Blue Bird Corp (BLBD) 2025 Q4 法說會逐字稿

Good afternoon and thank you for attending today's Blue Bird fiscal 2025 fourth-quarter and full-year earnings call. My name is Jayla, and I'll be a moderator for today. (Operator Instructions)

At this time, I'd like to pass the conference over to our host, Mark Benfield. Please proceed.

Thank you and welcome to Blue Bird's fiscal 2025 fourth-quarter earning conference call. The audio for our call is webcast live on blue-bird.com under the Investor Relations tab. You can access the 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 risk that could cause actual results to be materially different. Those risks include, among others, matters we have noted on the following two slides in our filings with 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 questions.

Let's get started. John?

Thanks, Mark, and good afternoon everyone, and thanks for joining us today. It's great to be here and we're excited to share with you our fiscal 2025 fourth-quarter and full-year financial results. The Blue Bird team did an outstanding job once again delivering record sales and adjusted EBITDA for the year. Razvan will be taking you through the details of financial results shortly.

So let me get started with some of the key takeaways for the fourth quarter and full year on slide 6. As shown in the first box, Blue Bird beat guidance on all metrics and delivered a record year. And this is despite the impact and challenges associated with the administration's policy on tariffs which continues to create some pricing uncertainty in the overall market.

This uncertainty, coupled with the fourth quarter typically being the lightest order period, reduced our backlog to 3,100 units. We will talk further on this, but we would consider 2025 fourth quarter ending backlog that's still in the range. In fact, today, our backlog is up to nearly 4,000 units and 850 EVs.

Once again, we had a strong operational execution and performance for the quarter, which is a testimony to the team's dedication. During the quarter, we also furthered our long-term manufacturing strategy by beginning scope development in the automation business cases for a new factory.

Once again, we are looking at where we can apply production automation, automated material movement, and manufacturing execution systems which will bring shop floor connectivity and ease of data collection. As I explained before, this fits into our manufacturing roadmap which will result in cost reduction steps for the future and will improve our overall long-term competitiveness.

In terms of pricing, we remain extremely disciplined. Bus prices remained higher than the previous year and the previous quarter. This process is very much how we manage the business. Our track record and dominance in alternative-powered vehicles continues.

Our EV demand is stable despite the tariff pricing uncertainty and EPA funding. The outlook in this area, though, remains strong. Alt Power is a segment we created more than 15 years ago, and we continue to maintain our leading position.

During the quarter, we also looked at our long-term investment thesis and to further defined our roadmap for both manufacturing and product. Again, we will invest in projects that have a clear and strong returns profile, and I look forward to sharing more in our next earnings call.

We recognize investing in our operation and product portfolio will improve the overall business. Consistent with what I communicated in the last two calls, it's our objective to position this business to be a strong, long-term investment.

And finally, we continue to manage the impacts of the administration's executive orders and tariff volatility. We are fortunate to be well positioned to navigate the situation to a margin neutral outcome. Overall, adjusted EBITDA came in at $221 million for the year or 15% of revenue. That's $38 million better compared to last year's record year.

Let's turn the page and take a closer look at the financial and key business highlights for the year on slide 7. We sold 9,409 buses in 2025 and recorded revenue of $1.48 billion, a record year and $133 million ahead of last year.

On the EV side, we sold 901 electric vehicles, 9.6% of volume, and our long-term outlook for EVs remains optimistic. As already mentioned, adjusted EBITDA for the year came in at $221 million, $38 million stronger than last year. And free cash flow came in at an outstanding $153 million. Razvan will talk more to this and our outlook later in the call.

Turning to the right side of the page, I'll start with backlog. Our backlog finished the year at 3,100 units. This drop was a function of industry volatility and the period itself. Fiscal fourth quarter is typically and historically the lightest order period for Blue Bird. Our 2025 order intake for the quarter was in line with the 10-year prior average, validating there were no performance issues during the quarter.

More recently, we are also seeing our strategy on providing pricing stability into June and next year paying off. Our backlog has increased some 800 units since year end.

Overall, the fundamentals are still there. The fleet is aging, they're coming into a heavy replacement cycle, and there has been industry supply issues in the last few years, leaving pent-up demand. So all of this continues to point towards this situation being more temporary than long-lasting or structural.

Year-over-year selling prices for buses was up almost $8,300 per unit. But, of course, this also includes tariff recovery as part of our margin-neutral strategy. With tariffs excluded, pricing was still up year over year, and parts sales totaled $103 million for the year.

Alt-powered buses represented a strong 56% of mixed unit sales for the year. Again, this compares with the typically less than 10% for our major competitors. And we benefit from higher margins and higher owner loyalty with our gas and propane products, as we are the exclusive supplier to the industry today.

At the end of the quarter, we had 901 EVs booked in 680 EVs in our order backlog. Our latest guidance reflects approximately 750 EV unit sales for fiscal 2026. Our EVs backlog is deep enough that it will push some bookings into fiscal 2027.

Again, we remain optimistic on EVs and school bus sector. EVs are a perfect fit for school buses when you look at the duty cycle, available charging intervals, range, and the proven health benefits to our children.

Similar to last quarter, we continued to see Rounds 2 and 3 of the EPA clean school bus program flowing to our end customers. And we continue to see that Rounds 4 and 5 are still in play. The government shutdown has created some delay, but we are hopeful to soon hear when and how these funds will be administered.

And reimbursement funds continue to flow for $80 million MESC contract with the DOE. This is for their funding towards our new plant in Fort Valley. There's been a lot of rumor in the areas about MESC grants, but there's been no unfavorable direction provided to us from the DOE.

As a reminder, this project adds 400 well-paying American jobs to a century-old American company with an iconic brand to build clean school buses, providing our children with the benefits of clean air. As I have said in prior earnings calls, it is really a great story.

Overall, we beat our guidance for the 12th consecutive quarter and for the full year. With an overall 15% adjusted EBITDA margin and record profits in Q4 for the full year, I'm very proud of our team's accomplishments.

So we'd like to now hand it over to Razvan to walk through our fiscal '25 fourth-quarter and full-year financial results as well as their full-year guidance in more detail. Razvan?

Thanks, John, and good afternoon. It's my pleasure to share with you the financial highlights from Blue Bird's fiscal 2025 fourth-quarter and year-end record results. The year-end is based on a closed date of September 27, 2025, whereas the prior year-end was based on a closed date of September 28, 2024.

We will file the 10-K today, November 24, after the market closed. Our 10-K includes additional material and disclosures regarding our business and financial performance. We encourage you to read the 10-K and the important disclosures that it contains. The appendix attached to today's presentation includes reconciliations of differences between GAAP and non-GAAP measures mentioned on this call as well as other important disclaimers.

Slide 9 is a summary of the fiscal '25, fourth-quarter and full-year record results. It was another outstanding operating quarter for Blue Bird with significantly improved volume and with high margin units across all power trains driving both our top-line and our bottom-line results.

We beat the adjusted EBITDA quarterly guidance provided in the last earnings call, and in fact, we delivered the best quarter ever for Blue Bird with $68 million adjusted EBITDA margin. The team continued to push hard and did again a fantastic job and generated 2,517 unit sales volume, which was 51 units above per year Q4 volume.

All-time quarterly record consolidated net revenue of $409 million, was $59 million or 17% higher than prior year, driven by increased prices and the higher number of EV units. Adjusted EBITDA was a quarterly record of $68 million driven by higher volumes and EV units, improved pricing, and operational improvement in efficiency and quality. The adjusted free cash flow of $60 million, $10 million increase versus the prior year fourth quarter, driven by strong operating margins and working capital improvements.

John covered already the record fiscal '25 year-end key figures with 9,409 units, $1.48 billion in revenue, $221 million or 15% in adjusted EBITDA, and the record $153 million in free cash flow, close to 70% of the adjusted EBITDA. I will provide more details on our full-year results later in the presentation.

Moving on to slide 10, as mentioned before by John, our backlog at the end of Q4 has softened, at just over 3,000 units, including 680 EVs. This was due to the uncertainty of bus pricing driven by the tariffs over the last six months.

Our mitigation actions, combined with the recently locking our tariff charges for new orders with deliveries until the end of June 2026, drove on improved order intake during fiscal '26 Q1 as expected with our backlog currently sitting at nearly 4,000 units, including over 850 EVs.

Breaking down the quarterly record $409 million in revenue into our two business segments, the bus net revenue was $384 million, up by $61 million versus per year. Our average bus revenue per unit was up $21,000 at $153,000 per unit, which was largely the result of pricing actions taken over the past year and high review product mix.

EV sales in Q4 were 233 units as expected or 149 units higher than last year. Parts revenue for the quarter was slightly down year over year at $25 million. This continued great performance was in part due to strong demand for our parts, but the fleet is still aging.

Gross margin for the quarter was 21% or 4.1 percentage points higher than last year due to our sustained operational performance and our pricing overtaking the inflationary costs, including the effects of tariff.

In fiscal '25 Q4 adjusted net income was $43.4 million, an outstanding $17.6 million or 68% improvement year over year. Adjusted EBITDA of $68 million or 16.6% was up compared with prior year by $26.6 million or a 64% improvement. Adjusted diluted earnings per share of $1.32 was up $0.55 versus the prior year.

Slide 11 shows the walk from fiscal '24 Q4 adjusted EBITDA to the fiscal '25 Q4 results. Starting on the left at $41.3 million. The impact of the bus segment gross profit in total was $27.6 million, split between volume and pricing effects, net of material cost increases of $23.3 million, plus efficiency and quality improvements of $4.3 million.

The parts segment gross profit was slightly down by $0.8 million driven by slightly lower sales as mentioned earlier in the call. Overall, the SG&A and other income expenses were flat year over year. The sum of all of the above mentioned developments drives our record fiscal '25 Q4, reported adjusted EBITDA result of $67.9 million.

Moving to slide 12, I will cover some more details regarding our full-year record results. Breaking down the $1.48 billion revenue into our two business segments. The bus net revenue was $1.377 billion, up by $134 million or 11% versus per year.

Our average bus revenue per unit was $146,000, an increase of $8,000 per unit versus the prior year which was largely the result of pricing actions taken over the past year and improve EV product mix. EV sales for fiscal '25 were 901 units as expected, an increase of 197 units or another 30% improvement versus last year and the same percentage growth of the year before.

Parts revenue for the year was flat at $103 million, maintaining the already very strong prior year levels. This performance was in part due to increased demand for our part, but the fleet is still aging. Gross margin for the year was a record 20.5% or 1.5 percentage points higher than last year due to our sustained operational performance and our pricing overtaking the inflationary cost year over year, including the tariff effects.

In fiscal '25, adjusting net income was $144 million, a $29 million improvement year over year or a 25% improvement. Record adjusted EBITDA of $221 million or 15%, was up compared to the prior year by $38 million for a 21% improvement. Adjusted diluted earnings per share of $4.38 was up $0.92 versus the prior year.

Slide 13 shows the walk from fiscal '24 adjusted EBITDA to the fiscal '25 results. Starting on the left at a prior record of $183 million. The impact of the bus segment gross profit in total was $48 million, driven mainly by the volume and pricing effects, net of material cost increases.

On the operations side, the labor and health care cost increases were offset by improved efficiencies and quality improvements. Parts segment gross profit was slightly down just under $1 million year over year due to slightly lower sales. These great improvements were offset by planned increases of $9 million in our fixed costs, mainly personnel and fringes/health care related, SG&A, and engineering as we continue to invest into our business and our people.

The sum of all of the above-mentioned developments drives our new record fiscal '25 adjusted EBITDA result of $221 million or 15%. I would like to remind you that 15% adjusted EBITDA was our long-term target not too long ago, and we delivered it ahead of the plan and with relatively low units sold under 9,500 compared to the pre-COVID years.

Moving on to slide 14. We have extremely positive development year over year, also on the balance sheet. We ended the year with $229 million in cash and this is after we repurchased $40 million worth of shares during the year.

Our liquidity stand at a record $371 million at the end of fiscal '25, a $100 million increase compared to a year ago. The operating cash flow was a very strong $176 million in this year, driven by an improvement in operations and margins and improvements in working capital.

The adjusted free cash flow was also a new record at $153 million in fiscal '25 or a 70% conversion from adjusted EBITDA of $221 million. On slide 15, we want to share with you our confirmed fiscal 2016 guidance. We have a number of both tailwinds and headwinds, and we maintain a cautious stance given the volatility of tariffs and other government policies related to EVs.

As tailwinds, we have an aging fleet driving strong demand, stable pricing, and still a solid industry backlog. We offer not only diesel and gasoline school buses but we have the only propane fuel school bus in the industry with clean fuel and best-in-class total cost of ownership.

We are also leading in the EV segment. and are confident that the still upcoming orders from Rounds 2 and 3 of the EPA clean school bus program will improve our already very strong EV backlog.

Additionally, at the end of fiscal '26, we are planning to bring to market our new commercial chassis product. But headwinds, the tariffs are still unpredictable at times and the material costs, people and health care costs, as well as supply and inflation pressures are still present.

The backlog is lower year over year, however, it is still significantly above pre-COVID levels for this time of year.And finally, we expect to deliver a much higher number of EVs in the second half versus first half, similar to fiscal '25.

In summary, we are maintaining our units and revenue midpoint guidance to $950 million and $1.5 billion, respectively, and given our record fiscal '25 results, we are also maintaining our adjusted EBITDA guidance of $220 million or 14.7%, with a range of $210 million to $230 million and 14.5% to 15% margin.

Moving to slide 16. We laid out for you the quarterly guidance for fiscal '26 and also shown the actuals by quarter for fiscal '25. Essentially, we are targeting a repeat of our all-time record fiscal '25 performance in fiscal '26 despite the unfavorable tariff environment and slightly lower EV volumes.

Starting in Q1 with the seasonal lowest number of production weeks in the year due to year-end holidays, we expect to sell approximately 2,100 units, including 100 EVs and generate $325 million in revenue with adjusted EBITDA of $40 million to $45 million.

In Q2, we expect our total volume to go up to approximately 2,200 units including 150 EVs and generate $350 million in revenue with adjusted EBITDA of $45 million to $50 million. In Q3 and Q4, we expect an increased number of total units with 225 EVs in Q3 and 275 EVs in Q4, driving quarterly revenue around $400 million to $425 million, and adjusted EBITDA of $60 million to $70 million per quarter per share.

On slide 17, in summary, our fiscal '26 guidance for net revenue is $1.45 billion to $1.55 billion, with adjusted EBITDA of $210 million to $230 million, and free cash flow of $10 million to $30 million after deducting $100 million in extraordinary CapEx for the new plant. We expect fiscal '26 to be another strong year for Blue Bird on our path of profitable growth.

Speaking of profitable growth, let's look again on slide 18 with some of our principles for running the business and entitled some capital allocation points. We strongly believe that revenue is vanity, profit is sanity, and cash is king. Let's cover these points one by one.

On the revenue side, we are focusing on executing our organic growth with an emphasis on alternative fuels. However, we do still offer diesel for those that continue to request it. We are not chasing market share yet we are engaging with some of the national large fleets as already shown in fiscal '25.

While we continue to be laser focused on our core school bus business, we have planted the seeds for adjacent market growth in the commercial step and chassis business as well as with Micro Bird with the new plant launched this summer in the New York State.

Looking at profit, we continue to be very disciplined in our margin management. We have implemented a price increase of $3,500 per bus for all orders received after November 18, 2025, to cover for new standard safety features, for example, industry-first driver airbag and the expected variable cost increases, and we continue to execute on our margin-neutral tariff strategy. We continue to monitor our backlog and keep it above one-quarter of production, providing us with the ability to schedule our mix and manage our supply chain efficiently.

Finally, we work relentlessly on reducing our variable costs through continuous cost improvement, quality improvement, lean manufacturing on one shift, supply chain management, and still forward buy.

Looking at cash, we plan to invest over the next three years up to $200 million into our future manufacturing capabilities while also returning value to our shareholders through stock buybacks. We already completed $50 million buyback through fiscal '25 Q4. We expect another $10 million in the current quarter and we have a new program announced in the last earnings call for up to $100 million over the next two years.

And we plan to achieve this while maintaining great liquidity and a strong cash position and they have flexibility in case we decide to pursue strategic and focused, attractive M&A opportunities.

Moving on to slide 19. Given our strong business momentum and record results of fiscal '25, today, we are reconfirming the medium-term outlook at 15% margin, with volumes of up to 10,500 units, including 500 commercial chassis, generating revenue around $1.6 billion and with adjusted EBITDA of approximately $240 million.

Starting in 2029 and beyond, our long-term target remains to drive profitable growth to now even higher levels towards $1.8 billion to $2 billion in revenue, comprising of 12,000 to 13,500 units, including 1,000 to 1,500 commercial chassis, and generate EBITDA of $280 million to $320 million-plus or 15.5% to 16%-plus at best-in-class levels.

The profitable growth comes not only from improved EV mix driven by sustained state funding and improve EV total cost of ownership over time, but also from our new Blue Bird commercial chassis addressable market expansion, as well as our Micro Bird joint venture new plant expansion in the USA, which went live this summer.

We continue to be incredibly excited about Blue Bird's future. And now I will turn it back over to John.

Thank you, Razvan. Let's move on to slide 21. We've shown this slide on several earnings calls so I won't spend much time on today as our priorities remain consistent. The churn on the left side of the page outlines the Blue Bird value system as a company, taking care of our employees, delighting our customers and our dealers, and delivering profitable growth.

The right side of the page outlines how we get there. And of course, the objective of delivering sustained, profitable growth to our investors is at the center of it all. And when you turn to page 22, it really summarizes what a great year 2025 was and what a bright future the company has. As we invest in the business with a longer-term perspective, we see our outlook only getting stronger.

Starting at the top, we built 9,409 units for fiscal 2025. But with a 6% CAGR projected for the school bus market, as well as entering new market adjacencies, we see our long-term volume growing to 13,500 units between school bus and commercial chassis. Our revenue for fiscal 2025 was up 10% from the prior year, ending at just under $1.5 billion, and our profitability soared 21% in 2025 to $221 million adjusted EBITDA.

But when you factor in these growth opportunities, our long-term outlook shows the company reaching $2 billion in revenue and $320 million or 16%-plus in adjusted EBITDA. And at the bottom of the page, you will see EVs are still very relevant for us. This year, EV sales grew 28% to 901 units and our long-term outlook shows 1,000 units-plus.

Overall, the achievements in 2025 were simply outstanding. But with the strong fundamentals of the industry and with our investment in the future, the outlook for the company is nothing but promising. There is a lot to be excited about.

So I'll wrap it up on slide 23. First, this great company and iconic brand is almost 100 years old. Blue Bird has stood the test of time, and it continues to be poised for an exciting future. We delivered an outstanding 2025 with just under $1.5 billion in revenue and $221 million or 15% in adjusted EBITDA.

We remain confident that the clean school bus funding program will continue. A bipartisan initiative, it's 100% appropriated, and eliminates harmful tailpipe toxins benefiting our children and communities. And we remain optimistic on overall near- and long-term volume. The fundamentals of this industry are solid.

And this performance has put Blue Bird in a position to focus longer term as we invest and enter new segments and upgrade our operations and products. As always, I want to thank our employees, our dealer network, our supply partners, and, of course, our investors, all are critical to our success.

Similar to my message in the last calls, I remain excited about Blue Bird. 2025 has been an incredible year with record results and beating guidance. This company has such a rich history and an exciting future. Thank you.

So that concludes our formal presentation for today. And I'd now like to hand it back to our moderator for the Q&A session.

(Operator Instructions) Mike Shlisky, D.A. Davidson Companies.

Good afternoon and thank you. I want to get a little bit more detail on the federal EV bus program, if you could. How important is that to the fiscal '26 guidance? Do you have to see money flow again for you to make the differences that you put in there for EVs for the year?

Can you update us also on whether the state and local subsidy programs that are out there across a lot of different states, have they increased over the last three months or so, and has stayed low overtaken federal as the driver of EV demand?

Hi, Mike. Thanks very much for the question. I would say that when you look at everything we have, EVs are relevant and 2 and 3 is flowing, as you know, but I don't think it's contingent when we look at our outlook to having to have Rounds 4 and 5 come through. We have a strong outlook. I think it's stable. Yeah. So I think it's -- with the state mandates that we see out there, I think it supports demand.

I don't know if Razvan has anything to add.

Yeah. So for fiscal '26, it does not rely on any Round 4 or 5. And we also have a very strong backlog. So we feel very good about the $750 million guidance of EV and there is some upside potential up to 1,000 units in this year.

Great. And then just looking at the '26 outlook, I know that most years, the real order season, if you would charge after Christmas break, and I know it's only November here. So I guess, I mean, -- look, being flat at a very high level is probably not the worst in the world coming up here, but do you -- are you taking a conservative stance until you start hearing from people ordering after the Christmas break?

And do you think maybe we'll get a much better picture of what your demand is on the next earnings call -- just looking at the slide that you just talked about, John, at the end there. The industry outlook for retail sales is quite a bit higher, a little bit higher at least for in 2026 -- in 2025, but your numbers don't really imply that at this time. So just help us reconcile the broader industry, the order season, and your outlook that you put forth today.

Yeah. Thanks, Mike. No, we have maybe a couple of things. Yeah. Certainly, when you look at the demand in the out years, it's strong.

I mean, we know the fundamentals, right? The replacement cycle is coming due. When you look at things like student enrollment, it's stable. There's a lot of things that support the demand going up.

And then from our end, of course, we have capability of producing some extra demand as well -- and that includes, of course, in a couple of years, our new factories. So we'll be able to support that. But overall, yeah, I don't -- I have probably less of a wait-and-see type of approach with this one that you alluded to in the beginning.

I think everything there is underneath. And everything we can see, including our backlog in the last quarter seems strong. So I feel comfortable.

I don't know if, again, Razvan or Mark, if you guys have anything to add.

Take that as my next question here, if you don't mind. So my last one here is on the commercial chassis project that you guys are working on. Just a little bit more detail there, what number of customers are testing it? What customers -- what the initial -- what the early rates have been and your confidence that there's a real ramp in '27 to compete here?

Yeah, I'll comment on a couple of things. First, we've got a couple of prototypes that have been built and bodies have been mounted and they're now going through calibration as well as some early testing or I'll say some testing in general. The product has been well received by the customers that looked at it.

They seem to be favorable. The market we know is open to another competitor. And then, as you know, we have capacity. So I think more to come as we start getting past the hurdle of release, if you will, but indications seem good for the product.

Great. I appreciate the answers. I'll pass it along.

Thanks, Mike

Eric Stine, Craig-Hallum.

Hi, everyone.

Hey, Eric.

Hey, Eric.

Hey. So maybe just sticking with, I guess, the commercial chassis, but also tagging into fiscal '26. I mean, is it -- I know that you expect some contribution in Q4 or fiscal Q4? I mean, is it fair to say, though, that that is a pretty minimal contribution, that's really not a driver of low end to high end as we think about the year?

Yeah, you are correct, Eric. This is Razvan. We have in our guidance approximately 100 commercial chassis and in terms of moving from low end to high end of guidance, they are not material at this point in time.

Okay. Got it. And so then thinking about the guide, I mean, yes, you're factoring in tariffs is still an issue, but I guess, arguably maybe calm down a little bit year over year. I know you are seeing some benefit from the stable pricing that you've got at least through a portion of fiscal '26. Then, you also mentioned the price increase.

And so I would assume that that's more for the second half. So I mean, clearly, you are guiding to a bit of a ramp throughout the year. I know you've talked about that really with the backlog, even if it's down a little bit, there's not that typical seasonality that would have been seen in years past. So I mean, is pricing the main determinant here and the reason for that ramp? I mean, other than EV mix, I guess?

Yeah, it's Razvan. So we have a couple of factors. I mean, first of all, it has to do with the number of production weeks that are in the year, Q1 is the lowest number of weeks, Q2 is slightly up, and then Q3 is the highest one. And then Q4, again, goes down a little bit. So you have the production seasonality.

The new price increase, I talked about, the $3,500 per bus, this is for new orders and it will materialize in Q3 a little bit and then into Q4 because they go most likely at the end of the backlog and is for new orders.

In terms of tariffs, we are monitoring the situation. We have provided tariff charge stability to our customers and orders all the way through June right now. So depending how the reality of tariffs materializes until then, there is still a little bit of risk.

And therefore, we are probably conservative in terms of the guidance for the first half and then we expect to ramp in the second half.

Got it. All right. That is helpful. And then maybe last one for me, just coming back to the order environment, and I do appreciate that after the holidays, that's when things pick up, but a nice bounce back here, I guess, as of a week ago.

I mean, as you talk to dealers, it sounds like you feel that that is sustainable in that those are trends that maybe are more normalized after that period where there was a lot of tariff uncertainty and that really impacted the orders. Is that a fair characterization of your view?

Yeah, for sure, it is, Eric. When you look at it, when you go back to the beginning of the year, there was constant change in tariffs, and I think it had some impact in terms of maybe district seizing up on some orders. So we're just waiting to see.

But you can certainly see it now. It's starting to stabilize, like you said, we have pricing out to the end of -- or to June, rather, for -- that's firm. And I think all of those suggest just what you indicated is that there's some stability coming back into the order cycle.

Okay. Thank you.

Thanks, Eric.

Thanks, Eric.

Greg Lewis, BTIG.

Hi. Thank you and good afternoon, and thanks for taking my questions. If we -- if I was thinking about the backlog and just on slide 7, you outlined what has happened quarter-to-date for the total backlog, but you didn't -- you didn't update the EV side.

Not sure if we have that information, but just as we think about the backlog as a percentage of the fleet on the EV side, is the bookings that were done or the order book growth quarter-to-date, does it mirror what we have in the current order book? Or was there a little bit of overperformance or underperformance on EVs with quarter-to-date earnings or orders?

Hi, Greg, this is Razvan. Thanks for the question. I had it actually in my remarks, the EV corresponding number is 850 so we had an increase also in EV throughout the quarter.

Okay. And on a percentage basis, about the same rate. And then the other question I had was, I'm not sure if it was today or last week, but I guess New Jersey came out with an updated incentive program, ZIP. I guess they released $37 million for additional buses. Curious, was that something that Blue Bird and the market was expecting? Did it come out of nowhere?

And just as we think about what New Jersey did or announced, should we be thinking about -- and I know you talked about it in the remarks, but should we be thinking about other states following through with updated programs that you're at least tracking or watching? Or is this just like a one-off?

Yeah, Greg. I think each state is different in terms of how they apply funds.

Yes.

But it's a testimony to the state funding. It's there, it's real, and it's flowing. And we know there are certain states that are aggressive in this area in terms of EV mandates.

Okay. So was this largely expected or was this something that we knew what was going to happen, we didn't know the timing of it?

This particular program, I would say, wasn't a cornerstone of our communications here, but it's the trend we see across the country and what we talk about on these calls is that outside of the federal side, there is real demand at the state level. So we continue to see a general trend of growth in these types of state-level programs.

Yeah. I'd say from a macro level, we knew that things would flow, but we don't really necessarily get into each state and the analysis of each single brand.

Yeah. Now we're trying to do that. It's a lot of leg work. Anyway, hey, guys, thanks for taking my questions and have a great night.

Thanks.

Sherif El-Sabbahy, Bank of America.

I guess just looking at the midpoint of guidance, it seems to indicate a little bit of a lower price mix in the second half of the year versus the first half. Understand there's the chassis product coming in the fourth quarter and likely some tariff impact given the second half weighting of EVs.

But I was just wondering if there's any other puts and takes we should be considering with regards to the first half versus second half price and mix.

Hi, Sherif. This is Razvan. So as I mentioned before, the price increase I talked about will come only at the tail end of the fiscal year. And then, you have numerous other factors. You have the product mix, you have the fleet mix. So all of them are baked into our detailed bottom-up forecast.

But overall, I would say, in general, we look at pretty flat pricing other than the price increase I talked about. And the wild card is still the tariffs at this point in time. We have not communicated Q4 tariffs charges yet because we are waiting and monitoring what will be the development on the cost side, on the government policy related to tariffs by then.

So overall, I would say, still, we are forecasting very strong EBITDA margins in the 15% and 16%, and we will update the guidance as needed in the next quarters to come.

Thank you.

Craig Irwin, ROTH Capital Partners.

Hi. Good evening and thanks for taking my questions. Razvan, the last several years, Blue Bird has provided on a quarterly basis, the dollar value of the backlog. And for a number of years, also the dollar value of the EV backlog. You gave us the $680 and $850 and obviously, the 3,068. Do you have those two financial metrics for us on this call?

Yeah. I mean, definitely, we can provide those in our follow-up calls if you report this level of detail. And right now, we focus more on the units at this point in time. But definitely, those are available if requested.

Fantastic. I'll definitely ask for that. Thank you.

Chris Pierce, Needham.

Hey. Good afternoon. Can you hear me?

Hey, Chris. We got you, man.

Cool. Thank you. I just wanted to ask two questions on industry competitive dynamics. I know you have peers that are owned by companies that sell Class A trucks into the US and that are seeing Section 232 tariffs that are talking about losing share of that part of the business. Do you think we'll see, or is it too early to talk about potential competitive shifting dynamics in the school bus market as they may be trying to make up for lost units in other parts of their business? Or is that too early to tell? Or have you seen anything along those lines?

Hi, Chris. This Razvan. I think it's too early to tell, and that's probably more of a question that you have to ask them how they manage between the different sections of the business. But so far, we haven't seen any meaningful change from that.

Okay. And then I know in your prepared remarks, you talked about student enrollment numbers. I guess there are smaller competitors that are working on optimizing school bus schedules. So it looks like it's less -- just more throughput on the buses that run versus running a total number of routes.

Is that something you're seeing -- do you have software like that? When you bid on larger contracts in larger school districts, or are school districts where we try and reduce the number of buses and increase students per bus? Or is that also early days?

No. That's not something that we generate or produce, but obviously, we worked with fleets or providers that do have that software. I mean, there's -- and you know some of them that are out there. Something we do.

But in terms of impact to the order or general demand, we haven't seen anything meaningful at this point in time coming out through higher utilization of school buses, if this was your question.

Okay. Thank you, both.

Thanks, Chris.

Thanks, Chris.

Okay. No questions registered in the queue. I would like to pass the conference back to our hosting team for closing remarks.

All right. Thank you, Jayla, and thanks to each of you for joining us on the call today. Blue Bird has delivered another year of record results, beating guidance, and demonstrating credibility, rather. And this is despite a challenging environment. With the fundamentals of the industry, I remain enthusiastic for Blue Bird in its future, and we look forward to updating you on our progress next quarter.

Should you have any questions, please don't hesitate to contact our Head of Investor Relations, Mark Benfield. Blue Bird continues to be stronger than ever and has an amazing future ahead as we approach our 100th anniversary in a couple of years. Thanks, again, from all of us at Blue Bird, and have a great evening.

That will conclude today's conference call. Thank you for your participation and enjoy the rest of your day.