What changed in this filing

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Item 1. Financial Statements

2025-02-05 compared with 2024-08-07 · 145 added, 208 removed, 286 unchanged (55% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of dollars, except for share data) June 29, 2024 September 30, 2023

(in thousands of dollars, except for share data) December 28, 2024 September 28, 2024

Current assets

7 unchanged sentences

Intangible assets, net 43,087 43,554

Equity investment in affiliate 28,715 17,619

Equity investment in affiliates

34,393 32,089

Deferred tax assets 2,112 2,399

20 unchanged sentences

Other liabilities 8,168 9,020

Pension 1,994 2,404

Total long-term liabilities $ 126,090 $ 129,357

1 unchanged sentence

Stockholders' equity

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at June 29, 2024 and September 30, 2023

Common stock, $ 0.0001 par value, 100,000,000 shares authorized, 32,331,161 and 32,165,225 shares outstanding at June 29, 2024 and September 30, 2023, respectively

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at December 28, 2024 and September 28, 2024

Common stock, $ 0.0001 par value, 100,000,000 shares authorized, 32,111,078 and 32,268,022 shares issued and outstanding at December 28, 2024 and September 28, 2024, respectively

Additional paid-in capital 187,379 185,977

Retained earnings (accumulated deficit)

25,184 ( 55,700 )

Retained earnings

Accumulated other comprehensive loss ( 26,363 ) ( 26,416 )

Treasury stock, at cost, 1,782,568 shares at June 29, 2024 and September 30, 2023

( 50,282 ) ( 50,282 )

Total stockholders' equity $ 179,705 $ 159,564

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Nine Months Ended

(in thousands of dollars except for share data) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

(in thousands of dollars except for share data) December 28, 2024 December 30, 2023

Net sales $ 313,872 $ 317,660

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Interest income 1,568 1,088

Other expense, net

( 2,729 ) ( 6,421 ) ( 5,918 ) ( 6,999 )

Loss on debt refinancing or modification

Other income (expense), net

2,916 ( 1,221 )

Loss on debt refinancing

Income before income taxes

2 unchanged sentences

( 8,693 ) ( 8,446 )

Equity in net income of non-consolidated affiliate

2,767 2,502 6,671 4,168

Equity in net income of non-consolidated affiliates

$ 28,722 $ 26,150

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Nine Months Ended

(in thousands of dollars) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

$ 28,722 $ 26,150

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

(in thousands of dollars) June 29, 2024 July 1, 2023

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

Cash flows from operating activities

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Share-based compensation expense 2,506 2,051

Equity in net income of non-consolidated affiliate ( 6,671 ) ( 4,168 )

Dividend from equity investment in affiliate 2,991 —

Equity in net income of non-consolidated affiliates ( 1,804 ) ( 1,962 )

Dividend from equity investment in affiliates

Loss on disposal of fixed assets 20 4

Deferred income tax expense

( 2,145 ) 1,143

Amortization of deferred actuarial pension losses 70 172

Loss on debt refinancing or modification

Loss on debt refinancing

Changes in assets and liabilities:

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Cash paid for fixed assets $ ( 4,594 ) $ ( 2,904 )

Equity investment in affiliates (Note 12)

Total cash used in investing activities $ ( 5,094 ) $ ( 2,904 )

Cash flows from financing activities

Revolving credit facility borrowings (Note 4)

$ 36,220 $ 45,000

Revolving credit facility repayments ( 36,220 ) ( 65,000 )

Term loan borrowings - new credit agreement (Note 4)

Term loan repayments (Note 4)

Revolving credit facility borrowings

Term loan borrowings

Term loan repayments

( 1,250 ) ( 131,800 )

Principal payments on finance leases ( 538 ) ( 145 )

Cash paid for debt costs (Note 4)

( 3,128 ) ( 3,272 )

Cash paid for debt costs

Repurchase of common stock in connection with repurchase program (Note 13)

Repurchase of common stock in connection with stock award exercises ( 1,445 ) ( 301 )

Cash received from stock option exercises 385 149

Total cash used in financing activities $ ( 36,195 ) $ ( 37,485 )

Change in cash, cash equivalents, and restricted cash 9,428 40,256

Cash, cash equivalents, and restricted cash at beginning of period 78,988 10,479

Cash, cash equivalents, and restricted cash at end of period $ 88,416 $ 50,735

Nine Months Ended

(in thousands of dollars) June 29, 2024 July 1, 2023

Total cash (used in) provided by financing activities $ ( 12,884 ) $ 995

Change in cash and cash equivalents

8,432 ( 1,692 )

Cash and cash equivalents at beginning of period

127,687 78,988

Cash and cash equivalents at end of period

$ 136,119 $ 77,296

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

Supplemental disclosures of cash flow information

Cash paid or received during the period:

Interest paid, net of interest received $ 4,725 $ 12,202

Income tax paid (received), net of tax refunds

Interest paid

$ 2,368 $ 2,895

Interest received

( 1,436 ) ( 1,088 )

Income tax paid, net of tax refunds

Non-cash investing and financing activities:

Changes in accounts payable for capital additions to property, plant and equipment $ 1,940 $ 953

Right-of-use assets obtained in exchange for operating lease obligations 1,682 199

Warrants issued for equity investment in affiliate

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

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

BLUE BIRD CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

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) Retained Earnings

Shares Amount Total Stockholders' Equity (Deficit)

Balance, March 30, 2024 32,299,065 $ 3 $ 191,216 — $ — $ ( 31,622 ) $ ( 3,527 ) 1,782,568 $ ( 50,282 ) $ 105,788

Restricted stock activity 18,896 — — — — — — — — —

Stock option activity 13,200 — 223 — — — — — — 223

Share-based compensation expense — — 2,430 — — — — — — 2,430

Net income — — — — — — 28,711 — — 28,711

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

Balance, June 29, 2024 32,331,161 $ 3 $ 193,869 — $ — $ ( 31,491 ) $ 25,184 1,782,568 $ ( 50,282 ) $ 137,283

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

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) Retained Earnings

Shares Par Value Additional Paid-In-Capital Shares Amount Accumulated Other Comprehensive Loss Retained Earnings (Accumulated Deficit)

Shares Amount Total Stockholders' Equity

Balance, September 28, 2024 32,268,022 $ 3 $ 185,977 — $ — $ ( 26,416 ) $ — — $ — $ 159,564

Issuance of warrants (Note 12)

— — 7,416 — — — — — — 7,416

Restricted stock activity 57,420 — ( 1,445 ) — — — — — — ( 1,445 )

1 unchanged sentence

Share-based compensation expense — — 2,462 — — — — — — 2,462

Share repurchases (Note 13)

( 243,450 ) — — — — — ( 10,036 ) — — ( 10,036 )

Net income — — — — — — 28,722 — — 28,722

Other comprehensive income, net of tax — — — — — 53 — — — 53

Balance, June 29, 2024 32,331,161 $ 3 $ 193,869 — $ — $ ( 31,491 ) $ 25,184 1,782,568 $ ( 50,282 ) $ 137,283

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

Balance, December 28, 2024 32,111,078 $ 3 $ 187,379 — $ — $ ( 26,363 ) $ 18,686 — $ — $ 179,705

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

Issuance of warrants

— — 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

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

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

BLUE BIRD CORPORATION

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The fiscal years ending September 27, 2025 ("fiscal 2025") and ended September 28, 2024 ("fiscal 2024") consist or consisted of 52 weeks.

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

The nine month periods in fiscal 2024 and 2023 both included 39 weeks.

The first quarters of fiscal 2025 and fiscal 2024 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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The Condensed Consolidated Balance Sheet data as of September 28, 2024 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

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.

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 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.

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 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 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.

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 latter half of fiscal 2023.

Supply chain disruptions continued during the first nine months 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 nine months of fiscal 2024 that were consistent with, or better than, historic levels experienced prior to the COVID-19 pandemic.

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 28, 2024 as set forth in the Company's fiscal 2024 Form 10-K filed with the Securities and Exchange Commission ("SEC") on November 25, 2024.

Impacts of Supply Chain Constraints on Our Business

The global automotive industry supply chain constraints that arose subsequent to the novel coronavirus pandemic known as "COVID-19" and that were further exacerbated by additional stress resulting from Russia’s invasion of Ukraine in February 2022 continued to impact our business and operations during the first quarters of fiscal 2024 and 2025.

Specifically, they continued to result in higher purchasing costs, including freight costs incurred to deliver critical components, to procure the raw materials inventory needed to produce buses to fulfill sales orders.

Additionally, there were still occasional shortages of certain critical components that limited the number and/or mix of school buses that we could produce and sell.

Nonetheless, ongoing improvements in manufacturing operations that have resulted in the consistent production of buses, when coupled with periodic pricing actions taken to ensure that the increased sales prices charged for buses keep pace with increased costs to procure inventory to produce buses, have resulted in the Company reporting gross profit and gross margin in the first quarters of fiscal 2025 and 2024 that exceeded those reported in pre-pandemic fiscal years.

Significant uncertainty still exists concerning the magnitude and duration of the ongoing 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.

Use of Estimates and Assumptions

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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.

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

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

unsalable inventory;

the allowance for doubtful accounts;

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Summary of Significant Accounting Policies and Recently Issued Accounting Standards

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 June 29, 2024.

The Company’s significant accounting policies are described in the Company’s fiscal 2024 Form 10-K, filed with the SEC on November 25, 2024.

Recently Issued Accounting Standards

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.

Improvements to Reportable Segment Disclosures , which requires public business entities ("PBEs") 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.

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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.

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;

1 unchanged sentence

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 ASU is effective for PBEs in fiscal years beginning after December 15, 2024, with early adoption permitted.

ASUs 2024-03 & 2025-01 On November 4, 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which requires PBEs to disclose disaggregated information about certain income statement expense line items.

On January 6, 2025, the FASB issued ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date , to clarify the effective date of ASU 2024-03, which is for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027.

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.

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

(in thousands of dollars) June 29, 2024 September 30, 2023

(in thousands of dollars) December 28, 2024 September 28, 2024

Raw materials $ 104,495 $ 83,027

2 unchanged sentences

Total inventories $ 163,120 $ 127,798

Restricted Cash

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) June 29, 2024 July 1, 2023

Cash and cash equivalents $ 88,416 $ 50,497

Restricted cash — 238

Total cash, cash equivalents, and restricted cash reported on the Condensed Consolidated Statements of Cash Flows $ 88,416 $ 50,735

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) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

Balance at beginning of period $ 16,179 $ 15,434

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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) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

Balance at beginning of period $ 27,962 $ 23,123

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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) June 29, 2024 September 30, 2023

(in thousands of dollars) December 28, 2024 September 28, 2024

Current portion $ 4,723 $ 5,008

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Shipping and Handling Revenues

Shipping and handling revenues were $ 5.9 million and $ 4.6 million for the three months ended June 29, 2024 and July 1, 2023, respectively, and $ 15.6 million and $ 13.1 million for the nine months ended June 29, 2024 and July 1, 2023, respectively.

The related cost of goods sold was $ 5.5 million and $ 4.0 million for the three months ended June 29, 2024 and July 1, 2023, respectively, and $ 14.2 million and $ 11.7 million for the nine months ended June 29, 2024 and July 1, 2023, respectively.

Pension Expense

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

Three Months Ended Nine Months Ended

(in thousands of dollars) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Shipping and handling revenues were $ 5.1 million and $ 4.7 million for the three months ended December 28, 2024 and December 30, 2023, respectively.

The related cost of goods sold was $ 4.6 million and $ 4.3 million for the three months ended December 28, 2024 and December 30, 2023, respectively.

Pension (Income) Expense

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

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

Interest cost $ 1,312 $ 1,484

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Amortization of prior loss 70 172

Net periodic pension benefit expense

Net periodic pension benefit (income) expense

$ ( 437 ) $ 36

Amortization of prior loss, recognized in other comprehensive income ( 70 ) ( 172 )

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

$ ( 136 ) $ ( 121 ) $ ( 408 ) $ ( 363 )

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, which commenced 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

2.00 % 3.00 %

IV Greater than or equal to 2.25x

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

$ ( 507 ) $ ( 136 )

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 that ended after the Closing Date, with pricing as of June 29, 2024 set at Level I.

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 June 29, 2024.

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) June 29, 2024 September 30, 2023

(in thousands of dollars) December 28, 2024 September 28, 2024

Term loan borrowings, net of deferred financing costs of $ 1,172 and $ 1,256 , respectively

4 unchanged sentences

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 June 29, 2024 and September 30, 2023, $ 97.5 million and $ 131.8 million, respectively, were outstanding on the term loans.

At June 29, 2024 and September 30, 2023, the stated interest rates on the term loans were 7.2 % and 10.0 %, respectively.

At June 29, 2024 and September 30, 2023, the weighted-average annual effective interest rates for the term loans were 8.5 % and 10.9 %, respectively, which include amortization of the deferred financing costs.

At June 29, 2024, $ 6.7 million of letters of credit were outstanding, which reduces the availability on the revolving line of credit.

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

At December 28, 2024 and September 28, 2024, $ 95.0 million and $ 96.3 million, respectively, were outstanding on the term loans.

At December 28, 2024 and September 28, 2024, the stated interest rates on the term loans were 6.4 % and 6.9 %, respectively.

At December 28, 2024 and September 28, 2024, the weighted-average annual effective interest rates for the term loans were 7.0 % and 8.2 %, respectively, which include amortization of the deferred financing costs.

At December 28, 2024, $ 6.7 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;

therefore, the Company would have been able to borrow $ 143.3 million on the revolving line of credit.

Interest expense on all indebtedness was $ 2.1 million and $ 4.5 million for the three months ended June 29, 2024 and July 1, 2023, respectively, and $ 8.6 million and $ 13.9 million for the nine months ended June 29, 2024 and July 1, 2023, respectively.

Interest expense on all indebtedness was $ 1.9 million and $ 3.6 million for the three months ended December 28, 2024 and December 30, 2023, respectively.

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

6 unchanged sentences

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 June 29, 2024 was 27.7 % and differed from the statutory federal income tax rate of 21 %.

The effective tax rate for the three months ended December 28, 2024 was 24.4 % 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 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 nine months ended June 29, 2024 was 26.4 % and differed from the statutory federal income tax rate of 21 %.

The effective tax rate for the nine months ended July 1, 2023 was 22.2 %, 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 period.

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 %.

Guarantees, Commitments and Contingencies

At June 29, 2024, the Company had a number of product liability and other cases pending.

At December 28, 2024, 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) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

Bus (1) $ 288,147 $ 293,437

1 unchanged sentence

Segment net sales $ 313,872 $ 317,660

(1) Parts segment revenue includes $ 2.6 million and $ 1.7 million for the three months ended June 29, 2024 and July 1, 2023, respectively, and $ 6.9 million and $ 4.1 million for the nine months ended June 29, 2024 and July 1, 2023, respectively, related to inter-segment sales of parts that was eliminated by the Bus segment upon consolidation.

Gross profit (loss)

Three Months Ended Nine Months Ended

(in thousands of dollars) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

(1) Parts segment revenue includes $ 1.9 million and $ 1.6 million for the three months ended December 28, 2024 and December 30, 2023, respectively, related to inter-segment sales of parts that was eliminated by the Bus segment upon consolidation.

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

Bus $ 47,172 $ 51,294

2 unchanged sentences

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

Three Months Ended Nine Months Ended

(in thousands of dollars) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

Segment gross profit $ 60,317 $ 63,558

2 unchanged sentences

Interest income 1,568 1,088

Other expense, net

( 2,729 ) ( 6,421 ) ( 5,918 ) ( 6,999 )

Loss on debt refinancing or modification

Other income (expense), net

2,916 ( 1,221 )

Loss on debt refinancing

Income before income taxes

1 unchanged sentence

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) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

$ 287,957 $ 302,532

3 unchanged sentences

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

Three Months Ended Nine Months Ended

(in thousands of dollars) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

(in thousands of dollars) December 28, 2024 December 30, 2023

Diesel buses $ 124,372 $ 84,998

7 unchanged sentences

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

Three Months Ended Nine Months Ended

(in thousands except for share data) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Three Months Ended

(in thousands except for share data) December 28, 2024 December 30, 2023

$ 28,722 $ 26,150

2 unchanged sentences

Weighted-average dilutive securities, stock options 249,233 100,170

Weighted-average dilutive securities, warrants (Note 12)

Weighted-average dilutive securities, warrants

404,225 12,419

5 unchanged sentences

$ 0.86 $ 0.81

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

(1) Potentially dilutive securities representing approximately 0.2 million shares of common stock were excluded from the computation of diluted earnings per share for the three months ended December 30, 2023, 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

June 29, 2024

Three Months Ended

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

December 28, 2024

Beginning Balance $ ( 26,416 ) $ ( 26,416 )

2 unchanged sentences

Income taxes ( 17 ) ( 17 )

Ending Balance June 29, 2024 $ ( 31,491 ) $ ( 31,491 ) $ ( 31,491 ) $ ( 31,491 )

Ending Balance December 28, 2024 $ ( 26,363 ) $ ( 26,363 )

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 )

Stockholder Transaction Costs

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 (“December Offering”).

On February 15, 2024, the Company entered into an underwriting agreement with Barclays Capital Inc., as representative of the several underwriters and the Selling Stockholder, pursuant to which the Selling Shareholder agreed to sell 4,042,650 shares of common stock at a purchase price of $ 32.90 per share ("February Offering," and collectively with the December Offering, “Offerings”).

The December Offering was conducted pursuant to a prospectus supplement, dated December 14, 2023, and the February Offering was conducted pursuant to a prospectus supplement, dated February 15, 2024, both to the prospectus dated December 22, 2021 included in the Company’s registration statement on Form S-3 (File No.

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 December Offering closed on December 19, 2023 and the February Offering closed on February 21, 2024.

Although the Company did not sell any shares or receive any proceeds from the Offerings, it was required to pay certain expenses in connection with the Offerings that totaled approximately $ 3.2 million for the nine months ended June 29, 2024, with $5.5 million and $ 6.3 million of similar expense recorded for the three and nine months ended July 1, 2023, respectively.

The $ 3.2 million of expense is included within other expense, net on the Condensed Consolidated Statements of Operations for the nine months ended June 29, 2024.

The $ 6.3 million of expense is included within other expense, net on the Condensed Consolidated Statements of Operations for both the three and nine months ended 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, net during the third quarter of fiscal 2023.

Joint Ventures

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 transaction that totaled approximately $ 1.2 million for the three months ended December 30, 2023.

The $ 1.2 million of expense is included within other income (expense), net on the Condensed Consolidated Statements of Operations for the three months ended December 30, 2023.

No such expense was incurred in the three months ended December 28, 2024.

Equity Investment in Affiliates

The Company has made investments in the below entities and utilizes the equity method of accounting to record its interest in them as it does not have control to direct the activities that most significantly impact their financial performance based on the shared powers of the venture partners.

The carrying amount of the equity method investments is adjusted for any contribution that the Company makes to them as well as for the Company’s proportionate share of net earnings or losses and any dividends received.

Micro Bird Holdings, Inc.

In December 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.

The Company holds a 50 % equity interest in Micro Bird Holdings, Inc.

("Micro Bird"), our unconsolidated Canadian joint venture that produces Blue Bird Micro Bird by Girardin Type A buses in Drummondville, Quebec.

In recognizing the Company’s 50 % portion of Micro Bird's net income or loss, the Company recorded $ 2.1 million and $ 2.0 million in equity in net income of non-consolidated affiliates on the Condensed Consolidated Statements of Operations for the three months ended December 28, 2024 and December 30, 2023, respectively.

In December 2023, Micro Bird 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 affiliates 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.

No dividends were paid in the three months ended December 28, 2024.

At December 28, 2024 and September 28, 2024, the carrying value of the Company's investment in Micro Bird included within equity investment in affiliates on the Condensed Consolidated Balance Sheets was $ 26.6 million and $ 24.4 million, respectively.

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 and nine months ended June 29, 2024.

The Company holds a 50 % equity interest in Clean Bus Solutions, LLC ("CBS"), our unconsolidated joint venture that provides a fleet-as-a-service ("FaaS") offering using electric school buses manufactured and sold by the Company.

The service is offered to qualified customers of the Company by providing them 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.

During the three months ended December 28, 2024, the Company made a $ 0.5 million cash contribution to CBS and during the three months ended December 30, 2023, the Company recorded the $ 7.4 million fair value of warrants it issued to the joint venture partner as its initial investment in CBS, both of which increased the balance of equity investment in affiliates on the Condensed Consolidated Balance Sheets.

In recognizing the Company’s 50 % portion of CBS' net income or loss, the Company recorded $( 0.3 ) million (a loss) in equity in net income of non-consolidated affiliates on the Condensed Consolidated Statements of Operations for the three months ended December 28, 2024, while no amount was recorded in the three months ended December 30, 2023.

CBS paid no dividends in either period.

At December 28, 2024 and September 28, 2024, the carrying value of the Company's investment in CBS included within equity investment in affiliates on the Condensed Consolidated Balance Sheets was $ 7.8 million and $ 7.7 million, respectively.

Stockholders’ Equity

Share Repurchase Program and Common Stock Retirement

On January 31, 2024, the Board of Directors of the Company authorized and approved a share repurchase program for up to $ 60 million of outstanding shares of the Company’s common stock over a period of 24 months, expiring January 31, 2026.

Under the share repurchase program, the Company may repurchase shares through open market purchases, privately negotiated transactions, accelerated share repurchase transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

During the three months ended December 28, 2024, the Company repurchased 243,450 shares of its common stock for $ 10.0 million, pursuant to the share repurchase plan.

The Company constructively retired these shares immediately after repurchase, with the $ 10.0 million amount paid in excess of the $ 0.0001 par value of each share recorded as a reduction in retained earnings.

No such repurchases were made during the three months ended December 30, 2023.

The total remaining authorization for future common stock repurchases under the Company's share repurchase program was $ 40.0 million as of December 28, 2024.

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