Release Date: November 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Blue Bird Corp (BLBD, Financial) achieved record financial results in fiscal 2024, more than doubling its prior record profit from 2023.
- The company reported an impressive adjusted EBITDA margin of 13.6%, a 6 percentage point increase from the previous year.
- Market demand for school buses remains strong, with a backlog of over 4,800 units, a 6% increase from the previous year.
- Blue Bird Corp (BLBD) has successfully managed supply chain issues, with expectations for further easing in 2025.
- The company has produced and delivered over 700 electric buses, nearly 30% more than the previous year, strengthening its leadership in alternative-powered vehicles.
Negative Points
- Despite improvements, supply chain issues remain a concern, with some constraints on chassis components.
- Material costs and supplier inflation pressures continue to be present, impacting overall costs.
- The company expects relatively low EV production and sales in the first half of fiscal 2025 due to infrastructure planning delays.
- There is a cautious stance on fiscal 2025 guidance due to ongoing supply chain fragility.
- Blue Bird Corp (BLBD) faces challenges in maintaining momentum with a modest 3% increase in volume guidance for fiscal 2025.
Q & A Highlights
Q: Are you relying on a renewal of the EPA program after fiscal '27, or do you feel like your EV business will stand on its own without subsidies?
A: Philip Horlock, CEO: We expect the EV business to stand on its own by 2028, as costs come down and scale increases. The EPA program is expected to end by then, but state and local support will continue. We've already seen reductions in rebates, which have allowed more units to be available in the market.
Q: What are you doing to ensure that powertrain providers reduce their prices to maintain margins?
A: Razvan Radulescu, CFO: We are working with several providers to drive costs down and make EV buses more affordable. There are new capacities coming online, and we have clear plans to reduce costs while maintaining margins.
Q: Do you have any significant growth expectations for parts in 2025?
A: Razvan Radulescu, CFO: We are targeting low single-digit revenue growth year-over-year for our parts business, which has been strong in recent years.
Q: How are customers reacting to the recent price increase, and how does it affect your competitiveness?
A: Philip Horlock, CEO: We have a rhythm of pricing adjustments twice a year, and we remain competitive. Our win rates and bids indicate that we are aligned with the competition, and we have added product features to differentiate ourselves.
Q: Can you provide more detail on the $6 million one-time SG&A and engineering expenses?
A: Razvan Radulescu, CFO: The $6 million one-time expense is primarily due to bonus accruals and consulting expenses booked in Q4, which are not expected to recur in upcoming quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
