Yahoo Finance Blue Bird Corp (BLBD) Q2 2024 Earnings Call Transcript Highlights: Record Profits and Strategic ...
Net Revenue: $346 million, a 15% increase over the previous year.
Adjusted EBITDA: $46 million, nearly double the previous year's figure.
Adjusted Free Cash Flow: $54 million, a $30 million improvement from the previous year.
Net Income: $29 million, up $21 million from the previous year.
Adjusted Diluted Earnings Per Share: $0.89, an increase of $0.62 from the previous year.
Gross Margin: 18.4%, a 6.5 percentage point increase over the previous year.
Unit Sales: 2,254 buses sold in the quarter.
Order Backlog: Over 5,900 units valued at approximately $850 million.
EV Bus Sales: 210 units, representing a 56% increase over the previous year.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Blue Bird Corp reported an all-time record profit for the fiscal 2024 second quarter, marking it as the best second quarter in the company's history.
Net sales revenue reached a record high for any quarter, with a significant 15% increase over the previous year, driven by higher pricing and a richer mix of electric vehicles (EVs).
Adjusted EBITDA for the quarter was $46 million, nearly double the previous year's figure and well above the general guidance range.
The company achieved a strong adjusted EBITDA margin of 13% in the second quarter, reflecting efficient operations and successful pricing strategies.
Blue Bird Corp's backlog of firm orders grew by nearly 30% from the first quarter, indicating strong market demand and customer confidence.
Negative Points
Despite overall easing, select supply chain constraints on chassis components continue to limit industry production and deliveries, potentially impacting Blue Bird Corp's ability to meet demand.
Unit sales volume for the quarter was slightly down from the previous year, indicating some challenges in maintaining growth in units sold.
The company anticipates inflationary pressures and cost increases in the second half of the fiscal year, which could affect profit margins.
While federal funding for electric and propane buses is a positive, the extended timeline for infrastructure readiness and bus purchases could delay revenue recognition.
Blue Bird Corp is facing the need for significant engineering spending to support new product programs and compliance with upcoming emission standards, which could impact short-term financial performance.
Q & A Highlights
Q: Thanks for taking the questions. So in the last page, so last quarter, you talked about pricing being ahead of materials prices in there you thought you might have stepped down sequentially and EBITDA, which did not come to fruition. I'm curious, did you see that in that was offset by, as you said, high mix of EVs and Type D school buses? Or is that something that for whatever reason, that's more of a second half event at present quarter? A: Mike, with that, I thank you for your question? This is Razvan. So definitely, as I mentioned, we have been much more proactive in our pricing actions in the last several quarters than we were in the past. We started to see some inflation factors into our costs, both in the cost of goods sold from the material cost as well as in our SG&A through labor inflation. But definitely, we expect more increases in the second half of this year? So overall, yes, we saw a bit of margin compression in the end. And but in the end, the bulk of it is still to come in the second half of fiscal '24.
Q: Got it. And you're not necessarily implying a lower or a noticeably lower mix of TVs you're just guiding in that way as not to being conservative, given some of the uncertainties that are still out there, supply chain and others? A: Yes. So we are maintaining our guidance of approximately 800 GV.s for this year. But yes, in any given quarter, the mix can vary a little bit. But overall, yes, we are confident and our guidance continue to remain conservative.
Q: Okay. That's great on maybe just turning to the federal funding, and I know that the deadlines have been pushed out versus clean school bus round one. Just curious, you talked about some pretty strong. The order trends. Are you I know it's still early. Are you seeing anything from around two or is that something that you expect throughout the remainder of the year and into 25? A: Hi, Eric. It's Phil here, um. Yes, I mean, I think obviously, when you get these grant awards, you know, you're a winner in the ticket time worried about the infrastructure that they need and utility companies are charging infrastructure to. I know that's all now in progress because the award winners, certainly that first Cali, the first round of the 2nd year. That's what they're working on. But we also do receive orders, though. I think we got come on. I could tell you what I know we got 50 more than 50 to date. I've just come in from the from the second second round, if you like, of our total a total program to date. So that's promising. That's good So I expect during the course of the year, we'll receive modal pick up pace as people figure out there charging infrastructure needs in on maybe those customers who we work with them on that trying to accelerate our orders. So we feel we feel very confident that we're going to have a nice order book continuing through this year and a good a data read numbers sold address I mentioned to you.
Q: Yes, it's good to hear. You're starting to see it even though it's still early days. Maybe last one for me. You mentioned the EV chassis business. And I think you kind of hinted at some some things sort of stay tuned here over the remainder of 24. Just wondering if you can give a little more details, whether if it's something we need to wait on? A: Yes. Okay. So obviously, we haven't gone to public in this yet, but I can tell you that we're in the pilot stage of those product program. We have chassis on the ground here that we're working with testing out Sunday, put through their rigorous and we will at a future date this year for bringing customers into take a look at it, give us feedback. And I think there's a couple of shows down the road that we're probably exhibited at two So yes, it's well under development and we're already generating customer interest and we'll take that further this year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
