BLBD - Earnings call transcript Q1 2018

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Operator

Good day, and welcome to the Blue Bird Corporation Fiscal 2018 Second Quarter Earnings 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, sir.

Mark Benfield

Cody. you, Thank Bird's Blue Quarter Earnings XXXX Welcome Fiscal Call. Conference to Second webcast today's blue-bird.com for audio live call tab. The Relations is on Investor under the

clicking the our on access slides Investor on by the page. can box the landing You Relations Presentations supporting website on

the statements forward-looking earnings be that have to Phil Bird are subject information different. noted matters release we Those with you Then risks Blue in any CFO, questions. disclaims some This Blue to include could update Phil take today this to SEC. afternoon in the actual latest will Bird's cause and comments obligation filings call. that Our others, President Horlock our results materially Tighe. risks from hear include, will and among we CEO, and

Phil? started. get Let's

Phil Horlock

Well, thanks, Mark.

you latest afternoon, opportunity joining results. second XXXX. everybody, for our for thank our earnings this We welcome good you today quarterly and quarter with us call fiscal share for to So

on overview So an let's start with financial of slide X. performance our

sold, than second importantly, we previously we XX% of sales seasonal, typically was half, Well, strong to X,XXX increase over results the XX% which explained XX% last a higher buses in industry with half around quarter. slow full first represents bus As X% year typically the year's calls, first despite and sales. the is achieve sales extremely in prior second the almost and, school the did quarter quarter first the

were quarter our that recall last sales first above year. You'll well

last revenue was a So quarter sales million, strong higher $XXX the our than X%. second in year, unit sales fact, for very year. were up first the of half net X% At

total unit our buses, quarter little of mix a alternative second XX% significantly sales of from growth sales to school largely So the X%, last year net a revenue was the mix grew mix to year. fuel-powered higher in of this XX% higher due which than growth the

a grew substantial of momentum and XX%. unit of half in the In year, segment That's the by first vehicles fact, through these our fastest-growing leadership sales of the business. the

all natural buses, fuels, to alternative these fuel Now as been compressed are count reminder, and in gasoline-powered we has which years. our staple of propane, the diesel, a for as all alternatives of gas

been alternative sales last I not growth several slowed years, fuel-powered mentioned, significant achieving bus we in just and however, For we've down. as the have

don't I out However, second in want the record for see growth of year to reasons. this the point continuing to we at the expect couple half of a pace

will second year customers in to we in purchasing did fuel the number half. of after alternative their First, see half purchase the year-over-year half first year. elect last Consequently, a this buses comparison the that in second the impact

in Air past seen That Fund months, buses the some year. to Settlement purchases push have buses XXXX targets Volkswagen fund fiscal Clean customers Act their in emissions. few with NOx we calendar from replacement new propane funding low of the Second, levels anticipation electing diesel the this later all that receiving emit of to of school

costs, our headwinds we're quarter At expect another steel perfect natural funds we first despite or in buses prices. year. year was Nevertheless, led fiscal alternative XX% the the record propane, above second hear last escalating million adjusted you'll year fuel the EBITDA above these school Our year. XXXX. as for choices $X.X was by million Through total adjusted fiscal best-selling next bus million, sales are to and $XX $X.X industry's half, compressed gas in seeing last electric-powered commodity for later, EBITDA utilize

period full adjusted both year outlook our net ago. a than and diluted Our for results EBITDA. first adjusted Adjusted higher income were earnings same per support half share the year

our utilizing about than stock $XX year, repurchase that than last $XX cash that March more increase debt net at the at XX by successfully months. our for six completed is time past over while the was program same explained higher million million we Now of

first in actions particularly underway off will now largely are the in we the are be half quarter, seen that accelerating growth. the these well are second initiatives as kicked transformational in We focused in fourth which and initial of profitable quarter on The implemented. the impact our they

at indicate will outlook, should ACT overall be is Research exceed grow XX,XXX the Looking units. slightly demand again the the on industry should and This industry orders net that and strong and highest we're XXXX. expectations fully full all, guidance. our year with the our quarter was All school since in result bus and support in industry second our for second line solid,

a selling bus Through year, our than orders a full XX% X% firm, competitive me and make were Through recorded number achievements backlog X. growth on year-to-date last yesterday, support of now of year-to-date year and slide and review our bookings operating price per one average the target. achievements, going half, our first key significant We sales each above higher will representing unit significant Let our our more us forward. was of non-cancelable ago. a year X%

production the quarter now are Our quarter, fourth now the are slots filling through and third we full schedule.

Blue XX% the in the of also number our dealer Importantly, same customers quarter, to the brand for new products our and our first network of great half spread. second of that's were year. and Bird of And endorsement the the buses a was that

of network, orders In our up fact, potential is dealer through our X%. pipeline

good the compared growth interest industry units bids through our the seeing school reflects alternative of significant in a in year That's not in last Bird. real time increase fuel-powered are the again year. of Blue awarded. we with in surprisingly, a really buses, and X% with same of orders Not strength solid yesterday but quoted orders indicator Now yet this customer fiscal

for initial Remaining be with two to was we I'm extend our the electric saw leader from voucher our undisputed we the and and HVIP programs means $XXX,XXX when school between bus, C only the will cost. the the to that alternative our CleanTech delivery extended Type first we've both in bus Bird later has school on bus in It this the D in first brought second to electric Together, our TVIP class-leading of for Since than more are as half prior already for slide, Drives with the for both fuel-powered decision the and together growth than programs, representing us to the I providing both XXX quote and manufacturer with great we've Type We're market qualify contract. alternative of a established This orders grants all-new year. to years our half. received per a down to in buydown record through these units buses a This announce Ride we qualification, more York. buses. firmly mentioned XXXX. companies California have on qualified fuels, New easy exclusive $XXX,XXX electric to Type first exclusive electric for topic we ROUSH bus dozen covering enabled nationwide, growth quarter, acquisition really has partnership products to another off C that and and to Blue As program. delighted significant held a customers start districts,

As experts implement upgrade significant this quality with efficiencies, direct buses, increasing we underway of I major the upgrades. regard, are to drive our implementing process to capacity, and to In program transformational our initiatives. with in our cost mentioned down automotive and are plant, working a well assembly new earlier, thereby we product

EBITDA as margins X EBITDA Beginning to all-new Valley, margin point year, this say main in end in It's the operation the reaffirming have on metrics to improvement the year business broken XXXX. of we to year. improving XX% multiple which this for more full of will profitable Blue construction based focus half paint we the first our are of Fort our project our all on early and at And toward now advance the for to is are adjusted X% our Bird. of completion on year shop report. from we on in our plant outlook These we a finally, toward goal key XX%. on of We last will and actions detail to on ground the year, this for we I fronts guidance continue cover X% performance go that call. the balance growth fair scheduled

on our financial earlier, a will little touched results I a later. results details Let's the now X. through take financial quarter Tighe run closer many these second of look Phil and on at slide

category and just adjusted category, adjusted with the half, was So EBITDA up every were flat. the the to exception second $XXX.X to the last year. EBITDA $XX.X X%, in million. summarize first second exceeded our parts up quarter. million up net results year, every XX% XXXX XX% from last fiscal sales quarter to up of with and which sales net sales, XX% for was up from were We Total Through

slide to X. now Turning

we as new year sales performance. bus the our take buses are a our closer or backlog to almost X,XXX buses. look school full way record Let's yesterday, booked than well order a achieving in alternative fuel alternative more on fueled of at With X,XXX sales of

record first of mentioned a mix I total strong first in sales, being alternative As saw we half, us. earlier XX%, a XX% growth of for the fuel buses new with half

fuel-powered undisputed purchased alternative in We the category. and XX% And in across with running with fleet. for at future school buses and XX,XXX fuel-powered less most it on engine alternative positioned proven our CleanTech having year road. share ROUSH continue industry. with modern well alternative to last We school to customers over market range XX% school alternative leader for Ford be of We the bus, alternative than our fuel-powered widest it grow have this fueled engines, in the now districts the makes fuel offer are easy of buses fastest-growing their than more we With and exclusive partnership segment, growth. the the bus an all

the the Propane market same move propane, that an having widely transmission and requirements architecture, engine operator. of the it's fleet cost is engine. or the CNG all same lowest same a products, for and the ownership as being gasoline, a three school and green total district in easy across recognized a With is service

NOx nitrogen In the level contribute emissions and brake These fact, or of hour X.X acid smog. per formation is other rain the of to horsepower at one manufacturers' of buses. gram Blue Bird gases oxides quarter

the for So of Blue Bird choosing level reason CNG. another best-in-class great is and NOx propane

than very Our appreciate diesel, sales can well and cold lower a I really shares price weather the gasoline you, simplicity mechanics really key a for the is this and engine has point also works capability who price where start running understood those with it tell concern. It acquisition year. are so propane. emission's strong is readily technicians it And customers by

of the with taking in in a all-new Type events And nationwide of beyond, buses Drive the of buses, beginning to deliveries summer, midst the are broadest and next and year Type series industry, our We late as D electric low forward to orders showcase C look for range Ride and our we latest the fuel bus. NOx cleanest, and alternative with school we're on position at in are Bird Blue replacing is These school bus natural VW is no low a aging Settlement zero NOx Blue emissions specifically Clean the road great clean reducing vehicles NOx fuel. harmful powered With vehicles on with the positioned emission gas propane and targeted diesel-powered and by buses, compressed funds Air to electric Funds. Bird. by Act manufacturer capitalize better than

a alternative ahead behind on record fuel-powered backlog With and X,XXX we of a buses of number units. are than us, year the this to us half of track more orders first deliver of strong

and Phil take outlook to guidance. the I'll Phil. over be me it to through later financials. Tighe, you, now cover turn back to you let Over who fiscal the will Then XXXX So

Phil Tighe

you, financial And performance 'XX. of few Phil. for of next afternoon, Thank The a fiscal second good our quarter the summary are slides everyone.

XXXX, note previously detailed deck. unchanged quarter fiscal XXXX, policies April that filed. Additional is on unchanged year. is this factors available material mentioned I in our critical measures a non-GAAP the GAAP information material appendix we're We at And 'XX had important with this for our today is are discussing the between has the the changes based XX-Q, X, of also of XX, and year March deals which More been in in would are review. XX-K. remind in filed end of from please second or no and close reconciliations and the the to The disclaimers accounting largely in you also, the significant prior Risk period. for

move So X, slide is results. a we of the quarter which if to second summary

point see can already be not those. only I'll the Phil I did longer out XX in that, top. material you has to a would Phil I than second this so quarter of the can of may duplicate. I quarter today, little at talked but find think our research X,XXX, mentioned, in second volume quickly, Blue highest and Some try It the years. it's XX last volume Very Bird our volumes about that I Horlock years.

selling for we So this we X%. I up our good period. slow that team that's - revenue, If in it's look a net mentioned at achievement

higher increased fuel average increase increase X% was and indicator a the about mix prices, the in So to, continuing to of positive also are was traction on we that's that average due alternative came of selling due markets in to competitive in around some largely turn margin. prices. of I The really importantly, the gross to obviously, get selling pretty months. competitors bigger of the to intense pressure and, in been buses where industry of face want the few aggressive the country, some have the last some higher

don't lower I to margin down think versus about zinc primarily of the cold that cost You costs, steel X.X to and rolled year. points and hear copper. you primary production. the be driver will The any of principally lead, can see that, gross commodity and And was metals, and due of was surprised including other last XX%, was aluminum margin that's

All of quarter in second these year. were versus the up prior the

steel actions three that were steel in increase during about XX%, the all result so. seen past cold a pricing expect to prices as see quarter we've Our and a in further of up we third the months or rolled

is generally was states of in second think to one one that did finally, I in us bit we you'd caused although volume, operational the Blue profit, a higher In the that higher the in the ordered that start of is we Also This up impact increases, business, And and those gross mix experience Unfortunately, we that to of versus to costs but quarter and costs, state more of impact after than and second freight and, to slow the first somewhat of had nice wished inbound business sales first and increases XX% prior that happen It impacting costs. drivers were came freight nice commodity commodity designed continue we lower about experienced in year. in get programs period, freight the don't costs. trucks one transformation range Bird we and included the quarter. continuing to minimize for the something to customer our talked on back we letting to in first agree manage and volumes. did get hidden of in Diesel therefore, and a they're about dealers availability the higher report. to margin a margins. and our shortage commodity of working effect quarter Also are problem. is do not of it surprises addition of in increases little margins. the we our the cost this sitting lot the sure to did the behind ongoing see business evidence go We're initiatives. get us. the been And annual on that volume the to broad to cost incentivize offset quarter a actions margin costs reduce really the we higher

come are starting that over initiatives We the implementing progressively rest fruition we're really of to the of each to year. see as the

come of we to second a expect and as are to that in range being a So more implemented been realized. see lot from have half that approved the of savings actions full the be

reduction as diluted share obviously the and we discussions. year. fourth so go more down Operating by were the $XXX,XXX income expenses margin. through big was Net $X.X hear was prior in $X.XX, And were was a about impacted, It earnings costs favorable. down. year. tax the That Net of gross favorable, and impact. up was quarter third you'll per income was which negative lot was Other million. Adjusted the was this our versus obviously, last versus

on a the reasonable result was for Suffice So was X.X% margin year, all little was increases. versus us. slide. say, was X.X the that a the really in by really Debt cover point $XXX,XXX and more up the the impact deterioration commodity sudden cash. of - Adjusted next just we'll about the that driven EBITDA, and of all, to cost prior

debt comes in can You the buyback that you're program cash about $X million. million and the $XX by favorable in share spent cash year-over-year, was reduction million is just the aware all face $XX that down about of. see of The buying shares. back We

obviously, so, I And that guidance focused think cash. for on cash come But out. our we're has still the

be cash $XX adjusted over will Our still free flow million.

going first in full much don't that's here. about the XX-Q so very where year. - It We And is cash show positive data filed. the year-to-date is so the half the or in we're

higher. that's that $X.X worse $X.X about the of point would is half selling by due prior to almost half million $X out Unfortunately, year. the loss higher tax flat, Volume comments accounts equal $XXX,XXX million. couple than or The I prices And first with was And due was to of the cost last and equity better which sold prior up million year. that, tax profit than loss about largely before nonconsolidated commodities our higher and issue. for Revenue year XX%. about that, a ground a is up the And They're was out, balance. for about of getting quickly. half. their that's in goods Just accounting that really - first Net subsidiary and the for production second $XXX,XXX. about at X mix. to a Gross that's will timing is down make $X lot in in million points is of average the

our achieving go guidance, which full the EBITDA we to If adjusted improvement year. supports that year. slide the are the we prior year-to-date is for I $XX.X a shows it bridge versus last And is XX% us shows brief Phil million, over $X.X of $XX that for fully It year. Finally, fairly compared - million. Horlock - to second already our a up prior or the on the is mentioned that's EBITDA this year. million XX% quarter think, XX,

make only cost there doing we We other $X.X items work and controlling freight. in the and of lot change. Gross profit costs got expenses a news We and about of see on large emphasis commodity some had controlling the bus progress volume But our on of the SG&A, to good and talked higher operating we've offset we've are did we can two down as pension. average been million, the higher the in quarter. revenue, the significant out was You discussed. that contributed some on partial our was impacts and

generally came that some we've of quarter. bigger lot We've do about to expenditure. controls retimed cost spending some that partial in of commodity through. XX as And So continue the elements second we to the put forward. Slide for we flow go all increases a And we'll SG&A. the this a offset cash free of do as and of reduced of talks

can year. the about cash by see flow there versus down the You $XX that free is million of million adjusted $X.X prior

the If it trade quarter around at of a of 'XX. 'XX fiscal from quarter really you'll 'XX. quarter. the a the of timing second receivable. got been accounts you look We the And in that's big fleet in second had the comes swing quarter working first the from see second to year of sale the money We capital, about

quarter. already in the same money, sale but last we've quarter and the customer, quarter, really it's third So that year. in looked got the the second occurred year, the unfortunately, fleet This good second sale,

the cause flow of change. the cash really that's free So major

in cash of in it's obviously But higher, believe was a were we're a all and year a So for flow. on timing we little cash balance higher. good basically the the issue. all, shape little free CapEx taxes

when a Bird. in As XX. cash quarter, our start and Blue sales happen that's more And can you of me see slide there, XX% $XXX.X than at $XX.X third at to fourth we for generate the Final on lot at and million. you million stands is know, debt of cash and slide will

is $XXX.X million. So our debt net

versus X.XX. of leverage covenant ratio at stands X.X the net Our

spending liquidity So we've And our I'd result room back Again, at buying $XX after shares. million cushion that stands got $XX.X you plenty is and the remind there. of cash million.

transformational build up CapEx position we'll and of a strong end part to cash very that in back we So will as the second our start half, with initiatives. we're despite the cash spending

who for balance it for questions. you you for Thanks. So back and Horlock, XXXX, me. of Phil your And outlook that's XXXX Thank hand will talk take to the I'll then the - about attention. for

Phil Horlock

Phil, Okay. that. for Thanks,

now as said, So focus outlook, Phil our and a let's the full year take for for also on the guidance.

to turn slide If you could just please XX.

So the industry. first on

X% high And again strong record on XXXX. year, we at my on growth slide. little industry for seeing the also at really With X% ACT a Research the market And between a we looking this above, somewhere XX,XXX. in this fiscal mentioned numbers, XX,XXX, that a strong last - anticipate the initial I And based is we year near potential good see bit again, another industry activity year. industry do so in XX,XXX, that orders, do fact it's for we're really XX-year a to important a industry.

XXXX before, that industry highest since As we that's be, said so XX-year a high. will the

we're positioned and to that's capitalize we than believe growth industry Bird do to on well higher what X% We these trying X% expect the range, Blue the in do. opportunities, slightly growth. we're Importantly, to

the year we're in think achieving start off that. as can the to first in So a good of you half I see,

So last structure our on a through efficiency, in call, the series actions our focus actions. and earnings we in addressing fiscal said transforming is of capacity quality, XXXX, cost product business as

to to seek from and XX% implemented financial X% up X%, to to X beyond. as this XX% that's EBITDA XXXX point desired XX% I year, we at and actions ago. finish year goal year step at do our about range to coming and range mentioned, And through for there up as progressively are The Phil year fiscal we As both a towards want a from being And of drive expect this get X%, last this to we be, year. our XX% margin years. margin our our That's this look the in EBITDA we goal to commodity and is at in of see XXXX year. about escalation by Phil increasing big high talked following results freight that. our the led first price and that issue - are steel a which, closely, and the taking are taking we're into you the of all rapid length, particularly obviously, pricing as But key to and half quotes very The driver by some watching And half, costs, fiscal a and freight second fuel particularly the we cost. will going we offset in be inbound of actions, forward. orders costs new saw also this on

So balance we bid regulatory is to been tough implementing through - are that there's year. be and this able we obviously, that. know, we like We industry shifts, going change, to an that commodity But you a the industry as do when to It's - typically over has of the often against. the is competitive that price years, big when business. the found issues - price

So to of prices year remain steel the while we high. would do the look balance that through

price at the has. features That bus our giving success a best-in-class products differentiated making work core that. our the to best I means our great of we'll passion, think that that on what alternative example and to else and And and that's no That great is customers and to say mission. value. would provide regard date quality is is - a one plans our I products Finally, that's value fuel continue and of want

the our fiscal profit with quarter in third quarter of timing on sales be compares that actions from quarter. the transformational for we recorded the savings the based quarterly last And fuel XXXX. highest unit expect year, will profit third this Now when and our we production our quarter and fourth the in anticipated highest year and quarter volume schedule

profit Fourth volume quarter outlook what for our and our versus different pipeline, last be little here our year. have based the balance on should transformational the of highest we in a our So our highest year. savings for

in initiatives. million now sales metrics. reaffirming results guidance $XX reported EBITDA guidance to me are all fiscal these on reflects fiscal on XXXX is we and all first the guidance increase significant on Net state costs year, our to million focus between $XX Adjusted reflect new the flow tax improving the in of EBITDA beyond, last cash the had. a half down you should advise does we driving between $XX $XX to we a that rate normalize earnings million for $X,XXX,XXX,XXX let margin. free we for XX, is the three Adjusted is tax call level. at fact, million XXXX the which remainder of slide guidance as Based to outlook And on fiscal and fiscal over million, million, combined that and about So $XX XX% and $XX of and of which rate federal $X,XXX,XXX,XXX. XX% XXXX, XX% to turn around between

a in XXXX. point more to continues cash be represents model business to upgrade of of flow feature adjusted fiscal now Just free our than our investments mention, despite XX% and strong a adjusted EBITDA facility the plant

XXXX second taking you, are growth and both margin continue the full profit and as are address performance, our presentation. fiscal plans up, our are strong our quarter Cody, us, year to I'll each to Escalating quarter. XXXX, to increased guidance. to cost. operationally guidance half action, and support pricing, to had this. update begin key we it financially, Cody. to we and to and mentioned, Over on a in look concludes a first And concern That we'll we question-and-answer fiscal wrapping now in prices progress our maintaining session. and and We just our pass moderator, formal you back including I So commodity

Operator

from with Capital. Instructions] first Matt question Koranda our [Operator Roth take We'll

Brad Noss

weighing of Brad you breakdown factors us that or inputs I between is by sort a freight can and there. to for in commodity start on other on at Matt. help were quantify looking labor, Noss just gross seeing if This wanted the gross any margins main margin, inflation, just and

Phil Tighe

on half major commodity second But into the than in really margin the more as I is adverse a impact and the the was Bird. goes there more quarter. - Blue Well, There typical said, some getting were volume on costs in quarter bit the little of dealers freight. of in that's gross That's second for and what the of deterioration. mix

think I an frankly, cost Clearly, commodity continue quite the the through. tariff steel see yet. continuing ongoing to and new cost, is oil of freight steel cost And issue in run-up. steel metals to some will news stuff off and the be all other I area down, until see of the don't was inbound freight. it hasn't the clearly the yet probably easing and settled won't see I gets escalation

it I week. than more barrel a hit $XX think this

to not go - assuming going away the future. costs are these we're So we in near

to will mentioned, to just that reduce that through That's alleviate also the going work to cost. it. And Phil variety it help on continue going and to of about aggressive other for we're price, costs offset product one. we're actions As a measures to

Brad Noss

sort are the are it? What you to pricing Or what of guess, term, All And confidence the really gives in? you are these to to that That's able see in offset previously are abate building going it beginning expected you really just what helpful. headwinds in you're you them not the to able is reiterating I what what for there? and given near initiatives - else guidance And continued these right. with and transformational I just the headwinds? mean, really do

Phil Horlock

Yes.

explaining good think, you're of transformational I job there. the are Obviously, Brad, costs. driving initiatives down doing a

of assistance. people external help lot here focused We that a with have that. have on team at Bird we our And driving professional in Blue

the seeing so we're And results.

in see coming second through the You'll half. that

push on further trying that. that, exceed driving to it's in, So

I've pricing that, our last that. on to and is dealers week, why, second dealer The and half network, of discussed this And fact, that, thing understand our just be doing talked that we'll mentioned. we in I obviously they the

these a And want network. more? free to two can things push push little at be our we Bird. and by things. always are be may group things we who headwinds. or We try can Blue thing like down third year responsive. out you costs are a is next we'll settle that until So at And we can the here tackle we that we us what's putting it off give look out budget. We to There's Can bit quarter responsive pull and space and positions where till we the some things have open, in defer of a look be where through in push to where levers

part we were the a pretty and what day. - mentioned, back Pretty of some levers. result still the able of some things. to of was those despite we we second quarter, those And control. as how we're Phil seeing quarter strong able come the in That's So that impact in every pull late of with do steel to

to it. on So Brad, great it. we're to we what get it's a it ask, just - that's every really is responding and work We day, question but

Brad Noss

out just Great. increases, regard then said you to the dealers That's And you the just with price helpful. communicated obviously, in recently.

most in guess, in Or So, I since QX through QX? new they begin slots it as would for we come just book the with benefit prices, already that QX? of set production have see the would to really to are

Phil Horlock

Yes. business. coming I sort see course, it's very you'll mean, dynamic most of And of QX. through of it, like a

someone I'm tell and to going not change We're going We back to what out there agreed have go price, quoted just who's a with been you. I quotes [indiscernible].

to So towards sort through, the impact the be that quarter fourth then see you - of full you'll run really when have see that. it'll and you'll of let

the the but the some working yet. price, we why of but obviously trigger all - got will that they made just with customers pull saying, our towards still new the and you see are the I receive the will higher new we there That's on, on point honor and wouldn't see, ones existing third, we've the quotes they out. You'll orders, that what already of should end

Brad Noss

one more it. And me. just for maybe Got

to that the I or rest I But of certain now in steel do the help your fix current steel prebuys quarter out Or increases, prior you as, that? sort why I portion able impact through was or you previous wondering you anything guess, if that - the year? to the from from were if if of like try get have a the you to mentioned that to some you wasn't had just hedged of ability advance. typically you prebuy - think you're

Phil Horlock

to respect for price we're a broker. buy, cold steel basically We the So locked with deal steel rolled quarter. third our with - for is

broker on is quarter. Again, And everything looking. make fourth based be doing pricing sure the to very close. what get quarter pricing our price available. the backward - the is with to understand so we forward And backward for work our can looking, we're we getting we And is will not best third

based we're So the at of not great. not the where moment some getting which are on priced forwards are,

Operator

now We'll Craig-Hallum. take Eric our next question with from Stine

Aaron Spychalla

for well other and markets bus. and out as electric the Maybe things on Spychalla of ACT heard alternative incentives seems into it the color of are the big Expo first has And of interest last on electric Maybe good there as good some going on side, that a that expanded at hear interest like to markets. for there. the week we were lot Aaron It's me, in where Eric fuels, Stine. isn't

So please? about can that talk of kind little a bit, you

Phil Horlock

with They've gas Yes. products successful premium is available. where bus, been mean, compressed significant are grants even our I always traditional and with fine think which certainly, a electric natural fuels. certainly I we're over there

quite particular, look to been New In California. good but time Texas a So has you York particularly has market. at from been time, California.

California So we've when we're are bit quite certainly interest expensive, grants is you is say available. where always terrific. - around certainly there getting found bus. that The a more electric it it's

as funding, that. for of And capitalize timing New York earlier. then can available. the mentioned we is And terrific, this be think, really VW of it should is I year End this that I good certainly, us.

just want the a where and emissions that's where thing zero great is in excited test strong try the are have you a aside markets mentioned and ones of But out, real ones you funds to they set like the money, onesy, nice opportunity those product VW have volume, really electric are cities there grants today you if I talking that be and the the one movement California And earlier, want a to want to where are big certain would might I that cities Type be to the it about provide but tend a right, when nice not and in green unique opportunity. Type for to New want the want to cities they've not twosy, to you a the to A bus certain electric. we're by but and two that. to York, our a And to which and bus, You're Micro think, they the Type get little to powered and smaller do stance, a able municipalities grants be actually partnership Bird we really through areas available. C position, show But the they're some there. are D, -

Aaron Spychalla

Right.

you the maybe Okay. I And an more initiative into the then there? Can try know for to parts. second get just an on SKUs you give us update dealers. that's been to

Phil Horlock

Yes.

side, it's us. second often the was quarter that a for think the get I quarter in parts And On the you in parts flat business.

at bit. school, January quarter mean, you're conditions, first the issues, with through of back at ice. little March, You're looking things, a is you're usually I That's dealing because snow up winter the

picks school - to The up the to buses. toward little - head And off, second again as renewing be it tends then backs school start, you're slower. a when a get we little

original you our a We're lasts typically just new finding, bus. our on years of what too, guy, So a that may to seasoned gets don't Bird Vice not Aaron, tends required, that XX-year-old division. growth part in products. we we've this obviously, excited maybe X, But and when least we Dean's I our look, quite X, achieve. long a new original of we that something buses. actually to means appointed in X, just - the be are quarter parts SKUs want not Blue bus adding overachieve this Head the Senior Dean portfolio want Parts President, every equipment the But X And And be the space. old, quarter to a actually Coulson. OEM in they about He's say is would second week opportunity. that

that to at traditional - can beyond that So increasing we the SKU are looking we parts going sort business offer of and done. the look that we've

because the being - said school industry I And I've road the park - to as buses the that. we of XXX,XXX-plus a consistently, used should we there, growth, XXX,XXX get outgrowing have of performing on that full for do actively in believe parts, buses out big are parts, want So over requiring industry over like share be unit service. our buses, school well requiring to we

the we would look I continue to think traditional beyond of bus going business parts industry the growth again, business. So forward growth in the

Aaron Spychalla

the just strategy. quarter? me, update second you allocation I I in on heard repurchase right. think program capital you remarks share us All there? And prepared the the the then last give finished Can an in that maybe for

Phil Tighe

quarter. it what buying think board spent was and Yes, I $XX buying to on that's back in million, the up was The - completed second exactly shares. back had purchases authorized

So that one is done.

Aaron Spychalla

I given repurchases anything dividends cash mean, this that, anything just and on And of discuss Or or profile business outlook, or growth right. can flow share All the of is at that then, kind it time? else tuned I guess, stay you kind like free there? kind the of of

Phil Horlock

bit actions. with. our we're paint of shop. a on year lot putting like a we transformational it's one things tuned this on think dealing with brand-new We've I going in got We're stay obviously, one things have on that because, this a

I'll of as very strong But on into that too. have run you next stay just spending tuned. flow bullish would you flow cash adjusted feel these still about despite capital investments. will quite - cash I is saw, free We just outlook. stay So very And our a that. a year still bit We've strong free say - cash say got tuned

to For have on one. now, announce we nothing that

Operator

from We'll Chris with [Operator CJS now hear Moore Securities. Instructions]

Chris Moore

competitive seen environment talked about bit quarter. was had think very a you - the the of that Phil Tighe kind I earlier pricing in little it a

or the was that related So overall for just all to alternative buses?

Phil Tighe

Chris, is Phil. was all It this no. buses. Oh, the

markets to going up they've people positions that while. there's So out of particularly a a for shore with had trying on there lot various markets, in movement

that so And one particular you state any have protect pin a it's it within gets bus. It fairly for companies on trying a really might they a specific some with time. account had And down couldn't to position to active.

on a basis. so this we And daily fight

a As bid know, business. you we're

they price the districts of can best school look get. the for many so will And

so the year. the seen that And for we have to this we're the put mean, really fighting aggressive people been quarter. always has going second But I some wouldn't fairly I half And have this. been of recently. first on it

Chris Moore

Okay.

the question together? does given prices that two how is fit increased I kind cost? those So, commodity then, with of how fit raising Kind do strategy the of the guess, of in

Phil Tighe

think I happened clearly Well, happened, it just the to Blue right? not And cost has Bird. has

well. Our competitors experiencing would as it be

to Blue care take trying the we're at So Bird of moment.

structural where those we it. that think so will of be everybody this one at movements will And look

from of lot of you hit look with cost companies, got commodity from this reports tools tools one that's got, the you've earnings being but and got of out You at there's haven't the is of the And - issue. only of lot people other you've a pricing. some come the a tools, one

by And do, fully we these know that to everybody we competitors comment our while so we what on going know prices. what but we're hit can't do will has expect been - we do,

Chris Moore

it, got Got it.

much - buyer propane from a a in a would bus sense of of the of the in gain Do waiting half some have 'XX, into You how could second get VW incentive in talked the you terms of buy by benefit 'XX second of is? into propane earlier any money. that terms 'XX big incentive with pushed of how that

Phil Horlock

about billion bunch a the the VW $X.X this shipyards we billion mean, that billion, I potential $X.X bus Well, truck the around worth obviously, beneficiaries a gets the with And piece in funding. starts forklift a it's that, pretty it. we transportation of that a And fund. pay business, whole money play the is there's for of of business, - - I mean, it great $XX sizable. is question. then transit

how off certainly, a available. it said And entire folks already all give applying we the we few be more for actually year. going a talking have very out, than reduce their - The a been on we've heard it portion that the for going thing that incentive. many and we're going is money. group the to been much with nitrogen the is see to meets much with who've settled climate, can states, that this is is important. amounts some out about how some an lobbyists some long significant lot states there's road, NOx But They've of heard states. yet. to end this We've a had of you states they discussion allocate haven't And states to work you pay vying how can partial we of saying We've probably heard this the half it talk towards a level. to have nitrous take money I - We've about, actually actual by. much So to NOx of about money mean, is states certain level as the certainly all oxide take folks we'll our what from quite of bus segments to out and they're looking as business. bus school different a

out. engaged being those help That's folks, provided? that the how worked still of these beneficiaries we're being them - selected. And figure I be still we're grants has worked say, with cleaner that to those So to terms in on on, going the you got better exactly think product we you've of And chance meeting But position. a know funds. we do of that the yet are exactly good the product we're - and more fact, terms got, in getting are by funds state like each trying detail, of you've in in

Chris Moore

at you Got the Are looking with the perhaps kind lead of what propane, similar you how big electric it. that of a have terms question of kind you you in at picture looking the to market to ability, That's kind of where Last - did are the of kind guys on bus less opportunity? in just there helpful. charge significant opportunity.

Phil Horlock

great That's Chris. question, a

features, is for think and market which I we've fits been our and adopting, with there's it strategy differentiated this. products a think we

going can maybe one a you I be one But a zero catalyst by I mean probably electric to a is this, they a to bus. business, buy, green never would got are question, a to into powered buy people these going using buy otherwise have propane there for - think bus than, a VW who the funds to there's It's good electric cost districts would get want and buses. chance able to to four to because get who electric no can propane electric And more a emission. nevertheless, emission. say, you funding - bus expensive. understand propane, California batteries like the I want get chance is green are - every you lot zero

of will seriously, So I lot think, they zero against are taking buses. a funding this utilize that and emission school very certainly

we show Cummins. bus, on But anyone we exclusive diesel like because a think us, wants have diesel else new diesel can We're in we that opportunity engine. We stressed in space. do. leader a to who a For engine it's is I what diesel being to partner Cummins too no this the also one best the clearly

have array So if very we you a everyone. want diesel, that, of we've but broad got offerings for

Operator

like I And the Horlock turn Mr. remarks. that over closing to does conclude additional today's question-and-answer Phil for to session. would conference now or

Phil Horlock

the you our you, to And I to the your today calls. story call. and Blue want It Okay. tell future. continued chance We you as these a appreciate our forward all Bird. enjoy in thank we Cody. on Well, to interest quarter thank of complete gives us me We joining outlook the always look for do for

do And Head all to we're of follow-up in hesitate Blue Bird, focused you Relations, today believe of profitable And I you. growth, for have again day. have questions. well are us growth deliver from Thank a to and and we Investor Mark contact our on Benfield, the Please intend thanks our We on positioned future. at don't any should commitments. and great

Operator

conference. today's participation. all your conclude does That for Thank you

Blue Bird (BLBD) 13 May 182018 Q1 Earnings call transcript