Blue bird reports fiscal 2022 fourth quarter and full year results; record ev sales and backlog; positioned for a strong recovery in fiscal 2023
Macon, ga.--(business wire)--blue bird corporation (“blue bird”) (nasdaq: blbd), the leader in electric and low-emission school buses, announced today its fiscal 2022 fourth quarter and full year results. highlights (in millions except unit sales and eps data) three months ended october 1, 2022 b/(w) 2021 fiscal year ended october 1, 2022 b/(w) 2021 unit sales 2,016 105 6,822 143 gaap measures: revenue $ 257.7 $ 65.5 $ 800.6 $ 116.6 net loss $ (23.1 ) $ (20.7 ) $ (45.8 ) $ (45.5 ) diluted loss per share $ (0.72 ) $ (0.63 ) $ (1.48 ) $ (1.46 ) non-gaap measures1: adjusted ebitda $ (16.4 ) $ (24.0 ) $ (14.7 ) $ (48.8 ) adjusted net loss $ (21.4 ) $ (23.4 ) $ (36.0 ) $ (44.6 ) adjusted diluted loss per share $ (0.66 ) $ (0.73 ) $ (1.15 ) $ (1.46 ) 1 reconciliation to relevant gaap metrics shown below “during a challenging 2022, the blue bird team developed and began execution of a rigorous plan to improve operations, reduce fixed costs, and recover economics through pricing. i am confident that this plan positions the company for a significant recovery over the next several years," said matthew stevenson, president and ceo of blue bird corporation. "in light of significant inflationary pressures experienced over the last 18 months, we were able to implement a total of 25% in price increases. in addition, we partnered with our valued dealer network and customer base to recover substantial pricing on backlog units. demand for blue bird’s best-in-class school buses remains strong and we have expanded our leadership position in zero-emission school buses, seeing significant growth in both electric school bus bookings, up 85%, and firm order backlog, at more than 310 electric school buses as we ended the fiscal year. our order backlog will grow significantly over the next several months as orders are placed with the epa’s 2022 clean school bus rebate program, which will accelerate adoption of zero-emission student transportation across the united states.” added stevenson: “blue bird continues to expand its portfolio of innovative products and services to develop a complete electric vehicle (ev) ecosystem for school districts, bus fleet operators, and its dealer network. this year, we launched our blue bird energy services, which provides comprehensive charging infrastructure for ev buses, including site engineering, permitting, construction, customizable hardware and software, warranties, and maintenance. we also announced a flexible class 5-6 electric chassis which will enable a broad range of zero-emission vehicles, including last-mile delivery step vans, motorhomes, and other specialty vehicles. in addition, we announced a repower program, which will launch in 2023, for gasoline- and propane-powered blue bird vision type c school buses. all these developments clearly demonstrate that blue bird is well-positioned to shape the future of the student transportation industry.” 2023 guidance revised "looking back, fy2022 was an incredibly difficult year for blue bird. starting in q1 with a supplier allocation that cut our volumes approximately in half, unprecedented inflation and steel prices that almost tripled during q2, fixed pricing on old backlog during the first half, unsuccessful production increase in q3 and inventory accumulation, but with all the operational metrics starting to improve during q3 and continuing in q4” said razvan radulescu, cfo of blue bird corporation. “however, the worst is behind us now, our turnaround is working and we expect to return to historical profitability levels during fy23, with increasing levels of revenues and performance each quarter, as shown in the forecast shared during the earnings call. we are providing full year fiscal 2023 guidance of net revenue of $900-1,000 million, adj. ebitda of $35-45 million and adj. free cash flow of $0-10 million. additionally, we are reconfirming our long term outlook of profitable growth towards $2 billion in revenues and adjusted ebitda margins of 12%, or $250 million.” fiscal 2022 fourth quarter results net sales net sales were $257.7 million for the fourth quarter of fiscal 2022, an increase of $65.5 million, or 34.1%, from prior year period. bus sales increased $60.6 million, reflecting a 27.6% increase in average sales price per unit, resulting from pricing actions taken by management to partially offset increases in inventory purchase costs as well as product and customer mix change, and a 5.5% increase in units booked. in the fourth quarter of fiscal 2022, 2,016 units were booked compared to 1,911 units booked for the same period in fiscal 2021. additionally, parts sales increased $4.8 million for the fourth quarter of fiscal 2022 compared to the fourth quarter of fiscal 2021. this increase is primarily attributed to (a) more schools offering in-person learning during the 2021/2022 school year when compared with the 2020/2021 school year, which increased school bus units in operation and thus increased bus repair and maintenance activities and (b) pricing actions taken by management to offset increases in purchased parts costs. gross profit fourth quarter gross profit of $4.4 million represented a decrease of $17.4 million from the fourth quarter of last year. the decrease was primarily driven by increases in manufacturing costs attributable to a) increased raw materials costs resulting from ongoing inflationary pressures, b) supply chain disruptions that resulted in higher purchase costs for components and freight and c) increased manufacturing inefficiencies resulting from the shortage of certain critical components that required more off-line labor to produce buses. as a result, at october 1, 2022, certain bus segment inventory had an approximate $8.8 million cumulative cost in excess of net realizable value that was recognized as a loss in fiscal 2022 with no similar activity in fiscal 2021. net loss net loss was $23.1 million for the fourth quarter of fiscal 2022, which was a $20.7 million increase compared to the same period last year. the increase in net loss was primarily driven by the $17.4 million decrease in gross profit, discussed above. also contributing was an increase of $3.2 million in sg&a, primarily due to an increase in professional services, largely relating to several cost cutting and operational transformation initiatives. adjusted net (loss) income adjusted net (loss) income was $(21.4) million, representing a decrease of $23.4 million compared with the same period last year. this decrease is primarily due to the $20.7 million increase in net loss, discussed above, and a decrease in share-based compensation expense of $2.2 million related to the retirement of two members of the executive team, as the expense recorded in fiscal 2021 had no similar activity in fiscal 2022. adjusted ebitda adjusted ebitda was $(16.4) million, which was a decrease of $24.0 million compared with the fourth quarter last year. this decrease primarily results from the $20.7 million increase in net loss, discussed above, and a decrease in share-based compensation expense of $2.2 million related to the retirement of two members of the executive team, as the expense recorded in fiscal 2021 had no similar activity in fiscal 2022. full year 2022 results net sales net sales were $800.6 million for the fiscal year ended october 1, 2022, an increase of $116.6 million, or 17.1%, compared with the prior year. bus unit sales were 6,822 units for the fiscal year ended october 1, 2022 compared with 6,679 units for the same period last year. the increase in net sales is primarily due to product and mix changes as well as pricing actions taken by management in response to increased inventory purchase costs. during the first half of fiscal 2021, the covid-19 pandemic caused many schools to shut down in-person learning, decreasing the demand for buses and related maintenance and replacement parts. however, by the third quarter of fiscal 2021, many schools began signaling a return to in-person learning by the beginning of the 2021/2022 school year (i.e., august and september 2021), resulting in a significant increase in the demand for buses and a corresponding increase in our net sales during the second half of fiscal 2021. although schools have generally continued to conduct in-person learning and demand for buses and related parts has remained strong as indicated by our sales backlog, significant supply chain disruptions began limiting the availability of certain critical components primarily beginning towards the end of the third quarter of fiscal 2021 and continuing throughout fiscal 2022. accordingly, such shortages have limited the number of buses the company could produce and deliver during this time period. gross profit full year gross profit was $36.5 million, a decrease of $35.6 million from the prior year. the decrease in gross profit is primarily due to higher cost of goods sold, which increased as a percentage of sales from 89.5% to 95.4%. this was driven by increasing inventory costs as the average cost of goods sold per unit for fiscal 2022 was 22.4% higher compared to fiscal 2021. this increase was primarily due to increases in manufacturing costs attributable to a) increased raw materials costs resulting from ongoing inflationary pressures, b) supply chain disruptions that resulted in higher purchase costs for components and freight and c) increased manufacturing inefficiencies resulting from the shortage of certain critical components that required more off-line labor to produce buses. as a result, at october 1, 2022, certain bus segment inventory had an approximate $8.8 million cumulative cost in excess of net realizable value that was recognized as a loss in fiscal 2022 with no similar activity in fiscal 2021. net loss net loss was $45.8 million for the fiscal year ended october 1, 2022, which was $45.5 million below the prior year. the increase in net loss was primarily driven by the $36.5 million decrease in gross profit, discussed above. also contributing was an increase of $11.6 million in sg&a, primarily due to a $7.5 million increase in professional services, largely relating to several cost cutting and operational transformation initiatives, a $1.2 million increase in research and development expense, and a $1.1 million increase in payroll, largely resulting from merit increases for all company employees that were effective at the beginning of fiscal 2022 and were intended to partially mitigate the impact of increasing inflation. additionally, selling, general and administrative expenses during the first half of fiscal 2021 benefited from actions taken by management to reduce labor costs and certain discretionary spending during the early months of the pandemic with similar actions taken to reduce labor costs only during the fourth quarter of fiscal 2022 given the competitiveness of the overall labor market primarily resulting from continuing labor shortages. adjusted net (loss) income year-to-date adjusted net (loss) income was $(36.0) million, $44.6 million below with the prior year. this is primarily due to the $45.5 million increase in net loss, discussed above. adjusted ebitda adjusted ebitda was $(14.7) million for the fiscal year ended october 1, 2022, a decrease of $48.8 million compared to the prior year. this is primarily due to the $45.5 million increase in net loss, discussed above, and a decrease in share-based compensation expense of $2.2 million as the expense recorded in fiscal 2021 was impacted by the retirement of two members of the executive team with no similar activity in fiscal 2022. conference call details blue bird will discuss its fourth quarter 2022 results in a conference call at 4:30 pm et today. participants may listen to the audio portion of the conference call either through a live audio webcast on the company's website or by telephone. the slide presentation and webcast can be accessed via the investor relations portion of blue bird's website at www.blue-bird.com. webcast participants should log on and register at least 15 minutes prior to the start time on the investor relations homepage of blue bird’s website at http://investors.blue-bird.com. click the link in the events box on the investor relations landing page. participants desiring audio only should dial 1-844-826-3035 or 1-412-317-5195 a replay of the webcast will be available approximately two hours after the call concludes via the same link on blue bird’s website. about blue bird corporation blue bird (nasdaq: blbd) is recognized as a technology leader and innovator of school buses since its founding in 1927. our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. blue bird buses carry the most precious cargo in the world – the majority of 25 million children twice a day – making us the most trusted brand in the industry. the company is the proven leader in low- and zero-emission school buses with more than 20,000 propane, natural gas, and electric powered buses in operation today. blue bird is transforming the student transportation industry through cleaner energy solutions. for more information on blue bird's complete product and service portfolio, visit www.blue-bird.com. key non-gaap financial measures we use to evaluate our performance this press release includes the following non-gaap financial measures “adjusted ebitda,” "adjusted ebitda margin," "adjusted net income," "adjusted diluted earnings per share," “free cash flow” and “adjusted free cash flow.” adjusted ebitda and free cash flow are financial metrics that are utilized by management and the board of directors to determine (a) the annual cash bonus payouts, if any, to be made to certain members of management based upon the terms of the company’s management incentive plan, and (b) whether the performance criteria have been met for the vesting of certain equity awards granted annually to certain members of management based upon the terms of the company’s omnibus equity incentive plan. additionally, consolidated ebitda, which is an adjusted ebitda metric defined by our amended credit agreement that could differ from adjusted ebitda discussed above as the adjustments to the calculations are not uniform, is used to determine the company's ongoing compliance with several financial covenant requirements, including being utilized in the denominator of the calculation of the total net leverage ratio. accordingly, management views these non-gaap financial metrics as key for the above purposes and as a useful way to evaluate the performance of our operations as discussed further below. adjusted ebitda is defined as net income or loss prior to interest income; interest expense including the component of operating lease expense (which is presented as a single operating expense in selling, general and administrative expenses in our u.s. gaap financial statements) that represents interest expense on lease liabilities; income taxes; and depreciation and amortization including the component of operating lease expense (which is presented as a single operating expense in selling, general and administrative expenses in our u.s. gaap financial statements) that represents amortization charges on right-of-use lease assets; as adjusted for certain non-cash charges or credits that we may record on a recurring basis such as share-based compensation expense and unrealized gains or losses on certain derivative financial instruments; net gains or losses on the disposal of assets as well as certain charges such as (i) significant product design changes; (ii) transaction related costs; (iii) discrete expenses related to major cost cutting and/or operational transformation initiatives; or (iv) costs directly attributed to the covid-19 pandemic. while certain of the charges that are added back in the adjusted ebitda calculation, such as transaction related costs and operational transformation and major product redesign initiatives, represent operating expenses that may be recorded in more than one annual period, the significant project or transaction giving rise to such expenses is not considered to be indicative of the company’s normal operations. accordingly, we believe that these, as well as the other credits and charges that comprise the amounts utilized in the determination of adjusted ebitda described above, should not be used in evaluating the company’s ongoing annual operating performance. we define adjusted ebitda margin as adjusted ebitda as a percentage of net sales. adjusted ebitda and adjusted ebitda margin are not measures of performance defined in accordance with u.s. gaap. the measures are used as a supplement to u.s. gaap results in evaluating certain aspects of our business, as described below. we believe that adjusted ebitda, adjusted ebitda margin, adjusted net income, and adjusted diluted earnings per share are useful to investors in evaluating our performance because the measures consider the performance of our ongoing operations, excluding decisions made with respect to capital investment, financing, and certain other significant initiatives or transactions as outlined in the preceding paragraph. we believe the non-gaap measures offer additional financial metrics that, when coupled with the gaap results and the reconciliation to gaap results, provide a more complete understanding of our results of operations and the factors and trends affecting our business. adjusted ebitda, adjusted ebitda margin, adjusted net income and adjusted diluted earnings per share should not be considered as alternatives to net income or gaap earnings per share as an indicator of our performance or as alternatives to any other measure prescribed by gaap as there are limitations to using such non-gaap measures. although we believe the non-gaap measures may enhance an evaluation of our operating performance based on recent revenue generation and product/overhead cost control because they exclude the impact of prior decisions made about capital investment, financing, and other expenses, (i) other companies in blue bird’s industry may define adjusted ebitda, adjusted ebitda margin, adjusted net income, and adjusted diluted earnings per share differently than we do and, as a result, they may not be comparable to similarly titled measures used by other companies in blue bird’s industry, and (ii) adjusted ebitda, adjusted ebitda margin, adjusted net income, and adjusted diluted earnings per share exclude certain financial information that some may consider important in evaluating our performance. we compensate for these limitations by providing disclosure of the differences between adjusted ebitda, adjusted ebitda margin, adjusted net income, and adjusted diluted earnings per share and gaap results, including providing a reconciliation to gaap results, to enable investors to perform their own analysis of our operating results. our measures of “free cash flow” and "adjusted free cash flow" are used in addition to and in conjunction with results presented in accordance with gaap and free cash flow and adjusted free cash flow should not be relied upon to the exclusion of gaap financial measures. free cash flow and adjusted free cash flow reflect an additional way of viewing our liquidity that, when viewed with our gaap results, provides a more complete understanding of factors and trends affecting our cash flows. we strongly encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. we define free cash flow as total cash provided by/used in operating activities as adjusted for net cash paid for the acquisition of fixed assets and intangible assets. we use free cash flow, and ratios based on free cash flow, to conduct and evaluate our business because, although it is similar to cash flow from operations, we believe it is a more conservative measure of cash flow since purchases of fixed assets and intangible assets are a necessary component of ongoing operations. forward looking statements this press release includes forward-looking statements within the meaning of the “safe harbor” provisions of the private securities litigation reform act of 1995. these forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. specifically, forward-looking statements include statements in this press release regarding guidance, seasonality, product mix and gross profits and may include statements relating to: inherent limitations of internal controls impacting financial statements growth opportunities future profitability ability to expand market share customer demand for certain products economic conditions (including tariffs) that could affect fuel costs, commodity costs, industry size and financial conditions of our dealers and suppliers labor or other constraints on the company’s ability to maintain a competitive cost structure volatility in the tax base and other funding sources that support the purchase of buses by our end customers lower or higher than anticipated market acceptance for our products other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions these forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. the factors described above, as well as risk factors described in reports filed with the sec by us (available at www.sec.gov), could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements. blue bird corporation and subsidiaries consolidated balance sheets (in thousands of dollars, except for share data) october 1, 2022 october 2, 2021 assets current assets cash and cash equivalents $ 10,479 $ 11,709 accounts receivable, net 12,534 9,967 inventories 142,977 125,206 other current assets 8,486 9,191 total current assets $ 174,476 $ 156,073 property, plant and equipment, net 100,608 105,482 goodwill 18,825 18,825 intangible assets, net 47,433 49,443 equity investment in affiliate 10,659 14,817 deferred tax assets 10,907 4,413 finance lease right-of-use assets 1,736 5,486 other assets 1,482 1,481 total assets $ 366,126 $ 356,020 liabilities and stockholders' equity (deficit) current liabilities accounts payable $ 107,937 $ 72,270 warranty 6,685 7,385 accrued expenses 16,386 12,267 deferred warranty income 7,205 7,832 finance lease obligations 566 1,327 other current liabilities 6,195 8,851 current portion of long-term debt 19,800 14,850 total current liabilities $ 164,774 $ 124,782 long-term liabilities revolving credit facility $ 20,000 $ 45,000 long-term debt 130,390 149,573 warranty 9,285 11,165 deferred warranty income 11,590 12,312 deferred tax liabilities — 3,673 finance lease obligations 1,574 4,538 other liabilities 11,107 14,882 pension 16,024 22,751 total long-term liabilities $ 199,970 $ 263,894 stockholders' equity (deficit) preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at october 1, 2022 and october 2, 2021 $ — $ — common stock, $0.0001 par value, 100,000,000 shares authorized, 32,024,911 and 27,205,269 shares outstanding at october 1, 2022 and october 2, 2021, respectively 3 3 additional paid-in capital 173,103 96,170 accumulated deficit (79,512 ) (33,753 ) accumulated other comprehensive loss (41,930 ) (44,794 ) treasury stock, at cost, 1,782,568 shares at october 1, 2022 and october 2, 2021 (50,282 ) (50,282 ) total stockholders' equity (deficit) $ 1,382 $ (32,656 ) total liabilities and stockholders' equity (deficit) $ 366,126 $ 356,020 blue bird corporation and subsidiaries consolidated statements of operations three months ended twelve months ended (in thousands of dollars except for share data) october 1, 2022 october 2, 2021 october 1, 2022 october 2, 2021 net sales $ 257,672 $ 192,204 $ 800,637 $ 683,995 cost of goods sold 262,073 179,183 764,091 611,854 gross profit $ (4,401 ) $ 13,021 $ 36,546 $ 72,141 operating expenses selling, general and administrative expenses 18,650 15,495 77,246 65,619 operating (loss) income $ (23,051 ) $ (2,474 ) $ (40,700 ) $ 6,522 interest expense (5,194 ) (2,613 ) (14,675 ) (9,682 ) interest income 9 3 9 4 other income, net 732 285 2,947 1,776 loss on debt modification (71 ) — (632 ) (598 ) loss before income taxes $ (27,575 ) $ (4,799 ) $ (53,051 ) $ (1,978 ) income tax benefit 5,134 2,079 11,451 1,191 equity in net (loss) income of non-consolidated affiliate (654 ) 332 (4,159 ) 498 net loss $ (23,095 ) $ (2,388 ) $ (45,759 ) $ (289 ) loss per share: basic weighted average shares outstanding 32,022,690 27,204,719 31,020,399 27,139,054 diluted weighted average shares outstanding 32,022,690 27,204,719 31,020,399 27,139,054 basic loss per share $ (0.72 ) $ (0.09 ) $ (1.48 ) $ (0.01 ) diluted loss per share $ (0.72 ) $ (0.09 ) $ (1.48 ) $ (0.01 ) blue bird corporation and subsidiaries consolidated statements of cash flows fiscal years ended (in thousands) 2022 2021 cash flows from operating activities net loss $ (45,759 ) $ (289 ) adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: depreciation and amortization expense 14,050 13,446 non-cash interest expense 3,400 2,754 share-based compensation expense 3,690 5,938 equity in net loss (income) of non-consolidated affiliate 4,159 (498 ) loss (gain) on disposal of fixed assets 15 (679 ) impairment of fixed assets 1,354 — lower of cost or net realizable value loss 8,752 — deferred income tax benefit (11,071 ) (925 ) amortization of deferred actuarial pension losses 3,768 1,861 loss on debt modification 632 598 changes in assets and liabilities: accounts receivable (2,567 ) (2,345 ) inventories (26,523 ) (68,684 ) other assets 1,913 (409 ) accounts payable 35,075 14,081 accrued expenses, pension and other liabilities (15,325 ) (19,090 ) total adjustments $ 21,322 $ (53,952 ) total cash used in operating activities $ (24,437 ) $ (54,241 ) cash flows from investing activities cash paid for fixed assets $ (6,453 ) $ (12,212 ) proceeds from sale of fixed assets — 903 total cash used in investing activities $ (6,453 ) $ (11,309 ) cash flows from financing activities revolving credit facility borrowings $ 135,000 $ 117,000 revolving credit facility repayments (160,000 ) (72,000 ) term loan repayments (14,850 ) (9,900 ) principal payments on finance leases (1,132 ) (1,294 ) cash paid for debt costs (2,751 ) (2,476 ) sale of common stock 75,000 — cash paid for common stock issuance costs (202 ) — proceeds from exercises of warrants — — repurchase of common stock in connection with stock award exercises (1,708 ) (517 ) cash received from stock option exercises 303 1,939 total cash provided by financing activities $ 29,660 $ 32,752 change in cash and cash equivalents (1,230 ) (32,798 ) cash and cash equivalents, beginning of year 11,709 44,507 cash and cash equivalents, end of year $ 10,479 $ 11,709 reconciliation of net loss to adjusted ebitda three months ended fiscal year ended (in thousands of dollars) october 1, 2022 october 2, 2021 october 1, 2022 october 2, 2021 net loss $ (23,095 ) $ (2,388 ) $ (45,759 ) $ (289 ) adjustments: interest expense, net (1) 5,277 2,689 14,973 10,010 income tax benefit (5,134 ) (2,079 ) (11,451 ) (1,191 ) depreciation, amortization, and disposals (2) 4,425 3,524 15,212 13,642 operational transformation initiatives 1,562 (33 ) 7,213 189 loss on debt modification 71 — 632 598 share-based compensation expense 537 4,015 3,690 5,938 product redesign initiatives — 1,575 549 3,483 restructuring charges — 165 246 659 costs directly attributed to the covid-19 pandemic (3) — 111 39 1,024 other — 40 — 40 adjusted ebitda $ (16,357 ) $ 7,619 $ (14,656 ) $ 34,103 adjusted ebitda margin (percentage of net sales) (6.3 )% 4.0 % (1.8 )% 5.0 % (1) includes $0.1 million for both three month fiscal periods, and $0.3 million for both the twelve months ended october 1, 2022 and october 2, 2021, respectively, representing interest expense on lease liabilities, which are a component of lease expense and presented as a single operating expense in selling, general and administrative expenses on our condensed consolidated statements of operations. (2) includes $0.2 million for both three month fiscal periods, and $1.1 million and $0.8 million for the twelve months ended october 1, 2022 and october 2, 2021, respectively, representing amortization charges on right-of-use lease assets, which are a component of lease expense and presented as a single operating expense in selling, general and administrative expenses on our condensed consolidated statements of operations. (3) primarily represents costs incurred for third party cleaning services and personal protective equipment for our employees in response to the covid-19 pandemic. reconciliation of free cash flow to adjusted free cash flow three months ended fiscal year ended (in thousands of dollars) october 1, 2022 october 2, 2021 october 1, 2022 october 2, 2021 net cash used in operating activities $ 30,014 $ (40,003 ) $ (24,437 ) $ (54,241 ) cash paid for fixed assets (1,705 ) (1,908 ) (6,453 ) (12,212 ) free cash flow $ 28,309 $ (41,911 ) $ (30,890 ) $ (66,453 ) cash paid for product redesign initiatives — 1,575 549 3,483 cash paid for operational transformation initiatives / other 1,562 (33 ) 7,213 (712 ) cash paid for restructuring charges — 165 246 659 cash paid for costs directly attributed to covid-19 — 111 39 1,024 adjusted free cash flow 29,871 (40,093 ) (22,843 ) (61,999 ) reconciliation of net loss to adjusted net (loss) income three months ended fiscal year ended (in thousands of dollars) october 1, 2022 october 2, 2021 october 1, 2022 october 2, 2021 net loss $ (23,095 ) $ (2,388 ) $ (45,759 ) $ (289 ) adjustments, net of tax benefit or expense (1) operational transformation initiatives 1,234 (25 ) 5,698 142 product redesign initiatives — 1,181 434 2,612 share-based compensation expense 424 3,011 2,915 4,454 restructuring charges — 124 194 494 costs directly attributed to the covid-19 pandemic (2) — 83 31 768 loss on debt modification 56 — 499 449 other — 30 — 30 adjusted net (loss) income, non-gaap $ (21,381 ) $ 2,017 (35,987 ) 8,659 (1) amounts are net of estimated statutory tax rates of 21% for three months and twelve months ended october 1, 2022, and 25% or three months and twelve months ended october 2, 2021. (2) primarily costs incurred for third party cleaning services and personal protective equipment for our employees in response to the covid-19 pandemic. reconciliation of diluted eps to adjusted diluted eps three months ended fiscal year ended october 1, 2022 october 2, 2021 october 1, 2022 october 2, 2021 diluted loss per share $ (0.72 ) $ (0.09 ) $ (1.48 ) $ (0.01 ) one-time charge adjustments, net of tax benefit or expense 0.06 0.16 0.33 0.32 adjusted diluted (loss) earnings per share, non-gaap $ (0.66 ) $ 0.07 $ (1.15 ) $ 0.31 weighted average dilutive shares outstanding 32,306,574 27,590,649 31,233,401 27,509,396
