Blue bird delivers strong fiscal 2017 financial performance
Fort valley, ga.--(business wire)--blue bird corporation (“blue bird”) (nasdaq: blbd), the leading independent designer and manufacturer of school buses, announced today its fiscal 2017 full year and fourth quarter results full year and fourth quarter highlights bus sales for the year were 11,317, representing an increase of 701 buses (or 7%) over the last year. bus sales for the quarter totaled 3,608 buses, 300 units (or 9%) higher than the same period last year. net sales revenue for the full-year of $990.6 million, representing an increase of $58.6 million (or 6%). net sales for the fourth quarter of $312.7 million, $26.3 million (or 9%) higher than the same period last year. full year income from continuing operations of $28.8 million, up $21.5 million compared with last year. fourth quarter income from continuing operations of $14.4 million, up $3.3 million compared with the same period last year. diluted earnings per share was $0.74, an increase of $0.60 compared with last year. fourth quarter diluted earnings per share of $0.28, a decrease of $0.11 compared with the same period last year. adjusted diluted earnings per share was $1.27 and $0.51 for the full year and fourth quarter, an increase of $0.13 and $0.09, respectively. full year adjusted ebitda1 of $68.9 million, down $3.3 million compared with last year. fourth quarter adjusted ebitda1 of $25.1 million was down $0.8 million compared with the same period last year. full year net cash provided by continuing operations was $47.9 million, an increase of $22.6 million compared with last year. fourth quarter net cash provided by continuing operations was $41.9 million, up $37.9 million compared with the same period last year. adjusted free cash flow1 for the full-year and fourth quarter was $43.7 million and $40.7 million, respectively. net debt as of september 30, 2017 was $88.6 million, $11.2 million (or 11%) lower than the same time last year. gross margin for the full year was 12.9%, down 100 bps. compared with last year. gross margin in the quarter was 12.6%, down 90 bps. from last year. announcing full-year fiscal 2018 net sales guidance of $1,000 million - $1,030 million, adjusted ebitda guidance of $78 - $82 million and adjusted free cash flow guidance of $36 - $40 million. three months endedseptember 30, 2017 b/(w)2016 fiscal year endedseptember 30, 2017 b/(w)2016 “we are pleased with our achievements in fiscal 2017 and are well positioned for profit growth in fiscal 2018," said phil horlock, president and chief executive officer of blue bird corporation. “we maintained our strong leadership position in alternative-fuel-powered buses, built a record number of buses in our plant, achieved our highest bus sales in 15 years and put in place key initiatives to drive profit growth. we are pleased to announce our full-year fiscal 2018 net revenue guidance of $1,000 million - $1,030 million, adjusted ebitda guidance of $78 - $82 million and adjusted free cash flow guidance of $36 - $40 million.” fourth quarter 2017 results net salestotal net sales were $312.7 million for the fourth quarter of fiscal 2017, an increase of $26.3 million, or 9.2%, from prior year period. bus unit sales were 3,608 units for the quarter compared with 3,308 units for the same period last year. gross profitfourth quarter gross profit of $39.5 million represents an increase of $0.8 million from the fourth quarter of last year. income/loss from continuing operationsincome from continuing operations was $14.4 million for the fourth quarter of fiscal 2017, an increase of $3.3 million compared with the same period last year. the increase was primarily driven by lower operating and interest expenses, partially offset by higher tax expense. adjusted income from continuing operationsadjusted income from continuing operations was $15.1 million, representing an increase of $1.8 million compared with the same period last year. adjusted ebitdaadjusted ebitda was $25.1 million, or 8.0% of net sales, for the fourth quarter of fiscal 2017, representing an increase of $0.8 million compared with the fourth quarter of the prior year. full year 2017 results net salestotal net sales were $990.6 million for the fiscal year ended september 30, 2017, an increase of $58.6 million, or 6.3%, compared with the prior year. this was primarily driven by higher bus unit sales, which were 701 units above the same period last year. gross profitfull year gross profit was $127.4 million, a decrease of $2.0 million from the prior year. income/loss from continuing operationsincome from continuing operations was $28.8 million for the fiscal year ended september 30, 2017, which was $21.5 million above the same period in the prior year. the increase was primarily driven by a decrease of $29.9 million in selling, general and administrative expenses, which was partially offset by a decrease of $2.0 million in gross profit. adjusted income from continuing operationsadjusted income from continuing operations was $37.1 million, representing an increase of $10.4 million compared with the prior year. adjusted ebitdaadjusted ebitda was $68.9 million, or 7.0% of net sales, for the fiscal year ended september 30, 2017, a decrease of $3.3 million from the prior year. the decrease in adjusted ebitda was primarily the result of lower gross profit. conference call details blue bird will discuss its fourth quarter 2017 results and other related matters 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 800-281-7829 or 323-794-2140. 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 is the leading independent designer and manufacturer of school buses, with more than 550,000 buses sold since its formation in 1927 and approximately 180,000 buses in operation today. blue bird’s longevity and reputation in the school bus industry have made it an iconic american brand. blue bird distinguishes itself from its principal competitors by its singular focus on the design, engineering, manufacture and sale of school buses and related parts. as the only manufacturer of chassis and body production specifically designed for school bus applications, blue bird is recognized as an industry leader for school bus innovation, safety, product quality/reliability/durability, operating costs and drivability. in addition, blue bird is the market leader in alternative fuel applications with its propane-powered and compressed natural gas-powered school buses. blue bird manufactures school buses at two facilities in fort valley, georgia. its micro bird joint venture operates a manufacturing facility in drummondville, quebec, canada. service and after-market parts are distributed from blue bird’s parts distribution center located in delaware, ohio. 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 income/loss from continuing operations," "adjusted diluted earnings per share," “free cash flow” and “adjusted free cash flow” because management views these metrics as a useful way to look at the performance of our operations between periods and to exclude decisions on capital investment and financing that might otherwise impact the review of profitability of the business based on present market conditions. adjusted ebitda is defined as income from continuing operations prior to interest income, interest expense, income taxes, and depreciation, amortization, and disposals, as adjusted to add back certain charges that we may record each year, such as stock-compensation expense and transaction costs, as these expenses are not considered an indicator of ongoing company performance. we define adjusted ebitda margin as adjusted ebitda as a percentage of net sales. adjusted income (loss) from continuing operations is net income from continuing operations net of taxes, as adjusted to add back certain transaction costs not considered an indicator of ongoing company performance. adjusted diluted earnings per share represents adjusted income (loss) from continuing operations by diluted weighted average common shares outstanding (as if we had gaap net income during the respective period). adjusted ebitda, adjusted ebitda margin, adjusted income from continuing operations, and adjusted diluted earnings per share are not measures of performance defined in accordance with gaap. the measures are used as a supplement to gaap results in evaluating certain aspects of our business, as described below. we believe that adjusted ebitda, adjusted ebitda margin, adjusted income from continuing operations, and adjusted diluted earnings per share are useful to investors in evaluating our performance because the measures consider the performance of our operations, excluding decisions made with respect to capital investment, financing, and other expenses. we believe that the non-gaap metrics 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 income from continuing operations 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 the 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 income from continuing operations, 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 income from continuing operations, 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 income from continuing operations, 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 net cash provided by/used in continuing operations minus cash paid for fixed assets. we define adjusted free cash flow as free cash flow minus cash paid for special compensation and other business combination expenses. we use free cash flow and adjusted free cash flow, and ratios based on both, 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. in limited circumstances in which proceeds from sales of fixed or intangible assets exceed purchases, free cash flow would exceed cash flow from operations. however, since we do not anticipate being a net seller of fixed or intangible assets, we expect free cash flow to be less than operating cash flows. 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 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 (unaudited) blue bird corporation and subsidiaries consolidated statements of operations (unaudited) blue bird corporation and subsidiaries consolidated statements of cash flows (unaudited) reconciliation of net income to adjusted ebitda (unaudited) reconciliation of free cash flow to adjusted free cash flow (unaudited) reconciliation of net income to adjusted income from continuing operations (unaudited) _______________ reconciliation of diluted eps to adjusted diluted eps (unaudited) ______________
