Q2 2025 Blue Bird Corp Earnings Call

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Operator: 🎵Outro Music🎵 This is a holding announcement for the Blue Bird fiscal 2025 second quarter earnings conference call. The call will begin shortly, please stay on the line.

This is a holding at asking for Liberty, but fiscal 2025 second quarter earnings Conference call will begin shortly please stay on the logs.

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Adam: Good morning or good afternoon all and welcome to the Blue Bird Fiscal 2025 Second Quarter Earnings Conference Call. My name is Adam and I'll be your operator for today.

Speaker Change: Good morning, good afternoon, and welcome to the Blue Bird fiscal 2025 second quarter earnings Conference call. My name is Adam Adobe rough range after today.

Adam: If you'd like to ask a question at the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad.

Speaker Change: You'd like to ask a question in the Q&A portion of today's call Jimmy Choo side by pressing star followed by one on your telephone keypad now.

Mark Benfield: I will now hand the floor to Mark Benfield to begin. So Mark, please go ahead when you are ready.

Mark Benfield: I'll hand, the floor to Mark Benfield to begin Tomorrow. Please go ahead when you're ready.

Mark Benfield: Thank you and welcome to Blue Bird's fiscal 2025 second quarter earnings conference call. The audio for our call is webcast live on blue-bird.com under the investor relations tab. You can access the supporting slides on our website by clicking on the presentations box on the IR landing page.

Mark Benfield: Thank you and welcome to Blue Bird's fiscal 2025 second quarter earnings Conference call.

Speaker Change: For our call is webcast live on Blue dashboard Dot com under the Investor Relations tab you.

Speaker Change: You can access the supporting slides on our website by clicking on the presentations box on the IR landing page.

Mark Benfield: Our comments today include forward-looking statements that are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters we have noted on the following two slides and in our filings to SEC. Blue Bird disclaims any obligation to update the information in this call.

Speaker Change: Our comments today include forward looking statements are subject to risks 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 SEC.

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

Mark Benfield: This afternoon, you will hear from Blue Bird's President and CEO, Jon Weiskell, and CFO, Razvan Radulescu. and we'll take some questions. Let's get started.

Speaker Change: This afternoon, you will hear from Blue Bird's President and CEO, John why scale, and CFO Roswell and Roger last year.

Speaker Change: We will take some questions. So let's get started John.

Mark Benfield: John.

Jon Weiskell: Thanks, Mark, and good afternoon, everyone. Thanks for joining us. It's great to be here and to share with you our financial results for our fiscal 2025 second quarter.

John: Thanks, Mark and good afternoon, everyone. Thanks for joining us it's great to be here and to share with you our financial results for our fiscal 2025 second quarter.

Jon Weiskell: As you might know, I worked for Blue Bird just over 20 years ago as a general manager. It was a challenging period back then, but it was truly one of the most rewarding times in my career, and I'm excited to be back. Before I get started, I want to thank outgoing CEO Philip Horlock, our board, and of course our employees for welcoming me back into the company and making the transition very smooth. Likewise, it's great to be back working with our supply partners and, of course, our very dedicated dealer network. I'm really excited to be back.

Speaker Change: As you might know I worked for Bluebird, just over 20 years ago as a general manager at.

Speaker Change: It was a challenging period back then but it was truly one of the most rewarding times in my career.

Speaker Change: <unk> to be back.

Speaker Change: Before I get started I want to thank outgoing CEO, Phil <unk>, our board and of course, our employees for welcoming me back into the company and making the transition very smooth.

Speaker Change: Likewise, it's great to be back working with our supply partners and of course. They are very dedicated dealer network I'm really excited to be back there is such a bright future ahead as youll see today.

Jon Weiskell: There is such a bright future ahead, as you'll see today.

Jon Weiskell: Let's get to the quarter. I'm very pleased to tell you that our momentum from last year has not slowed down at all, with the Blue Bird team doing a fantastic job in delivering record-adjusted EBITDA in the second quarter of fiscal 2025.

Speaker Change: Let's get to the quarter I am very pleased to tell you that our momentum from last year has not slowed down at all with the Bluebird team doing a fantastic job in delivering record adjusted EBITDA in the second quarter of fiscal 2025.

Jon Weiskell: Razvan will be taking you through the details of our financial results shortly. So let me get started with the key takeaways for the second quarter on slide six. Going straight to the headline, we achieved record quarterly revenue and profit due to 2025. As shown in the first box, we beat Q2 guidance and are maintaining our full year guidance. This despite the impact of the current administration policy on tariffs. and we'll talk more on that later in this call. We continue to execute our plan developed a few years ago, which focused on improvement across the entire business.

Speaker Change: Raj <unk> will be taking you through the details of our financial results shortly.

Speaker Change: So let me get started with the key takeaways for the second quarter on slide six.

Speaker Change: Going straight to the headline we achieved record quarterly revenue and profit in Q2 2025.

Speaker Change: As shown in the first box, we'd be Q2 guidance and are maintaining our full year guidance. This despite the impact of the current administration policy on tariffs.

Speaker Change: And we will talk more on that later in this call.

Speaker Change: We continue to execute our plan developed a few years ago, which focused on improvement across the entire business.

Jon Weiskell: And that focus is evident in our strong Q2 results. Now, market demand for school buses continues to be very strong. We ended the quarter with just under 5,000 units in our backlog, representing over six months of production. This bodes well for operational stability in March. A few years ago, we had to take some strong pricing action, and we continue to maintain laser focus in this area. This is demonstrated in our results. Bus prices were again higher in Q2 compared to a year ago on every combustion engine model. And we're still priced competitively, as we can see from our bid results and our overall win rate.

Speaker Change: And that focus is evident in our strong Q2 results.

Speaker Change: Now market demand for school buses continues to be very strong.

Speaker Change: We ended the quarter with just under 5000 units in our backlog representing over six months of production.

Speaker Change: This bodes well for operational stability in margins.

Speaker Change: A few years ago, we had to take some strong pricing action and we continue to maintain laser focus in this area.

Speaker Change: This is demonstrated in our results box prices were again higher in Q2 compared to a year ago on every combustion engine model.

Speaker Change: And we are still price competitively as we can see from our bid results and our overall win rate.

Jon Weiskell: During the quarter, we also continued to see strong mix of alternative power vehicles. We maintain our lead position in this segment, and it's a segment we created more than 15 years ago. We are also reinvesting back into the business by selectively updating facilities, focusing on lean production systems and developing exciting new and differentiated products that will hit the market beginning as early as next year. We recognize targeted investment in our operations will lead to better performance on the manufacturing side of the business, and investment in our product portfolio will grow the top It is our objective to position this business to be a strong long-term investor.

Speaker Change: During the quarter. We also continued to see strong mix of alternative power vehicles, we maintained our lead position in this segment and it is a segment we created more than 15 years ago.

Speaker Change: We're also reinvesting back into the business by selectively updating facilities focusing on lean production systems, and developing exciting new and differentiated products that will hit the market beginning as early as next year.

Speaker Change: We recognized targeted investment in our operations will lead to better performance on the manufacturing side of the business.

Speaker Change: And investment in our product portfolio will grow the topline.

Speaker Change: It's our objective to position this business to be a strong long term investment.

Jon Weiskell: As a result of this continued path, our Q2 profitability and margin was the highest quarterly result we've ever achieved. Adjusted EBITDA came in at $49 million or 14%. That's six and a half percent better compared to last year's second quarter. Similar to almost every business in the country, we are also dealing with the impacts of the administration's executive orders and the tariff volatility. We are fortunate to be well-positioned to navigate the situation to a margin-neutral outcome.

Speaker Change: As a result of this continued past Q2 profitability in margin was the highest quarterly result, we've ever achieved.

Speaker Change: Adjusted EBITDA came in at $49 million or 14%.

Speaker Change: That six 5% better compared to last year's second quarter.

Speaker Change: Similar to almost every business in the country. We are also dealing with the impacts of the administration's executive orders and the tariff volatility.

Speaker Change: We are fortunate to be well positioned to navigate the situation to a margin neutral outcome.

Jon Weiskell: But now let's take a closer look at the financial and key business highlights for the second quarter on slide seven. We sold 2,295 buses in the second quarter and recorded revenue of $359 million. quarterly record and $13 million ahead of last year. On the EV side, we sold 265 vehicles, 11.5%, and we continue to have strong order intake for EVs. As I mentioned earlier, second quarter adjusted EBITDA $49 million was a quarterly record as well, and was $3 million above the second quarter of 2024. That's a 14% margin, 50 basis points better than last year.

Speaker Change: But now let's take a closer look at the financial and key business highlights for the second quarter on slide seven.

Speaker Change: We sold 2295 buses in the second quarter and recorded revenue of $359 million.

Speaker Change: Quarterly record $13 million ahead of last year.

Speaker Change: On the EV side, we sold 265 vehicles 11, 5% and we continue to have strong order intake for evs.

Speaker Change: As I mentioned earlier second quarter, adjusted EBITDA of $49 million was a quarterly record as well it was $3 million above the second quarter of 2024.

Speaker Change: That's a 14% margin 50 basis points better than last year.

Jon Weiskell: We will talk more on our Outlook later in this call. As a reminder, our merchants are very balanced across our entire product line from a percentage basis, including you. And we think EVs are a perfect fit for the school bus market, when you look at the duty cycle, available charging intervals, range, and proven health benefits to our children. But our core business in the ice segments is equally as strong. Even with nearly 90% ice mix, our second quarter results highlight the underlying strength in the overall business. And finally, adjusted free cash flow for the second quarter was $19 million, a decrease of $35 million over a year ago, but mainly driven by a tax carry forward benefit that we had in 2024.

Speaker Change: We will talk more on our outlook later in this call.

Speaker Change: As a reminder, our merchants are very balanced across our entire product line from a percentage basis, including Evs and.

Speaker Change: And we think Evs are a perfect fit for the school bus market. When you look at the duty cycle available charging <unk> range and proven health benefits to our children.

Speaker Change: But our core business and the ice segment is equally as strong even with nearly 90% ice mix, our second quarter results highlight the underlying strength in the overall business.

Speaker Change: And finally, adjusted free cash flow for the second quarter was $19 million.

Speaker Change: A decrease of $35 million over a year ago, but mainly driven by a tax carryforward benefit that we had in 2024.

Jon Weiskell: Overall, we achieved an outstanding second quarter financial result. On the right-hand side of the slide, you can see some of the operating highlights for the business. As I mentioned earlier, demand continues to be strong, with a firm order backlog of 4,900 buses representing $770 million in revenue. Second quarter average selling prices for buses was up $4,000 per unit or about 3% compared to last year. And part sales totaled $26 million in Q2. All powered buses represented a 57% mix of unit sales in Q2. This compares with a typically less than 10-15% mix for our major competitors.

Speaker Change: Overall, we achieved an outstanding second quarter financial results.

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

Speaker Change: As I mentioned earlier demand continues to be strong with our firm order backlog of 4900 buses representing $770 million in revenue.

Speaker Change: Second quarter average selling prices for buses was up $4000 per unit were both 3% compared to last year.

Speaker Change: And part sales totaled $26 million in Q2.

Speaker Change: All powered buses represented a 57% mix of unit sales in Q2.

Speaker Change: This compares with a typically less than 10% to 15% mix for our major competitors.

Jon Weiskell: We benefit from higher margins. and Higher Owner Loyalty with their gas and propane products. were the exclusive supplier in the industry. At the end of the quarter, we had a combined 1,100 EVs either booked or in an order backlog. Our latest forecast reflects 800 to 1,000 EV unit sales for the full year. We are well positioned from an order standpoint to achieve a previous target of a thousand units. However, tariff exposure is higher on EVs, and it may create a scenario where we intentionally push out some of our bills.

Speaker Change: We benefit from higher margins and higher owner loyalty with our gas and propane products.

Speaker Change: We're the exclusive supplier in the industry.

Speaker Change: At the end of the quarter, we had a combined 1100 evs either booked or in our order backlog.

Speaker Change: Our latest forecast reflects 800 to 1000 EV unit sales for the full year.

Speaker Change: And we are well positioned from an order standpoint to achieve our previous target of 1000 units. However.

Speaker Change: The tariff exposure is higher on Evs and it may create a scenario, where we intentionally pushed out some of our builds.

Jon Weiskell: Razvan will cover this in more detail. The current backlog of 708 electric buses represents $233 million in revenue. Throughout the second quarter, it was very encouraging to see rounds two and three of the EPA Clean School Bus program flowing through to our end customers. It's a good program, and this momentum provides optimism that will continue into round four. In addition, reimbursement funds were flowing for our $80 million MESS contract with the DOE. This is for their funding towards our new plant expansion in Fort Valley. As a reminder, this project adds 400 well-paying American jobs to a century-old American company with an iconic brand.

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

Speaker Change: The current backlog of 708 electric buses represents $233 million in revenue.

Speaker Change: Throughout the second quarter. It was very encouraging to see round two and three of the EPA Clean School bus program flowing through to our end customers.

Speaker Change: A good program.

Speaker Change: This momentum provides optimism that will continue into around four.

Speaker Change: In addition, reimbursement funds were flowing for $80 million mask contract with the Doe.

Speaker Change: This is for their funding towards our new plant expansion in Fort Valley.

Speaker Change: As a reminder, this project at 400, well paying American jobs to a century old American company with an iconic brand.

Jon Weiskell: to build clean school buses, providing our children with the benefits of clean air. It's really a great story. And finally, we beat our guidance for the 10th consecutive quarter and are holding our full year guidance. With a 14% adjusted EBITDA margin and record profits in Q2, I'm very proud of the team's accomplishments.

Speaker Change: To build clean school buses, providing our children with the benefits of clean there.

Speaker Change: It's really a great story.

Speaker Change: And finally, we beat our guidance for the 10th consecutive quarter and are holding our full year guidance.

Speaker Change: With a 14% adjusted EBITDA margin and record profits in Q2, I'm very proud of the team's accomplishments.

Jon Weiskell: But before I hand it over to Razvan to cover the financials, I would ask that you turn to slide eight so I can talk to another highlight in Q2.

Speaker Change: But before I hand, it over to Razvan to cover the financials I would ask that you turn to slide eight so I can talk to another highlight in Q2.

Jon Weiskell: Earlier in March, we debuted our Blue Bird commercial chassis at the Work Truck Show in Indianapolis. We are recognized and we am in this segment and the reaction to this new product was overwhelming. The chassis will be offered in propane or EV. It has some best-in-class features, like a 55-degree wheel cut for tight turning radiuses, the highest front axle clearance at over 8 inches, galvanized frame rails, and it's designed to have fewer electrical and fluid connection points for reliability.

Speaker Change: Earlier in March we debuted our Bluebird commercial chassis at the work truck show in Indianapolis.

Speaker Change: We are a recognized OEM in this segment and the reaction to this new product was overwhelming.

Speaker Change: The chassis will be offered in propane or TV.

Speaker Change: It has some best in class features like a 55 degree we'll cut for <unk> turning radius.

Speaker Change: The highest for an actual clearance that over eight inches galvanized frame rails and is designed to have fewer electrical and fluid connection points for reliability.

Jon Weiskell: We are now executing our manufacturing strategy, but the product is scheduled to launch in 2026 at a market competitive price. As mentioned, many company fleets, last milers, and delivery companies express strong interest. We will be finalizing our financial projections for this new segment this year as a part of our 2026 outlook.

Speaker Change: We are now executing our manufacturing strategy, but the product is scheduled to launch in 2026 at a market competitive price.

Speaker Change: As mentioned many company fleets last milers and delivery companies expressed strong interest.

Speaker Change: We will be finalizing our financial projections for this new segment this year as a part of our 2026 outlook.

Jon Weiskell: I'm really excited about this opportunity.

Speaker Change: I'm really excited about this opportunity.

Razvan Radulescu: So, I would like to now hand it over to Razvan to walk through our fiscal 25 second quarter financial results and full year guidance in more detail. Razvan Thanks, John, and good afternoon. It's my pleasure to share with you the financial highlights from Blue Bird's fiscal 2025 second quarter and first half of the year results.

Speaker Change: So I would like to now hand, it over to Roz fun to walk through our fiscal 'twenty five second quarter financial results and full year guidance in more detail.

Speaker Change: <unk>.

Roz Fun: Thanks, John and good afternoon, it's my pleasure to share with you the financial highlights from Bluebird fiscal 2025 second quarter and first half of the year results.

Razvan Radulescu: The quarter end is based on a close date of March 29th, 2025, whereas the prior year was based on a close date of March 30th, 2024. We will file the 10-Q today, May 7, after market close. Our 10Q 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 GAAP and non-GAAP measures mentioned on this call, as well as other important disclaimers.

Roz Fun: And this is based on a close date of March 29 2025.

Roz Fun: Whereas the prior year was based on the close date of March 30 of 2024.

Roz Fun: We will file the 10-Q today may seven after market close.

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

Roz Fun: We encourage you to read the 10-Q and the important disclosures that it contains.

Roz Fun: The appendix attached to this presentation includes reconciliations of differences between GAAP and non-GAAP measures mentioned on this call.

Roz Fun: One other important disclaimers.

Razvan Radulescu: Slide 10 is a summary of the fiscal 25 second quarter record financial results. It was another great operating quarter for Blue Bird, with highest ever EV volume, and they beat once again our guidance provided in the last earnings call. In fact, we delivered the best quarter ever in terms of both top line and bottom line, as a testament of our continued journey of profitable growth. The team pushed hard and did once again a fantastic job generating 2,295 unit sales volume, which was just above prior year level. Record Q2 consolidated net revenue of $359 million, was $13 million higher than prior year, driven by pricing actions that materialized in this quarter and increased EV volume.

Roz Fun: Slide 10 is a summary of the fiscal 'twenty second quarter record financial results.

Roz Fun: With another great operating quarter for Uber with highest ever easy volume and they beat once again, our guidance provided in the earnings call.

Roz Fun: In fact, we delivered the best quarter ever in terms of both topline and bottom line.

Roz Fun: Testament of our continued journey of profitable growth.

Roz Fun: The team pushed hard and with once again, a fantastic job generating 2295 unit sales volume, which was just above prior year level.

Roz Fun: Record Q2, consolidated net revenue of $359 million was $13 million higher than prior year, driven by pricing actions that materialized in this quarter and increase the volume.

Razvan Radulescu: Adjusted EBITDA for the quarter was an all-time record $49 million, driven by high boss and parts margins, partially offset by increased investments in headcount, engineering, and business growth areas. The adjusted free cash flow was strong at $19 million and $35 million lower than the prior year's second quarter, primarily due to increased tax expenses year-over-year. This result was due to continuous strong profitability across all bus and powertrain types, strategic cost management, and improvements in working capital. Looking on the right side, at the first half of the fiscal year, we posted all-time record revenue of $673 million and all-time record adjusted EBITDA of $95 million, both improved versus then-record last year's first half.

Roz Fun: Adjusted EBITDA for the quarter was an all time record $49 million.

Roz Fun: We've run by Hyatt Boston parts margins, partially offset by increased investments in head count engineering and business growth areas.

Roz Fun: The adjusted free cash flow was strong at $19 million and $35 million lower than the prior year second quarter, primarily due to increased tax expenses year over year.

Roz Fun: This result was due to continued strong profitability across all bus and powertrain types.

Roz Fun: Cost management and improvements in working capital.

Roz Fun: Looking on the right side of the first half of the fiscal year, we posted all time record revenue of $673 million, an all time record adjusted EBITDA of $95 million, most improved versus Denver Airport last year's first half.

Razvan Radulescu: Moving on to slide 11, as mentioned before by John, our backlog at the end of Q2 continues to be strong at almost 5,000 units, including over 700 EVs. In fact, at the end of March, we have now 1,100 EVs sold in the first half and in backlog, with only 150 EPA Round 3 units in process to be funded. Round three is slowing again, as confirmed by the EPA, as well as round two. Breaking down the Q2 $359 million in revenue into our two business segments, the bus net revenue was $333 million, up by $15 million versus prior year, due to higher EV mix and improved pricing across non-EV products.

Roz Fun: Moving on to slide 11 as mentioned before by John our backlog at the end of Q2 continues to be strong at almost 5000 units, including over 700 Evs.

Roz Fun: In fact at the end of March we have now 1100 give you sold in the first half and in backlog with only 150 EPA around three units in process to be funded.

Roz Fun: But all three slowing again as confirmed by the EPA as well as around too.

Roz Fun: Breaking down the Q to $359 million in revenue into our two business segments. The bus net revenue was $333 million up by $15 million versus prior year due to higher <unk> mix and improved pricing across non <unk> products.

Razvan Radulescu: As a result, our average bus revenue per unit increased from $141,000 to $145,000, or approximately 3%. EVs in Q2 were a record 265 units, doubled versus Q1, and 55 units, or 26% higher than last year, was planned. Parts revenue for the quarter was flat from Q1 at $26 million, representing a small reduction of $2 million compared to the prior year. This continued strong performance was in part due to increased demand for our parts because the fleet is offset by a reduction of part use in warranty due to quality improvements made year over year. Cross margin for the quarter was 19.7%, or 130 basis points higher than last year, in line with our target.

Roz Fun: As a result, our average bus revenue per unit increased from 141000 to 145000.

Roz Fun: Approximately 3%.

Roz Fun: <unk> in Q2 were a record 265 units doubled versus Q1, and 55 units or 26% higher than last year.

Roz Fun: <unk>.

Roz Fun: <unk> revenue for the quarter was flat from Q1 of $26 million, representing a small reduction of $2 million compared to the prior year.

Roz Fun: Continued strong performance was in part due to increased demand for our part of the fleet is aging.

Roz Fun: Offset by a reduction of postures and warranty due to quality improvements made year over year.

Roz Fun: Gross margin for the quarter was 19, 7% or 130 basis points higher than last year in line with our targets.

Razvan Radulescu: Adjusted EBITDA of 49 million, or 13.7%, was higher by 4 million compared with prior year and showed a 50 basis points improvement. The fiscal 25Q2 adjustment income was a record $32 million, or $2 million higher than last year. Adjusted diluted earnings per share of $0.96 was up $0.07 versus the prior year.

Roz Fun: Adjusted EBITDA of $49 million or 13, 7% was higher by $4 million compared with prior year and showed the 50 basis points improvement.

Roz Fun: In fiscal 'twenty five Q2, adjusted net income was a record $32 million or $2 million higher than last year.

Roz Fun: Adjusted diluted earnings per share of $9 <unk> was up seven.

Roz Fun: Versus the prior year.

Razvan Radulescu: Slide 12 shows the walk from fiscal 24 Q2 adjusted EBITDA to the fiscal 25 Q2 result. Starting on the left, at $45.8 million, the impact of the bus segment gross profit in total was $8 million. Split between volume, EV mix, and pricing effects, net of material cost increases of $8.5 million, and operational small cost increases of negative $0.5 million, largely driven by the USW labor agreement now in full effect, almost fully offset by other efficiency improvements. The small unfavorable development in the park segment gross profit was negative $0.8 million, driven by lower sales of parks using warranty, as mentioned earlier in the call.

Roz Fun: Slide 12 shows the walk from fiscal 2000 and for Q2 adjusted EBITDA the fiscal 'twenty five Q2 results.

Roz Fun: Starting on the left with $45 8 million the impact of the bus segment gross profit in total was 8 million split between volume mix and pricing effects.

Roz Fun: Cost increases of $8 5 million and operational small cost increases of negative 0.5 million largely driven by the USW labor agreements knowing fully effect.

Roz Fun: Most fully offset by other efficiency improvements.

Roz Fun: The small unfavorable development in the product segment gross profit was negative zero point $8 million.

Roz Fun: Given by lower sales of postures and warranty as mentioned earlier in the call.

Razvan Radulescu: Our fixed costs and other income were unfavorable year over year by negative $3.8 million due to increased headcount and investments into our growth area.

Roz Fun: Our fixed costs and other income were unfavorable year over year by negative $3 8 million due to increased head count and investments into our growth areas.

Razvan Radulescu: The sum total of all the above-mentioned developments drives our all-time record fiscal 2025 Q2 reported adjusted EBITDA result of $49.2 million or 13.7%.

Roz Fun: The sum total of all the above mentioned developments drives our all time record of fiscal 'twenty. Five Q2 reported adjusted EBITDA result of $49 2 million or 13, 7%.

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 a new record $131 million in cash and further reduced our debt by approximately $5 million over the last year. Our liquidity set very strong at a new record $274 million at the end of fiscal 2052, a $38 million increase compared to a year ago. Additionally, we have executed another tranche of share repurchases accelerated to $20 million during fiscal 25 Q2, which brings us to $40 million completed over the last nine months, with another $20 million left to go on the existing program approved by our board.

Roz Fun: Moving on to Slide 13, we have extremely positive development year over year also on the balance sheet.

Roz Fun: We ended the quarter with a near record $131 million in cash and further reduced our debt by approximately $5 million over the last year.

Roz Fun: Our liquidity is very strong at a near record $274 million at the end of fiscal 'twenty, five tier two but $38 million increased compared to a year ago.

Roz Fun: Additionally, we have executed another tranche of share repurchases accelerated to 20 million during fiscal 'twenty, five Q2, which brings us to $40 million completed over the last nine months with another $20 million left to go on the existing program approved by our board.

Razvan Radulescu: The operating cash flow was strong for Q2 at $29 million, given by great operational execution and margins, improvements in working capital, and partially offset by increased tax payment.

Roz Fun: The operating cash flow are strong for Q2 of $29 million driven by great operational execution and margin improvements in working capital and partially offset by increased tax payments.

Razvan Radulescu: On slide 14, we'd like to give you an update about the impact the new administration's tax policy already has on our business and the respective countermeasures we put in place. To level set definitions on how they work, tariffs are taxes imposed by the government on certain goods brought in from other countries. They are paid by the importer of record and usually are passed on to the end user. Since February, we have seen almost on a weekly basis, and sometimes even twice in the same day, new tariffs being imposed on various imports in the United States of America.

Roz Fun: On slide 14, we would like to give you an update about the impact of new Ministration Patrick's policy.

Roz Fun: He has on our business and the respective counter measures we've put in place.

To level set definitions and how they work tariffs or taxes imposed by the government on certain goods brought in from other countries that are paid by the importer of record and usually are passed onto the end users.

Roz Fun: Since February we have seen almost on a weekly basis and sometimes even twice in the same day, new patterns being imposed on various inputs and very United States of America.

Razvan Radulescu: And while the majority of our parts and assemblies are sourced in the US, we are also using great suppliers from Mexico and Canada, as well as a small number of components or subparts from China and Europe. We have highlighted on this chart the main components exposure for each tariff category. On Canada and Mexico, the good news is that at least so far, the USMCA exemptions apply for a brief period they did not. Our exposure to Europe is low, but even a 10% tariff adds up. And this is temporary and could go up based on the ongoing negotiations.

Roz Fun: And while the majority of our parts and assemblies are sourced in the U S. We are also using great suppliers from Mexico, and Canada as well as the small number of components are sub parts from China and Europe.

Roz Fun: We have highlighted on this chart the main components exposure for these patents category.

Roz Fun: On Canada, and Mexico. The good news is that so far the U S. MCA exemptions apply for a brief period they did not.

Roz Fun: Our exposure to Europe is low, but even a 10% tariff ends up and this is temporary and could go up based on the ongoing negotiations.

Razvan Radulescu: The steel and aluminum 25% import tariff gave the U.S. manufacturers the opportunity to raise prices immediately, as shown in the spot market at the end of March. The good news is that we have a robust steel hedging program covering our backlog. However, this cost increase impact will materialize in fiscal 26 if the prices stay where they are now.

Roz Fun: The steel and aluminum, 25% import tariffs if the U S manufacturers the opportunity to raise prices immediately as shown in the spot market at the end of March.

Roz Fun: The good news is that we have a robust hedging program covering our backlog. However, this cost increase impact will materialize in fiscal 'twenty six.

Roz Fun: Prices stay where they are now.

Razvan Radulescu: And now to the big elephant in the room, China. The 145% tariffs are bringing the imports to a standstill. And we are particularly exposed on our EV kit from Accelera. To give you a rough order of magnitude, we are looking at more than 10% price increase on the total value of an EV bus. Therefore, we decided to prioritize ICE buses in fiscal Q4 and reduce the number of EVs we produce until the tariff situation comes to a resolution. As you will see in our updated guidance, Q3 is proceeding as planned due to already inbound and strategic inventory we have put in place.

Roz Fun: And now to the big elephant in the room China.

Roz Fun: <unk> hundred 45% Paris are bringing the inputs to a standstill and we're particularly exposed on our EV Keith from accelerator. So give you a rough order of magnitude, we're looking at more than 10% price increase on the total value of uneasy bus.

Roz Fun: Therefore, we decided to prioritize buses in fiscal Q4 and reduced the number of years, we've produced until the tariff situation comes toward a solution.

Roz Fun: As you will see in our updated guidance Q3 is proceeding as planned due to already in both and strategic inventory we have put in place.

Razvan Radulescu: While we are working with our supply chain partners to find alternative sources in the United States and North America, this takes time, and we are not going to compromise safety or quality during this process. As a result, we had to implement a 2% tariff increase at the end of Q2 on all units sold, as well as an additional 2% general price increase on all new orders after April 1st. This was done when China new tariffs were at only 20%. More price increases are going to be announced in the near future, reflecting the now 145% new tariff levels for China.

Roz Fun: While we are working with our supply chain partners to find alternative sources in the United States and North America. This takes time, and we're not going to compromise safety or quality during this process.

Roz Fun: As a result, we had to implement a 2% tariff increase at the end of Q2 on all units sold as well as an additional 2% general price increase on all new orders after April one.

Roz Fun: This was done when China, new tariffs, whereas only 20%.

Roz Fun: Price increases are going to be announced in the near future, reflecting the now 145% new tariff levels for China.

Razvan Radulescu: Our goal is to provide as much advance notice as possible to our dealers and customers while preserving the financial health of our business.

Roz Fun: Our goal is to provide those margins advanced notice as possible to our dealers and customers.

Roz Fun: Preserving the financial health of our business, let me be clear this unprecedented tariffs have a real effect on our business and they will drive our prices up.

Razvan Radulescu: Let me be clear. These unprecedented tariffs have a real effect on our business, and they will drive our prices up.

Razvan Radulescu: On slide 15, we wanted to remind you about our quarterly guidance provided in our last earnings call. We are targeting $200 million adjusted EBITDA for the year, with approximately $1,000.

Roz Fun: On slide 15, we wanted to remind you about our quarterly guidance provided in our last earnings call. We are targeting $200 million adjusted EBITDA for the year was approximately one <unk>.

Razvan Radulescu: On slide 16, we want to share with you our confirmed fiscal 25 total year 200 million guidance with updated Q3 and Q4 and a tariff-driven lower EV number for the year of 800 to 1,000 units. But first, looking at Q2 actuals, we have beat once again our guidance this past quarter. So we had a very strong and record-breaking first half for the fiscal year. There is still some uncertainty on the EPA rounds four and five due to the recent executive orders. However, the rounds two and three funding disbursements are flowing again, as confirmed by the EPA.

Roz Fun: On slide 16, we want to share with you our confirmed fiscal 'twenty five total year $200 million guidance with updated Q3, and Q4 and a tariff driven lower <unk> number for the year of 800 to 1000 units.

Roz Fun: But first looking at Q2 actuals, we have beat once again our guidance this past quarter.

Roz Fun: We had a very strong record breaking first half for the fiscal year.

Roz Fun: There is still some uncertainty on the EPA announced four and five due to the recent executive orders, however that Austrian three funding disbursements are flowing again as confirmed by the EPA we.

Razvan Radulescu: We have booked approximately 400 EVs in the first half and have a backlog of 700 EVs, of which now only 150 are in process of receiving funding from round three. On the adjusted EBITDA side, we are increasing slightly our guidance for Q3, given our strong business momentum, and we are lowering the bottom range by $5 million for Q4, driven by lower EBITDA.

Roz Fun: We have booked approximately 400 disease in the first half and have a backlog of 700 Evs.

Roz Fun: Of which now only 150 are in process of receiving funding from round III.

Roz Fun: On the adjusted EBITDA side, we are increasing slightly our guidance for Q3, given our strong business momentum and we are lowering the bottom range by $5 million for Q4, driven by lower disease.

Razvan Radulescu: We are maintaining our revenue to a range of $1.4 to $1.5 billion and we are confirming our adjusted dividend of $200 million or approximately 14% with a narrowed range of $190 to $210 million or 13.5 to 14.5%.

Roz Fun: We are maintaining our revenue to a range of one four to $1 5 billion and we are confirming our adjusted EBITDA of 200 million or approximately 14% with a narrowed range of $190 million to $210 million or 13, five to 14, 5%.

Razvan Radulescu: We'll provide further updates at the beginning of August after we close fiscal Q3 and gather further insight into the tariff situation, especially for China and the U.S.

Roz Fun: We will provide further updates at the beginning of August after we close fiscal Q3 and gather further insight into the tariff situation, especially for China and disease.

Razvan Radulescu: On slide 17, we want to reiterate our thoughts on fiscal 25 business environment and our total year guidance. We continue to have a number of both tailwinds and headwinds at play this year. As tailwinds, we have strong bus demand, stable pricing, and still a very high industry backlog. We offer not only diesel and gasoline school buses, but we have the only propane-fueled school bus in the industry, with clean fuel and best-in-class total cost of ownership. As mentioned last few times, we are not a one-trick pony. We are also leading in the EV segment with over 2,000 EV buses on the road.

Roz Fun: On slide 17, we want to reiterate our thoughts on fiscal 'twenty, five business environment, and our total year guidance.

Roz Fun: We continue to have a number of both tailwind and headwinds at play this year.

Roz Fun: As tailwind, we have strong box demand stable pricing and still a very high industry backlog, we offer not only diesel and gasoline school buses.

Roz Fun: The only program to a school bus in the industry with clean fuel and best in class total cost of ownership as mentioned last few times, we are not a one trick pony.

Roz Fun: We are also leading in the EV segment with over 2000 EV buses on the road. The state subsidies continued to be strong EV pure play competitors are going out of business and we have already approximately 1100 into salt and in backlog at the end of March.

Razvan Radulescu: The state subsidies continue to be strong. EV pure play competitors are going out of business, and we have already approximately 1,100 EVs sold and in backlog at the end of March.

Razvan Radulescu: But headwinds, there is some uncertainty regarding the timing of EPA Clean School Bus Program future rounds four and five. Also, supply chain is still fragile at times while improving overall. The material costs and supplier inflation pressures are still present, and the newly implemented tariffs are impacting our cost of goods sold over time, with bus pricing countermeasures already announced and more to be implemented as needed. In summary, we are slightly raising our units and maintaining our revenue midpoint guidance to $9,300 and $1.45 billion, respectively, with approximately 900 EVs. We are also confirming our adjusted EBITDA guidance of 200 million or 14% with a range of 190 to 210 million and 13.5 to 14.5% margin.

Roz Fun: With headwinds there is some uncertainty regarding the timing of EPA Clean School bus program future rounds, four and five.

Roz Fun: Also supply chain is still fragile at times, while improving overall.

Roz Fun: The material cost and supplier inflation pressures are still present and the newly implemented tariffs are impacting our cost of goods sold over time with both pricing counter measures already announced and more to be implemented as needed.

Roz Fun: In summary, we are slightly raising our units and maintaining our revenue midpoint guidance to 90, 301 45 billion, respectively was approximately 900 disease.

Roz Fun: We are also confirming our adjusted EBITDA guidance of 200 million or 14% with a range of $190 million to $210 million and 13 five to 14, 5% margin.

Razvan Radulescu: Moving to slide 18. In summary, we are forecasting an improvement year over year, with revenue up to approximately $1.45 billion, adjusted EBITDA in the range of $190 to $210 million, or 13.5 to 14.5%, and improved adjusted free cash flow of $60 to $80 million. The free cash flow guidance is in line with our typical target of approximately 50% of adjusted EBITDA and it includes on top the extraordinary capex of now $30 million as our 50% fiscal 25 portion of the new plant investment funded by a DOE MAS grant, which is currently proceeding.

Roz Fun: Moving to slide 18 in summary, we are forecasting an improvement year over year with revenue up to approximately 145 billion adjusted EBITDA in the range of $190 million to $210 million or 13, five to 14, 5% and improved adjusted free cash flow of 60.

Roz Fun: You too inconvenient.

Roz Fun: Our free cash flow guidance is in line with our typical target of approximately 50% of adjusted EBITDA and it includes on top of the extraordinary capex of $30 million or $1, 50% fiscal 'twenty five portion of the new plant investments funded by a grant which is currently.

Roz Fun: <unk>.

Razvan Radulescu: Moving on to slide 19. Today, we are once again reconfirming the medium term outlook at 14% margin with volumes of up to 10,000 units, generating revenue around $1.6 billion, and with adjusted EBITDA of $225 million. Starting in 2028 and beyond, our long-term target remains to drive profitable growth to higher levels, towards $1.85 to $2 billion in revenue, comprising of 11,000 to 12,000 units, and generate EBITDA of $270 to $300 plus million, or 14.5% to 15% plus, at best-in-class level. The growth comes not only from improved EV mix driven by sustained state funding and improved EV total cost of ownership over time.

Roz Fun: Moving onto slide 19.

Roz Fun: Today, we are once again confirming the medium term outlook at 14% margin with volumes of up to 10000 units generating revenue around $1 6 billion and was adjusted EBITDA of $225 million stock.

Roz Fun: Starting in 2028 and beyond our long term target remains to drive profitable growth to higher levels.

Roz Fun: $185 2 billion in revenue comprising of 11000 to 12000 units and generate EBITDA of 270 to 300 plus million or 14, 5% to 15% plus but the best in class levels there.

Roz Fun: The growth comes not only from improved mix driven by sustained state funding and improved if your total cost of ownership over time.

Razvan Radulescu: but also from our new Blue Bird commercial chassis addressable market expansion, as well as our Micro Bird joint venture new plant expansion in the USA.

Roz Fun: But also from our new global commercial chassis addressable market expansion as well as our micro bird joint venture new plant expansion and the USA.

Jon Weiskell: We continue to be incredibly excited about Blue Bird's future, and now I will turn it back over to John. Thank you, Razvan. Let's move on to slide 21. We've shown this slide on several earnings calls, so I won't spend too much time on it today as our business priorities remain The chart on the left side of the page outlines our Blue Bird value system as a company. taking care of employees, delighting our customers and dealers, and delivering profitable growth. The right side of the page outlines how we get there. And of course, the objective of delivering sustained profitable growth for our investors is at the center of it all.

John: Continue to be incredibly excited about global future and now I will turn it back over to John.

Speaker Change: Thank you Roz van.

Speaker Change: Let's move on to Slide 21, we've shown this slide on several earnings calls so I won't spend too much time on it today as their business priorities remain consistent.

Speaker Change: The chart on the left side of the page outlines our bluebird value system as a company.

Speaker Change: Taking care of employees, delighting, our customers and dealers and delivering profitable growth.

Speaker Change: The right side of the page outlines how we get there.

Speaker Change: And of course, the objective of delivering sustained profitable growth for our investors is at the center of it all.

Jon Weiskell: And when you turn to slide 22, I want to start with Blue Bird's history and resilience. After the COVID and inflationary period that affected the entire industry to epic proportions, we really worked hard to restructure and improve our business. So looking at 2025 and beyond, we are really coming into our moment. Razvan took you through the guidance for Fiscal 25, and I'm showing some of those key metrics and the midpoint guidance here. First, we're being cautious with our bookings outlook, only increasing volume by 3% over fiscal 24 at this time. Net revenue of $1.45 billion will be a new record for Blue Bird, up 8% from fiscal 2024.

Speaker Change: And when you turn to slide 22, I want to start with Bluebird history and resilience.

Speaker Change: After the Covid, an inflationary period that affected the entire industry to epic proportions, we really worked hard to restructure and improve their business.

Speaker Change: So looking at 2025 and beyond.

We are really coming into a moment.

Roz Fun: Roslyn took you through the guidance for fiscal 'twenty five.

Speaker Change: Im showing some of those key metrics and the mid point guidance here.

Speaker Change: First we are being cautious with their bookings outlook only increasing volume by 3% over fiscal 'twenty four at this time.

Speaker Change: Net revenue of $1 45 billion will be a new record for Bluebird.

Speaker Change: Up 8% from fiscal 'twenty four.

Jon Weiskell: and adjusted EBITDA guidance of $200 million is 9% higher than our fiscal 24 results. Importantly, we are planning on a robust 14% adjusted EBITDA margin in FY25, up 40 basis points from FY24. And finally, we are forecasting to grow EV unit sales to 900 buses in Fiscal 25, up 28% from last year. On the right chart, you can see there's still a lot of pent up demand following the low industry sales over the last five years. and the bus fleet has continued to age. ACT is forecasting a compounded annual growth rate of 6% through 2030.

Speaker Change: And adjusted EBITDA guidance of $200 million is 9% higher than our fiscal 'twenty four results.

Speaker Change: Importantly, we are planning on a robust 14% adjusted EBITDA margin in fiscal 'twenty five.

40 basis points from fiscal 'twenty four.

Speaker Change: And finally, we are forecasting to grow EV unit sales to 900 buses in fiscal 'twenty five.

Speaker Change: Up 28% from last year.

Speaker Change: On the right chart you can see there is still a lot of pent up demand following the low industry sales over the last five years.

Speaker Change: And the bus fleet has continued to age.

Speaker Change: <unk> is forecasting a compounded annual growth rate of 6% through 2030.

Jon Weiskell: And that's great news for our business and our profit.

Speaker Change: That's great news for our business and our profit outlook.

Jon Weiskell: So I'll wrap it up with slide 23. As I approach my first 100 days since rejoining the company, I really do feel good about that. This great company and iconic brand is almost 100 years old. It has stood the test of time and it's poised for the future. We deliver record sales and adjusted EBITDA for the quarter and are maintaining our full year guidance despite the challenging tariff environment. We remain confident the Clean School Bus program will continue. It's a bipartisan initiative, it's 100% appropriated, and eliminates harmful tailpipe toxins benefiting our children and communities. Over time, Blue Bird has demonstrated resilience.

Speaker Change: So I'll wrap it up with slide 23, as I approach My first 100 days since rejoining the company.

Speaker Change: Really do feel good about things.

Speaker Change: This great company and iconic brand is almost 100 years old.

Speaker Change: It has stood the test of time and it's poised for the future.

Speaker Change: We delivered record sales and adjusted EBITDA for the quarter and are maintaining our full year guidance, despite the challenging tariff environment.

Speaker Change: We remain confident that clean school bus program will continue.

Speaker Change: By partisan initiative, it's 100% appropriated and eliminates harmful tailpipe toxins benefiting our children and communities.

Speaker Change: Overtime Bluebird has demonstrated resilience our performance has put us in a position to really look longer term as we invest and enter new segments and upgrade our operations.

Jon Weiskell: Our performance has put us in a position to really look longer term as we invest and enter new segments and upgrade our operations. I want to thank our employees, our dealer network, and our supply partners. All are critical to our success. and I'm really glad to have rejoined Blue Bird. It's been an incredible start with record results, maintaining guidance, a great history, and an exciting future.

Speaker Change: I want to thank our employees, our dealer network and our supply partners all are critical to our success.

Speaker Change: And I'm really glad to have rejoined bluebird.

Speaker Change: It's been an incredible start with record results maintaining guidance, a great history and an exciting future.

Jon Weiskell: Thank you.

Speaker Change: Thank you.

Adam: So that concludes our formal presentation for today, and now I'd like to hand it back to the moderator for our Q&A session. Thank you. As a reminder, if you'd like to ask a question today, please press star followed by one on your telephone keypad now to enter the queue. I'm preparing to ask you a question. Please ensure you are unmuted locally.

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

Speaker Change: Thank you and as a reminder, if you'd like to ask a question. Please press star followed by one on your telephone keypad now to into the queue.

Speaker Change: <unk> been preparing to ask a question. Please ensure your RBC Luckily.

Mike Shlisky: And our first question comes from Mike Shlisky from D.A. Davidson.

Speaker Change: And our first question comes from <unk> from D. A Davidson. Please go ahead your line is open.

Mike Shlisky: Mike, please go ahead, your line is open. Yes, hi. Good afternoon.

Speaker Change: Yes, hi, good afternoon.

Jon Weiskell: And John, welcome. So I noticed that you didn't really change much on your outlook for your medium or long-term targets. Well, I was kind of wondering, John, it's been about two months since you've been there, a little more than two months. Does your background lend itself to any margin improvements above and beyond what's been stated?

Speaker Change: And John welcome.

Speaker Change: So I noticed that you didn't really change much on your outlook your medium or long term targets.

Speaker Change: And I'm wondering John.

Speaker Change: Two months that you wanted.

Speaker Change: Two months with your background lend itself to any margin improvements above and beyond what's been stated.

Jon Weiskell: I think you might want to change that. You probably sat down and chatted with a lot of folks from the company for the last couple of months here. All right. You can get a kind of... get beyond that 15% over the over the long term and your personal goal. Thanks, Mark. Thanks for the question. Thanks for welcoming, welcoming me into the company. The couple things I think it's early, I've only been here the first 100 days. So I wouldn't want to speculate in that area. But there's a couple things I think from my end, I can bring the company, you know, and I think you know, my background, I have a strong operational background, and I can support the company in that area.

Speaker Change: You might want to change that you probably you sat down with.

Speaker Change: With law enforcement.

Speaker Change: From the company for the last couple of months here.

Speaker Change: And you can do to kind of.

Speaker Change: Beyond that 50% over the over the long term you got a personal goals.

Speaker Change: Thanks, Mark Thanks for the question and thanks for welcoming me welcoming into the company. The couple of things I think it's early I've only been here. The first 100 days, so I wouldn't want to speculate in that area.

Speaker Change: There is a couple of things I think from my end that can bring the company.

Speaker Change: And I think you know my background I have a strong operational background and it can support the company in that area. A large part of my career was on the plant floor.

Jon Weiskell: Large part of my career was on the plant floor. And if you look at the last 20 years, you know, predominantly in Magna prior, I was running large, you know, groups, large segments in the company up to 60 plants. Probably uniquely, I have an advantage in that I've run a bus plant in Blue Bird, so I have a lot of familiarity with the product, a lot of familiarity with the manufacturer.

Speaker Change: And if you look at the last 20 years predominantly in Magna prior I'm, just running large groups large segments in the company up to 60 plants.

Speaker Change: Ah probably uniquely I have.

Speaker Change: An advantage in that I've run a bus plant in Bluebird. So I have a lot of familiarity with the product has a lot of familiar with the manufacturing process.

Jon Weiskell: So again, I think it's a little bit early to tell what we can do, but a big part of what we're focusing on is the longer term manufacturing strategy. Got it. Thanks for that.

Speaker Change: So again I think it's a little bit early to tell what we can do but a big part of what we're focusing on is the longer term manufacturing strategy.

Speaker Change: Got it.

Razvan Radulescu: There also were some comments made about the price for non-EV buses. I was wondering if you could share a little bit about the price education to performance for the EV buses themselves. I know there were plans to come down over time. That's been the whole point of all the substitutes, get the kind of scale you need, get those prices down. But I was just kind of wondering if EV pricing is running in line with what you were targeting, and do the tariffs throw all that off in the next couple of quarters?

Speaker Change: Thanks for that.

Speaker Change: We also have some comments you made about the price for non EV.

Speaker Change: Well, what I can share a little bit about the classifications of performance will be for the EV buses themselves.

Speaker Change: There were planned to come down over time, that's the whole point of all the subsea.

Speaker Change: You need to get those prices down but that was just kind of wondering if maybe pricing is running in line with what you were targeting.

Speaker Change: Tariffs will all of that.

Speaker Change: That off of.

Speaker Change: Quarter two.

Razvan Radulescu: Hey Mike, this is Razvan. Thanks for the question. So as you might be aware, and as we discussed last time, we took the first step to reduce prices on EVs by approximately $25,000. Unfortunately, the current situation with the tariff is moving us backwards in that goal by how much we are still evaluating. But needless to say, it's a pause in our journey to reduce the price of the EV buses and improve the total cost of ownership. However, we are optimistic that the tariff situation will clarify hopefully in the next few months, and then we'll be able to resume our journey on the price reduction for EVs.

Speaker Change: Hey, Mike This is Ron Thanks for the question. So as you might be aware and as we discussed last time, we took the first step to reduce prices on your views by approximately $25000. Unfortunately, the current situation with the tariffs.

Speaker Change: Moving backwards in that goal by how much we are still evaluating but needless to say it's a.

Speaker Change: Pause in our journey to reduce the price of the EV buses and improve the total cost of ownership. However, we are optimistic that the tariff situation.

Speaker Change: Clarify hopefully in the next few months and then we'll be able to resume our journey on the price reduction for the group.

Razvan Radulescu: Okay, great. I also want to clarify just kind of the broad guidance here. I mean, there are some uncertainties. It sounds like you're facing some of them. Some of them were not there last quarter, especially in the EVs, as you just mentioned. But are you saying that EVs have a couple headwinds that are taking place right now, but the ice and propane outlook has actually improved, so the net seems like it's pretty much unchanged? I'm sure it's just going to be some of the big parts that are moving here that made the guidance stay roughly the exact same as it was before.

Speaker Change: Okay great.

Speaker Change: I also want to clarify just kind of the broad guidance here I mean, there are some uncertainties it sounds like you're 50 in 'twenty.

Speaker Change: They were not there last quarter.

Speaker Change: And the easy Pickings, you just mentioned, but are you, saying that you just have a couple of headwinds.

Speaker Change: Right now what the ICU propane outlook actually improved for the net seems like it's pretty much unchanged I'm just curious as can be seen in <unk> space.

Speaker Change: Possibly moving here that need the guidance roughly the exact same as it was before.

Razvan Radulescu: Yes, Mike. So obviously, we had a very strong first half, which gives us good momentum, and it puts us in a position to strengthen our results for the total year. So that's the first thing. Second, the effects on the ice from the tariff so far are fairly moderate. And we have taken already pricing action. to offset that. So indeed, the variable now is the EV tariff level that will affect us mainly in Q4. And therefore, we may decide together with our dealers and our customers to push some of the volume that we could build in Q4 into fiscal 26.

Speaker Change: Yes, Mark So obviously, we had a very strong first half, which gives us good momentum and it puts us in a position to.

Speaker Change: Strengthen our results for the total year. So that's the first thing.

Speaker Change: The effects on the ice from the tariff so far are fairly moderate and we have taken already pricing actions to offset that.

Speaker Change: So indeed the variable now.

Speaker Change: Todd it's levels that will affect us mainly in Q4, and therefore, we may decide together with our dealers and our customers to push some of the volume that we could build in Q4 into fiscal 'twenty six so thats.

Razvan Radulescu: So that's why we widened the guidance for Q4 now to 45 to 60 million. But we narrowed the guidance on Q3 towards the upper end now 50 to 55 So just to clarify, Razvan, if you don't build the EVs, you've got ice and propane orders to take those build slots. Am I on the right track there? Yeah, absolutely. In terms of total volume, we will substitute EV with ice in And keep in mind we're closer to the fourth quarter as well compared to most companies just based on our reporting period. So the risk period for us is considerably less than other Most companies are closing in December.

Speaker Change: Why we widened the guidance for Q4 now to $45 million to $60 million, but we narrowed the guidance on Q3s towards the upper end now 50% to $55 million.

Speaker Change: So just to clarify Roslyn, if you don't build the Evs <unk> got ICU propane orders that take those build slots.

Speaker Change: I'll start off in terms of total volume will substitute easier with nice in Q4.

Speaker Change: And keep in mind, we're closer to 10 fourth quarter as well compared to most companies.

Speaker Change: <unk> Center.

Speaker Change: Mourning period, so the risk period for us is considerably less than other companies most companies Youre closing in December of course.

Razvan Radulescu: of course.

Mike Shlisky: Thanks so much for the answers. I'll pass it along. Thank you very much.

Speaker Change: Of course.

Speaker Change: Thanks, so much for the answers I'll I'll pass it along.

Mike: Thanks, Mike.

Eric Stine: The next question comes from Eric Stine from Craig Hallam. Eric, your line is open. Please go ahead. Hi everyone, thanks for taking the questions today. Hey, so I know that your dealer network is certainly one of your strengths and just curious on the pricing side. I mean, obviously everyone's dealing with uh... this tariff uncertainty but just curious i mean have you gotten any pushback uh... from your dealer network and and then i guess it's your dealer network uh... going to the school districts but any uh...

Speaker Change: The next question comes from Eric Stine from Craig Hallum. Eric Your line is open. Please go ahead.

Eric Stine: Hi, everyone. Thanks for taking the questions today.

Speaker Change: Sure.

Speaker Change: Hey, so.

Speaker Change: I know that your dealer network is certainly one of your strengths and just curious on the pricing side I mean, obviously everyone's dealing with this.

Speaker Change: This tariff uncertainty, but just curious I mean have you gotten any pushback.

Speaker Change: From your dealer network and then I guess, it's your dealer network.

Speaker Change: Going into the school districts, but.

Eric Stine: any pushback at either level and just curious you know are It seems as if they are, but curious your thoughts on some of the other market participants and whether the other two are kind of following suit and acting rationally.

Speaker Change: Any any pushback at either level and just curious are it seems as if they are but curious your thoughts on some of the other market participants and what are the other two are are kind of following suit and acting rationally.

Razvan Radulescu: Hey, Eric, this is Razvan. Thanks for the question. So We are obviously working very closely with our dealer partners and the end customers to navigate these challenging times regarding tariffs. Now, the first price increase we put in place was fairly moderate, approximately 2%, and this is because the majority of our supply chain is from the United States and North America, and we have smaller exposure to other markets. So the level is, while nobody likes to pay taxes or tariffs more than before, this is something that we are able to navigate and work together on. The risk right now is coming on the EV level, and especially in the Q4, because we have some exposure to China, and those dollars now are tariffed at 145%, so definitely it's a bigger number.

Ron: Hey, Eric This is Ron thanks for the question so.

Speaker Change: We are obviously working very closely with our dealer partners and the end customers to navigate these challenging times regarding tariffs now.

Speaker Change: First price includes we put in place was fairly moderate approximately 2% and this is because the majority of our supply chain is from the United States and North America, and we have smaller exposure to other markets. So the level is while nobody likes to pay taxes or tariffs more than before.

Speaker Change: This is something that we are able to navigate and work together on the risk right now its coming on the <unk> level and especially in the Q4.

Speaker Change: Because we have some exposure to China and those dollars in our tariff at the 145% so definitely it's a bigger number yes.

Jon Weiskell: Yeah, and maybe just a couple other points that Razvan says. Nobody likes price increases, but it's also not inherent to us. It's an entire industry. In fact, I would say it's nationwide. going on. So relative to our peers who are in the same situation. Um, and then maybe just one last point on the dealers. I mean, we have a really collaborative relationship. We've been talking to them right since January on this. So they're lock, stock and barrel with us on. And then to the second part, we have seen similar actions from our competitors so far on the tariff level.

Speaker Change: Yes, maybe just a couple of other points the grassman says nobody.

Speaker Change: Nobody likes price increases, but it's also not inherent to us.

And the entire industry in fact, I would say its nationwide with what's going on so.

Speaker Change: Relative to relative to our peers in the same situation.

Speaker Change: And then maybe just one last point on the dealers I mean, we haven't really collaborative relationship we've been talking to them right. Since January on this so theyre lock stock and barrel with us on this whole thing and then to the second part we have seen similar actions from our competitors so far on the tonnage levels.

Speaker Change: Okay.

Eric Stine: Okay, that's great.

Razvan Radulescu: And, and I know, you know, top of mind for investors clearly is is the CSB funding and I know round two and round three now now flowing and it sounds like you're hopeful on round four. But could you just update us or give your updated thoughts on how much of the funding is federal versus state and local?

Speaker Change: Okay, that's great and I know top of mind for investors clearly is.

Speaker Change: Is the CSP funding and I know round, two and round three now now flowing and it sounds like you're hopeful on round four but could you just update us or give your updated thoughts on how much of the funding is federal versus state and local.

Razvan Radulescu: And then also just curious, and then I can jump back in the line, but just curious, given everything going on on the EV side, whether you are seeing a noticeable uptake in interest in propane and gas. So on the first question, so the level of funding and subsidies was roughly 50-50 between state and federal when we had the full Clean School Bus program announced, obviously over a certain number of years. Right now, the good news is that the rounds two and three are flowing as we expected last time. So there is some uncertainty on rounds four and five, but we are optimistic that round four will continue, given the fact that rounds two and three are flowing.

Speaker Change:

Speaker Change: And then also just curious.

Speaker Change: I can jump back into line, but just curious.

Speaker Change: Given everything going on on the EV side, whether you are seeing a noticeable uptake in interest in propane and gasoline.

Speaker Change: So on the first question so the <unk>.

Speaker Change: Level of.

Speaker Change: Funding and subsidies was roughly 50 50 between state and federal.

Speaker Change: When we had the full clean school bus program announced obviously over a certain number of years.

Speaker Change: Right now the good news is that that rounds to entry on flowing because we expected last time.

Speaker Change: So there is some uncertainty on round two four and five but we are optimistic that around four will continue given the fact that it owns two and three are flowing.

Razvan Radulescu: So, they are still fairly balanced at this point in time, and we see continuous strength in the state level funding. So, so far, I would say it's still a balanced equation there with rounds two and three.

Speaker Change: They are still fairly balanced at this point in time Andrew.

Speaker Change: And we see continued strength in the state level funding so.

Speaker Change: So far I would say, it's still a balanced equation, there was announced two and three.

Jon Weiskell: and then on the EV side. That's right. We'll cut on the EV side. I think we're in a pretty unique position as you can appreciate. We're the only ones with this alt power segment, a segment we created, and it puts us in a great position in terms of dealers or districts that may want a cleaner solution in their process. Yep.

Speaker Change: On the <unk> side.

Speaker Change: That's correct Pat on the EV side.

Speaker Change: I think we're in a pretty unique position as you can appreciate we're the only ones with this.

Speaker Change: Paul.

Speaker Change: Our segment. This segment, we created and it puts us in a great position in terms of dealers or.

Speaker Change: Districts that may want a clean a cleaner solution in their product.

Razvan Radulescu: And you know what, maybe just just one more to sneak in. So you mentioned I think you gave the number it was 100 or maybe it was a little bit over in terms of what's exposed to round three. Um, in school districts just waiting on that funding is that was am I correct in that? Yeah, so last earnings call, we had 250 units waiting for funding. And now we have only 150. And they are all around three, and they are in process of being funded. Okay, thank you.

Speaker Change: Yes.

Speaker Change: Maybe just one more to sneak in so you mentioned I think you gave the number it was 100 or maybe it was a little bit over in terms of what's exposed to round three.

Speaker Change: And school districts, just waiting on that funding is that am I correct in that thinking.

Speaker Change: Yes, So last earnings call. We had 250 units waiting for funding and now we have only a 150 and they are all around three and they are in process of being funded as we speak.

Speaker Change: Okay. Thank you.

Tyler DiMatteo: Our next question comes from Tyler DiMatteo from BTIG. Tyler, your line is open, please go ahead. Thanks for taking the questions here and good afternoon. I wanted to follow up on the some of the pricing comments here. And I guess I'm curious, you know, how do you think about balancing the pricing equation with some of the win rate comments? Is it as simple as it?

Speaker Change: The next question comes from Tyler <unk> from BTG caller. Your line is open. Please go ahead.

Speaker Change: Alright, thanks for taking the questions here and good afternoon.

Speaker Change: I wanted to follow up on the some of the pricing comments here and I guess I'm curious how do you think about balancing the pricing equation with some of the win rate comments is it as simple as hey, if we can.

Jon Weiskell: Hey, if we can't sell EVs to customers, we substitute to some of the other all powered buses as you alluded to, I guess, just how do you think about kind of maybe leaning into this as an opportunity, given your market leading position here?

Sell EDI to customers, we substitute to some of the other all powered buses that you alluded to I guess, just how do you think about kind of may be leaning into this as an opportunity given the market leading position here.

Jon Weiskell: Yeah, I'll start and then I'll hand it to Razvan. I mean, it's early to tell, you know, in terms of seeing a shift if they're going to go from propane to say, or sorry, from EV to propane. But I think we're well situated. I mean, we're the only ones with the product. So that leaves and I think more comfortable. But again, early. We're only a week or so since the China tariffs were announced.

Roz Fun: Yes, I'll start and then I'll hand, it to raise fund I mean, it's early to tell in terms of seeing a shift if theyre going to go from propane to see or sorry from EV to propane, but I think we're well situated I mean, we're the only ones with the product. So that leaves me. Please.

Speaker Change: Martin I think more comfortable.

Speaker Change: But again early do you mean.

Speaker Change: Sure.

Speaker Change: A week or so since the China tariffs were announced so Russell I don't know if you have anything to add yes on the pricing side.

Razvan Radulescu: I don't know if you have anything to add. Yeah, on the pricing side... It appears that all the major manufacturers in the school bus industry are similarly affected by these tariffs, based on what we've seen for our competitors' pricing actions. So from that perspective, it seems like we are in balance, at least on the first round that we have put in place so far. So therefore, they do not have any material effect on our window. Okay, great.

Speaker Change: Okay.

Speaker Change: It appears that all the major manufacturers in the school bus industry are similarly affected by these tariffs based on what we've seen for our competitors pricing actions. So from that perspective. It seems like we are in balance and lift on the first rounds that we have put in place. So far. So therefore, they did not have any material effect on our.

Speaker Change: To win the race.

Tyler DiMatteo: Thank you.

Speaker Change: Okay, great. Thank you and then my follow up here is.

Razvan Radulescu: And then my follow up here is I wanted to kind of get a little bit more color on maybe the cost sharing split here. I know Razvan, to your point, Spoken a few times here to the pricing and kind of how that would flow through to customers. I guess, how do you think about that dynamic in terms of the supplier base here? Maybe what are the conversations there and, you know, kind of how do you think about that as you kind of look at the entire value chain? Yeah, thank you. It's a great question. And obviously, we are working very closely with our supply chain partners to first understand the exposure and then take mitigating steps, whether it's identifying alternative sources, or potentially stair-stepping the cost increases over time.

Speaker Change: I wanted to kind of get a little bit more color on maybe the cost sharing split here I know, Rob my viewpoint that you've spoken a few times here to the pricing and kind of how that would flow through to customers. I guess, how do you think about that dynamics in terms of the supplier base here and maybe what are the conversations there and kind of how do you think.

Speaker Change: That as you kind of look at the entire value chain here.

Speaker Change: Yes. Thank you. It's a great question and obviously, we are working very closely with our supply chain partners to first understand the exposure and then take mitigating steps whether is identifying alternative sources or potentially slipping the cost increases over time.

Razvan Radulescu: But this is definitely a one-on-one discussion. It varies by country, by supplier, by component, by lead time. So there is no really simple or universal answer.

Speaker Change: But this is definitely a one on one discussion it varies by customer by supplier by component by lead time. So there is no really simple order universal answer to this.

Speaker Change: Yeah.

Tyler DiMatteo: Okay, great. Thank you guys. Really appreciate the time.

Speaker Change: Okay, great. Thank you guys really appreciate the time I will turn it back to the queue.

Craig Irwin: I'll turn it back to the Q.

Tyler: Hey, Tyler.

Craig Irwin: The next question comes from Craig Irwin from Roth Capital Partners.

Speaker Change: The next question comes from Craig Irwin from Roth Capital Partners. Craig. Your line is open. Please go ahead.

Razvan Radulescu: Craig, your line is open, please go ahead. Thank you for taking my questions. So, I wanted to ask about the change to your fourth fiscal quarter guidance. You know, I appreciate the granularity going in and saying 100 to 300 units of EVs in the quarter, you know, and you did tap higher. Your total number of units is 2,500. You know, if the tariff situation was to resolve, the couple hundred units of EVs that look like they maybe are less likely to materialize now, would that be a potential source of upside for you in the fourth fiscal quarter?

Craig Irwin: Thank you for taking my questions. So I wanted to ask about the change to your fourth fiscal quarter guidance.

Speaker Change: I appreciate the granularity going in and saying 100 to 300 units of Evs in the quarter.

Craig Irwin: And you did tap higher your total number of units 2500.

Craig Irwin: If the tariff situation was to resolve.

Craig Irwin: The couple of hundred units of Evs that look like they may be less likely to materialize now.

Craig Irwin: Would that be a potential source of upside for you in the fourth fiscal quarter or is this something where the customers maybe if delayed into the next year.

Razvan Radulescu: Or is this something where the customers maybe are delayed into the next year, given the uncertainty that's been introduced by the tariff?

Craig Irwin: Given the uncertainty that's been introduced by the tariffs.

Razvan Radulescu: Hi, Craig, this is Razvan. Thanks for the question. So we do have the orders in our backlog. So there is indeed upside should the tariff EV situation solve favorably, let's call it very soon. So there is some upside. That's why our upper end of the guide is a 210 with 300 EVs in Okay, excellent. Excellent.

Speaker Change: Yes, Hi, Craig it's restaurant and thanks for the question. So we do have the orders in our backlog. So that is indeed, the upside should the tariff situation.

Speaker Change: Favorably, let's call. It very soon so there is some upside that's why our upper end of the guidance of two <unk> with 300 DVS in Q4.

Speaker Change: Yeah.

Craig Irwin: My next question is about the the commercial chassis that you're introducing. So, you know, a year ago at AXA Expo, you showed an EV chassis this year. It's propane. I know you can do gas and other and other drive trains in there.

Speaker Change: Okay excellent excellent. My next question is about the.

Speaker Change: The commercial chassis that youre introducing so.

Speaker Change: A year ago at Act Expo you showed an EV chassis this year.

Speaker Change: Its propane I know you can do gas and other and other.

Craig Irwin: You know, when you're doing the early development work with your customers, as you put together the business model to to share details with investors, what drive train or what fuel preference are you hearing from your customers? You know, this seems to be an area of the market that might be underserved and you have interesting partners.

Speaker Change: Drivetrains in there.

Speaker Change: When youre doing the early work with your customers as you put together the business model.

Speaker Change: Share details with investors.

Speaker Change: What drive train or what's your preference are you hearing from your customers.

Speaker Change: It seems to be an area of the market that might be underserved.

Jon Weiskell: You know, can you can you maybe just give us an update on on the early conversations and how this is playing out into your potential investment, you know, in the different technologies that might You know, Sherif will be over the next number of years. Yeah, thanks, Craig. Great question. So a couple things. I had a chance, of course, to be at the work truck show and can see firsthand the positive response. ACT, everything we heard similar was very favorable. Um, similar to you, I believe there's room in the segment. We can see that. And initial indications seem to be, I'd say there's greater interest on the propane side right now.

Speaker Change: And you have interesting partners.

Speaker Change: Can you can you maybe just give us an update on the early conversations.

Speaker Change: And how this is playing out and say your potential investment.

Speaker Change: And the different technologies that might.

Speaker Change: Yeah sure view over the next number of years.

Speaker Change: Yes, Thanks, Greg Great question. So couple of things I had a chance to of course to be at the work truck show and can see firsthand. The positive response to the ECT everything we heard similar was very favorable.

Speaker Change: Similar to you I believe there is room in this segment, we can see that in initial indications seem to be.

Speaker Change: I'd say, there's greater interest on the propane side right now now some of that May just be the sentiment that we see with <unk>.

Jon Weiskell: Now, some of that may just be the sentiment that we see with EVs and, you know, people recognizing there'll be stronger tariffs in that area because of China, but certainly propane. and Scotty. a great opportunity in that segment from everything we can. If you couple that as well with some of the best-in-class features that we have, we think we're pretty well-placed.

Speaker Change: And people recognizing there'll be stronger tariffs in that area because of China, but certainly propane and it's got a.

Speaker Change: A great opportunity in that segment from everything we can see.

Speaker Change: If you couple that as well with some of the best in class features that we have.

Speaker Change: We're pretty well positioned.

Craig Irwin: Okay, and then lastly, if I may, you know, I met with management from both of your leading competitors at ActExpo in Anaheim, and a bunch of industry suppliers.

Speaker Change: Okay, and then lastly, if I may.

Speaker Change: I met with.

Speaker Change: Management from both of your your leading competitors that Act Expo in Anaheim and.

Jon Weiskell: And there seems to be some chatter out there that one of the other two will have a copain bus next year. You know, the volumes and, you know, customer experience is obviously undefined at this moment. You know, can you talk about, you know, brand loyalty? And, you know, how propane has helped you with existing Blue Bird customers and winning new customers? Would you expect to continue to sell propane to existing Blue Bird customers instead of, you know, wins? Does this really impact you? Or is this really them taking care of their existing brand loyal customer?

Speaker Change: A bunch of industry suppliers and there seems to be some chatter out there that one of the other two will have a propane bus next year.

Speaker Change: The volumes.

Speaker Change: And customer experience.

Speaker Change: <unk>, obviously undefined at this moment.

Speaker Change: Can you talk about you know brand loyalty and.

Speaker Change: How propane has helped you with existing bluebird customers and winning new customers.

Speaker Change: You expect to continue to sell propane to existing bluebird customers instead of.

Speaker Change: No.

Speaker Change: <unk>.

Speaker Change: Does this really impact you or is this really them.

Speaker Change: Taking care of their existing brand loyal customer base.

Jon Weiskell: Yeah, so, Craig, thanks for the question. However, we are not aware or we do not have any confirmation of any competitive propane engine products coming into the market at this time for a school bus application. However, we are very confident in the value and the performance of our Ford propane engine together with Roush that we've put in place several years ago. We have over 20,000 buses in operation with propane, and we have a great owner loyalty and repeat customers. So we are welcome any competition in the segment if they.

Speaker Change: Yes, so Craig Thanks for the question. However, we are not aware or we do not have any confirmation of any competitive propane engine products coming into the market at this time for the school bus application.

Speaker Change: However, we are very confident in the value and the performance of our propane engine together with Roche.

Speaker Change: We put in place several years ago, we have over 20000 buses in operation with propane and we have a great owner loyalty repeat customers. So well welcome any competition in this segment as they come.

Jon Weiskell: Yeah, and maybe just a couple of other things. I think our supply partner with Roush is Equity in the Name, and that helps us talk into that brand loyalty. course, it's it's not a retrofit. So there's a lot of Excellent. Well, you've demonstrated the value of propane, and that's why I think the market is paying attention. So, congratulations on another strong quarter here.

Speaker Change: And maybe just a couple of other things I think our supply partner with Roche as equity in the name and that helps us talking to that brand loyalty and of course, it's not a retrofit so theres a lot of benefits to that.

Speaker Change: Yes.

Speaker Change: Excellent well you've demonstrated the value of propane and that's why I think the market is paying attention. So congratulations on another strong quarter here I'll hop back into queue.

Craig Irwin: I'll hop back in. Thanks, Craig.

Craig Irwin: Thanks, Great. Thanks, Craig.

Chris Piers: The next question is from Chris Piers at Needham.

Speaker Change: The next question is from Chris <unk> at Needham Chris. Your line is open. Please go ahead.

Chris Piers: Chris, your line is open. Please go ahead. Hey, good afternoon. About, you know, three months ago, we were on this call, and there was just a lot of uncertainty around Clean School Bus EPA. Is there any way to kind of get a sense of, then I know headlines hit and the portals were open. Is there any way to get a sense of what kind of levers within the industry kind of helped push that to happen? Or was it just, were you guys as surprised as everyone else? And the reason I ask is just, I know no one knows what's going to happen with Round 4, but just try to see how much of a topic this is within the administration and within the industry.

Chris: Hey, good afternoon.

Chris Needham: Three months ago, we were on this call and that was just a lot of uncertainty around clean school bus EPA is there any way to kind of get a sense of and then I know headlines hit and portals, where open is there any way to get a sense of what kind of levers within the industry kind of help push that to happen or was it just with what you guys are surprises everyone.

Chris Needham: And the reason I ask is just I know no one knows what's going to happen around corporate just try to see how much of the topic. This is within the administration and within the industry.

Razvan Radulescu: Hi Chris, this is Razvan. Thanks for the question. So first of all, we are not surprised because as we discussed three months ago, and as we messaged in all our meetings, we were confident that rounds two and three were going to flow because there was a legal obligation and the potential liability if they were to stop or to be stopped. So it confirmed what we were expecting. Obviously, we didn't know for sure, but we had that positive sentiment that rounds two and three will be completed. So this also gives us some optimism now for round four, at least the next step.

Chris Needham: Hey, Chris This is Ron Thanks for the question. So first of all we're not surprised because as we discussed three months ago and there's a message in all our meetings. We are confident that two and three we're going to flow. Because there is there was a legal obligation and the potential liability if they wanted to stop or it can be stopped.

Chris Needham: So it confirmed what we are expecting August than we.

Chris Needham: We didn't know for sure, but we had the positive sentiment that ask to entry would be completed so it also gives us some optimism now for around for at least the next step, but obviously, we'll have to wait and see what the EPA decides to do is around four.

Razvan Radulescu: But obviously, we'll have to wait and see what the EPA decides to do with rounds four. Okay, but rounds four and five would follow that same logical argument that there's a you know, a law in place and repercussions and that type of thing. That's fair to say. No, because rounds two and three were awarded. So people started to put programs in place, break ground for infrastructure. People were told to order buses. Rounds four was not awarded yet, only the applications were collected. So they are earlier in the stage of maturity. Okay, thanks for the clarification.

Chris Needham: Okay, but round four and five would follow that same logical argument that there is like a line in place and repercussions in that type of thing that's fair to say.

Chris Needham: Now because.

Chris Needham: Around two and three were awarded so people started to put the programs in place to break ground for infrastructure people were told to order buses rounds, Florida was not awarded yet only the applications were collected so.

Chris Needham: They are earlier in the stage of maturity if you will.

Chris Needham: Okay. Thanks for that clarification, and then on China in Evs, because let's say around four does start flowing or state subsidies for evs or just market based purchases do you have pricing power on evs or it because there is a certain stair stepped asps built.

Razvan Radulescu: And then on China and EVs, because let's say round four does start flowing or state subsidies for EVs or just market based purchases. Do you have pricing power on EVs or it's because there's a certain stairstep ASP built into the round four, round five and that could, you know, have a be a headwind to margins on EVs. So the details for round four or five, as far as what is the level of funding per bus, are not yet confirmed or clarified by the EPA. We do have some idea what the prices will be based on the current tariffs, but obviously, by the time rounds four are awarded, orders are put in place, we work through the backlog.

Chris Needham: Built into the round for around five and that could happen.

Chris Needham: I'd be a headwind to margins on Evs.

Chris Needham: So the details for around four to five as far as what is the level of funding per box I don't know what you have confirmed or ratified by the EPA. We do have some idea of what the prices will be based on the current counties, but obviously by the time it rounds for Ottawa.

Chris Needham: The orders that are put in place we work through the backlog.

Razvan Radulescu: several it's towards the end of 2026 calendar year most likely so by then we will know for sure the tariffs what they are for any visa I would say it's a bit early to have this conversation for rounds four Okay, perfect.

Chris Needham: Several of its towards the end of 2026 calendar year. Most likely by then we will know for sure that that is.

Speaker Change: What they are for any view, so I would say to be thoroughly to have this conversation four rounds for fun.

Razvan Radulescu: And then just lastly, with the accelerated buyback and the $20 million left, how should we think about, you know, look at that cash balance, and you talked about the balance sheet, you know, what that I guess, how should investors think about that moving forward with the stock trading at the multiple attack? Yeah, so as you saw this quarter, we accelerated our previous pace. So we went up from 10 million before to 20 million. Now, we still have 20 million left in the current program. And we will let you know in the next earnings call what we have done during this quarter and potentially what our plans might be for the future.

Speaker Change: Okay, Perfect and then just lastly, with the accelerated buyback in the $20 million, how should we think about look at that cash balance and you talked about the balance sheet.

Speaker Change: I guess, how should investors think about that moving forward with the stock trading at the multiple attack.

Speaker Change: Yes, so as you saw this quarter, we accelerated our previous pace. So we went up from $10 million before 20 million now we still have $20 million left during the current program.

Speaker Change: We will let you know in the next earnings call. What we have done during this quarter and potentially what our plans might be for the future.

Speaker Change: Sure.

Razvan Radulescu: Okay, thanks everybody.

Speaker Change: Okay. Thanks for everything.

Speaker Change: Thanks, Chris.

Jon Weiskell: That concludes today's Q&A session, so I'm going to go back to Jon for some closing comments. Thank you, Adam, and thanks to each of you for joining us on the call today. Last year you saw momentum increasing throughout the year with profitability improving as we move through the quarters and we're continuing that theme for 2025. I think you can share my enthusiasm for Blue Bird, and we look forward to updating you on our progress in the next call next quarter.

Speaker Change: This concludes today's Q&A session. So go back to John for some closing comments.

John: Yes, Thank you Adam and thanks to each of you for joining us on the call today.

John: Last year, you saw momentum increasing throughout the year with profitability improving as we move through the quarters and we're continuing that theme for 2025.

Speaker Change: I think you can share my enthusiasm for Bluebird.

Speaker Change: And we look forward to updating you on our progress in the next call next quarter should you have any follow up questions. Please do not hesitate to contact our head of Investor Relations Mark Benfield.

Jon Weiskell: Should you have any follow-up questions, please do not hesitate to contact our Head of Investor Relations, Mark Benfield. And Blue Bird has never been in a stronger position than it is today. It has a fantastic future ahead as we approach a hundred years. as company.

Speaker Change: And Bluebird has never been in a stronger position than it is today. It has a fantastic future ahead as we approached 100 years.

Speaker Change: As a company.

Operator: And from all of us here, thanks for joining us on the call from Blue Bird and have a great evening.

Speaker Change: And from all of Us here. Thanks.

Speaker Change: Joining us on the call from Bluebird and have a great evening.

Operator: This concludes today's call. Thank you very much for your attendance. You may now disconnect your line.

Speaker Change: This concludes today's call. Thank you very much for your attendance you may now disconnect your lines.