Q3 2026 Blue Bird Corp Earnings Call Transcript
Key Points
- Blue Bird Corp (BLBD) beat guidance on all metrics for the 15th consecutive quarter, delivering record Q3 Adjusted EBITDA of $71 million.
- The company announced a major expansion with Ford Motor Company to design, manufacture, and sell the next-generation F-53/F-59 commercial strip chassis, expanding its total addressable market by $1.4 billion.
- Blue Bird Corp (BLBD) continues to dominate the alternative power segment, with EVs representing 10% of unit volume and a strong EV backlog of 776 units extending into 2027.
- The company raised its full-year fiscal 2026 Adjusted EBITDA guidance to a record $245-$250 million, reflecting strong operational execution and pricing discipline.
- Blue Bird Corp (BLBD) successfully closed the Micro Bird acquisition, which is expected to contribute to growth in the Type A school bus and commercial shuttle bus markets, and the company maintains a strong liquidity position of $259 million.
- The company's long-term outlook has been significantly raised to approximately $3 billion in revenue and $400-$500 million in Adjusted EBITDA, driven by the Ford collaboration and other strategic initiatives.
- Blue Bird Corp (BLBD)'s Blue Bird unit sales were 7% below the prior year level, driven by a large number of GSA and fleet units in finished goods inventory, which delayed revenue recognition.
- Gross margin for the quarter was 160 basis points lower year-over-year, primarily due to the dilutive impact of consolidating Micro Bird's revenue.
- Adjusted free cash flow for Q3 was $24 million lower than the prior year, impacted by a seasonal increase in working capital and finished goods inventory.
- The company faces ongoing volatility and uncertainty related to the administration's tariff policies, which it must continue to manage to achieve a margin-neutral outcome.
- The new Ford chassis collaboration requires a significant investment of approximately $90 million in 2027, including $50 million in CapEx, with production not expected to start until early 2028.
- The company's Q4 forecast includes a small reduction in units sold versus the previous forecast, indicating some near-term demand softness.
Ladies and gentlemen, thank you for joining us and welcome to Blue Bird's fiscal 2026 third-quarter earnings. (Operator Instructions)
I will now hand the conference over to Mark Benfield, Blue Bird's Head of Investor Relations. Mark, please go ahead.
Thank you. Welcome to Blue Bird's fiscal 2026 third-quarter earnings conference call. The audio for our call is webcast live on blue-bird.com under the investor relations tab. You can access 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 and our filings with the SEC. Blue Bird disclaims any obligation to update the information in this call. This afternoon, you will hear from Blue Bird's president and CEO, John Wyskiel, and CFO, Razvan Radulescu. Then we'll take some
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