Q3 2024 Blue Bird Corp Earnings Call

Speaker Change: Hello all and thank you for your patience. Today's call will begin in approximately two minutes time.

Lydia: Hello all and welcome to Blue Bird's Fiscal 2024 3rd Quarter Earnings Conference Call. My name is Lydia and I'll be your operator today.

Lydia: My name is Lydia, and I'll be your operator today. After the prepared remarks, there'll be an opportunity to ask questions.

Operator: After the prepared remarks, there will be an opportunity to ask questions. If you'd like to ask a question during the Q&A, you can do so by pressing the star followed by 1 on your telephone keypad. I'll now hand you over to Mark Benfield, Head of Investor Relations, to begin. Please go ahead.

Mark Benfield: If you'd like to ask a question during the Q&A, you can do so by pressing star followed by one on your telephone keypad. On our hand, we hand over to Mark Benfield, head of investor relations, to begin. Please go ahead. Thank you, and welcome to Blue Bird's fiscal 2024 third quarter earnings conference call.

Lydia: After the prepared remarks there'll be an opportunity to ask questions. If you'd like to ask a question during the Q&A you can do so by pressing star followed by one on your telephone keypad. I'll now hand you over to Mark Benfield, Head of Investor Relations, to begin. Please go ahead.

Mark Benfield: Thank you, and welcome to Blue Bird's fiscal 2024 third quarter earnings conference call. The audio for our call will be 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 four 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 and in our filings with the SEC. Blue Bird disclaims any obligation to update the information in this call. This afternoon, you will hear from Blue Bird CEO, Phil Horlock, and CFO, Razvan Radulescu. Then we will take some questions. So let's get started.

Mark Benfield: Thank you and welcome to Blue Bird's fiscal 2024 third quarter earnings conference call.

Mark Benfield: 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 four 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 SEC. Blue Bird describes any obligation to update the information in this call. This afternoon you will hear from Blue Bird's CEO, Phil Horlock, and TFO, Roz Von Radio Rescue.

Speaker Change: 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.

Speaker Change: Our comments today include four looking statements that are subject to risk that could cause actual results to be materially different.

Speaker Change: Those risks include, among others, matters we have noted on the following two slides and in our filings with the SEC.

Speaker Change: Blue Bird disclaims any obligation to update the information in this call.

Speaker Change: This afternoon, you will hear from Blue Bird CEO , Phil Horlock, and CFO , Razvan Radulescu.

Phil Horlock: Then we will take some questions, so let's get started. Thanks, Mark, and good afternoon to everyone on our call today. It's great to be here and to share with you our results for our fiscal 2024 third quarter. You recalled that on our last earnings call, we reported an all-time record profit for a second quarter. Well, I'm very pleased to tell you that our momentum has not slowed down at all.

Speaker Change: Then we will take some questions. So let's get started.

Philip Horlock: Thanks, Mark, and good afternoon to everyone on our call today. It's great to be here and to share with you our results for our fiscal 2024 third quarter. You'll recall that on our last earnings call, we reported an all-time record profit for the second quarter. Well, I'm very pleased to tell you that our momentum has not slowed down at all, with the Blue Bird team doing a fantastic job of delivering a third quarter profit that is an all-time record for any quarter in our history.

Phil Horlock: Thanks, Mark, and good afternoon to everyone on our call today. It's great to be here and to share with you our results for our fiscal 2024 third quarter.

Speaker Change: You'll recall that on our last earnings call, we reported an all-time record profit for a second quarter.

Phil Horlock: With the Blue Bird team doing a fantastic job in delivering a third quarter profit, that is an all-time record for any quarter in our history. That surpasses our previous quarterly record that we achieved in the first quarter of this year. Razvan will be taking you through the details of our financial results shortly, so let me get started with the key takeaways for the third quarter on slide six. As the headline says, we recorded a best-ever profit for a quarter. I am particularly proud of this achievement after breaking profit records in each of the past two quarters, and we have much more to come.

Speaker Change: Well, I'm very pleased to tell you that our momentum has not slowed down at all, with the Blue Bird team doing a fantastic job in delivering a third quarter profit that is an all-time record for any quarter in our history.

Philip Horlock: That surpasses our previous quarterly record that we achieved in the first quarter of this year. Razvan will be taking you through the details of our financial results shortly, so let me get started with the key takeaways for the third quarter on slide 6.

Speaker Change: That surpasses our previous quarterly record that we achieved in the first quarter of this year.

Speaker Change: Razvan will be taking you through the details of our financial results shortly, so let me get started with the key takeaways for the third quarter on slide 6.

Philip Horlock: As the headline says, we recorded the best ever profit for a quarter. I am particularly proud of this achievement after breaking profit records in each of the past two quarters. And we have much more to come.

Razvan Radulescu: As the headline says, we recorded the best ever profit for a quarter. I am particularly proud of this achievement after breaking profit records in each of the past two quarters. And we have much more to come.

Phil Horlock: Regarding the first line in the box, I'm very pleased to report that we achieved an outstanding adjusted EBDR margin of 14.5% in the third quarter. That's more than four percentage points higher than a year ago. And once again, we are increasing fully a guidance on all three metrics that we provide, and we are also increasing our long-term financial outlook, as Razvan will show you later. As we look at the drivers for this terrific progress in Q3, it really is about maintaining and delivering the plan we laid out last year, which focuses on making significant improvements across every piece of our business.

Philip Horlock: Regarding the first line in the box, I'm very pleased to report that we achieved an outstanding adjusted EBITDA margin of 14.5% in the third quarter, more than four percentage points higher than a year ago. And once again, we're increasing our four-year guidance on all three metrics that we provide, and we're also increasing our long-term financial outlook, as Razvan will show you later. As we look at the drivers for this terrific progress in Q3, it really is about maintaining and delivering the plan we laid out last year, which focuses on making significant improvements across every piece of our business. Market demand for school buses continues to be very strong. As a result, our quarter-end backlog of firm orders for Blue Bird buses stood at just over 5,200 units. That's a little more than at the same time last year.

Razvan Radulescu: Regarding the first line in the box, I'm very pleased to report that we achieved an outstanding adjusted EBITDA margin of 14.5% in the third quarter.

Razvan Radulescu: That's more than four percentage points higher than a year ago. And once again, we're increasing four-year guidance on all three metrics that we provide, and we're also increasing our long-term financial outlook, as Razvan will show you later.

Razvan Radulescu: As we look at the drivers of this terrific progress in Q3, it really is about maintaining and delivering the plan we laid out last year, which focuses on making significant improvements across every piece of our business.

Phil Horlock: Market demand for school buses continues to be very strong. Our quarter-end backlog of firm orders for Bluebird buses stood at just over 5,200 units. That's a little more than at the same time last year. But importantly, our net orders for Bluebird buses, through the first three quarters of this year, were 10% higher than for the same period last year. Now, that's a great endorsement of a strength of the industry and the customer demand for Bluebird buses. And this boards well for pricing, production stability, and profit margins. Now, while supply chain issues are undoubtedly easing, as we have reported throughout this year, we do have select constraints on a couple of chassis components across the truck and bus industry that are limiting industry production and deliveries.

Razvan Radulescu: Market demand for school buses continues to be very strong. Our quarter-end backlog of firm orders for Blue Bird buses stood at just over 5,200 units. That's a little more than at the same time last year.

Philip Horlock: But importantly, our net orders for Blue Bird buses through the first three quarters of this year were 10% higher than for the same period last year. Now that's a great endorsement of the strength of the industry and customer demand for Blue Bird's buses. And this bodes well for pricing, production stability, and profit margins. Now, while supply chain issues are undoubtedly easing, as we have reported throughout this year, we do have select constraints on a couple of chassis components across the truck and bus industry that are limiting industry production and delivery.

Razvan Radulescu: But importantly, our net orders for Blue Bird buses through the first three quarters of this year were 10% higher than for the same period last year.

Razvan Radulescu: Now that's a great endorsement of the strength of the industry and the customer demand for Blue Bird's buses. And this bodes well for pricing, production stability, and profit margins.

Razvan Radulescu: Now while supply chain issues are undoubtedly easing, as we have reported throughout this year, we do have select constraints on a couple of chassis components across the truck and bus industry that are limiting industry production and deliveries.

Phil Horlock: But we're very engaged with those constraints suppliers, and with additional capacity being added in the balance of this calendar year, we should see some easing of those constraints as it moved through the end of this year and into 2025. Every bus we are selling today, and those in our order backlog, reflect current pricing, and we are priced competitively, which we can tell from our quote-win rate and our incoming orders. This is an entirely different Bluebird bus revenue and gross margin structure compared with just a year ago, with bus prices up significantly. On the EV front, thanks largely to the first round of $1 billion of funding from the EPA's unprecedented $5 billion clean school bus program, our third quarter delivered electric buses were again over 200 units and nearly 40 percent more than last year and represented 9 percent of our unit sales for the quarter.

Philip Horlock: But we're very engaged with those constraints suppliers, and with additional capacity being added in the balance of this calendar year, we should see some easing of those constraints as we move through the end of this year and into 2025. Every bus we are selling today and those in our order backlog reflect current pricing, and we are priced competitively, which we can tell from our quote win rate and our incoming orders. This is an entirely different Blue Bird bus revenue and gross margin structure compared with just a year ago, with bus prices going up significantly.

Razvan Radulescu: But we're very engaged with those constraint suppliers, and with additional capacity being added in the balance of this calendar year, we should see some easing of those constraints as we move through the end of this year and into 2025.

Razvan Radulescu: Every bus we are selling today and those in our order backlog reflect current pricing and we are priced competitively, which we can tell from our quote win rate and our incoming orders. This is an entirely different Blue Bird bus revenue and gross margin structure compared with just a year ago with bus prices up significantly.

Philip Horlock: On the EV front, thanks largely to the first round of $1 billion of funding from the EPA's unprecedented $5 billion Clean School Bus Program, our third quarter delivered electric buses. We were again over 200 units and nearly 40% more than last year, and they represented 9% of our unit sales for the quarter. And we ended the quarter with a record backlog of EV buses. This is particularly impressive as we're approaching the end of deliveries for the first round of the Clean School Bus program and are just beginning to see orders from the second and third rounds of the EPA's program. These will really impact fiscal 25 and 26, and I will cover this timing of deliveries in more detail a little later.

Razvan Radulescu: On the EV front

Razvan Radulescu: Thanks largely to the first round of $1 billion of funding from the EPA's unprecedented $5 billion Clean School Bus Program, our third quarter delivers electric buses, who are again over 200 units.

Razvan Radulescu: and nearly 40% more than last year and represented 9% of our unit sales for the quarter. And we ended the quarter with a record backlog of EV buses.

Phil Horlock: And we ended the quarter with a record backlog of EV buses. This is particularly impressive as we're approaching the end of deliveries for the first round of the Clean School Bus program and are just beginning to see orders from the second and third round of the EPA's program. These were really impact fiscal 25 and 26, and I will cover this timing of deliveries in more detail a little later. We also maintain our very strong mix of alternative power to vehicles and further strengthen our leadership position in this segment. The higher margins and higher unilaterally from these products contribute to our profit improvement in the third quarter.

Razvan Radulescu: This is particularly impressive as we're approaching the end of deliveries for the first round of the Clean School Bus program and are just beginning to see orders from the second and third round of the EPA's program.

Razvan Radulescu: These will really impact fiscal 25 and 26, and I will cover this timing of deliveries in more detail a little later.

Philip Horlock: We also maintained our very strong mix of alternatively powered vehicles and further strengthened our leadership position in this segment. The higher margins and higher owner loyalty from these products contributed to our profit improvement in the third quarter. We are continuing to invest back into the business by selectively upgrading facilities and installing lean manufacturing processes, and we are enhancing the plant working environment. Through the efforts of the best workforce in the business, strong leadership, lean process improvements, and just sheer hard work, we have been achieving some of the best manufacturing performance the company has ever seen. Bottom line, we are performing extremely well in a strong market. We are delivering a rich mix of higher-margin, alternative-powered vehicles.

Razvan Radulescu: We also maintained our very strong mix of alternative powered vehicles and further strengthened our leadership position in this segment. The higher margins and higher owner loyalty from these products contributed to our profit improvement in the third quarter.

Phil Horlock: We are continuing to invest back into the business by selectively upgrading facilities and installing lean manufacturing processes, and we are enhancing the plant working environment. Through the efforts of the best workforce in the business, strong leadership, lean process improvements, and just sheer hard work, we have been achieving some of the best manufacturing performance the company has ever seen. Bottom line, we are performing extremely well in a strong market. We are delivering a rich mix of higher margin alternative power to vehicles. We are price competitively and appropriately for today's economic environment, and manufacturing efficiencies are improving.

Razvan Radulescu: We are continuing to invest back into the business by selectively upgrading facilities and installing lean manufacturing processes, and we are enhancing the plant working environment.

Speaker Change: Through the efforts of the best workforce in the business, strong leadership, lean process improvements, and just sheer hard work, we have been achieving some of the best manufacturing performance the company has ever seen.

Razvan Radulescu: bottom line we are performing extremely well in a strong market we are delivering a rich mix of highermargin alternative powered vehicles we are priced competitively and appropriately for today's economic environment and manufacturing efficiencies are improving

Philip Horlock: We are priced competitively and appropriately for today's economic environment, and manufacturing efficiencies are improving. As a result of all these accomplishments, we achieved an outstanding third quarter adjusted EBITDA of $48 million, with a margin of 14.5%. Now, let's take a closer look at the financial and key operating highlights for the third quarter on slide 7. As I have said on previous earnings calls, our present year's financial performance is transformed from a year ago, with many record highs reported. We sold 2,151 buses in the third quarter of fiscal 24, which is very slightly above last year.

Phil Horlock: As a result of all these accomplishments, we achieved an outstanding third quarter adjusted EBIDAR of $48 million with a margin of 14.5%. Now let's take a closer look at the financial and key operating highlights for the third quarter on slide 7. As I have said on previous earnings calls, our present year financial performance is transformed from a year ago, with many record highs reported. We sold 2,151 buses in the third quarter fiscal 24, which is very slightly above last year. However, those unit sales drove a strong third quarter net revenue of $333 million, which is a very impressive 13% increase over last year.

Razvan Radulescu: As a result of all these accomplishments, we achieved an outstanding third quarter adjusted EBITDA of $48 million with a margin of 14.5%.

Razvan Radulescu: Now, let's take a closer look at the financial and key operating highlights for the third quarter on slide 7.

Speaker Change: As I have said on previous earnings calls, our present year financial performance is transformed from a year ago with many record highs reported.

Speaker Change: We sold 2,151 buses in the third quarter fiscal 24, which is very slightly above last year. However, those unit sales drove a strong third quarter net revenue of $333 million, which is a very impressive 13% increase over last year.

Philip Horlock: However, those unit sales drove a strong third quarter net revenue of $333 million, which is a very impressive 13% increase over last year. So, with essentially flat volume compared with a year ago, up by only 14 buses, and net revenue of 13%, the impact of higher pricing and a richer mix of EVs is clearly evident in the revenue growth. Our record third quarter adjusted EBITDA of $48 million was $19 million above last year.

Phil Horlock: So, with essentially flat volume compared to a year ago by only 14 buses and net revenue of 13%, the impact of higher pricing and a rich mix of EVs is clearly evident in the revenue growth. Our record third quarter adjusted EBIDAR of $48 million was $19 million above last year. That's almost 70% higher and well above the $25 to $35 million general guidance range for quarterly profits that we showed at our last earnings call. And finally, while adjusted pretty cash flow for the quarter was slightly negative, that was more than explained by significant sales to the national fleets, where we provide extended payment terms. We won this business other in fiscal 24, and the units were delivered late in the third quarter and are now being paid for in the fourth quarter.

Speaker Change: So, with essentially flat volume compared with a year ago, up by only 14 buses, and net revenue of 13%, the impact of higher pricing and a richer mix of EVs is clearly evident in the revenue growth.

Speaker Change: Our record third quarter adjusted EBITDA of $48 million was $19 million above last year. That's almost 70% higher and well above the $25 to $35 million general guidance range for quarterly profits that we showed at our last earnings call.

Philip Horlock: That's almost 70% higher and well above the $25 to $35 million general guidance range for quarterly profits that we showed on our last earnings call. And finally, while adjusted free cash flow for the quarter was slightly negative, that was more than explained by significant sales to national fleets, where we provide extended payment terms. We won this business earlier in fiscal 24, and these units were delivered late in the third quarter and are now being paid for in the fourth quarter. They are recognized as receivables in Q3.

Speaker Change: And finally, while adjusted free cash flow for the quarter was slightly negative, that was more than explained by significant sales to the national fleets, where we provide extended payment terms.

Speaker Change: We won this business earlier in fiscal 24 and these units were delivered late in the third quarter and are now being paid for in the fourth quarter.

Phil Horlock: They are recognized as receivables in few three. Overall, we had exceptional third quarter financial results and achieved some semational improvements over last year. We are on a great trajectory. 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 very strong with our firm order backlog at the end of the third quarter worth about $775 million in revenue, respecting a backlog of over 5,200 buses. That's almost seven months of firm order backlog out of current sales rate. We raised prices considerably over the last two years, and the average third quarter selling price per bus in fiscal 24 was an outstanding 13% higher than a year ago.

Philip Horlock: Overall, we had exceptional third-quarter financial results and achieved transformational improvements over last year. We are on a great trajectory. On the right-hand side of the slide, you can see some of the operating highlights for the business.

Speaker Change: They are recognized as receivables in Q3.

Speaker Change: Overall, we had exceptional third quarter financial results and achieved transformational improvements over last year. We are on a great trajectory.

Speaker Change: On the right-hand side of the slide, you can see some of the operating highlights for the business.

Philip Horlock: As I mentioned earlier, demand continues to be very strong, with our firm order backlog at the end of the third quarter worth about $775 million in revenue, reflecting a backlog of over 5,200 buses. That's almost seven months of firm order backlog at our current sales rate. We have raised prices considerably over the last two years, and the average third quarter selling price per bus in fiscal 24 was an outstanding 13% higher than a year ago. That's about a $17,000 increase in average selling price per book.

Speaker Change: As I mentioned earlier, demand continues to be very strong, with our firm order backlog at the end of the third quarter worth about $775 million in revenue, reflecting a backlog of over 5,200 buses.

Speaker Change: That's almost seven months of firm order backlog on our current sales rate.

Speaker Change: we raised prices considerably over the last two years and the average third quarter selling price for bus in fiscal twenty-four was an outstanding thirteen percent highide in a year ago that's about a seventeen thousand dollar increase in average selling price for bus

Phil Horlock: That's about a $17,000 increase in average selling price per bus. Part sales total $25 million in Q3, representing a strong 6% growth over last year, and that's also consistent with the growth we saw in the first half of 24. 2012 powered busters, they're represented about 59% of our total unit sales in the third quarter, and we are running at a very strong 60% of sales mix through the first nine months of the fiscal year. We continue to be the clear leader in this space. No other major school bus manufacturer comes even close to those numbers.

Philip Horlock: Parts sales totaled $25 million in Q3, representing a strong 6% growth over last year, and that's also consistent with the growth we saw in the first half of 2014. Turning to Alternative Powered Busters, they represented about 59% of our total unit sales in the third quarter. And we are running at a very strong 60% of the sales mix through the first nine months of the fiscal year. We continue to be the clear leader in this space.

Speaker Change: Parts sales totaled $25 million in Q3, representing a strong 6% growth over last year, and that's also consistent with the growth we saw in the first half of 24.

Speaker Change: Turning to Alternative Powered Busters, they're represented about 59% of our total unit sales in the third quarter and we are running at a very strong 60% of sales mix through the first nine months of the fiscal year.

Philip Horlock: No other major school bus manufacturer comes even close to those numbers. EV buses are part of that alternative power mix, and in the third quarter, EV bookings increased by 38% over last year. Once again, we sold over 200 EVs in a quarter. That represents a very strong mix at 9% of our total sales compared with 7% in last year's third quarter. Additionally, we left the quarter with a record Q3 backlog of 567 EVs, which is a very strong 11% share of our total backlog.

Speaker Change: We continue to be the clear leader in this space. No other major school bus manufacturer comes even close to those numbers.

Phil Horlock: EV bus is a part of the alternative power mix, and in the third quarter, EV book is increased by 38% over last year. Once again, we saw over 200 EVs in a quarter. That represents a very strong mix at 9% of our total sales, compared with 7% in last year's third quarter. Additionally, we left the quarter with a record Q3 backlog of 567 EVs, which is a very strong 11% share of our total backlog. Now, that's more than $180 million in revenue, and the impressive 17% higher than the backlog we had at the end of the second quarter.

Speaker Change: EV buses are part of that alternative power mix, and in the third quarter, EV bookings increased by 38% over last year. Once again, we've sold over 200 EVs in a quarter.

Speaker Change: That represents a very strong mix at 9% of our total sales compared with 7% in last year's third quarter.

Speaker Change: Additionally, we left the court with a record Q3 backlog of 567 EVs, which is a very strong 11% share of our total backlog.

Philip Horlock: Now that's worth more than $180 million in revenue, and the impressive 17% higher than the backlog we had at the end of the second quarter, clearly will benefit substantially from the first year of funding from the EPA's $5 billion Clean School Bus Program. I'll come back to the status of the second year of this program, which comprises two rounds, and we expect significant orders and deliveries from those two rounds in fiscal 25 and fiscal 26. On the labor front, I am really pleased with the outcome of our first collective bargaining agreement with the United Steelworkers' Union, which now represents our hourly employees and was completed in just less than a year.

Speaker Change: Now, that's worth more than $180 million in revenue and the impressive 17% higher than the backlog we had at the end of the second quarter.

Phil Horlock: Clearly, we're benefiting substantially from the first year of funding from the EPA's $5 billion Clean School Bus Program. Our couple later, the status of the second year of this program, which comprises of two rounds. And we expect significant orders and deliveries from those two rounds in fiscal 25 and fiscal 26.

Phil Horlock: On the labor front, I am really pleased with the outcome of our first collective bargaining agreement with the 90 Steel Workers Union, which now represents our hourly employees, and was completed in just less than a year. Razvan will summarize the details of the program a little later, but this is truly a win-win for Bluebird and for employees, and will look forward to a collaborative and stable partnership that benefits all.

Philip Horlock: Razvan will summarize the details of the program a little later, but this is truly a win-win for Blue Bird and for our employees, and we look forward to a collaborative and stable partnership that benefits all. In regard to future investment expansion plans, I'm very excited about being awarded an $80 million grant by the Department of Energy to increase EV and overall production of our Type D bus, allowing us to expand single shift capacity of school buses from 10,000 buses annually to 14,000 buses.

Phil Horlock: In regard to future investment expansion plans, I'm very excited with being awarded an $80 million grant by the Department of Energy to increase EV and overall production of our tight D bus, allowing us to expand single shift capacity of school buses from 10,000 buses annually to 14,000 buses. I will cover the significant growth initiative in more detail a little later.

Philip Horlock: I will cover the Significant Growth Initiative in more detail a little later. And finally, on the back of our third-quarter results, we are once again raising our four-year guidance for adjusted EBITDA, net sales revenue, and adjusted free cash flow. Most notably, we're increasing adjusted EBITDA at the midpoint of the range by $20 million, with guidance now at $175 million for the full year. That represents a really strong margin of 13.3%, which is now 5.5 percentage points higher than last year.

Speaker Change: I'll cover the significant growth initiative in more detail a little later.

Phil Horlock: And finally, on the back of our third quarter results, we are once again raising full-year guidance for just a EBIDAR, net sales revenue, and adjusted pre-cash flow. Most notably, we're increasing adjusted EBIDAR at the midpoint of range by $20 million, with guidance now at 175 million for the full year. That represents a really strong margin of 13.3%, which is then standing 5.5% each point higher than last year. This is our sixth quarter in succession that we have beaten and raised our guidance, with expected outcome being record-fully of results in fiscal 24. In fact, at midpoint of guidance, we are now at double the profit we achieved in 2023, which was a then record.

Speaker Change: And finally on the back of our third quarter results. We are once again raising full year guidance for adjusted EBITDA net sales revenue and adjusted free cash flow.

Speaker Change: Most notably we are increasing adjusted EBITDA at the midpoint of range by $20 million with guidance now with $175 million for the full year.

Speaker Change: That represents a really strong margin of 13, 3%, which is now standing five five percentage points higher than last year.

Philip Horlock: This is the sixth quarter in succession that we have beaten and raised our guidance, with the expected outcome being a record full year of results in fiscal 24. In fact, at the midpoint of guidance, we are now at double the profit we achieved in 2023, which was a then record. Importantly too, we have raised our longer-term margin outlook from 14% to 15% as we continue to solidify and build on our recent operating and financial performance, with an all-time fourth-record profit in the third quarter, reflecting a 14.5% just-at-EBITDA margin. I'm incredibly proud of our team's accomplishments. Let me now walk you through the highlights of our plans for the $80 million DOE grant that we were awarded just last month. Turning to slide 8.

Speaker Change: This is our sixth quarter in succession that we have beaten and raised our guidance with expected outcome being record full year results in fiscal 2004 in fact, our midpoint of guidance. We are now at double the profit we achieved in 2023, which was a then record.

Phil Horlock: Importantly, too, we have raised our longer-term margin outlook from 14% to 15%, as we continue to solidify and build on our recent operating and financial performance.

Speaker Change: Importantly, too we have raised our longer term margin outlook from 14% to 15% as we continued to solidify and build on our recent operating and financial performance.

Phil Horlock: with an all-time quarterly record profit in the third quarter, reflecting a 14.5% just at EBITDAM margin, I'm incredibly proud of our team's accomplishments. Let me now walk you through the highlights of our plans for the $80 million DOE grant that we were awarded just last month, turning on to slide eight. Blue Bird is one of 11 companies to be awarded a grant by the DOE under the MESC program. That is the Manifactric and Energy Supply Chains Office of the DOE. Awards were based on convertive hostility that produced combustion engine-based products to one that produces EV products.

Speaker Change: With an all time quarterly record profit in the third quarter, reflecting a 14, 5% adjusted EBITDA margin I'm incredibly proud of our team's accomplishments.

Speaker Change: Let me now walk you through the highlights of our plans for the $80 million Grant that we were awarded just last month turning on to slide eight.

Philip Horlock: Blue Bird is one of 11 companies to be awarded a grant by the DOE under the MESC program, which is the Manufacturing and Energy Supply Chain Office of the DOE. Awards were based on converting a facility that produced combustion engine-based products to one that produces EV products. In our case, we're converting our former Wunderlodge RV production facility. The grant award of $80 million represents 50% of the capital required to build a 600,000-square-foot Type D and EB production facility located right across the street from our existing plant.

Speaker Change: Blue Bird is one of 11 companies to be awarded a grant by the Dow under the <unk> program that is the manufacturing and energy supply chains office of the Doa.

Speaker Change: Awards were based on converting facilities that produce combustion engine based products to one that produces EV products in our case, we're converting a former London RV production site.

Phil Horlock: In our case, we're converting our formal Wondrology RV production site. The grant award of $80 million represents 50% of the capital required to build a 600,000 square foot, type D and EV production facility located right across the street from our existing plant. So the total investment is around $160 million, with Blue Bird funding the other 50%. The build out will span around two years, with production loans expected by the end of '26 or early '27. Adding this facility would raise our total production capacity to around 14,000 buses on one ship and would provide for increased volume upside for the commercial chassis production when needed.

Speaker Change: The Grant award of $80 million represents 50% of the capital required to build a 600000 square foot type D and <unk> production facility located right across the street from our existing plan.

Philip Horlock: So the total investment is around $160 million, with Blue Bird funding the other 50%. The build-out will span around two years, with production launch expected by the end of 2026 or early 2027. Adding this facility would raise our total production capacity to around 14,000 buses on one shift and would provide for increased volume upside for the commercial chassis production when needed. The new plant would create approximately 400 new jobs, and the project includes a number of community benefits.

Speaker Change: So the total investment is around $160 million with Bluebird funding the other 50%.

Speaker Change: The Buildout will spun around two years with production launch expected by the end of 2006, our early 2007.

Speaker Change: Adding this facility would raise our total production capacity to around 14000 buses on one shift.

Speaker Change: Would provide for increased volume upside for the commercial chassis production when needed.

Phil Horlock: The new plant would create approximately 400 new jobs, and the project includes a number of community benefits. The project generates a great return on investment with a projected IRR of 28% and payback less than two years after the start of production. Now grant deployment is subject to finalize contract negotiations with the DOE through December this year, which are underway today and final board approval. We are very excited about the opportunities that this award presents as another pillar for our long-term profitable growth outlook. We will apprise of our progress at our next earnings call.

Speaker Change: The new plant would create approximately 400, new jobs and the project includes a number of community benefits.

Philip Horlock: The project generates a great return on investment with a projected IRR of 28% and payback less than two years after the start of production. Now, grant deployment is subject to finalized contract negotiations with the DOE through December this year, which are underway today, and final board approval. We are very excited about the opportunities that this award presents as another pillar for our long-term profitable growth outlook. We will apprise you of our progress on this during our next earnings call. I'd now like to hand it over to Razvan to walk through our Fiscal 24 third quarter financial results and updated guidance in more detail. We'll also be providing our first look at guidance for Fiscal 25.

Speaker Change: The project generates a great return on investment with a projected IRR of 28% and payback less than two years after startup production.

Speaker Change: Now Grand deployment is subject to finalize contract negotiations with the Doe through December this year, which are underway today and final board approval.

Speaker Change: We are very excited about the opportunities that this award presents as another pillar for our long term profitable growth outlook, we will apprise you of our progress at our next earnings call.

Razvan Radulescu: I'd now like to hand it over to Ransvan to walk through our fiscal 24 third quarter financial results and updated guidance in more detail.

Speaker Change: I would now like to hand, it over to <unk> to walk through our fiscal 'twenty four third quarter financial results and updated guidance in more detail. We'll also be providing our first look at guidance for fiscal 'twenty five.

Razvan Radulescu: We'll also be providing our first look at guidance of Fiscal 25.

Razvan Radulescu: Over to you, Ransvan. Thanks, Phil, and good afternoon. It's my pleasure to share with you the financial highlights from Bluebird's fiscal 2024 third quarter record results.

Speaker Change: But to your residents.

Razvan Radulescu: Thanks, Phil, and good afternoon. It's my pleasure to share with you the financial highlights from Blue Bird's fiscal 2024 third quarter record result. The quarter end is based on a close date of June 29, 2024, whereas the prior year was based on a close date of July 1, 2023. We will file the thank you today, August 7, after market close.

Phil Horlock: Thanks, Phil.

Speaker Change: And good afternoon, it's my pleasure to share with you the financial highlights from Blue Bird's fiscal 2024 third quarter quarterly results.

Razvan Radulescu: The quarter end is based on a close date of June 29th, 2024, whereas the prior year was based on a close date of July 1st, 2023. We will file the 10-Q today, August 7, after market close. Our 10-Q includes additional material and disclosures regarding our business and financial performance. We encourage you to read the 10-Q and the important disclosures that it contains. The appendix attached to this presentation includes the reconciliation of differences between GAAP and non-GAAP measures mentioned on this call, as well as other important disclaimers.

Speaker Change: Quarter end is based on a close date of June 29, 2024, whereas the prior year was based on a close date of July one 2023.

Speaker Change: We will file the 10-Q today August seven after market close.

Razvan Radulescu: Our Thank You includes additional material and disclosures regarding our business and financial performance. We encourage you to read the 10Q and the important disclosures that it contains. The appendix attached to today's presentation includes reconciliations of differences between gap and non-gap measures mentioned on this call, as well as other important disclaimers.

Speaker Change: Our 10-Q includes additional material and disclosure regarding our business and financial performance.

Speaker Change: We encourage you to read the 10-Q and the important disclosures that could contain.

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

Razvan Radulescu: To item is a summary of the fiscal 24 third quarter and year-to-date record result. It was another outstanding operating quarter for Bluebird, with somewhat limited and very well managed supply chain and labor challenges, and with high margin units driving both our top line and our bottom line results. We significantly beat the adjusted EBITDA general quarterly guidance provided in the last turning schools, and in fact, we deliver the best quarter ever for Blue Bird with 48.2 million adjusted EBITDA margin. Additionally, on a year-to-date basis, we triple the results of last year for a new record year-to-date of 141.6 million.

Razvan Radulescu: Slide 10 is a summary of the fiscal 24th quarter and year-to-date record results. It was another outstanding operating quarter for Blue Bird, with somewhat limited and very well managed supply chain and labor challenges, and with high-margin units driving both our top line and our bottom line results. We significantly beat the adjusted EBITDA general quarterly guidance provided in the last earnings call, and in fact, we delivered the best quarter ever for Blue Bird, with $48.2 million adjusted EBITDA margin. Additionally, on a year-to-date basis, we tripled the results of last year for a new record year-to-date of 141.6 million.

Speaker Change: Slide 10 is a summary of the fiscal 2000 for the third quarter and yesterday at our quarterly results.

Speaker Change: It was another outstanding operating quarter for Blue Bird with somewhat limited and very well managed supply chain and labor challenges and with higher margin units driving both our topline and our bottom line results with.

Speaker Change: We significantly beat the adjusted EBITDA agenda of our quarterly guidance provided in the last earnings call and in fact, we delivered our best quarter ever for Bluebird with $48 $2 million adjusted EBITDA margin.

Speaker Change: Additionally, on a year to date basis with three the results of last year for our newer aircraft year to date of $141 6 million.

Razvan Radulescu: The team continued to push hard and did again a fantastic job and generated 2151 unit sales volume, which was just above prior year Q3 volumes but is more complex type D and a higher number of EBITDA. Record Q3 consolidated net revenue of 333 million was 39 million or 13 percent higher than prior years, given by a slightly higher number of units, higher part sales, improved mix of type D and the lexic buses, and pricing actions that continued to materialize also in this quarter as expected. The adjusted EBITDA was an all-time quarterly record of 48 million, driven by high margins, increased part sales and margins, partly offset by increased labor and material costs.

Razvan Radulescu: The team continued to push hard and did, again, a fantastic job and generated 2,151 unit cells volume, which was just above prior year Q3 volumes, but with more complex type D and a higher number of EP buses. Record Q3 consolidated net revenue of $333 million was $39 million, or 13% higher than the prior year, given by a slightly higher number of units, higher part sales, an improved mix of type D and electric buses, and pricing actions that continue to materialize also in this quarter, as expected.

Speaker Change: The team continued to push hard and did again, a fantastic job and generated 2151 unit sales volume, which was just above prior year Q3 volumes Barclays multiple complex type D and a higher number of E&P buses.

Speaker Change: Record Q3, consolidated net revenue of $333 million or $39 million or 13% higher than prior year, driven by a slightly higher number of units higher product sales improved mix of type and electric buses and pricing actions that continue to materialize also in this quarter as expected.

Razvan Radulescu: Adjusted EBITDA was an all-time quarterly record of $48 million, driven by high margins, increased parcels, and margins, partly offset by increased labor and material costs. The adjusted free cash flow was negative $4 million, a $46 million reduction versus the prior year's third quarter.

Speaker Change: Adjusted EBITDA was an all time quarterly record of $48 million driven by higher margins increased product sales and margins, partially offset by increased labor and material costs.

Razvan Radulescu: The adjusted free cash flow was negative 24 million, a 46 million reduction versus the prior year-third quarter. This was due to increasing investment in working capital, mainly finished goods and accounts receivables, as we solved a larger number of buses to fleets and GSA in this quarter. We expect many of these units to turn into cash by the end of fiscal 24. Our liquidity position at the end of zero net debt position. On a year-to-date basis, in nine months we generated revenues close to 1 billion, triple the prior year-to-date adjusted EBITDA result to 142 million, and we deliver significant steps forward on our profitable growth path.

Speaker Change: The adjusted free cash flow was negative $4 million, a $46 million reduction versus the prior year third quarter.

Razvan Radulescu: This was due to increased investment in working capital, mainly finished goods and accounts receivables, as we sold a larger number of buses to fleets and GSA in this quarter. We expect many of these units to turn into cash by the end of fiscal 24. Our liquidity position at the end of this quarter was also at a record Q3 level, with $232 million, and we have close to a zero net debt position.

Speaker Change: This was due to increased investment in working capital mainly finished goods on the accounts receivable.

Speaker Change: <unk>, a larger number of boxes to fleets and GSA in this quarter.

Speaker Change: We expect many of these units to turn into cash by the end of fiscal 2004.

Speaker Change: Our liquidity position at the end of this quarter was also a third quarter tier three level with $232 million and we have close to zero net debt position.

Razvan Radulescu: On a year-to-date basis, in nine months, we generated revenues close to $1 billion, tripled the prior year-to-date adjusted EBITDA result to $142 million, and we delivered significant steps forward on our profitable growth path. Moving on to slide 11, as mentioned before by Phil, our backlog at the end of Q3 has grown and continues to be very strong at over 5,200 units, including over 11% EVs. Breaking down the Q3 record $333 million in revenue into our two business segments, the bus net revenue was $308 million, up by $38 million versus the prior year.

Speaker Change: On a year to date basis in nine months, we generated revenues close to $1 billion triple the prior year to date adjusted EBITDA results of $142 million and we delivered a significant steps forward on our profitable growth path.

Razvan Radulescu: Moving on to slide 11, as mentioned before by Phil, our backlog at the end of Q3 has grown and continues to be very strong at over 5,200 units, including over 11 percent EV. Breaking down the Q3 record, 333 million in revenue into our two business segments, the vast net revenue was 308 million, up by 38 million versus prior year. Our average vast revenue per unit increased from 127,000 to 143,000, or 13 percent, which was largely the result of pricing action taken over the past year, as well as the higher mix of type D and electric buses.

Razvan Radulescu: Our average bus revenue per unit increased from $127,000 to $143,000, or 13 percent, which was largely the result of pricing actions taken over the past year, as well as a higher mix of Type D and electric buses. E cells in Q3 were also strong at 204 units, or 56 more than last year, a 38% increase year-over-year.

Speaker Change: Moving on to slide 11, as mentioned before by Phil our backlog at the end of Q3 has grown and continues to be very strong at over 50 to 100 unit, including over 11%.

Speaker Change: Breaking down our Q3 at $333 million in revenue into our two business segments. The vast net revenue was $308 million up by $38 million versus prior year.

Speaker Change: Our average bus revenue per unit increased from 127000 to 143000, or 13%, which was largely the result of pricing actions taken over the past year as well as a higher mix of type D and electric buses.

Razvan Radulescu: EV cells in Q3 were also strong at 204 units, or 56 more than last year, a 38 percent increase year over year. Part revenue for the quarter was 25 million, representing a growth of 1 million or 5 percent, compared to the already very strong prior year levels. This great performance was in part due to increased demand for our parts of the free-to-steel aging, as well as applied chain-driven pricing actions and throughput improvements. Growth margin for the quarter was a record 20.8 percent, or 5.3 percentage points higher than last year, due to our sustained operational performance and our pricing overtaking the inflation record in the last four quarters.

Speaker Change: <unk> sales in Q3 were also stronger 240 units or 56 more than last year, a 38% increase year over year.

Razvan Radulescu: Part revenue for the quarter was $25 million, representing a growth of $1 million or 5% compared to the already very strong prior year level. This great performance was in part due to increased demand for our parts as the fleet is still aging, as well as supply chain-driven pricing actions and throughput improvements. Gross margin for the quarter was a record 20.8%, or 5.3 percentage points higher than last year due to our sustained operational performance and our pricing overtaking inflationary costs in the last four quarters.

Speaker Change: Product revenue for the quarter was $25 million, representing a growth of $1 million or 5% compared to the already very strong prior year levels.

Speaker Change: Great performance was in part due to increased demand for our part of the fleet is still aging as well as supply chain driven pricing actions and throughput improvement.

Speaker Change: Gross margin for the quarter was a record of 28% or five three percentage points higher than last year due to our sustained operational performance and our pricing overtaking the inflationary cost in the last four quarters.

Razvan Radulescu: In fiscal 2043, adjusted in the tinkam was a record 31 million, double the level of the prior year, a 60 million in 21 year over year. Adjusted EBITDA of 40 million or 14.5% was up, compared with the prior year by 90 million, an increase of over 4% is point. Record adjusted diluted earnings per shares of 91 cents was up 47 cents versus the prior year, more than double. Slide 12 shows the work from fiscal 23 to 3 adjusted EBITDA to the fiscal 24 to 3 result. Starting on the left of 29.27 million, the impact of the bar segment gross profit in total was 22.3 million.

Razvan Radulescu: In fiscal 2043, adjusted net income was a record $31 million, double the level of the prior year, a $16 million improvement year-over-year. Adjusted EBITDA of 14 million, or 14.5%, was up compared with the prior year by 19 million, an increase of over 4 percentage points. Record adjusted diluted earnings per share of $0.91 was up $0.47 versus the prior year, more than double.

Speaker Change: In fiscal 2043 of adjusted net income was a record $31 million double the level of the prior year of $16 million equivalents per year.

Speaker Change: Adjusted EBITDA of $48 million or 14, 5% was up compared with the prior year by $19 million, an increase of over four percentage points.

Speaker Change: Record adjusted diluted earnings per shares of <unk> 91 was up 47 versus the prior year more than doubled.

Razvan Radulescu: Slide 12 shows the walk from fiscal 23 Q3 adjusted EBITDA to the fiscal 24 Q3 results. Starting on the left, at $29.7 million, the impact of the bus segment gross profit was $22.3 million, split between volume and pricing effects, net of material cost increases of $25 million, offset by labor cost increases of negative $2.7 million. The favorable development in the past segment gross profit was $1.2 million, driven by higher sales at very good margins, as mentioned earlier in the call. These great improvements were slightly offset by increases in our other expenses and fixed costs, mainly engineering and personnel-related, of negative $5 million, as discussed in the last earnings call.

Speaker Change: Slide 12 shows the walk from fiscal 2000, <unk> Q3, adjusted EBITDA for the fiscal 2000 for Q3 results.

Speaker Change: Starting on the left of $29 7 million the impact of the bus segment gross profit in total was $22 3 million.

Razvan Radulescu: Species in volume and pricing effects net of material cost increases of 25 million, offset by labor cost increases of negative 2.7 million. The favorable development in the past segment gross profit was 1.2 million, given by higher sales was very good margins, as mentioned earlier in the call. These great improvements were slightly offset by increases in our other expenses and six costs mainly engineering and personal related of negative 5 million, as discussed in the last turning. The sum of all of the above mentioned development drives our record fiscal 24 to 3 reported adjusted EBITDA result of 48.2 million, or 14.5%.

Speaker Change: Between volume and pricing effect net of material cost increases of $25 million.

Speaker Change: Offset by labor cost increases of negative $2 7 million.

Speaker Change: The favorable development in the product segment gross profit was $1 2 million driven by higher sales at very good margins as mentioned earlier in the call.

Speaker Change: He has great improvements were slightly offset by increases in our other expenses and fixed cost mainly engineering and personnel related of negative $5 million as discussed in the last earnings call.

Razvan Radulescu: The sum of all of the above-mentioned developments drives our record fiscal 2024 Q3 reported adjusted EBITDA results of 48.2 million, or 14.5 percent. Moving on to slide 13, we have extremely positive developments year over year also on the balance sheet. We ended the quarter with $88 million in cash and reduced our debt by $39 million over the last four quarters. In fact, our net debt position was once again close to zero at the end of this quarter.

Speaker Change: Some or all of the above mentioned developments drives our record fiscal 2000 for Q3 reported adjusted EBITDA result of $48 2 million or 14, 5%.

Razvan Radulescu: Moving on to slide 13, we have extremely positive developments year over year also on the balance sheet. We ended the quarter with 88 million in cash and reduced our debt significantly by 39 million over the last four quarters. In fact, our net debt position was once again close to zero at the end of this quarter. Our liquidity is at very strong at 242 million at the end of fiscal 24 to 3 and 98 million increase compared to a year ago. The operating cash flow was 1 million in this quarter, driven by an improvement in operations and margins, offset by an increase in finished goods and the count receivables due to a large number of fleet and GSA units built this quarter.

Speaker Change: Moving onto slide 13, we have extremely positive developments year over here also on the balance sheet.

Speaker Change: We ended the quarter was $88 million in cash and reduce our debt significantly by $39 million over the last four quarters.

Speaker Change: In fact, our net debt position was once again close to zero at the end of this quarter.

Razvan Radulescu: Our liquidity is very strong at $242 million at the end of fiscal 2043, a $98 million increase compared to a year ago. The operating cash flow was $1 million in this quarter, driven by an improvement in operations and margins, offset by an increase in finished goods and account receivables due to the large number of fleet and GSA units built this quarter. For the fleet and the government GSA units, the working capital flow is different than for the dealer business in two main ways.

Speaker Change: Our liquidity is very strong at $242 million at the end of fiscal 2000 for Q3 and $98 million increased compared to a year ago.

Speaker Change: The operating cash flow was $1 million in this quarter driven by an improvement in operations and margins offset by an increase in finished goods and the accounts receivables due to the large number of fleet and GSA units this quarter.

Razvan Radulescu: For the fleet and the government GSA units, the working capital flow is different than the dealer business in two main ways. First, the bosses are in finished goods inventory for an additional 2 to 6 weeks while they are transported and inspected for delivery before they get into customer hands, which is when we recognize the sale. Second, fleet and GSA bosses generally have longer payment terms than our dealer business, which could be 30 days or more depending on the contract. A detailed comparison chart of this flow is available in the appendix of today's presentation.

Speaker Change: For the fleet and the government GSA units the working capital flow is different than the dealer business in two main ways.

Razvan Radulescu: First, the buses are in finished goods inventory for an additional two to six weeks while they are transported and inspected for delivery before they get into customer hands, which is when we recognize the sale. Second, fleet and GSA buses generally have longer payment terms than our dealer business, which could be 30 days or more, depending on the contract. A detailed comparison chart of these flows is available in the appendix of today's presentation.

Speaker Change: The boxes are in finished goods inventory for an additional two to six weeks, while they are transported and inspected for delivery before they get into customer hands, which is when we recognize the sale.

Speaker Change: Second fleet on GSA boxes, generally have longer payment terms than our dealer business, which could be 30 days or more depending on the contract.

Speaker Change: A detailed comparison chart of this flows is available in the appendix of today's presentation.

Razvan Radulescu: Slide 14 shows the sustainable results achieved by our team over the last four quarters, generating over 180 million in adjusted EBDA or 14%. Our revenues have been consistently above 300 million every quarter, partially due to pricing realization combined with a strong increase in sales versus last year. We have beaten, raised our conservative guidance for the last six quarters in a row due to the outstanding execution of our plans by our teams and despite the still difficult supply chain environment with select suppliers. The last four quarters have been in the 13 to 15 percent adjusted EBITDA range, demonstrating that we are delivering now consistently double-digit performance and at the best-in-class levels.

Razvan Radulescu: Slide 14 shows the sustainable results achieved by our team over the last four quarters, generating over $180 million in adjusted EBITDA, or 14%. Our revenues have been consistently above $300 million every quarter, partially due to pricing realizations, combined with a strong increase in EV sales versus last year. We have beaten and raised our conservative guidance for the last six quarters in a row due to the outstanding execution of our plans by our team and despite the still difficult supply chain environment with select suppliers.

Speaker Change: Slide 14 shows the sustainable the results achieved by our team over the last four quarters generating over $180 million and adjusted EBITDA or 14%.

Speaker Change: Our revenues have been consistently above $300 million every quarter, partially due to pricing realization combined with a strong increase in DSO versus last year.

Speaker Change: We have beaten raised our conservative guidance for the last six quarters in a row due to the outstanding execution of our plans by our team and despite the still difficult supply chain environment with select suppliers.

Razvan Radulescu: The last four quarters have been in the 13% to 15% adjusted EBITDA range, demonstrating that we are now consistently delivering double-digit performance and at a best-in-class level. Finally, it is important to note that our pricing curve has been ahead of our costing curve in the last four quarters, preparing us for the significant investments lined up for 2025 and the contractual inflation factors expected ahead of us, some of which already impacted our margins in fiscal 24Q3, as expected.

Speaker Change: The last four quarters have been in the 13% to 15% adjusted EBITDA range.

Speaker Change: Illustrating that we are delivering now consistently double digits for four months and are the best in class levels.

Razvan Radulescu: Finally, it is important to note that our pricing curve has been ahead of our costing curve in the last four quarters, preparing us for the significant investment lined up for 2025 and the contractual inflation factors expected ahead of us, some of which already impacted our margins in fiscal 24 Q3, as expected.

Speaker Change: Finally, it is important to note that our pricing curve has been ahead of our cost incurred in the last four quarters.

Speaker Change: Joining us for the significant investments lined up for 2025.

Speaker Change: And the contractual inflation factors expected ahead of us some of which already impacted our margin in fiscal 2000 for Q3 as expected.

Razvan Radulescu: Before we talk about the updated guidance for fiscal 24 and our updated mid and long-term outlook, on slide 15 we wanted to share with you the results of our eared-long negotiations with the USW on our first collective bargaining agreement. Overall, we believe we have achieved the win-win result, which makes Blue Bird an even more attractive place to work in Middle Georgia and will give us the talented and stable workforce required for our profitable growth plan. We have now a three years contract from June 2024 to June 2027 with approximately 1,500 people in scope. The average wage increase in the first year is 12 percent, followed by 4 percent in year two and another 4 percent in year three.

Razvan Radulescu: Before we talk about the updated guidance for fiscal 24 and our updated mid- and long-term outlook, on slide 15, we wanted to share with you the results of our year-long negotiations with the USW on our first collective bargaining agreement. Overall, we believe we have achieved a win-win result, which makes Blue Bird an even more attractive place to work in Middle Georgia and will give us the talented and stable workforce required for our profitable growth plan.

Speaker Change: Before I talk about the updated guidance for fiscal 'twenty, four and our updated mid and long term outlook on slide 15, we wanted to share with you the results of our year long negotiations with the USW on our first collective bargain agreement.

Speaker Change: Overall, we believe we have achieved a win win result, which makes <unk>, an even more attractive place to work in middle, Georgia and will give us the talented stable workforce required for our profitable growth plan.

Razvan Radulescu: We now have a three-year contract from June 2024 to June 2027, with approximately 1,500 people in scope. The average wage increase in the first year is 12%, followed by 4% in year two and another 4% in year three. We are also introducing profit sharing at 4% of net income once certain thresholds for profitability are met each year. We have also strengthened the company 401k contributions for employees. In total, the increased cost equals approximately 1% of the company's revenues on a run-rate, go-forward basis, and we intend to pass this to our customers over time through pricing action. In Q3, we recorded a number of one-time expenses, including the ratification bonus of $750 per employee paid in June and a two-off of our profit-sharing accrual.

Speaker Change: We have now three years contract from June 2024 to June 2027, with approximately 500 people in scope.

Speaker Change: The average wage increase in the first year is 12% followed by 4% in year, two and another 40% in year three.

Razvan Radulescu: We are also introducing profit sharing at 4 percent of net income; one certain threshold for profitability is net each year. We also strengthen the company 401k contributions for the employees. In total, the increased cost equals approximately 1 percent of the company revenues on a run rate go forward basis, and we intend to pass this to our customers over time through pricing action. In Q3, we recorded a number of one-time expenses, including the ratification bonus of $750 per employee paid in June and a two-up of our profit sharing accruals. In summary, we believe our CBA provides us with the necessary workforce and stability to continue to grow profitably in the years to come.

Speaker Change: We are also introducing profit sharing at 4% of net income once certain thresholds for profitability automate each year.

Speaker Change: We also strengthened the company 401K contributions for the employees.

Speaker Change: In total the increased cost equals approximately 1% of the company revenues on a run rate go forward basis, and we intend to pass this to our customers over time through pricing actions.

Speaker Change: In Q3, we recorded a number of onetime expenses, including the ratification bonus of $750 per employee paid in June and a true up of our profit sharing accrual.

Razvan Radulescu: In summary, we believe our CBA provides us with the necessary workforce and stability to continue to grow profitably in the years to come. On slide 16, we want to share with you our updated fiscal 24 guidance. We are increasing our revenue to $1.315 billion, and we are significantly increasing our adjusted EBITDA by $20 million to $175 million, or 13%, with a range of $170 to $180 million. This is an increase of 100% over the prior year record results, doubling our prior best year ever.

Speaker Change: In summary, we believe our CBA provides us with the necessary workforce and stability to continue to grow profitably in the years to come.

Razvan Radulescu: On slide 16, we want to share with you our updated fiscal 24 guidance. We are increasing our revenue to 1.315 billion, and we have significantly increased our adjusted EBDA by 20 million to 175 million, or 13 percent, with a range of 170 to 180 million. This is an increase of 100 percent over the prior year record results, doubling our prior best year ever. We are reducing our revenue sales outlook for the year by about 100 units due to the timing of EPA orders and requested delivery timing. We will cover this in more detail in the outlook.

Speaker Change: On slide 16, we want to share with you our updated fiscal 2004 guidance, we are increasing our revenue to $1 31, 5 billion and we are significantly increasing our adjusted EBITDA by $20 million to $175 million or 13% with a range of $170 million to $180 million.

Speaker Change: This is an increase of 100% over the prior year record results doubling our prior best year ever.

Razvan Radulescu: We are reducing our review sales outlook for the year by about 100 units due to the timing of EPA orders and requested delivery time. Phil will cover this in more detail in the outcome. Given this and cost factor headwinds anticipating Q4, we expect revenues of $300 to $330 million and increased adjusted EBITDA in the range of $30 to $40 million, or 10 to 12%. Moving to slide 17.

Speaker Change: We are reducing our outlook for the year by about 100 units due to the timing of EPA order requested delivery timing.

Speaker Change: <unk> will cover this in more detail in the outlook.

Razvan Radulescu: Given this and cost factor headlines anticipating in Q4, we expect in the last quarter revenues of 300 to 330 million, and increase the adjusted EBDA in the range of 30 to 40 million, or 10 to 12 percent.

Speaker Change: Given this and cross sector headwinds anticipating in Q4, we expect in the last quarter revenues of $300 million to $330 million and increased adjusted EBITDA in the range of $30 million to $40 million or 10% to 12%.

Razvan Radulescu: Moving to slide 17 in summary, we are forecasting a significant improvement year over year with revenue up 16 percent to over 1.3 billion, the adjusted EBDA in the range of 170 to 180 million, and the adjusted threshold of 80 to 90 million in line with our typical target of approximately. As a reminder, we are moving from accelerated filers to a large accelerated filer status at the end of fiscal year 2024, which will reduce our form 10-K filing requirements from 75 to 60 days. As a result, we plan to file our 10-K and hold our fiscal year and earnings call on Monday, November 25, 2024, as announced in the last turning school.

Razvan Radulescu: In summary, we are forecasting a significant improvement year over year, with revenue up 16% to over $1.3 billion, adjusted EBITDA in the range of $170 to $180 million, and adjusted free cash flow of $80 to $90 million, in line with our typical target of approximately 50% of adjusted EBITDA. As a reminder, we are moving from an accelerated filer to a large accelerated filer status at the end of fiscal year 2024, which will reduce our Form 10-K filing requirements from 75 to 60 days.

Speaker Change: Moving to slide 17 in summary, we are forecasting a significant improvement year over year with revenue up 16% to over $1 3 billion adjusted EBITDA in the range of $170 million to $180 million and adjusted free cash flow of $80 million to $90 million in line with our typical.

Speaker Change: Target of approximately 50% of adjusted EBITDA.

Speaker Change: As a reminder, we are moving from accelerated filer to a large accelerated filer status by the end of fiscal year, 2024, which will reduce our Form 10-K filing requirements from 75% to 60 days.

Razvan Radulescu: As a result, we plan to file our 10-K and hold our fiscal year-end earnings call on Monday, November 25, 2024, as announced in the last earnings call. On slide 18, we wanted to give you a first look at Fiscal 25 in terms of preliminary guidance. We have a number of both tailwinds and headwinds, and we maintain a cautious stance, yet maybe a bit less conservative than in previous years. As tailwinds, we have strong demand, stable pricing, and a still very high industry backlog.

Speaker Change: As a result, we plan to file our 10-K and hold our fiscal year end earnings call on Monday November 22024, as announced in the last earnings call.

Razvan Radulescu: On Friday, 18, we wanted to give you a first look at fiscal 25 in terms of preliminary guidance. We have a number of both tailwinds and headwinds, and we maintain a cautious stance, yet maybe a bit less conservative than in the prior years. As tailwinds, we have strong demands, stable pricing, and still very high industry backlogs. We have now the only propane fuel school bus in the industry with clean fuel and resting class total cost of ownership. We are also leading in the EV segment with close to 2,000 buses on the road, and the orders from round 2 and 3 of the EPA in the school bus program will significantly improve our sales mix in the second half of fiscal 25.

Speaker Change: On slide 18, we wanted to give you a first look at fiscal 'twenty five in terms of preliminary guidance, we have a number of both tailwind and headwinds and we maintain a cautious stance, yes, it may be a bit less conservative than in the prior years.

Speaker Change: As tailwind do we have strong demand stable pricing and still very high industry backlog.

Razvan Radulescu: We now 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 with close to 2,000 buses on the road, and the orders from round two and three of the EPA Clean School Bus Program will significantly improve our sales mix in the second half of fiscal 25. But Hedwin's supply chain is still fragile at times while improving overall, and they have made great progress in removing bottlenecks for some key components. However, material costs and supplier inflation pressures are still present.

Speaker Change: We have now the only propane fuel school bus in the industry with clean fuel and best in class total cost of ownership.

Speaker Change: We are also leading in the EV segment with close to 2000 buses on the road and the orders from round two and three of the EPA can school bus program will significantly improve our sales mix in the second half of fiscal 'twenty five.

Razvan Radulescu: But headwinds, supply chain is still fragile at times while improving overall, and we have made great progress in removing bottlenecks for some key components. The material costs and supplier inflation pressures are still present. And finally, we expect still relatively low EV production and sales to the first half of fiscal 25, but the infrastructure plans are being worked on, and there's many customers requesting EV delivery before school starts in the summer of 2025. While it's still very early, we are modeling the range of scenarios as follows. Units in the range of 9,000 to 9,500 units, EV sales in the range of 1,000 to 1,300 units back and loaded in the second half, revenues in the 1.4 to 1.5 billion, or approximately 10% increase over fiscal 24, also back and loaded.

Speaker Change: As headwinds supply chain is still fragile at times, while improving overall and we have made great progress in removing bottlenecks for some key components.

Speaker Change: The material cost and supplier inflation pressures are still present.

Razvan Radulescu: And finally, we expect relatively low EV production and sales in the first half of Fiscal 25, as the infrastructure plans are being worked on, and with many customers requesting EV delivery before school starts in the summer of 2025. While it's still very early, we are modeling a range of scenarios as follows, with units in the range of 9,000 to 9,500 units. EV sells in the range of 1,000 to 1,300 units, back and loaded in the second half.

Speaker Change: And finally, we expect to relatively low EV production and sales through the first half of fiscal 'twenty five as the infrastructure plans that are being worked on and there is many customers requesting EV delivery before school starts in the summer of 2025.

Speaker Change: While it's still very early we are modeling a range of scenarios as follows.

Speaker Change: Earnings in the range of 90 to 9500 units.

Speaker Change: <unk> sales in the range of one to 1300 units backend loaded in the second half.

Razvan Radulescu: Revenues in the $1.4 to $1.5 billion, or approximately 10% increase over fiscal 24, also back unloaded. And adjusted EBITDA of approximately 13% and in the range of $180 to $200 million, approximately 10% year-over-year improvement. We'll provide more insight into Fiscal 25 during our next earnings call on November 25. On slide 19, we also wanted to update you on our raised long-term outlook and our expected path to get there. Looking at fiscal 24 updated guidance, thanks to hard work from all our teams and great execution of our strategy, we have already delivered way ahead of schedule the 13% adjusted EBITDA margin we had highlighted in the past as our long-term aspiration.

Speaker Change: Revenues in the one 4% to $1 5 billion or approximately 10% increase over fiscal 'twenty four also backend loaded.

Razvan Radulescu: And the just review is our approximate percent and in the range of 1,800 to 200 million, approximately 10% year-over-year improvement.

Speaker Change: And adjusted EBITDA of approximately 13% and in the range of $180 million to $200 million approximately 10% year over year improvement.

Razvan Radulescu: We will provide more insight into fiscal 25 during our next starting school on November 25.

Speaker Change: We will provide more insight into fiscal 'twenty five during our next earnings call on November 2015.

Razvan Radulescu: On slide 19, we wanted to also update you on our raised long-term outlook and our expected path to get there. Looking at fiscal 24 updated guidance, to hard work from all our teams and great execution of our strategy, we already delivered way ahead of schedule of the 13% adjusted EBITDA margin. We had highlighted in the past the long-term aspiration. Therefore, today we are raising the bar again for our outlook as follows. fiscal 25 shows 190 million and 13% plus adjusted EBITDA margin and replaces the previous short term outlook. Looking to the medium term in fiscal 26 or fiscal 27, our EV growth and operational improvements on one shift with the existing plan can support volumes of up to 10,000 units, including degrees of 25,500 units, generating revenues of 1.6 billion and with adjusted EBITDA of 225 million or 14%.

Speaker Change: On Slide 19, we wanted to also update you on our raised long term outlook and our expected path to get there.

Speaker Change: King at fiscal 'twenty for updated guidance through hard work from all our teams and great execution of our strategy. We have already delivered way ahead of schedule. The 13% adjusted EBITDA margin, we had highlighted in the past with our long term aspiration.

Razvan Radulescu: Therefore, today we are raising the bar again for our outlook as follows. Fiscal 25 shows $190 million and 13% plus adjusted EBITDA margin and replaces the previous short-term outlays. Looking to the medium term, in fiscal 26 or fiscal 27, our EV growth and operational improvements on one shift with the existing plan can support volumes of up to 10,000 units, including EVs of 2,500 units, generating revenues of $1.6 billion and with adjusted EBITDA of $225 million, or 14%.

Speaker Change: Therefore today, we are raising the bar again for our outlook as follows.

Speaker Change: Fiscal 'twenty five shows $190 million and 13% plus adjusted EBITDA margin and replaces the previous short term outlook.

Speaker Change: Looking to the medium term in fiscal 2000, <unk> or fiscal 'twenty, seven our EBIT growth and operational improvements on one shift with the existing plan can support volumes of up to 10000 units, including reviews of 2500 units generating revenues of $1 6 billion and was adjusted EBITDA of 202.

Speaker Change: $95 million or 14%.

Phil Horlock: Beyond 2027, our long-term target remains to drive profitable growth, now to even higher levels. The worth 1.5 to 2 billion in revenue, comprising of 11,000 to 12,000 units, of which 4,000 to 5,000 are EVs, and generate EBITDA of 270 to 300 million, or 14.5% to 15% at best in plus levels. We are incredibly excited about Blue Bird's future, and now we are turning back over to Phil.

Razvan Radulescu: Beyond 2027, our long-term target remains to drive profitable growth now to even higher levels toward $1.85 to $2 billion in revenue, comprising 11,000 to 12,000 units, of which 4,000 to 5,000 are EVs, and generate EBITDA of $270 to $300 million, or 14.5% to 15% at best-in-class levels. We are incredibly excited about Blue Bird's future, and now I'll turn it back over to Phil.

Speaker Change: Beyond 2027, our long term target remains to drive profitable growth now to even higher levels towards one five to 2 billion in revenue comprising of 11000 to 12000 units of which 4000 to 5000, <unk> and generate EBITDA of 270 to 300 million or.

Speaker Change: 14, 5% to 15%, but the best in class levels.

Phil Horlock: We are incredibly excited about <unk> future and I'll turn it back over to Phil.

Phil Horlock: Well, thanks, Razvan. As usual, that was a great explanation of our quarterly results and our forward-year outlook. Let's move on to slide 21.

Phil Horlock: Well, thanks restaurant as usual that's a great explanation of our quarterly results and our full year outlook. So let's move on to slide 21.

Phil Horlock: I coupled this slide with our two prior earnings calls, so I won't spend much time on it today as our priorities and our strategy are unchanged, as they should be. The chart on the left illustrates the three priorities that continue to drive us: taking care of our employees, delivering our customers and our dealers, and delivering profitable growth. The chart on the right provides more texture and the specific strategies that we are pursuing that both align with our priorities and drive our four-year growth plans. At the center is our ultimate objective to drive sustained, profitable growth.

Philip Horlock: I covered this slide on our two prior earnings calls, so I won't spend much time on it today as our priorities and our strategy are unchanged, as they should be. The chart on the left illustrates the three priorities that continue to drive us: taking care of our employees, delighting our customers and our dealers, and delivering profitable growth.

Phil Horlock: A couple of these funded our two prior earnings calls so I won't spend much time on it today as our priorities and our strategy are unchanged as they should be the chart on the left illustrates the three priorities that continue to drive us taking care of our employees.

Speaker Change: <unk>, our customers and our dealers and delivering profitable growth.

Philip Horlock: The chart on the right provides more detail around the specific strategies that we are pursuing that both align with our priorities and drive our four-year growth plan. At the center is our ultimate objective, to drive sustained, profitable growth. As you look at the margin accomplishments in Fiscal 23, we transformed the business from losses in Fiscal 22 to record profitability in Fiscal 23, achieving a full-year margin of 8%. For fiscal 24, we just increased our full-year earnings guidance, the midpoint of the range, to a 13% adjusted EBITDA margin.

Speaker Change: 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.

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

Phil Horlock: As you look at the margin accomplishments in fiscal 23, we transformed the business from losses in fiscal 22 to record profitability in 23, achieving a full-year margin of 8%. For fiscal 24, we just increased our full-year earnings guidance at mid-point of range to a 13% adjusted EBITDA margin. Then, over the next few years, we plan to grow the margin to 14%, and then to 15% and beyond. Following these core strategies has been key to our margin transformation and will continue to drive our four-year plans. On this point, we have highlighted our leadership and safety strategy on this slide in recognition of the significant move we announced just a couple of months ago.

Speaker Change: How do you look at the margin accomplishments in fiscal 'twenty, three we transformed the business from losses in fiscal 'twenty two to record profitability in 'twenty, three achieving a full year margin of 8%.

Speaker Change: For fiscal 'twenty four we just increased our full year earnings guidance midpoint of range to a 13% adjusted EBITDA margin that over the next few years, we plan to grow the margin to 14% and then to 15% and beyond.

Philip Horlock: Then, over the next few years, we plan to grow the margin to 14% and then to 15% and beyond. Following these core strategies has been key to our margin transformation and will continue to drive our four-year plan.

Speaker Change: Following these core strategies has been key to our margin transformation and we will continue to drive our full year plans.

Philip Horlock: On this point, we have highlighted our leadership and safety strategy on this slide in recognition of the significant move we announced just a couple of months ago to make three-point seatbelts a standard feature on all of our Type C and Type D school buses. This will take effect in the fourth quarter of this calendar year, and we will be the first school bus manufacturer to provide three-point seatbelts as standard equipment. Now we are following this with the standardization of a driver's airbag in mid-2025 on our Type C bus, with a Type D bus coming a little later. We will be first to market with this safety feature, and both actions show our commitment to the safety of our children and the safety of our drivers.

Speaker Change: On this point, we have highlighted our leadership in safety strategy on this slide in recognition of the significant move we announced just a couple of months ago to make three point seat belt a standard feature on all of our type C and type D School buses.

Phil Horlock: To make 3.C. both a standard feature and all of our Type C and Type D school buses. This will take effect in the fourth quarter of this calendar year, and we will be the first school bus manufacturer to provide 3.C. belts a standard equipment. Now we are following this with a standardization of a driver's airbag in mid 2025 on our type C bus, with the type D bus coming a little later. We will be first to market with this safety feature, and both actions show our commitment to the safety of our children and the safety of our drivers.

Speaker Change: This will take effect in the fourth quarter. This calendar year, and we will be the first school bus manufacturer to provide three seatbelts as standard equipment.

Speaker Change: Now we are following this with the standardization of a driver's airbag in mid 2025 on our type C bus with a type D bus coming a little later.

Speaker Change: We will be first to market with this safety feature in both actions show our commitment to the safety of our children and the safety of our drivers we intend to lead and we have many more safety initiatives in our product development pipeline that will differentiate us.

Philip Horlock: We intend to lead, and we have many more safety initiatives in our product development pipeline that will differentiate. Let's now turn to slide 22 and look at the latest status of federal funding for clean school buses, which is so important in helping accelerate the adoption of electric and propane vehicles in fiscal 24 and beyond. As a reminder, we are just starting the second year of this bipartisan five-year program, which provides $5 billion in funding for electric and propane-powered school buses. There is still over $4 billion to be deployed after the first year of funding.

Phil Horlock: We intend to lead, and we have many more safety initiatives in our product development pipeline that will differentiate us.

Phil Horlock: Let's now turn to slide 22. I look at the latest status of federal funding for clean school buses, which is so important in helping to accelerate the adoption of electric and propane vehicles in fiscal 24 and beyond. As a reminder, we are just starting the second year of this bipartisan five-year program, which provides $5 billion of funding for electric and propane-powered school buses. There is still of a $4 billion to be deployed after the first year of funding. The second year, which is referred to by the EPA as a 2023 program, provides two more rounds of funding, totaling almost $2 billion.

Speaker Change: Let's now turn to slide 22, I'll look at the latest status of federal funding, but clean school buses, which is so important in helping us accelerate the adoption of electric and propane vehicles in fiscal 'twenty four and beyond.

Speaker Change: As a reminder, we are just starting the second year. This bipartisan five year program, which provides $5 billion of funding of electric and propane powered school buses. There was still a $4 billion to be deployed after the first year of funding.

Philip Horlock: The second year, which is referred to by the EPA as a 2023 program, provides for two more rounds of funding, totaling almost $2 billion. That's close to a billion dollars more than was anticipated and appears to be an acceleration by the EPA to deploy the five billion dollars in total funding. As the left chart shows, round two awards for the 2023 grant program are confirmed at $965 million. In fact, that's a $565 million increase from the original plan due to the high level of grant applications submitted.

Speaker Change: The second year, which is referred to by the EPA as a 2023 program provides for two more rounds of funding totaling almost $2 billion.

Phil Horlock: That's close to a billion dollars more than was anticipated, and the PSC has been accelerated by the EPA to deploy the five billion dollars in total funding. As the left chart shows, rammed through awards, the 2023 grant program are confirmed at nine hundred and sixty-five million dollars. In fact, that's a five hundred and sixty-five million dollar increase from the original plan due to the high level of grant applications submitted. Now about twenty seven hundred electric and propane buses were awarded these grants earlier this year, which covered tight A, C, and D school buses, and the winners will have until April twenty six to take delivery of their buses using these awards.

Speaker Change: That's close to $1 billion more than was anticipated and appears to be an acceleration by the EPA to deploy to $5 billion in total funding.

Speaker Change: As the left chart shows ramp two awards for the 2023 Grand program are confirmed at $965 million.

Speaker Change: In fact, that's a $565 million increase from the original plan due to the high level of grant applications submitted.

Philip Horlock: Now about 2,700 electric and propane buses were awarded these grants earlier this year, which cover type A, C, and D school buses, and the winners will have until April 26th to take delivery of their buses using these grants. Looking now at the middle chart, immediately after announcing the RAND 2 award results, the EPA announced its RAND 3 REVE program, which is also part of the RAND 23 program, totaling $940 million, and again, about $500 million more than had been anticipated due to the sheer volume of applications.

Speaker Change: Now about 'twenty 700 electric and propane buses were awarded these grants earlier this year, which cover type a C and D School buses and the winners will have until April 26 to take deliver buses using these awards.

Phil Horlock: Looking out the middle chart, immediately after announcing the rammed to award results, the EPA announced its rammed three-ray bay program, which is also part of the twenty-three program, totaling nine hundred and forty million dollars and again about five hundred million dollars more than have been anticipated due to the sheer volume of applications. Approximately thirty-six hundred school buses will be awarded these rebates, which covers all body types again, and the winners will have until June twenty-six to take delivery of these buses. So in total, rammed two and three will help to fund around sixty three hundred EV and propane powered buses, and virtually all this is ahead of us in terms of orders and deliveries.

Speaker Change: Looking now at the Middle chart immediately after announcing the ramp to award results. The EPA announced its run three rebate program, which is also part of the <unk> three program.

Speaker Change: Totaling $940 million and again about $500 million more than had been anticipated due to the sheer volume of applications.

Philip Horlock: Approximately 3,600 school buses will be awarded these rebates, which cover all body types again, and the winners will have until June 26th to take delivery of these buses. So, in total, Rams 2 and 3 will help to fund around 6,300 EV and propane-powered buses. And virtually all this is ahead of us in terms of orders and deliveries. Now, our expectation is that Blue Bird should win approximately 30% of these bus orders, meaning around 1,900 buses, with deliveries in fiscal 25 and fiscal 26.

Speaker Change: Approximately 3600 school buses will be awarded these rebates, which covers all body types again and the wind is 11 until June 26 to take delivery of these buses.

Speaker Change: So in total <unk>, two and three will help to fund around 6300, EV and propane powered buses and virtually all of this is ahead of us in terms of orders and deliveries.

Phil Horlock: Now our expectation that blueberries should win approximately thirty percent of these bus orders, talking around nineteen hundred buses were delivered in fiscal twenty-five and fiscal twenty-six. Now, with the deadline of bus deliveries from these two rounds being as late as June twenty twenty-six, significant deliveries likely won't begin until the second quarter of twenty-five calendar year. A Zen customer deals first with finalizing the charging and utility infrastructure needs prior to ordering. However, the EPA's timing plan indicates that purchased orders for the rammed three rebates must be placed by year and twenty twenty four. So we are expecting an order surge late this calendar year.

Speaker Change: Now our expectation that bluebush when approximately 30% of these bus orders totaling around 1900 buses with deliveries in fiscal 'twenty, five and fiscal 'twenty six.

Philip Horlock: Now, with the deadline for bus deliveries from these two rounds being as late as June 2026, significant deliveries likely won't begin until the second quarter of the 25 calendar year, as end customers deal first with finalizing their charging and utility infrastructure needs prior to ordering. However, the EPA's timing plan indicates that purchase orders for round three rebates must be placed by year-end 2024, so we are expecting an order surge late this calendar year.

Speaker Change: Now with a deadline of bus deliveries from these two rounds being as late as June 2026 significant deliveries likely won't begin until the second quarter of 'twenty five calendar year Zheng customers deal first with finalizing the charging and utility infrastructure needs prior to ordering.

Speaker Change: However, the Epa's timing plan indicates that purchase orders for the Rins free rebates must be placed by year end 2024. So we are expecting an order surge late this calendar year.

Phil Horlock: Finally, looking to the right hand chart at the last earnings poll, I introduced the twenty twenty four clean heavy duty vehicle program, which amounts to nine hundred and thirty two million dollars. Now this is funded by the Inflation Reduction Act, and the great news is that seventy percent of that EV funding is being allocated to school buses. That's up to six hundred and fifty million dollars have additional funding to accelerate the adoption of EV school buses, and that's beyond the five billion dollars from the EPA's Clean School Bus Program. Now we estimate that orders from this program should total around twenty-three hundred EV school buses.

Philip Horlock: Finally, looking at the right-hand chart, at our last earnings poll, I introduced the 2024 Clean Heavy Duty Vehicles Program, which amounts to $932 million. Now this is funded by the Inflation Reduction Act, and the great news is that 70% of that EV funding is being allocated to school buses. That's up to $650 million of additional funding to accelerate the adoption of EB school buses, and that's beyond the $5 billion from the EPA's Clean School Bus Program. We estimate that orders from this program should total around 2,300 EV school buses. Awards should be announced in February 2025, with the winners having until January 2027 to take delivery of their bus.

Speaker Change: Finally, looking at the right hand chart at our last earnings call I introduced the 2024 clean heavy duty vehicles program, which amongst the $932 million.

Speaker Change: Now this is funded by the inflation reduction Act and the Great News is that 70% of our EV funding is being allocated to school buses.

Speaker Change: That's up to $650 million of.

Speaker Change: <unk> funding to accelerate adoption of <unk> school buses and Thats beyond the $5 billion from the Epa's Clean School bus program now.

Speaker Change: Now we estimate that orders from this program should total around 2300 EV School buses.

Phil Horlock: Awards should be announced in February twenty twenty-five, with the winners having until January twenty twenty-seven to take delivery of their buses. The EPA focus on school buses is great news for industry, great news for our customers, and great news for our school children, with school buses recognized and having the perfect duty cycle for EV adoption. So we have a total of two point six billion dollars approved and about to be deployed over the next two years to fund around eight thousand six hundred EV and propane school bus. with our expectation on winning around 30% of these orders.

Speaker Change: Awards will be announced in February 2025, with the winners happening until January 2027 to take delivery of their buses.

Philip Horlock: The EPA's focus on school buses is great news for our industry, great news for our customers, and great news for our school children, with school buses recognized as having the perfect duty cycle for EV adoption. So we have a total of $2.6 billion approved and about to be deployed over the next two years to fund around 8,600 EV and propane school buses. With our expectation of winning around 30% of these orders, these programs represent a great opportunity for Blue Bird, totaling around 2,600 EB school buses of all body types over the next two years or so.

Speaker Change: The EPA is focused on school buses is great news for our industry, Great news for our customers and Great News for our school children with school buses recognized as having the perfect duty cycle for EV adoption.

Speaker Change: So we have a total of $2 6 billion approved and about to be deployed over the next two years to fund around 8600 ethane propane school buses with our expectation of winning around 30% of these orders. These programs represent a great opportunity for bluebird totaling around 20.

Phil Horlock: These programs represent a great opportunity for Blue Bird, totaling around 2,600 EV school buses of all body types over the next two years or so. Beyond that, we have another two billion dollars in clean bus funding still to go and state and local funding to accelerate the adoption of cleaning EV and propping power school buses.

Speaker Change: 600, <unk> school buses of all body types over the next two years or so.

Speaker Change: Beyond that we have another $2 billion, including bus funding still to go and state and local funding two to accelerate the adoption of clean EV and propane powered school buses.

Philip Horlock: Beyond that, we have another $2 billion in clean bus funding still to go, and state and local funding, too, to accelerate the adoption of clean EV and propane-powered school buses. What could be more important than safe student transportation?

Phil Horlock: Now let's remember the mission. The Clean School Bus Act was a bipartisan agreement signed in 2021 designed to keep our children and communities safe from air pollution by removing harmful older emissions diesel-powered buses from the road and replacing them with clean-powered buses. What could be more important than safe student transportation?

Speaker Change: Remember the mission the clean school bus stack was a bipartisan agreement signed in 2021 designed to keep our children and communities safe from air pollution by removing harmful older emissions diesel powered buses from the road and replacing them with clean powered buses, while it can be more importantly, safe student transportation.

Phil Horlock: So let me now wrap up the earnings poll, and I'll look for the business on slide 23. Razvan took you through the raised guides of fiscal 24, and I'm showing you some of those key metrics at the midpoint of guidance here. A volume outlook of 880 buses is 3% of a fiscal 23. Net revenue at $1.3 billion will be a new record for Blue Bird, up 15% from fiscal 23. Adjusted EBDA guidance of $175 million is double the $88 million profit we made last year, which was a record at that time. Importantly, we are planning on a 13% EBDA margin in fiscal 24 of 5.5 percentage points from fiscal 23, which is several years ahead of the plan we had been sharing with you just a couple of years ago.

Philip Horlock: So let me now wrap up the earnings call and a look for the business on slide 23. Razvan took you through the RAISE guidance for Fiscal 24, and I'm showing you some of those key metrics at the midpoint of guidance here. Our volume outlook of 883 buses is 3% over Fiscal 23. Net revenue at $1.3 billion will be a new record for Blue Bird, up 15% from Fiscal 23.

Speaker Change: So let me now wrap up the earnings call and our outlook for the business on slide 23.

Speaker Change: Roger I took you through the raise guidance fiscal 'twenty, four and I am showing you some of those key metrics of the midpoint of guidance here.

Speaker Change: Our volume outlook of 80 to 80 buses is 3% over fiscal 'twenty three.

Speaker Change: Net revenue of $1 $3 billion will be a new record for blue bird up 15% from fiscal 'twenty three.

Philip Horlock: Adjusted EBITDA guidance of $175 million is double the $88 million profit we made last year, which was a record at the time. Importantly, we are planning on a 13 percent EBITDA margin in fiscal 24, up 5.5 percentage points from fiscal 23, which is several years ahead of the plan we had been sharing with you just a couple of years ago. We have confidence in achieving this margin after recording an impressive 14% adjusted EBITDA margin in the first three quarters of Fiscal 24.

Speaker Change: Adjusted EBITDA guidance of $175 million is double the $88 million profit. They made last year, which was a record at that time.

Speaker Change: Importantly, we are planning on a 13% EBITDA margin in fiscal 'twenty four up five five percentage points from fiscal 'twenty, three which is several years ahead of the plan. We had been sharing with you just a couple of years ago.

Phil Horlock: We have confidence in achieving this margin after recording an impressive 14% adjusted EBDA margin in the first three quarters of fiscal 24. Now we should be noted that the first nine months did benefit from an exceptional mix of EVs at 9% of unit sales within a strong total mix of alternative fuel vehicles at 60% of sales. The extended time granted by the EPA for customers to deploy buses from the new Ram 2 and 3 funding awards has slowed the recent pace of orders and is impacting deliveries late in fiscal 24. Consequently, we have lowered our forecast preview book in this year from 800 buses to 700 buses.

Speaker Change: We have confidence in achieving this margin after recording an impressive 14% adjusted EBITDA margin in the first three quarters of fiscal 'twenty four.

Speaker Change: Now it should be noted that the first nine months did benefit from an exceptional mixed at <unk>, 9% of unit sales within our strong total mix of alternative fuel vehicles are 60% of sales.

Philip Horlock: The extended time granted by the EPA for customers to deploy buses from the new Ram 2 and 3 funding awards has slowed the recent pace of orders and is impacting deliveries late in fiscal 24. Consequently, we have lowered our forecast preview bookings this year from 800 buses to 700 buses.

Speaker Change: The extended time granted by the EPA for customers to deploy buses from the new Ram two and three funding awards has slowed the recent pace of orders and is impacting deliveries late in fiscal 'twenty four.

Speaker Change: Consequently, we have lowered our forecast for EV bookings this year from 800 buses to 700 buses. This.

Phil Horlock: This is purely due to order timing where these 100 deliveries now be removed from fiscal 24 to fiscal 25 and still represents a healthy 28% growth over last year. As I mentioned earlier, however, we do expect an order surge towards the end of this year as Ram 3 rebate bus orders must be submitted by December 24 for the EPA's timing plan. As you can see on the right chart, there is a lot of pent-up demand following the low-interference sales in 2020, 2021, and 2022, and the bus fleet is aged by a couple of years over that period.

Philip Horlock: This is purely due to order timing, with these 100 deliveries now being moved from Fiscal 24 to Fiscal 25, and still represents a healthy 28% growth over the last year. As I mentioned earlier, however, we do expect an order surge towards the end of this year as round three rebate bus orders must be submitted by December 24 per the EPA's timing plan. As you can see on the right chart, there was a lot of pent-up demand following the low interest sales in 2020, 2021, and 2022, and the bus fleet has aged by a couple of years over that period. ACT is forecasting a compound annual industry growth rate of 7% from the end of Fiscal 23 through Fiscal 27.

Speaker Change: This is purely due to order timing with these 100 deliveries now being moved from fiscal 'twenty four to fiscal 'twenty, five and still represents a healthy 28% growth over last year.

Speaker Change: As I mentioned earlier, however, we do expect an order surge towards the end of this year as round three rebate bus orders must be submitted by December 24 for the Epa's timing plan.

Speaker Change: As you can see on the right chart. There was a lot of pent up demand following the low energy sales in 2000, 22021, and 2022 and the bus fleet has aged by a couple of years over that period.

Phil Horlock: ACP is forecasting a compound annual industry growth rate of 7% from the end of fiscal 23 through fiscal 27, and that's great news for our business and great news for our profit outlook. With residual supply chain challenges still impacting the auto industry, the ability to build all these units near-term is not a given, but clearly the demand is there. After executing a substantial transformation across our business, the companies performing exceptionally well looked into improved operating performance and looked forward to sustained profitable growth in the robust market ahead. You recall that just a couple of years ago, our stated long-term objective was to achieve a 12% EBITDA margin.

Speaker Change: Acte's forecasting a compound annual industry growth rate of 7% from the end of fiscal 'twenty three through fiscal 2007, and Thats, Great news for our business and Great news for our profit outlook.

Philip Horlock: And that's great news for our business and great news for our profit out... With residual supply chain challenges still impacting the auto industry, the ability to build all these units near term is not a given, but clearly, the demand is there. After executing a substantial transformation across our business, the company is performing exceptionally well. We'll continue to improve operating performance and look forward to sustained profitable growth in the robust market ahead.

Speaker Change: With residual supply chain challenge is still impacting the auto industry the ability to build all these units near term is not a given.

Speaker Change: But clearly the demand is there.

Speaker Change: After executing a substantial transformation across our business. The company is performing exceptionally well we will continue to improve operating performance and we look forward to sustained profitable growth and a robust market ahead.

Philip Horlock: You will recall that just a couple of years ago, our stated long-term objective was to achieve a 12% EBITDA margin. Well, with guidance for fiscal 24 now reflecting a margin of 13 percent, we have updated our long-term outlook to reflect an EBITDA margin of at least two percentage points higher than this year, at 15 percent.

Speaker Change: You will recall that just a couple of years ago. Our stated long term objective was to achieve a 12% EBITDA margin.

Phil Horlock: Well, with guidance of fiscal 24 and our reflecting a margin of 13%, we have updated our long-term outlook to reflect an EBITDA margin at least 2% is points higher than this year at 15%. I want to thank our nearly 2000 employees for all their hard work and dedication in delivering an all-time record profit in the third quarter, as well as our outstanding deal of partners who are critical to our success.

Speaker Change: <unk> with guidance for fiscal 'twenty, four now, reflecting a margin of 13% we have updated our long term outlook to reflect an EBITDA margin at least two percentage points higher than this year at 15%.

Philip Horlock: I want to thank our nearly 2,000 employees for all their hard work and dedication in delivering an all-time record profit in the third quarter, as well as our outstanding dealer partners who are critical to our success. Now, before I pass it back to our moderator for the Q&A session, I would like to move to slide 24 and briefly cover the CEO and Chairman transition plan that we announced at the market close today. After 14 years as CEO of Blue Bird, I will be stepping down at the end of this fiscal year.

Speaker Change: I want to thank our nearly 2000 employees for all their hard work and dedication in delivering an all time record profit in the third quarter as well as outstanding dealer partners, who are critical to our success.

Phil Horlock: Now, before I pass you back to our moderator for the Q&A session, I would like to move to slide 24 and briefly cover the CEO and Chairman transition plan that we announced at the market close today. After 14 years of CEO Bluebird, I will be stepping down at the end of this fiscal year. It's been an honor and a privilege to lead this great company for so long and to work with the best team in the business. Now, I'm very pleased to confer that our president, Britain Smith, will be taking over from the CEO, with his appointment effective September 29, which is the start of our new fiscal year.

Speaker Change: Now before I pass it back to our moderator for the Q&A session I would like to move to slide 24, and briefly cover the CEO and chairman transition plan that we announced after market close today.

Speaker Change: After 14 years as CEO of Blue Bird I'll be stepping down at the end of this fiscal year, it's been an honor and a privilege to lead this great company for so long and to work with the best team in the business.

Philip Horlock: It's been an honor and a privilege to lead this great company for so long and to work with the best team in the business. Now, I'm very pleased to confirm that our President, Britain Smith, will be taking over from me as CEO with his appointment effective September 29th, which is the start of our new fiscal year. We have been working together on a very thorough transition plan over the past year, with Britain taking on increasing responsibilities during that time.

Philip Horlock: Britain will be joining the board immediately, and I will also be staying on the board. I have to say, this is how a leadership transition should be handled. Promoting from within, with a leader who knows the business and ensures continuity. Also, transitioning is our chairman. After almost nine years in the seat, Kevin Penney is stepping down and will be succeeded by Doug Grimm, effective immediately. Now Doug knows our company very well, having been on the board since 2017, and will be a great success to Kevin, who will be staying on the board as a director.

Speaker Change: Now I am very pleased to confirm that our president Britton Smith will be taking over from me as CEO with his appointment effective September 29, which is a start of our new fiscal year.

Phil Horlock: We have been working together on a very thorough transition plan over the past year, with Britain taking on increasing responsibilities during that time. Britain will be joining the board immediately, and now will also be staying on the board. I have to say, this is our leadership transition should be run, promoting from within with a leader who knows the business and ensuring continuity. Also, transitions are chairman. After almost nine years in the seat, Kevin Pan is stepping down and will be succeeded by Doug Grimm, effective immediately. Now Doug knows our company very well, having been on the board since 2017 and will be a great successor to Kevin, who will be staying on the board as a director.

Speaker Change: We have been working together in a very thorough transition plan over the past year with Britain, taking on increasing responsibilities during that time.

Speaker Change: Britain will be joining the board immediately and I will also be staying on the board.

Speaker Change: I have to say this is how our leadership transition should be run.

Speaker Change: Promoting from within with a leader, who knows our business and ensuring continuity.

Kevin: So transitioning as our chairman after almost nine years in the seat Kevin <unk> stepping down and will be succeeded by Doug Grimm effective immediately now.

Kevin: Now Doug knows our company very well having been on the board since 2017 and will be a great success to Kevin who will be staying on the board as a director.

Phil Horlock: From a personal standpoint, I'd like to thank Kevin for all the support he has given me during my time as CEO and for the great friendship we have built over those years. Again, the German foundation couldn't be better, coming from within the board and ensuring continuity.

Philip Horlock: From a personal standpoint, I'd like to thank Kevin for all the support he has given me during my time as CEO and for the great friendship we have built over those years. Again, the Chairman's Foundation couldn't be better, coming from within the Board and ensuring continuous development. So, this will be my last earnest call as Blue Bird's CEO, and I'd now like to hand it back to our moderator for one final Q&A.

Speaker Change: From a personal standpoint, I'd like to thank Kevin for all the support he has given me during my time as CEO and for the great friendship we have built over those years.

Kevin: Again, the chairman transition couldnt be better coming from within the board and ensuring continuity.

Lydia: So, this will be my last earnings call of Bluebird CEO, and I'd now like to hand it back to our moderator for one final Q&A session. Thank you. Please press star for the number one if you'd like to ask a question, and ensure your advice is unmuted locally when it's your turn to speak.

Speaker Change: So this will be my last earnings call, a bluebird CEO and I'd now like to hand, it back to our moderator for one final Q&A session.

Speaker Change: Thank you.

Operator: Thank you. Please press star followed by the number one if you'd like to ask a question and ensure your device is unmuted locally when it's your turn to speak. Our first question today comes from Mike Shlisky with DA Davidson. Please go ahead, your line is open.

Speaker Change: Please press star followed by the number one if you'd like to ask a question and ensure your devices Amit.

Tien Tsin: Sure Tien Tsin spoke.

Mike Schlisky: Our first question today comes from Mike Schlisky with DA Davidson. Please go ahead; your line is open. Good afternoon. Thank you for my question. Of course, and of course, still congrats on your time. Thanks, Mike. Hey, there's a lot of cover here. Sure, yeah, of course. Hey, there's a lot of cover here.

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

Speaker Change: Please go ahead your line is open.

Mike Shlisky: Good afternoon. Thank you for asking my question.

Mike <unk>: Good afternoon, and thanks for taking my question.

Speaker Change: And of course Bill Congrats on your retirement.

Philip Horlock: Of course, and of course, Phil, congrats on your. Thanks, Mike. Hey, there's a lot to cover here.

Bill: Thanks, Mike.

Speaker Change: To cover here.

Bill: Sure Yes of course.

Speaker Change: Lots to cover here.

Mike Schlisky: I want to start with the question about the long term guidance. If we're looking at what you're doing now or what your long-term guidance is, you know, it can apply also $100 million worth of additional revenues. But even though up about 125. that's less than 20% is no margin; actually, about 18%. This past quarter, you just did 50%, 5.0. Here's one of the things more, and even though given the EV mix going forward, the 50% higher revenues on the top line in general, I'm sure the fixed cost space won't grow anywhere near that much.

Mike Shlisky: Why don't I start with a question or two about your long-term guidance? So looking at what you're doing now, what your long-term guidance is, you know, it implies almost $100 million worth of additional revenues, but even... up about 125 million, you know, that's less than 20% in our margins, actually about 18%, you just did 50%, 5-0. I guess I would have expected more, and even given, you know, the EV mix going forward, the 50% high revenues on the top line in general, I'm sure the fixed cost base won't grow anywhere near that much.

Speaker Change: Well I'll start.

Speaker Change: With a question or two about the long term guidance.

Speaker Change: Looking at what you're doing now and what your long term guidance.

Bill: <unk>.

Speaker Change: Also $100 million worth of additional revenues.

Speaker Change: But EBITDA.

Speaker Change: About $125 million.

Speaker Change: That's less than 20% incremental margins actually about 18%.

Speaker Change: This past quarter unit gets 50% five zero.

Speaker Change: Okay.

Bill: Or is something more in EBITDA given.

Bill: The next going forward.

Speaker Change: 2% higher revenues on the top line in general what should a fixed cost base will grow anywhere near that much. So.

Mike Shlisky: So I guess I'm curious, you know... I know you just put this guidance out, but do you think there's potential to go above 15% if your GV back hits $2 billion and the EV mix plays out as you expect?

Mark Benfield: So I guess I'm curious, you know, I know you just put this guy in doubt, but do you think there's potential to go above 15% if you do that hit $2 billion and the EV mix plays out as you expect? Yes, Mark, thanks for the question. This is Razvan. So I feel alluded in his comments. You mentioned 15% and beyond. And obviously, as we are executing on this journey, as we firm our plan for the future, we are going to look potentially at higher numbers. However, there are also factors that are part of this strategic long-term plan.

Speaker Change: So I guess I'm curious.

Speaker Change: I know you just put this guidance out but do you think there's potential to go above 15%.

Speaker Change: Got it.

Speaker Change: $2 billion.

Speaker Change: The mix plays out as you expect.

Razvan Radulescu: Yes, Mike, thanks for the question. This is Razvan.

Speaker Change: Yes, Mike Thanks for the question this is rather than.

Speaker Change: As Phil alluded in his comments, you mentioned, 15% and beyond and obviously we.

Razvan Radulescu: So, as Phil alluded in his comments, he mentioned 15% and beyond. And obviously, as we are executing on this journey, as we form our plan for the future, we are going to look potentially at higher numbers. However, there are also factors that are part of this strategic long-term plan. For example, we are modeling over time a lower price for the EV buses in conjunction with lower costs, which in the end will drive a lower margin per bus compared to what we are making today.

Speaker Change: We are executing on this journey.

Speaker Change: We've <unk> our plans for the future we are going to look potentially at higher numbers. However, there are also factors that are a part of this.

Speaker Change: This strategic long term plan.

Razvan Radulescu: We are modeling overtime, lower price for the EV buses in conjunction with lower cost, which in the end will drive a lower margin per bus compared to what we are making today. And definitely this will drive the adoption and increase the mix with then goes hand in hand with our increase mix of EVs.

Speaker Change: We are modeling over time, a lower price for the EV buses in conjunction with lower cost, which Indiana will drive a lower margin per box compared to what we are making today and definitely this will drive the adoption and increase the mix, which then goes hand in hand, with our increased mix of disease.

Razvan Radulescu: And definitely, this will drive adoption and increase the mix, which then goes hand-in-hand with our increased mix of EVs. So we are working on that journey, and as we have more updates that we can give you, we'll be happy to share those with you at that time.

Mark Benfield: So we are working on that journey, and we have more updates that we can give you. We will be happy to share those with you at that time. Okay, sure.

Speaker Change: We are working on that journey and as we have more updates.

Speaker Change: And gives you will be happy to share those with you at that time.

Mike Shlisky: Okay, sure. On a somewhat similar note, looking at the 4Q outlook and given what you did the first three quarters of stacking into it, you're suggesting that revenues may be down from the 3Q that you just put up here. Outside the pandemic, does a lower 4Q than 3Q really have any precedent? Is it maybe just a case, again, of the EVs being a little bit lower? Or are you having a hard time figuring out how you're going to have lower revenues just before school starts and everyone wants their deliveries delivered faster than you did in the previous quarter? Yeah, so

Speaker Change: Okay sure.

Speaker Change: Sure.

Razvan Radulescu: Someone still don't know looking at the 4Q outlook and giving me to the first three quarters is backing into it. Suggesting that the revenues may be down the 3Q they just put up here. Outside the pandemic, does a lower 4Q than 3Q really have any president? Is it maybe just a mix again of the EVs being a little bit lower or. I'm having a high time figuring out how you can have lower revenues just before school starts. Everyone wants their delivery when you did in the previous quarter. Yeah, so the 4Q has one less work week than the 3Q because of the July 4 shutdown, which we put in place two years ago.

Jeff: So whats still a note looking at the <unk> outlook and give me did the first three quarters of stacking Intuit. This is Jeff.

Speaker Change: And that the revenues may be down.

Speaker Change: The <unk> that you just put up here.

Speaker Change: <unk> had demick theres, a lower <unk> than <unk> really have any president.

Speaker Change: Is it maybe just a mix again of the evs being a little bit lower.

Speaker Change: Hi, guys figuring out how you're going to have lower revenues just before school starts they will want their deliveries.

Speaker Change: Did in the previous quarter.

Razvan Radulescu: Yeah, so the fourth quarter, Mike, has one less work week than the third quarter because of the July 4th shutdown, which we put in place two years ago, so there are fewer number of work days. However, this particular fourth quarter, as mentioned both by me and Phil, has a lower number of EV units by about 100, and this definitely drives significantly lower revenues given the average selling price for EV buses.

Speaker Change: Yes, so the fourth quarter, Mike has one less week than the third quarter because of the July shutdown, which we put in place two years ago. So there is less number of workdays. However, this particular fourth quarter as mentioned in both mining and steel has a lower number of units by about 100.

Razvan Radulescu: So there is less number of work days; however, this particular 4Q, as mentioned both by me and feel, has a lower number of EV units by about 100. And definitely this drives the country lower revenues given the average selling price 40 V bus. Got it, got it.

Jeff: And definitely drives significantly lower revenues, given the average selling price for TV buttons.

Mike Shlisky: Got it, got it. Maybe one last one for me, and that's on the political environment. Can the EPA or other federal funding for buses be reversed or taken away starting on, you know, January 2025 if a certain candidate wins the presidency, or do you feel like what has been passed and will be allocated? I'm just kind of trying to figure out whether there's any kind of risk to some of the EV programs that are out there today.

Speaker Change: Got it got it.

Mike Schlisky: There you one last one for me, and that's on the political environment. Can the EPA or other federal funding to buses be reversed or taken away during the January 2025? If a certain candidate wins the presidency or you feel like what has been passed has passed and will be allocated. Just kind of trying to deal with this. Is any kind of risk to some of the EV programs that are out there today. Yeah, Mike, well it's still here. I mean a lot of things can happen, obviously, but you know we look at this way. I mean those those those amounts have already been awarded; they've actually allocated them.

Speaker Change: One last one for me and that's on the political environment.

Speaker Change: Can the EPA or other federal funding for buses.

Jeff: Reversed or taken away starting in January 2025.

Speaker Change: That's certainly a candidate who wins the presidency or we feel like what has been past is past then will be allocated.

Speaker Change: I'm, just kind of a choppy out whether there is any high risk to some of the programs that are out there today.

Philip Horlock: Yeah, Mike, well, it's Phil here. I mean, a lot of things can happen, obviously, but, you know, we look at it this way.

Phil Horlock: Yes, Mike it's Phil here I mean, a lot of things can happen, obviously, but we look at it this way I mean, those those those amounts have already been awarded they've actually allocated them. So I mean, one of the second Brian when I talked about it and allocated to customers right as they're they know what they're getting let just finalize our infrastructure plans remember that was a bipartisan agreement in 'twenty one.

Philip Horlock: I mean, those amounts have already been awarded. They've actually allocated them. So the one in the second round we talked about has already been allocated to customers. It's right out there.

Phil Horlock: Something one of the second round where I talked about it allocated the customer is right out there they know what they're getting. They just finalized their infrastructure plans. Remember that was a bypasses agreement in 21. Both part there was no objection to it; it went through pretty easily. And you know I think it was all around the fact talking about school children, school transportation. So I think it's very difficult to what's what we feel very difficult not to be reversed. There's so much support for it, and it's doing so much good for the environment for our children.

Philip Horlock: They know what they're getting because they just finalized their infrastructure plans. Remember, that was a bipartisan agreement in 21. Both parties; there was no objection to it. It went through pretty easily. And, you know, I think it was all around the fact that we were talking about school children and school transportation. So I think it'd be very difficult to, that's what we feel, very difficult for that to be reversed. There's so much support for it, and it's doing so much good for the environment.

Speaker Change: Both par there was no objection to it it went through pretty easily and I think it is all around the fact that we much school children in school transportation. So I think it'd be very difficult to that so we feel very doable it ought to be reverse of Soma support for it and is doing so much good further for the environment for our children.

Mike Schlisky: Okay, we'll kind of show that answer, and again, congrats on. I'll leave it there. Thanks, Molly.

Mike Shlisky: Okay, well, thanks for that answer, and again, congrats. I will leave it there.

Speaker Change: Okay, well thanks for that.

Jeff: Congrats.

Speaker Change: I will leave it there.

Mike <unk>: Thanks, Mike.

Andrew: Our next question comes from Craig Irwin with Rock After Partners. Please go ahead.

Jeff: Our next question comes from Craig Irwin with Roth Capital Partners. Please go ahead.

Razvan Radulescu: Hey guys, it's actually Andrew on for Craig, and Phil, congrats on the retirement. I'll find first question on gross. Yeah, first question on gross margins: you know, posted some really strong margins in the quarter with the strong revenue. You guys are still kind of seeing cost inflation, and you guys are engaged with your suppliers that are kind of seeing some constraints here. So just any update you could provide on the cost inflation and kind of where you can see long-term margins going would be great.

Andrew: Hey guys, it's actually Andrew on for Craig, and Phil, congrats on the retirement. The first question is about Grossman.

Jeff: Hey, guys, it's actually Andrew on for Craig and sell congrats on the <unk>.

Jeff: Chairman.

Speaker Change: Well, thanks for the questions mainly on gross.

Jeff: Yes.

Speaker Change: First question on gross margins.

Jeff: Some some really strong margins in the quarter with strong revenue.

Speaker Change: And you guys are still kind of seeing a.

Jeff: Cost inflation and.

Speaker Change: You guys are engaged with your suppliers that are kind of seeing some constrained here.

Speaker Change: So just any update you can provide on the cost inflation and kind of where you can see our long term margin scaling would be great.

Razvan Radulescu: Andrew, this is Razvan. I'll take this one. So, in terms of gross margins, we highlighted some of the tail headwinds that we are seeing into fiscal 25. We have just finalized a new collective bargaining agreement with the USW, and that is going to cost us about 1% of revenues on a run-rate basis going forward. We do see continued inflation pressures from our suppliers in terms of material costs, also driven by some labor factors, but also the general economic environment that is still not entirely stable at this point in time. So we have material inflation, and we have labor inflation that will put pressure on margins at the same time.

Razvan Radulescu: Andrew, this is Razvan. I'll take this one.

Raj: Andrew This is Raj.

Andrew: I'll take this one so in terms of gross margins.

Speaker Change: Highlighting some of the headwinds that we are seeing into fiscal 'twenty five we have the finalized new collective bargaining agreement with the USW and that is going to cost us about 1% of revenues on a run rate basis going forward. We do see continued inflation pressures from our <unk>.

Razvan Radulescu: So in terms of gross margins, we highlighted some of the tail headwinds that we are seeing into fiscal 25. We have just finalized a new collective bargaining agreement with the USW, and that is going to cost us about 1% of revenues on a run rate basis going forward. We do see continued inflation pressures from our suppliers in terms of material costs, also driven by some labor factors, but also the general economic environment that is still not entirely stable at this point in time.

Andrew: Players in terms of material costs.

Andrew: Also driven by some labour side, but also the general.

Speaker Change: Economic environment that is still not entirely stable at this point in time, so we have material inflation and we have labor inflation that will put pressure on margins at the same time, we are continuing to on a regular cadence.

Razvan Radulescu: So we have material inflation and we have labor inflation that will put pressure on margins. At the same time, we are continuing to, on a regular basis, increase our prices to the market, and we're trying to balance the two factors there. So at this point in time, we provided the general guidance for fiscal 25 with a range, and we'll be happy to provide more insight in the next earnings call when we have more visibility into our exact built-in backlog for the entire fiscal 25.

Razvan Radulescu: We are continuing to, on a regular cadence, increase our prices to the market, and we are trying to balance the two factors there.

Speaker Change: <unk> increased our prices to the market.

Speaker Change: We're trying to balance the two factors there. So at this point in time, we provided the general guidance for fiscal 'twenty five with a range and we'll be happy to provide more insight in the next earnings call. When we have more visibility into our existing building backlog for the entire fiscal 2012.

Razvan Radulescu: So at this point in time, we provided the general guidance for fiscal 25 with a range, and we'll be happy to provide more insight in the next turning school when we have more visibility into our exact built and backlog for the entire fiscal 25. Great. Thank you.

Andrew: Great, thank you. Second one for me.

Speaker Change: Great. Thank you and second one for me I know, we're kind of still early days in the chassis business, but I think you said last quarter, yet you had one on the ground.

Razvan Radulescu: Second one for me. I know we're still early days in the tracking business, but I think you said last quarter you had one on the ground. We're engaging some customers there. So, is there any update now after the fiscal third quarter?

Speaker Change: We're engaging some customers there so is there any kind of update.

Speaker Change: Now after the fiscal third quarter.

Phil Horlock: Not really, Andrew. I think what we said last quarter is still the same. We're in development mode now, developing a prototype. We have a prototype. We show that the ACT show, big truck show, back in May, well received, well-recognized, and a very active customer group come and walk through that and see that chassis. So right now our goal is that we want to get this product in the hands of customers later this year. We got several customers extremely interested in want that product. They do their own validation tests. They preview back your feedback to us, and then we'll be looking at it into later into 25 to get a commercial product out on the road to those customers.

Speaker Change: No not really Andrew I think what we said last quarter still the same we're in development mode now developing a prototype we have a prototype we showed that the ICT show Big truck show back in May well receive a well recognized that are very active customer group come and walk through that and see that chassis. So right now our goal is that we we.

Philip Horlock: I know we're kind of still in the early days in the chassis business, but I think you said last quarter you had one on the ground. We're engaging some customers there. So is there any kind of update on that after the fiscal third quarter?

Philip Horlock: Not really, Andrew. I think what we said last quarter is still the same. We're in development mode now, developing a prototype. We have a prototype. We showed it at the ACT show, the big truck show, back in May. Well-received, well-recognized.

Philip Horlock: We had a very active customer group come and walk through it and see that chassis. So right now, our goal is that we want to get this product in the hands of customers later this year. We got several customers extremely interested. They want that product. They do their own validation tests, and they give feedback to us. And then we'll be looking later into 2025 to get a commercial product out on the road for those. We're very optimistic about it, we like what we're doing, and it's going to be a great chassis when it comes to market.

Speaker Change: I want to get this product in the hands of customers later this year.

Speaker Change: Several customers extremely interested who want that product they do their own validation tests. They pre buy give feedback to us and then we have been looking at and into later into 'twenty five to believe is getting our commercial prototypes on the road to those customers.

Phil Horlock: But also we're very optimistic about it. We like what we're doing, and it's going to be a great chassis when it becomes a market, that's for sure. Awesome.

Speaker Change: So we're very optimistic about it we like what we're doing and it's going be a great chassis when it when it becomes a market thats for sure.

Speaker Change: Awesome, that's great to hear congrats on the strong results and I'll hop back in queue.

Andrew: Well, it's great to hear. Congrats on the strong results, and I'll hop back in the queue. Thank you.

Speaker Change: Thank you.

Chris Pierce: And that question comes from Chris Piss with Needham. Please go ahead. Hey, good afternoon, everyone. I just wanted to ask on the national sleep business. You're talking, you know, we had this bump up in a counter-seas rule that we don't see in prior years, but it's literally my model doesn't go back that far.

Christopher Pierce: Our next question comes from Chris Pierce with Needham. Please go ahead.

Chris <unk>: Our next question comes from Chris <unk> with Needham. Please go ahead.

Christopher Pierce: Hey, good afternoon, everyone. I just wanted to ask about the national fleet business. You know, we had this bump up in accounts receivable that we didn't see in prior years, but admittedly, my model doesn't go back that far, so I'm just curious: are you winning more business with these national fleets? And is EV and propane driving that? Or are you winning your share of diesel engines as well? Like what's the right way to think about, you know, the national fleet business for Blue Bird?

Chris <unk>: Hey, good afternoon, everyone.

Chris <unk>: Just wanted to ask on the National fleet business.

Chris <unk>: This bump up in accounts receivable that we don't see in prior years, but admittedly my model doesn't go back that far. So I'm. Just curious are you winning more business with these national fleet and is easy and propane driving that or are you winning your share of diesel engines as well like what's the right way to think about.

Phil Horlock: So, I'm just curious, are you winning more business than these national sleep, and is EV and propane driving that, or are you winning your share of diesel engines as well? Like, what's the right way to think about, you know, the national sleep business, the Blue Bird? Yeah, I mean, it's really all of the above. We are definitely participating more in national sleep business than we have recently. Propane has been a fantastic product for us this year, as we've said before on prior earnings calls. Our competitors don't have a propane product. It's a fantastic total cost of ownership vehicle for these fleet operators, and they know that.

Speaker Change: The National fleet business to Bluebird.

Philip Horlock: Yeah, I mean, it's really all of the above. We are definitely participating more in national fleet business than we have recently. Propane has been a fantastic product for us this year. As we said before on prior earnings calls, our competitors don't have a propane product.

Speaker Change: Yes, I mean, it's really all of the above we are definitely official betting more international fleet business. Then we have recently propane has been a fantastic product for us this year as we said before in prior earnings calls our competitors don't have a propane product.

Philip Horlock: It's a fantastic total cost of ownership vehicle for these fleet operators, and they know that. So we've had great success there. Electric is the same thing; we're very excited about our product.

Speaker Change: It's a fantastic total cost of ownership vehicle for these fleet operators and they know that so we have a great success. There electric is the same thing various thought about our product I think the third thing is we have a very good delivery time versus the rest of the market in terms of getting products in customers hands and that's been that's been great news for us the fleets one of those products.

Phil Horlock: So, we have a great success there. Electric is the same thing. Very excited about our product. I think the third thing is we have a very good delivery time. This is the rest of the market in terms of getting products to cut in customer's hands, and that's been great news for us, the fleets who want those products for school start. So, I think we've done very well with that. By the way, we intend to keep it. We intend to keep this business going. I said, this isn't a one-off year for us in that we've turned up the capability this year for us.

Philip Horlock: I think the third thing is we have a very good delivery time versus the rest of the market in terms of getting products in customers' hands. And that's been great news for us, the fleets who want those products for school start. So I think we've done very well with that. And, by the way, we intend to keep it. We intend to keep this business; this isn't a one-off event for us. I said this wasn't a one-off year for us in that we've turned up the capability this year for us. We intend to retain this business going forward. It's a good business for us.

Chris <unk>: <unk>, So I think we've done very well with them.

Chris <unk>: Oh by the way, we intend to keep this business.

Speaker Change: We intend to keep this just a one off event.

Speaker Change: I said this isn't a one off year for us and that we've turned up capability. This year for us we intend to retain this business going forward is good business for us.

Phil Horlock: We intend to, you know, retain this business going forward. It's good business for us.

Phil Horlock: Perfect. You just answered my follow-up, because I know one of the three players in the market has had trouble delivering a diesel bus at this point in time. Okay. Perfect.

Christopher Pierce: You just answered my follow-up question because I know one of the three players in the market has had trouble delivering a diesel bus at this point in time. Okay.

Speaker Change: Perfect you just answered my follow up because I know one of the three market has had trouble deliberate diesel bus at this point in time okay.

Philip Horlock: And then I was at ACT Expo recently, and I sat in on a presentation with Cummins and talked to some of the other competitors. Can you talk about your, you know, you guys have been talking about diesel emissions, and, you know, I just didn't pick up the same level of concern from other players in the industry, but I just didn't know if that's something that's, you know, I didn't know how to frame that from not having looked at the industry for a long time.

Speaker Change: Perfect and then I was at ECT Expo recently, and I said in our presentation come in and talk to some of the other competitors can you talk about your you guys when youre talking about diesel emissions.

Phil Horlock: And then I was at ACT Expo recently, and I sat in on a presentation, comments, and talked to some of the other competitors. Can you talk about your, you know, you guys have been talking about diesel emissions, and, you know, I just didn't pick up the same level of concern from other players in the industry. But I just didn't know if that's something that, you know, I didn't know how to frame that. I'm not having with the industry for a long time. Is it just that diesel emissions get tighter over time and everyone's worth of adjust?

Philip Horlock: Is it just that diesel emissions get tighter over time and everyone sort of adjusts, or is there something specific to these 2027 diesel emissions that gives you confidence in them? Alternative to a bus is taking an increased share.

Speaker Change: I just didn't pick up the same level of concern from other players in the industry, but I just didn't know if that's something that.

Speaker Change: I didn't know how to frame that not having looked at the industry for a long time is it just that utilization to get tighter over time and everyone's sort of adjust or is there something specific to these 2027 diesel emissions that gives you confidence in.

Phil Horlock: Or is there something specific to these 2027 diesel emissions that gives you confidence in? I'll turn it to you about the taking increase share. It's absolutely the second one you raised there. In 2027, the emissions get very stringent on the requirements. So it's very difficult for a diesel engine to meet it without a lot of hardware support. Very costly. It'll significantly increase the cost of a diesel engine. Now our propane product today meets the 27 emissions engine. Even our gasoline engine is quite a small putt. I'll call it to try to get there to meet the emissions requirements.

Speaker Change: Alternative fuel buses taking increased share.

Philip Horlock: It's absolutely the second one you raised there. In 2027, emissions requirements will get very stringent, such that it's very difficult for a diesel engine to meet them without a lot of hardware support. Very costly. It'll significantly increase the cost of a diesel engine. Now, our propane product today meets the 2027 emissions engine. Even our gasoline engine is quite a small putt, I'll call it, to try to get there to meet the emissions requirements. Obviously, electric cars have zero emissions and fully meet all those requirements.

Speaker Change: It's absolutely the second one you raised in 2027, the emissions get very stringent on.

Speaker Change: On the requirements such as the spiritual for diesel engine to meet it without a lot of hardware support very costly it will significantly increase the cost of a diesel engine now our propane product today Liza twenty-seven emissions engine, even though gasoline engine is quite a small part I'll call it to trying to get that to meet the emissions requirements.

Phil Horlock: Obviously, electric is zero emissions and fully meets all those requirements. Our competitors don't have a propane engine. They don't have a gasoline engine. All they have is a diesel engine and electric vehicle. So I think you're going to get a different comment from them. And when I talk about our leadership, just remind them that 60% of the vehicles that we sell today are non-diesel. That's a quite a different story for our competitors. They're up at the 90% level of diesel sales diesel mix for their business. So it's 10% non-diesel, so to speak. So for them, it's quite a different story.

Speaker Change: Electric zero emissions and fully meets all those requirements.

Speaker Change: Our competitors don't have a propane engine, we don't have a gasoline engine. All they have is a diesel engine and electric vehicle. So I think youre going to get a different comment from them and when I talk about our leadership just remind I mean, 60% of the vehicles that we sell today.

Philip Horlock: Our competitors don't have a propane engine. They don't have a gasoline engine. All they have is a diesel engine and an electric vehicle. So, I think you're going to get a different comment from them.

Philip Horlock: And when I talk about our leadership, just a reminder, I mean, 60% of the vehicles that we sell today are non-diesel. That's quite a different story for our competitors. They're up at the 90% level of diesel sales, diesel mix for their business. So, it's 10% non-diesel, so to speak. For them, it's quite a different story.

Speaker Change: On diesel.

Speaker Change: So quite a different story for our competitors rapidly thereafter, the 90% level of diesel sales diesel mix for that business. So it's 10% non diesel so to speak so for them. It's it's quite a different story for US. We're very excited about it we're well positioned for it we have exclusive products in propane and gasoline uneven electric.

Philip Horlock: For us, we're very excited about it. We're well positioned for it. We have exclusive products in propane and gasoline. And even in electric, we have exclusivity by default because we get it from Cummins, and it's the only one provided by Cummins. So, I think we're in a very good position.

Phil Horlock: For us, we're very excited about it. We're well positioned for it. We have exclusive products and propane and gasoline. And even electric, we have exclusivity by default because we get it from Cummins and the only one with variety by Cummins. So I think we're in a very good position.

Speaker Change: Exclusivity by default because we got it from coming in so the only ones with variety by coming so I think we're in a very good position.

Chris Pierce: I appreciate the detail. Talk to you. Thank you.

Christopher Pierce: Okay, I appreciate the detail. Talk soon.

Speaker Change: I appreciate the detail.

Speaker Change: Yeah.

Speaker Change: But thank you.

Eric Stein: The next question comes from Eric Stein with Craig Hallam. Please go ahead. Hi, everyone. I've been on multiple calls jumping around, so I apologize if I repeat any questions. Just curious, you mentioned for Q4 that you're tempering your outlook for electric buses, you know, just given some of the funding push out or the dates being pushed out for the clean school bus funding. You know, wondering, have you given an update on the timing of the labor agreement? Is that also a reason for the EBITDA, I guess, implied EBITDA guide to be down versus the first three quarters of the year?

Eric Stine: The next question comes from Eric Stine with Craig Hallam. Please go ahead.

Speaker Change: The next question comes from Eric Stine with Craig Hallum. Please go ahead.

Eric Stine: Hi everyone. I've been on multiple calls jumping around, so I apologize if I repeat any questions. Just curious, you mentioned for Q4 that you're tempering your outlook for electric buses just given some of the funding pushout or the dates being pushed out for the clean school bus funding. Wondering, have you given an update on the timing of the labor agreement? Is that also a reason for the EBITDA, I guess implied EBITDA guide, to be down versus the first three quarters?

Eric Stine: Hi, everyone Evan on multiple calls jumping around so I apologize if I repeat any questions.

Eric Stine: Just curious you mentioned for Q4.

Eric Stine: Just that you're tempering your outlook for electric buses.

Evan: Just given some of the funding pushout or or the dates being pushed out for the clean school bus funding.

Speaker Change: Wondering have you given an update on the timing of the Labor agreement is that also a reason for the EBITDA I.

Speaker Change: I guess implied EBITDA guide to be down versus the first three quarters of the year.

Razvan Radulescu: Eric, this is Razvan. I'll take that. So for Q4 guidance, in addition to having lower review needs, as mentioned several times by me and Phil in the preparing remarks, we have also the USW which concluded in June. So we will have the full impact of the USW agreement starting to hit in Q4, and the run rate impact is about 1% of revenue. So indeed, there will be an impactful run rate in Q4 from there. Okay. Yep. There's an example of me asking a question. You'd already addressed, so sorry for that.

Razvan Radulescu: That's Eric, this is Razvan. I'll take that. So for Q4 guidance, in addition to having lower review units, as mentioned several times by me and Phil in the prepared remarks, we also have the USW, which concluded in June, so we will have the full impact of the USW agreement starting to hit in Q4, and the run rate impact is about 1% of revenue. So indeed, there will be an impact on the run rate in Q4 from there.

Speaker Change: Hi, Eric This is Ron I'll take that.

Speaker Change: So for Q4 guidance in addition to having lower these units as mentioned several times by EMEA failing.

Speaker Change: Our prepared remarks.

Speaker Change: We.

Speaker Change: We have also the USW, which concluded in June so we will have the full impact of the USW agreement starting to hit in Q4, and the run rate impact of about 1% of revenue. So indeed, there will be an impact full run rate in Q4 from that.

Speaker Change: Sure.

Eric Stine: Okay, yep, see there's an example of me asking a question you've already addressed, so sorry for that. Well, maybe this one, for fiscal 25, your run rate for the last three quarters would put you above where you're guiding for fiscal 25, And I know the headwinds, you know, just curious, are you also being conservative on the EV side, simply because of what you talked about, even though you're going to see or expect an order pickup here before December of this year, but those buses likely wouldn't be deliveries for you until late fiscal 25 or early fiscal 26. Is that the right way to think about it?

Speaker Change: Okay. Yes. So there is an example of me asking a question you'd already.

Speaker Change: That you'd already addressed so sorry for that.

Razvan Radulescu: Well, maybe this one, for fiscal 25, you know, your run rate the last three quarters would put you above where you're guiding for fiscal 25, and I know the headwinds. You know, just curious. Are you also being conservative on the EB side? Simply because of what you talked about, even though you're going to see or expect an order pick up here before December of this year, but those buses likely wouldn't be deliveries for you until late fiscal 25 or early fiscal 26. Is that the right way to think about it? Yes, sir. So definitely, we will see lower EV volumes in the first half of fiscal 25, as we indicated, with a higher, more back-loaded for the second half.

Speaker Change: Well, maybe this one for fiscal 'twenty five.

Speaker Change: You run rate the last three quarters would put you above where you're guiding for fiscal 'twenty five and I know the headwinds. Just curious are you also being conservative on the EV side.

Speaker Change: Simply because of what you talked about even though youre going to see or expect in order pick up here before December of this year, but those buses likely wouldnt be deliveries for you until late fiscal 'twenty five early fiscal 'twenty six is that the right way to think about it.

Razvan Radulescu: Yes, Eric, so definitely, we will see lower EV volumes in the first half of fiscal 25, as we indicated, with higher, more back-loaded volumes for the second half. We provided a range of guidance of 1,000 to 1,300, and as we said going forward, we are becoming a bit less conservative in our guidance that we give. So right now, we feel pretty good about the ranges we preliminarily put out for fiscal 25, both in terms of units, EV, revenues, and EBITDA. But obviously, as things develop, we'll give you an update on the next earnings call, and we'll fine-tune the look for fiscal 25.

Eric Stine: Yes, Eric So definitely we will see lower <unk> volumes in the first half for fiscal 'twenty five as we indicated with our hire.

Speaker Change: More backend loaded for the second half, we provided a range or guidance for one to 1300.

Eric Stein: We provided a range of guidance of 1,000 to 1,300. And as we said, going forward, we are becoming a bit less conservative in our guidance that we give. So right now, we feel pretty good about the ranges we deliberately put out for fiscal 25, both in terms of units, EV, and revenues and EBDA. But obviously, as things develop, we'll give you an update in the next turning score, and we'll find you in the look for fiscal 25. Okay, thank you.

Speaker Change: And as we said going forward, we are becoming a bit less conservative in our guidance that we give so right now we feel pretty good about the ranges, we preliminarily put out for fiscal 'twenty five both in terms of units.

Speaker Change: Revenues and EBITDA, but obviously as things develop we'll give you an update in the next earnings call under a slide and tuned for fiscal 'twenty.

Speaker Change: Okay. Thank you.

Sharif Al-Sobahi: And next question is from Sharif Al-Sobahi with Bank of America. Please go ahead. Hi, good afternoon. I'm just giving much of the significant balance sheet optionality that you now have. How should we think about capital allocation going forward? Especially this is right one.

Sharif Al-Sabahi: Our next question is from Sharif Al-Sabahi with Bank of America. Please go ahead. I would just give in.

Eric Stine: Okay, thank you. Our next question is from Sharif Al-Sabahi with Banksy.

Speaker Change: Our next question is from <unk> <unk> with Bank of America. Please go ahead.

<unk> <unk>: Hi, good afternoon.

<unk> <unk>: Just given the significant balance sheet Optionality that you now have how should we think about capital allocation going forward.

Razvan Radulescu: Actually, this is Razvan. So we outlined our capital allocation strategies two earnings calls ago. However, since then, we've been awarded the Department of Energy MAS grant for $80 million. And once it's approved by the board and finally negotiated with the DOE, we will fund $80 million over the next two years from that.

Speaker Change: Hi, Sharon this is Raj we outlined our capital allocation strategy is two earnings calls ago.

Razvan Radulescu: So we outlined our capital allocation strategies two earnings calls ago. However, since then, we've been awarded the Department of Energy mass grant for $80 million. And once it's approved by the board and finally negotiated with the DOE, we will fund $80 million over the next two years from that. So we are; we will evaluate all the opportunities to deploy capital. This project has a great internal rate of return. We have a great opportunity to deploy that for our long-term growth. But at the same time, we expect to continue to generate significant cash flow.

Speaker Change: However, since then we've been awarded the department of energy mass Grand for $80 million.

Speaker Change: Once it's approved by the board and finally negotiated with the <unk> and we will fund.

Speaker Change: $80 million over the next two years from that so we are we will evaluate all the opportunities to deploy capital it's projects as a great intent.

Razvan Radulescu: So we will evaluate all the opportunities to deploy capital. This project has a great internal rate of return. So we have a great opportunity to deploy that for our long-term growth. But at the same time, we expect to continue to generate significant free cash flow. And as we find in our capital allocation strategy, we'll give you an update on the next earnings call and probably the following.

Speaker Change: The rates of returns that we have a great opportunity to deploy that for our long term growth.

Speaker Change: At the same time, we expect to continue to generate significant free cash flow and as we fine tune our capital allocation strategy will give you an update in the next earnings call and probably the following goes well.

Razvan Radulescu: And as we find in our capital allocation strategy, we'll give you an update in the next turning score and probably the following as well. Thank you.

Sharif Al-Sabahi: Are you still there, Cherie? Thank you.

Speaker Change: <unk>. Thank you.

Speaker Change: Okay.

Phil Horlock: We have no further questions, so I'll turn the call back over to Phil Horlock or any closing comments. Okay. Well, thank you, Lydia, and thanks to all of you for joining us on the call today.

Operator: We have no further questions, so I'll turn the call back over to Phil Horlock for any closing comments.

Speaker Change: We have no further questions. So I'll turn the call back over to Keith.

Speaker Change: For any closing comments.

Philip Horlock: Okay. Well, thank you, Lydia, and thanks to all of you for joining us on the call today. Before I close this earnings call, for my final time, I'd like to summarize where I believe we are today, where we stand today, and where we are going. Last year, you saw momentum growing throughout the year, and profitability increasing as we moved through each of the quarters. And we continue to be on the same path this year, delivering an impressive all-time quarterly record profit in the third quarter with a 14.5% margin.

Keith: Okay, well, thank you Lydia and thanks to all of you for joining us on the call today.

Phil Horlock: Before my closing earnings call for my final time, I'd like to summarize where I believe we are today, where we stand today, and where we are going. Long your last year, you saw momentum growing throughout the year; profitability increasing has moved through each of the quarters. And we've continued to be on the same path this year, delivering an impressive all-time quarterly record profit in the third quarter with a 14.5% margin. With this very strong base behind us, we've raised guidance for the sixth quarter in a row, and a guide into a full-year-adjusted EBIDAR of $175 million, a margin of 13.3%.

Keith: Before I close this earnings call for my final time, I'd like to summarize where I believe we are we are today, where we stand today and where we're going.

Keith: Last year, you saw a momentum growing throughout the year profitability, increasing as we move through each of the quarters.

Keith: We've continued to be on the same path this year delivering impressive all time quarter record profit in the third quarter.

Keith: With a 14, 5% margin.

Philip Horlock: With this very strong base behind us, we've raised guidance for the sixth quarter in a row and guidance to a full year adjusted EBITDA of $175 million at a margin of 13.3 percent. And as I mentioned earlier, that's a full 5.5 percentage points above last year's then record profitability.

Rodney: This very strong base behind us we've raised guidance for the sixth quarter in a row on a guide to our full year adjusted EBITDAR of $175 million and a margin of 13, 3% and as I mentioned earlier, that's a full five five percentage points above last year's then record profitability in fact, it's worth pointing out and remember that Rodney is again.

Phil Horlock: And, as I mentioned earlier, that's a full 5.5% of points above last year's then record profitability. In fact, it's worth pointing out and remembering that we're only as again that our absolute EBIDAR is double last year's result, which was then a record for the company.

Philip Horlock: In fact, it's worth pointing out and reminding us again that our absolute EBITDA is double last year's result, which was then a record for the company. And as we look to go forward from here, I mean, we've outlined some of our four-year financial plan, but I think it's worthwhile just reminding ourselves of the extremely favorable factors we have right now. These tailwinds we have that help drive profitability and grow shareholder value are what we're seeing right now and what we think we'll see moving ahead.

Rodney: Our absolute EBITDA is double last year's result, which was then a record for the company.

Phil Horlock: And as we look to going forward from here, I mean, we've outlined a few of our 40-year financial plans, but I think it's worthwhile just reminding ourselves of the extremely favorable factors we have right now, these tailwinds we have that help and drive profitability and grow shareholder value that we're seeing right now, and we think we'll see you moving ahead. Number one, we've got an unprecedented backlog of firm orders and strong market demand of edivers with an aging bus fleet that's shown by the ACT data and confirmed by all the industry experts that are out there.

Keith: As we look to going forward from here I mean, we've outlined a few of our full year financial plan, but I think it's worthwhile just reminding ourselves of the extremely favorable factors, we have right now.

Keith: These tailwind as we have that up and drive profitability and grow shareholder value that we're seeing right now and we think we will see moving ahead number one we've got an unprecedented backlog of firm orders and a strong market demand ahead of those with an aging bus fleet. That's shown by the ICT data and confirmed by all the industry experts that are out there.

Philip Horlock: Number one, we've got an unprecedented backlog of firm orders and a strong market demand for editors with an aging business. That's shown by the ACT data and confirmed by all the industry experts that are out there. Supply chain constraints are easing, and we've seen that a little bit, albeit there's still some way to go. And again, that's why you see the increase in trend on the ACT volume chart we showed you of industry projections growing.

Phil Horlock: Supply chain constraints are easing, and we've seen that a little bit, albeit there's still some way to go. And again, that's why you see the increase in trend on the ACT volume chart we showed you, the industry projections growing. Upcoming 27 emissions standards will definitely increase the need for alternative power to vehicles, and that is our sweet spot. We can deliver on that. Number four, we have strong bipartisan federal and state support and customer demand for electric buses. The demand is there. Look at the applications that we receive for round two and round three of these grants by customers who never had an electric bus before.

Speaker Change: Supply chain constraints are easing and we're seeing that a little bit, albeit there's still some way to go and again Thats why you see the increasing trend on the ACD volume chart, we showed you or the industry projections growing.

Philip Horlock: Upcoming 2027 emission standards will definitely increase the need for alternatively powered vehicles, and that is our sweet spot. We can deliver on that. Number four, we have strong bipartisan federal and state support and customer demand for electric buses. The demand is there. Look at the applications that we receive for round two and round three of these grants by customers who have never had an electric bus before. They want electric-powered buses.

Speaker Change: Upcoming 2027 emission standards will definitely increase the need for alternative powered vehicles.

Philip Horlock: That's our sweet spot. Number five, we've been awarded a significant investment grant by the DOE that will allow us to increase our type D EB production capacity and, importantly, our total capacity to 14,000 units on a single shift. That's a fantastic opportunity for us to improve our sales outlook in the coming years and obviously build very competitively as we move forward. And number six, on the basis we have, we're achieving record profits, record margins, record cash, and record liquidity today.

Speaker Change: That is our sweet spot, we can deliver on that.

Speaker Change: Number four we have strong bipartisan federal and state support and customer demand for electric buses. The demand is there look at the applications that we receive for round two and run three of these grants by customers, who never had electric bus before they want electric powered buses, that's our sweet spot.

Phil Horlock: They want electric powered buses; that's our sweet spot. Number five, we've been awarded a significant investment grant by the DOE that will allow us to increase our type DEB production capacity, and importantly, our total capacity to 14,000 units on a single shift. That's a fantastic opportunity for us to improve our sales outlook in the four years, and obviously build very competitively as we move forward. And number six, the base we have, we're achieving record profits, record margins, record cash, and we're at record liquidity today. And these are structural improvements we've made that will stay with us as a great baseline as we move forward.

Speaker Change: Number five we've been awarded a significant investment grant by the Doe that will allow us to increase our <unk> production capacity and importantly, our total capacity to 14000 units on a single shift.

Speaker Change: Thats fantastic opportunity for us to improve our our sales outlook can afford he is obviously build very competitively.

Speaker Change: As we move forward.

Speaker Change: Number six the base, we have we're achieving record profits record margins record cash and with record liquidity today.

Speaker Change: These are structural improvements we've made that will stay with us as a great baseline as we move forward.

Philip Horlock: And these are structural improvements we've made that will stay with us as a great baseline as we move forward. So with these very positive tailwinds, we provided our first look at guidance for fiscal 25. We took the midpoint of the range up to $190 million, and that's $15 million higher than fiscal 24. And we are confident in achieving a 14% margin within a couple of years as the industry supply chain constraints ease, and then going on to 15% in the long term.

Phil Horlock: So, with these very positive tailwinds, we provided our first look at Guides fiscal 25. We took EBIT out, EBIT out, midpoint of range of $190 million, and that's $15 million high on fiscal 24. And we are confident in achieving a 14% margin in a couple of years as the industry supply tank constraints ease and then go on to 15% in the long term. Bottom line, I have to say that blue blood has never been stronger, and we have great momentum. So we appreciate a continued interest in Blue Bird, and Britain and Razvan look forward to taking you to update you all again on our progress at the next earnings call.

Speaker Change: So with these positive very positive tailwind as we provided our first look at guidance fiscal 'twenty five we took abd EBITDA midpoint of a range up to $190 million and that's $15 million higher than fiscal 'twenty four and we are confident in achieving a 14% margin when a couple of years as the industry supply chain constraints ease and then go on.

Speaker Change: To 15% in the long term bottom line and I have to say to Bluebird has never been stronger and we have great momentum.

Philip Horlock: Bottom line, I have to say that Blue Bird has never been stronger, and we have great momentum. So we appreciate your continued interest in Blue Bird, and Britton and Razvan look forward to taking you on to update you all again on our progress during the next earnings call. Should you have any follow-up questions, please don't hesitate to contact our Head of Investor Relations, Mark Benfield, and thanks again from all of us at Blue Bird. Have a great evening.

Speaker Change: So we appreciate your continued interest in Blue Bird in Britain, and Ross If I look forward to taking you to update you all again on our progress over the next earnings call should you have any follow up questions. Please don't hesitate to contact our head of Investor Relations Mark Benfield, and thanks again from all of US at Bluebird have a great evening.

Lydia: If you have any follow-up questions, please don't hesitate to contact our Head of Investor Relations, Mark Benfield. Thanks again from all of us at Blue Bird. Have a great evening.

Lydia: This concludes today's call. Thank you for joining; you may now disconnect your line.

Operator: This concludes today's call. Thank you for joining us. You may now disconnect your line.

Speaker Change: This concludes today's call. Thank you for joining you may now disconnect your line.

Speaker Change: Okay.