Q4 2023 Blue Bird Corporation Earnings Call

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Ladies and gentlemen, please remain holding. Your conference call will begin momentarily.

Ladies and gentlemen, please remain holding.

Your conference call will begin momentarily.

Again, please remain holding. Your conference call will begin momentarily.

Again, please remain holding your conference call will begin momentarily.

[music].

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Hello, everyone.

Thank you for attending Bluebird Corporation's fiscal 2023 fourth quarter and full year earnings call. My name is Sierra and I'll be.

Hello, everyone.

Thank you for attending Blue Bird Corporation fiscal 2023 fourth quarter and full year earnings call My.

My name is Sierra and I'll be your moderator today.

All lines will be muted during the prepared remarks from our management team with an opportunity for questions and answers at the end.

All lines will be muted during the prepared remarks from our management team with an opportunity for questions and answers at the end.

If you'd like to ask a question, press star one on your telephone keypad. I would now like to pass the conference over to our HRSA. Mark Benfield.

If you'd like to ask a question press star one on your telephone keypad.

I would now like to pass the conference over to our Hearts.

Mark Benfield.

Head of Investor Relations. Please proceed.

Thank you and welcome to Bluebird's fiscal 2023 fourth quarter and full year earnings conference call. The audio for our call is webcast live on blue-bird.com under the investor relationship.

Thank you and welcome to Blue Bird's fiscal 2023 fourth quarter and full year earnings conference call. The audio for our call is webcast live on Blue Bird Dot com under the Investor Relations tab.

You can access supporting slides on our website by clicking on the presentation box on the IR website. Our comments today include 4 looking statements that are subject to risk that could cause actual results to be materially different.

You can access the supporting slides on our website by clicking on the presentation box on the IR website. 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 in our filings with the SBA.

Those risks include among others matters. We have noted on the following two slides and in our filings with the SEC Blue Bird disclaims any obligation to update the information in this call.

Bloomberg disclaims any obligation to update the information.

This afternoon, you'll hear from Bluebird CEO , Phil Horlock, and CFO , Razvan Radulescu.

This afternoon, you'll hear from Bluebird, CEO, Phil <unk>, and CFO Roswell Raviolis view.

Maybe we'll take some questions. Let's get started. Bill? Well, thank you, Mark, and good afternoon, everybody. First, let me say the Bluebird team has done a fantastic job in delivering continually approved results as we have moved through each quarter in 2023.

They will take some questions. So let's get started Phil.

Well, thank you Mark and good afternoon everybody.

First let me say the Blue Bird team has done a fantastic job and delivering continuing improved results as we have move through each quarter in 2023.

As you'll see shortly in Razvan's section, the fourth quarter was no exception to that, where we achieved outstanding financial performance.

As you'll see shortly on rather than section the fourth quarter was no exception to that where we achieved outstanding financial performance for.

For the full year, we delivered record financial results across the board, well ahead of the transformational plan that we outlined just a year ago, following a very tough year in fiscal 2022.

For the full year, we delivered record financial results across the board well ahead. The transformational plan that we outlined just a year ago. Following a very tough year in fiscal 2022.

So let's get started with a key takeaway for the full year on slide six.

So let's get started with the key takeaways for the full year on slide six.

As the headline says, we achieved record full-year financial results in fiscal 2023, and we beat guidance every quarter, including the fourth quarter.

As a headline size, we achieved record full year financial results in fiscal 2023, and we beat guidance every quarter, including the fourth quarter in.

In fact, as Razvan will show you in just a few minutes, the fourth quarter was an all-time record profit for any quarter in Bluebird's history, with an exceptional adjusted EBITDA margin of 13%.

In fact as Rajeev I'll show you in just a few minutes the fourth quarter was an all time record profit for any quarter in blue birds history, with an exceptional adjusted EBITDA margin of 13%.

As we look at the drivers for this terrific progress in fiscal 2023, it really is about making significant improvements across our entire business throughout the year.

As we look at the drivers for this terrific progress in fiscal 2023, it really is about making significant improvements across our entire business throughout the year.

Market demand for school buses continues to be very strong and the backlog for Bluebird school buses was at a very healthy 4,600 units at the end of the fourth quarter. This falls well for pricing, production stability and profit margin.

Market demand for school buses continues to be very strong and the backlog for Blue Bird School buses was at a very healthy 4600 units at the end of the fourth quarter.

This bodes well for pricing production stability and profit margins.

Now while supply chain constraints are easing, there are select constraints across the industry which are still limiting industry production and delivery.

Now while supply chain constraints are easing there are select constraints across the industry, which is still limiting industry production and deliveries.

But we are very engaged with those constrained suppliers, with on-site support at their plants, and we are managing the situation very well. On that point, the evidence is clear, with our bus deliveries in 2023 being 25% higher than last year.

But we are very engaged with those constrained supply as with onsite supported their plans and we are managing the situation very well on that point. The evidence is clear with our bus deliveries in 2023 being 25% higher than last year.

I'm pleased to tell you the legacy price backlog, which hurts us in fiscal 2022 and in the first quarter this year, is now fully behind us.

I am pleased to tell you that legacy price backlog, which hurt us in fiscal 2022 and in the first quarter. This year is now fully behind us.

As a reminder, we define those legacy price units as those at contractual price levels prior to October 21.

As a reminder, we define those legacy priced units as those are contractual price levels prior to October 21.

Every bus in our order backlog now reflects current price.

Every bus and our order backlog now reflects current pricing.

and were priced competitively, which we can tell from our quote win rate and incoming order.

And we're priced competitively, which we can tell from our quote win rate and incoming orders.

This is an entirely different Bluebird bus revenue structure compared with a year ago.

This is an entirely different blue bird bus revenue structure compared with a year ago.

On the EV front, thanks largely to the first phase of funding of $1 billion from the EPA's unprecedented $5 billion Clean School Bus program, we had nearly 600 EVs in our firm backlog at the end of the fiscal year, and full year deliveries more than doubled from a year ago. With $4 billion still to go, this program is really accelerating the adoption of electric school bus.

On the EV front, thanks, largely to the first phase of funding of $1 billion from the EPA as unprecedented $5 billion Clean School bus program, we had nearly 600 evs and our firm backlog at the end of the fiscal year and full year deliveries more than doubled from a year ago with $4 billion still to go. This program is really acts.

<unk> and the adoption of electric school buses.

As we have done for many years, we again increased our sales mix of alternative-powered vehicles and strengthened our leadership position even further. The higher margins and higher owner loyalty from these products contributed to our profit improvement in fiscal 2023.

As we have done for many years, we again increased our sales mix of alternative powered vehicles and strengthened our leadership position, even further the higher margins and higher on a loyalty from these products contributed to our profit improvement in fiscal 2023.

We also reinvested back into the business by selectively upgrading facilities and processes, enhancing the plant-looking environment, and adding electric bus capacity for our new EV production centre.

We also reinvested back into the business by selectively upgrading facilities and processes enhancing the plant working environment and adding electric bus capacity through our new EV production Center.

Through the efforts of the best workforce in the business' strong leadership lean process improvements and sheer hard work, we have been achieving some of the best manufacturing performance. The company has ever achieved bottom line, we're performing extremely well in a strong market, while delivering a greater mix of higher margin alternative powered vehicles where price.

Competitively Unappropriate Lee for today's economic environment.

<unk> financial results are at an all time record level.

Now, let's take a closer look at the financial and business highlights for the full year on slide seven.

I wanted to start by saying that our full year financial performance is transformed from a year ago with many record highs achieved we sold over 8500 buses in fiscal 'twenty, three which is a substantial 25% or almost 17 hungry buses above last year.

Those unit sales drove four-year net revenue of $1.13 billion. That's an all-time net sales record for Bluebird and an exceptional 41% higher than a year ago.

Those unit sales drove full year net revenue of $1 $3 billion. That's an all time net sales record for Bluebird, and an exceptional 41% higher than a year ago full.

Fully-adjusted EBITDA of $88 million is another all-time record for Bluebird. That's $103 million higher than last year, and $15 million above the midpoint of guidance that we set at our last earnings call.

Full year adjusted EBITDA of $88 million is another all time record for Bluebird, that's $103 million higher than last year and $50 million above the midpoint of guidance that we set at our last earnings call.

And finally, adjusted free cash flow for the year was $121 million. That's an extraordinary increase of $144 million over last year. And another all-time cash flow record for Bloomberg.

And finally adjusted free cash flow for the year was $121 million, that's an extraordinary increase of $144 million over last year and another all time cash flow record for Bluebird.

Overall, these are outstanding four-year results and transformational gains from last year.

Overall these are outstanding full year results and transformational gains from last year.

Although not shown on this slide, it's worth pointing out that in the second half of fiscal 2023, we achieved an adjusted EBITDA of $70 million, representing a margin of 12%.

Although not shown on this slide its worth pointing out that as in the second half of fiscal 2023, we achieved an adjusted EBITDAR of $70 million representing.

A margin of 12%.

It's clear we have great momentum going into fiscal 24. On the right-hand side of the slide, you can see some of the operating highlights for the business.

It's clear we have great momentum going into fiscal 'twenty four.

On the right hand side of the slide you can see some of the operating highlights for the business.

As I mentioned earlier, demand continues to be strong, with our firm order backlog at fiscal year-end worth over $670 million in revenue.

As I mentioned earlier demand continues to be strong with a firm order backlog at fiscal year end with over $670 million in revenue.

We raised prices considerably over the past two years, and the average full-year selling price per bus in fiscal 23 was 15% higher than a year ago.

We raised prices considerably over the past two years and the average full year selling price per bus in fiscal 'twenty, three was 15% higher than a year ago.

Parts sales were just shy of $100 million, another Bluebird record, and up 27% year over year. The increasing average age of buses on the road is having a material positive impact on our aftermarket business, and we gain market share.

<unk> sales were just shy of $100 million, another bluebird record and up 27% year over year.

The increasing average age of buses on the road as having a material positive impact on our aftermarket business and we gained market share.

Turning to alternative power buses, they represent a record 62% of our full year unit sales, and that's a four percentage points increase compared with last year.

Turning to alternative powered buses that represented a record 62% of our full year unit sales and Thats, a four percentage points increase compared with last year.

We continue to be the clear leader in this space. No other school bus manufacturer comes close to that number.

We continue to be the clear leader in this space No. Other school bus manufacturer comes close to that number now.

Now EV buses were part of that mixed growth, with bookings more than doubling from last year. Additionally, we left the year with nearly 600 firm EV orders in our backlog, which is around a 12% share of our total backlog. That's worth approximately $182 million in revenue.

Now EV buses were part of that mix growth with bookings more than doubling from last year. Additionally.

Additionally, we left the year with nearly 600 firm orders in our backlog, which is around a 12% share of our total backlog that's worth approximately $180 million in revenue.

clearly we're benefiting substantially from the billion dollars funding from the first phase of the EPA's five billion dollar clean school bus program.

Clearly what benefit substantially from the $1 billion funding from the first phase of the EPA is $5 billion Clean School bus program.

And last on our EV business, we did launch an all new extended range battery in the second half of the year, providing around a 30% increase in range on a single charge over our standard battery.

And last on our EV business, we did launch an all new extended range battery in the second half of the year, providing around a 30% increase in range on a single charge over a standard battery.

That's an expected range of about 130 miles, which is a terrific value offering for our customers by meeting the sweet spot for daily school bus use.

That is an expected range of about 130 miles, which is a terrific value offering for our customers by meeting the sweet spot with Daily School bus use.

From an operations standpoint, a great example of lean manufacturing is improved throughput, looking at the time taken from initially setting up a bus chassis to receiving payment for the complete finished bus.

From an operation standpoint, a great example of lean manufacturing has improved throughput looking at the time taken from initially setting up a bus chassis to receiving payment for the complete finished bus.

We cut that from 40 days to 20 days in fiscal 23. Incidentally, we've been running it around 16 days in the first quarter of fiscal 24. That's a great performance by our operations.

We cut that from 40 days to 20 days in fiscal 'twenty three incidentally, we've been running at around 16 days in the first quarter fiscal 'twenty four that's a great performance by our operations team.

And finally, we beat full year guidance, reporting record net sales, record adjusted EBITDA, and record adjusted free cash flow for fiscal 2023.

And finally, we beat full year guidance reporting record net sales record adjusted EBITDA and record adjusted free cash flow for fiscal 2023.

We finished the year incredibly strong with a 13% adjusted EBITDA margin in the fourth quarter and I'm very proud of our accomplishment.

We finished the year incredibly strong with a 13% adjusted EBITDA margin in the fourth quarter and I'm very proud of our accomplishments.

I would now like to hand it over to Razman to walk through our Fiscal 23 financial results in more detail. In addition, we will be providing our updated Fiscal 2024 guidance, which in an adjusted EBITDA margin of 10 percent is substantially higher than what we showed you in our last earnings call.

I would now like to hand, it over to <unk> to walk through our fiscal 'twenty three financial results in more detail. In addition, we will be providing our updated fiscal 2024 guidance with an adjusted EBITDA margin of 10% is substantially higher than what we showed you in our last earnings call.

Over to you <unk>.

Thanks, Phil, and good afternoon. It's my pleasure to share with you the financial highlights from Bluebird's fiscal 2023 fourth quarter and four-year record results.

Thanks, Taylor and good afternoon, it's my pleasure to share with you the financial highlights from Bluebird fiscal 2023 fourth quarter and full year direct quarterly results.

The quarter end is based on a close date of September 30th, 2023, whereas the prior year was based on a close date of October 1st, 2022. We will file the 10-K today, December 11, after market close. Our 10-K includes additional material and disclosures regarding our business and financial performance.

Quarter end is based on a close date of September 30th 2023, whereas the prior year was based on a close date of October one 2022.

We will file the 10-K today December 11 after market close.

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.

We encourage you to read our 10-K and the important disclosures that it contains yeah.

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.

The appendix attached to today's presentation includes reconciliations of differences between GAAP and non-GAAP measures mentioned during this call as well as other important disclaimers.

Slide nine is a summary of the fourth quarter and full year record results for fiscal 2023. It was another outstanding operating quarter for Bluebird with somewhat limited supply chain challenges and with an increased number of higher margin units driving both our top line and our bottom line results. We significantly beat the adjusted EBITDA quarterly guidance provided in the last earnings call. And in fact, we delivered the best quarter ever for Bluebird with 13% adjusted EBITDA margin.

Slide nine is a summary of the fourth quarter and full year record results for fiscal 2023 it.

It was another outstanding operating quarter for Blue Bird with somewhat limited supply chain challenges and with an increased number of higher margin units driving both our topline and our bottom line results with.

We significantly beat the adjusted EBITDA quarterly guidance provided in the last earnings call and in fact, we delivered our best quarter ever for Blue Bird with 13% adjusted EBITDA margin.

The team pushed hard and continued doing a fantastic job and generated 2,116-unit sales volume, which was 100 units or 5% higher than prior year. Record consolidated net revenue of $303 million was $45 million or 17% higher than prior year, driven by a higher number of units, higher part sales, improved mix of electric buses, and pricing actions that took hold significantly in this quarter, as expected.

The team pushed hard and continue doing a fantastic job and generated 2116 unit sales volume, which was 100 units or 5% higher than prior year record consolidated net revenue of $303 million was $45 million or 17% higher than prior year.

Given by a higher number of units higher parts sales improved mix of electric buses and pricing actions that to grow significantly in this quarter as expected.

The adjusted free cash flow was very strong at $35 million and $6 million higher than the prior year for sports.

The adjusted free cash flow was very strong at $35 million and $6 million higher than the prior year fourth quarter.

This performance was driven by the increased profitability combined with strong working capital management and support our great liquidity position at the end of this quarter, which was 163 million.

This performance was driven by the increased profitability combined with strong working capital management and support our great liquidity position at the end of this quarter, which was $163 million.

Adjusted EBITDA for the quarter was a record $41 million, driven by our high volume of now-profitable buses, increased parcels and margins, partly offset by increased labor costs.

Adjusted EBITDA for the quarter was a record $41 million driven by our high volume Wilson, our profitable Boston <unk>.

<unk> par sales and margin, partly offset by increased labor costs.

Looking quickly at the total year, we are very proud by the team's performance in recording the best year ever for our company in several top-line and bottom-line assets.

Looking quickly at the total year, we are very proud by the team's performance and recording the best year ever for our company and several topline and Bottomline aspect.

and with only 8,514 units sold, or approximately 2,500 units less than the prior best year of 2019. And this is despite the transitional nature of our fiscal 23 Q1 results, which included still a large portion of all backlog low margin bus.

And with only 8514 units sold for approximately 2500 units less than the prior to best year was 2019 and.

And this is despite the transitional nature of our fiscal 'twenty three Q1 results, which include the still a large portion of our backlog low margin bucket.

Our full year performance was outstanding for both the top line and the bottom line. All-time record $1.13 billion in revenues. All-time record adjusted EBITDA of $88 million. And all-time record adjusted free cash flow of $121 million.

Our full year performance was outstanding for both the topline and the bottom line.

<unk> record of $1 3 billion in revenues Alzheimers record adjusted EBITDA of $88 million, an all time record of adjusted free cash flow or $121 million.

Moving on to slide 10, as mentioned before by Phil, our backlog at the end of Q4 continues to be very strong at approximately 4,600 units, and with all of these units at current price.

Moving on to slide 10, as mentioned before by Phil our backlog at the end of Q4 continues to be very strong at approximately four to 600 unit and with all of these units at the current price levels.

Breaking down the record Q4, $303 million in revenue into our two business segments. The bus net revenue was $278 million, up by $42 million versus prior year.

Breaking down our record Q4 $303 million in revenue into our two business segments. The vast net revenue was $278 million up by $42 million versus prior year.

Our average bus revenue per unit increased from $117,000 to $131,000, or 12%, which was largely the result of pricing actions taken over the past 18 months, as well as a higher mix of electric buses.

Our average bus revenue per unit increased from 117 to 131000, or 12%, which was largely the result of pricing actions taken over the past 18 months as well as a higher mix of electric buses.

EV sales in Q4 were also at a record level of 171 units, or 51 more than last year, a 43% increase year over year.

<unk> sales in Q4 were also at a record level of 171 units or 51 more than last year, a 43% increase year over year.

Part revenue for the quarter was $25 million, representing a growth of $4 million or 17% compared to the prior year.

Product revenue for the quarter was $25 million, representing a growth of $4 million or 17% compared to the prior year.

This extraordinary performance was in part due to increased demand for our parts as the fleet is aging, as well as supply chain-driven pricing actions and throughput improvements.

This extraordinary performance was in part due to increased demand for our part of the fleet is aging as well as supply chain driven pricing actions and throughput improvement.

Gross margin for the quarter was a record 16.5 percent or approximately 18 percentage points higher than last year due to our improved operational performance and our pricing catching up with the inflationary costs over the last 18 plus months.

Gross margin for the quarter was a record $16, 5% or approximately 18 percentage points higher than last year due to our improved operational performance and our pricing catching up with the inflationary cost over the last 18 plus months.

In fiscal 23Q4, adjusted net income was $21 million or $43 million higher than last year.

In fiscal 2000, <unk> Q4, adjusted net income was $21 million or $50 million higher than last year.

Adjusted EBITDA of 41 million or 13% was up compared to this prior year by 57 million and 20%

Adjusted EBITDA of $41 million or 13% was up compared to prior year by $57 million and 20 percentage points adjust.

Adjusted dilutive earnings per share of 66 cents was up by $1.32 versus the prior year.

Adjusted diluted earnings per share of $6 to the expense was up by $1 32 expense versus the prior year.

Moving on to slide 11, and for the remaining of this presentation, we will focus on the full year results.

Moving on to slide 11, and for the remaining of this presentation, we will focus on the full year results.

Breaking down the $1.13 billion in revenue into our two business segments, the bus net revenue crossed the $1 billion mark at $1.035 billion, up by $311 million versus prior year.

Breaking down to $113 billion in revenue.

Our two business segments. The vast net revenue crossed the 1 billion Mark at 1.0 to <unk> 5 billion up by $311 million versus prior year.

Our average bus revenue per unit increased from $106,000 to $122,000, or 15%, which was largely the result of pricing actions taken over the past 18 months, as well as a higher mix of electric buses.

Our average bus revenue per unit increased from 106000 to 122000, or 15%, which was largely the result of pricing actions taken over the past 18 months as well as a higher mix of electric buses.

EV sales for the year were at a record level of 546 units, which is 277 more than last year, or more than double.

Sales for the year were at a record level of 546 units.

Which is 277 more than last year or more than doubled.

Parts revenue for the year was $98 million, representing a growth of $21 million, or 27% compared to the prior year. This extraordinary performance was in part due to increased parts demand as the city is aging, as well as supply chain-driven pricing actions throughout the year and throughput improvements.

Revenue for the year was $98 million, representing a growth of $21 million or 27% compared to the prior year.

This extraordinary performance was in part due to increased parts demand as the fleet is aging as well as supply chain driven pricing actions throughout the year and throughput improvement.

Gross margin for the year, including the low margin units from Q1, was approximately 12% or 8 percentage points higher than the last year due to our improved operational performance and our price in catching up with the inflationary period.

Gross margin for the year, including the low margin units from Q1 was approximately 12% or eight percentage points higher than the last year due to our improved operational performance and our pricing catching up with the inflationary cost.

In fiscal 23, adjusted net income was $35 million, for $71 million higher than last year.

In fiscal 'twenty three adjusted net income was 35 million or $71 million higher than last year.

Adjusted EBITDA of 88 million or 8% was up compared with prior year by 103 million and 10%.

Adjusted EBITDA of $88 million or 8% was up compared with prior year by $103 million and 10 percentage points.

Adjusted diluting earnings per share of $1.07 was up $2.22 versus the prior year.

Adjusted diluted earnings per share of $1 seven.

It was up $2, 20% versus the prior year.

In summary, our operating performance and financial results demonstrated in this year, and particularly in the last two quarters, are clear evidence that our business transformation has been very successful. And it sets a solid base for our future performance towards our goal of sustained profitable growth, with adjusted EBITDA margins of 10% plus in the short-term normal year and with some more supply chain normalization, followed by 12% plus in

In summary, our operating performance and financial results demonstrated in this year and particularly in the last two quarters are clear evidence that our business transformation has been very successful and it sets a solid base for our future performance.

Our goal of sustained profitable growth with adjusted EBITDA margins of 10% plus in the short term normal year.

And we spend more supply chain of amortization.

Followed by 12% plus in the medium to long term.

Moving on to slide 12.

We have extremely positive development year over year also on the balance sheet.

We ended the year with almost $80 million in cash and reduced our debt significantly by $40 million over the last four quarters.

We ended the year with almost $80 million in cash now reduced our debt significantly by $40 million over the last four quarters.

Our liquidity is very strong at a record $163 million at the end of fiscal 2023 with a zero balance on our revolvers.

Our liquidity is very strong at a record $163 million at the end of fiscal 2003 with a zero balance on our revolver.

The improvements in operating cash flow and adjusted free cash flow were primarily driven by improved operations and margins, and were supported also by improvements in trade working capital.

The improvements in operating cash flow and adjusted free cash flow were primarily driven by improved operations and margins and were supported also by improvements in trade working capital. Additionally, we had at the end of the year $19 million in prepaid revenues from phase one of the EPA Clean School bus program with more to come in the future.

Additionally, we had at the end of the year $19 million in prepaid revenues from phase one of the EPA Clean School Bus program with more to come in the future.

Moving to slide 13, at the end of November 2023, we refinanced our crisis facility at significant better terms with a five-year maturity date through November 2028.

Sure.

Moving to slide 13 at the end of November 2023, we refinanced our credit facility a significant better terms with a five year maturity date through November 2028.

The new structure consists of a 100 million term loan with 5% per year amortization and the new revolver line of credit of 150 million.

The new structure consists of over 100 million term loan with <unk>, 5% per year amortization, and a new revolver line of credit of $160 million.

We would like to thank BMO, who led the syndication process, the other joint lead arrangers, including Bank of America, and the other lender-participating banks for their support and confidence into our system.

I'd like to thank BMO collab, the syndication process.

Other joint lead Arrangers, including Bank of America, and the other lender participating banks for their support and confidence into our future.

The reduced covenants and extended maturity of our loan provide Bluebird with both flexibility and stability. As our business grows profitably and we continue to lead the school bus industry in the alternative fuel.

The reduced covenants and extended the maturity of our loan provides global was both flexibility and stability of our business gross profit per <unk> and we continue to lead the school bus industry in the alternative space.

Slide 14 shows the magnitude of the business transformation and results achieved by our team over the last year. We went from arguably the worst year ever to the best year ever. With over 100 million adjusted EBITDA improvements year over year, record revenue up 40 percent and approximately doubling our EV sales and record adjusted free cash.

Slide 14 shows the magnitude of the business transformation and the results achieved by our team over the last year.

Went from arguably the worst year ever for the best year ever with over $100 million adjusted EBITDA improvement year over year record revenue up 40% and approximately doubling our EV sales and record of adjusted free cash flow and we achieved this with approximately 2500 less than the prior to best year of 2019.

Which demonstrates our much lower breakeven point, we operate under right now.

Slide 15 shows the work from fiscal 22 adjusted EBITDA to the fiscal 23 results.

Slide 15 shows the walk from fiscal 'twenty to adjusted EBITDA for the fiscal 2003 results.

Starting on the left at negative 15 million, the impact of the bus segment gross profit in total was 86 million. Split between volume and pricing effects, net of material cost increases of 66 million, and operational improvements of 20 million.

Starting on the left because negative $15 million the impact of the bus segment gross profit in total was 86 million split between volume and pricing effects net of material cost increases of $66 million.

And operational improvements of $20 million.

The operational improvements consist of year-over-year manufacturing efficiency improvements and lower freight in cost.

The operational improvements consists of year over year manufacturing efficiency improvements and lower trading cost.

The favorable development in the par segment gross profit of $17 million, driven by higher sales and improved margins, as mentioned earlier in the call.

The favorable development in the past segment gross profit was $17 million driven by higher sales and improved margins as mentioned earlier in the call.

Moving on, our JV Microbots had an outstanding year and their best year ever as well.

Moving on our JV Microbot had an outstanding year and their best year ever as well.

Coming from a net income loss last year to a record result, the year-over-year improvement was $12 million. Additionally, we updated our adjusted EBITDA advects to include now, due to materiality, our portion of the JV interest, taxes, depreciation, and amortization of approximately $5 million in absolute terms and year-over-year. As last year, it netted under $100.

From a net income loss last year to a record result, the year over year improvement was $12 million. Additionally, we updated our adjusted EBITDA add backs to include now due to metal reality, our portion of the JV interest taxes, depreciation and amortization of approximately $5 million in absolute terms.

And year over year as last year, it netted to under 100 K.

These improvements were fully offset by increases in our other expenses and fixed costs, mainly personal related of negative 17 million, as we started to reinvest into our business and our teams during fiscal.

These improvements were fully offset by increases in our other expenses and fixed cost mainly personnel related of negative $17 million.

We started to reinvest into our business and our teams during fiscal 'twenty three.

The sum total of all of the above-mentioned developments drives our record fiscal 23 reported adjusted EBITDA results of $88 million or $88 billion.

The sum total of all of the above mentioned developments drives our record fiscal 2020 reported adjusted EBITDA result of $88 million or 8%.

On slide 16, you can see once again the spot market development for steel prices. After the reduction in the second half of calendar year 2022, they started to increase again all the way through the end of May. And this did offset a portion of our pricing realization for the remainder of calendar year 2022.

On Slide 16, you can see once again the support market development for steel prices offset the reduction in the second half of calendar year 'twenty. Two they started to increase again all the way through the end of May and this did offset a portion of our pricing realization for the remainder of calendar year 2020.

The next few months showed some easing, but the UAW strike resolution with the major auto manufacturers created upward pricing pressure into the market.

The next few months showed some easing by the UAW strike resolution with the major auto manufacturers created upward pricing pressure into the market there.

The future, however, indicates some flattening in the next few months.

The future however indicates some flattening in the next few months however.

The future however indicates some flattening in the next few months however.

However, please keep in mind that we have already put in place a comprehensive steel buying strategy, and we are entering into future locked contracts for steel prices with certain tonnages up to 12 months forward, minimizing our exposure and margin risk in the background.

However, please keep in mind that we have already put in place a comprehensive steel buying strategy and we are entering into future locked contracts for steel prices with certain tonnage is up to 12 months forward minimizing our exposure and margin risk in the backlog.

Before we talk about the updated guidance for fiscal 24 and our improved long-term outlook, on slide 17 we wanted to share with you some significant investments that we are planning to start in fiscal 24 to ensure our profitable growth strategy is successful.

Before I talk about the updated guidance for fiscal 2004, and our improved long term outlook on slide 17, we wanted to share with you some significant investments.

Turning to start in fiscal 'twenty four to ensure our profitable growth strategy is successful.

Our engineering expenses plan for fiscal 24 are double the level of fiscal 23 as we start the integration work of the next generation of quartz gas and propane engines for the next level of emission regulation.

Our engineering the experiences planned for fiscal 2004 or double the level of fiscal 'twenty three.

Started the integration work of the next generation of broadcast and propane engines for the next level of emission regulations.

Additionally, we continue to evolve our EV offering and plan new product safety enhancements.

Additionally, we continue to evolve our <unk> offering and planned new product safety enhancement features.

Finally, we will continue to ramp up our investment in bringing to market the commercial EV chassis by the end of calendar 2020.

Finally, we will continue to ramp up our investment in bringing to market. The commercial EV chassis by the end of calendar 2024.

We are also planning to triple our capital investments into capacity expansion, production facility upgrades, quality improvements and our supply chain capability and tooling towards our target of 50 buses per day or approximately 12,000 buses per year.

We are also planning to triple our capital investments into capacity expansion production facility upgrade quality improvements and our supply chain capability and tooling.

Our target of 50 <unk> per day or approximately 12000 buses per year.

On the people's side, we experience inflationary pressures both externally from our supply base and internally, and we continue to provide competitive benefits to our employees.

On the people side, we experienced inflationary pressures both externally from our supply base and importantly, and we continue to provide competitive benefits to our employees.

We are also launching a complexity reduction initiative, and we will begin the upgrade of our ERP system, as well as modernization of our business intelligence and financial planning and analysis tools. All these costs combined can add up to approximately 2% of our revenues in fiscal 24 and beyond.

We are also launching our complexity reduction initiative and we will begin the upgrade of our ERP system as well as modernization or business intelligence and financial planning and analysis tools.

All of these costs combined can add up to approximately 2% of our revenues in fiscal 2004 and beyond.

On to slide 18. This is the last earnings call in which we will present this picture as it was necessary in the past to provide transparency to our pricing journey and consumption of the old.

Onto slide 18. This is the last earnings call in which we represent this picture because it was necessary in the past to provide transparency to our pricing journey in consumption of the old backlog. However.

However, we are happy to reiterate that we are now past all of the old backlog units with fixed pricing from fiscal 21 order.

However, we are happy to reiterate that we are now past all of the all backlog unit with fixed pricing on fiscal 'twenty one orders.

Our production schedule is now full into fiscal 2042 with some models type D, for example, going already into fiscal 25.

Our production schedule is now fall into fiscal 2000 for Q2 with some modest type D. For example, going already into fiscal 'twenty five.

As shown in the page before, supply chain and labor inflationary cost pressures still exist.

As shown in the page before supply chain and labor inflationary cost pressures two languages, and we are investing heavily into our products and manufacturing capabilities.

And we are reinvesting heavily into our product and manufacturing capabilities.

Given our significant backlog, we announced for fiscal 'twenty for another immediate price increase of $2500 per box net.

For new orders received after April one 2024 to cover expected inflationary cost and other investments.

This is in addition to the prior price increase of 2,500 we took for order starting on October 1st, 2020.

This is in addition to the prior price increase of 2500, we took four orders starting on October one 2023.

On slide 19, we want to share with you our updated fiscal 24 guidance.

On slide 19, we want to share with you our updated fiscal 2000 and for guidance.

As a reminder, we are continuing to take a more transparent and conservative approach also this year as it is still a somewhat uncertain supply chain environment we are facing.

As a reminder, we are continuing to take a more transparent and conservative approach also this year, but it is still somewhat uncertain supply chain environment, we are facing.

However, we have improved already all the other business levers that we could address, as now demonstrated by our very strong fiscal 23 Q3 and Q4 actual results.

However, we have improved already all the other business levers that we could address has now demonstrated by our very strong fiscal 'twenty three Q3 and Q4 actual results.

Looking forward to fiscal 2004, we are increasing our revenue to a range of $1 five to one 5 billion.

We are significantly increasing our adjusted EBITDA margin grew $115 million or 10% with a range of $105 million to $125 million.

Due to supply chain volatility at this point, we are only providing general quarterly ranges with every quarter I expected to have revenue between $275 million to $325 million adjusted EBITDA in the range of 25 to 35 million or 9% to 11%.

We will provide further updates in mid February after we closed Q1 and gather further insight into our supply chain capabilities to support our strong backlog and easy.

Moving to slide 20 in summary, we are forecasting a significant improvement year over year with revenue up 6% to approximately $1 2 billion.

Adjusted EBITDA in the range of $105 million to $125 million and adjusted free cash flow of $50 million to $60 million in line with our typical target of approximately 60% of adjusted EBITDA.

On Slide 21, we wanted to also update you on our improving long term outlook. We are very happy about the results of our business transformation as demonstrated by our fiscal 2015, Q3, and Q4 actual results and our increased fiscal 2000 and for guidance.

10% adjusted EBITDA margin is currently now into our updated new normal year and one of the supply chain. Further normalizes, we expect to sell 9500 unit, including 1500 units Tvs and generate $135 million of adjusted EBITDA on $1 $35 billion in revenue.

Looking to the medium term, our EBIT growth and operational improvements can support volumes of 10500 to 11000 units, including <unk> in the range of 2500 to 3500 unit Gen.

Generating revenues of one five to $1 75 billion with adjusted EBITDA of 165 to 210 million or 11% to 12%.

Our long term target remains to drive profitable growth towards approximately $2 billion in revenue comprising on up to 12000 units of which up to 5000, rovs and generate EBITDA in excess of $250 million or 12, 5% plus we're.

We're incredibly excited about <unk> future.

Ill turn it back over to Phil to further expand on it.

Thanks, Ross Van let's move on now to slide 23.

Now we've shown in the chart on the left before which illustrates the three priorities that drive us taking care of our employees, our customers and our dealers and delivering profitable growth. The new chart on the right provides more texture around the specific strategies that we are pursuing that both align with our priorities and drive our full year growth plans.

At the center is our ultimate objective to drive sustained profitable growth.

If you look at the accomplishments in fiscal 'twenty, three we transformed the business from losses to record profitability.

Fiscal 'twenty four we have increased our earnings guidance to reflect a 10% adjusted EBITDA margin and then over the next couple of years, we plan to grow the margin to 11% to 12%.

Our core strategy is focused on delivering these financial goals and are spelled out in this chart.

Shown on the top of this chart leadership and safety both in the workplace and with our products is paramount to us specifically with our products, we seek to differentiate ourselves providing more value to our customers. Our buses are purpose built from the ground up for transporting children's safely with many unique features that no one else has in the industry.

The another derivative of a truck chassis like most of our competitors and our customers understand the value of this.

Delivering the best and broadest range of products and features and leading in quality durability and alternative power are the cornerstone of our product planning and development.

Being competitive in cost through lean manufacturing and efficient throughput strong supply relationships and smart product design are essential to compete in a business where competitive bids are mandatory.

And after the sale, we need to provide great service and ensure the highest possible vehicle uptime throughout the 15 years or more that are buses need to run. This means partnering with our exclusive dealer network that covers every corner of the United States and Canada.

Average tenure of 31 years, our dedicated Blueblood dealers know how to service our customers.

Frankly, you can't make it in the school bus business, we had a fully capable dealer network that can reach more than 10000 school districts that operate their own bus fleets and 3400 independent owner operators obstacle buses.

Following these core strategies have been key to our transformation and will continue to drive our full year plans.

Next two slides highlight a couple of key initiatives that will help us accelerate adoption of EV and propane vehicles in fiscal 2024 and beyond.

Let's turn to slide 24, and look at the latest impact of the federal government's clean School bus funding program as.

As a reminder, we are in the second half of this five year program, which provides $5 billion of funding for electric and propane powered school buses there was still a $4 billion available after the first round of funding.

Ram two provides $40 million in grants and applications for this round closed at the end of August this year.

It's expected to around 1000 buses and associated charging infrastructure will be funded by this grant program and we expect the grant to loss, we made in the first quarter of 2000 and for calendar year.

With the help of our in House Grant writing team Bluebird supported enough well qualified applications supported by the 1000 buses. So we should be well positioned to capitalize on this opportunity.

In addition, a third round of funding was announced late this year, providing a further $500 million in rebates for electric and propane bus purchases. The application process is well underway and the walls are expected to be made in the second quarter of 2000 and for calendar year.

In total both of these funding initiatives should support up to 2500 electric and propane school buses and associated infrastructure, which is great for the industry and in particular grateful Bluebird.

Continuing on this theme of accelerating adoption of Bluebird Electric school buses Slide 25 shows our latest initiative that we announced late last week.

We have formed exclusive joint venture with generate capital who is a leading sustainable investment operating company focused on infrastructure transition.

Our new venture called clean bus solutions will provide electric school buses and charging infrastructure as a service to <unk> customers for an affordable monthly fee over the lifetime of the service. This.

This turnkey service eliminates the typical high upfront cost for school district, and paying for an electric bus when grants are limited and how does the entire charging infrastructure process, including installation.

This recurring revenue business should accelerate adoption of Bluebird electric buses by school district, and will be a great new sales tool for our dealers. We will keep you posted on progress throughout the coming year as clean bus solutions begins to transact business.

So let me now wrap up the prepared remarks on our outlook for the business on slide 26, there is not much more I can say on a fiscal 'twenty three results other than we achieved record results across every metric in which we provide guidance and it was a transformational improvement from fiscal 2022.

Roslyn is with the raised guidance for fiscal 'twenty, four and I am showing you some of those key metrics at the midpoint of guidance on this slide.

We have been prudent in our bookings outlook only increasing volume by 3% over fiscal 'twenty three at this time as we still deal with select supply chain issues, but we did manage them very well in fiscal 'twenty three and then we can build more in fiscal 'twenty fall. We will just as we did last year.

Net revenue $1 $2 billion will be a new record for Bluebird up 6% from fiscal 'twenty three.

Adjusted EBITDA guidance of $150 million is more than 30% higher than the record $88 million, we delivered in fiscal 'twenty three.

Importantly, we are planning on a 10% EBITDA margin in fiscal 'twenty four up two percentage points from fiscal 'twenty, three which is a couple of years ahead of the plan that we have been sharing with you.

We have confidence in achieving this margin have to recall to get 12% adjusted EBITDA margin in the second half of fiscal 'twenty three.

As Raj pointed out we are doubling our engineering work in fiscal 'twenty four in support of new product programs, which is contained within our 10% margin outlook for fiscal 'twenty four.

And finally, we're looking to grow EBIT unit sales to 900 buses in fiscal 'twenty four that's a 65% increase over our 2023 sales.

And as you can see on the right chart. There is a lot of pent up demand following the low interest of sales in 2020, 'twenty, one and 'twenty two and the bus leaves his age by a couple of years during that period.

ACC is forecasting a compound annual growth rate of 10% through to fiscal 'twenty, seven and Thats, great news for our business and great news for our profit outlook.

With residual supply chain challenge is still impacting the auto industry the ability to build all these units near term is not a given but I can tell you one thing the demand for these buses is clearly there.

After executing a substantial transformation across our business. The company is performing exceptionally well as you can see by our financial results will continue to improve operating performance and look forward to sustained profitable growth and a robust market ahead. The future's incredibly bright for Bluebird and we are confident in achieving what had been a long term goal of $12.

<unk> EBITDA margin within the next couple of years I want to thank our nearly 2000 employees for all the hard work and dedication in delivering a record results in fiscal 'twenty, three and four transforming our company as well as our outstanding dealer body, who are critical to our success.

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

Thank you.

If you would like to ask a question. Please press star followed by one on your telephone keypad.

Tim is your question press Star followed by Tim.

And if youre using a speakerphone please pick up your handset before asking a question.

Our first question today comes from Eric Stine with Craig Hallum.

Please proceed.

<unk>.

Hello.

Hey, Eric Eric can you Hey.

Hey can you hear me okay.

So.

Good good well obviously.

<unk> ended the year $40 million in EBIT.

Appreciate that.

The fiscal 'twenty four.

High level quarterly view, but maybe just talk about seasonality a little bit obviously, historically a very seasonal.

Business now you've got this big backlog Youre working through plus you've got strong industry demand. So maybe in the context of that high level guidance that you have given per quarter.

How should we think about seasonality throughout the year.

That's a great question, Eric is Phil here.

Obviously youll use to us you've seen our report numbers over many years seasonality has always had one issue we dealt with I think right now with our backlog and with the pent up demand we have in the industry in general with dealing with the same issues.

He is really not something that.

Is concerning US right now in the first quarter has always been lower we obviously have shutdown holiday vacation plans around Thanksgiving and around the holiday season. The Christmas time. So these obviously impacted with less with less days, obviously, especially in December but I think overall when you look at US now that predictability of looking by quarter.

We're not going to have anything like the seasonality we used to have it's pretty it's.

Fairly consistent throughout the year, just first quarter should be a little lower.

On a volume standpoint.

Okay. That's helpful and then.

You're talking about clean box solutions and.

Then you expect that to accelerate.

I would assume you are talking about affordable, but getting us close to what the cost of the diesel bus would be on a monthly basis for a school district.

I mean, how do you I think in the in the slides you said you expect it to be 10% of sales here in the relative near term.

How.

How do you see that playing out do you think that school districts are looking at the clean School bus rebate program waiting to see if they get funding if they don't.

Then they potentially go this route and possibly do it quickly.

As a way to.

To really get buses on the road.

Pretty rapid fashion.

Yes, I think that's the way we're looking at obviously the grants for the EPA program have been terrific come into to help people really accelerate adoption in districts, who otherwise would not have been able to afford the product another chance to get a terrific grant.

There's no question when you don't have ground. So you have a limited grants and theirs.

We said before the price of a <unk> bus is stable at three times the price of one with a combustion will spark engine ignition.

It's a bit of a sticker shock as we say in the auto industry and so having this capability now that instead of a big upfront capital expense you can pay was cold affordable monthly feel that 12 years 15 years or so of the lifetime of the product makes it much more affordable and faster to adopt and that's the beauty of it.

$350000, let's say plus price of electric school bus.

When you're playing a standard monthly fee over $50 you can afford a few more of those buses right upfront that get to run them get used to them now I do think at the end of the.

The EPA grants to five year program, that's being put out there.

It's going to be that we expect obviously battery cost to come down significant reductions in the price of the.

The platform so the speed electric platform.

I think thats when you really will see the benefits of a program like this coming through because it will be much more attractive.

In a traditional upfront capital cost per school bus.

Got it very helpful. And then last one for me just I mean, obviously the margins the price per bus I mean, all of that moving in the right direction and pretty quickly I mean, but would you agree with the statement that really that is more.

Due to the price increases you've put through in that that's finally worked through backlog rather than the mix of electric buses. If I do my math it looks like maybe electric made at 6% to 7% of the mix in.

In fiscal 'twenty three.

Hi, Eric This is Rob Tanya. Thank you for the question absolutely. The biggest impact comes from the numerous price increases we put in place over the last almost 24 months now to keep up with the material cost inflation and re.

Position, our margins for the future. So, yes, evs, a smaller portion of that but all the other buses and especially alternative power ones are what drives our extraordinary bus margins today.

Alright, thank you.

Thanks, Eric.

Our next question today comes from Mike <unk> with D. A Davidson.

Please proceed.

Yes, hi, good afternoon, and thanks for taking my questions.

Hi, Thanks, I wanted to talk to us.

Hi, there.

Touching first on on the EV subsidies and EDI programs for fiscal 'twenty four.

Do you anticipate that well continue to kind of get its fair share if not.

Greater.

Well it was awarded this use and initiatives subsidies and in the broader EV bus market.

In general yes.

Yes, yes, I would yes, I would expect as Mike to do to do very well and get our fair share. We've got a good share to the first phase and I think we prepared very well for this we have grant writers on our team who worked with our school districts. They work with our customers they work with the dealers.

Together, what I call really valid applications I mean, when you're when you're looking at the grant program Youre also naphtha into look at the quality of that customer other entertainment area needs as an area that needs electric buses because of the pollution that might be another area and we've reached that very well gone through it. So we feel we feel confident of what.

We stand in terms of the applications, we put forward and validity of those applications.

And just a follow up there have you found any large number or even a small number of.

The previous awards.

Get postponed because the customer didn't have a charging infrastructure or other products that were required to get the bus.

That's a good question.

I've heard that some others have asked some some folks out there.

The cancellations on our requests I can tell you. This we've got two vehicle cancellations to until it's not now 22 customers with lots of applicant to vehicles, because if a customer who is just concerned about could we get the infrastructure in place at the time. He wanted it and thats. It thats for US is that we've been we've been very successful in terms of.

Putting out Graham request in highly validated highly qualified so we feel good about that.

Got it.

What kind of is it wasn't really mentioned was.

The organized labor in your facility I was wonder if you could update us on how discussions I think going with.

With your employees.

If there is a date or.

Possible.

Milestone you've got for us to to share today on that thank you.

Okay, Yes, I think it's pretty much the same as I said last quarter actually we are collaborating well with the United Steelworkers were having very frequent to negotiations we're not we're not actually talking about the what I call economic terms, yet it's been more Brian things like.

Holidays, and what do we do about grievance issues that might be more of a typical what we call non economic factors.

As I said going very well.

Have a good discussion.

Very professionally run and I would say that I think the earliest we're going to be told we've seen our completion of this I don't know if a date on it but I think we're talking well into 'twenty for <unk>.

Before something might be finalized.

That makes it very regularly with very thorough this is a ground up program I mean, your staff literally from a blank sheet of paper and work through everything with United Steelworkers in.

So I think sometime maybe towards middle of next year, it could be but again I'm not putting any timeframe on that will just do it as a religious analysts thoroughly.

Okay. Phil Thanks, so much I appreciate the commentary I'll pass it along you bet.

Sure.

Our next question comes from Craig Irwin with Roth <unk>.

Please proceed.

Good evening, Thanks for taking my questions.

Thanks, you guys.

Hi, guys.

You guys have really demonstrated leadership in alternative fuels over the last many years.

Part of that is understanding the market.

And.

Today again on this call you've been really clear that the long term.

Adoption of <unk> school buses to accelerating adoption is dependent on the ability to reduce.

It's about creating these buses the cost of acquiring these buses.

For the school districts.

That are considering going electric can.

Can you maybe share with us.

Your level of activity your level of engineering focus on reducing the cost of <unk> message to your customers.

Maybe if you could share opportunities you see as particularly ripe or.

Having good near term returns.

And what's your vision for potential.

Cost improvement over the next few years.

Okay. Great question, Craig. So obviously you look at what we buy.

The assistant from Cummins, right and they're a great partner bottles, we buyout drivetrain system from them <unk>.

The controls the control software system the motor the Inverters all the pieces and we have a regular cadence with comments in terms of the products that we will meet on going through options to reduce design lower cost things smarter.

About the product itself and I am not going for any numbers on the table and that needs to say we have a we have a great program that will kind of look at our resourcing sourcing alternatives lower cost systems, whether that includes batteries. The control motor itself does it <unk> down the road.

These are all things, we can say that in collaboration with Cummins.

I think we're still at the early stages I would say in terms of the EV capability and we've been in since 2018 with Cummins as a partner, but I think I think down the road, you'll sort of look at as we look at more and more.

Battery supply is battery alternative cell providers because frankly.

What's happening with one of our major battery supplies on Abaxis.

A bunch of supply out there who.

Who.

The declared bankruptcy and was acquired by another company. Here's an example, I think of some of the flux is going on there. So we're constantly looking at alternatives for stronger partners better better cost pounds lower cost partners more efficient partners and we'll keep doing that I think some things all the time. This thing is probably bring a little bit more of this in half two as we go.

More scale on our business, but we're at the forefront of it we're very collaborative with Cummins are a great partner to work with nothing you see it.

So the outcome in our results.

Do think that all of this.

Over the next few years, you're definitely seeing not only the battery cost coming down but other components. So there's more scale in the electrification of school buses and trucks in general and we want to capitalize on that and be ready for it. Hence this generate capital venture we've done clean bus solutions is again trying to make it more affordable on a regular predictable monthly.

<unk> has taken away, what we call anxiety anxiety for infrastructure away from the customer and we'll handle it for them and take care of it and make it more.

Much easier for them to adopt electric buses and Thats, what we learned a lot from propane when Lindsay here the process, Craig, but I know you know our business very well you're doing this a long time, while limited with propane was when we first entered that market.

First of all we're not get propane from the tank trading do I need you have to explain that and educate and train. The drive is the customers about handle these vehicles and I think we do a good job in that regard.

Excellent excellent and then I guess.

Others have tried this question maybe will be just a little a little more direct right.

Have the most experienced mid team out there facing the EPA right any demonstrated clear leadership and EV School buses do you expect to have a greater share of the $400 million funding.

<unk> customers that use support than what you saw on $1 billion that was handed out last year.

Well, it's an interesting question I can tell you this I'm not quite sure what's going to happen in the end right at the end, we don't select the.

The actual folks we're going to get those grants. So I mean, the Apis for EPS, because I will tell you I think we prepared extremely well for it.

Just to reiterate we sent an enough applications take the entire fund.

So we think we.

We really well qualified our applicants we didn't go into Hela, just hey, let me just give you a <unk>.

Free opportunity to have a bus.

Relatively low cost or no cost, we actually went thoroughly through every school district, everyone of our customers. Some of them were conquest customers, new customers, who wanted to move to Blue bird. So I guess, what I'm, saying is Craig the proof of the putting will be in leasing right. When it shows up but I feel confident we prepared as best we possibly could to get.

Every opportunity to capitalize on this on these grants.

Okay, and then an adjacent question to that.

Congratulations on your collaboration with generate capital Jaeger shot is also a visionary on Cleantech finance and has executed impeccably and is in as many different business ventures.

Do your competitors the companies that have aspirations of leadership in the school bus market has access to.

The funding out of generate or would they need to go and find similar partners to set those up and offer that kind of financial support to some of these low income disadvantaged communities that the president is really focused on giving the opportunity to.

Yes, our venture would generate in there by the way I agree with you fully <unk> a fantastic job at several times over the years.

Current events, even prior to this joint venture here.

But I will tell you that.

I think we are really well prepared on this.

As I look at it.

So on the question on second.

Yeah, Let's just say I'd just lots of tolling. The question I will explain my knowledge the Giga Shanghai, just as you would do it but I think.

Good evening thing for US, we have an exclusive relationship with generate capital.

I want to work with us they see all leadership in this space.

The fantastic access to things that we don't really accessed today in terms of tax credits get into every sort of corner of utility understanding better than we do around the price of electricity and what it really means to our customers. So the answer to your question is quick we are the only ones who can do this deal with generate capital and so we're very proud to have that.

<unk> relationship the Gulf Rosenau as a train our entire dealer network of what this is all about what it means the a bunch. It gave them give a chance for all of our customers to get the zero emission school bus as fast as possible.

Great well congratulations on fantastic performance, it's got to feel good to come back.

To Bloomberg to drive this level of success.

It feels great. Thanks, a lot Craig I appreciate it so I'll let <unk>.

Absolutely.

Okay.

Thank you for your questions.

There are currently no questions waiting at this time, so I'll pass the conference back over to Philip <unk> for closing remarks.

And thanks to all of you joining us on the on the call. Today. We appreciate your continued interest in Blue Bird and we look forward to updating you again on our progress next quarter as we always do.

As you saw today, we've completed a significant transformation well ahead of schedule I think clearly showed in our records fiscal 'twenty three fourth quarter and full year results. We have a really strong momentum going into fiscal 'twenty four and consequently raised our fiscal 'twenty four guidance significantly project to get 10% adjusted EBITDA margin, which is two percentage point.

Above what we achieved in fiscal 'twenty three.

And we're confident in achieving an 11% to 12% margin within a couple of years as industry supply chain constraints continue to lease.

Should you have any follow up questions. Please don't hesitate to contact our head of best simulations, Mark Benfield and thanks again from all of US at Bluebird have a great evening.

Yes.

That does conclude today's conference call.

Thank you all for your participation you may now disconnect your line.