Blue bird reports fiscal 2016 third quarter results
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 2016 third quarter results. third quarter highlights total net sales of $323.1 million, 23.0% higher than the same period last year unit sales of 3,768 buses, compared with 2,993 in the third quarter of prior year propane-powered bus unit sales 92% higher than the same period last year parts sales of $13.6 million, compared with $14.2 million for the same period last year gross margins of 14.5%, compared with 14.0% for the same period last year net loss from continuing operations of $1.8 million, compared with net income from continuing operations of $10.7 million for the third quarter last year. the fy2016 third quarter loss includes $26.2 million in stock-based compensation, special compensation and business combination expenses, of which, $15.6 million was funded by our former majority stockholder adjusted net income from continuing operations1 of $16.2 million, 40% higher than the same period last year adjusted ebitda1 of $32.5 million, compared with $23.4 million for the same prior year period reducing net sales guidance by 3.5%, to $930-950 million, due primarily to the delayed release for sale of gasoline-powered buses. revising adjusted ebitda guidance to $70-72 million based on lower volume outlook. maintaining adjusted free cash flow1 guidance of $30-35 million three months ended july 2, 2016 b/(w) 2015 nine months ended july 2, 2016 b/(w) 2015 “overall, we had a great third quarter. we delivered strong top-line growth of 23% in the third quarter which helped drive adjusted ebitda of $32.5 million for the period.” said phil horlock, president and chief executive officer of blue bird corporation. “momentum behind our propane-powered bus offering continues with sales up 92% over prior year in the quarter. we began production of our new gasoline-powered vision school bus and plan to start shipping buses with this powertrain in our fiscal fourth quarter, pending final certification from the epa. due to later-than-expected epa approval of our exclusive gasoline bus, we see potential for slightly lower volume in the fourth quarter. as such, we are adjusting our full year net revenue guidance downward to $930-950 million and revising adjusted ebitda to $70-72 million. due to our ongoing focus on cash management, we are able to maintain adjusted free cash flow at $30-35 million.” 1 see attachments for adjusted ebitda, adjusted net income, adjusted diluted eps and adjusted free cash flow reconciliations third quarter & year-to-date 2016 results sales third quarter: total net sales were $323.1 million for the third quarter of fiscal 2016, an increase of $60.4 million or 23.0% over prior year. bus unit sales were 3,768 units for the quarter this year compared with 2,993 units for the same period last year. for the bus segment, the average net sales price per unit for the third quarter of fiscal 2016 was 1.1% lower than the price per unit for the same period in fiscal 2015. this decrease in unit price reflects mainly product and customer mix changes. parts sales of $13.6 million reflect a year-over-year decrease of $0.5 million. year-to-date: total net sales were $645.6 million for the nine months ended july 2, 2016, an increase of $34.1 million or 5.6% compared with prior year. this was primarily driven by an increase in bus unit sales, which were 398 units above last year for the same period. for the bus segment, the average net sales price per unit for the nine months ended july 2, 2016 was 0.4% higher than the price per unit for the nine months ended during the comparable quarter last year. this increase in unit price reflects a higher mix of propane-powered buses as well as customer mix changes. parts sales for the nine months ended july 2, 2016 were $40.8 million, a decrease of $1.0 million or 2.5% compared with prior year. gross profit third quarter: third quarter gross profit of $46.8 million represents an increase of $10.1 million over the third quarter of last year. bus gross profit of $41.6 million for the third quarter improved by $9.9 million compared with the third quarter of last year. gross profits for the quarter were mainly impacted by increased volume and a higher mix of propane-powered buses. parts gross profit in the third quarter of 2016 of $5.2 million was $0.2 million higher than the same period in 2015. year-to-date: year-to-date gross profit was $90.7 million, up $11.5 million from the prior year. bus gross profit of $75.1 million was up by $11.2 million. the increase in bus gross profit was primarily driven by increased volume and a greater mix of propane-powered buses. parts gross profit year-to-date of $15.6 million was up $0.3 million compared with the prior year. adjusted ebitda third quarter: adjusted ebitda was $32.5 million or 10.1% of net sales for the third quarter of fiscal 2016, an increase of $9.1 million, or 39.1%, compared with $23.4 million or 8.9% of net sales for the third quarter of fiscal 2015. the increase in adjusted ebitda is primarily the result of increased gross profit. year-to-date: adjusted ebitda was $47.8 million or 7.4% of net sales for the nine months ended july 2, 2016, an increase of $7.0 million, or 17.1%, compared to $40.9 million or 6.7% of net sales for the nine months ended july 4, 2015. the increase in adjusted ebitda is primarily the result of higher gross profit, partially offset by increased adjusted selling, general and administrative expenses. net income from continuing operations third quarter: net loss from continuing operations was $1.8 million for the third quarter of fiscal 2016, a decrease of $12.4 million compared with the third quarter of fiscal 2015. the decrease primarily reflects lower operating profit of $16.6 million, driven primarily by $26.2 million of stock-based compensation, special compensation and business combination expenses. the decrease was partially offset by lower tax expense of $3.4 million and a decrease of $0.5 million in interest income and expense. adjusted net income from continuing operations was $16.2 million, representing an increase of $4.6 million compared with the same period last year. year-to-date: net loss from continuing operations was $2.7 million for the nine months ended july 2, 2016, a decrease of $1.6 million compared with the nine months ended july 4, 2015. this reflects primarily a decrease in operating profit of $1.7 million. adjusted net income from continuing operations was $16.9 million, representing an increase of $4.4 million compared with the same period last year. conference call details blue bird will discuss its third quarter and year-to-date 2016 results and other related matters in a conference call at 8:00 am 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 ten 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 877-407-4018 or 201-689-8471. 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. non-gaap financial measures this press release may include the following non-gaap financial measures: “adjusted ebitda,” "adjusted net income," "adjusted diluted earnings per share," “free cash flow” and “adjusted free cash flow.” adjusted ebitda is defined as income from continuing operations prior to interest income, interest expense, income taxes, and depreciation and amortization, 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. adjusted net income is defined as net income, 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 divided by diluted weighted average common shares outstanding (as if we had gaap net income during the respective period). adjusted net income from continuing operations and adjusted diluted earnings per share are calculated net of taxes. free cash flow represents net cash provided by continuing operations minus cash paid for fixed assets. adjusted free cash flow represents free cash flow excluding cash paid for special compensation and other business combination expenses. there are limitations to using non-gaap measures. although blue bird believes that such measures may enhance an evaluation of blue bird’s operating performance and cash flows, (i) other companies in blue bird’s industry may define such measures differently than blue bird does and, as a result, they may not be comparable to similarly titled measures used by other companies in blue bird’s industry and (ii) such measures may exclude certain financial information that some may consider important in evaluating blue bird’s performance and 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 condensed consolidated balance sheets preferred stock, $0.0001 par value, 10,000,000 shares authorized 500,000 issued and liquidation preference of $50,000 common stock, $0.0001 par value, 100,000,000 shares authorized, 21,449,954 and 20,874,882 issued and outstanding at july 2, 2016 and october 3, 2015, respectively blue bird corporation and subsidiaries condensed consolidated statements of operations and comprehensive income (loss) blue bird corporation and subsidiaries condensed consolidated statements of cash flows reconciliation of gaap net income (loss) to adjusted ebitda (unaudited) (1) the special compensation payments for fiscal 2016 and 2015 were primarily funded by a contribution from our former majority stockholder concurrent with the june 2016 change in control and 2015 business combination, respectively. reconciliation of adjusted ebitda to free cash flow (unaudited) reconciliation of net income (loss) to adjusted net income (unaudited) reconciliation of gaap diluted eps to non-gaap diluted eps (unaudited)
