Blue Bird Corporation

Good afternoon. Thank you for attending the Bluebird fiscal 2025 third quarter earnings call. My name is Matt and I'll be the moderator for today's call. All lines are muted in the presentation portion of the call for an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I'll not to pass the conference over to our host Mark Benfield, head of investor relations. Mark, please go ahead.

Thank you and welcome to Bluebird fiscal 2025 third quarter earnings conference call. The audio for our call is webcast live on -bird.com under the investor relations tab. You can access the supporting slides on our website by clicking on the presentations box on the IR landing page. Our comments today include forward looking statements that are subject to risks that could cause actual results to be materially different. Those risks include among others matters. We have noted on the following two slides and in our filings with the SEC. Bluebird disclaims any obligation to update the information in this call. This afternoon, you will hear from Bluebird's president and CEO, John Weiskull and CFO, Rosvon Rodulescu. Then we will take some questions. Let's get started. John?

Thanks, Mark and good afternoon, everyone. And thanks for joining us today. It's great to be here and we're excited to share with you our financial results for our fiscal 2025 third quarter. Once again, the momentum continues and the Bluebird team is doing a fantastic job and delivered record sales and adjusted EBITDA in the third quarter of fiscal 2025. Rosvon will be taking you through the details of our financial results shortly. So let me get started with the key takeaways for the third quarter on slide six. As shown in the first box with record sales and adjusted EBITDA, we beat our Q3 guidance and increased our full year guidance as well. And this is despite the impact and challenges associated with the administration's policy on tariffs, which is currently creating some uncertainty in the overall market. The uncertainty in pricing translated into an overall reduction industry backlog, including ours. We will talk more to this, but despite the drop in orders, our backlog at 3900 units is still at what we describe as in the sweet spot. During the quarter, we had strong operational execution and performance, which is a testimony to the team's dedication. But we also took the quarter to deep dive our long term manufacturing strategy. As we've communicated prior, we are slated to build a new factory to support forecast volume. But we're using this period to challenge our detailed plans and to ensure we can be even more competitive. We're looking at where we can apply production automation, automated material movement, and manufacturing execution systems, systems which bring shop floor connectivity and ease of data collection. The objective is to build steps of cost reduction and a manufacturing roadmap into the future. This area of the business really excites me. In terms of pricing, we remain disciplined. Bus prices remain higher than the previous year and the previous quarter. And we remain competitive as we continue to see from our bit results and overall win rate. Our track record of dominance and alternative powered vehicles continues. While EV demand softened again with all the tariff uncertainty, the outlook in this area remains strong. All power is a segment we created more than 15 years ago and we remain in the lead position. Earlier, I spoke about further developing our manufacturing strategy. As we develop that strategy, we will invest in projects that have clear and strong returns. But we also will be reinvesting back into the business by developing new product features and differentiated products that will hit the market next year and the years to come. We recognize targeted investment in our operations will lead to better performance on the manufacturing side of the business and investment in our product portfolio will grow the top line. Consistent with what I've communicated in the last call, it is our objective to position this business to be a strong long term investment. And similar to almost every business in the country, we're also dealing with the impacts of the administration's executive orders and tariff volatility. We are fortunate to be well positioned to navigate this situation to a margin neutral outcome. Overall adjusted EBITDA for the quarter came in at 58 million or 14.7%. That's over $10 million better than compared to last year's third quarter. Now let's turn the page and take a closer look at the financial and key business highlights for the third quarter on slide seven. We sold 2,467 buses in the third quarter and recorded revenue of 398 million, a quarterly record and almost 65 million ahead of last year. On the EB side, we sold 271 vehicles, 11% of our volume and our long term outlook for EBs remains optimistic. As already mentioned, adjusted EBITDA for the quarter came in at 58 million, 10 million stronger than last year and free cash flow came in at 52 million. Razvan will talk more to this and a road look later in this call. Turning to the right side of the page, I will start with backlog. Backlog of course is a function of orders and build rate and there's no question the volatility and tariffs is having an impact on orders. The consistent movement in tariffs just creates uncertainty. It puts school districts in the mindset to purchase when things just settle down. So with that, we've taken action to offer some certainty and pricing into next year. Razvan will talk to that further. But I will qualify a couple of other things. We can see that our order decreased between Q3 and the previous quarter matched the industry. So this is not a performance issue and our orders for the quarter were 1% stronger when compared to last year's orders for the same Q3 period. More importantly, the fundamentals are still there. The fleet is aging, we're coming into a heavy replacement cycle and there has been an industry supply issue the last few years, leaving pent up demand. So all of this points towards this situation being temporary rather than long lasting or structural. And to put it in context, we have consistently said that our sweet spot is in the 4,000 unit range for backlog. Third quarter average selling price for buses was up almost $7700 per unit. But of course, this concludes the tariff recovery as part of our margin neutral tariff strategy. And with tariffs excluded, pricing was still up quarter over quarter and part sales totaled $26 million in Q3. All powered buses represented strong 61% of unit mix in Q3. Again, this compares with a typically less than 10 to 15% mix for major competitors. And we benefit from higher margins and higher owner loyalty with their gas and propane products as we are the exclusive supplier to the industry today. At the end of the quarter, we had a combined 1200 EVs either booked or in our order backlog. Our latest forecast reflects approximately 900 EV unit sales for the full year. Overall, we remain optimistic on EVs in the bus sector. EVs are a perfect fit for the school bus market when you look at the duty cycle, available charging intervals, range and the proven health benefits to our children. The current EV backlog is over 500 buses and represents $174 million in revenue. Throughout the quarter, it was very encouraging to see rounds two and three of the EPA Clean School Bus program continuing to flow to our end customers. And we're seeing rounds four and five are still in play. We are hopeful to soon hear when and how these funds will be administered. And reimbursement funds continue to flow for our $80 million MES grant with the DOE. This is for further funding towards our new plant in Fort Valley. As a reminder, this project adds 400 well-paying American jobs to a century-old American company and an iconic brand to build school buses, providing our children with the benefits of clean air. As I said in our prior earnings call, it really is a great story. As a special note, during the quarter, we started production in our Micro Bird-Plaxburg New York plant. Micro Bird is a joint venture between Blue Bird and Gerdin. The new plant manufactures small buses, primarily targeting the Buy America US shuttle bus market. As a reminder, this new segment entry was announced in December 2024 and will double our small bus capacity. I would like to congratulate the entire Micro Bird team for doing an outstanding job. Similarly, we've continued to make progress on our Blue Bird commercial chassis, which I spoke to last quarter. We are entering the final testing phase now and will be moving into production in 2026. This chassis is targeted to be best in class and we are excited about the opportunity. But back to the overall business. We beat our guidance for the 11th consecutive quarter and are increasing our full year guidance. With a .7% adjusted EBITDA margin and record profits in Q3, I'm very proud of our team's accomplishments. So I'd like to now hand it over to Razvan to walk you through our fiscal 2025 third quarter financial results and full year guidance in more detail. Razvan?