What changed in this filing

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Item 1. Financial Statements

2021-08-12 compared with 2021-05-12 · 109 added, 100 removed, 324 unchanged (39% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of dollars, except for share data) April 3, 2021 October 3, 2020

(in thousands of dollars, except for share data) July 3, 2021 October 3, 2020

Current assets

33 unchanged sentences

Stockholders' deficit

Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at April 3, 2021 and October 3, 2020 $ — $ —

Common stock, $0.0001 par value, 100,000,000 shares authorized, 27,153,872 and 27,048,404 shares outstanding at April 3, 2021 and October 3, 2020, respectively 3 3

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at July 3, 2021 and October 3, 2020

Common stock, $ 0.0001 par value, 100,000,000 shares authorized, 27,204,435 and 27,048,404 shares outstanding at July 3, 2021 and October 3, 2020, respectively

Additional paid-in capital 92,169 88,910

1 unchanged sentence

Accumulated other comprehensive loss ( 57,336 ) ( 58,397 )

Treasury stock, at cost, 1,782,568 shares at April 3, 2021 and October 3, 2020 ( 50,282 ) ( 50,282 )

Treasury stock, at cost, 1,782,568 shares at July 3, 2021 and October 3, 2020

( 50,282 ) ( 50,282 )

Total stockholders' deficit $ ( 46,811 ) $ ( 53,230 )

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Six Months Ended

(in thousands of dollars except for share data) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

Three Months Ended Nine Months Ended

(in thousands of dollars except for share data) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

Net sales $ 196,659 $ 189,181 $ 491,791 $ 597,810

8 unchanged sentences

Loss on debt modification — — ( 598 ) —

Loss before income taxes $ ( 780 ) $ ( 1,167 ) $ ( 2,886 ) $ ( 2,065 )

Income tax benefit 483 817 1,004 1,143

Equity in net loss of non-consolidated affiliate ( 322 ) ( 289 ) ( 351 ) ( 120 )

Net loss $ ( 619 ) $ ( 639 ) $ ( 2,233 ) $ ( 1,042 )

Income (loss) before income taxes $ 5,707 $ 1,091 $ 2,821 $ ( 974 )

Income tax (expense) benefit ( 1,892 ) ( 765 ) ( 888 ) 378

Equity in net income of non-consolidated affiliate 517 960 166 840

Net income $ 4,332 $ 1,286 $ 2,099 $ 244

Earnings per share:

1 unchanged sentence

Diluted weighted average shares outstanding 27,428,877 27,080,015 27,337,360 26,980,480

Basic loss per share $ ( 0.02 ) $ ( 0.02 ) $ ( 0.08 ) $ ( 0.04 )

Diluted loss per share $ ( 0.02 ) $ ( 0.02 ) $ ( 0.08 ) $ ( 0.04 )

Basic earnings per share $ 0.16 $ 0.05 $ 0.08 $ 0.01

Diluted earnings per share $ 0.16 $ 0.05 $ 0.08 $ 0.01

The accompanying notes are an integral part of these condensed consolidated financial statements.

BLUE BIRD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Three Months Ended Six Months Ended

(in thousands of dollars) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

Net loss $ ( 619 ) $ ( 639 ) $ ( 2,233 ) $ ( 1,042 )

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Nine Months Ended

(in thousands of dollars) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

Net income $ 4,332 $ 1,286 $ 2,099 $ 244

Other comprehensive income, net of tax:

1 unchanged sentence

Total other comprehensive income $ 354 $ 327 $ 1,061 $ 980

Comprehensive loss $ ( 265 ) $ ( 313 ) $ ( 1,526 ) $ ( 389 )

Comprehensive income $ 4,686 $ 1,613 $ 3,160 $ 1,224

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

(in thousands of dollars) April 3, 2021 April 4, 2020

Nine Months Ended

(in thousands of dollars) July 3, 2021 July 4, 2020

Cash flows from operating activities

Net loss $ ( 2,233 ) $ ( 1,042 )

Adjustments to reconcile net loss to net cash used in operating activities:

Net income $ 2,099 $ 244

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization 10,145 10,728

1 unchanged sentence

Share-based compensation 1,923 4,105

Equity in net loss of non-consolidated affiliate 351 120

Loss (gain) on disposal of fixed assets 21 ( 121 )

Equity in net income of non-consolidated affiliate ( 166 ) ( 840 )

Gain on disposal of fixed assets ( 681 ) ( 100 )

Deferred taxes 350 32

27 unchanged sentences

Interest paid, net of interest received $ 8,855 $ 6,616

Income tax paid, net of tax refunds 46 327

Income tax paid (received), net of tax refunds 52 ( 1,668 )

Non-cash investing and financing activities:

9 unchanged sentences

Shares Par Value Additional Paid-In-Capital Shares Amount Accumulated Other Comprehensive Loss Accumulated Deficit Shares Amount Total Stockholders' Deficit

Balance, January 2, 2021 27,091,808 $ 3 $ 89,171 — $ — $ ( 58,044 ) $ ( 35,078 ) 1,782,568 $ ( 50,282 ) $ ( 54,230 )

Balance, April 3, 2021 27,153,872 $ 3 $ 91,078 — $ — $ ( 57,690 ) $ ( 35,697 ) 1,782,568 $ ( 50,282 ) $ ( 52,588 )

Stock option activity 50,563 — 794 — — — — — — 794

Share-based compensation expense — — 297 — — — — — — 297

Net loss — — — — — — ( 619 ) — — ( 619 )

Net income — — — — — — 4,332 — — 4,332

Other comprehensive income, net of tax — — — — — 354 — — — 354

Balance, July 3, 2021 27,204,435 $ 3 $ 92,169 — $ — $ ( 57,336 ) $ ( 31,365 ) 1,782,568 $ ( 50,282 ) $ ( 46,811 )

Balance, April 4, 2020 27,027,272 $ 3 $ 87,408 — $ — $ ( 55,501 ) $ ( 46,691 ) 1,782,568 $ ( 50,282 ) $ ( 65,063 )

Balance, January 4, 2020 26,511,641 $ 3 $ 84,302 — $ — $ ( 55,827 ) $ ( 46,052 ) 1,782,568 $ ( 50,282 ) $ ( 67,856 )

Warrant exercises 336,391 — 3,868 — — — — — — 3,868

Restricted stock activity — — ( 255 ) — — — — — — ( 255 )

1 unchanged sentence

Share-based compensation expense — — 1,777 — — — — — — 1,777

Net loss — — — — — — ( 639 ) — — ( 639 )

Net income — — — — — — 1,286 — — 1,286

Other comprehensive income, net of tax — — — — — 327 — — — 327

Balance, April 4, 2020 27,027,272 $ 3 $ 87,408 — $ — $ ( 55,501 ) $ ( 46,691 ) 1,782,568 $ ( 50,282 ) $ ( 65,063 )

Six Months Ended

Balance, July 4, 2020 27,048,404 $ 3 $ 88,930 — $ — $ ( 55,174 ) $ ( 45,405 ) 1,782,568 $ ( 50,282 ) $ ( 61,928 )

Nine Months Ended

(in thousands of dollars, except for share data) Common Stock Convertible Preferred Stock Treasury Stock

4 unchanged sentences

Share-based compensation expense — — 1,854 — — — — — — 1,854

Net loss — — — — — — ( 2,233 ) — — ( 2,233 )

Net income — — — — — — 2,099 — — 2,099

Other comprehensive income, net of tax — — — — — 1,061 — — — 1,061

Balance, April 3, 2021 27,153,872 $ 3 $ 91,078 — $ — $ ( 57,690 ) $ ( 35,697 ) 1,782,568 $ ( 50,282 ) $ ( 52,588 )

Balance, July 3, 2021 27,204,435 $ 3 $ 92,169 — $ — $ ( 57,336 ) $ ( 31,365 ) 1,782,568 $ ( 50,282 ) $ ( 46,811 )

Balance, September 28, 2019 26,476,336 $ 3 $ 84,271 — $ — $ ( 56,154 ) $ ( 45,649 ) 1,782,568 $ ( 50,282 ) $ ( 67,811 )

3 unchanged sentences

Share-based compensation expense — — 3,987 — — — — — — 3,987

Net loss — — — — — — ( 1,042 ) — — ( 1,042 )

Net income — — — — — — 244 — — 244

Other comprehensive income, net of tax — — — — — 980 — — — 980

Balance, April 4, 2020 27,027,272 $ 3 $ 87,408 — $ — $ ( 55,501 ) $ ( 46,691 ) 1,782,568 $ ( 50,282 ) $ ( 65,063 )

Balance, July 4, 2020 27,048,404 $ 3 $ 88,930 — $ — $ ( 55,174 ) $ ( 45,405 ) 1,782,568 $ ( 50,282 ) $ ( 61,928 )

The accompanying notes are an integral part of these consolidated financial statements.

7 unchanged sentences

References in these notes to financial statements to “Blue Bird,” the “Company,” “we,” “our,” or “us” relate to Blue Bird Corporation and its wholly-owned subsidiaries, unless the context specifically indicates otherwise.

Beginning at the end of our second quarter of fiscal year 2020 and continuing through the second quarter of fiscal year 2021, the novel coronavirus known as "COVID-19" spread throughout the world, resulting in a global pandemic.

The pandemic significantly impacted our financial results for the second half of fiscal year 2020, which continued into the first half of fiscal year 2021, causing, among other matters, lower customer orders for both buses and bus parts, supply disruptions, higher rates of absenteeism among our hourly production workforce and a temporary shutdown of manufacturing in April 2020 and March 2021.

The continuing development and fluidity of the pandemic precludes any prediction as to the ultimate severity of the adverse impacts on our business, financial condition, results of operations, and liquidity.

A prolonged economic downturn resulting from the continuing pandemic would likely have a material adverse impact on our financial results.

Beginning at the end of our second quarter of fiscal year 2020 and continuing through the third quarter of fiscal year 2021, the novel coronavirus known as "COVID-19" spread throughout the world, resulting in a global pandemic.

The pandemic significantly impacted our financial results for the second half of fiscal year 2020, which continued throughout the first nine months of fiscal year 2021, causing, among other matters, lower customer orders for both buses and bus parts, supply disruptions, higher rates of absenteeism among our hourly production workforce and a temporary shutdown of manufacturing in April 2020, March 2021, and May 2021.

The continuing development and fluidity of the pandemic and its trailing impact precludes any prediction as to the ultimate severity of the adverse impacts on our business, financial condition, results of operations, and liquidity.

A prolonged economic downturn resulting from the pandemic would likely have a material adverse impact on our financial results.

Basis of Presentation

4 unchanged sentences

Fiscal year 2021, which ends on October 2, 2021, consists of 52 weeks while fiscal year 2020, which ended on October 3, 2020, consisted of 53 weeks.

The second quarters of fiscal years 2021 and 2020 both included 13 weeks.

The six month periods in fiscal years 2021 and 2020 included 26 and 27 weeks, respectively.

The third quarters of fiscal years 2021 and 2020 both included 13 weeks.

The nine month periods in fiscal years 2021 and 2020 included 39 and 40 weeks, respectively.

In the opinion of management, all adjustments considered necessary for a fair presentation of financial results have been made.

12 unchanged sentences

Future events, including the extent and duration of COVID-19 related economic impacts, and their effects cannot be predicted with certainty, and, accordingly, the Company’s accounting estimates require the exercise of judgment.

The accounting estimates used in the preparation of the Company’s condensed consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes.The

Company evaluates and updates its assumptions and estimates on an ongoing basis and may employ outside experts to assist in the Company’s evaluations.

2 unchanged sentences

The Company’s significant accounting policies are described in the Company’s 2020 Form 10-K, filed with the SEC on December 17, 2020.

Our senior management has reviewed these significant accounting policies and related disclosures and determined that there were no significant changes in our critical accounting policies in the six months ended April 3, 2021.

Recently Adopted Accounting Standards

27 unchanged sentences

The following table presents the components of inventories at the dates indicated:

(in thousands of dollars) April 3, 2021 October 3, 2020

(in thousands of dollars) July 3, 2021 October 3, 2020

Raw materials $ 94,173 $ 43,272

4 unchanged sentences

The following table reflects activity in accrued warranty cost (current and long-term portions combined) for the periods presented:

Three Months Ended Six Months Ended

(in thousands of dollars) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

Three Months Ended Nine Months Ended

(in thousands of dollars) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

Balance at beginning of period $ 19,181 $ 21,398 $ 21,374 $ 22,343

4 unchanged sentences

The following table reflects activity in deferred warranty income (current and long-term portions combined), for the sale of extended warranties of two to five years , for the periods presented:

Three Months Ended Six Months Ended

(in thousands of dollars) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

Three Months Ended Nine Months Ended

(in thousands of dollars) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

Balance at beginning of period $ 20,724 $ 22,948 $ 22,588 $ 24,045

6 unchanged sentences

The following table reflects our total accrued self-insurance liability, comprised of workers' compensation and health insurance related claims, at the dates indicated:

(in thousands of dollars) April 3, 2021 October 3, 2020

(in thousands of dollars) July 3, 2021 October 3, 2020

Current portion $ 2,675 $ 2,993

3 unchanged sentences

Shipping and Handling Revenues

Shipping and handling revenues were $ 3.2 million and $ 4.1 million for the three months ended April 3, 2021 and April 4, 2020, respectively, and $ 5.9 million and $ 7.6 million for the six months ended April 3, 2021 and April 4, 2020, respectively.

The related cost of goods sold was $ 2.7 million and $ 3.5 million for the three months ended April 3, 2021 and April 4, 2020, respectively, and $ 5.1 million and $ 6.6 million for the six months ended April 3, 2021 and April 4, 2020, respectively.

Shipping and handling revenues were $ 3.3 million and $ 3.9 million for the three months ended July 3, 2021 and July 4, 2020, respectively, and $ 9.2 million and $ 11.5 million for the nine months ended July 3, 2021 and July 4, 2020, respectively.

The related cost of goods sold was $ 2.9 million and $ 3.4 million for the three months ended July 3, 2021 and July 4, 2020, respectively, and $ 8.0 million and $ 10.0 million for the nine months ended July 3, 2021 and July 4, 2020, respectively.

Pension Expense

Components of net periodic pension benefit cost were as follows for the periods presented:

Three Months Ended Six Months Ended

(in thousands of dollars) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

Three Months Ended Nine Months Ended

(in thousands of dollars) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

Interest cost $ 1,057 $ 1,237 $ 3,171 $ 3,711

11 unchanged sentences

No payments or receipts are exchanged on the interest rate collar contract unless interest rates rise above or fall below the contracted ceiling or floor rates.

During the six months ended April 3, 2021, the three month LIBOR rate fell below the established floor, which required $ 1.0 million in total cash payments to the counterparty.

During the nine months ended July 3, 2021, the three month LIBOR rate fell below the established floor, which required $ 1.4 million in total cash payments to the counterparty.

Additionally, $ 0.5 million was paid in the first quarter of fiscal year 2021 for amounts owed to the counterparty that were accrued in the fourth quarter of fiscal 2020.

Changes in the interest rate collar fair value are recorded in interest expense as the collar does not qualify for hedge accounting.

At April 3, 2021, the fair value of the interest rate collar contract was $( 2.9 ) million and is included in other current liabilities on the Condensed Consolidated Balance Sheets.

At July 3, 2021, the fair value of the interest rate collar contract was $( 2.5 ) million and is included in other current liabilities on the Condensed Consolidated Balance Sheets.

The fair value of the interest rate collar is a Level 2 fair value measurement, based on quoted prices of similar items in active markets.

8 unchanged sentences

However, during the Limited Availability Period, an additional margin of 0.50 % applies.

During the Limited Availability Period, the Borrower is required to prepay existing revolving loans and, if undrawn and unreimbursed letters of credit exceed $ 7.0 million, cash collateralize letters of credit if unrestricted cash and cash equivalents exceed $ 20.0 million, as determined on a semimonthly basis.

Any issuance, amendment, renewal, or extension of credit during the Limited Availability Period may not cause unrestricted cash and cash equivalents to exceed $ 20.0 million, or cause the aggregate outstanding Revolving Credit Facility principal to exceed $ 100.0 million.

6 unchanged sentences

Term debt consisted of the following at the dates indicated:

(in thousands of dollars) April 3, 2021 October 3, 2020

(in thousands of dollars) July 3, 2021 October 3, 2020

2023 term loan, net of deferred financing costs of $ 2,307 and $ 2,246 , respectively

$ 166,618 $ 174,104

current portion of long-term debt 13,613 9,900

3 unchanged sentences

If measured at fair value in the financial statements, the term loans would be classified as Level 2 in the fair value hierarchy.

At April 3, 2021 and October 3, 2020, $ 171.4 million and $ 176.4 million, respectively, were outstanding on the term loans.

At April 3, 2021 and October 3, 2020, the stated interest rates on the term loans were 3.8 % and 3.5 %, respectively.

At April 3, 2021 and October 3, 2020, the weighted-average annual effective interest rates for the term loans were 6.2 % and 4.1 %, respectively, which includes amortization of the deferred financing costs.

At April 3, 2021, $ 6.9 million of Letters of Credit were outstanding, of which $ 2.7 million reduces the availability on the revolving line of credit.

At July 3, 2021 and October 3, 2020, $ 168.9 million and $ 176.4 million, respectively, were outstanding on the term loans.

At July 3, 2021 and October 3, 2020, the stated interest rates on the term loans were 4.0 % and 3.5 %, respectively.

At July 3, 2021 and October 3, 2020, the weighted-average annual effective interest rates for the term loans were 6.0 % and 4.1 %, respectively, which includes amortization of the deferred financing costs and interest relating to the interest rate collar, as applicable.

At July 3, 2021, $ 6.9 million of Letters of Credit were outstanding, which reduces the availability on the revolving line of credit.

No borrowings were outstanding on the Revolving Credit Facility;

therefore, the Company would have been able to borrow $ 93.1 million on the revolving line of credit.

Interest expense on all indebtedness was $ 2.3 million and $ 5.7 million for the three months ended April 3, 2021 and April 4, 2020, respectively, and $ 4.3 million and $ 7.6 million for the six months ended April 3, 2021 and April 4, 2020, respectively.

Interest expense on all indebtedness was $ 2.8 million and $ 2.4 million for the three months ended July 3, 2021 and July 4, 2020, respectively, and $ 7.1 million and $ 10.0 million for the nine months ended July 3, 2021 and July 4, 2020, respectively.

The schedule of remaining principal payments through maturity for total debt is as follows:

2 unchanged sentences

Total remaining principal payments $ 168,925

Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant infrequent or unusual items which are required to be discretely recognized within the current interim period.

Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant infrequent or unusual items that are required to be discretely recognized within the current interim period.

The effective tax rates in the periods presented are largely based upon the forecast pre-tax earnings mix and allocation of certain expenses in various taxing jurisdictions where the Company conducts its business, primarily in the United States.

2 unchanged sentences

While the Act has broad income tax implications for many companies stemming from COVID-19 relief and various tax extenders, it did not have a material impact on our reported income tax accounts.

The effective tax rate for the three months ended April 3, 2021 was 61.9 %, which differed from the statutory federal income tax rate of 21 %.

The difference is mainly due to discrete period tax benefit from share-based compensation expenses, but also due to normal tax rate items, including impacts from state taxes.

The effective tax rate for the three months ended April 4, 2020 was 70.0 %, which differed from the statutory federal tax rate of 21 %.

The difference is mainly due to discrete period tax benefit from share-based compensation expenses, but also due to normal tax rate items, such as the benefit from federal and state tax credits (net of valuation allowance), which were partially offset by net non-deductible compensation expenses and other tax adjustments.

The effective tax rate for the six months ended April 3, 2021 was 34.8 %, which differed from the statutory federal income tax rate of 21 %.

The difference is mainly due to discrete period tax benefit from share-based compensation expenses, but also due to normal tax rate items, including impacts from state taxes.

The effective tax rate for the six months ended April 4, 2020 was 55.4 %, which differed from the statutory federal tax rate of 21 %.

The guidance for accounting for uncertainty in income taxes requires that a determination be made regarding whether a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination, which is the threshold required for recognition of the tax position in the financial statements.

As of October 2, 2020, there were no amounts recorded in the consolidated financial statements for gross unrecognized tax benefits.

During the three months ended July 3, 2021, management obtained additional information that resulted in a conclusion that certain tax positions previously recognized in specific prior year financial statements may be subject to adjustment in conjunction with an examination.

Accordingly, such determination resulted in the derecognition of these tax positions during the third quarter of fiscal year 2021, resulting in gross unrecognized tax benefits of $ 0.5 million as of July 3, 2021.

These tax positions would impact the Company's effective tax rate in future periods if subsequently recognized.

The Company recognizes accrued interest and penalties related to unrecognized tax positions in income tax expense, with such accrual totaling $ 0.3 million as of July 3, 2021.

The Company's liability arising from uncertain tax positions ("UTPs"), including accrued interest and penalties, is recorded in other liabilities in the Condensed Consolidated Balance Sheets.

The effective tax rate for the three months ended July 3, 2021 was 33.2 %, which differed from the statutory federal income tax rate of 21 %.

The difference is mainly due to normal tax rate items, including impacts from state taxes, net non-deductible compensation expenses and other tax adjustments.

The effective tax rate was also impacted by discrete period tax expense resulting from recording a liability for UTPs, including accrued interest and penalties, that was partially offset by discrete period tax benefits resulting from share-based compensation expenses and prior year tax return adjustments.

The effective tax rate for the three months ended July 4, 2020 was 70.1 %, which differed from the statutory federal tax rate of 21 %.

The difference is mainly due to discrete period tax expense from prior year tax return adjustments and normal tax rate items, such as the benefit from federal and state tax credits (net of valuation allowance), which were partially offset by net non-deductible compensation expenses and other tax adjustments.

The effective tax rate for the nine months ended July 3, 2021 was 31.5 %, which differed from the statutory federal income tax rate of 21 %.

The difference is mainly due to normal tax rate items, including impacts from state taxes, net non-deductible compensation expenses and other tax adjustments.

The effective tax rate was also impacted by discrete period tax benefits resulting from share-based compensation expenses and prior year tax return adjustments that were partially offset by discrete period tax expense resulting from recording a liability for UTPs, including accrued interest and penalties.

The effective tax rate for the nine months ended July 4, 2020 was 38.8 %, which differed from the statutory federal tax rate of 21 %.

The difference is mainly due to a net discrete period tax benefit from share-based compensation expenses, but also due to normal tax rate items, such as the benefit from federal and state tax credits (net of valuation allowance), which were partially offset by net non-deductible compensation expenses and other tax adjustments.

Guarantees, Commitments and Contingencies

At April 3, 2021, the Company had a number of product liability and other cases pending.

At July 3, 2021, the Company had a number of product liability and other cases pending.

Management believes that, considering the Company’s insurance coverage and its intention to vigorously defend its positions, the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial statements.

Environmental

The Company is subject to a variety of environmental regulations relating to the use, storage, discharge and disposal of hazardous ma erials used in its manufacturing processes.

The Company is subject to a variety of environmental regulations relating to the use, storage, discharge and disposal of hazardous materials used in its manufacturing processes.

Failure by the Company to comply with present and future regulations could subject it to future liabilities.

2 unchanged sentences

In the ordinary course of business, we may provide guarantees for certain transactions entered into by our dealers.

At April 3, 2021, we had a $ 3.0 million guarantee outstanding which relates to a guarantee of dealer indebtedness for a term loan with remaining maturity up to 1.8 years.

At July 3, 2021, we had a $ 3.0 million guarantee outstanding that relates to a guarantee of dealer indebtedness for a term loan with remaining maturity up to 1.5 years.

The $ 3.0 million represents the estimated maximum amount we would be required to pay upon default of all guaranteed indebtedness, and we believe the likelihood of required performance to be remote.

At April 3, 2021, $ 0.2 million was included in other current liabilities on our Condensed Consolidated Balance Sheets for the estimated fair value of the guarantee.

At July 3, 2021, $ 0.2 million was included in other current liabilities on our Condensed Consolidated Balance Sheets for the estimated fair value of the guarantee.

Segment Information

3 unchanged sentences

The tables below present segment net sales and gross profit for the periods presented:

Three Months Ended Six Months Ended

(in thousands of dollars) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

Three Months Ended Nine Months Ended

(in thousands of dollars) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

Bus (1) $ 181,735 $ 180,592 $ 449,876 $ 554,061

1 unchanged sentence

Segment net sales $ 196,659 $ 189,181 $ 491,791 $ 597,810

(1) Parts segment revenue includes $ 1.2 million and $ 0.9 million for the three months ended April 3, 2021 and April 4, 2020, respectively, and $ 2.0 million and $ 1.5 million for the six months ended April 3, 2021 and April 4, 2020, respectively, related to inter-segment sales of parts that was eliminated by the Bus segment upon consolidation.

Three Months Ended Six Months Ended

(in thousands of dollars) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

(1) Parts segment revenue includes $ 0.9 million and $ 0.8 million for the three months ended July 3, 2021 and July 4, 2020, respectively, and $ 2.9 million and $ 3.2 million for the nine months ended July 3, 2021 and July 4, 2020, respectively, related to inter-segment sales of parts that were eliminated by the Bus segment upon consolidation.

Three Months Ended Nine Months Ended

(in thousands of dollars) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

Bus $ 20,471 $ 18,079 $ 43,265 $ 50,884

1 unchanged sentence

Segment gross profit $ 26,159 $ 21,082 $ 59,120 $ 66,551

The following table is a reconciliation of segment gross profit to consolidated loss before income taxes for the periods presented:

Three Months Ended Six Months Ended

(in thousands of dollars) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

The following table is a reconciliation of segment gross profit to consolidated income (loss) before income taxes for the periods presented:

Three Months Ended Nine Months Ended

(in thousands of dollars) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

Segment gross profit $ 26,159 $ 21,082 $ 59,120 $ 66,551

4 unchanged sentences

Loss on debt modification — — ( 598 ) —

Loss before income taxes $ ( 780 ) $ ( 1,167 ) $ ( 2,886 ) $ ( 2,065 )

Income (loss) before income taxes $ 5,707 $ 1,091 $ 2,821 $ ( 974 )

Sales are attributable to geographic areas based on customer location and were as follows for the periods presented:

Three Months Ended Six Months Ended

(in thousands of dollars) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

Three Months Ended Nine Months Ended

(in thousands of dollars) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

United States $ 179,850 $ 175,433 $ 436,286 $ 544,176

3 unchanged sentences

The following table disaggregates revenue by product category for the periods presented:

Three Months Ended Six Months Ended

(in thousands of dollars) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

Three Months Ended Nine Months Ended

(in thousands of dollars) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

Diesel buses $ 76,753 $ 88,299 $ 212,578 $ 278,698

7 unchanged sentences

The following table presents the earnings per share computation for the periods presented:

Three Months Ended Six Months Ended

(in thousands except for share data) April 3, 2021 April 4, 2020 April 3, 2021 April 4, 2020

Net loss $ ( 619 ) $ ( 639 ) $ ( 2,233 ) $ ( 1,042 )

Three Months Ended Nine Months Ended

(in thousands except for share data) July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020

Net income $ 4,332 $ 1,286 $ 2,099 $ 244

Weighted-average common shares outstanding 27,172,162 27,027,731 27,116,915 26,784,404

Effect of dilutive securities (1) — — — —

Weighted-average dilutive securities, restricted stock 121,399 50,769 144,835 135,792

Weighted-average dilutive securities, stock options 135,316 1,515 75,610 60,284

Weighted-average shares and dilutive potential common shares (1) 27,428,877 27,080,015 27,337,360 26,980,480

Earnings per share:

Basic loss per share $ ( 0.02 ) $ ( 0.02 ) $ ( 0.08 ) $ ( 0.04 )

Diluted loss per share $ ( 0.02 ) $ ( 0.02 ) $ ( 0.08 ) $ ( 0.04 )

(1) Potentially dilutive securities representing 0.7 million and 0.5 million shares of common stock were excluded from the computation of diluted earnings per share for April 3, 2021 and April 4, 2020, respectively, as their effect would have been antidilutive.

Basic earnings per share $ 0.16 $ 0.05 $ 0.08 $ 0.01

Diluted earnings per share $ 0.16 $ 0.05 $ 0.08 $ 0.01

(1) Potentially dilutive securities representing 0.0 million and 0.4 million shares of common stock were excluded from the computation of diluted earnings per share for the three months ending July 3, 2021 and July 4, 2020, respectively, and potentially dilutive securities representing 0.1 million and 0.3 million shares of common stock were excluded from the computation of diluted earnings per share for the nine months ending July 3, 2021 and July 4, 2020, respectively, as their effect would have been antidilutive.

Accumulated Other Comprehensive Loss

The following table provides information on changes in accumulated other comprehensive loss ("AOCL") for the periods presented:

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

(in thousands of dollars) Defined Benefit Pension Plan Total AOCL Defined Benefit Pension Plan Total AOCL

April 3, 2021

Beginning Balance $ ( 57,690 ) $ ( 57,690 ) $ ( 58,397 ) $ ( 58,397 )

2 unchanged sentences

Income taxes ( 112 ) ( 112 ) ( 336 ) ( 336 )

Ending Balance April 3, 2021 $ ( 57,690 ) $ ( 57,690 ) $ ( 57,690 ) $ ( 57,690 )

April 4, 2020

Ending Balance July 3, 2021 $ ( 57,336 ) $ ( 57,336 ) $ ( 57,336 ) $ ( 57,336 )

Beginning Balance $ ( 55,501 ) $ ( 55,501 ) $ ( 56,154 ) $ ( 56,154 )

2 unchanged sentences

Income taxes ( 103 ) ( 103 ) ( 309 ) ( 309 )

Ending Balance April 4, 2020 $ ( 55,501 ) $ ( 55,501 ) $ ( 55,501 ) $ ( 55,501 )

Ending Balance July 4, 2020 $ ( 55,174 ) $ ( 55,174 ) $ ( 55,174 ) $ ( 55,174 )

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements