Blue Bird Corporation (NASDAQ:BLBD) Q1 2023 Earnings Call Transcript

Matthew Stevenson: Hey, Eric.

Eric Stine: Hey. So I mean obviously, a really strong start to the year, I think above where you had kind of forecast last quarter. And it looks like maybe not as steep as your typical ramp and it’s more of a general ramp throughout the year. So just curious, what do you attribute the first quarter strength to? I mean is it that you had a modest loosening of the supply chain? Obviously, there’s pent-up demand, something around productivity of the plant because that was a pretty eye-opening number. So just curious if you could fill in some blanks there?

Matthew Stevenson: Yes. Thanks for the question Eric. It’s Matt. We talked about the operational improvements we’ve been working on for well over a year now. And month-over-month week-over-week the team continues to get better and we’re really starting to see the realization of those efforts. And there has been some improvement in the stability of the supply chain which always helps. But it’s just the hard work is starting to pay off.

Eric Stine: Got it. And then thinking about sort of the remainder of the year except in the second half of the fourth quarter, you’re pretty much full. I mean is that limited more just by customer delivery schedule request? I mean because it seems that you actually could push harder on that. Now it sounds like you’re also holding off on filling some slots so you can have them open when electric orders are placed here over the coming months but maybe some thoughts on the ramp?

Matthew Stevenson: Yes. So I think you touched on it Eric, historically Blue Bird’s would have a much bigger second half on volume than first half and it’s more even fueled throughout the year and that’s really due to supply chain constraints. We’re seeing it across the industry still suppliers are having issues finding frontline labor and having those teammates available to increase their capacity. And the same with the commercial truck market still holding in there pretty strong. So really it’s just — it’s centering around supply chain limitations from taking volume higher, because the demand is there.

Eric Stine: Got it. Okay. And then maybe last one for me. Just on — obviously, you expect a nice order flow on electric and you’re expecting that to pick up here over the next couple of months. But when you think about the coming quarters here in fiscal 2023, I mean, I would assume that you’re not able to fulfill all of those orders within the fiscal year. And I guess what I’m getting at if you’re talking about an $80 million EBITDA run rate just trying to get a sense, it would seem like in fiscal 2024 and I haven’t done the math yet on the slide you had, but in fiscal 2024, I mean, you certainly would look at that $80 million as a number that you would grow from year-over-year?

Razvan Radulescu : Yes, hi, Eric, this is Razvan. I’ll take this question. So it’s a bit too early to give guidance for fiscal 2024. Obviously, there are still many variables. However, as we’ve shown in our outlook on Page 20 in our presentation in the short-term for a normal year, we expect to have about $100 million plus of EBITDA with 8% on roughly 9,500 units with a good mix of EVs. So this could be as early as fiscal 2024 assuming the business continues to improve and the supply chain continues to stabilize a bit more.

Eric Stine: Okay. That’s great. Thank you.

Matthew Stevenson: Thank you, Eric.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Matthew Stevenson for any closing remarks.