EV funding is impacted? A: Philip Horlock, CEO: Propane buses are a logical alternative with the lowest total cost of ownership. They are clean and meet 2027 emissions standards. We would focus on propane if EV funding is disrupted.

Q: Can you discuss your strategy for reducing EV bus costs? A: Razvan Radulescu, CFO: We recently reduced EV bus prices by $25,000. We are working with suppliers to lower costs and bring total cost of ownership closer to that of internal combustion engine buses.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.