Blue Bird (BLBD) Q4 Earnings call transcript Nov 25, 2024
2min read In a recent earnings call, Blue Bird Corporation, a leading manufacturer of school buses and commercial vehicles, reported record financial results for the fiscal year 2024. The company's executives, including President and CEO, Phil Horlock, and CFO, Razvan Radulescu, provided insights into the company's performance, future growth prospects, and strategic initiatives.
Blue Bird Achieves Record Profitability and Revenue Growth
The company reported a significant increase in profitability, with an adjusted EBITDA margin of 13.6%, marking a 6 percentage point improvement over the previous year. This accomplishment is attributed to the company's strategic focus on enhancing operational efficiencies, managing supply chain challenges, and expanding its product offerings, particularly in the alternative powered bus segment.
Revenue for the fiscal year 2024 reached a record $1.35 billion, representing an increase of 19% over the prior year. This growth was driven by the sale of approximately 9,000 buses, including a record number of electric buses, and strong demand for Blue Bird's range of school buses and commercial vehicles.
Blue Bird's Strategic Focus on Alternative Powertrains
The company's commitment to sustainability and innovation was evident in its discussion on alternative powertrains, particularly electric buses. Blue Bird produced and delivered over 700 electric buses in the fiscal year 2024, a 30% increase over the previous year. This growth is largely due to the company's participation in the EPA's Clean School Bus Program, which has provided significant funding for the adoption of electric buses.
Blue Bird's strategic focus on alternative powertrains is not limited to electric buses. The company also emphasized its continued investment in propane and gas buses, highlighting their lower total cost of ownership and environmental benefits. This diversified approach to powertrains is expected to drive growth and differentiate Blue Bird from its competitors.
Investment in Manufacturing Capacity and Efficiency
Blue Bird's strategic investments in its manufacturing capabilities are yielding impressive results. The company has achieved record manufacturing performance, with higher efficiencies and increased throughput. These improvements are attributed to the implementation of lean manufacturing processes, strategic supply chain management, and the expansion of its Fort Valley, Georgia facility, which is set to increase production capacity to 14,000 school buses annually.
Outlook for Fiscal 2025 and Beyond
Looking ahead, Blue Bird is optimistic about its prospects for fiscal 2025, with guidance for net sales, adjusted EBITDA, and adjusted free cash flow exceeding the previous year's record levels. The company's focus on maintaining a firm order backlog, investing in manufacturing capabilities, and expanding its product offerings are expected to drive growth and profitability.
The company's long-term outlook is ambitious, with plans to increase revenue to $1.85 billion to $2 billion by 2028, representing a significant increase from the current level. This growth is predicated on the successful implementation of its strategic initiatives, including the expansion of its manufacturing capabilities, the continued adoption of alternative powertrains, and the diversification of its product offerings.
Conclusion
Blue Bird Corporation's record financial results and outlook for the future underscore its strategic focus on innovation, sustainability, and operational excellence. The company's commitment to alternative powertrains, particularly electric buses, and its investment in manufacturing capabilities position it well for future growth and profitability. With a diversified product portfolio and a strong focus on customer demand, Blue Bird is poised to capitalize on the opportunities in the school bus and commercial vehicle markets.