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.

Thanks, John, and good afternoon. It's my pleasure to share with you the financial highlights from Bluebird's fiscal 2025 fourth quarter and year-end record results. The year-end is based on a closed date of September 27, 2025, whereas the prior year-end was based on a closed date of September 28, 2024. We will file the 10-K today, November 24th, after the market close. Our 10-K includes additional material and disclosures regarding our business and financial performance. We encourage you to read the 10-K and the important disclosures that it contains. The appendix attached to today's presentation includes reconciliations of differences between GAAP and non-GAAP measures mentioned on this call, as well as other important disclaimers. Slide nine is a summary of the fiscal 25 fourth quarter and four-year record results. It was another outstanding operating quarter for Bluebird, with significantly improved volume and with high margin units across all power trains, driving both our top line and our bottom line results. We bid the adjusted EBITDA quarterly guidance provided in the last earnings call, and in fact, we delivered the best quarter ever for Bluebird, with 68 million adjusted EBITDA margin. The team continued to push hard and did, again, a fantastic job and generated 2,517 unit sales volume, which was 51 units above prior year Q4 volumes. All-time quarterly record consolidated net revenue of $409 million was $59 million, or 17 percent higher than prior year, driven by increased prices and the higher number of EV units. Adjusted EBITDA was a quarterly record of $68 million, driven by higher volumes and DV units, improved pricing, and operational improvement in efficiencies and quality. The adjusted free cash flow was $60 million, a $10 million increase versus the prior year fourth quarter, driven by strong operating margins and working capital improvements. John covered already the record fiscal 25 year-end key figures with 9,409 units, $1.48 billion in revenue, 221 million or 15 percent in adjusted EBITDA, and a record 153 million in free cash flow, close to 70 percent of the adjusted EBITDA. I will provide more details on our full year results later in the presentation. Moving on to slide 10, as mentioned before by John, our backlog at the end of Q4 has softened at just over 3,000 units, including 680 EVs. This was due to the uncertainty of bus pricing driven by the tariffs over the last six months. Our mitigation actions, combined with us recently locking our tariff charges for new orders with deliveries until the end of June 2026, drove an improved order intake during fiscal 2061, as expected, with our backlog currently sitting at nearly 4,000 units, including over 850 EVs. Breaking down the quarterly record $409 million in revenue into our two business segments, the bus net revenue was $384 million, up by $61 million versus prior year. Our average bus revenue per unit was up $21,000 at $153,000 per unit, which was largely the result of pricing actions taken over the past year and higher EV product mix. EV sales in Q4 were 233 units as expected, or 149 units higher than last year. Parts revenue for the quarter was slightly down year-over-year at 25 million. Its continued great performance was in part due to strong demand for our parts, as the fleet is still aging. Gross margin for the quarter was 21%, or 4.1 percentage points higher than last year, due to our sustained operational performance and our pricing overtaking the inflationary costs, including the effects of tax. In fiscal 25 to 4, adjusted net income was $43.4 million, an outstanding $17.6 million or 68% improvement year over year. Adjusted EBITDA of $68 million or 16.6% was up compared with prior year by $26.6 million for a 64% improvement. Adjusted diluted earnings per share of $1.32 was up 55 cents versus the prior year. Slide 11 shows the walk from fiscal 24 Q4 adjusted EBITDA to the fiscal 25 Q4 result. Starting on the left at $41.3 million, the impact of the bus segment gross profit in total was $27.6 million, split between volume and pricing effects, net of material cost increases of $23.3 million, plus efficiency and quality improvements of $4.3 million. The bus segment gross profit was slightly down, by 0.8 million, driven by slightly lower sales, as mentioned earlier in the call. Overall, the SG&A and other income expenses were flat year-over-year. The sum of all of the above-mentioned developments drives our record fiscal 25Q4, reported adjusted EBITDA results of 67.9 million. Moving to slide 12, I will cover some more details regarding our full-year record results. Breaking down the $1.48 billion revenue into our two business segments, the bus net revenue was $1.377 billion, up by $134 million or 11% versus prior year. Our average bus revenue per unit was $146,000, an increase of $8,000 per unit versus the prior year, which was largely the result of pricing actions taken over the past year and improved EV product mix. EV sales for fiscal 25 were 901 units, as expected, an increase of 197 units, or another 30% improvement versus last year, and the same percentage growth as the year before. Parts revenue for the year was flat at 103 million, maintaining the already very strong prior year levels. This performance was in part due to increased demand for our parts of the fleet distillating. Gross margin for the year was a record 20.5% or 1.5 percentage points higher than last year due to our sustained operational performance and our pricing overtaking the inflationary cost year over year, including the tariff effects. In fiscal 25, adjusted net income was $144 million, a $29 million improvement year over year for a 25% improvement. Record adjusted EBITDA of 221 million, or 15%, was up compared with prior year by 38 million for a 21% improvement. Adjusted diluted earnings per share of $4.38 was up 92 cents versus the prior year. Slide 13 shows the walk from fiscal 24 adjusted EBITDA to the fiscal 25 result. Starting on the left at the prior record of 183 million, The impact of the bus segment gross profit in total was $48 million, driven mainly by the volume and pricing effects, net of material cost increases. On the operations side, the labor and healthcare cost increases were offset by improved efficiencies and quality improvements. Bus segment gross profit was slightly down, just under $1 million year-over-year, due to slightly lower sales. These great improvements were offset by planned increases of $9 million in our fixed costs, mainly personal and fringes slash healthcare-related, SG&A and engineering, as we continue to invest into our business and our people. The sum of all of the above-mentioned developments drives our new record fiscal 25 adjusted EBITDA result of $221 million, or 15%. I would like to remind you that 15% adjusted EBITDA was our long-term target not too long ago, and we delivered it ahead of the plan and with relatively low units sold, under 9,500, compared to the pre-COVID years. Moving on to slide 14, we have extremely positive developments year over year, also on the balance sheet. We ended the year with $229 million in cash, and this is after we repurchased $40 million worth of shares during the year. Our liquidity set at the record $371 million at the end of fiscal 25, a $100 million increase compared to a year ago. The operating cash flow was a very strong $176 million in this year, driven by an improvement in operations and margins and improvements in working capital. The adjusted free cash flow was also a new record at $153 million in fiscal 25, or a 70% conversion from adjusted EBITDA of 221 million. On slide 15, we want to share with you our confirmed fiscal 26 guidance. We have a number of both tailwinds and headwinds, and we maintain a cautious stance given the volatility of tariffs and other government policies related to EVs. As tailwinds, we have an aging fleet driving strong demand, stable pricing, and still a solid industry backlog. We offer not only diesel and gasoline school buses, but we have the only propane fuel school bus in the industry with clean fuel and best-in-class total cost of ownership. We are also leading in the EV segment and are confident that the still upcoming orders from rounds two and three of the EPA Clean School Bus Program will improve our already very strong EV backlog. Additionally, at the end of fiscal 26, we are planning to bring to market our new commercial chassis product. But headwinds, the tariffs are still unpredictable at times, And the material costs, people and healthcare costs, as well as supplier inflation pressures are still present. The backlog is lower year over year. However, it is still significantly above pre-COVID levels for this time of year. And finally, we expect to deliver a much higher number of EVs in the second half versus first half, similar to fiscal 25. In summary, we are maintaining our units and revenue midpoint guidance to 9,500 and 1.5 billion respectively. And given our record fiscal 25 results, we are also maintaining our adjusted EBITDA guidance of 220 million or 14.7% with a range of 210 to 230 million and 14.5% to 15% margin. Moving to slide 16, we laid out for you the quarterly guidance for fiscal 26 and also shown the actuals by quarter for fiscal 25. Essentially, we are targeting a repeat of our all-time record fiscal 25 performance in fiscal 26, despite the unfavorable tariff environment and slightly lower EV volumes. Starting in Q1, with the seasonal lowest number of production weeks in the year due to year-end holidays, we expect to sell approximately 2,100 units, including 100 EVs, and generate 325 million in revenue with adjusted EBITDA of 40 to 45 million. In Q2, we expect our total volume to go up to approximately 2,200 units, including 150 EVs, and generate 350 million in revenue with adjusted EBITDA of 45 to 50 million. In Q3 and Q4, we expect an increased number of total units with 225 EVs in Q3 and 275 EVs in Q4, driving quarterly revenue around 400 to 425 million and adjusted EBITDA of 60 to 70 million per quarter as shown. On slide 17, in summary, our fiscal 26 guidance for net revenue is 1.45 to 1.55 billion with adjusted EBITDA of 210 to 230 million and free cash flow of 10 to 30 million after deducting 100 million in extraordinary capex for the new plant. We expect fiscal 26 to be another strong year for Bluebird on our path of profitable growth. Speaking of profitable growth, let's look again on slide 18 at some of our principles for running the business and touch on some capital allocation points. We strongly believe that revenue is vanity profit is sanity, and cash is king. Let's cover these points one by one. On the revenue side, we are focusing on executing our organic growth with an emphasis on alternative fuels. However, we do still offer diesel for those that continue to request it. We are not chasing market share, yet we are re-engaging with some of the national large fleets as already shown in fiscal 25. While we continue to be laser focused on our core school bus business, We have planted the seeds for adjacent market growth in the commercial step and chassis business, as well as with MicroBird with the new plant launch this summer in New York State. Looking at profit, we continue to be very disciplined in our margin management. We have implemented a price increase of $3,500 per bus for all orders received after November 18th, 2025 to cover for new standard safety features for example, industry-first driver airbags, and the expected variable cost increases, and we continue to execute on our margin-neutral tariff strategy. We continue to monitor our backlog and keep it above one quarter of production, providing us with the ability to schedule our mix and manage our supply chain efficiently. Finally, we work relentlessly on reducing our variable costs through continuous cost improvements, quality improvements, lean manufacturing on one shift, supply chain management, and still forward buys. Looking at cash, we plan to invest over the next two years up to $200 million into our future manufacturing capabilities, while also returning value to our shareholders through stock buybacks. We already completed $50 million buyback through fiscal 2025 Q4. We expect another $10 million in the current quarter, and we have a new program announced in the last earnings call for up to $100 million over the next two years. And we plan to achieve this while maintaining great liquidity and a strong cash position, and we have flexibility in case we decide to pursue strategic and focused, attractive M&A opportunities. Moving on to slide 19. Given our strong business momentum and record results of fiscal 25, today we are reconfirming the medium-term outlook at 15 percent margin with volumes of up to 10,500 units, including 500 commercial chassis, generating revenue around 1.6 billion and with adjusted EBITDA of approximately 240 million. Starting in 2029 and beyond, our long-term target remains to drive profitable growth to now even higher levels, towards 1.8 to 2 billion in revenue, comprising of 12,000 to 13,500 units, including 1,000 to 1,500 commercial chassis and generate EBITDA of 280 to 320 plus million, or 15.5% to 16% plus at best-in-class levels. The profitable growth comes not only from improved EV mix, given by sustained state funding, and improved EV total cost of ownership over time, but also from our new Bluebird commercial chassis addressable market expansion, as well as our microboard joint venture new plant expansion in the USA, which went live this summer. We continue to be incredibly excited about Bluebird's future, and I will turn it back over to John.

Thank you, Razvan. Let's move on to slide 21. We've shown this slide on several earnings calls, so I won't spend much time on it today, as our priorities remain consistent. The chart on the left side of the page outlines the Bluebird value system as a company. taking care of our employees, delighting our customers and our dealers, and delivering profitable growth. The right side of the page outlines how we get there. And of course, the objective of delivering sustained profitable growth to our investors is at the center of it all. And when you turn to page 22, it really summarizes what a great year 2025 was and what a bright future the company has. As we invest in the business with a longer-term perspective, we see our outlook only getting stronger. Starting at the top, we built 9,409 units for fiscal 2025. But with a 6% CAGR projected for the school bus market, as well as entering new market adjacencies, we see our long-term volume growing to 13,500 units between school bus and commercial chassis. Our revenue for fiscal 2025 was up 10% from the prior year, ending at just under $1.5 billion. and our profitability soared 21% in 2025 to $221 million adjusted EBITDA. But when you factor in these growth opportunities, our long-term outlook shows the company reaching $2 billion in revenue and $320 million, or 16% plus, in adjusted EBITDA. And at the bottom of the page, you will see EVs are still very relevant for us. This year, EV sales grew 28% to 901 units, And our long-term outlook shows 1,000 units plus. Overall, the achievements in 2025 were simply outstanding. But with the strong fundamentals of the industry and with our investment in the future, the outlook for the company is nothing but promising. There's a lot to be excited about. So I'll wrap it up on slide 23. First, this great company and iconic brand is almost 100 years old. Bluebird has stood the test of time. and it continues to be poised for an exciting future. We delivered an outstanding 2025 with just under 1.5 billion in revenue and 221 million or 15% in adjusted EBITDA. We remain confident that the clean school bus funding program will continue. It's a bipartisan initiative. It's 100% appropriated and eliminates harmful tailpipe toxins benefiting our children and communities. And we remain optimistic on overall near and long-term volume. The fundamentals of this industry are solid. And this kind of performance has put Bluebird in a position to focus longer term as we invest and enter new segments and upgrade our operations and product. As always, I want to thank our employees, our dealer network, our supply partners, and of course our investors. All are critical to our success. Similar to my message in the last calls, I remain excited about Bluebird. 2025 has been an incredible year with record results and beating guidance. This company has such a rich history and an exciting future. Thank you. So that concludes our formal presentation for today, and I'd now like to hand it back to our moderator for the Q&A session.

At this time, if you'd like to ask a question, it is star followed by one on your telephone keypad. If for any reason you would like to remove that question, it is star followed by two. Again, to ask a question, it is star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking a question. I'll pause briefly here as questions are registered. Our first question comes from Mike Shalinski with the company D.A. Davidson Companies. Mike, your line is now open.

Good afternoon and thank you. I want to get a little bit more detail on the federal EV bus program, if you could. How important is that to the fiscal 26 guidance? Do you have to see money flow again for you to make the numbers that you put in there for EVs for the year? Can you update us also on whether the state and local subsidy programs that are out there across a lot of different states, have they increased over the last 12 months or so and has state and local kind of overtaken federal as the driver of EV demand?

Hi, Mike. Thanks very much for the question. I would say that when you look at everything we have, EVs are relevant, and two and three is flowing, as you know. But I don't think it's contingent when we look at our outlook to having to have rounds four and five come through. We have strong outlook. I think it's stable. Yeah, so I think it's with the state mandates that we see out there, I think it supports demand. I don't know if Rosamond has anything to add.

Yeah, so for fiscal 26, it does not rely on any around four or five. And we also have a very strong backlog. So we feel very good about the 750 guidance of EV. And there is some upside potential up to 1,000 units in this year.

Great. And then just looking at the 26 outlook, I know that most years, the real order season, if you would, starts after Christmas break. And I know it's only November here. i guess i mean i mean look being flat at a very high level is probably not the worst view in the world coming up here but do you are you kind of taking a conservative stance until you start hearing from people ordering after the christmas break and do you think maybe we'll get a much better picture of what real demand is on the next earnings call you know just kind of looking at the slide that you just talked about john at the end there the industry outlook for retail sales is is a quite a bit higher a little bit higher at least for 2026 in 2025 but you're Your numbers don't really imply that at this time. So just kind of help us to reconcile the broader industry, the order season, and your outlook that you put forth today.

Yeah, thanks, Mike. No, we have maybe a couple things. Yeah, certainly when you look at the demand in the out years, it's strong. I mean, we know the fundamentals, right? The replacement cycle is coming due. When you look at things like student enrollment it's stable there's a lot of things that support the demand going up and then from our end of course. We have capability of producing some extra demand as well, and that includes, of course, in a couple of years, our new factory so we'll be able to support that but overall um. Yeah, I don't I have probably less of a wait and see type of approach with this one that you kind of alluded to in the beginning. I think everything there is underneath and everything we can see, including our backlog in the last quarter, seems strong. So I feel comfortable. I don't know if, again, Rosman or Mark, if you guys have anything to add.

Take that as a as a I know my next question here, if you don't mind. So my last one here is on the commercial chassis project that you guys are working on. Just a little bit more detail there, you know, what number of customers are testing it, what kind of customers, what the initial, what the early reactions have been, and your confidence that there's a real ramp in 27 to complete here.

Yeah, I'll comment on a couple of things. First, we've got a couple of prototypes that have been built and bodies have been mounted, and they're now going through calibration, as well as some early testing, or I'll say some testing in general. The product's been well received by the customers that looked at it. They seem to be favorable. The market, we know, is open to another competitor. And then, as you know, we have capacity. So I think more to come as we start, you know, getting past the hurdle of release, if you will. But indications seem good for the product.

Great. I appreciate the answers. I'll pass it along.

Thanks, Mike.

Next question comes from Eric Stein with the company Craig Harlem. Eric, your line is now open.

Hi, everyone. Eric. Hey, Eric. Hey. So, maybe just sticking with, I guess, the commercial chassis, but also, tagging into fiscal 26. I mean, is it, I know that you expect some contribution in Q4, or fiscal Q4. I mean, is it fair to say, though, that that is a pretty minimal contribution? That's really not a, you know, driver of low-end to high-end as we think about the year?

Yeah, you are correct, Mr. Razan. We have in our guidance approximately 100 commercial chassis, and the in terms of moving from low end to high end of guidance, they are not material at this point in time.

Okay, got it. And so then thinking about the guide, I mean, yes, you're factoring in tariffs are still an issue, but I guess arguably maybe calm down a little bit year over year. I know you are seeing some benefit from the stable pricing that you've got at least through a portion of fiscal 26. And you also mentioned the price increase. And so I would assume that that's more for the second half. So, I mean, clearly you are guiding to a bit of a ramp throughout the year. I know you've talked about that, you know, really with the backlog, even if it's down a little bit, you know, there's not that typical seasonality that would have been seen in years past. So, I mean, is pricing different? kind of the main determinant here and the reason for that ramp? I mean, other than EV mix, I guess.

Yeah, so we have a couple of factors. I mean, first of all, it has to do with the number of production weeks that are in the year. Q1 is the lowest number of weeks. Q2 is slightly up. And then Q3 is the highest one. And then Q4, again, goes down a little bit. So you have the production seasonality. The new price increase, I talked about the $3,500 per bus. This is for new orders, and it will materialize in Q3 a little bit and then into Q4 because they go most likely at the end of the backlog, and it's for new orders. In terms of tariffs, we are monitoring the situation. We have provided the tariff charge stability to our customers and orders all the way through June right now. So depending how the reality of tariffs materializes until then, there is still a little bit of risk. And therefore, we are probably conservative in terms of the guidance for the first half. And then we expect to ramp in the second half.

Got it. All right. That is helpful. And then maybe last one for me, just coming back to the order environment. And I do appreciate that. After the holidays, that's when things pick up, but a nice bounce back here, I guess, as of a week ago. I mean, as you talk to dealers, it sounds like you feel that that is sustainable and that those are trends that maybe are more normalized after that period where there was a lot of tariff uncertainty and that really impacted the orders. Is that a fair characterization of your view?

Yeah, for sure it is, Eric. When you look at it, if you go back to the beginning of the year, there was constant change in tariffs, and I think it had some impact in terms of maybe districts seizing up on some orders. They were just waiting to see. But you can certainly see it now. It's starting to stabilize, like you said. We have pricing out to June that's firmed. And I think all of those suggest just what you indicated is that there's some stability coming back into the order cycle.

Okay, thank you. Thanks, Eric.

One moment, team. I'm having some technical difficulties on my end.

Our next question comes from Greg Lewis with the company BTIG. Greg, your line is now open.

Hey, thank you, and good afternoon, and thanks for taking my questions. You know, if I was thinking about the backlog and, you know, just on slide seven, you kind of outlined what has happened, you know, quarter to date for the total backlog, but you didn't kind of, you didn't update the EV side. I'm not sure if we have that information, but just kind of, as we think about the backlog as a percentage of the fleet on the EV side, is kind of the bookings that were done or the order book growth quarter to date, does it kind of mirror what we have in the current order book or was there a little bit of overperformance or underperformance on EVs with the quarter to date earnings or orders?

Yeah, hi Greg, this is Razlan, thanks for the question. I had it actually in my remarks, the EV corresponding number is 850. So we had an increase also in EV throughout the course.

Okay, and on a percentage basis about the same grade. And then the other question I had was, I'm not sure if it was today or last week, but I guess New Jersey came out with an updated incentive program, ZIP. I guess they released $37 million for additional buses. Kind of curious, was that something that Bluebird and the market was expecting? Did it kind of come out of nowhere? And just as we think about what New Jersey did or announced, should we be thinking about, and I know you kind of talked about it in the remarks, but should we be thinking about other states kind of following through with updated programs that you're at least tracking or watching, or is this kind of just like a one-off?

Yeah, Greg, I think each state is different in terms of how they apply funds, but it's a testimony to The state funding, it's there, it's real, and it's flowing. And we know there are certain states that are aggressive in this area in terms of EV mandates.

Okay, so was this largely expected, or was this something that we kind of knew was going to happen, we didn't know the timing of it?

This particular program, I would say, wasn't a cornerstone of our communications here, but it's the trend we see across the country in what we talk about. on these calls is that outside of the federal side, there's real demand at the state level. So we continue to see a general trend of growth in these types of state-level programs.

Yeah, I was going to say, from a macro level, we knew that things would flow, but we don't really necessarily get into each state in the analysis of each single grant.

Yeah, no, we're trying to do that. It's a lot of legwork. Anyway, hey, guys, thanks for taking my questions, and have a great night.

My next question comes from Sharif El-Sabi with the company Bank of America. Sharif, your line is now open. Good evening.

Thanks for taking my question. I guess just looking at the midpoint of guidance, it seems to indicate a little bit of a lower price mix in the second half of the year versus the first half. I understand there's the chassis product coming in the fourth quarter and likely some tariff impact given the second half weighting of EVs. But I was just wondering if there's any other puts and takes we should be considering with regards to the first half versus second half price and mix.

Actually, this is Razvan. So as I mentioned before, the price increase I talked about will come only at the tail end of the fiscal year. And then you have numerous other factors. You have the product mix. You have the fleet mix. So all of them are baked into our detailed bottom-up forecast. But overall, I would say in general we look at pretty flat pricing other than the price increase I talked about. And the wild card is still the tariffs at this point in time. We have not communicated Q4 tariffs charges yet as we are waiting and monitoring what will be the development on the cost side on the government policy related to tariffs by then. So overall, I would say still we are forecasting very strong EBITDA margins in the 15% and 16%, and we will update the guidance as needed in the next quarters to come.

Thank you.

Our next question comes from Craig Irwin with the company Roth Capital Partners. Craig, your line is now open.

Good evening, and thanks for taking my questions. Razvan, the last several years, Bluebirds has provided on a quarterly basis, the dollar value of the backlog, and for a number of years, also the dollar value of the EV backlog. You know, you gave us the 680 and 850 and, you know, obviously the 3068. Do you have those two financial metrics for us on this call?

Yeah, I mean, definitely we can provide those metrics in our follow-up calls if you request this level of detail. And right now we focus more on the units at this point in time, but definitely those are available if requested.

Fantastic. I'll definitely ask for that. Thank you.

Our next question comes from Chris Pierce with the company Needham. Chris, your line is now open.

Hey, good afternoon. Can you hear me? Hey Chris, we got you, man. Cool. Uh, thank you. I just wanted to ask two questions on industry competitive dynamics. I know you have peers that are owned by companies that sell class eight trucks into the U S and that are seeing section two 32 tariffs. They're talking about, you know, losing share of that part of the business. Do you think we'll see, or is it too early to talk about potential competitive shifting dynamics in the school bus market as they maybe try to make up for lost units in other parts of their business, or is that kind of too early to tell, or have you seen anything along those lines?

Hi, Chris. This is Razvan. I think it's too early to tell, and that's probably more of a question that you have to ask them, how they manage between the different sections of the business, but so far we haven't seen any meaningful change from that.

Okay, and then I know in your prepared remarks, you talked about student enrollment numbers. I guess there are smaller competitors that are kind of working on optimizing school bus schedules. So it would make, you know, there's less, you know, just more throughput on the buses that run versus running a total number of routes. Is that something you're seeing when you kind of, do you have software like that when you kind of bid on larger contracts and larger school districts or school districts where we try and reduce the number of buses and increase students per bus? Or is that also kind of early days?

No, that's not something that we generator produce, but obviously we worked with fleets or providers that do have that software. I mean, there's, and you know, some of them that are out there, but it's not something we do.

But in terms of impact to the order or general demand, we haven't seen anything meaningful at this point in time coming out through higher utilization of school buses, if this was your question.

Okay.

Thank you both.

Thanks, Chris.

Questions registering, can you like to pass the conference back over to our hosting team for closing remarks?

All right.

Thank you, Jayla. And thanks to each of you for joining us on the call today. Bluebird has delivered another year of record results, beating guidance and demonstrating capability or credibility rather. And this is despite a challenging environment. With the fundamentals of the industry, I remain enthusiastic for Bluebird and its future. And we look forward to updating you on our progress next quarter. Should you have any questions, please don't hesitate to contact our head of investor relations, Mark Benfield. Bluebird continues to be stronger than ever and has an amazing future ahead as we approach our 100th anniversary in a couple of years. Thanks again from all of us at Bluebird and have a great evening.

That will conclude today's conference call. Thank you for your participation and enjoy the rest of your day.