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Jul 04, 2020
Blue Bird Q3 2020 Earnings Report
Blue Bird's Q3 2020 earnings were significantly impacted by COVID-19, but the company focused on margin growth.
Key Takeaways
Blue Bird's Q3 2020 results were significantly impacted by COVID-19, with net sales down 39% year-over-year to $189.2 million. Despite these challenges, the average bus selling price increased by 9%. The company reported a GAAP net income of $1.3 million and an adjusted EBITDA of $12.5 million.
Net sales decreased by 39% to $189.2 million due to COVID-19 impacts.
Average selling price per bus increased by 9% due to pricing and a richer mix of higher-priced vehicles.
GAAP net income was $1.3 million, a decrease of $13.3 million from the prior year.
Adjusted EBITDA was $12.5 million, down $16.6 million from the prior year.
Blue Bird
Blue Bird
Forward Guidance
The company is focused on achieving an EBITDA margin target of at least 10% in the near-term and is taking restructuring actions to navigate the challenges posed by COVID-19.
Positive Outlook
- Successfully moved to a single shift production schedule to drive efficiency and quality improvement.
- Average selling price per bus increased by more than $7,000, or 9%, over last year's third quarter.
- Alternative-fuel results represent a 48% mix of year-to-date sales and backlog.
- The company is the market share leader in propane, gasoline and electric-powered buses.
- Transformational Initiatives improved profits by $2.3 million in the quarter.
Challenges Ahead
- School shutdowns and shelter-in-place mandates delayed orders through the third quarter.
- Continued supplier disruptions impacted efficiencies throughout the quarter.
- Orders have continued to be slow as schools deliberate online versus in-classroom teaching this Fall.
- Lower volumes and manufacturing disruptions due to COVID-19 impacted gross profit margin.
- Adjusted EBITDA decreased due to lower volume and production inefficiencies due to COVID-19.