Blue bird fiscal 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 second quarter 2015 results. second quarter highlights second quarter unit sales of 2,093 buses, 6% lower than the second quarter of fiscal 2014 total net sales of $183.0 million, 6% lower than the same period last year parts sales of $13.8 million, 9% higher than the same period last year net loss from continuing operations of $11.1 million, compared with net income from continuing operations of $7.6 million for the second quarter last year adjusted net income1 from continuing operations of $0.7 million, compared with $8.1 million last year adjusted ebitda of $10.1 million, $4.6 million lower than the same prior year period continued strong momentum in propane-powered bus sales with significant demand from new customers; on track to deliver planned double-digit growth for the full year first school bus manufacturer to offer shorter wheelbase propane-powered type c bus for compact urban environments and electronic stability control feature to help mitigate or possibly prevent loss-of-control delivering strong sales growth through micro bird (non-consolidated joint venture); first-to-market with the new, fuel-efficient ford transit chassis deployed in micro bird’s all-new t-series reaffirming full-year guidance of net sales of $918-940 million and adjusted ebitda2 of $72-75 million; forecasting full year adjusted free cash flow of $35-40 million (excludes cash paid for business combination transaction expenses and special compensation payments) “i am pleased with our second quarter results. we continue to have strong business momentum and are delivering exciting new products to help fuel future growth,” said phil horlock, president and chief executive officer of blue bird corporation. “demand in the first half of the fiscal year is always seasonally low following school start and customers often elect to delay their purchases until later in the fiscal year. despite these challenges, we sold over 3,900 buses in the first half of the fiscal year, 4% above last year and the fourth consecutive year of volume growth in the first half. looking forward, our order backlog continues to grow at a robust pace, providing visibility to both product mix and gross profits into the seasonally-strong second half of the year. we are on plan and are reaffirming full-year guidance.” second quarter & first half 2015 results seasonality it is important to note when reviewing the second quarter results that industry sales of new school buses are highly seasonal. the first and second quarters are historically the lowest volume quarters of the year. based on r.l. polk registration data, approximately one-third of annual new school bus registrations occur during the first half of the fiscal year (october-march). the majority of blue bird’s annual sales and profits occur in the fiscal third and fourth quarters (april-september). further, customers often elect to defer or to advance planned purchases from quarter to quarter based on their own prudent business analyses. such decisions can create significant change when comparing present-year quarterly results with prior year and are particularly noticeable in the first half of the fiscal year. over the course of the year, these apparent anomalies are typically resolved as customer orders are fulfilled. our guidance for the full year considers these unique aspects of our business and our industry. sales second quarter: total net sales for the second quarter of fiscal 2015 were $183.0 million, up 10% from the first quarter of fiscal 2015 and down 6% from the second quarter of fiscal 2014. bus unit sales during the second quarter of fiscal 2015 were 2,093, up 15% from the first quarter of fiscal 2015 and down 6% from the second quarter of last year. net bus sales revenue of $169.2 million for the fiscal second quarter of 2015 was up 11% from the first quarter and down 8% from the prior year. net parts sales for the second quarter of fiscal 2015 were $13.8 million, equal to the first quarter, and an increase of 9% compared with the second quarter of last year. first half: total net sales were $348.9 million for the first half of the fiscal year, an increase of $7.2 million or 2% compared with prior year. blue bird sold 3,917 buses in this period, up 4% compared with prior year and consistent with our plan. net bus sales revenue of $321.2 million for the half was up 1% compared with the same period in fiscal 2014. the favorable impact of higher volume was partially offset by unfavorable product and customer mix, as dealers and end-customers often shift the timing of their bus purchases between quarters from year-to-year. first half net parts sales were $27.6 million, up 12% compared with fiscal 2014. we benefited from a number of successful promotions, added product lines and focused efforts on marketing to end-customers. gross profit second quarter: second quarter gross profit of $23.0 million was an increase of $3.6 million over the first quarter and a reduction of $3.0 million compared with the second quarter of the prior year. bus gross profit of $17.9 million for the second quarter improved by $3.6 million compared with the first quarter and was down $3.2 million compared with the second quarter last year. gross profits for the quarter were impacted by lower volumes and a less profitable product and customer mix. favorable material costs partially offset the impact of volume and mix. parts gross profit in the second quarter of 2015 of $5.1 million was about equal to the first quarter and up $0.2 million over the same period in 2014. first half: first half gross profit was $42.5 million, down $4.0 million from the prior year. bus gross profit of $32.2 million was down by $4.9 million. the reduction in gross profit primarily reflects less profitable product and customer mix versus last year, partially offset by higher unit sales and lower material costs. parts gross profit for the first half of $10.3 million was up $0.9 million compared to the prior year. higher sales of parts drove the profitability growth. adjusted ebitda second quarter: adjusted ebitda for the quarter was $10.1 million, $4.6 million lower than the prior year. the reduction reflected lower unit volume and less profitable product and customer mix, accounting for $3.7 million, and higher operating costs of $1.6 million, including $1.0 million in additional expenses to support growth plans and $0.6 million to support the ongoing incremental requirements of being a public company. material cost reductions of $0.6 million in the quarter were a partial offset. first half: adjusted ebitda for the first half was $17.5 million, down $6.8 million compared with the prior year. similar to the second quarter change, unfavorable product and customer mix of $3.4 million and higher operating costs of $4.6 million were partially offset by material cost reductions of $1.1 million. net income/loss second quarter: net loss from continuing operations during the second quarter was $11.1 million, compared with net income from continuing operations of $7.6 million in the same period last year. the reduction of $18.7 million is explained principally by special compensation payments totaling $13.8 million related to becoming a publicly traded company, net interest expense of $4.5 million associated with the term loan facility implemented in june 2014, and business combination expenses of $4.3 million. reduced income tax of $7.9 million was a partial offset. interest expense will also be substantially higher than prior year in the third quarter of 2015. first half: net loss from continuing operations in the first half was $11.7 million, a decrease of $23.4 million compared with the same period last year. the decrease was driven by lower operating profits of $24.8 million (including special compensation payments of $13.8 million and business combination expenses of $4.9 million) and higher interest expense of $9.4 million. income tax savings of $10.5 million were a partial offset. full year guidance with a strong backlog of orders through the third quarter and beyond, where we have visibility on price and margins, coupled with a solid pipeline of potential new orders, we are tracking to our plan and reaffirming our full-year guidance for total net sales of $918-940 million and adjusted ebitda of $72-75 million. consistent with the information provided in our proxy statement, guidance for adjusted ebitda specifically excludes the ongoing incremental costs required to operate as a publicly-traded company. forecast adjusted free cash flow we are also providing a forecast of adjusted free cash flow for the full year as several expenses associated with the business combination transaction in the first half consumed significant cash. going forward, we expect strong cash generation and are projecting adjusted free cash flow of between $35-40 million for the full year. nasdaq round lot shareholder count update we had previously been advised by nasdaq that blue bird satisfied all requirements for initial listing of our common stock on the nasdaq global market (the “global market”) other than the 400 round lot shareholder requirement as set forth in nasdaq listing rule 5450(a)(2). based on independent third party reports on the number of round lot shareholders, we believe that as of may 5, 2015, we have met the 400 holder rule with respect to our common stock. we are in the process of confirming this information with nasdaq. on may 15, 2015, nasdaq’s staff informed us that we must also have 400 round lot holders of our warrants, pursuant to listing rule 5410(d), in order for our warrants to continue to be listed on either the nasdaq capital market or the nasdaq global market. we are currently reviewing our alternatives with respect to our warrants. conference call details blue bird will discuss its second quarter and first half fiscal 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 at on the blue bird corporate website on the investor relations homepage at: http://investors.blue-bird.com/corporateprofile.aspx?iid=4042668.click the link in the events box. the event number is 114405. http://investors.blue-bird.com/corporateprofile.aspx?iid=4042668.click the link in the events box. the event number is 114405. 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 from continuing operations,” “adjusted 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 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 earnings per share represents adjusted income (loss) from continuing operations divided by weighted average common shares outstanding. adjusted net income from continuing operations and adjusted 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 is a schedule that reconciles adjusted ebitda, adjusted net income from continuing operations and adjusted 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. 1 adjusted net income and adjusted earnings per share include adjustments to add back certain costs not considered an indicator of ongoing company performance. see income (loss) from continuing operations to adjusted income from continuing operations reconciliation in attachment 2 consistent with the information provided in our proxy statement, guidance for adjusted ebitda specifically excludes the ongoing incremental costs required to operate as a publicly-traded company. these ongoing public company costs represented $0.6 million for the second quarter and $0.8 million for the first half of the fiscal year. 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 april 04, 2015 and liquidation preference of $50,000 blue bird corporation and subsidiaries condensed consolidated statements of operations and comprehensive income/(loss) three months endedapril 04, 2015 three months endedmarch 29, 2014 six months endedapril 04, 2015 six months endedmarch 29, 2014 blue bird corporation and subsidiaries condensed consolidated statements of cash flows six months ended april 04, 2015 blue bird corporation and subsidiaries condensed consolidated statements of stockholders' deficit (unaudited) commonshares preferredshares commonpar value additionalpaid-in-capital liquidationpreference accumulatedothercomprehensiveincome/(loss) accumulateddeficit totalstockholder'sdeficit $(46,568) the following table sets forth a reconciliation of adjusted ebitda to net income for the second quarter of fiscal 2015 and the second quarter of fiscal 2014: * primarily funded by contribution from majority shareholder in the business combination the following table sets forth a reconciliation of adjusted ebitda to net income for the six months ended april 4, 2015 and the six months ended march 29, 2014: * primarily funded by contribution from majority shareholder in the business combination three months endedapril 4, 2015 three months endedmarch, 2014 six months endedapril 4, 2015 six months endedmarch, 2014
