Blue Bird Corporation (NASDAQ:BLBD) Q4 2018 Earnings Conference Call Transcript

Dec 06, 2018 • 04:30 pm ET

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Blue Bird Corporation (NASDAQ:BLBD) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen and welcome to the Blue Bird Fiscal 2018 Fourth Quarter Earnings Conference Call and Webcast. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Mr. Mark Benfield, Director of Investor Relations. Please go ahead.

Executive
Mark Benfield

Thanks, Keith. Welcome to Blue Bird's fiscal fourth quarter and full year 2018 earnings conference call. The audio for our call is webcast live on investors.blue-bird.com. You can access the supporting slides by clicking on the Presentations portion of our IR website.

(Forward-Looking Cautionary Statements)

This afternoon, you will hear from Blue Bird's CEO, Phil Horlock and CFO, Phil Tighe. Then, we will take some questions. Let's get started. Phil?

Executive
Phil Horlock

Okay. Thanks, Mark. Well, good afternoon, everybody and thank you for joining us today for our fourth quarter and full year earnings call for fiscal 2018. It's been a very busy year at Blue Bird, and all of us love this opportunity to take you through our latest quarterly and full year results. Let's start with an overview of those financial results on slide four.

Our fourth quarter results were strong and I am very pleased with the progress we've made this year. Our unit sales were the highest in the fourth quarter since 2008 with 3,757 buses sold. That represented a 4% increase over last year, and correspondingly, we saw a 6% growth in total net sales, which amounted to $332 million. The higher growth in net sales versus unit sales reflects a richer product mix, and to a lesser extent, the pricing action we took later in the year to address tariff escalation in commodity prices.

Now, going to our business seasonality, I mean, it's worth noting that fourth quarter net sales represented 32% of our full year sales and the second half with a substantial 64% of our full year. Our adjusted EBITDA grew 16% or $4 million over last year to a strong $29 million, which is a solid 9% EBITDA margin. It was also our best fourth quarter result for more than 10 years. As Phil Tighe will show you later, we achieved this improvement despite escalating steel and commodity prices as we drove fourth quarter cost reductions through our transformational initiatives, which we mentioned in our prior earnings call.

Adjusted net income and adjusted diluted earnings per share were both significantly higher than the fourth quarter a year ago, up $12 million and $0.40, respectively. On a GAAP basis, both net income and diluted earnings per share also improved from a year ago.

So, let's now shift for the full year. All three of our key financial metrics either met or exceeded guidance. Net sales of $1.025 billion was above the guidance range and the first time in our history that we exceeded $1 billion in net sales, that's quite a milestone for Blue Bird.

At $70.4 million, adjusted EBITDA was within guidance range, $1.5 million above last year despite the commodity headwinds that hit us in fiscal 2018.