Blue Bird Corporation ((BLBD)) has held its Q2 earnings call. Read on for the main highlights of the call.
Blue Bird Corporation’s latest earnings call revealed a generally optimistic sentiment, driven by record-breaking revenue and adjusted EBITDA. The company showcased its resilience through strong demand and effective cost management, maintaining its leadership in alternative power vehicles. However, challenges such as significant tariff impacts, especially on EV production, were acknowledged. Despite these hurdles, Blue Bird’s robust backlog and strategic pricing actions are expected to sustain its stability.
Record Quarterly Revenue and Profit
Blue Bird Corporation achieved a remarkable milestone with record quarterly revenue of $359 million and an adjusted EBITDA of $49 million. This represents a 6.5% improvement over the previous year’s second quarter, underscoring the company’s strong financial performance.
Strong Backlog and Demand
The company concluded the quarter with an impressive backlog of nearly 5,000 units, equating to over six months of production and totaling $770 million in revenue. This robust demand highlights Blue Bird’s market strength and future revenue potential.
Lead Position in Alternative Power Vehicles
Blue Bird continues to dominate the alternative power vehicles segment, with a 57% mix of unit sales. This leadership position sets the company apart from its competitors and reinforces its commitment to sustainable transportation solutions.
Commercial Chassis Debut
At the Work Truck Show, Blue Bird introduced its new commercial chassis, which received overwhelmingly positive feedback. The company plans to launch this promising product in 2026, further expanding its market offerings.
Impact of Tariffs on EV Production
New tariffs, particularly a 145% tariff on Chinese imports, are significantly impacting Blue Bird’s EV kit costs. This may lead to a 10% price increase on EV buses, posing a challenge to the company’s cost structure and pricing strategy.
Decrease in Adjusted Free Cash Flow
The earnings call highlighted a $35 million decrease in adjusted free cash flow compared to the previous year. This decline is primarily due to increased tax expenses, affecting the company’s cash position.
Potential Delay in EV Production
Due to the impact of tariffs, Blue Bird may strategically delay some EV builds to fiscal 2026. This potential shift in the production schedule reflects the company’s adaptive approach to external economic pressures.
Forward-Looking Guidance
Despite the challenges, Blue Bird maintained its full-year guidance, buoyed by strong order intake and strategic pricing actions. The company sold 2,295 buses, including 265 electric vehicles, contributing to its robust backlog of 4,900 buses. With average selling prices increasing by $4,000 per unit, Blue Bird remains well-positioned to meet its fiscal 2025 targets.
In conclusion, Blue Bird Corporation’s earnings call painted a picture of a company navigating challenges with strategic foresight and operational strength. The record-breaking financial results and strong market position in alternative power vehicles underscore its resilience. While tariff impacts pose challenges, Blue Bird’s strategic actions and robust backlog offer a promising outlook for continued stability and growth.