Blue Bird Corp (BLBD) 2016 Q1 法說會逐字稿

Greetings and welcome to the Blue Bird Corporation fiscal 2016 first-quarter results conference. (Operator Instructions). As a reminder, this conference is being recorded. I will now turn the conference over to Mr. Jeff Merten, Director of Investor Relations. Thank you. Mr. Merten, you may now begin.

Thank you, Manny. Welcome to Blue Bird's fiscal 2016 first-quarter earnings conference call. You can access the audio and supporting slides for our webcast by clicking on the link in the Events box on the Investor Relations landing page of blue-bird.com.

Our comments 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 in our latest earnings release and filings with the SEC. Blue Bird disclaims any obligation to update information in this call.

This morning you will hear from Blue Bird's President and Chief Executive Officer Phil Horlock, and Chief Financial Officer Phil Tighe, then we will take some questions. So let's get started. Phil?

Well thanks, Jeff. Well, good morning, and thank you all for joining us today for our first-quarter earnings call. We are approaching our one year anniversary as a publicly traded Company and I can tell you it has been a busy and exciting 12 months for Blue Bird. We welcome this opportunity to share our fiscal 2016 first-quarter results with you. So let's get started with an overview of our financial performance on slide 4.

As we previously explained, the school bus industry is extremely seasonal and we achieved a solid result in the softest quarter of the year.

Now what do we mean by the softest quarter of the year? Well, the first-quarter covers the three months immediately following the start of the new school year and consequently is the slowest quarter of the year for new bus sales, basically every district wants their buses ready for the new school start.

Net sales for the quarter were $131 million, which is $35 million below the same period a year ago. Now this decline was in line with our expectations and we mentioned this in our December earnings call as we saw a number of specific customers shifting their new bus purchases from the first quarter to later in the year. These types of shifts happen often from year to year and are particularly noticeable in the first quarter.

Gross margins of 14.3% for the quarter were almost 3 points above a year ago. Two factors drove the significant increase. First, a substantially higher mix of propane bus sales. And second, select customers requiring higher spec school buses with more options at higher prices.

Our adjusted EBITDA of $5 million was down about $2 million from last year, but represents the third consecutive year in which we have achieved positive EBITDA in the lowest volume quarter of the year. This is a solid result and consistent with our full year plan.

Let me now review the first-quarter highlights on slide 5. First let me cover our production. We built 1,600 buses in the first quarter. Now as a reminder, we don't build buses to retain in Blue Bird's inventory to satisfy orders late in the year. Every unit we build is for a firm order.

First-quarter production is only 8% below a year ago when there were five more production days. Now we are forecasting significant increased demand in the second half of the year and recently launched a second shift to ensure capacity is in place.

We sold just over 1,400 buses in the second quarter which is down about 23% from last year. As I mentioned earlier, we knew that certain customers were delaying their purchases till later in the year and this reduction is fully accounted for by lower bus deliveries to three dealers.

We continue to be the undisputed leader in propane powered bus sales and achieved an exceptionally strong mix at 20% of total bus unit sales with many more customers new to propane. And unit volume was up a very high 72% from last year.

And finally, we are seeing almost double the volume of quote activity through our dealer channel compared with last year. And this activity provides a basis for our strong pipeline of projected future orders in the coming quarters.

With seasonality being such a key aspect of our business let's turn to slide 6 for a closer look. The new bus registration data provided by R.L. Polk illustrates the seasonality as shown by the chart on the right.

Now the seasonality is driven by the buying pattern of school districts, which traditionally emphasizes delivery in preparation of new buses for the start of the new school year and by release of municipal budgets typically in the May through July period.

This leads to much higher demand in the second half of our fiscal year of April through September causing two-thirds of annual vehicle registrations to occur in the second half. Now we have taken a step to add capacity in the second half of the year to better accommodate the delivery needs of our customers. And we are well positioned to handle the anticipated surge in orders.

So let's now look at how we see our sales outlook for the year, turning to slide 7. As shown on the left in section of the slide, consistent with our plan and guidance we are projecting Blue Bird unit sales in fiscal 2016 to be up between 4% to 6%, representing 10,800 to 11,000 buses in fiscal 2016.

As we saw earlier, first-quarter unit sales are down about 23% from last year, but we expect much of this decline to be recovered in the next quarter as our customers reenter the market. And we are forecasting first-half sales to be about 4% to 6% lower than a year ago.

Now with extra production capacity available in fiscal year 2016 for the addition of a second shift, we are projecting strong second half volume in the peak ordering season, up by 10% to 13% from fiscal 2015. The resulted first and second half calendarization of Blue Bird's unit sales more closely mirrors the timing of when customers really want their school buses delivered.

Turning to slide 8 let's take a look at our propane bus sales performance. Blue Bird's propane powered Vision bus continues to be our number one product differentiator in the market with six times more propane buses registered than all of our competitors combined. Our propane Vision bus also registers the highest owner loyalty in the industry.

Our first-quarter propane bus unit sales were up a substantial 72%, and year to date today 50% of our customers this year are new to propane. Furthermore, 20% of our unit sales in the first quarter were propane buses. These are very significant results that we are very pleased with.

Now the advantage of propane over other fuels are clearly understood, and market acceptance is growing as customer testing [volumes] confirmed the total cost of ownership and other key benefits.

Let me describe now our notable achievements in the first quarter. Kyrene School District in Arizona bought an additional 73 propane buses taking the fleet now of propane to 98 buses. Mobile School District in Alabama bought an additional 50 propane buses taking their fleet to 80 buses. Hillsborough schools in Florida and Safeway Transportation of Michigan were new to propane and each purchased 50 and 32 buses respectively.

These are just a few examples of the many customers realizing the environmental and cost of ownership benefits from operating Blue Bird's propane buses. And as a reminder, our proven modern and efficient propane engine is exclusive to us, developed and supported by our partnership with [Ford] and ROUSCH CleanTech.

At Blue Bird we believe in being first to market with differentiated products that customers want and value and where we can we strive for exclusivity. Our propane success is a great example of this.

Let's now turn to slide 9 and look at the other innovative new products we have coming in 2016 that are important to our continued growth. We have four exciting and brand-new powertrains coming to the market this year. We are the first and only manufacturer to offer a gasoline powered bus at the largest school bus segment.

Mechanics and technicians understand gasoline engines, they are simple to maintain, service costs are lower and they perform exceptionally well in cold climate conditions. Now this bus will utilize the same proven engine and transmission used in our propane powered bus and is another product from our exclusive partnership with Ford and ROUSCH.

This bus will be a great choice for customers who want the lowest acquisition price of any fuel type and simpler maintenance for their technicians. And we have terrific interest from customers since we announced this engine in the coming year.

And next our all new Cummins 5 liter V8 diesel is a new lighter weight engine from Cummins offering a lower acquisition price than other diesel options while delivering fuel economy. Blue Bird again is the only school bus manufacturer currently offering this all new modern, efficient and quiet powertrain.

Next our all new CNG-powered Blue Bird Vision bus will provide a lower price Type C bus option compared with today's CNG powered Type B (sic - see slide 9) bus option. And once again this was developed by our exclusive partnership with Ford and ROUSCH deploying Ford's 6.8 liter V10 engine and a fuel system developed uniquely for us by the ROUSCH team.

With this engine, along with our propane and gasoline offerings, we will have three distinct powertrains using the same Ford engine and transmission architecture. This is great news for the mechanics who work on the engines and it really simplifies the whole service process.

Last our new Eaton Procision transmission option will be available on most diesel engines this year and is the first dual clutch, seven speed automatic available on school buses in North America. It provides great acceleration, optimized shift points and improved fuel economy and a host of features that make the bus easier to drive.

As I mentioned earlier, we are committed at Blue Bird to providing innovative and differentiated products that customers want and value. And I can tell you that based off feedback to date our dealers and customers are extremely excited about these all new products.

Now let's turn to slide 10. So how do all of these products fit together? Well each one has a unique price point and its own value proposition for the customer. Starting to the left we will have our Type C bus value models, the lowest price point will be our gasoline entry.

Alternatively, should diesel be more desirable to the customer, we will have the all new V-8 diesel entry from Cummins to offer, again at the lowest diesel price point. Continuing up the price ladder, we will have our traditional ISB diesel engine from Cummins and alternative fuel offerings with Ford/ROUSCH propane and CNG models ending with our highest passenger capacity Type D rear engine model powered by either a Cummins diesel or a CNG engine.

Bottom line, in 2016 Blue Bird will have the broadest array of product offerings in the market all with differing value propositions and that is great news for our customers and key to our growth plans. In fact, we already have significant orders in hand for our new gasoline powered bus that launches later this year.

Now let's turn it over to Phil Tighe who will cover our financial results. Phil?

Thanks, Phil, and good morning to everyone. It is my pleasure to present to you the fiscal year 2016 first-quarter results for Blue Bird Corporation.

I'd just remind you that the fiscal year for Blue Bird is a 52-, 53-week period and our financial close for each quarter is on the Saturday closest to the last calendar day of each quarter. So the material that we are looking at today is based on a close of January 2, 2016 and January 3, 2015 for fiscal years 2016 and 2015 first quarters respectively.

One other note that I would make is that the first quarter of 2016 had 13 weeks and that compared to 14 weeks in the first quarter of fiscal year 2015.

So if we can go to slide 12. This slide gives you an overview of some of the key data. Phil Horlock has already mentioned some of the data to you, so I won't sort of walk through each part of it, but I will talk through some of the key points I think.

We have already talked about the fact that the first quarter was down versus the prior year, but again this was in line with our planning process. We had visibility through our dealers and our account planning process and we knew that some delays would be experienced in about three key accounts.

We do not see this decline in the first quarter flowing through to the full year and already two of the three dealers have submitted orders based on their major customers to build this back. And so we will see these units coming back in the second and third quarters.

Bus revenue of $118.5 million was down due to volume. However, I think importantly our average per-unit revenue was up by over 1 point compared to the prior year and was the highest average revenue per unit in fiscal year 2013. Now the improvement in revenue was driven in part by higher propane mix and also in part due to improved customer mix which is something we talked to you about in prior discussions.

The gross margin of 14.3% was substantially better than in the first quarter of last year. Again, you recall the discussion that we had on customer mix in our prior communications.

The 10-K filed in December last year and the 10-Q which will be filed today include margins by segment. And you will see that the first-quarter bus margins are more than 2 points higher than the first quarter last year and are actually higher than the full-year margins for fiscal year 2013 through 2015.

This is a key point for us and the result of a combination of higher propane, lower costs and improved mix. And we believe that the new products that Phil just talked you through will further improve margins when they get into the market.

Finally on this slide I would note that revenue was down by $34 million, adjusted EBITDA, on the other hand, was down by about $2.3 million. We do not believe that the adjusted EBITDA shortfall in the first quarter is an issue for the full year.

So, in summary we believe the first quarter is consistent with our guidance and plan. Key points, margins are up significantly, strong propane activity, the EBITDA reduction of $2 million is about 3% of full-year guidance and well within our tolerance.

Importantly, the activity in the market is very strong, our quote activity is up about 86% versus the same period last year. And the conversion of quotes to orders is up substantially providing confidence in the full year.

So, now I think I would go to slide 13. Slide 13 looks at the walk from first quarter 2015 to first quarter 2016. You can see we had again favorable news in net cost reductions of about $700,000 or about $500 a bus based on the sales in the first quarter.

Lower material costs and lower freight costs were the prime drivers for these cost improvements and we foresee that they will continue to carry through the full year and we will probably add to the good news in that area. We continue to see material cost favorability. And of course as fuel prices remain down freight costs are lower.

The volume and mix, obviously we talked about the lower volumes, they were worth about $3.3 million. Mix of product was favorable by about $1.1 million. And so, that contributes to the $2.2 million volume and mix.

Other includes higher costs for engineering. We had previously talked about the fact that we are spending more money developing the new products and there were sales launch activities as we are starting to ramp up to prepare for the introduction of the new products later this year. So there is some of that preparatory work in there.

And finally, there was a small amount for ongoing public company costs on the year-over-year basis and higher pension costs which were due to amortization of prior losses.

On slide 14 you can see the free cash flow for the first quarter. This was negative $43 million on a free cash flow basis, which was about $12 million worse than the same period last year. Key drivers for the change, obviously lower EBITDA was worth about $2.3 million.

We had higher outflows due to trade working capital of about $17 million. In part this is due to two actions. One is, and Phil mentioned this earlier, towards the end of fiscal year 2015 we completely basically drained the line as we got units out to customers to meet the timing that they required.

And secondly, as we have started to build back up we actually set up 1,600 buses in the first quarter for production. And as you have seen previously, we wholesaled or booked 1,400 buses. So we put 200 partially built buses into work in process and the inventory along with them, and that will account for the increase in trade working capital.

CapEx was up a little bit. Those of you have seen our trend in CapEx, we have been saying that we will tend to spend a little more money in CapEx as we develop new product and the first quarter is up as we follow that.

And finally, other was down by about $4 million as we reduce some of the accruals year over year.

So all in all the free cash flow was lower, but we don't see a cause for concern here. It was really driven by some of the physicals as we went through the first quarter. And we think we stay on target for the full-year guidance, which is strongly positive free cash flow.

The final slide I will take you through is slide 15. This looks at net debt, leverage and liquidity. Net debt was $178 million, as you can see, that included $17 million of cash. The net leverage ratio of 2.5 was substantially below the covenant of 4.5. Liquidity stood at $61.5 million, included in that we had drawn $10 million on the revolver as we went through the funding of the trade working capital.

Again, we don't see any issues with net debt or meeting our covenants. And we continue to make progress paying down debt. So with that I will turn you back to Phil who will discuss the outlook for 2016 and our guidance and give you a wrap up before we go into Q&A. Thank you.

Thanks, Phil. So let's turn to our guidance for fiscal 2016 on slide 17. As you heard, our first-quarter financial results were in line with plan and we are reaffirming the full-year guidance we provided on our earnings call in December. Let me just [line up] those numbers.

First, net sales revenue of between $960 million to $985 million. This represents an increase of 4% to 7% over last year. Second, adjusted EBITDA between $72 million to $75 million, between $2 million to $5 million increase over fiscal 2015 or 3% to 7% growth. And finally, free cash flow ranging from $30 million to $35 million.

As Phil mentioned a [piece] of our business is our strong free cash flow that we return out of our EBITDA. And while it is still very strong it is down a little bit from fiscal 2015 as we are increasing our investment in new products, infrastructure upgrades and growth initiatives this coming year. So bottom line we are reaffirming guidance and we are on track.

So let me now turn to the wrap up slide on number 18, please. We had a solid result in the softest quarter of the year, very important to recognize that. This is the low volume quarter. As you saw earlier from Phil, we were cash utilized in this quarter for each of the remaining quarters we generate cash, that is the way our model has always worked at Blue Bird with respect to seasonality of our business.

Our results were in line with our plan and guidance while we expect significant growth in the second half supported by our addition of a second shift this year. And our seasonal sales pattern will match typical [customer] demand timing. That is very important, matching your production with availability to the demands of the consumer.

Our gross margins were up about 3 percentage points in the first quarter driven by a substantially higher mix of propane sales, while sales were up a very strong 72% and we also have strong customer mix, meaning that customers who bought higher revenue vehicles from us.

And we are on track to deliver four all new powertrains this year providing our customers with the broadest choice of products in the industry. Quote activity has almost doubled last year's level which bodes well for volume growth in the quarters ahead and we are reaffirming our full-year guidance. Bottom line, a strong quarter for us and we are on track to deliver our results for the year.

So that concludes our formal presentation. I will now pass it back to our moderator, Manny, to begin the Q&A session. Over to you, Manny.

(Operator Instructions). John Rolfe, Argand Capital.

One question, so I think the number you mentioned was that quoting activity from September through January was up 83% and you said that the win rates were higher than in the past as well. So, I am just trying to understand a bit better how that feeds through to the 4% to 6% expectation for volume growth.

What percentage of the quoting activity typically occurs in that September to January period? And I guess the real question behind that is it seems like if a substantial portion of quoting activity occurs in that period that you guys might stand a chance of even coming in at or above the top end of that 4% to 6% volume growth guidance. So just trying to understand a little bit better how that all works. Thanks.

Okay, John, this is Phil Horlock, that is a great question. I'm going to try and take this into pieces. So when we look at quotes, I mean basically when we quote business, and we quote business every day here in Blue Bird, I mean we can see a quote turn into an order within a couple of weeks. We can see it take as long as 120 days. I mean it varies.

Some folks -- we were quoting today for things that might hit us in June; June/July even in some situations. So it is a long time, and we know that, we understand when it is going to go to a Board for approval.

From our quote performance, Phil Tighe mentioned we are seeing certainly a higher level than last year. Yes, we have seen a nice close rate in our quotes. And the way we get after this is really deeply understanding where our customers positioned, what they are looking for on the buses. Do we have a spec that meets their needs? Do they like our dealership support that we are having?

And so, it enables us to really be very selective the way we handle our bids and offers for those guys. And so, yes, we are seeing -- and the [interesting thing] about being -- saying our quotes are up versus a year ago shows I think the vibrancy of the business we are seeing and it is coming to us to ask for a quote which I am excited about.

Phil Tighe mentioned that the quote close rate is up. I probably won't want to get into the specifics on that, but it is a strong conversion rate we have been seeing, several percentage points above last year. And I think it is going to the fact we have the right products in place.

I mean they love our diesel engines, they love our propane, they are seeing what we have got coming with gasoline down the pike that we feel pretty good. And I think you mentioned about how does this translate to the growth we see for the year. We certainly want to see that we look internally.

We are planning on growing market share a little bit this year. So yes, we look to make sure we continue to return a high level of this into firm orders. And we look to grow a little bit beyond the industry this year. So that is our objective.

Okay, great. And one quick follow-up. It looks like, based on the seasonality that you are now projecting first-half versus second half, this quarter versus what you were projecting during the fourth quarter call you are expecting even a little more pronounced seasonality than you thought you were going to be having a quarter ago. So what sort of accounts for that shift?

Well actually, I think if you go back to our December earnings call, we were very explicit saying the first quarter was going to be down versus a year ago. And in fact we were right on the money with what we said in December, because we had pretty good visibility at that time of where the first quarter was going to be, obviously. So actually we were right in line with our expectations.

I think one thing I would mention is that the first-quarter production Phil mentioned is pretty high at 1,600 units while we sold 1,400 units. That means we have already got orders obviously we are fulfilling. Those units we built in the first quarter will be deliveries in the second quarter and beyond.

I think one thing I would say is we pride ourselves on Blue Bird and what we call delivering the buses in line with our promise dates to our customer. We feel very strongly about that, it is a big strength at Blue Bird.

And if you looked at our backlog at the end of fiscal year 2015, which was in our -- we published that in our SEC filings. It was down a little bit from a year ago and it was down because our customers told us, you know, we really love you to deliver buses for school start rather than delivering them to us in October and November. And so we basically busted our pig to try and get those buses out and we did it.

So actually we saw a really nice surge in the end of last year and that actually -- our typical year frankly that might have been a few extra units would have sold in 2016 fiscal first quarter. Instead they were sales in the fourth quarter of last year, and our customers are a lot happier because they had the bus at the school start.

And I'm just telling you that [because that makes] the business. We used to operate in light of this, John. I mean we recognize the first quarter is lower. That is a quarter where we take an annual vacation shut down for employees in October. We obviously have Thanksgiving holiday, our Christmas holiday -- it is a low quarter generally and we accommodate that and recognize it.

But I think hopefully you see, as Phil mentioned, despite the volume being done some 23% and [35 of the] revenue the EBITDA was only down a couple million which is I think a testament to the team of how we handle the cost of the business here and how we run the business.

Okay, great. Thanks very much.

(Operator Instructions). [Sean Gulley], OFS Asset Management.

Question on what you are seeing with the lower diesel prices, how are they impacting the demand for the propane product?

Well, I think you saw there, Sean, the first-quarter results on propane were pretty impressive, 27% of our vehicles sold were propane. Last year it was 12%. See what has happened on diesel -- yes, diesel prices have come down, terrific. So are propane. Propane prices have come down too. And we are seeing regularly well below $1 a gallon for propane across the nation.

In fact, I know our lowest price we saw was about six weeks ago, just a couple months ago, I forget which state it was, but it was in the $0.45 a gallon one customer secured a two-year contract for. And coupled with that -- so when you run the numbers, when you actually run a bus look at lifetime of a diesel bus against a propane bus with those fuel prices.

And, by the way, there was lower maintenance cost on propane, it is a clean fuel, less oil required, less filter change required. There is about a $2,500 to $3,000 a year savings on a propane bus versus a diesel plus. So when you keep a bus for 15 years it is a $35,000, $40,000 sort of saving here over the lifetime of the bus. That is a tremendous value and our customers get that.

I shall also add that the federal government, in December they reinstated the tax credit for propane. I believe they cut it this year, it is actually $0.36 a gallon. So they give a $0.36 a gallon tax credit on every single gallon that is used. Those numbers I mentioned, those savings are before that credit, that is a nice bonus. And that has been -- that actually was implemented retroactive for 2015 and forward-looking four 2016.

So it is -- propane is still by far the best total customer ownership value proposition. Having said that, we build a wonderful diesel engine product for -- with our Cummins partner and if folks want diesel we have the best in the business too.

Great, so the payback time is about the same in the current pricing environment?

Yes, typically about two to three years for the payback is the payback on the propane product, a little bit of a premium. That is a premium product for us, but yes, it is two- to three-year payback.

This is Phil Tighe, just one thing to add on just in case you missed it in the presentation. But I think we did mention that we sold propane to 84 customers in the (inaudible). But half of the customers we sold to were new customers. So the importance is that despite where diesel is we are continuing to get a lot of new customers coming in buying propane.

And I think that to us is the really important trend because the word of mouth and the education we have been doing out there is clearly taking hold. And new folks are coming in and the existing customers are coming back and continuing to buy propane even though diesel is at probably historic lows.

And how is the propane being accepted by your competitors in terms of how much traction are they getting with their products?

Yes, Sean, I think you have to ask those guys. I mean I think there is no question we are the absolute leader in this field. I mean we are actually pleased that our competitors decided to enter this business over the last year to 18 months after years of really not being in the market.

I think it's proven this is a mainstream product, it is real, it is (inaudible), [filling] is easy, it is simple, infrastructure is great. But I asked that question -- I know for a fact, as we mentioned before, we are by far the leader in this space and we are proud of that position. We have been in the market (multiple speakers).

Great. Yes, are they catching up though on your first mover advantage? Or can you tell from units if they are catching up to you guys?

No, from units we have seen registered, no, they are not at all. No, we are very strong in a very commanding position.

Okay, two more questions. On the -- just your pension obligations looked like -- and I haven't seen the first quarter I guess, but at year end it moved up a little bit. How are you guys tackling that to be comfortable with the level of underfunded pensions?

Yes, we are comfortable with the level, it hasn't changed a lot. Obviously with the swings in the market in 2015 we didn't quite achieve the level of return on the assets that we thought we might get, so that extended the underfunding a little bit.

But we have played very close attention to this. We have very good advisors and they work with us on a continuous basis. We have taken some actions to ensure that we minimize the risk. So we don't see it as a major issue.

How much do you need to spend in 2016 on catching up on those?

$6 million.

Okay.

And I think that (multiple speakers).

Go ahead, sorry.

Sorry, I think that data is laid out in the K and you will see it in the Q today when it is published.

Great. And then I was a few minutes late to the call, so the driver on the top-line miss was three dealers delayed some orders, but you have got a sense already that at least two out of the three are going to make up to similar levels of last year. Is that what I heard throughout the call?

Yes, that is exactly right, yes. I mean we use a very technical term when we describe the first quarter, orders can be lumpy.

Right, no that is (multiple speakers).

(Multiple speakers) but we even behind the dealers we know the customers behind them who are saying, hey, look, I ordered in November last year, I am going to put my order in in February this coming year or March. And we are on top of that, that is not an issue for us. That is what we are saying this is just something you have to deal with in the softest quarter of the year, it happens. But they will come through for the full year.

Great, and final question. I didn't quite follow the working capital usage increase for this quarter year over year. Did you say you were building inventories for a particular reason?

No. I mean we were -- because of the way our orders come in and the lead time on the orders and the time it takes to build the bus, we actually set up about 200 more buses than we sold in the first quarter. Those buses are sold buses -- are ordered -- firm order buses, we are not building inventory. But those buses won't be delivered to the dealer until the second quarter. So we carried work in process inventory across the end of the quarter.

Okay, hey, thanks, guys. Really appreciate it.

(Operator Instructions). It appears we have no further questions at this time. I would like to turn the conference back over to management for any closing comments.

Well thanks, Manny, this is Phil Horlock back again. I want to thank you all for joining us on the call today and we do appreciate your continued interest in Blue Bird. I can tell you we are focused on profitable growth and we intend to deliver on our commitments.

We also strive to be shareholder friendly and in this regard you will see in the appendix on slide 21 of the presentation we show all of our upcoming investor conferences. And we would be more than happy to meet you at any of those events.

Please don't hesitate to contact our Head of Investor Relations, Jeff Merten, should you have any follow-up questions. And again, thanks from all of us at Blue Bird and we wish you a good day. Thank you.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time and thank you for your participation.