Item 1. Financial Statements
Item 1. Financial Statements (Unaudited)
BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of dollars, except for share data) March 29, 2025 September 28, 2024
Assets
Current assets
Cash and cash equivalents $ 130,749 $ 127,687
Accounts receivable, net 15,786 59,099
Inventories 163,832 127,798
Other current assets 18,052 8,795
Total current assets $ 328,419 $ 323,379
Property, plant and equipment, net $ 104,022 $ 97,322
Goodwill 18,825 18,825
Intangible assets, net 42,620 43,554
Equity investment in affiliates
35,967 32,089
Deferred tax assets 5,075 2,399
Finance lease right-of-use assets 78 332
Pension
6,563 4,649
Other assets 2,129 2,345
Total assets $ 543,698 $ 524,894
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 153,730 $ 143,156
Warranty 7,164 7,166
Accrued expenses 42,454 55,775
Deferred warranty income 10,281 9,421
Finance lease obligations 377 975
Other current liabilities 7,640 14,480
Current portion of long-term debt 5,000 5,000
Total current liabilities $ 226,646 $ 235,973
Long-term liabilities
Revolving credit facility $ — $ —
Long-term debt 87,661 89,994
Warranty 9,181 9,013
Deferred warranty income 20,167 18,541
Deferred tax liabilities 1,530 2,783
Finance lease obligations — 6
Other liabilities 8,121 9,020
Total long-term liabilities $ 126,660 $ 129,357
Guarantees, commitments and contingencies (Note 6)
Stockholders' equity
Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at March 29, 2025 and September 28, 2024
$ — $ —
Common stock, $ 0.0001 par value, 100,000,000 shares authorized, 31,674,003 and 32,268,022 shares issued and outstanding at March 29, 2025 and September 28, 2024, respectively
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Additional paid-in capital 191,985 185,977
Retained earnings
24,715 —
Accumulated other comprehensive loss ( 26,311 ) ( 26,416 )
Total stockholders' equity $ 190,392 $ 159,564
Total liabilities and stockholders' equity $ 543,698 $ 524,894
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
(in thousands of dollars except for share data) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
Net sales $ 358,851 $ 345,915 $ 672,723 $ 663,575
Cost of goods sold 287,997 282,276 541,552 536,378
Gross profit $ 70,854 $ 63,639 $ 131,171 $ 127,197
Operating expenses
Selling, general and administrative expenses 37,143 27,571 64,418 53,173
Operating profit
$ 33,711 $ 36,068 $ 66,753 $ 74,024
Interest expense ( 1,813 ) ( 2,812 ) ( 3,728 ) ( 6,443 )
Interest income 1,258 1,054 2,826 2,142
Other income (expense), net
444 ( 1,968 ) 3,360 ( 3,189 )
Loss on debt refinancing
— — — ( 1,558 )
Income before income taxes
$ 33,600 $ 32,342 $ 69,211 $ 64,976
Income tax expense
( 9,129 ) ( 8,261 ) ( 17,822 ) ( 16,707 )
Equity in net income of non-consolidated affiliates
1,575 1,942 3,379 3,904
Net income
$ 26,046 $ 26,023 $ 54,768 $ 52,173
Earnings per share:
Basic weighted average shares outstanding 31,917,407 32,240,458 32,072,354 32,205,657
Diluted weighted average shares outstanding 32,885,993 33,074,592 33,152,066 32,828,339
Basic earnings per share
$ 0.82 $ 0.81 $ 1.71 $ 1.62
Diluted earnings per share
$ 0.79 $ 0.79 $ 1.65 $ 1.59
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
Net income
$ 26,046 $ 26,023 $ 54,768 $ 52,173
Other comprehensive income, net of tax:
Net change in defined benefit pension plan 52 131 105 262
Total other comprehensive income $ 52 $ 131 $ 105 $ 262
Comprehensive income
$ 26,098 $ 26,154 $ 54,873 $ 52,435
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024
Cash flows from operating activities
Net income $ 54,768 $ 52,173
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 7,710 7,255
Non-cash interest expense 167 219
Share-based compensation expense 9,940 4,543
Equity in net income of non-consolidated affiliates ( 3,379 ) ( 3,904 )
Dividend from equity investment in affiliates
— 2,991
Loss on disposal of fixed assets 285 25
Deferred income tax (benefit) expense
( 3,962 ) 1,825
Amortization of deferred actuarial pension losses 139 344
Loss on debt refinancing
— 1,558
Changes in assets and liabilities:
Accounts receivable 43,313 1,149
Inventories ( 36,034 ) ( 10,115 )
Other assets ( 10,955 ) ( 10,016 )
Accounts payable 9,929 2,298
Accrued expenses, pension and other liabilities ( 17,741 ) 4,426
Total adjustments $ ( 588 ) $ 2,598
Total cash provided by operating activities $ 54,180 $ 54,771
Cash flows from investing activities
Cash paid for fixed assets $ ( 13,616 ) $ ( 5,643 )
Equity investment in affiliates (Note 12)
( 500 ) —
Total cash used in investing activities $ ( 14,116 ) $ ( 5,643 )
Cash flows from financing activities
Revolving credit facility borrowings
$ — $ 36,220
Revolving credit facility repayments — ( 36,220 )
Term loan borrowings
— 100,000
Term loan repayments
( 2,500 ) ( 133,050 )
Principal payments on finance leases ( 604 ) ( 292 )
Cash paid for debt costs
— ( 3,128 )
Repurchase of common stock in connection with repurchase program (Note 13)
( 30,053 ) —
Repurchase of common stock in connection with stock award exercises ( 4,412 ) ( 301 )
Cash received from stock option exercises 567 1,751
Total cash used in financing activities $ ( 37,002 ) $ ( 35,020 )
Change in cash and cash equivalents
3,062 14,108
Cash and cash equivalents at beginning of period
127,687 78,988
Cash and cash equivalents at end of period
$ 130,749 $ 93,096
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Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024
Supplemental disclosures of cash flow information
Cash paid or received during the period:
Interest paid
$ 4,048 $ 5,820
Interest received
( 2,761 ) ( 2,142 )
Income tax paid, net of tax refunds
30,695 9,443
Non-cash investing and financing activities:
Changes in accounts payable for capital additions to property, plant and equipment $ 2,521 $ 780
Warrants issued for equity investment in affiliate (note 12)
— 7,416
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.
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BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
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 Retained Earnings (Accumulated Deficit)
Shares Amount Total Stockholders' Equity
Balance, December 28, 2024 32,111,078 $ 3 $ 187,379 — $ — $ ( 26,363 ) $ 18,686 — $ — $ 179,705
Restricted stock activity 111,432 — ( 2,966 ) — — — — — — ( 2,966 )
Stock option activity 10,845 — 182 — — — — — — 182
Share-based compensation expense — — 7,390 — — — — — — 7,390
Share repurchases (Note 13)
( 559,352 ) — — — — — ( 20,017 ) — — ( 20,017 )
Net income — — — — — — 26,046 — — 26,046
Other comprehensive income, net of tax — — — — — 52 — — — 52
Balance, March 29, 2025 31,674,003 $ 3 $ 191,985 — $ — $ ( 26,311 ) $ 24,715 — $ — $ 190,392
Balance, December 30, 2023 32,198,592 $ 3 $ 187,159 — $ — $ ( 31,753 ) $ ( 29,550 ) 1,782,568 $ ( 50,282 ) $ 75,577
Stock option activity 100,473 — 1,602 — — — — — — 1,602
Share-based compensation expense — — 2,455 — — — — — — 2,455
Net income — — — — — — 26,023 — — 26,023
Other comprehensive income, net of tax — — — — — 131 — — — 131
Balance, March 30, 2024 32,299,065 $ 3 $ 191,216 — $ — $ ( 31,622 ) $ ( 3,527 ) 1,782,568 $ ( 50,282 ) $ 105,788
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Six 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 Retained Earnings (Accumulated Deficit)
Shares Amount Total Stockholders' Equity
Balance, September 28, 2024 32,268,022 $ 3 $ 185,977 — $ — $ ( 26,416 ) $ — — $ — $ 159,564
Restricted stock activity 168,852 — ( 4,412 ) — — — — — — ( 4,412 )
Stock option activity 39,931 — 567 — — — — — — 567
Share-based compensation expense — — 9,853 — — — — — — 9,853
Share repurchases (Note 13) ( 802,802 ) — — — — — ( 30,053 ) — — ( 30,053 )
Net income — — — — — — 54,768 — — 54,768
Other comprehensive income, net of tax — — — — — 105 — — — 105
Balance, March 29, 2025 31,674,003 $ 3 $ 191,985 — $ — $ ( 26,311 ) $ 24,715 — $ — $ 190,392
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 )
Stock option activity 111,725 — 1,751 — — — — — — 1,751
Share-based compensation expense — — 4,489 — — — — — — 4,489
Net income — — — — — — 52,173 — — 52,173
Other comprehensive income, net of tax — — — — — 262 — — — 262
Balance, March 30, 2024 32,299,065 $ 3 $ 191,216 — $ — $ ( 31,622 ) $ ( 3,527 ) 1,782,568 $ ( 50,282 ) $ 105,788
The accompanying notes are an integral part of these consolidated financial statements.
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BLUE BIRD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Nature of Business and Basis of Presentation
Nature of Business
Blue Bird Body Company ("BBBC"), a wholly-owned subsidiary of Blue Bird Corporation, was incorporated in 1958 and has manufactured, assembled and sold school buses to a variety of municipal, federal and commercial customers since 1927. The majority of BBBC’s sales are made to an independent dealer network, which in turn sells buses to ultimate end users. References in these notes to condensed consolidated financial statements to “Blue Bird,” the “Company,” “we,” “our,” or “us” relate to Blue Bird Corporation and its wholly-owned subsidiaries, unless the context specifically indicates otherwise. We are headquartered in Macon, Georgia.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company transactions and accounts have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting and Article 10 of Regulation S-X. 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 27, 2025 ("fiscal 2025") and ended September 28, 2024 ("fiscal 2024") consist or consisted of 52 weeks. The second quarters of fiscal 2025 and fiscal 2024 both included 13 weeks. The six month periods in fiscal 2025 and 2024 both included 26 weeks.
In the opinion of management, all adjustments considered necessary for a fair presentation of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for any interim period are not necessarily indicative of the results that may be expected for the entire year. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
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. GAAP. 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 second 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 second 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
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions. At the date of the financial statements, these estimates and assumptions affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, and during the reporting period, these estimates and assumptions affect the reported
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amounts of revenues and expenses. For example, significant management judgments are required in determining excess, obsolete, or unsalable inventory; the allowance for doubtful accounts; potential impairment of long-lived assets, goodwill and intangible assets; 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 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. The Company evaluates and updates its assumptions and estimates on an ongoing basis and may employ outside experts to assist in the Company’s evaluations. Actual results could differ from the estimates that the Company has used.
2. Summary of Significant Accounting Policies and Recently Issued Accounting Standards
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. Our senior management has reviewed these significant accounting policies and related disclosures and determined that there were no significant changes in our critical accounting policies in the six months ended March 29, 2025.
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 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.
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. 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, 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 statements. The Company plans to provide the updated disclosures required by the ASUs in the periods in which they are effective.
3. Supplemental Financial Information
Inventories
The following table presents the components of inventories at the dates indicated:
(in thousands of dollars) March 29, 2025 September 28, 2024
Raw materials $ 87,556 $ 83,027
Work in process 43,519 32,556
Finished goods 32,757 12,215
Total inventories $ 163,832 $ 127,798
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Product Warranties
The following table reflects activity in accrued warranty cost (current and long-term portions combined) for the periods presented:
Three Months Ended Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
Balance at beginning of period $ 16,127 $ 15,283 $ 16,179 $ 15,434
Add current period accruals 2,698 2,512 5,236 4,853
Current period reductions of accrual ( 2,480 ) ( 2,319 ) ( 5,070 ) ( 4,811 )
Balance at end of period $ 16,345 $ 15,476 $ 16,345 $ 15,476
Extended Warranties
The following table reflects activity in deferred warranty income (current and long-term portions combined), for the sale of extended warranties of two to five years , for the periods presented:
Three Months Ended Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
Balance at beginning of period $ 29,559 $ 24,118 $ 27,962 $ 23,123
Add current period deferred income 3,337 3,562 7,266 6,560
Current period recognition of income ( 2,448 ) ( 2,117 ) ( 4,780 ) ( 4,120 )
Balance at end of period $ 30,448 $ 25,563 $ 30,448 $ 25,563
The outstanding balance of deferred warranty income in the table above is considered a "contract liability," and represents a performance obligation of the Company that we satisfy over the term of the arrangement but for which we have been paid in full at the time the warranty was sold. We expect to recognize $ 5.2 million of the outstanding contract liability during the remainder of fiscal 2025, $ 9.4 million in fiscal 2026, and the remaining balance thereafter.
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) March 29, 2025 September 28, 2024
Current portion $ 4,427 $ 5,008
Long-term portion 2,389 2,248
Total accrued self-insurance $ 6,816 $ 7,256
The current and long-term portions of the accrued self-insurance liability are reflected in accrued expenses and other liabilities, respectively, on the Condensed Consolidated Balance Sheets.
Shipping and Handling Revenues
Shipping and handling revenues were $ 5.2 million and $ 5.0 million for the three months ended March 29, 2025 and March 30, 2024, respectively, and $ 10.3 million and $ 9.7 million for the six months ended March 29, 2025 and March 30, 2024, respectively. The related cost of goods sold was $ 4.7 million and $ 4.4 million for the three months ended March 29, 2025 and March 30, 2024, respectively, and $ 9.3 million and $ 8.7 million for the six months ended March 29, 2025 and March 30, 2024, respectively.
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Pension (Income) Expense
Components of net periodic pension benefit (income) expense were as follows for the periods presented:
Three Months Ended Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
Interest cost $ 1,312 $ 1,484 $ 2,624 $ 2,968
Expected return on plan assets ( 1,819 ) ( 1,620 ) ( 3,638 ) ( 3,240 )
Amortization of prior loss 69 172 139 344
Net periodic pension benefit (income) expense
$ ( 438 ) $ 36 $ ( 875 ) $ 72
Amortization of prior loss, recognized in other comprehensive income ( 69 ) ( 172 ) ( 139 ) ( 344 )
Total recognized in net periodic pension benefit (income) expense and other comprehensive income
$ ( 507 ) $ ( 136 ) $ ( 1,014 ) $ ( 272 )
4. Debt
Term loan borrowings consisted of the following at the dates indicated:
(in thousands of dollars) March 29, 2025 September 28, 2024
Term loan borrowings, net of deferred financing costs of $ 1,089 and $ 1,256 , respectively
$ 92,661 $ 94,994
Less: current portion of long-term debt 5,000 5,000
Long-term debt, net of current portion $ 87,661 $ 89,994
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 March 29, 2025 and September 28, 2024, $ 93.8 million and $ 96.3 million, respectively, were outstanding on the term loans.
At March 29, 2025 and September 28, 2024, the stated interest rates on the term loans were 6.2 % and 6.9 %, respectively. At March 29, 2025 and September 28, 2024, the weighted-average annual effective interest rates for the term loans were 6.7 % and 8.2 %, respectively, which include amortization of the deferred financing costs.
At March 29, 2025, $ 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 $ 1.8 million and $ 2.8 million for the three months ended March 29, 2025 and March 30, 2024, respectively, and $ 3.7 million and $ 6.4 million for the six months ended March 29, 2025 and March 30, 2024, respectively.
The schedule of remaining principal payments through maturity for the term loans is as follows:
(in thousands of dollars)
Fiscal Year Principal Payments
2025 $ 2,500
2026 5,000
2027 5,000
2028 5,000
2029 76,250
Total remaining principal payments $ 93,750
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5. Income Taxes
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 United States of America ("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.
Three Months
The effective tax rate for the three months ended March 29, 2025 was 27.2 % 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 March 30, 2024 was 25.5 % 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.
Six Months
The effective tax rate for the six months ended March 29, 2025 was 25.8 % 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 six months ended March 30, 2024 was 25.7 % 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 period.
6. Guarantees, Commitments and Contingencies
Litigation
At March 29, 2025, the Company had a number of product liability and other cases pending. Management believes that, considering the Company’s insurance coverage and its intention to vigorously defend its positions, the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial statements.
Environmental
The Company is subject to a variety of environmental regulations relating to the use, storage, discharge and disposal of hazardous materials used in its manufacturing processes. Failure by the Company to comply with present and future regulations could subject it to future liabilities. In addition, such regulations could require the Company to acquire costly equipment or to incur other significant expenses to comply with environmental regulations. The Company is currently not involved in any material environmental proceedings and therefore, management believes that the resolution of pending environmental matters will not have a material adverse effect on the Company’s financial statements.
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7. Segment Information
We manage our business in two operating segments: (i) the Bus segment, which includes the manufacturing and assembly of buses to be sold to a variety of customers across the U.S., Canada and in certain limited international markets; and (ii) the Parts segment, which consists primarily of the purchase of parts from third parties to be sold to dealers within the Company’s network and certain large fleet customers. Management evaluates the segments based primarily upon revenues and gross profit, which are reflected in the tables below for the periods presented:
Net sales
Three Months Ended Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
Bus (1) $ 332,712 $ 317,959 $ 620,859 $ 611,396
Parts (1) 26,139 27,956 51,864 52,179
Segment net sales $ 358,851 $ 345,915 $ 672,723 $ 663,575
(1) Parts segment revenue includes $ 1.9 million and $ 2.7 million for the three months ended March 29, 2025 and March 30, 2024, respectively, and $ 3.8 million and $ 4.3 million for the six months ended March 29, 2025 and March 30, 2024, respectively, related to inter-segment sales of parts that was eliminated by the Bus segment upon consolidation.
Gross profit
Three Months Ended Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
Bus $ 57,634 $ 49,589 $ 104,806 $ 100,883
Parts 13,220 14,050 26,365 26,314
Segment gross profit $ 70,854 $ 63,639 $ 131,171 $ 127,197
The following table is a reconciliation of segment gross profit to consolidated income before income taxes for the periods presented:
Three Months Ended Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
Segment gross profit $ 70,854 $ 63,639 $ 131,171 $ 127,197
Adjustments:
Selling, general and administrative expenses ( 37,143 ) ( 27,571 ) ( 64,418 ) ( 53,173 )
Interest expense ( 1,813 ) ( 2,812 ) ( 3,728 ) ( 6,443 )
Interest income 1,258 1,054 2,826 2,142
Other income (expense), net
444 ( 1,968 ) 3,360 ( 3,189 )
Loss on debt refinancing
— — — ( 1,558 )
Income before income taxes
$ 33,600 $ 32,342 $ 69,211 $ 64,976
Sales are attributable to geographic areas based on customer location and were as follows for the periods presented:
Three Months Ended Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
U.S.
$ 299,274 $ 316,583 $ 587,231 $ 619,115
Canada 59,471 29,058 84,074 44,177
Rest of world 106 274 1,418 283
Total net sales $ 358,851 $ 345,915 $ 672,723 $ 663,575
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8. Revenue
The following table disaggregates revenue by product category for the periods presented:
Three Months Ended Six Months Ended
(in thousands of dollars) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
Diesel buses $ 117,611 $ 123,444 $ 241,983 $ 208,442
Alternative power buses (1) 199,462 180,162 348,384 375,491
Other (2) 16,285 14,991 31,772 28,688
Parts 25,493 27,318 50,584 50,954
Net sales $ 358,851 $ 345,915 $ 672,723 $ 663,575
(1) Includes buses sold with any power source other than diesel (e.g., gasoline, propane, compressed natural gas ("CNG") or electric).
(2) Includes shipping and handling revenue, extended warranty income, surcharges and chassis and bus shell sales .
9. Earnings Per Share
The following table presents the earnings per share computation for the periods presented:
Three Months Ended Six Months Ended
(in thousands except for share data) March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024
Numerator:
Net income
$ 26,046 $ 26,023 $ 54,768 $ 52,173
Denominator:
Weighted-average common shares outstanding 31,917,407 32,240,458 32,072,354 32,205,657
Weighted-average dilutive securities, restricted stock 432,673 390,498 475,526 283,078
Weighted-average dilutive securities, stock options 216,937 183,538 239,056 153,044
Weighted-average dilutive securities, warrants
318,976 260,098 365,130 186,560
Weighted-average shares and dilutive potential common shares (1) 32,885,993 33,074,592 33,152,066 32,828,339
Earnings per share:
Basic earnings per share
$ 0.82 $ 0.81 $ 1.71 $ 1.62
Diluted earnings per share
$ 0.79 $ 0.79 $ 1.65 $ 1.59
(1) Potentially dilutive securities representing 0.1 million and approximately zero shares of common stock were excluded from the computation of diluted earnings per share for the three months ending March 29, 2025 and March 30, 2024, respectively, and potentially dilutive securities representing approximately zero shares of common stock were excluded from the computation of diluted earnings per share for each of the six months ending March 29, 2025 and March 30, 2024, as their effect would have been antidilutive.
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10. Accumulated Other Comprehensive Loss
The following table provides information on changes in accumulated other comprehensive loss ("AOCL") for the periods presented:
Three Months Ended Six Months Ended
(in thousands of dollars) Defined Benefit Pension Plan Total AOCL Defined Benefit Pension Plan Total AOCL
March 29, 2025
Beginning Balance $ ( 26,363 ) $ ( 26,363 ) $ ( 26,416 ) $ ( 26,416 )
Amounts reclassified and included in earnings 69 69 139 139
Total before taxes 69 69 139 139
Income taxes ( 17 ) ( 17 ) ( 34 ) ( 34 )
Ending Balance March 29, 2025 $ ( 26,311 ) $ ( 26,311 ) $ ( 26,311 ) $ ( 26,311 )
March 30, 2024
Beginning Balance $ ( 31,753 ) $ ( 31,753 ) $ ( 31,884 ) $ ( 31,884 )
Amounts reclassified and included in earnings 172 172 344 344
Total before taxes 172 172 344 344
Income taxes ( 41 ) ( 41 ) ( 82 ) ( 82 )
Ending Balance March 30, 2024 $ ( 31,622 ) $ ( 31,622 ) $ ( 31,622 ) $ ( 31,622 )
11. 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 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 Selling Stockholder, pursuant to which Selling Stockholder 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 Offerings were conducted pursuant to prospectus supplements, dated December 14, 2023 and February 15, 2024, respectively, both 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 $ 1.9 million and $ 3.2 million for the three and six months ended March 30, 2024, respectively. The $ 1.9 million and $ 3.2 million of expense is included within other income (expense), net on the Condensed Consolidated Statements of Operations for the three and six months ended March 30, 2024, respectively. No such expense was incurred in the six months ended March 29, 2025.
12. 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.
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 equity in net income of non-consolidated affiliates on the Condensed Consolidated Statements of Operations totaling $ 2.0 million for each of the three months
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ended March 29, 2025 and March 30, 2024, and $ 4.1 million and $ 3.9 million for the six months ended March 29, 2025 and March 30, 2024, 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 six months ended March 29, 2025.
At March 29, 2025 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 $ 28.5 million and $ 24.4 million, respectively.
Clean Bus Solutions, LLC
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 six months ended March 29, 2025, the Company made a $ 0.5 million cash contribution to CBS, and during the six months ended March 30, 2024, 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 $( 0.4 ) million and $( 0.7 ) million (losses) in equity in net income of non-consolidated affiliates on the Condensed Consolidated Statements of Operations for the three and six months ended March 29, 2025, respectively, while no amount was recorded in the six months ended March 30, 2024. CBS paid no dividends in any period.
At March 29, 2025 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 $ 7.5 million and $ 7.7 million, respectively.
13. 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 and six months ended March 29, 2025, the Company repurchased 559,352 and 802,802 shares of its common stock, respectively, for $ 20.0 million and $ 30.1 million, respectively, pursuant to the share repurchase plan. The Company constructively retired these shares immediately after repurchase, with the $ 20.0 million and $ 30.1 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 six months ended March 30, 2024. The total remaining authorization for future common stock repurchases under the Company's share repurchase program was $ 20.0 million as of March 29, 2025.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.