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DATE

Wednesday, February 4, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • President & Chief Executive Officer — John Wyskiel
  • Chief Financial Officer — Razvan Radulescu

TAKEAWAYS

  • Revenue -- $333 million, representing a 6% increase; this marked a record Q1 driven primarily by pricing actions, including tariff pass-throughs.
  • Adjusted EBITDA -- $50 million, up $4 million versus the prior year; margin reached 15%.
  • Free Cash Flow -- $31 million, which was $9 million higher than the previous year and cited as a record for Q1.
  • Unit Sales Volume -- 2,135 buses sold this quarter, slightly above the prior year level.
  • Average Bus Revenue per Unit -- Increased by $9,000 to $144,000, or 6.5%, attributable to both pricing actions and tariffs.
  • Backlog -- 3,400 units at quarter-end, including a record 25% electric vehicles (EVs); order intake up 45% versus 2025.
  • Electric Vehicle Sales -- 121 units sold, making up 6% of the unit volume; EV backlog reached 855 units with guidance updated to approximately 800 EV deliveries for the fiscal year.
  • Alt Power Market Position -- Blue Bird Corporation remains exclusive in propane-powered school buses and continues to lead in gas variants, with management emphasizing continued dominance in “alt power.”
  • Gross Margin -- 21.4%, representing a 220 basis points improvement from the prior year due to pricing, manufacturing efficiencies, and quality improvements.
  • Cash and Liquidity -- $242 million in cash at quarter-end and record liquidity of $385 million, reflecting a $106 million increase year over year.
  • Backlog and EV Mix -- Approximately 1,000 cumulative EVs were sold or in backlog between Q1 and upcoming deliveries, some extending into fiscal 2027.
  • Parts Segment -- Delivered $25 million in quarterly revenue, benefiting from aging fleets and supply chain dynamics.
  • Capital Return -- $15 million in share buybacks executed in Q1, with $5 million under the new $100 million program and $10 million concluding the previous program; $95 million remains authorized.
  • Commercial Chassis Initiative -- First commercial chassis order received; product development and field validation ongoing, with first revenue now expected in fiscal 2027 Q1 instead of this year.
  • Guidance Update -- Full year revenue guidance remains $1.45-$1.55 billion; adjusted EBITDA raised to $225 million with a $215-$235 million range; free cash flow guidance set at $40-$60 million.
  • Automation and Plant Investment -- Roadmap for factory automation finalized; $75 million capital expenditure planned for the new assembly plant in Fort Valley, funded partly via an $80 million DOE contract.
  • Tariff Impact -- Tariffs accounted for roughly half of the year over year per-unit price increase; management targets a margin neutral outcome and notes volatility in both costs and supply chain arrangements.

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RISKS

  • Razvan Radulescu said, “the downside to our guidance comes from tariffs. And the cost coming from tariffs that we can't fully predict right now.”
  • Uncertainty highlighted regarding future emissions regulations and the possibility of a “pull forward for some diesel units,” indicating near-term demand shifts.
  • Management described ongoing volatility and unpredictability in tariffs and related supply chain costs, which complicates pricing and sourcing strategies.

SUMMARY

Blue Bird Corporation (BLBD 5.24%) delivered a record Q1, exceeding internal guidance on every key financial metric. Management emphasized that order intake surged 45% and the company’s backlog reached a seasonally strong 3,400 units, supporting visibility into future revenues. The updated outlook raises adjusted EBITDA guidance to $225 million and confirms planned capital investments across automation and manufacturing, with rigorous capital allocation efforts including continued share repurchases.

  • Management stated that EV unit deliveries are anticipated to reach 800 for the year, bolstered by federal and state funding and strong fleet mandate activity.
  • The new commercial chassis offering will not contribute revenue until fiscal 2027, as engineering and production ramp timelines have shifted.
  • Blue Bird Corporation confirmed that guidance is not contingent on future rounds of federal EPA funding (specifically rounds four and five), with state support and private fleet mandates providing stability for the “alt power” strategy.
  • Share repurchase activity continued with $5 million initiated under the new program, and management underscored a readiness to pursue both strategic M&A and vertical integration when attractive opportunities emerge.

INDUSTRY GLOSSARY

  • Alt Power: Segment encompassing alternative powertrain school buses, including electric (EV), propane, gasoline, and compressed natural gas models; a strategic focus for Blue Bird Corporation.
  • Adjusted EBITDA: Non-GAAP measure of operating profit, excluding certain items for comparability; referenced as the key underlying profitability metric by Blue Bird Corporation management.
  • Backlog: The total number of units ordered but not yet delivered, offering forward visibility on production and revenue.
  • DOE: U.S. Department of Energy, which awarded Blue Bird Corporation an $80 million contract for manufacturing plant investment.
  • EPA Clean School Bus Program: Federal initiative providing funding to assist school districts in purchasing electric and alternative-fuel school buses.

Full Conference Call Transcript

John Wyskiel: Thanks, Mark, and good afternoon, everyone, and thanks for joining us today. It's great to be here, and we are excited to share with you our fiscal 2026 first quarter financial results. Once again, the Blue Bird Corporation team delivered outstanding Q1 sales and adjusted EBITDA. And we are off to a great start. Razvan will take you through the details of our financial results shortly. But I will walk you through some of the key takeaways for the first quarter on Slide six. First, Blue Bird Corporation beat guidance on all metrics for the quarter. This is despite the impact and volatility associated with the administration policy on tariffs.

We continue to navigate this situation well and have beat guidance for the thirteen quarters. Validating the strength in our management, and business model. Order intake for the period was exceptionally strong. Our Q1 order intake was up 45% from 2025. Which pushed our backlog to a seasonally strong 3,400 units. This is a great start to the year, especially as we come into the order season. Operationally, we continue to perform with all metrics pointing in the right direction. And the team has been able to execute on a day-to-day basis while simultaneously developing detailed manufacturing plans for the future. In terms of pricing, we remain extremely disciplined.

US prices remain higher than the previous year, and the previous quarter. As I've communicated before, this process is just how we manage the business. In the alt power segment, our dominance continues. Our EV backlog is now into 2027, We remain exclusive in propane, which has the lowest total cost of operation, and our gas variant continues to be a leader. Alt Power is a segment we created more than fifteen years ago and we continue to maintain our lead position. We continue to develop our investment thesis as explained before. Our manufacturing strategy encompasses many factory of the future that will be rolled into our new assembly plan.

During the quarter, we completed our analysis of automation use cases, and have locked in on a road map. The initiative has a strong return. But this strategy also creates a path for ongoing cost improvement through other industry three point o and four point o opportunities. And finally, we continue to manage the impact of the administration's executive orders and tariff volatility. We are fortunate to be well positioned to navigate this situation to a margin neutral outcome. Consistent with past communications, it is our objective to position this business to be a strong long-term investment. Let's turn the page and take a closer look at the financial and key business highlights for the quarter. On Slide seven.

We sold 2,135 buses in Q1 and recorded revenue of $333 million, 6% ahead of last year. On the EV side, we sold 121 vehicles, 6% of unit volume, and our long-term outlook for EVs remains optimistic. Adjusted EBITDA for the quarter came in at $50 million, four million stronger than last year, and free cash flow came in at an outstanding $31 million. Razvan will talk more to this and her outlook later in the call. Turning to the right side of the page, I'll touch on a few points. With the strong order intake I spoke about earlier, our backlog finished the quarter at 3,400 units, This puts us in a good position coming into the order season.

And I continue to reiterate the overall market fundamentals are still there. The fleet is aging. We are coming into a heavy replacement cycle. And there's been industry supply issues the last few years, leaving pent-up demand. The horizon ahead looks very good for school bus volumes. In January, we also took our first order for commercial chassis. The market remains excited about this product. We are continuing with the testing, validation, and normal engineering change loops. We are projecting to start production in late Q4 which pushes sales into fiscal 2027. Our emphasis is to get this product right from a design, cost, and quality perspective. And not force timing that can jeopardize any one of those elements.

Back to school bus, year-over-year selling price for buses was up almost $8,800 per unit. But, of course, this also includes tariff recovery as part of our margin neutral strategy. With tariffs excluded, pricing was still up year-over-year. And part sales totaled $25 million for the quarter. All powered buses represented a strong 48% of mix per unit sales in the quarter. Our powertrain strategy is a differentiator in the market, and allows us to maintain strong emergence. But we are not dependent on it. If you look at Q1, RL power mix dipped below 50% but there was no compromise in profitability.

At the end of the quarter, we had a 121 EVs booked and 855 EVs in our order backlog, pushing into 2027. Our updated guidance reflects approximately 800 EV unit sales for fiscal 2026. Again, we remain optimistic on EVs in the school bus sector. EVs are a perfect fit for school buses when you look at the duty cycle, available charging intervals, range, and the proven health benefits for our children. Rounds two and three of the EPA clean school bus program remain intact with funds flowing to our end customers. Earlier this month, it seems there was some misinterpretation of media coverage and quotes that suggested rounds four and five would be discontinued.

But I will highlight from our subsequent discussions in Washington there has been no such indication. It is our understanding that the EPA is still working through how and when these funds will be administered. And that the program is still bipartisan in support. Overall, when you look at state funding and the fleet EV mandates, we believe this market will remain relevant. And our short-term guidance is not dependent on federal funding for rounds four and five. And finally, the $80 million MES contract with the DOE remains intact. This is for their funding towards our new plant in Fort Valley.

There's been a lot of rumor in the area of MassGrants, but, again, there's been no unfavorable direction provided to us from the DOE. As a reminder, this project adds 400 well-paying American jobs to a century-old company with an iconic brand. To build clean school buses, providing our children with the benefits of clean air. As I've said in prior earnings calls, it's a great story. Overall, we beat guidance for the thirteenth consecutive quarter with a 15% adjusted EBITDA. This continued performance reflects the strength in the entire Blue Bird Corporation enterprise. I'm very proud of the team's accomplishments.

So I'd like to now hand it over to Razvan to walk through our fiscal 2026 first quarter financial results as well as our full year updated guidance in more detail.

Razvan Radulescu: Thanks, John, and good afternoon. It's my pleasure to share with you the financial highlights from Blue Bird Corporation's fiscal 2026. First quarter results. The quarter end is based on a close date of 12/27/2025 whereas the prior year was based on a close date of 12/28/2024. We will file the 10-Q today, February 4, after market close. Our 10-Q includes additional material and disclosures regarding our business and financial performance. We encourage you to read the 10-Q and the important disclosures that it contains. The appendix attached to today's presentation includes reconciliations of differences between GAAP and non-GAAP measures mentioned on this call. As well as other important disclaimers.

Slide nine is a summary of the fiscal 2026 first quarter record financial results. It was a strong operating quarter for Blue Bird Corporation, a great start for the new fiscal year, and they beat our guidance provided in the last earnings call on all metrics. In fact, we delivered the best Q1 ever for Blue Bird Corporation. With $333 million in revenue, and $50 million in adjusted EBITDA in percent margin. The team pushed hard and continued doing a fantastic job. And generated 2,135 unit sales volume was just above prior year level. Record Q1 consolidated net revenue of $333 million was $19 million higher than prior year driven by pricing actions, including tariffs, that materialized in this quarter.

Adjusted EBITDA for the quarter was a record $50 million driven by high margins, partially offset by increased labor and engineering costs. The adjusted free cash flow was also a record Q1 of $31 million and $9 million higher than the prior year first quarter. This result due to continued strong profitability across all bus and powertrain types. Our liquidity position at the end of this quarter was on record $385 million. Moving on to Slide 10. As mentioned before by John, our backlog at the end of Q1 continues to be solid. At 3,400 units including a record 25% EV.

In fact, at the January, have now close to 1,000 EVs sold in Q1 and in backlog, With some of them scheduled to be billed and delivered in fiscal 2027 Q1. Breaking down the Q1, $330 million in revenue into our two business segments, The BOSnet revenue was $308 million up $20 million versus prior year, due to increased prices across all products, including tariffs. As a result, our average bus revenue per unit increased by $9,000 from $135,000 to $144,000 or 6.5%. EV sales in Q1 were 121 units, just 11 units lower than last year as planned. Revenue for the quarter was almost flat with a strong $25 million.

This great performance was in part due to increased demand for our parts as the city's aging as well as supply chain driven pricing actions and throughput improvement. Gross margin for the quarter was a record 21.4%, or two twenty basis points higher than last year. Due to pricing actions, manufacturing efficiencies, and quality improvement. Adjusted EBITDA of $50 million or 15% was higher compared with prior year by $4 million, forty basis points. In fiscal 2026 Q1, adjusted net income was a record to one at $32.5 million or $2 million higher than last year. Adjusted diluted earnings per share of $1 was up 8¢ versus the prior year.

Slide 11 shows the walk from fiscal 2025 Q1 adjusted EBITDA to the fiscal 2026 Q1 result. Starting on the left at $45.8 million the impact of the bus segment gross profit in total was $11.1 million, split between volume and pricing effects, net of material cost increases, of $7 million. And operational and quality improvements of $4.1 million. The parts segment gross profit was almost flat and our fixed costs and other income were unfavorable year over year by $6 million. Out of this, $2.6 million comprises of EV emission credits that were sold in fiscal 2025 Q1 sale which did not repeat again so far this year.

Sum total of all the above-mentioned developments drives our record fiscal 2026 Q1 reported adjusted EBITDA result of $50.1 million or 15%. Moving on to slide 12. We have extremely positive developments year over year also on the balance sheet. We ended the quarter with a record $242 million in cash, and reduced our debt by $5 million over the last year. Our liquidity is very strong at a record $385 million at the end of fiscal 2026 Q1, a $106 million increase compared to a year ago. Additionally, we have executed another tranche of shares buyback of $15 million during fiscal 2026 Q1, $10 million of which concludes our $60 million prior stock buyback program.

And $5 million began our new $100 million program with another $95 million left to go. The operating cash flow was very strong for Q1 at $37 million, driven by great operational execution and margins combined with the large advanced payment received for future EV units, which more than offset the seasonal increase in working capital. On slide 13, we want to share with you our updated fiscal 2026 guidance. Looking at Q1 actuals, we have bid in every metric our guidance past quarter, So we had a very strong start for the fiscal year. Q2 is forecasted to be a repeat of Q1, with additional cost pressures coming tariffs and labor costs and inflation on our SG and A.

Continue to plan for a strong second half at 15% to 16% adjusted EBITDA margin with of eight 100 now scheduled for the year. We are maintaining our revenue to a range of $1.45 to $1.55 billion. And given our B21, we are raising our adjusted EBITDA to $225 million or 15% with a range of $215 to $235 million. We will provide further updates at the May after we close Q2. Moving to Slide 14.

In summary, are forecasting an improvement year over year to a new record, with revenue up to approximately $1.5 billion adjusted EBITDA in the range of $215 million to $235 million or approximately 15% and adjusted free cash flow of $40 million to $60 million in line with our typical target of 50% of adjusted EBITDA And after accounting for the extraordinary CapEx of $75 million as our 50% fiscal 2026 portion of the new plant investment funded by a DOE grant which is currently proceeding with the detailed planning and permitting phase. On to slide 16.

Today, we are reconfirming the medium-term outlook at 15% margin with volumes of up to 10,000 units, including 500 strip chassis, generating revenues around $1.6 billion and with adjusted EBITDA $40 million Starting in 2029 and beyond, our long-term target remains to drive profitable growth to higher levels, towards $1.8 billion to $2 billion in revenue, comprising of 12,500 units including 1,000 to 1,500 strip chassis, and generate EBITDA of $280 to $320 plus million or 15.5% to 16% plus at best in class levels.

The growth comes not only from improved EV mix, driven by sustained state funding and improved total cost of ownership over time, but also from our new global commercial chassis addressable market expansion, as well as our Microboard joint venture new plant in The US. We continue to be incredibly excited about Global's future, and now I will turn it back over to John.

John Wyskiel: Thank you, Razvan. Let's move on to slide 17. Blue Bird Corporation is off to a great start for 2026. Starting at the top, we're tracking to 9,500 units for fiscal 2026. But with a 6% CAGR projected for the school bus market, as well as entering new market adjacencies, we see our long-term volume growing to 13,500 units between school bus, and commercial chassis. This translates to a revenue of $1.5 billion for 2026, with an adjusted EBITDA moving up to $225 million But when you factor our growth opportunities, our long-term outlook moves up to $2 billion in revenue, and $320 million in adjusted EBITDA. Expanding to 16% plus.

And at the bottom of the page, you will see EV is still very relevant. This year, we are guiding 800 EVs, but continue to see 750 to 1,000 units per annum in our long-term outlook. Overall, Q1 has been a great start. And with the strong fundamentals of the industry, our investment in the future and our strength in this team the outlook for Blue Bird Corporation is very strong. So as I closed in on my one-year anniversary, and returned to Blue Bird Corporation, I wanted to share a few high-level details about our updated strategy on Slide 18. It is based off of four key elements and positions the company for the future.

First, as an almost 100-year-old company, business continuity and long-term stability is a core element. This includes investing and updating our manufacturing facilities and products. A great example is our new assembly plant, which is scheduled to launch in 2028. Infrastructure and competitive products are an essential part of our plan. The next element is a theme that has been consistent the last few years. Profitable growth. Of course, the school bus market is projected to grow over the next few years, and our new plant will allow us to capitalize on that. But for Blue Bird Corporation, it also means organically, expanding our total addressable market by entering new adjacencies.

The Blue Bird commercial chassis, and the Microbird JV Buy America shuttle bus is a great example of profitable growth opportunities. Margin expansion is the next element. This area focuses on advancing competitiveness, and cost reduction. For Blue Bird Corporation, this means continuing our industry three point o automation initiative as I discussed at the beginning of the call. We are in a good path in this area with a strong automation road map that will be incorporated into our new assembly plan. But as well, the new plant will allow us further factor the future opportunities, including industry four point o initiatives. And the last area is putting the balance sheet to work.

Blue Bird Corporation has strong liquidity and generates solid cash flows. Our balance sheet position allows us to be strategically opportunistic. We have the ability to grow through acquisitions, or exploit vertical integration. This is a tremendous area of opportunity for us. Overall, we have a balanced strategy that positions this great company for the future and delivers value to shareholders. I'll wrap it up on slide 19. This great company and iconic brand is almost 100 years old. Blue Bird Corporation has stood the test of time. We delivered outstanding results in the 2026. We continue to demonstrate credibility by delivering on our target.

And looking ahead, our strategy, discipline, and demonstrated execution will set this great company up for the future and deliver value to our shareholders. As always, I want to thank our employees, our dealer network, our supply partners, and, of course, our investors. All are critical to our success. I remain excited about Blue Bird Corporation, and we had a great start for 2026. This company is a great American story with such a rich history and an exciting future ahead. Thank you. So that concludes our formal presentation for today, and I'd now like to hand it back to our moderator for the Q and A session.

Operator: Thank you. We will now begin the Q and A session. If you would like to ask a question, If you would like to remove that question, please press star followed by two. Again, to ask a question, press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. We will pause here briefly as questions are registered. Our first question comes from the line of Greg Lewis with BTIG. Greg, your line is now open.

Greg Lewis: Yeah. Hi. Thank you, and good afternoon, and thanks for taking my question. I guess I'd like to start off maybe talking a little bit about margins. It was a good quarter around margins. You called out the benefit of maybe some of the cost efficiencies you're driving. And you've also called out the, you know, the having to kind of pass through the tariffs. Could you kind of give us some color around how much of that was pricing versus how much of that was maybe efficiencies that you've been able to squeeze out of the company?

Razvan Radulescu: Yeah. Hi, Greg. This is Razvan. If you look at the slide 11 about two-thirds came from net pricing and about one-third of it more or less is from better efficiency and quality. Let's I think the split that we have.

Greg Lewis: Yeah. Yeah. So as we look at yeah. Yeah. So as we look out through, you know, the rest of the year, is that kinda how we should be thinking about you know you know, the benefit of pricing I does it seem like we have the opportunity to kinda keep pushing that pricing through?

Razvan Radulescu: So I would say on the efficiency and quality, these are sustaining improvements that we are making on the pricing side. However, is pricing net of material cost increases, so you have the variability of the cost of goods sold, supplier inflation, maybe volatility in tariffs. While at the same time, our last pricing action was in November for the new model year. Those pricing effects will come in the second half of this fiscal year. So it's a bit too early to tell, especially on the cost goods sold, how the second half of the year is gonna develop.

Greg Lewis: Okay, great. Thanks for that. And then I did have a around the backlog. I know that there's as we think about the outlook for EV and you know, just given some of the, you know, some of the delays maybe we've seen and the potential for that backlog to build, Have customers kind of been shifting to the other alternatives, or is it kind of, hey. You know, we were is I guess what I'm trying to understand is as a percentage of the market, is has diesel been gaining share here over the last couple quarters?

Razvan Radulescu: Yeah. This is Razvan. I'll start and then my colleagues can join in for sure. In terms of the EV, we have a very strong backlog So, actually, between what we sold in Q1 and the backlog, we over a thousand units. And they said already some of these are bleeding into 2027 Q1 fiscal. And this is because of the timing it takes for the infrastructure to be ready at the sites of our customer. I would say on the EV, it's very strong, and we are already starting to 2027. In terms of diesel, we had a strong quarter for the diesel.

We you could notice didn't affect our overall profitability because we have very strong margins across all our powertrains and product types. However, as people look at the emission regulations potentially for 2027, is still some uncertainty regarding where that's gonna land. So we may see a little bit pre-buy or a pull forward for some diesel units. Into this year.

John Wyskiel: Yeah. And I don't have anything to add. We've always said diesel sticky, and like you say, you've got this potential pull forward maybe for pricing. With the new regs.

Greg Lewis: Okay. Super helpful. Thank you very much.

Razvan Radulescu: Sure. Thanks, Greg.

Operator: Thank you. Our next question comes from the line of Eric Stine with Craig Hallum. Eric, your line is now open.

Eric Stine: Hi, everyone. Maybe we could just stick with that last question and maybe ask it a little bit differently. So, know, obviously, EV has continued to be pretty strong here. I know you've been in all fuels for, what, fifteen plus years, but I'm just curious specific to propane. I know you're exclusive there. You know, school districts still, you know, by and large want to get off diesel. So what kind of trends are you seeing, whether it's this quarter or going forward in propane? You know, what type of advantage is that? I would think that continues to resonate a bit in the market. And, you know, how do you see that kind of playing out going forward?

John Wyskiel: Yeah. I'll start with a couple comments. I think from a from a marketplace, they still recognize propane as the best, total cost of operation. We also like you know, I guess, the ease of converting a fleet over because with propane, you can go to a propane seller. They can install the infrastructure relatively easily, you know, as part of the contract for fuel. There's still a pretty strong acceptance, and, I guess, know, compared to EV, they really like the infrastructure side. In terms of trends, I'm not sure I can comment anything there. Maybe my colleagues might be able to.

Razvan Radulescu: No significant change at this point in dynamic. There.

Eric Stine: Okay. Fair enough. Know, maybe just then talking about orders. I know on your last conference call, you talked about how it hadn't necessarily shown up you know, in terms of order improvement in the quarter that you had reported. But that you were starting to see it in Q1. Obviously, that came to fruition. You mentioned a little bit about EVs, but just curious as we're part of the way into Q2, you know, maybe what you're seeing just on the overall order front and then what you know, how you view as you said, you're you're about to get into, you know, where orders season kinda starts to pick up. You know?

So how do you feel about that? What kind of trends are you seeing?

John Wyskiel: Yeah. Great question. So a couple comments. Just, first, I mean, very strong order intake period. I think, as you know, we've been mentioned 45% increase. And I think that's validation. Of what we did in terms of stabilizing pricing. Now giving that certainty just allowed districts to go ahead and purchase. So I think that was a strong sign. And then look, whenever we talk about even, like, you know, in the backlog side, I'll talk little bit just for a minute on EV. Continued strong state funding. You know, New York, California, we're Illinois, Michigan all have strong funding, 1 and a half billion dollars. All of that helped contribute as well.

So order intake, I'd say good quarter, strong validation, perhaps a little bit of Catch up from Q4. Was in there as well. So, again, pumping up the numbers. In terms of 45%, some of that's just catching up from orders that weren't placed. But overall, good validation.

Eric Stine: Okay. And last one for me just on the capital allocation strategy. Obviously, balance sheet quite strong. You mentioned some potential acquisitions. I'm just wondering if you can just expand on your thoughts there a little bit, integration. Makes sense. I would assume if it's if it's something else, it wouldn't be too far afield from what you currently do.

Razvan Radulescu: Yeah. This is Razvan. Thanks for the question. So on capital allocation, we have a very strong balance sheet, and we continue to remain focused and evaluate opportunities strategically both on the growth side, but also on the vertical integration side. So at this point, nothing special to talk about. However, our balance sheet is now stronger as it has ever been. And, therefore, it enables us to look strategically at different opportunity.

John Wyskiel: Yeah. And, Eric, maybe the only thing I'll add is, look where we are. We can be opportunistic. Lots of options there for us in that regard. And I think, you know, for us, safe accretive, those are key elements of anything we would do in that area.

Eric Stine: Okay. That's great. Thank you.

Operator: Thank you. Our next question comes from the line of Mike Shlisky with D. A. Davidson. Mike, your line is now open.

Mike Shlisky: Good afternoon, and thanks for taking my questions here. You help me frame the potential impact from your comments, John, about adding more, like, automation to the process I was curious whether that was already baked into what you said last quarter, two quarters ago about getting that to that 15% plus or does adding more emission Is that the plus? Do you have more you can do And just sense of just any kind of sense as to the size of the impact that it might have on your margins given what you know today.

John Wyskiel: Yeah. Great question, Mike. Look. We're I guess the best way to say it is we've done the use case analysis We know what the returns are. They're favorable. Anything we're putting through. And I think, you know, the way we look at it, we have, a longer-term outlook there, and this know, fits within the outlook. You know, maybe it helps us in terms of being some tailwinds as we kind of, move towards that. But a good story overall in terms of the manufacturing story. Manufacturing strategy rather coming together.

Mike Shlisky: Great. I also wanted to ask a question about the balance sheet and capital allocation. You know, pre-pandemic, you're operating with cash of, like, $50 million. Now you're at $240 million. And know, adding together your portion of the CapEx for the new facility, what you've got left on your buyback, you know, other things you've got going on. And what you've got probably from a cash flow because for the rest of the year here, you're gonna have probably more cash than you know what to do with. I'm just curious if new M and A if no M and A comes into view anytime soon, what is your kind of regular plan?

Is it just to buy back more shares? Or some other way to that cash to use. I'm just not sure what else you could do if you can't if you don't find a deal. Going forward.

Razvan Radulescu: Hey, Mike. Yeah. Thanks for the question. So we outlined our capital allocation strategy in the last earnings call. We didn't repeat it here today. However, you are correct. We have the share buyback program up a $100 million approved by the board. We spent $5 million already. In Q1 out of this program. We are looking at a big capital investment for the new plant of our portion of $100 million or so over two years. We also are increasing a bit our regular CapEx spending and we are investing also a lot in engineering with the different engineering and the emissions regulations that are coming in the next couple of years.

But, obviously, as time develop, at least on a yearly basis, we are gonna revisit that strategy. And then potentially consider other avenues Maybe in the future, we could evaluate a dividend program, but we are not quite there yet.

Mike Shlisky: Got it. Could I just squeeze one more in here about market share going forward because of some previous issues the last year or two about one of your competitors having some issues with reducing on time, things out the out the door, were some weird swings in market share. Do you have anything that you done or that's on your that's on your radar screen for the rest of calendar '26 here as far as any company that's been also acting strangely or new models or things like that might affect your share one way or the other, or is it pretty steady from here?

John Wyskiel: No. I think it may be a couple things. As, you know, one of our competitors had some supply issues. Seems like they've gotten through that, and I think it's maybe normalized the market share that we're seeing right now. I don't know if Mark Rosvan has anything else to add.

Razvan Radulescu: Yeah. That's it. From what we see from order intake, it I would say business as usual. Mike?

Mike Shlisky: Okay. Outstanding. I'll pass it along. Thank you.

John Wyskiel: Thanks, Mike.

Operator: Thank you. Our next question comes from the line of Chris Pierce with Needham. Chris, your line is now open.

Chris Pierce: Hey. Just one question for me. I guess I know that it's tariff pass-throughs on pricing. But I guess I'm just curious about what you're hearing from distributors, the industry. I mean, when you talk about that $9,000 per bus, is there any sort of pushback out there from buyers? Or kinda what are buyers saying to you? And then what role does pricing play as far as long-term margin guidance as well?

Razvan Radulescu: Yes, Chris. So our tariffs are very different between internal combustion engine buses and EVs. So our tariffs for internal combustion are now below $5,000 per bus, but the EVs are above $10,000 per bus. So I'm not sure. Where the $9,000 is. So coming from. But definitely, we see tariffs as a tax imposed by the government, they are working very hard with our supply chain partners to minimize those in a volatile environment. Where different countries go on different lists from time to time. So it's a bit difficult to come up with a consistent supply and sourcing strategy. Geographically in this environment. But we are working to minimize those.

At the same time, we are working with our dealers and our customers and providing them certainty going forward right now all the way through June. For fixed tariff pricing, for future delivery. So this point, our target remains to be margin neutral on tariffs.

John Wyskiel: Yeah. And I think maybe with that $9,000, I just wanna clarify, Chris, might come from at the beginning, we talked about our $8,800 change in price from prior year. Which we said roughly half is tariff, half is pricing action.

Chris Pierce: Yeah. For sure. But in the end, the customer still have to pay that I just I was kinda curious if you're hearing anything from distributors as far as elevated pricing. Which I know is because of tariffs, but I'm just kinda curious what the market is saying.

John Wyskiel: Yeah. Well, look. A couple things. And I know there could be some of you know, we were 45% up for the quarter on order intake. Some of that may be catch up from the prior year. But the reality is know, unfortunately, there's tariffs now that they're all dealing with. But the in terms of if you were to compare it to, is there any fatigue? Maybe there's they're not happy, but at the end of the day, they recognize all the manufacturers have them. And then I think the other side of it is they recognize they have to change the fleet out.

You know, there are buses that are coming into that ten-year window right now, a heavy number. That they simply have to change, and it becomes a matter of economics. It's easier to or more effective to replace the unit than to keep it going.

Chris Pierce: Okay. That makes sense. Appreciate that the detail. Thank you.

Operator: Thanks, Chris. Thank you. Our next question comes from the line of Craig Irwin with Roth Capital Partners. Craig, your line is now open.

Andrew: Guys. It's Andrew on for Craig. First one for me, I kinda touched a lot provide a lot of detail on kind of the alt fuel buses. But looks like within EVs, you guys kinda nudged up your the midpoint of your annual guide backlog remains solid. You talked about sourcing and EPA funding flowing. So can you just provide a bit more color on what you're seeing in the overall EV market?

Razvan Radulescu: Yeah, Andrew. Thanks for the questions. This is Raz. Yeah. We see strong orders supported both by the EPA rounds 23 and the state funding subsidies that are out there. And, yes, we raised our guidance for this year to 800 units. And I would say part of the upside to our to go higher on both revenues and EBITDA for the year is, comes from EV. So to the extent that we can build more and deliver them, we will do that in this year, and this gives the upside to our guidance. On the other side, the downside to our guidance comes from tariffs. And the cost coming from tariffs that we can't fully predict right now.

So those are the two puts and takes for the guidance. And we feel very good about the EV right now.

John Wyskiel: Yeah. Maybe just a couple other things. The you know, of course, there's a federal side that we just talked to with around one through five. But then on the state side, I always reiterate New York California, Oregon, Illinois, Michigan, there's about a billion 5 in funding there. And then a lot of these big fleets just have mandates. They wanna get to certain thresholds in terms of EVs, as a portion of their fleet, and that includes both big fleets as well as states. So when you roll it all together, we've we've continued to say EV is relevant.

Andrew: Great. Well, appreciate the color. And then, second from me, I know it's not a big driver in twenty six, but I know last quarter, you provided an update on the commercial chassis, your prototyping some models with some different body types. Can you just provide some additional color and update there? And if we can still kind of expect around a 100 units. Towards the latter half of the year.

John Wyskiel: Yeah. For sure. So first of all, we took our first order know, first of '30, I guess, is best way to say it, from one customer. And this is a customer that helped us with the development and know, working through what they wanted to see from a field standpoint. What we're doing now is we're going through normal engineering loops and then we're kinda rolling up our bill and doing all that or bill materials and working that process. Our production SOP now looks like it's gonna be you know, I would say, later fourth quarter, which is gonna push out units into next year.

But, again, our focus on this whole thing is this is a new entry, so we wanna make sure we got it right from quality. A durability perspective, from a price perspective. Getting all that right is important. It matters.

Razvan Radulescu: Maybe just to clarify in terms of guidance, we substituted those 100 sales with buses for the total year, so we maintain the 9,500, but due to the timing of production, this strip charges will start to be revenue recognized and sold for the income statement purposes. In fiscal 2027 Q1.

Andrew: No worries. Thank you.

Operator: Thank you. There are currently no questions registered. So as a brief reminder, if you would like to ask a question, please press 1 on your telephone keypad. There are no more questions waiting at this time. So I would like to pass the conference back over to John for any closing remarks.

John Wyskiel: Yes. Thank you, William, and thanks to each of you for joining us on the call today. Blue Bird Corporation has delivered a great start for 2026 with strong results, beating expectations, and raising our guidance, and this is despite a challenging environment. With the fundamentals of the industry and the key elements of our strategy, I remain very optimistic for Blue Bird Corporation and its future. And we look forward to updating you on our progress next quarter. Should you have any follow-up questions, please don't hesitate to contact our head of investor relations Mark Benfield.

Blue Bird Corporation continues to be stronger than ever and has an amazing future ahead as we approach our one hundredth anniversary next year. Thanks again from all of us at Blue Bird Corporation, and have a great evening.

Operator: Thank you. That concludes the Blue Bird Corporation Fiscal 2026 First Quarter Earnings Call. Thank you for your participation. You may now disconnect your lines.