Blue Bird Corporation

Good afternoon, and thank you for attending today's Bluebird Fiscal 2025 Fourth Quarter and Full Year Earnings Call. My name is Jayla, and I'll be your moderator for today. All lines will be muted in the presentation portion of the call, with opportunity for questions and answers at the end. At this time, I'd like to pass the conference over to our host, Mark Binfield. Please proceed.

Thank you, and welcome to Bluebird's Fiscal 2025 Fourth Quarter Earnings Conference Call. The audio for our call is webcast live on blue-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 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 Weiskopf, and CFO, Razvan Radulescu. Then we'll 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 fiscal 2025 fourth quarter and full year financial results. The Bluebird team did an outstanding job, once again, delivering record sales and adjusted EBITDA for the year. Razvan will be taking you through the details of our financial results shortly, so let me get started with some of the key takeaways for the fourth quarter and full year on slide six. As shown in the first box, Bluebird beat guidance on all metrics and delivered a record year. And this is despite the impact and challenges associated with the administration's policy on tariffs, which continues to create some pricing uncertainty in the overall market. This uncertainty, coupled with the fourth quarter typically being the lightest order period, reduced our backlog to 3,100 units. We will talk further on this, but we would consider 2025 fourth quarter ending backlog as still in the range. In fact, today our backlog is up to nearly 4,000 units and 850 EVs. Once again, we had a strong operational execution and performance for the quarter, which is a testimony to the team's dedication. During the quarter, we also furthered our long-term manufacturing strategy by beginning scope development and automation business cases for our new factory. Once again, we are looking at where we can apply production automation, automated material movement, and manufacturing execution systems, which will bring shop floor connectivity and ease of data collection. As I explained before, this fits into our manufacturing roadmap, which will result in cost reduction steps for the future and will improve our overall long-term competitiveness. In terms of pricing, we remain extremely disciplined. Bus prices remained higher than the previous year and the previous quarter. This process is very much how we manage the business. Our track record in dominance in alternative powered vehicles continues. Our EV demand is stable despite the tariff pricing uncertainty and EPA funding. The outlook in this area, though, remains strong. All power is a segment we created more than 15 years ago, and we continue to maintain our lead position. During the quarter, we also looked at our long-term investment thesis, and it further defined our roadmap for both manufacturing and product. Again, we will invest in projects that have a clear and strong returns profile, and I look forward to sharing more in our next earnings call. We recognize investing in our operation and product portfolio will improve the overall business. Insistent with what I communicated in the last two calls, it's our objective to position this business to be a strong long-term investment. And finally, we continue to manage the impacts of the administration's executive orders and tariff volatility. We are fortunate to be well-positioned to navigate the situation to a margin-neutral outcome. Overall, adjusted EBITDA came in at $221 million for the year, or 15% of revenue. That's $38 million better compared to last year's record year. Let's turn the page and take a closer look at the financial and key business highlights for the year on slide seven. We sold 9,409 buses in 2025 and recorded revenue of $1.48 billion, a record year and $133 million ahead of last year. On the EV side, we sold 901 electric vehicles, 9.6% of volume, and our long-term outlook for EVs remains optimistic. As already mentioned, adjusted EBITDA for the year came in at $221 million, $38 million stronger than last year. And free cash flow came in at an outstanding $153 million. Razvan will talk more to this and our outlook later in the call. Turning to the right side of the page, I'll start with backlog. Our backlog finished the year at 3,100 units. This drop was a function of industry volatility and the period itself. Fiscal fourth quarter is typically and historically the lightest order period for Bluebird. Our 2025 order intake for the quarter was in line with the 10-year prior average, validating there were no performance issues during the quarter. More recently, we are also seeing our strategy on providing pricing stability into June and next year paying off. Our backlog has increased some 800 units since year end. Overall, the fundamentals are still there. The fleet is aging. We're coming into a heavy replacement cycle and there has been industry supply issues the last few years, leaving pent up demand. So all of this continues to point towards this situation being more temporary than long lasting or structural. Year over year selling prices for buses was up almost $8300 per unit, but of course this also includes tariff recovery as part of our margin neutral strategy. With tariffs excluded, pricing is still up year over year, and part sales totaled 103 million for the year. All powered buses represented a strong 56% of mixed unit sales for the year. Again, this compares with a typically less than 10% for our major competitors. And we benefit from higher margins and higher owner loyalty with our gas and propane products, as we are the exclusive supplier to the industry today. At the end of the quarter, we had 901 EVs booked and 680 EVs in our order backlog. Our latest guidance reflects approximately 750 EV unit sales for fiscal 2026. Our EV backlog is deep enough that it will push some bookings into fiscal 2027. Again, we remain optimistic on EVs in the school bus sector. EVs are a perfect fit for school buses when you look at the duty cycle, Available charging intervals range in the proven health benefits to our children. Similar to last quarter, we continue to see rounds two and three of the EPA Clean School Bus Program flowing to our end customers. And we continue to see that rounds four and five are still in play. The government shutdown has created some delay, but we are hopeful to soon hear when and how these funds will be administered. And reimbursement funds continue to flow for an $80 million MESS contract with the DOE. This is for their funding towards our new plant in Fort Valley. There's been a lot of rumor in the areas of MESS grants, but there's been no unfavorable direction provided to us from the DOE. As a reminder, this project adds 400 well-paying American jobs to a century-old American company with an iconic brand to build clean school buses, providing our children with the benefits of clean air. As I have said in prior earnings calls, it is really a great story. Overall, we beat our guidance for the 12th consecutive quarter and for the full year. With an overall 15% adjusted EBITDA margin and record profits in Q4 for the full year, I'm very proud of our team's accomplishments. So we'd like to now hand it over to Razvan to walk through our fiscal 25 fourth quarter and full-year financial results, as well as our full-year guidance in more detail. Razvan.