Blue Bird Corporation ((BLBD)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Blue Bird Corporation’s recent earnings call for the first quarter of fiscal 2025 reflected a strong financial performance, despite facing several challenges. The company reported near-record profits and a robust backlog, demonstrating strategic cost management. However, uncertainties remain due to federal funding issues and potential tariffs. Despite a decline in the EV sales mix, Blue Bird has shown resilience and confidence in its adaptability and future success.
Near Record Quarterly Profits
Blue Bird achieved near-record adjusted EBITDA and margin in the first quarter of fiscal 2025. The company reported an adjusted EBITDA of $46 million, with an exceptional adjusted EBITDA margin of 15%, underscoring its strong financial health and effective operational strategies.
Strong Backlog and Demand
The demand for Blue Bird school buses remains robust, with a healthy backlog of 4,400 units at the end of the first quarter. This backlog represents almost six months of production, with EV orders showing a significant increase of 22% from the end of fiscal 2024, highlighting the strong market demand.
Successful Cost Management
Blue Bird’s strategic cost management efforts were evident in its financial results, with an adjusted free cash flow of $22 million, marking a $23 million increase from a year ago. The adjusted EBITDA for the quarter was $46 million, only slightly lower than the previous year, showcasing the company’s efficiency.
EV Segment Growth
The company has experienced remarkable growth in its EV segment, with a backlog of 765 units at the end of Q1, an 82% increase from the same period last year. Blue Bird has sold or has in its backlog a total of 1,000 EV units for fiscal 2025, emphasizing its commitment to sustainable transportation solutions.
Impact of Executive Orders
The President’s Executive Orders, particularly those pausing federal funding and implementing new tariffs, pose potential risks to Blue Bird’s business. These uncertainties could affect funding and cost structures, impacting future performance.
EV Sales Mix Decline
The first quarter saw a decline in EV sales, with only 132 units sold, representing a 36% decrease from the previous year. The EV sales mix fell to 6% compared to 10% last year, indicating a shift in the company’s sales dynamics.
Potential Impact of Tariffs
Potential tariffs on imported Canadian and Mexican goods are currently on hold for 30 days. In response, Blue Bird is exploring alternative sourcing options to mitigate risks, with plans to implement a 5% price increase to cover additional costs.
Forward-Looking Guidance
Blue Bird maintained its full-year guidance despite external challenges, projecting a revenue range of $1.4 billion to $1.5 billion, with an adjusted EBITDA of $200 million. The company expects continued growth in alternative-powered vehicles, which accounted for 51% of unit sales. Adjusted free cash flow also saw a significant year-over-year increase, reaching $22 million for the quarter.
In summary, Blue Bird Corporation’s earnings call painted a positive picture of its financial health and strategic vision for fiscal 2025. Despite challenges from federal funding uncertainties and potential tariffs, the company showcased its resilience and capacity for growth, particularly in the EV segment. Investors and stakeholders can look forward to Blue Bird’s continued focus on innovation and market adaptability.
