Blue Bird Reports Fiscal 2025 First Quarter Results; Beats First Quarter Guidance; Reaffirms 2025 Guidance and Long-Term Outlook

Net Sales of $314M and GAAP Net Income of $29M

Adj. EBITDA of $46M with 15% Margin and 2,130 Buses Sold

FY2025 Adj. EBITDA Reaffirmed at $200M or 14% of Revenue

Blue Bird Corporation ("Blue Bird") (NASDAQ:BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2025 first quarter results.

"I am incredibly proud of our team's achievements in delivering another outstanding result and near record profit in the first quarter," said Phil Horlock, President & CEO of Blue Bird Corporation. "The Blue Bird team continued to exceed expectations, improving operations, driving new orders, and expanding our leadership in alternative-powered buses. Market demand remains very strong with nearly 4,400 units in our order backlog at the end of the first quarter. Unit sales were about the same as last year, with revenue down by $3.8M, driven by product mix, and we delivered an exceptional 14.6% Adj. EBITDA margin. With 94% of our first quarter unit sales mix comprised of internal combustion engine (ICE) buses, this result demonstrates the very strong earnings power of our base business.

"In our push to expand our leadership in alternative-powered school buses, we delivered over 130 electric-powered buses this quarter, ahead of the plan we communicated in November. We also saw strong growth in EV orders from both the EPA's Clean School Bus Program and state/local level programs. As of today, we have approximately 1,000 EV buses either sold or in our firm order backlog, which supports our EV sales target for 2025.

"Based on our strong Q1 performance, we've reaffirmed our full-year financial guidance for Adjusted EBITDA at $200 million, with a 14% margin. This will be an all-time full-year record for Blue Bird, and we look forward to sustained profitable growth in the coming years."

FY2025 Guidance and Long-Term Outlook Reaffirmed

"We are very pleased with the first quarter results, with the second highest ever Q1 Adj. EBITDA" said Razvan Radulescu, CFO of Blue Bird Corporation. "Our business is in a very strong position and we continue to deliver ahead of the plan we have been messaging. We are reaffirming our full-year 2025 guidance for Net Revenue to $1.4-1.5 Billion, Adj. EBITDA to $185-215 million and Adj. Free Cash Flow to $40-60 million. Additionally, we are confirming our long-term profit outlook towards an Adjusted EBITDA margin of 15%+ on ~$2 billion in revenues."

Fiscal 2025 First Quarter Results

Net Sales

Net sales were $313.9 million for the first quarter of fiscal 2025, a decrease of $3.8 million, or 1.2%, from the first quarter of last year. Bus sales decreased $5.3 million, reflecting a 1.9% decrease in average sales price per unit, primarily due to customer and product mix changes (lower EV volumes). In the first quarter of fiscal 2025, 2,130 units were booked compared with 2,129 units booked for the same period in fiscal 2024. Additionally, Parts sales increased $1.5 million, or 6.2%, for the first quarter of fiscal 2025 compared with the first quarter of fiscal 2024. This increase is primarily attributed to price increases, driven by ongoing inflationary pressures, as well as higher fulfillment volumes and slight variations due to product and channel mix.

Gross Profit

First quarter gross profit of $60.3 million represented a decrease of $3.2 million from the first quarter of last year. The decrease was primarily driven by the $3.8 million decrease in net sales, discussed above, and partially offset by a corresponding decrease of $0.5 million in cost of goods sold.

Net Income

Net income was $28.7 million for the first quarter of fiscal 2025, which was a $2.6 million increase from the first quarter of last year. The increase was primarily driven by $2.6 million in emission credits that the Company sold in the first quarter of fiscal 2025, recorded in other income (expense), net, with no similar income in the first quarter of fiscal 2024.

Adjusted Net Income

Adjusted net income was $30.6 million, largely consistent with the $29.7 million from the same period last year.

Adjusted EBITDA

Adjusted EBITDA was $45.8 million, which was a decrease of $1.9 million compared with the first quarter of fiscal 2024. This decrease results primarily from the lower gross profit, partially offset by improvements in other income(expense), net, as described above..

Conference Call Details

Blue Bird will discuss its first quarter 2025 results in a conference call at 4:30 PM ET today. Participants may listen to the audio portion of the conference call either through a live audio webcast on the Company's website or by telephone. The slide presentation and webcast can be accessed via the Investor Relations portion of Blue Bird's website at www.blue-bird.com.

• Webcast participants should log on and register at least 15 minutes prior to the start time on the Investor Relations homepage of Blue Bird's website at http://investors.blue-bird.com. Click the link in the events box on the Investor Relations landing page.
• Participants desiring audio only should dial 404-975-4839 or 833-470-1428. The access code is 393430.

A replay of the webcast will be available approximately two hours after the call concludes via the same link on Blue Bird's website.

About Blue Bird Corporation

Blue Bird (NASDAQ:BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. School buses carry the most precious cargo in the world – 25 million children twice a day – making them the most trusted mode of student transportation. The company is the proven leader in low- and zero-emission school buses with more than 20,000 propane, natural gas, and electric powered buses in operation today. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird's complete product and service portfolio, visit www.blue-bird.com.

Key Non-GAAP Financial Measures We Use to Evaluate Our Performance

This press release includes the following non-GAAP financial measures "Adjusted EBITDA," "Adjusted EBITDA Margin," "Adjusted Net Income," "Adjusted Diluted Earnings per Share," "Free Cash Flow" and "Adjusted Free Cash Flow". Adjusted EBITDA and Free Cash Flow are financial metrics that are utilized by management and the board of directors, as and when applicable, to determine (a) the annual cash bonus payouts, if any, to be made to certain employees based upon the terms of the Company's Management Incentive Plan, and (b) whether the performance criteria have been met for the vesting of certain equity awards granted annually to certain members of management based upon the terms of the Company's Omnibus Equity Incentive Plan. Additionally, consolidated EBITDA, which is an adjusted EBITDA metric defined by our Amended Credit Agreement that could differ from Adjusted EBITDA discussed above as the adjustments to the calculations are not uniform, is used to determine the Company's ongoing compliance with several financial covenant requirements, including being utilized in the denominator of the calculation of the Total Net Leverage Ratio. Accordingly, management views these non-GAAP financial metrics as key for the above purposes and as a useful way to evaluate the performance of our operations as discussed further below.

Adjusted EBITDA is defined as net income or loss prior to interest income; interest expense including the component of operating lease expense (which is presented as a single operating expense in selling, general and administrative expenses in our U.S. GAAP financial statements) that represents interest expense on lease liabilities; income taxes; and depreciation and amortization including the component of operating lease expense (which is presented as a single operating expense in selling, general and administrative expenses in our U.S. GAAP financial statements) that represents amortization charges on right-of-use lease assets; as adjusted for certain non-cash charges or credits that we may record on a recurring basis such as share-based compensation expense and unrealized gains or losses on certain derivative financial instruments; net gains or losses on the disposal of assets as well as certain charges such as (i) significant product design changes; (ii) transaction related costs; or (iii) discrete expenses related to major cost cutting and/or operational transformation initiatives. While certain of the charges that are added back in the Adjusted EBITDA calculation, such as transaction related costs and operational transformation and major product redesign initiatives, represent operating expenses that may be recorded in more than one annual period, the significant project or transaction giving rise to such expenses is not considered to be indicative of the Company's normal operations. Accordingly, we believe that these, as well as the other credits and charges that comprise the amounts utilized in the determination of Adjusted EBITDA described above, should not be used in evaluating the Company's ongoing annual operating performance.

We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of net sales. Adjusted EBITDA and Adjusted EBITDA Margin are not measures of performance defined in accordance with U.S. GAAP. The measures are used as a supplement to U.S. GAAP results in evaluating certain aspects of our business, as described below.

We believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share are useful to investors in evaluating our performance because the measures consider the performance of our ongoing operations, excluding decisions made with respect to capital investment, financing, and certain other significant initiatives or transactions as outlined in the preceding paragraph. We believe the non-GAAP measures offer additional financial metrics that, when coupled with the GAAP results and the reconciliation to GAAP results, provide a more complete understanding of our results of operations and the factors and trends affecting our business.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Diluted Earnings per Share should not be considered as alternatives to net income or GAAP earnings per share as an indicator of our performance or as alternatives to any other measure prescribed by GAAP as there are limitations to using such non-GAAP measures. Although we believe the non-GAAP measures may enhance an evaluation of our operating performance based on recent revenue generation and product/overhead cost control because they exclude the impact of prior decisions made about capital investment, financing, and other expenses, (i) other companies in Blue Bird's industry may define Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share differently than we do and, as a result, they may not be comparable to similarly titled measures used by other companies in Blue Bird's industry, and (ii) Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share exclude certain financial information that some may consider important in evaluating our performance.

We compensate for these limitations by providing disclosure of the differences between Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share and GAAP results, including providing a reconciliation to GAAP results, to enable investors to perform their own analysis of our operating results.

Our measures of "Free Cash Flow" and "Adjusted Free Cash Flow" are used in addition to and in conjunction with results presented in accordance with GAAP and free cash flow and adjusted free cash flow should not be relied upon to the exclusion of GAAP financial measures. Free cash flow and adjusted free cash flow reflect an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. We strongly encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

We define Free Cash Flow as total cash provided by/used in operating activities as adjusted for net cash paid for the acquisition of fixed assets and intangible assets. We use Free Cash Flow, and ratios based on Free Cash Flow, to conduct and evaluate our business because, although it is similar to cash flow from operations, we believe it is a more conservative measure of cash flow since purchases of fixed assets and intangible assets are a necessary component of ongoing operations.

Forward Looking Statements

This press release includes forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. Specifically, forward-looking statements include statements in this press release regarding guidance, seasonality, product mix and gross profits and may include statements relating to:

• Inherent limitations of internal controls impacting financial statements
• Growth opportunities
• Future profitability
• Ability to expand market share
• Customer demand for certain products
• Economic conditions (including tariffs) that could affect fuel costs, commodity costs, industry size and financial conditions of our dealers and suppliers
• Labor or other constraints on the Company's ability to maintain a competitive cost structure
• Volatility in the tax base and other funding sources that support the purchase of buses by our end customers
• Lower or higher than anticipated market acceptance for our products
• Other statements preceded by, followed by or that include the words "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "target" or similar expressions

These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. The factors described above, as well as risk factors described in reports filed with the SEC by us (available at www.sec.gov), could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements.

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Mark Benfield

Investor Relations

(478) 822-2315

[email protected]