Blue Bird Corporation, the leading independent designer and manufacturer of school buses, announced its fiscal 2017 first quarter results.

Highlights

• Unit sales for the quarter totaled 1,493 buses, 85 units above the same period last year

• Generated net sales of $136.7 million, $5.3 million higher than the same period last year

• First quarter loss from continuing operations of $8.4 million, down $6.1 million compared with the same period last year. Loss from continuing operations was impacted by $10.1 million of debt extinguishment costs

• First quarter Adjusted EBITDA of $2.6 million was down $2.7 million compared with the same period last year. The decline was primarily driven by timing of customer orders and engineering expenses

• Adjusted Free Cash Flow was an outflow of $34.7 million in the quarter, an improvement of $8.4 million compared with last year

• The Company executed a new $160 million term loan and $75 million revolving line of credit. The new credit facility reduces the Company’s effective interest rate paid by approximately 4 pts., representing interest savings of approximately $5 million in FY2017. Proceeds from the new credit facility were used to extinguish the previous facility

• Gross margins in the quarter were 13.3%, down 1 pt. from last year. The deterioration was primarily driven by timing of certain customer orders

• The Company was awarded $4.4 million from the Department of Energy to develop a zero-emissions electric-powered school bus with "Vehicle-to-Grid" technology

• Reaffirming full-year fiscal 2017 net sales guidance of $980 million - 1,010 million, Adjusted EBITDA guidance of $72 - 76 million and Adjusted Free Cash Flow guidance of $38 - 42 million

“We had a great start to our 90th year at Blue Bird! We delivered solid growth in top-line revenue and unit sales and secured a number of first-time accounts,” said Phil Horlock, President and Chief Executive Officer of Blue Bird Corporation. “We are pleased that our gasoline-powered bus is generating excitement in the market and our initial customer-feedback has been very positive. Blue Bird's propane bus continues to be the leading alternative-fuel choice and we are excited to have been awarded the DoE grant to develop an electric school bus, further strengthening our leadership position in alternative fuels. We are pleased to reaffirm our full-year fiscal 2017 net revenue guidance of $980 million - 1,010 million, Adjusted EBITDA guidance of $72 - 76 million and Adjusted Free Cash Flow guidance of $38 - 42 million.”

First Quarter 2017 Results

Net Sales

Total net sales were $136.7 million for the first quarter of fiscal 2017, an increase of $5.3 million, or 4.1%, from prior year period. Bus unit sales were 1,493 units for the quarter compared with 1,408 units for the same period last year.

Gross Profit

First quarter gross profit of $18.2 million represents a decrease of $0.6 million from the first quarter of last year.

Adjusted EBITDA

Adjusted EBITDA was $2.6 million, or 1.9% of net sales, for the first quarter of fiscal 2017, a decrease of $2.7 million compared with $5.3 million, or 4.0% of net sales, for the first quarter of the prior year. The decrease in adjusted EBITDA is primarily driven by timing of customer orders and engineering expenses.

Loss from Continuing Operations

Loss from continuing operations was $8.4 million for the first quarter of fiscal 2017, a decrease of $6.1 million compared with the same period last year. The decrease was primarily driven by debt extinguishment costs of $10.1 million.

Adjusted Loss from Continuing Operations was $2.1 million, representing a decrease of $0.5 million compared with the same period last year.