Blue bird delivers strong fiscal 2015 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 fourth quarter and full-year results. highlights delivered full-year net sales of $919 million and adjusted ebitda of $73 million1, excluding $3 million in ongoing public company costs, in line with fiscal year 2015 guidance generated net sales for the fourth quarter of $308 million, up 12% over the same period last year, and adjusted ebitda for the quarter of $29 million, up 53% over prior year grew bus unit sales in the fourth quarter 13% over prior year to 3,468 buses. overall unit sales for the year were up 8% to 10,378 units, with propane-powered bus sales up 14% to 1,688 units generated strong free cash flow in the fourth quarter of $53 million. full-year adjusted free cash flow was $45 million2 prepaid $25 million of debt in september as a result of strong cash position delivered diluted earnings per share of $0.59 for the year, $0.46 better than prior year. adjusted diluted earnings per share was $1.113 initiated investment in major new powertrains and other product programs that will help further differentiate blue bird and drive sales positioned for continued growth in fiscal year 2016 with net sales guidance of $960-985 million and adjusted ebitda guidance, including ongoing public company expenses, of $72-75 million three months endedoctober 3, 2015 b/(w)2014 twelve months endedoctober 3, 2015 b/(w)2014 29 0.63 0.65 0.37 "it was an exciting year at blue bird," said phil horlock, president and ceo of blue bird. "we became a public company in february and began trading on nasdaq. we invested in a number of innovative new products, including four all-new powertrains. we continued to build capabilities in our dealer network, grew our mix of propane-powered bus sales and delivered solid top and bottom line growth that was consistent with our guidance. i am very pleased with the performance the blue bird team delivered in fiscal 2015 and am looking forward to another good year in 2016." 1 consistent with the information provided in our proxy statement filed on january 20, 2015, guidance for fy2015 adjusted ebitda specifically excludes the ongoing incremental costs required to operate as a publicly-traded company. these costs represented $2.9 million for fy2015 2 see reconciliation of free cash flow to adjusted free cash flow in attachment 3 see reconciliation of gaap diluted eps to non-gaap adjusted diluted eps in attachment fourth quarter & full-year 2015 results sales fourth quarter: total net sales for the quarter were $307.6 million, up 12% from the fourth quarter of fiscal 2014. bus unit sales during the fourth quarter of fiscal 2015 were 3,468, up 13% from the fourth quarter of last year. net bus sales of $292.0 million for the fourth quarter of 2015 were up 13% from the prior year. net parts sales for the quarter were $15.7 million, $0.7 million higher when compared with the fourth quarter of last year. full-year: total net sales were $919.1 million for the fiscal year ending october 3, 2015, an increase of $63.4 million or 7.4% compared with prior year. blue bird sold 10,378 buses in this period, up 8.1% compared with the same period last year. net bus sales revenue for the year of $861.7 million was 7.5% higher than prior year. full-year net parts sales were $57.5 million, up 6.6% compared with 2014, driven by success with many of our go-to-market initiatives. gross profit fourth quarter: fourth quarter gross profit of $41.2 million was an increase of $12.1 million over the fourth quarter of the prior year. bus gross profit of $35.4 million for the fourth quarter improved by $11.8 million compared with the same period last year. gross profits for the quarter were favorably impacted by higher volume, positive changes in customer mix, a richer mix of propane-powered buses and lower material costs. parts gross profit in the fourth quarter of 2015 of $5.8 million was $0.3 million higher when compared with the same period in 2014. this was primarily the result of higher volume. full-year: full-year gross profit was $120.4 million, up $11.0 million from the prior year. bus gross profit of $99.3 million was up $10.0 million or 11% over prior year. the increase was driven by higher unit sales and favorable material costs, partially offset by a less profitable product and customer mix in the first half of the fiscal year as well as higher overtime costs. parts gross profit for the year of $21.1 million was up $1.0 million or 5% compared with the prior year. higher sales of parts drove the profitability growth. adjusted ebitda fourth quarter: adjusted ebitda for the quarter was $29.0 million, $10.0 million or 53% higher than the prior year. this increase is primarily the result of higher gross profit partially offset by an increase in ongoing sg&a expenses, as we invest in growth and product initiatives as well as ongoing public company costs. full-year: full-year adjusted ebitda was $69.8 million, up $3.0 million compared with prior year. the improvement was primarily the result of higher gross profit partially offset by an increase in ongoing sg&a expenses to support growth and product initiatives as well as ongoing public company expenses. excluding ongoing public company expenses of $2.9 million for the year, fiscal year 2015 adjusted ebitda was $72.7 million. our guidance specifically excluded ongoing public company expenses, as outlined in our proxy statement filed on january 20, 2015. net income/loss fourth quarter: net income for the fourth quarter was $16.0 million, compared with a net loss of $(0.9) million in the same period last year. the $16.8 million improvement was driven primarily by an increase in operating profit of $18.9 million, partially offset by an increase in tax expense of $3.0 million and an increase in interest expense of $0.3 million. full-year: net income was $14.9 million for the year, an increase of $12.2 million compared with net income of $2.8 million in the same period last year. this primarily reflects an increase in operating profit of $17.9 million and a $6.0 million reduction in income tax expense, partially offset by a $12.9 million increase in interest expense. fiscal year 2016 guidance blue bird is issuing the following guidance for fiscal year 2016: net sales: $960-985 million, up from $919 in fy2015 adjusted ebitda: $72-75 million, up from $70 million in fy2015 adjusted free cash flow: $30-35 million, compared with $45 million in fy2015. no adjustments are included in the fy2016 free cash flow guidance adjusted ebitda will be impacted by higher spending as we invest in new initiatives and product programs that will establish a foundation for future growth. free cash flow will be impacted by higher cash taxes and higher capital spending as we invest in product programs, information technology and facility actions that will support capacity expansion. the seasonality of our business is expected to be more pronounced in fiscal 2016 with first quarter sales and adjusted ebitda lower than last year and first half sales and adjusted ebitda approximately flat with prior year. our second shift will help us meet higher production requirements in the seasonally-strong second half to support our growth plans. we have a solid plan in place that will continue to deliver results and move blue bird forward. conference call details blue bird will discuss its fourth quarter and full-year 2015 results and other related matters in a conference call at 8:00 am est 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 includes 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 net income prior to interest income, interest expense and other expense, net 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 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. 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. attached to this press release are schedules that reconcile adjusted ebitda, adjusted net income and adjusted diluted earnings per share to gaap measures. 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 hennessy capital acquisition corp. or blue bird corporation (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 series a preferred stock, $.0001 par value, 10,000,000 shares authorized, 500,000 issued at october 3, 2015 and liquidation preference of $50,000 blue bird corporation and subsidiaries condensed consolidated statements of operations and comprehensive income/(loss) blue bird corporation and subsidiaries consolidated statements of cash flows blue bird corporation and subsidiaries condensed consolidated statement of stockholders' deficit blue bird corporation and subsidiaries condensed consolidated statements of operations and comprehensive income/(loss) three months endedoctober 3, 2015 three months endedseptember 27, 2014 the following tables reconciles free cash flow to adjusted free cash flow for the three months ended october 3, 2015 and the twelve months ended october 3, 2015: three months endedoctober 3, 2015 twelve months endedoctober 3, 2015 1 primarily funded by a $13.6 million capital contribution from our majority stockholder at the business combination the following table sets forth a reconciliation of net income to adjusted ebitda for the three-month and years ended october 3, 2015 and september 27, 2014: three months endedoctober 3, 2015 three months endedseptember 27, 2014 twelve months endedoctober 3, 2015 twelve months endedseptember 27, 2014 *fiscal year 2015 amount reflects a loss on disposal of fixed assets. fiscal year 2014 amount reflects an immaterial out-of-period adjustment increasing cost of goods sold. the following table sets forth a reconciliation of gaap net income to non-gaap adjusted net income from continuing operations available to common stockholders for the three-month and years-ended october 3, 2015 and september 27, 2014: three months endedoctober 3, 2015 three months endedseptember 27, 2014 twelve months endedoctober 3, 2015 twelve months endedseptember 27, 2014 (125 (180 301 7,030 15,265 6,155 16,273 6,155 note: marginal tax rate of 35% the following table sets forth a reconciliation of gaap diluted eps to non-gaap adjusted diluted eps for the three-month and years ended october 3, 2015 and september 27, 2014: three months endedoctober 3, 2015 three months endedseptember 27, 2014 twelve months endedoctober 3, 2015 twelve months endedseptember 27, 2014 — — (0.01 ) 0.65 0.28 *already included in the diluted earnings per share numerator in this period (a) represents incentive compensation paid to officers in excess of a related accrual (typically recorded at 100% target level) due to over-performance relative to budget. this adjustment excludes the amount of the accrual above 200% of the target level.
