Blue bird reports fiscal 2016 second 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 second quarter results. second quarter highlights total net sales of $191.2 million, 4.5% higher than the same period last year bus unit sales of 2,132 buses, compared with 2,093 in the second quarter of prior year propane-powered bus unit sales 20% higher than the same period last year parts sales of $14.3 million, compared with $13.8 million for the same period last year gross margins of 13.1%, compared with 12.6% for the same period last year net income from continuing operations of $1.4 million, compared with a net loss from continuing operations of $11.1 million for the second quarter last year adjusted ebitda1 of $10.1 million, compared with $9.9 million for the same prior year period reaffirming full-year guidance of net sales of $960-985 million, adjusted ebitda of $72-75 million, and free cash flow of $30-35 million three months endedapril 2, 2016 b/(w)2015 six months endedapril 2, 2016 b/(w)2015 ) “we delivered top-line growth of 4% in the second quarter which helped drive adjusted ebitda of $10.1 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 20% over prior year in the quarter. we are continuing to innovate with exciting new products that customers want and value. orders for our new gasoline-powered vision school bus have been coming in at a strong pace, and we will start shipping buses with this powertrain in our fiscal fourth quarter. this new product, and others like it, will continue to differentiate blue bird and drive future growth. our second shift in manufacturing is ramping up on schedule to support a stronger second half of the year. based on our financial results to date, the backlog of bus orders currently in-hand, and our outlook for the balance of the year, we are reaffirming our previous full-year guidance for net sales, adjusted ebitda and free cash flow.” 1 see reconciliation of net income to adjusted ebitda in attachment second quarter & year-to-date 2016 results sales second quarter: total net sales were $191.2 million for the second quarter of fiscal 2016, an increase of $8.2 million or 4.5% over prior year. bus unit sales were 2,132 units for the quarter this year compared with 2,093 units for the same period last year. for the bus segment, the average net sales price per unit for the second quarter of fiscal 2016 was 2.6% higher than the price per unit for the same period in fiscal 2015. this increase in unit price reflects mainly product and customer mix changes. parts sales of $14.3 million reflect a year-over-year increase of $0.5 million. year-to-date: total net sales were $322.5 million for the six months ended april 2, 2016, a decrease of $26.3 million or 7.5% compared with prior year. this was primarily driven by a decrease in bus unit sales, which were 377 units below last year for the same period. we are moving more of our volume into the second half of our fiscal year when many customers would prefer to take delivery of their buses closer to the start of the new school year. this plan is supported by the second shift that we recently launched in our manufacturing operation that will increase our daily-rate capacity by over 50% during the peak selling season. this is viewed as a positive by our customers. for the bus segment, the average net sales price per unit for the six months ended april 2, 2016 was 1.8% higher than the price per unit for the six 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 six months ended april 2, 2016 were $27.1 million, a decrease of $0.5 million or 1.8% compared with prior year. gross profit second quarter: second quarter gross profit of $25.1 million represents an increase of $2.1 million over the second quarter of last year. bus gross profit of $19.8 million for the second quarter improved by $1.8 million compared with the second quarter of last year. gross profits for the quarter were mainly impacted by positive changes in customer mix and a higher mix of propane-powered buses. parts gross profit in the second quarter of 2016 of $5.3 million was $0.3 million higher when compared with the same period in 2015. year-to-date: year-to-date gross profit was $43.9 million, up $1.4 million from the prior year. bus gross profit of $33.5 million was up by $1.3 million. the increase in bus gross profit was primarily driven by a more profitable product and customer mix in the first half of the fiscal year, partially offset by lower volume. parts gross profit year-to-date of $10.4 million was up $0.1 million compared with the prior year. adjusted ebitda second quarter: adjusted ebitda was $10.1 million for the second quarter of fiscal 2016, an increase of $0.2 million compared with prior year. the $0.2 million increase is primarily the result of increased gross profit offset by higher selling, general and administrative expenses as we invest in growth and product initiatives. year-to-date: year-to-date adjusted ebitda was $15.4 million for the six months ended april 2, 2016, a decrease of $2.1 million compared with prior year. the decrease in adjusted ebitda is primarily the result of increased selling, general and administrative expenses, partially offset by higher gross profit. net income second quarter: net income from continuing operations was $1.4 million for the second quarter of fiscal 2016, an increase of $12.5 million compared with net loss from continuing operations of $11.1 million for the second quarter of fiscal 2015. the improvement reflects primarily an increase in operating profit of $17.3 million, offset principally by an increase in tax expense of $5.1 million. year-to-date: net loss from continuing operations was $0.9 million for the six months ended april 2, 2016, an improvement of $10.8 million compared with a net loss from continuing operations of $11.7 million for the same period last year. the improvement reflects an increase in operating profit of $14.9 million, an increase in equity in net income of non-consolidated affiliate of $0.3 million and a decrease in net interest expense of $1.3 million, offset by an increase in tax expense of $5.7 million. conference call details blue bird will discuss its second quarter and year-to-date 2016 results and other related matters in a conference call at 5:00 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 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,” “free cash flow” and “adjusted free cash flow.” adjusted ebitda is defined as net income prior to interest income, interest expense and income taxes, and depreciation and amortization, as adjusted to add back certain charges recorded 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 from continuing operations is defined as income from continuing operations, 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. 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 blue bird corporation and subsidiaries condensed consolidated statements of operations and comprehensive income/(loss) three months endedapril 2, 2016 three months endedapril 4, 2015 six months endedapril 2, 2016 six months endedapril 4, 2015 blue bird corporation and subsidiaries condensed consolidated statements of cash flows the following table sets forth a reconciliation of net income to adjusted ebitda for the second quarter of fiscal 2016 and the second quarter of fiscal 2015: the following table sets forth a reconciliation of net income to adjusted ebitda for the six months ended april 2, 2016 and the six months ended april 4, 2015: * the fiscal 2015 payment was primarily funded by a contribution from our majority shareholder in the business combination.
