What changed in this filing

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Item 1. Financial Statements

2024-02-07 compared with 2023-08-09 · 189 added, 201 removed, 272 unchanged (59% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of dollars, except for share data) July 1, 2023 October 1, 2022

(in thousands of dollars, except for share data) December 30, 2023 September 30, 2023

Current assets

4 unchanged sentences

Total current assets $ 243,345 $ 236,063

Restricted cash $ 238 $ —

Property, plant and equipment, net $ 95,563 $ 95,101

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Stockholders' equity

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at July 1, 2023 and October 1, 2022

Common stock, $ 0.0001 par value, 100,000,000 shares authorized, 32,121,607 and 32,024,911 shares outstanding at July 1, 2023 and October 1, 2022, respectively

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at December 30, 2023 and September 30, 2023

Common stock, $ 0.0001 par value, 100,000,000 shares authorized, 32,198,592 and 32,165,225 shares outstanding at December 30, 2023 and September 30, 2023, respectively

Additional paid-in capital 187,159 177,861

1 unchanged sentence

Accumulated other comprehensive loss ( 31,753 ) ( 31,884 )

Treasury stock, at cost, 1,782,568 shares at July 1, 2023 and October 1, 2022

Treasury stock, at cost, 1,782,568 shares at December 30, 2023 and September 30, 2023

( 50,282 ) ( 50,282 )

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Nine Months Ended

(in thousands of dollars except for share data) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

(in thousands of dollars except for share data) December 30, 2023 December 31, 2022

Net sales $ 317,660 $ 235,732

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Interest income 1,088 —

Other (expense) income, net ( 6,421 ) 735 ( 6,999 ) 2,215

Loss on debt modification — — ( 537 ) ( 561 )

Other expense, net

( 1,221 ) ( 236 )

Loss on debt refinancing or modification

( 1,558 ) ( 537 )

Income (loss) before income taxes $ 32,634 $ ( 14,344 )

Income tax (expense) benefit ( 8,446 ) 2,981

Equity in net income (loss) of non-consolidated affiliate 2,502 ( 1,490 ) 4,168 ( 3,505 )

Equity in net income of non-consolidated affiliate

Net income (loss) $ 26,150 $ ( 11,294 )

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended Nine Months Ended

(in thousands of dollars) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

Net income (loss) $ 26,150 $ ( 11,294 )

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

(in thousands of dollars) July 1, 2023 July 2, 2022

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

Cash flows from operating activities

Net income (loss) $ 26,150 $ ( 11,294 )

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

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization expense 3,618 3,361

1 unchanged sentence

Share-based compensation expense 2,051 589

Equity in net (income) loss of non-consolidated affiliate ( 4,168 ) 3,505

Equity in net income of non-consolidated affiliate ( 1,962 ) ( 69 )

Dividend from equity investment in affiliate 2,991 —

Loss on disposal of fixed assets 4 —

Impairment of fixed assets — 1,354

Deferred income tax expense (benefit) 1,143 ( 2,986 )

Amortization of deferred actuarial pension losses 172 299

Loss on debt modification 537 561

Loss on debt refinancing or modification

Changes in assets and liabilities:

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Total adjustments $ ( 25,933 ) $ 31,220

Total cash provided by (used in) operating activities $ 84,131 $ ( 54,451 )

Total cash provided by operating activities $ 217 $ 19,926

Cash flows from investing activities

Cash paid for fixed assets $ ( 2,904 ) $ ( 1,146 )

Proceeds from sale of fixed assets — —

Total cash used in investing activities $ ( 2,904 ) $ ( 1,146 )

Cash flows from financing activities

Revolving credit facility borrowings $ 45,000 $ 120,000

Revolving credit facility borrowings (Note 4)

$ 36,220 $ 5,000

Revolving credit facility repayments — ( 20,000 )

Term loan repayments ( 14,850 ) ( 11,138 )

Term loan borrowings - new credit agreement (Note 4)

Term loan repayments - previous credit agreement (Note 4)

( 131,800 ) ( 4,950 )

Principal payments on finance leases ( 145 ) ( 141 )

Cash paid for debt costs ( 3,272 ) ( 2,468 )

Sale of common stock — 75,000

Cash paid for common stock issuance costs — ( 202 )

Cash paid for debt costs (Note 4)

( 3,128 ) ( 3,211 )

Repurchase of common stock in connection with stock award exercises ( 301 ) ( 57 )

Cash received from stock option exercises 149 —

Total cash (used in) provided by financing activities $ ( 37,485 ) $ 73,999

Total cash provided by (used in) financing activities $ 995 $ ( 23,359 )

Change in cash, cash equivalents, and restricted cash ( 1,692 ) ( 4,579 )

1 unchanged sentence

Cash, cash equivalents, and restricted cash at end of period $ 77,296 $ 5,900

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

Supplemental disclosures of cash flow information

1 unchanged sentence

Interest paid, net of interest received $ 1,807 $ 3,170

Income tax (received) paid, net of tax refunds ( 33 ) 48

Income tax paid (received), net of tax refunds

Non-cash investing and financing activities:

Changes in accounts payable for capital additions to property, plant and equipment $ 953 $ 672

Accrue debt modification costs — 61

Right-of-use assets obtained in exchange for operating lease obligations 1,241 199

Warrants issued for equity investment in affiliate

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

BLUE BIRD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

Three 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) Equity

Balance, April 1, 2023 32,036,149 $ 3 $ 174,313 — $ — $ ( 41,476 ) $ ( 83,676 ) 1,782,568 $ ( 50,282 ) $ ( 1,118 )

Restricted stock activity 28,771 — — — — — — — — —

Stock option activity 56,687 — 1,053 — — — — — — 1,053

Share-based compensation expense — — 924 — — — — — — 924

Net income — — — — — — 9,358 — — 9,358

Other comprehensive income, net of tax — — — — — 227 — — — 227

Balance, July 1, 2023 32,121,607 $ 3 $ 176,290 — $ — $ ( 41,249 ) $ ( 74,318 ) 1,782,568 $ ( 50,282 ) $ 10,444

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

Net loss — — — — — — ( 6,435 ) — — ( 6,435 )

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

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' Equity (Deficit)

Balance, October 1, 2022 32,024,911 $ 3 $ 173,103 — $ — $ ( 41,930 ) $ ( 79,512 ) 1,782,568 $ ( 50,282 ) $ 1,382

Balance, September 30, 2023 32,165,225 $ 3 $ 177,861 — $ — $ ( 31,884 ) $ ( 55,700 ) 1,782,568 $ ( 50,282 ) $ 39,998

Issuance of warrants (Note 12)

— — 7,416 — — — — — — 7,416

Restricted stock activity 22,115 — ( 301 ) — — — — — — ( 301 )

3 unchanged sentences

Other comprehensive income, net of tax — — — — — 131 — — — 131

Balance, July 1, 2023 32,121,607 $ 3 $ 176,290 — $ — $ ( 41,249 ) $ ( 74,318 ) 1,782,568 $ ( 50,282 ) $ 10,444

Balance, December 30, 2023 32,198,592 $ 3 $ 187,159 — $ — $ ( 31,753 ) $ ( 29,550 ) 1,782,568 $ ( 50,282 ) $ 75,577

Balance, October 1, 2022 32,024,911 $ 3 $ 173,103 — $ — $ ( 41,930 ) $ ( 79,512 ) 1,782,568 $ ( 50,282 ) $ 1,382

Private placement 4,687,500 — 74,798 — — — — — — 74,798

Restricted stock activity 7,156 — ( 57 ) — — — — — — ( 57 )

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

Share-based compensation expense — — 546 — — — — — — 546

1 unchanged sentence

Other comprehensive income, net of tax — — — — — 227 — — — 227

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

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

Balance, December 31, 2022 32,032,067 $ 3 $ 173,592 — $ — $ ( 41,703 ) $ ( 90,806 ) 1,782,568 $ ( 50,282 ) $ ( 9,196 )

BLUE BIRD CORPORATION

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The Company’s fiscal year ends on the Saturday closest to September 30 with its quarters consisting of thirteen weeks in most years.

The fiscal years ending September 30, 2023 ("fiscal 2023") and ended October 1, 2022 ("fiscal 2022") consist or consisted of 52 weeks.

The third quarters of fiscal 2023 and fiscal 2022 both included 13 weeks.

The nine month periods in fiscal 2023 and 2022 both included 39 weeks.

The fiscal years ending September 28, 2024 ("fiscal 2024") and ended September 30, 2023 ("fiscal 2023") consist or consisted of 52 weeks.

The first quarters of fiscal 2024 and fiscal 2023 both included 13 weeks.

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

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GAAP for complete financial statements.

The Condensed Consolidated Balance Sheet data as of October 1, 2022 was derived from the Company’s audited financial statements but does not include all disclosures required by U.S.

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 1, 2022 as set forth in the Company's fiscal 2022 Form 10-K filed with the Securities and Exchange Commission ("SEC") on December 12, 2022.

The Condensed Consolidated Balance Sheet data as of September 30, 2023 was derived from the Company’s audited financial statements but does not include all disclosures required by U.S.

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 September 30, 2023 as set forth in the Company's fiscal 2023 Form 10-K filed with the Securities and Exchange Commission ("SEC") on December 11, 2023.

Impacts of COVID-19 and Subsequent Supply Chain Constraints on our Business

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

Countermeasures taken to address the COVID-19 pandemic included virtual and hybrid schooling in many jurisdictions throughout the United States of America ("U.S.") and Canada.

The uncertainty of when and how schools would open materially affected demand for new buses and replacement/maintenance parts during the second half of fiscal 2020 and first half of the fiscal year that ended October 2, 2021 ("fiscal 2021"), significantly impacting our business and operations.

Demand for school buses strengthened substantially during the second half of fiscal 2021 as COVID-19 vaccines were administered and many jurisdictions began preparing for a return to in-person learning environments for the new school year that began in mid-August to early September 2021.

However, during this same period of time, the Company, and automotive industry as a whole, began experiencing significant supply chain constraints resulting from, among others, labor shortages;

the lack of maintenance on, and acquisition of, capital assets by suppliers during the extended COVID-19 global lockdowns;

significant increased demand for consumer products containing certain materials required for the production of vehicles, such as microchips, as consumers spent stimulus and other funds on items for their homes;

As discussed in detail in the fiscal 2023 Form 10-K filed with the SEC on December 11, 2023, the novel coronavirus known as "COVID-19" materially affected demand for new buses and replacement/maintenance parts during the second half of our fiscal year that ended October 3, 2020 ("fiscal 2020") and first half of our fiscal year that ended October 2, 2021 ("fiscal 2021"), significantly impacting our business and operations.

Although demand for school buses strengthened substantially during the second half of fiscal 2021, the Company, and automotive industry as a whole, began experiencing significant supply chain constraints around this same period of time.

These supply chain disruptions had a significant adverse impact on our operations and results during the second half of fiscal 2021 and all of fiscal 2022 due to higher purchasing costs, including freight costs incurred to expedite receipt of critical components, increased manufacturing inefficiencies and our inability to complete the production of buses to fulfill sales orders.

Towards the end of fiscal 2022 and continuing into fiscal 2023, there were slight improvements in the supply chain's ability to deliver the parts and components necessary to support our production operations, resulting in increased (i) manufacturing efficiencies and (ii) production of buses to fulfill sales orders during the first three quarters of fiscal 2023.

However, the higher costs charged by suppliers to procure inventory that continued into fiscal 2023 had a significant

adverse impact on our operations and results.

Specifically, such cost increases outpaced the increases in sales prices that we charged for the buses that were sold during the first quarter of fiscal 2023, many of which were included in the backlog of fixed price sales orders originating in fiscal 2021 and the early months of fiscal 2022 that carried forward into fiscal 2023.

During the second and third quarters of fiscal 2023, the buses that were sold were generally included in the backlog of fixed price sales orders originating more recently (i.e., the latter months of fiscal 2022 and in fiscal 2023), with the cumulative increases in sales prices we charged for those buses generally outpacing the higher costs we paid to procure inventory, resulting in gross profit during the quarters.

While the gross margin on bus sales during the second quarter of fiscal 2023 lagged the historical gross margin reported prior to the COVID-19 pandemic, it returned to more normal historical levels during the third quarter of fiscal 2023.

Additionally, Russian military forces launched a large-scale invasion of Ukraine on February 24, 2022, which further exacerbated global supply chain disruptions.

While the Company has no assets or customers in either of these countries, this military conflict significantly impacted our financial results during the second half of fiscal 2022 and continuing into fiscal 2023, 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 second half of fiscal 2022 and continuing into fiscal 2023.

Significant uncertainty exists concerning the magnitude and duration of the pandemic and subsequent supply chain constraints and accordingly, precludes any prediction as to the ultimate severity of the adverse impacts on our business, financial condition, results of operations, and liquidity.

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

Specifically, it 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 fiscal 2022, fiscal 2023 and continuing into fiscal 2024.

However, the higher costs charged by suppliers to procure inventory that continued into fiscal 2023 had a significant adverse impact on our operations and results.

Specifically, such cost increases outpaced the increases in sales prices that we charged for the buses that were sold during the first quarter of fiscal 2023, many of which were

included in the backlog of fixed price sales orders originating in fiscal 2021 and the early months of fiscal 2022 that carried forward into fiscal 2023.

During the remainder of fiscal 2023, the buses that were sold were generally included in the backlog of fixed price sales orders originating more recently (i.e., the latter months of fiscal 2022 and in fiscal 2023), with the cumulative increases in sales prices we charged for those buses generally outpacing the higher costs we paid to procure inventory, resulting in gross profit during the quarters.

Supply chain disruptions continued into the first quarter of fiscal 2024 as there were still occasional shortages of certain critical components as well as ongoing increases in raw materials costs, both of which impacted our business and operations by limiting the number of school buses that we could produce and sell as well as increasing the costs to manufacture buses.

Nonetheless, the lessons learned, and resulting actions taken, by management over the past three fiscal years allowed the Company to better navigate these supply chain challenges and consistently produce buses to fulfill sales orders.

Ongoing improvements in manufacturing operations, when coupled with periodic pricing actions taken by the Company to ensure that the increased sales prices charged for buses kept pace with increased costs to procure inventory to produce the buses, allowed the Company to report gross profit and gross margin during the first quarter of fiscal 2024 that were consistent with, or better than, historic levels experienced prior to the COVID-19 pandemic.

Use of Estimates and Assumptions

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and the accounting for self-insurance reserves, warranty reserves, pension obligations, income taxes, environmental liabilities and contingencies.

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

Future events, including the extent and duration of continued supply chain constraints and their 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.

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The Company’s significant accounting policies are described in the Company’s fiscal 2023 Form 10-K, filed with the SEC on December 11, 2023.

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 nine months ended July 1, 2023.

Recently Issued Accounting Standards

ASU 2020-04 On March 12, 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , providing temporary guidance to ease the potential burden in accounting for reference rate reform primarily resulting from the discontinuation of LIBOR (defined below), which was initially expected to occur on December 31, 2021.

The amendments in ASU 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued.

ASU 2021-01 On January 7, 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848):

Scope , which refines the scope of Accounting Standards Codification Topic ("ASC") 848, Reference Rate Reform , and clarifies some of its guidance as part of the FASB’s ongoing monitoring of global reference rate reform activities.

The ASU permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements, and calculating price alignment interest in connection with reference rate reform activities under way in global financial markets.

ASU 2022-06 On December 21, 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 , which defers the sunset date of ASC 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in ASC 848.

The above amendments are effective for all entities from March 12, 2020 through December 31, 2024.

An entity may elect to apply the amendments to contract modifications on a (i) full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or (ii) prospective basis from any date within an interim period that includes or is subsequent to March 12, 2020 through the date that the interim financial statements are issued or available to be issued.

On March 5, 2021, the Intercontinental Exchange, Inc.

("ICE") Benchmark Administration ("IBA"), the administrator of the United States Dollar London Interbank Offering Rate ("LIBOR"), issued a statement, following the completion of a formal consultation process, reaffirming the preliminary announcement it made on November 30, 2020, to cease publication of (i) 1 week and 2 month LIBOR subsequent to December 31, 2021 and (ii) the overnight and 1, 3, 6 and 12 month LIBOR tenors subsequent to June 30, 2023.

The IBA’s statement regarding such cessation dates primarily resulted from a majority of LIBOR panel banks communicating to the IBA that they would be unwilling to continue contributing to the relevant LIBOR settings after such dates.

As a result, the IBA determined that it would be unable to publish the relevant LIBOR settings on a representative basis after such dates.

The United Kingdom Financial Conduct Authority ("FCA"), which regulates the IBA, confirmed that, based on information it received from LIBOR panel banks, it did not expect that any LIBOR settings would become unrepresentative before the announced cessation dates summarized above.

With the maturity of the interest rate collar on September 30, 2022 and execution of the Fifth Amended Credit Agreement (defined below) on September 2, 2022, which, among other things, changed one of the market interest rate indices that the Company can elect to accrue interest on outstanding borrowings from LIBOR to the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York (“SOFR”) and became effective at the end of the applicable interest period for any LIBOR borrowings outstanding on the fifth amendment effective date, the Company no longer has any contracts that reference LIBOR.

The change in interest rate indices from LIBOR to SOFR occurred at the end of December 2022 when the LIBOR interest rate on outstanding borrowings on the fifth amendment effective date matured.

At that time, the Company adjusted the effective interest rate on outstanding borrowings on a prospective basis, which did not have a material impact on the condensed consolidated financial statements.

ASU 2023-07 On November 27, 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024, with early adoption permitted.

ASU 2023-09 On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires entities to disclose more detailed information in their reconciliation of their statutory tax rate to their effective tax rate.

Public business entities ("PBEs") are required to provide this incremental detail in a numerical, tabular format.

The ASU also requires entities to disclose more detailed information about income taxes paid, including by jurisdiction;

pretax income (or loss) from continuing operations;

and income tax expense (or benefit).

The ASU is effective for PBEs in fiscal years beginning after December 15, 2024, and interim periods beginning after December 15, 2025, with early adoption permitted.

The new ASUs will not impact amounts recorded in the financial statements but instead, will require more detailed disclosures in the footnotes to the financial statement.

The Company plans to provide the updated disclosures required by the ASUs in the periods in which they are effective.

Supplemental Financial Information

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

(in thousands of dollars) July 1, 2023 October 1, 2022

(in thousands of dollars) December 30, 2023 September 30, 2023

Raw materials $ 96,045 $ 88,116

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The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the applicable Condensed Consolidated Balance Sheets that sum to the total of such amounts reported on the Condensed Consolidated Statements of Cash Flows:

(in thousands of dollars) July 1, 2023 July 2, 2022

(in thousands of dollars) December 30, 2023 December 31, 2022

Cash and cash equivalents $ 77,296 $ 5,664

1 unchanged sentence

Total cash, cash equivalents, and restricted cash reported on the Condensed Consolidated Statements of Cash Flows $ 77,296 $ 5,900

Amounts included in restricted cash represent those required by a contractual agreement with a financial institution to serve as collateral against outstanding balances pertaining to the Company's corporate credit card program.

Amounts included in restricted cash represent those that were required by a contractual agreement with a financial institution to serve as collateral against outstanding balances pertaining to the Company's corporate credit card program.

Product Warranties

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

Three Months Ended Nine Months Ended

(in thousands of dollars) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

Balance at beginning of period $ 15,434 $ 15,970

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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 Nine Months Ended

(in thousands of dollars) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

Balance at beginning of period $ 23,123 $ 18,795

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Other Current Liabilities

The balance in other current liabilities as of July 1, 2023 includes approximately $ 13.2 million of funds awarded by the U.S.

The balance in other current liabilities as of December 30, 2023 includes approximately $ 7.1 million of funds awarded by the U.S.

Environmental Protection Agency in administering the U.S.

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The IIJA allocates federal funds to help local school jurisdictions purchase zero and low emission school buses over a five year period.

The Company expects to recognize the vast majority of this amount as revenue during the fourth quarter of fiscal 2023 and first quarter of fiscal 2024 as the underlying buses are produced and delivered.

The Company expects to recognize this amount as revenue during fiscal 2024 as the underlying buses are produced and delivered.

Self-Insurance

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) July 1, 2023 October 1, 2022

(in thousands of dollars) December 30, 2023 September 30, 2023

Current portion $ 4,392 $ 4,475

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Shipping and Handling Revenues

Shipping and handling revenues were $ 4.6 million and $ 4.2 million for the three months ended July 1, 2023 and July 2, 2022, respectively, and $ 13.1 million and $ 11.1 million for the nine months ended July 1, 2023 and July 2, 2022, respectively.

The related cost of goods sold was $ 4.0 million and $ 3.7 million for the three months ended July 1, 2023 and July 2, 2022, respectively, and $ 11.7 million and $ 9.9 million for the nine months ended July 1, 2023 and July 2, 2022, respectively.

Shipping and handling revenues were $ 4.7 million and $ 4.3 million for the three months ended December 30, 2023 and December 31, 2022, respectively.

The related cost of goods sold was $ 4.3 million and $ 3.8 million for the three months ended December 30, 2023 and December 31, 2022, respectively.

Pension Expense

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

Three Months Ended Nine Months Ended

(in thousands of dollars) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

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

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

Interest cost $ 1,484 $ 1,509

1 unchanged sentence

Amortization of prior loss 172 299

Net periodic benefit expense (income) $ 178 $ ( 739 ) $ 534 $ ( 2,217 )

Net periodic pension benefit expense

Amortization of prior loss, recognized in other comprehensive income ( 172 ) ( 299 )

Total recognized in net periodic pension benefit expense (income) and other comprehensive income $ ( 121 ) $ ( 1,030 ) $ ( 363 ) $ ( 3,090 )

On November 21, 2022, BBBC (as "Borrower") executed a sixth amendment to the Credit Agreement, dated as of December 12, 2016 ("Credit Agreement");

as amended by the first amendment to the Credit Agreement, dated as of September 13, 2018 (the "First Amended Credit Agreement"), the second amendment to the Credit Agreement, dated as of May 7, 2020 (the "Second Amended Credit Agreement"), the third amendment to the Credit Agreement, dated as of December 4, 2020 (the "Third Amended Credit Agreement");

the fourth amendment to the Credit Agreement, dated as of November 24, 2021 (the "Fourth Amended Credit Agreement:);

the fifth amendment and limited waiver to the Credit Agreement, dated as of September 2, 2022 (the "Fifth Amended Credit Agreement");

and as further amended by the sixth amendment (the "Sixth Amended Credit Agreement" and collectively, the "Amended Credit Agreement").

The Sixth Amended Credit Agreement, among other things, extends the maturity date for both the term loan and revolving credit facilities from September 13, 2023 to December 31, 2024.

The total revolving credit facility commitment is reduced to an aggregate principal amount of $ 90.0 million, of which $ 80.0 million is available for Borrower to draw, with the remaining $ 10.0 million subject to written approval from the lenders, which, once obtained, will be irrevocable.

There was no change in the term loan facility commitment;

however, the Sixth Amended Credit Agreement requires principal repayments approximating $ 5.0 million on a quarterly basis through September 30, 2024, with the remaining balance due upon maturity.

There were $ 151.6 million of term loan borrowings outstanding on the sixth amendment effective date.

The Sixth Amended Credit Agreement also provides for temporary amendments to certain financial performance covenants during the period from the third amendment effective date, December 4, 2020, through and including April 1, 2023 (the “Amended Limited Availability Period:), which will terminate on the date on which the Company’s Total Net Leverage Ratio ("TNLR"), defined as the ratio of (a) consolidated net debt to (b) consolidated EBITDA, for the two fiscal quarters most recently ended is each less than 4.00x and no default or event of default has occurred and is continuing.

However, the Amended Limited Availability Period can re-occur upon a default or event of default or if the TNLR for the immediately preceding fiscal quarter is equal to or greater than 4.00x.

The minimum consolidated EBITDA that the Company is required to maintain during the Amended Limited Availability Period is updated as set forth in the table below (in millions):

Period Minimum Consolidated EBITDA

Fiscal quarter ending July 1, 2023 $ 50.0

Fiscal quarter ending September 30, 2023 $ 60.0

For purposes of complying with the above minimum consolidated EBITDA covenant, the Company’s consolidated EBITDA for the (i) two fiscal quarter period ending July 1, 2023 is multiplied by 2 and (ii) three fiscal quarter period ending September 30, 2023 is multiplied by 4/3.

The minimum liquidity (in the form of undrawn availability under the revolving credit facility and unrestricted cash and cash equivalents) that the Company is required to maintain at the end of each fiscal month during the Amended Limited Availability Period is amended as set forth in the table below (in millions):

Period Minimum Liquidity

Sixth amendment effective date through December 30, 2023 $ 30.0

Additionally, the financial performance covenant requiring that school bus units manufactured by the Company (“Units”) not fall below certain pre-set thresholds on a three month trailing basis (“Units Covenant”) is amended for Units to be calculated at the end of each applicable fiscal month on a cumulative basis, with the minimum cumulative threshold that the Company is required to maintain during the Amended Limited Availability Period amended as set forth in the table below.

The Units Covenant is triggered only if the Company’s liquidity for the most-recently ended fiscal month is less than $ 50.0 million during the Amended Limited Availability Period:

Period Minimum Units Manufactured

Period from October 2, 2022 and ending October 29, 2022 450

Period from October 2, 2022 and ending November 26, 2022 900

Period from October 2, 2022 and ending December 31, 2022 1,400

Period from October 2, 2022 and ending January 28, 2023 1,900

Period from October 2, 2022 and ending February 25, 2023 2,400

Period from October 2, 2022 and ending April 1, 2023 3,000

The Company is not required to comply with a maximum TNLR financial maintenance covenant for any fiscal quarters from the sixth amendment effective date through September 30, 2023, with the maximum threshold amended thereafter as follows :

Period Maximum Total

Net Leverage Ratio

Fiscal quarter ending December 30, 2023 through the fiscal quarter ending March 30, 2024 4.00 :1.00

Fiscal quarter ending June 29, 2024 and thereafter 3.50:1.00

The pricing grid in the Amended Credit Agreement, which is based on the TNLR, is applicable to both term loan and revolving borrowings and is determined in accordance with the amended pricing matrix set forth below:

Level Total Net Leverage Ratio ABR Loans SOFR Loans

Total recognized in net periodic pension benefit expense and other comprehensive income

$ ( 136 ) $ ( 121 )

On November 17, 2023 (the “Closing Date”), BBBC, as Borrower, executed a $ 250.0 million five-year credit agreement with Bank of Montreal, acting as administrative agent and an issuing bank;

several joint lead arranger partners and issuing banks, including Bank of America;

and a syndicate of other lenders (the "Credit Agreement").

The credit facilities provided for under the Credit Agreement consist of a term loan facility in an aggregate initial principal amount of $ 100.0 million (the “Term Loan Facility”) and a revolving credit facility with aggregate commitments of $ 150.0 million.

The revolving credit facility includes a $ 25.0 million letter of credit sub-facility and $ 5.0 million swingline sub-facility (the “Revolving Credit Facility,” and together with the Term Loan Facility, each a “Credit Facility” and collectively, the “Credit Facilities”).

A minimum of $ 100.0 million of additional term loans and/or revolving credit commitments may be incurred under the Credit Agreement, subject to certain limitations as set forth in the Credit Agreement, and which additional loans and/or commitments would require further commitments from existing lenders or from new lenders.

Borrower has the right to prepay the loans outstanding under the Credit Facilities without premium or penalty (subject to customary breakage costs, if applicable).

Additionally, proceeds from asset sales, condemnation, casualty insurance and/or debt issuances (in

certain circumstances) are required to be used to prepay borrowings outstanding under the Credit Facilities.

Borrowings under the Term Loan Facility, which were made on the Closing Date, may not be reborrowed once they are repaid while borrowings under the Revolving Credit Facility may be repaid and reborrowed from time to time at our election.

The Term Loan Facility is subject to amortization of principal, payable in equal quarterly installments on the last day of each fiscal quarter, commencing on March 30, 2024, with 5.0% of the $ 100.0 million aggregate principal amount of all initial term loans outstanding at the Closing Date payable each year prior to the maturity date of the Term Loan Facility.

The remaining initial aggregate principal amount outstanding under the Term Loan Facility, as well as any outstanding borrowings under the Revolving Credit Facility, will be payable on the November 17, 2028 maturity date of the Credit Agreement.

The Credit Facilities are guaranteed by all of the Company’s wholly-owned domestic restricted subsidiaries (subject to customary exceptions) and are secured by a security agreement which pledges a lien on virtually all of the assets of Borrower, the Company and the Company’s other wholly-owned domestic restricted subsidiaries, other than any owned or leased real property and subject to customary exceptions.

The $ 100.0 million of Term Loan Facility proceeds and $ 36.2 million of Revolving Credit Facility proceeds that were borrowed on the Closing Date were used to pay (i) the $ 131.8 million of term loan indebtedness outstanding under the previous credit agreement ("Amended Credit Agreement"), (ii) interest and commitment fees accrued under the Amended Credit Agreement through the Closing Date and (iii) transaction costs associated with the consummation of the Credit Agreement.

Under the terms of the Credit Agreement, Borrower, the Company and the Company’s other wholly-owned domestic restricted subsidiaries are subject to customary affirmative and negative covenants and events of default for facilities of this type (with customary grace periods, as applicable, and lender remedies).

Borrowings under the Credit Facilities bear interest, at our option, at (i) base rate ("ABR") or (ii) the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York ("SOFR") plus 0.10 %, plus an applicable margin depending on the Total Net Leverage Ratio ("TNLR," which is defined in the Credit Agreement as the ratio of consolidated net debt to consolidated EBITDA on a trailing four quarter basis) of the Company as follows:

ABR Loans SOFR Loans

I Less than 1.00x

0.75 % 1.75 %

II Greater than or equal to 1.00x and less than 1.50x

1.50 % 2.50 %

III Greater than or equal to 1.50x and less than 2.25x

IV Greater than or equal to 3.00x and less than 3.25x 1.50 % 2.50 %

V Greater than or equal to 3.25x and less than 3.50x 1.75 % 2.75 %

VI Greater than or equal to 3.50x and less than 4.00x 2.00 % 3.00 %

VII Greater than or equal to 4.00x and less than 4.50x 2.75 % 3.75 %

VIII Greater than or equal to 4.50x and less than 5.00x 3.75 % 4.75 %

IX Greater than 5.00x 4.75 % 5.75 %

Further, the pricing margins for levels VII though IX above are each increased (x) by 0.25 % if the aggregate revolving borrowings are equal to or greater than $ 50.0 million and less than or equal to $ 80.0 million and (y) by 0.50 % if the aggregate revolving borrowings are greater than $ 80.0 million.

On the sixth amendment effective date, the interest rate was set at SOFR plus 5.75 % and will be adjusted, as applicable, for future fiscal quarters in accordance with the amended pricing grid set forth above.

Finally, the Company is required to deliver to the administrative agent, on a quarterly basis, a projected consolidated balance sheet and consolidated statements of projected operations and cash flows containing the next four fiscal quarters.

The Company incurred approximately $ 3.3 million in lender fees and other issuance costs relating to the sixth amendment.

Of such total, approximately $ 1.2 million and $ 1.5 million was capitalized within other assets and long-term debt (as a contra-balance), respectively, on the Condensed Consolidated Balance Sheets and will be amortized as an adjustment to interest expense on a straight-line basis and utilizing the effective interest method, respectively, until maturity of the Amended Credit Agreement.

The remaining approximate $ 0.5 million was recorded to loss on debt modification on the Condensed Consolidated Statements of Operations.

Term debt consisted of the following at the dates indicated:

(in thousands of dollars) July 1, 2023 October 1, 2022

2023 term loan, net of deferred financing costs of $ 1,801 and $ 1,410 , respectively

2.00 % 3.00 %

IV Greater than or equal to 2.25x

2.25 % 3.25 %

Pricing on the Closing Date was set at Level III until receipt of the financial information and related compliance certificate for the first fiscal quarter ending after the Closing Date.

Borrower is also required to pay lenders an unused commitment fee of between 0.25 % and 0.45 % per annum on the undrawn commitments under the Revolving Credit Facility, depending on the TNLR, quarterly in arrears.

The Credit Agreement also includes a requirement that the Company comply with the following financial covenants on the last day of each fiscal quarter through maturity:

(i) a pro forma TNLR of not greater than 3.00:1.00 and (ii) a pro forma fixed charge coverage ratio (as defined in the Credit Agreement) of not less than 1.20:1.00.

The Company was in compliance with such covenants as of December 30, 2023.

The Company incurred approximately $ 3.1 million in lender fees and other issuance costs relating to the Credit Agreement.

Of such total, approximately $ 1.9 million and $ 0.8 million was capitalized within other assets and long-term debt (as a contra-balance), respectively, on the Condensed Consolidated Balance Sheets and will be amortized as an adjustment to interest expense on a straight-line basis and utilizing the effective interest method, respectively, until maturity of the Credit Agreement.

The remaining approximate $ 0.4 million was recorded to loss on debt refinancing or modification on the Condensed Consolidated Statements of Operations.

In conjunction with executing the Credit Agreement, previously capitalized lender fees and other issuance costs relating to the Amended Credit Agreement and incurred in prior periods totaling $ 1.1 million were also expensed to loss on debt refinancing or modification on the Condensed Consolidated Statements of Operations.

Term loan borrowings consisted of the following at the dates indicated:

(in thousands of dollars) December 30, 2023 September 30, 2023

Term loan borrowings, net of deferred financing costs of $ 1,514 and $ 1,456 , respectively

$ 98,486 $ 130,344

current portion of long-term debt 5,000 19,800

Long-term debt, net of current portion $ 93,486 $ 110,544

Term loans are recognized on the Condensed Consolidated Balance Sheets at the unpaid principal balance, and are not subject to fair value measurement;

Term loan borrowings are recognized on the Condensed Consolidated Balance Sheets at the unpaid principal balance, and are not subject to fair value measurement;

however, given the variable rates on the loans, the Company estimates that the unpaid principal balance approximates fair value.

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

At July 1, 2023 and October 1, 2022, $ 136.8 million and $ 151.6 million, respectively, were outstanding on the term loans.

At July 1, 2023 and October 1, 2022, the stated interest rates on the term loans were 11.1 % and 7.9 %, respectively.

At July 1, 2023 and October 1, 2022, the weighted-average annual effective interest rates for the term loans were 11.6 % and 8.0 %, respectively, which includes amortization of the deferred financing costs and interest relating to the interest rate collar, as applicable.

At July 1, 2023, $ 6.3 million of letters of credit were outstanding, which reduces the availability on the revolving line of credit.

There were no borrowings outstanding on the revolving credit facility;

At December 30, 2023 and September 30, 2023, $ 100.0 million and $ 131.8 million, respectively, were outstanding on the term loans.

At December 30, 2023 and September 30, 2023, the stated interest rates on the term loans were 8.5 % and 10.0 %, respectively.

For the three month periods ended December 30, 2023 and September 30, 2023, the weighted-average annual effective interest rates for the term loans were 9.9 % and 10.9 %, respectively.

At December 30, 2023, $ 6.7 million of letters of credit were outstanding, which reduces the availability on the revolving line of credit.

There were $ 36.2 million borrowings outstanding on the Revolving Credit Facility;

therefore, the Company would have been able to borrow $ 107.1 million on the revolving line of credit.

Interest expense on all indebtedness was $ 4.5 million and $ 3.9 million for the three months ended July 1, 2023 and July 2, 2022, respectively, and $ 13.9 million and $ 9.5 million for the nine months ended July 1, 2023 and July 2, 2022, respectively.

Interest expense on all indebtedness was $ 3.6 million and $ 4.2 million for the three months ended December 30, 2023 and December 31, 2022, respectively.

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

1 unchanged sentence

Fiscal Year Principal Payments

Thereafter 76,250

Total remaining principal payments $ 100,000

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 annual forecasted pre-tax earnings mix and allocation of certain expenses in various taxing jurisdictions where the Company conducts its business, primarily in the U.S.

In periods where our pre-tax 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 July 1, 2023 was 21.6 %, which aligned with the statutory federal income tax rate of 21 % and is comprised of normal tax rate items, including impacts from state taxes, federal and state tax credits (net of valuation allowances) and permanent differences, which were partially offset by the impact of discrete period items during the quarter.

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 nine months ended July 1, 2023 was 22.2 %, which aligned with the statutory federal tax rate of 21 % and is comprised of normal tax rate items, including impacts from state taxes, federal and state tax credits (net of valuation allowances) and permanent differences, which were partially offset by the impact of discrete period items during the period.

The effective tax rate for the nine months ended July 2, 2022 was 24.8 % 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 and federal and state tax credits (net of valuation allowances), which were 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 December 30, 2023 was 25.9 % and differed from the statutory federal income tax rate of 21 %.

The increase was primarily due to the impacts from state taxes and certain permanent items on the federal rate, which were partially offset by the impacts from federal and state tax credits (net of valuation allowances) and discrete period items during the quarter.

The effective tax rate for the three months ended December 31, 2022 was 20.8 %, which aligned with the statutory federal income tax rate of 21 % and is comprised of normal tax rate items, including impacts from state taxes and federal and state tax credits (net of valuation allowances), with discrete period items having a nominal impact on the effective rate during the quarter.

Guarantees, Commitments and Contingencies

At July 1, 2023, the Company had a number of product liability and other cases pending.

At December 30, 2023, 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.

9 unchanged sentences

Management evaluates the segments based primarily upon revenues and gross profit, which are reflected in the tables below for the periods presented :

Three Months Ended Nine Months Ended

(in thousands of dollars) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

Bus (1) $ 293,437 $ 213,249

1 unchanged sentence

Segment net sales $ 317,660 $ 235,732

(1) Parts segment revenue includes $ 1.7 million and $ 0.7 million for the three months ended July 1, 2023 and July 2, 2022, respectively, and $ 4.1 million and $ 2.6 million for the nine months ended July 1, 2023 and July 2, 2022, respectively, related to the inter-segment sale of parts that was eliminated by the Bus segment upon consolidation.

Three Months Ended Nine Months Ended

(in thousands of dollars) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

(1) Parts segment revenue includes $ 1.6 million and $ 1.1 million for the three months ended December 30, 2023 and December 31, 2022, respectively, related to the inter-segment sale of parts that was eliminated by the Bus segment upon consolidation.

Gross profit (loss)

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

Bus $ 51,294 $ ( 3,731 )

2 unchanged sentences

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 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

Segment gross profit $ 63,558 $ 7,457

2 unchanged sentences

Interest income 1,088 —

Other (expense) income, net ( 6,421 ) 735 ( 6,999 ) 2,215

Loss on debt modification — — ( 537 ) ( 561 )

Other expense, net

( 1,221 ) ( 236 )

Loss on debt refinancing or modification

( 1,558 ) ( 537 )

Income (loss) before income taxes $ 32,634 $ ( 14,344 )

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

Three Months Ended Nine Months Ended

(in thousands of dollars) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

United States $ 282,908 $ 193,571 $ 751,730 $ 488,363

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

$ 302,532 $ 204,541

Canada 15,119 30,521

2 unchanged sentences

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

Three Months Ended Nine Months Ended

(in thousands of dollars) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

(in thousands of dollars) December 30, 2023 December 31, 2022

Diesel buses $ 84,998 $ 71,494

7 unchanged sentences

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

Three Months Ended Nine Months Ended

(in thousands except for share data) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Three Months Ended

(in thousands except for share data) December 30, 2023 December 31, 2022

Net income (loss) $ 26,150 $ ( 11,294 )

2 unchanged sentences

Weighted-average dilutive securities, stock options 100,170 —

Weighted-average dilutive securities, warrants (Note 12)

Weighted-average shares and dilutive potential common shares (1) 32,429,127 32,026,311

2 unchanged sentences

Diluted earnings (loss) per share $ 0.81 $ ( 0.35 )

(1) Potentially dilutive securities representing 0.1 million and 0.6 million shares of common stock were excluded from the computation of diluted earnings per share for the three month periods ending July 1, 2023 and July 2, 2022, respectively, and potentially dilutive securities representing 0.5 million and 0.4 million shares of common stock were excluded from the computation of diluted earnings per share for the nine months ending July 1, 2023 and July 2, 2022, respectively, as their effect would have been antidilutive.

(1) Potentially dilutive securities representing 0.2 million and 0.8 million shares of common stock were excluded from the computation of diluted earnings per share for the three month periods ending December 30, 2023 and December 31, 2022, 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 Nine Months Ended

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

Three Months Ended

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

December 30, 2023

Beginning Balance $ ( 31,884 ) $ ( 31,884 )

2 unchanged sentences

Income taxes ( 41 ) ( 41 )

Ending Balance July 1, 2023 $ ( 41,249 ) $ ( 41,249 ) $ ( 41,249 ) $ ( 41,249 )

Ending Balance December 30, 2023 $ ( 31,753 ) $ ( 31,753 )

December 31, 2022

Beginning Balance $ ( 41,930 ) $ ( 41,930 )

2 unchanged sentences

Income taxes ( 72 ) ( 72 )

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

Ending Balance December 31, 2022 $ ( 41,703 ) $ ( 41,703 )

Stockholder Transaction Costs

On June 7, 2023, the Company entered into an underwriting agreement with BofA Securities, Inc.

and Barclays Capital Inc., as representatives of the several underwriters and American Securities LLC, Coliseum Capital Partners, L.P., and Blackwell Partners LLC – Series A ("Selling Stockholders"), pursuant to which the Selling Stockholders agreed to sell 5,175,000 shares of common stock, including the sale of 675,000 shares pursuant to the underwriters’ exercise of their over-allotment option, at a purchase price of $ 20.00 per share (“Offering”).

The Offering was conducted pursuant to a prospectus supplement, dated June 7, 2023, to the prospectus, dated December 22, 2021, included in the Company’s registration statement on Form S-3 (File No.

On December 14, 2023, the Company entered into an underwriting agreement with BofA Securities, Inc.

and Barclays Capital Inc., as representatives of the several underwriters and American Securities LLC ("Selling Stockholder"), pursuant to which the Selling Stockholder agreed to sell 2,500,000 shares of common stock at a purchase price of $ 25.10 per share (“Offering”).

The Offering was conducted pursuant to a prospectus supplement, dated December 14, 2023, to the prospectus, dated December 22, 2021, included in the Company’s registration statement on Form S-3 (File No.

333-261858) that was initially filed with the SEC on December 23, 2021.

The Offering closed on June 12, 2023.

Although the Company did not sell any shares or receive any proceeds from the Offering, it was required to pay certain expenses in connection with the Offering that totaled approximately $ 5.6 million and $ 6.3 million for the three and nine month periods ending July 1, 2023, respectively, with no similar expense recorded during the same periods of fiscal 2022.

The $ 6.3 million of expense is included within other (expense) income, net on the Condensed Consolidated Statements of Operations for the three and nine month periods ending July 1, 2023, although approximately $ 0.7 million of such expense was initially recorded within selling, general and administrative expenses during the second quarter of fiscal 2023 and reclassified to other (expense) income, net, during the third quarter of fiscal 2023.

The Offering closed on December 19, 2023.

Although the Company did not sell any shares or receive any proceeds from the Offering, it was required to pay certain expenses in connection with the Offering that totaled approximately $ 1.2 million for the three month period ending December 30, 2023, with no similar expense recorded during the same period of fiscal 2023.

The $ 1.2 million of expense is included within other expense, net on the Condensed Consolidated Statements of Operations for the three month period ending December 30, 2023.

Joint Ventures

Micro Bird Holdings, Inc.

During the three month period ended December 30, 2023, Micro Bird Holdings, Inc., our unconsolidated Canadian joint venture, paid dividends to all common stockholders, with the Company's proportionate share totaling $3.0 million, gross of required withholding taxes.

The dividend was recorded as a reduction in the balance of equity investment in affiliate on the Condensed Consolidated Balance Sheets and is presented as a cash inflow in the operating section of the Condensed Consolidated Statements of Cash Flows.

Clean Bus Solutions, LLC

On December 7, 2023, the Company, through its wholly owned subsidiary, BBBC, and GC Mobility Investments I, LLC, a wholly owned subsidiary of Generate Capital, PBC (“Generate Capital”), a sustainable investment company focusing on clean energy, transportation, water, waste, agriculture, smart cities and industrial decarbonization, executed a definitive agreement (“Joint Venture Agreement”) establishing a joint venture, Clean Bus Solutions, LLC, to provide a fleet-as-a-service ("FaaS") offering using electric school buses manufactured and sold by the Company (“Joint Venture”).

The service will be offered to qualified customers of the Company.

Through the Joint Venture, the Company will provide its end customers with turnkey electrification solutions, including a wide product range consisting of, among others, electric school buses, financing of electric buses and supporting charging infrastructure, project planning and management, and fleet optimization.

The Company and Generate Capital will initially have an equal common ownership interest in the Joint Venture, and will initially jointly share management responsibility and control, with each party having certain customary consent and approval rights and control triggers.

The parties have each agreed to contribute up to $ 10.0 million to the Joint Venture, as agreed from time to time, for common interests to fund administrative expenses, and up to an additional $ 100.0 million of capital in the form of preferred interests to fund the purchase, delivery, installation, operation and maintenance of FaaS projects, inclusive of Blue Bird electric school buses and associated charging infrastructure.

Of this amount, the Company has committed to provide up to $ 20.0 million and Generate Capital has committed to provide up to $ 80.0 million, with the Company’s aggregate commitment in any one year not to exceed $ 10.0 million without its consent.

In accordance with the terms of the Joint Venture Agreement, the Company will promote the Joint Venture as the Company’s preferred FaaS offering for electric school buses and has agreed to not participate as a joint venture partner in any other similar FaaS offering for electric school buses, except as an original equipment manufacturer of buses.

The Company’s obligations do not prevent or limit any activities of its dealers.

The Joint Venture has a perpetual duration subject to the right of either party to terminate early upon the occurrence of certain events of default or the failure to achieve certain milestones set forth in the terms of the Joint Venture Agreement.

In connection with the execution of the Joint Venture Agreement, the Company granted Generate Capital warrants to purchase an aggregate of 1,000,000 shares of Company common stock at an exercise price of $ 25.00 per share during a five-year exercise period (“Warrants”).

Two-thirds of the Warrants were immediately exercisable while the remaining Warrants will become exercisable upon Generate Capital satisfying certain funding conditions.

The exercise price and the number of shares issuable upon exercise of the Warrants are subject to adjustment in the event of a recapitalization, stock dividend or similar event.

The Company recorded the $ 7.4 million fair value of the Warrants upon issuance as permanent equity within additional paid-in capital on the Condensed Consolidated Balance Sheets and is not required to subsequently record changes in fair value as long as the Warrants continue to be classified within stockholders' equity.

Additionally, since the Warrants were provided in exchange for an investment in the Joint Venture, the Company recorded the cost of its investment based on the fair value of the Warrants upon issuance, which increased the balance of equity investment in affiliate on the Condensed Consolidated Balance Sheets by a corresponding $ 7.4 million.

No other activity was recorded relating to the Joint Venture during the three month period ended December 30, 2023.

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