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Item 1. Financial Statements

2022-08-10 compared with 2022-05-12 · 111 added, 102 removed, 358 unchanged (37% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of dollars, except for share data) April 2, 2022 October 2, 2021

(in thousands of dollars, except for share data) July 2, 2022 October 2, 2021

Current assets

34 unchanged sentences

Stockholders' equity (deficit)

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at April 2, 2022 and October 2, 2021

Common stock, $ 0.0001 par value, 100,000,000 shares authorized, 31,990,860 and 27,205,269 shares outstanding at April 2, 2022 and October 2, 2021, respectively

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at July 2, 2022 and October 2, 2021

Common stock, $ 0.0001 par value, 100,000,000 shares authorized, 31,990,860 and 27,205,269 shares outstanding at July 2, 2022 and October 2, 2021, respectively

Additional paid-in capital 172,814 96,170

1 unchanged sentence

Accumulated other comprehensive loss ( 44,131 ) ( 44,794 )

Treasury stock, at cost, 1,782,568 shares at April 2, 2022 and October 2, 2021

Treasury stock, at cost, 1,782,568 shares at July 2, 2022 and October 2, 2021

( 50,282 ) ( 50,282 )

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Six Months Ended

(in thousands of dollars except for share data) April 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

Three Months Ended Nine Months Ended

(in thousands of dollars except for share data) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Net sales $ 206,083 $ 196,659 $ 542,965 $ 491,791

3 unchanged sentences

Selling, general and administrative expenses 20,505 18,073 58,596 50,124

Operating (loss) profit $ ( 16,701 ) $ 1,132 $ ( 18,737 ) $ 910

Operating profit (loss) $ 1,088 $ 8,086 $ ( 17,649 ) $ 8,996

Interest expense ( 3,908 ) ( 2,805 ) ( 9,481 ) ( 7,069 )

2 unchanged sentences

Loss on debt modification — — ( 561 ) ( 598 )

Loss before income taxes $ ( 18,448 ) $ ( 780 ) $ ( 23,391 ) $ ( 2,886 )

Income tax benefit 7,415 483 9,177 1,004

Equity in net loss of non-consolidated affiliate ( 1,114 ) ( 322 ) ( 2,015 ) ( 351 )

Net loss $ ( 12,147 ) $ ( 619 ) $ ( 16,229 ) $ ( 2,233 )

Loss per share:

(Loss) income before income taxes $ ( 2,085 ) $ 5,707 $ ( 25,476 ) $ 2,821

Income tax (expense) benefit ( 2,860 ) ( 1,892 ) 6,317 ( 888 )

Equity in net (loss) income of non-consolidated affiliate ( 1,490 ) 517 ( 3,505 ) 166

Net (loss) income $ ( 6,435 ) $ 4,332 $ ( 22,664 ) $ 2,099

(Loss) earnings per share:

Basic weighted average shares outstanding 31,990,860 27,172,162 30,687,406 27,116,915

Diluted weighted average shares outstanding 31,990,860 27,428,877 30,687,406 27,337,360

Basic loss per share $ ( 0.38 ) $ ( 0.02 ) $ ( 0.54 ) $ ( 0.08 )

Diluted loss per share $ ( 0.38 ) $ ( 0.02 ) $ ( 0.54 ) $ ( 0.08 )

Basic (loss) earnings per share $ ( 0.20 ) $ 0.16 $ ( 0.74 ) $ 0.08

Diluted (loss) earnings per share $ ( 0.20 ) $ 0.16 $ ( 0.74 ) $ 0.08

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 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

Net loss $ ( 12,147 ) $ ( 619 ) $ ( 16,229 ) $ ( 2,233 )

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

Three Months Ended Nine Months Ended

(in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Net (loss) income $ ( 6,435 ) $ 4,332 $ ( 22,664 ) $ 2,099

Other comprehensive income, net of tax:

1 unchanged sentence

Total other comprehensive income $ 221 $ 354 $ 663 $ 1,061

Comprehensive loss $ ( 11,926 ) $ ( 265 ) $ ( 15,787 ) $ ( 1,526 )

Comprehensive (loss) income $ ( 6,214 ) $ 4,686 $ ( 22,001 ) $ 3,160

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 2, 2022 April 3, 2021

Nine Months Ended

(in thousands of dollars) July 2, 2022 July 3, 2021

Cash flows from operating activities

Net loss $ ( 16,229 ) $ ( 2,233 )

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

Net (loss) income $ ( 22,664 ) $ 2,099

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Depreciation and amortization 10,089 10,145

1 unchanged sentence

Share-based compensation 3,153 1,923

Equity in net loss of non-consolidated affiliate 2,015 351

Loss on disposal of fixed assets 12 21

Equity in net loss (income) of non-consolidated affiliate 3,505 ( 166 )

Loss (gain) on disposal of fixed assets 12 ( 681 )

Impairment of fixed assets 1,354 —

12 unchanged sentences

Cash paid for fixed assets $ ( 4,748 ) $ ( 10,304 )

Proceeds from sale of fixed assets — 901

Total cash used in investing activities $ ( 4,748 ) $ ( 9,403 )

Cash flows from financing activities

Payments of revolving credit facility borrowings $ ( 45,000 ) $ —

Revolving credit facility borrowings $ 15,000 $ —

Principal payments of senior term loan borrowings ( 11,138 ) ( 7,425 )

22 unchanged sentences

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

Balance, January 1, 2022 31,975,274 $ 3 $ 171,150 — $ — $ ( 44,573 ) $ ( 37,835 ) 1,782,568 $ ( 50,282 ) $ 38,463

Private Placement (Note 11) — — ( 24 ) — — — — — — ( 24 )

Stock option activity 15,586 — 284 — — — — — — 284

Balance, April 2, 2022 31,990,860 $ 3 $ 172,191 — $ — $ ( 44,352 ) $ ( 49,982 ) 1,782,568 $ ( 50,282 ) $ 27,578

Share-based compensation expense — — 623 — — — — — — 623

1 unchanged sentence

Other comprehensive income, net of tax — — — — — 221 — — — 221

Balance, July 2, 2022 31,990,860 $ 3 $ 172,814 — $ — $ ( 44,131 ) $ ( 56,417 ) 1,782,568 $ ( 50,282 ) $ 21,987

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

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

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

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

Six Months Ended

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

Nine Months Ended

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

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

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

Balance, October 2, 2021 27,205,269 $ 3 $ 96,170 — $ — $ ( 44,794 ) $ ( 33,753 ) 1,782,568 $ ( 50,282 ) $ ( 32,656 )

5 unchanged sentences

Other comprehensive income, net of tax — — — — — 663 — — — 663

Balance, April 2, 2022 31,990,860 $ 3 $ 172,191 — $ — $ ( 44,352 ) $ ( 49,982 ) 1,782,568 $ ( 50,282 ) $ 27,578

Balance, July 2, 2022 31,990,860 $ 3 $ 172,814 — $ — $ ( 44,131 ) $ ( 56,417 ) 1,782,568 $ ( 50,282 ) $ 21,987

Balance, October 3, 2020 27,048,404 $ 3 $ 88,910 — $ — $ ( 58,397 ) $ ( 33,464 ) 1,782,568 $ ( 50,282 ) $ ( 53,230 )

2 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 )

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

BLUE BIRD CORPORATION

13 unchanged sentences

The fiscal years ending October 1, 2022 ("fiscal 2022") and ended October 2, 2021 ("fiscal 2021") consist or consisted of 52 weeks.

The second quarters of fiscal 2022 and fiscal 2021 both included 13 weeks.

The six month periods in fiscal 2022 and 2021 both included 26 weeks.

The third quarters of fiscal 2022 and fiscal 2021 both included 13 weeks.

The nine month periods in fiscal 2022 and 2021 both included 39 weeks.

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

5 unchanged sentences

For additional information, including the Company’s significant accounting policies, refer to the consolidated financial statements and related footnotes as of and for the fiscal year ended October 2, 2021 as set forth in the Company's fiscal 2021 Form 10-K filed on December 15, 2021.

Towards the end of our second quarter of the fiscal year that ended October 3, 2020 ("fiscal 2020") and continuing through the second quarter of fiscal 2022, the novel coronavirus known as "COVID-19" spread throughout the world, resulting in a global pandemic.

The pandemic has significantly impacted our financial results from the second half of fiscal 2020, continuing through the second quarter of fiscal 2022, causing, among other matters, reduced demand for school buses and major supply chain disruptions during portions of this period of time.

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.

Impacts of COVID-19 and Russia's Invasion of Ukraine on our Business

Towards the end of our second quarter of the fiscal year that ended October 3, 2020 ("fiscal 2020") and continuing through the third quarter of fiscal 2022, the novel coronavirus known as "COVID-19" spread throughout the world, resulting in a global pandemic.

The pandemic has significantly impacted our financial results from the second half of fiscal 2020, continuing through the third quarter of fiscal 2022, causing, among other matters, reduced demand for school buses and major supply chain disruptions during portions of this period of time.

Additionally, Russian military forces launched a large-scale invasion of Ukraine on February 24, 2022.

While the Company has no assets or customers in either of these countries, this military conflict significantly impacted our financial results during the third quarter of fiscal 2022, primarily in an indirect manner since the Company does not sell to customers located in, or source goods directly from, either country.

Specifically, it has contributed to increased a) costs charged by suppliers for the purchase of inventory that is at least partially dependent on resources originating from either of the countries and b) freight costs, both of which negatively impacted the gross profit recognized on sales during the third quarter of fiscal 2022.

The continuing development and fluidity of the pandemic and military conflict in Ukraine and their trailing impacts preclude any prediction as to the ultimate severity of the adverse impacts on our business, financial condition, results of operations, and liquidity.

Use of Estimates and Assumptions

1 unchanged sentence

GAAP requires management to make estimates and assumptions.

At the date of the financial statements, these estimates and assumptions affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, and during the reporting period, these estimates and assumptions affect the reported amounts of revenues and expenses.

amounts of revenues and expenses.

For example, significant management judgments are required in determining excess, obsolete, or unsalable inventory;

8 unchanged sentences

The Company’s significant accounting policies are described in the Company’s fiscal 2021 Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on December 15, 2021.

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 2, 2022.

Recently Issued Accounting Standards

16 unchanged sentences

Therefore, it is likely that neither the interest rate collar nor Amended Credit Agreement will be modified to reflect the discontinuation of 3 month LIBOR effective July 1, 2023 and accordingly, the Company will not be required to decide whether or not to elect to adopt such amendments prior to or on December 31, 2022 (i.e., the last effective date for adopting the amendments).

However, to the extent that either or both of the contracts are modified prior to December 31, 2022, the Company plans to adopt the amendments on a prospective basis by adjusting the derivative fair value and/or debt effective interest rate, as applicable, neither of which is expected to have a material impact on the consolidated financial statements.

However, to the extent that either or both of the contracts are

modified prior to December 31, 2022, the Company plans to adopt the amendments on a prospective basis by adjusting the derivative fair value and/or debt effective interest rate, as applicable, neither of which is expected to have a material impact on the consolidated financial statements.

Supplemental Financial Information

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

(in thousands of dollars) April 2, 2022 October 2, 2021

(in thousands of dollars) July 2, 2022 October 2, 2021

Raw materials $ 152,191 $ 74,862

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 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

Three Months Ended Nine Months Ended

(in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Balance at beginning of period $ 16,985 $ 19,181 $ 18,550 $ 21,374

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 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

Three Months Ended Nine Months Ended

(in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Balance at beginning of period $ 18,414 $ 20,724 $ 20,144 $ 22,588

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 2, 2022 October 2, 2021

(in thousands of dollars) July 2, 2022 October 2, 2021

Current portion $ 3,876 $ 2,781

3 unchanged sentences

Shipping and Handling Revenues

Shipping and handling revenues were $ 3.5 million and $ 3.2 million for the three months ended April 2, 2022 and April 3, 2021, respectively, and $ 6.9 million and $ 5.9 million for the six months ended April 2, 2022 and April 3, 2021, respectively.

The related cost of goods sold was $ 3.1 million and $ 2.7 million for the three months ended April 2, 2022 and April 3, 2021, respectively, and $ 6.2 million and $ 5.1 million for the six months ended April 2, 2022 and April 3, 2021, respectively.

Shipping and handling revenues were $ 4.2 million and $ 3.3 million for the three months ended July 2, 2022 and July 3, 2021, respectively, and $ 11.1 million and $ 9.2 million for the nine months ended July 2, 2022 and July 3, 2021, respectively.

The related cost of goods sold was $ 3.7 million and $ 2.9 million for the three months ended July 2, 2022 and July 3, 2021, respectively, and $ 9.9 million and $ 8.0 million for the nine months ended July 2, 2022 and July 3, 2021, respectively.

Pension Expense

Components of net periodic pension benefit (income) expense were as follows for the periods presented:

Three Months Ended Six Months Ended

(in thousands of dollars) April 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

Three Months Ended Nine Months Ended

(in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Interest cost $ 1,092 $ 1,057 $ 3,276 $ 3,171

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 2, 2022, the three month LIBOR rate fell below the established floor, which required us to make $ 1.0 million in total cash payments to the counterparty.

During the nine months ended July 2, 2022, the three month LIBOR rate fell below the established floor, which required us to make $ 1.2 million in total cash payments to the counterparty.

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

At April 2, 2022, the fair value of the interest rate collar contract was $ 0.2 million and is included in other current liabilities on the Condensed Consolidated Balance Sheets.

At July 2, 2022, the fair value of the interest rate collar contract was $ 0 .

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.

54 unchanged sentences

Term debt consisted of the following at the dates indicated:

(in thousands of dollars) April 2, 2022 October 2, 2021

(in thousands of dollars) July 2, 2022 October 2, 2021

2023 term loan, net of deferred financing costs of $ 1,715 and $ 2,027 , respectively

5 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 2, 2022 and October 2, 2021, $ 159.0 million and $ 166.5 million, respectively, were outstanding on the term loans.

At April 2, 2022 and October 2, 2021, the stated interest rates on the term loans were 6.1 % and 4.0 %, respectively.

At April 2, 2022 and October 2, 2021, the weighted-average annual effective interest rates for the term loans were 7.2 % and 6.0 %, respectively, which includes amortization of the deferred financing costs and interest relating to the interest rate collar, as applicable.

At April 2, 2022, $ 6.3 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;

At July 2, 2022 and October 2, 2021, $ 155.3 million and $ 166.5 million, respectively, were outstanding on the term loans.

At July 2, 2022 and October 2, 2021, the stated interest rates on the term loans were 7.9 % and 4.0 %, respectively.

At July 2, 2022 and October 2, 2021, the weighted-average annual effective interest rates for the term loans were 7.7 % and 6.0 %, respectively, which includes amortization of the deferred financing costs and interest relating to the interest rate collar, as applicable.

At July 2, 2022, $ 6.3 million of letters of credit were outstanding, which reduces the availability on the revolving line of credit.

There were $ 60.0 million in borrowings outstanding on the revolving credit facility;

therefore, the Company would have been able to borrow $ 33.7 million on the revolving line of credit.

Interest expense on all indebtedness was $ 2.5 million and $ 2.3 million for the three months ended April 2, 2022 and April 3, 2021, respectively, and $5.6 million and $4.3 million for the six months ended April 2, 2022 and April 3, 2021, respectively.

Interest expense on all indebtedness was $ 3.9 million and $ 2.8 million for the three months ended July 2, 2022 and July 3, 2021, respectively, and $9.5 million and $7.1 million for the nine months ended July 2, 2022 and July 3, 2021, respectively.

The schedule of remaining principal payments through maturity for the term loans is as follows:

5 unchanged sentences

In periods where our operating income approximates or is equal to break-even, the effective tax rates for quarter-to-date and full-year periods may not be meaningful due to discrete period items.

The effective tax rate for the three months ended April 2, 2022 was 40.2 %, 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 and federal and state tax credits (net of valuation allowances), which was partially offset by discrete period tax expense resulting from net non-deductible compensation expenses and other tax adjustments.

The effective tax rate for the three months ended April 3, 2021 was 61.9 %, 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, including impacts from state taxes.

The effective tax rate for the six months ended April 2, 2022 was 39.2 % and differed from the statutory federal tax rate of 21 %.

The effective tax rate for the three months ended July 2, 2022 was ( 137.2 )%, which differed from the statutory federal income tax rate of 21 %.

In addition, the amount recorded represents income tax expense in a three month period in which the Company recorded loss before income taxes.

This unusual relationship exists as the amount recorded was necessary to adjust the income tax benefit for the nine months ended July 2, 2022, discussed below, to reflect the Company's revised estimated annual income tax rate, including the effects of discrete period tax items.

The effective tax rate for the three months ended July 3, 2021 was 33.2 %, which differed from the statutory federal 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 uncertain tax positions ("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 nine months ended July 2, 2022 was 24.8 % and differed from the statutory federal tax rate of 21 %.

The effective tax rate for the six months ended April 3, 2021 was 34.8 % and 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 nine months ended July 3, 2021 was 31.5 % and 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.

Guarantees, Commitments and Contingencies

At April 2, 2022, the Company had a number of product liability and other cases pending.

At July 2, 2022, 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.

5 unchanged sentences

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

At April 2, 2022, 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 0.8 years.

At July 2, 2022, 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 0.5 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 2, 2022, $ 0.1 million was included in other current liabilities on our Condensed Consolidated Balance Sheets for the estimated fair value of the guarantee.

At July 2, 2022, $ 0.1 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 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

Three Months Ended Nine Months Ended

(in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Bus (1) $ 186,631 $ 181,735 $ 487,552 $ 449,876

1 unchanged sentence

Segment net sales $ 206,083 $ 196,659 $ 542,965 $ 491,791

(1) Parts segment revenue includes $ 1.1 million and $ 1.2 million for the three months ended April 2, 2022 and April 3, 2021, respectively, and $ 1.9 million and $ 2.0 million for the six months ended April 2, 2022 and April 3, 2021, respectively, related to inter-segment sales of parts that were eliminated by the Bus segment upon consolidation.

Three Months Ended Six Months Ended

(in thousands of dollars) April 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

(1) Parts segment revenue includes $ 0.7 million and $ 0.9 million for the three months ended July 2, 2022 and July 3, 2021, respectively, and $ 2.6 million and $ 2.9 million for the nine months ended July 2, 2022 and July 3, 2021, 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 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Bus $ 13,632 $ 20,471 $ 19,290 $ 43,265

1 unchanged sentence

Segment gross profit $ 21,593 $ 26,159 $ 40,947 $ 59,120

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 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

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

Three Months Ended Nine Months Ended

(in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Segment gross profit $ 21,593 $ 26,159 $ 40,947 $ 59,120

4 unchanged sentences

Loss on debt modification — — ( 561 ) ( 598 )

Loss before income taxes $ ( 18,448 ) $ ( 780 ) $ ( 23,391 ) $ ( 2,886 )

(Loss) income before income taxes $ ( 2,085 ) $ 5,707 $ ( 25,476 ) $ 2,821

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 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

Three Months Ended Nine Months Ended

(in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

United States $ 193,571 $ 179,850 $ 488,363 $ 436,286

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 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

Three Months Ended Nine Months Ended

(in thousands of dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Diesel buses $ 79,355 $ 76,753 $ 221,669 $ 212,578

5 unchanged sentences

(2) Includes shipping and handling revenue, extended warranty income, surcharges and chassis and bus shell sales .

Loss Per Share

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

Three Months Ended Six Months Ended

(in thousands except for share data) April 2, 2022 April 3, 2021 April 2, 2022 April 3, 2021

Net loss $ ( 12,147 ) $ ( 619 ) $ ( 16,229 ) $ ( 2,233 )

(Loss) Earnings Per Share

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

Three Months Ended Nine Months Ended

(in thousands except for share data) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021

Net (loss) income $ ( 6,435 ) $ 4,332 $ ( 22,664 ) $ 2,099

Weighted-average common shares outstanding 31,990,860 27,172,162 30,687,406 27,116,915

Weighted-average dilutive securities, restricted stock — 121,399 — 144,835

Weighted-average dilutive securities, stock options — 135,316 — 75,610

Weighted-average shares and dilutive potential common shares (1) 31,990,860 27,428,877 30,687,406 27,337,360

Loss per share:

Basic loss per share $ ( 0.38 ) $ ( 0.02 ) $ ( 0.54 ) $ ( 0.08 )

Diluted loss per share $ ( 0.38 ) $ ( 0.02 ) $ ( 0.54 ) $ ( 0.08 )

(1) Potentially dilutive securities representing 0.3 million and 0.7 million shares of common stock were excluded from the computation of diluted loss per share for the three months ending April 2, 2022 and April 3, 2021, respectively, and potentially dilutive securities representing 0.3 million and 0.7 million shares of common stock were excluded from the computation of diluted loss per share for the six months ending April 2, 2022 and April 3, 2021, respectively, as their effect would have been antidilutive.

Basic (loss) earnings per share $ ( 0.20 ) $ 0.16 $ ( 0.74 ) $ 0.08

Diluted (loss) earnings per share $ ( 0.20 ) $ 0.16 $ ( 0.74 ) $ 0.08

(1) Potentially dilutive securities representing 0.6 million and 0.0 million shares of common stock were excluded from the computation of diluted (loss) earnings per share for the three months ending July 2, 2022 and July 3, 2021, respectively, and potentially dilutive securities representing 0.4 million and 0.1 million shares of common stock were excluded from the computation of diluted (loss) earnings per share for the nine months ending July 2, 2022 and July 3, 2021, 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 2, 2022

Beginning Balance $ ( 44,352 ) $ ( 44,352 ) $ ( 44,794 ) $ ( 44,794 )

2 unchanged sentences

Income taxes ( 70 ) ( 70 ) ( 210 ) ( 210 )

Ending Balance April 2, 2022 $ ( 44,352 ) $ ( 44,352 ) $ ( 44,352 ) $ ( 44,352 )

April 3, 2021

Ending Balance July 2, 2022 $ ( 44,131 ) $ ( 44,131 ) $ ( 44,131 ) $ ( 44,131 )

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 )

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

Stockholders' Equity (Deficit)

3 unchanged sentences

Subsequent to the sale, Coliseum owns an approximate 15 % equity interest in the Company.

In connection with the purchase of the shares, Coliseum received customary registration rights and the Company added Adam Gray of Coliseum as a Class II director.

In connection

with the purchase of the shares, Coliseum received customary registration rights and the Company added Adam Gray of Coliseum as a Class II director.

The Company used the net proceeds (approximately $ 74.8 million) from the Private Placement to repay outstanding revolving loans as required by the terms of the Fourth Amended Credit Agreement.

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