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Date

May 6, 2026, 4:30 p.m. ET

Call participants

  • President and Chief Executive Officer — John Wyskiel
  • Chief Financial Officer — Razvan Radulescu
  • Head of Investor Relations — Mark Benfield

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Takeaways

  • Bus unit sales -- 2,148 buses sold, a slight decrease due to fewer production days compared to last year.
  • Total revenue -- $353 million, down $6 million compared to prior year, attributed to lower volumes.
  • Electric vehicle (EV) sales -- 201 EV units sold, making up just under 10% of total unit volume.
  • Adjusted EBITDA -- $51 million, a fiscal Q2 record and up $2 million versus last year, driven by higher margins.
  • Adjusted free cash flow -- $40 million, representing a record fiscal Q2 and $21 million above last year.
  • Average bus selling price -- $151,000 per unit, reflecting a $6,145 increase, or 4.3% higher compared to last year.
  • Backlog -- Approximately 3,600 units at fiscal quarter-end (March 28, 2026), including more than 900 EVs, and positioned near stated optimal levels.
  • Order intake -- Up 7% for the first half, compared to a near 4% decline in the broader market.
  • Alt power unit mix -- 41% of unit sales attributed to alternative power buses during the quarter.
  • Parts revenue -- $28 million, supported by aging fleet demand and supply-chain-driven pricing actions.
  • Gross margin -- 20%, up 30 basis points year over year, on the back of pricing and manufacturing efficiencies.
  • Adjusted EBITDA margin -- 14.4% for the quarter, an increase of 70 basis points year over year.
  • Adjusted net income -- $32.5 million, a record for fiscal Q2 and $1 million above last year.
  • Adjusted diluted EPS -- $1.00, up $0.04 compared to last year.
  • Liquidity -- $418 million, marking a $144 million increase over the prior year.
  • Cash position -- $276 million in cash at fiscal quarter-end, with a $5 million debt reduction year over year.
  • Share buybacks -- $5 million executed during the quarter under a $100 million program.
  • Updated full-year revenue guidance -- Projected $1.725 billion to $1.775 billion, including consolidation of MicroBird in the second half.
  • Full-year adjusted EBITDA guidance -- $245 million, with a range of $235 million to $255 million, and margin guidance at approximately 14% post-MicroBird acquisition.
  • DOE MES grant -- $80 million in funding reconfirmed, supporting construction of a new facility for Type C buses targeted to open in Q4 of calendar year 2028.
  • MicroBird JV acquisition -- Acquisition of the remaining 50% announced and closed April 1, bringing two plants and 950 employees into Blue Bird.
  • Share of supply chain and pricing discipline -- Management emphasized "extremely disciplined" pricing and margin-neutral outcomes on tariffs.
  • Buy America shuttle bus expansion -- MicroBird acquisition enables entry into the commercial shuttle bus segment and expands the addressable market by 78%.
  • CapEx for new facility -- Total investment exceeds $300 million, with no requirement for additional CapEx at the existing plant for current models.

Summary

Blue Bird (BLBD +3.12%) reported record profitability and raised full-year financial guidance, citing robust demand and successful execution of its growth initiatives. Management confirmed the integration of the MicroBird acquisition and provided updated forecasts demonstrating significant expansion in both the core school bus market and new commercial opportunities. The company achieved its best fiscal Q2 adjusted EBITDA and free cash flow despite slightly lower bus volumes, supported by higher average sales prices and favorable product mix. Diversification into alternative powertrains and commercial vehicles remains central to the strategy, with the electric vehicle backlog at a record 25% mix. The new manufacturing facility, funded in part by a reconfirmed DOE MES grant, is expected to further enhance production efficiency and long-term cost competitiveness.

  • Management stated, "we beat our guidance provided in the last earnings call on all metrics," reflecting quarter-on-quarter operational outperformance.
  • Leadership explained that maintaining current backlog levels at 3,000 to 4,000 units provides one to two quarters of scheduling visibility, which they consider optimal.
  • With a "margin-neutral" tariff strategy, the company has successfully mitigated the impact of multiple tariffs, as evidenced by steady gross and EBITDA margins.
  • The Clean School Bus Program continues to support end-customer funding, with rounds four and five under EPA review, potentially sustaining EV market momentum.
  • Company highlighted that the expanded addressable market following the MicroBird acquisition is complemented by vertical integration and critical technology brought by EcoTube integrated EV powertrains.
  • The new plant will focus on Type C buses, which "is 90% of the market, 80% of our sales, and 70% of our people," ensuring alignment with the largest market segment.
  • Guidance post-MicroBird acquisition elevates the company’s midterm revenue target to $2 billion and adjusted EBITDA target to $275 million, with long-term targets raised to $2.5 billion in revenue and $325 million to $375 million-plus in adjusted EBITDA.

Industry glossary

  • MES grant (Manufacturing Energy Solutions Grant): U.S. Department of Energy funding for manufacturing facility upgrades or new construction, aimed at energy efficiency and modernization.
  • Buy America: U.S. federal requirement that certain vehicles and components be domestically produced to qualify for transit contracts and funding.
  • EcoTube: Proprietary integrated electric powertrain technology offered by MicroBird for commercial vehicle applications.

Full Conference Call Transcript

John Wyskiel: Thanks, Mark, and good afternoon, everyone. Thanks for joining us today. It is an exciting day, and we are going to share our strong fiscal 2026 second quarter financial results and the significant progress we have made with our long-term strategy. Results for Q2 were once again very strong, and the Blue Bird Corporation team delivered outstanding sales and adjusted EBITDA, beating guidance for the fourteenth consecutive quarter. Razvan will take you through the details of our financial results shortly, but let us turn to Slide 6, where I will talk to some of the key takeaways for the quarter. First, Blue Bird Corporation beat guidance on all metrics for the quarter.

Again, we continue to manage the volatility associated with the administration’s policy on tariffs well. Backlog for the quarter ended at just under 3,600 units, and operationally, all metrics are pointing in the right direction. The team has been able to execute on a day-to-day basis while simultaneously developing detailed manufacturing plans for the future, which I will talk more about later in this call. In terms of pricing, we remain extremely disciplined. Bus prices remain higher than the previous year and the previous quarter. As I have communicated prior, this process is just how we manage the business. In the alt power segment, our dominance continues. Our EV backlog is over 900 units extending into 2027.

We remain exclusive in propane, which has the lowest total cost of operation, and our gas variant continues to be a leader. Again, alt power is the segment we created more than fifteen years ago, and we continue to maintain our lead position. Our manufacturing strategy is coming into focus, and I will talk more to that later in this presentation. It is focused on building our new plant, automating where we can get good financial returns, and ensuring production contingency, all of which builds a safe path for ongoing cost improvement through Industry 3.0 and 4.0 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. As I have said on every earnings call, it is our objective to position this business to be a strong, long-term investment. Let us turn to Slide 7 and take a closer look at the financial and key business highlights for the quarter. We sold 2,148 buses in Q2 and recorded revenue of $353 million, slightly below last year. On the EV side, we sold 201 electric vehicles, just under 10% of unit volume, and our long-term outlook for EVs remains optimistic.

Adjusted EBITDA for the quarter came in at $51 million, $2 million stronger than last year, and free cash flow came in at an outstanding $40 million. Razvan will talk more about this and our outlook later in this call. Turning to the right side of the page, I will touch on a few points. As discussed earlier, our backlog finished at a solid 3,600 units, so we remain close to the sweet spot. As you know, backlog is a function of orders and production, and if you look at the first half of the year, order intake was up 7% from the same period last year versus the market, which was down almost 4%.

Overall, we are feeling good about our performance in the market, and I continue to reiterate the overall market fundamentals are still strong. The fleet is aging. We are coming into a heavy replacement cycle, and there have been industry supply issues the last few years leaving pent-up demand. The horizon ahead continues to look very good for school bus volumes. Year-over-year selling price for buses was up almost $6,400, but, of course, this also includes tariff recovery as part of our margin-neutral tariff strategy. With tariffs excluded, pricing was still up year-over-year, and parts sales totaled $28 million for the quarter. Alt-powered buses represented a strong 41% mix of unit sales for the quarter.

Our powertrain strategy is a differentiator in the market and allows us to maintain stronger margins. For the quarter, we had 201 EVs booked and 912 EVs in our order backlog pushing into 2027. 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 Clean School Bus Program remain intact with funds flowing to our end customers, and the EPA has invited comments for 2026 funding, solidifying rounds four and five of the program consistent with what we have been communicating.

We should understand very soon how and when the EPA will administer these funds. Overall, when you look at state funding and the fleet EV mandates, we believe this market will remain relevant. Finally, I have two very exciting items to report for the quarter. First, the $80 million MES contract with the DOE has been officially reconfirmed for funding, solidifying our manufacturing strategy and new plant. Second, we announced the acquisition of our MicroBird 50/50 JV. Similarly, this transaction is another key component of a profitable growth strategy. So let us turn to Slide 8. MicroBird has a rich history with three main segments: Type A school bus, commercial shuttle bus, and integrated EV powertrains.

The acquisition was a safe and accretive play that brings with it two plants, 950 people, and best-in-class quality products. For Blue Bird Corporation, the transaction focused on a strategic value proposition for growth, technology, and efficiency. First, the transaction will allow us to consolidate sales and drive critical growth outside of the school bus segment by accessing the Buy America commercial shuttle bus segment, expanding our total addressable market. Second, it brings critical integrated EV technology through EcoTube, expanding our product offering, bringing vertical integration opportunities, and ensuring supply stability. Lastly, this transaction brings efficiencies through critical integration, which has already begun both organizationally and in business processes.

Overall, this is an excellent transaction for the company, and it brings a tremendous opportunity for growth, technology, and efficiency. It has certainly been a busy quarter, with strong results and some exciting announcements. I would now like to hand it over to Razvan to walk through our fiscal 2026 second quarter financial results as well as our full-year updated guidance in more detail. Razvan?

Razvan Radulescu: Thanks, John, and good afternoon. It is my pleasure to share with you the financial highlights from Blue Bird Corporation’s fiscal 2026 second quarter and year-to-date record results. The quarter end is based on a close date of 03/28/2026, whereas the prior year was based on a close date of 03/29/2025. We will file the 10-Q today, May 6, after market close. Our 10-Q includes additional material and disclosures regarding our 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 10 is a summary of the fiscal 2026 second quarter and first-half record financial results. It was a seasonally strong operating quarter for Blue Bird Corporation and a great continuation for the first half of the fiscal year, and we beat our guidance provided in the last earnings call on all metrics. In fact, we delivered the best Q2 profit ever for Blue Bird Corporation with $51 million in adjusted EBITDA. The team pushed hard and continued doing a fantastic job and generated 2,148 unit sales volume, which was just below prior-year level, driven by a lower number of production days in this fiscal quarter due to the way holidays fell in the year.

As a result, Q2 consolidated net revenue of $353 million was $6 million lower than prior year. Adjusted EBITDA for the quarter was a Q2 record of $51 million driven by higher margins, partially offset by increased year-over-year health-care costs. Adjusted free cash flow was also a record Q2 of $40 million and $21 million higher than the prior-year second quarter. This result was due to continued strong profitability across all bus and powertrain types. Our liquidity position at the end of this quarter was a record $418 million. The first-half results are equally impressive.

While units sold of 4,283 buses were just below prior year by 142 units, revenue grew to $686 million with adjusted EBITDA of $101 million, both record first-half results. Free cash flow was also very strong at $71 million, or $30 million above prior-year level. Moving on to Slide 11. As mentioned before by John, our backlog increased versus Q1 and continues to be solid at approximately 3,600 units, including over 900 EVs—a record 25% EV backlog mix. Some of them are already scheduled to be built and delivered in fiscal 2027 Q1.

Breaking down the Q2 $353 million in revenue into our two business segments, the bus net revenue was $325 million, down $8 million versus prior year due to slightly lower volumes. However, our average bus revenue per unit increased by $6,145 to $151,000, or 4.3%. EV sales in Q2 were 201 units, or 64 units lower than last year as planned. Parts revenue for the quarter was up at a strong $28 million. This great performance was in part due to increased demand for our parts as the fleet is aging, as well as supply-chain-driven pricing actions and throughput improvements.

Gross margin for the quarter was a seasonal record 20%, or 30 basis points higher than last year, due to pricing actions, manufacturing efficiencies, and quality improvements. Adjusted EBITDA of $51 million, or 14.4%, was higher compared with prior year by $1.6 million and 70 basis points. In fiscal 2026 Q2, adjusted net income was a record Q2 at $32.5 million, $1 million higher than last year. Adjusted diluted earnings per share of $1.00 was up $0.04 versus the prior year. Slide 12 shows the walk from fiscal 2025 Q2 adjusted EBITDA to the fiscal 2026 Q2 result.

Starting on the left at $49.2 million, the impact of the bus segment gross profit in total was $1.7 million, split between volume and pricing effects, net of material cost increases, of $4.3 million and year-over-year health-care cost increases and lower overhead absorption of $2 million. The parts segment gross profit was flat, and our fixed cost and other income/expenses were also almost flat. Sum total of all the above-mentioned developments drives our record fiscal 2026 Q2 reported adjusted EBITDA result of $50.8 million, or 14.4%. Moving on to Slide 13, we have extremely positive developments year-over-year also on the balance sheet.

We ended the quarter with a record $276 million in cash and reduced our debt by $5 million over the last year. Our liquidity is very strong at a record $418 million at the end of fiscal 2026 Q2, a $144 million increase compared to a year ago. Additionally, we have executed another $5 million tranche of share buybacks during fiscal 2026 Q2, part of our new $100 million program, with $90 million left to go. The operating cash flow was very strong for Q2 at $48 million, driven by great operational execution and margins and with almost flat working capital.

On Slide 14, we want to share with you our updated fiscal 2026 forecast prior to the MicroBird acquisition and consolidation. Looking at Q2 actuals, we have beaten again in every metric our guidance this past quarter, and we had a very strong start for the first half of the fiscal year. We continue to forecast a strong second half at 15% to 16% adjusted EBITDA margins. We are increasing our EV outlook to 900 for the fiscal year and our pre-deal forecasted revenue to a range of $1.515 billion to $1.565 billion. Given also our beat in Q2, we are raising our forecast adjusted EBITDA to $230 million, or 15%, with a range of $220 million to $240 million.

These numbers are prior to the MicroBird acquisition and second-half consolidation. On Slide 15, we want to share with you our updated fiscal 2026 guidance post close on April 1 of our acquisition of the remaining 50% of the MicroBird joint venture. As you can see on this slide, the first half of the year remains reported as unconsolidated JV. However, in the second half, we are now going to consolidate 100% of the revenue and the remaining 50% of the adjusted EBITDA for MicroBird.

Building on the updated forecast for the year from the prior page, in Q3 and Q4, we are guiding to increase consolidated total revenue to $500 million and $560 million, respectively, driving the total year to $1.725 billion to $1.775 billion in revenue. For adjusted EBITDA, the Q3 midpoint is increased by $5 million and Q4 midpoint is increased by $10 million for a total year guidance of $245 million, with a range of $235 million to $255 million. Due to consolidation of 100% of the MicroBird revenue for the second half, and only 50% of the adjusted EBITDA, the adjusted EBITDA margin percentage is being updated to approximately 14% for the year.

Moving to Slide 16, in summary, we are forecasting an improvement year-over-year to a new record with revenue up to approximately $1.75 billion, adjusted EBITDA in the range of $235 million to $255 million, or approximately 14%, and adjusted free cash flow of $100 million to $125 million, in line with our typical target of 50% of adjusted EBITDA and after accounting for the extraordinary CapEx of $25 million, with our 50% fiscal 2026 portion of the new plant investment funded by a reconfirmed DOE MES grant which is currently proceeding with the permitting phase. Moving on to Slide 17, we wanted to remind you of our medium- and long-term outlook prior to the MicroBird acquisition.

Medium-term outlook was at $240 million adjusted EBITDA, which included $25 million for our 50% portion of MicroBird results. Our long-term target was to generate EBITDA of $280 million to $320 million, which included MicroBird with $30 million to $35 million. Moving on to Slide 18. We want to remind you of the growth potential we see for MicroBird, especially in the commercial shuttle bus segment in the U.S. with Buy America certification. We are driving towards $450 million in revenue midterm with $60 million in adjusted EBITDA. The long-term outlook is for $500 million to $550 million in revenue and $75 million to $90 million in adjusted EBITDA.

Moving on to Slide 19, you can see our updated medium- and long-term outlook post MicroBird acquisition. What used to be our long-term target of $2 billion in revenue moved to midterm, with approximately $275 million in adjusted EBITDA. The long-term outlook is raised now to $2.5 billion in revenue, $325 million to $375 million-plus in adjusted EBITDA, or 14% to 15% plus. Now this is what we call profitable growth. We continue to be incredibly excited about Blue Bird Corporation’s future and now I will turn it back over to John.

John Wyskiel: Thank you, Razvan. Let us move to Slide 21. I want to take this opportunity to remind everyone of our long-term strategy, which consists 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 in and updating our manufacturing facilities and products. A great example is our new assembly plant, which I will talk to further in a couple of minutes. Infrastructure and competitive products are an essential part of our plan. The next element is a theme that has been consistent in 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 expanding our total addressable market by entering new adjacencies. The Blue Bird Corporation commercial chassis and the MicroBird Buy America shuttle bus are great examples. Margin expansion is the next element. This area focuses on advancing competitiveness and cost reduction. For Blue Bird Corporation, this means continuing our Industry 3.0 automation initiative, and the new plant will allow for further factory-of-the-future opportunities, including Industry 4.0 initiatives. The last area is putting the balance sheet to work. The MicroBird acquisition was a great example of this.

Even after this transaction, Blue Bird Corporation continues to have a pristine balance sheet, strong liquidity, and solid cash flows. This will allow us to continue to be strategically opportunistic. We continue to have the ability to grow through acquisition or exploit vertical integration. Overall, we have a balanced strategy that positions the company for the future and delivers value to our shareholders. Let us turn to Slide 22. Earlier in the presentation, I spoke about the DOE MES grant, and now that it has been reconfirmed, I think it is a good time to provide some more details about our manufacturing strategy and our new plant.

First, the new plant will be just under 1 million square feet, with an overall total investment of over $300 million, replacing our current 75-year-old plant. The $80 million MES grant will contribute towards this, and we are scheduled to start production in Q4 calendar year 2028. We thank the DOE for the consideration and confirmation of this project. This increased investment was a result of shifting our manufacturing strategy to build Type C buses in the new plant at a capacity of 9,000 buses per year on one shift. The original scope over a year ago was to build Type D.

This shift to Type C is critical, as Type C is 90% of the market, 80% of our sales, and 70% of our people. This allows us to align our investment and improvements with the biggest, most competitive segment of the market. Our successful Type D bus will remain in the current facility. Critically, we have identified a number of automation use cases with strong returns that will be incorporated into the new plant at the start of production. We will also maintain Type C capacity in the current plant to protect volume as a start-up contingency.

This will allow us to ramp up production at the new plant while production winds down at the old plant during an overlap period. This new plant will also enable further Industry 3.0 and 4.0 opportunities, providing a roadmap to continue our long-term cost competitiveness. This investment in critical infrastructure is part of the business continuity and long-term stability component of our strategy. We are very excited about the new plant and what it will bring to us in decades to come. Lastly, I want to finish up with the strong outlook we have for the business on Slide 23.

As we have shown before, the fundamentals of the school bus segment remain strong, as shown on the left side of the page. We are moving into the replacement cycle for the high-volume period. We know there is pent-up demand remaining from the COVID period, and there are still over 180,000 buses over ten years old. Funding remains stable for this market. All of this contributes to a strong 6% CAGR over the next several years. With the addition of MicroBird, we now get the consolidation benefit of Type A school bus and the growth associated with entering the Buy America commercial shuttle bus market, as shown on the right side of the page.

Combined, this move increases our total addressable market by 78%. When you add other contributors for growth, like the commercial strip chassis, the outlook gets even stronger. Profitable growth is a key component of our strategy. I will wrap it up on Slide 24. This great company and iconic brand is almost 100 years old. It has stood the test of time. We delivered outstanding results again in 2026, and we continue to demonstrate credibility by delivering on our targets. We are excited about the MicroBird acquisition and the new plant that we discussed today. Both are key components of our very important long-term strategy.

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, supply partners, and, of course, our investors. All are critical to our success. We remain excited about Blue Bird Corporation, and we have had a great start to 2026. This company is a great American story with such a rich history and exciting future ahead. Thank you. That concludes our formal presentation for today, and I would now like to hand it back to our moderator for the Q&A session.

Operator: We will now open the call for questions. We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Eric Stine with Craig-Hallum. Your line is open. Please go ahead.

Eric Stine: Hey, everyone. So maybe just wanted to start with MicroBird, timely since it recently closed. I know that the Plattsburgh plant is a big deal, and a big part of this and why now is the fact that in addition to Type A, you can go after this Buy America fleet market. Just curious, are you already going after that market? Is that an initiative where we need to see a few steps before that plays out, or how should we think about when that starts to contribute? And since you are on those lists, is that a near-term event that ramps?

John Wyskiel: I will start. There are three main segments: FTA/FAA, large fleets, and retail. The retail side has already started; we have been working through that with dealers. On the FAA and FTA, which is the biggest segment, we have been working to get on contracts—both cooperative and state contracts. Activity has begun. We have won some contracts, and we are going to start working through that process. That puts us on a list for bids and ultimately for purchase orders to be materialized. So the process is underway. It is a near-term event that will ramp. Keep in mind, not every state is open in terms of contracts, so there is a phase-in period.

Some contracts are in year two of five, for example. This will take some time to ramp, but it is coming.

Razvan Radulescu: Maybe just to complement that, Eric, if you look at our long-term growth chart for MicroBird on Slide 18, you see the ramp-up between the current forecast, midterm, and long term. The vast majority of that growth comes from the shuttle bus segment, so you can correlate that.

Eric Stine: Got it. That is helpful. For my follow-up, on EPA funding—there is a comment period and a lot of discussion, and investors ask about it. How do you see that playing out with the administration? Is it potentially more skewed to propane? Does it stay as is? Any thoughts would be helpful.

John Wyskiel: A couple of things. I do not want to speculate because we do not know what will happen. Propane would be a great opportunity, especially since we are the only company that builds propane school buses. That is a possibility. For EV, who knows what they do with funding. Right now, they fund essentially the entire price of the bus. Maybe they reduce that, and if they do, it could be applicable to a larger number of buses, spreading it across more units, which would be advantageous as well.

Operator: Our next question comes from the line of Michael Shlisky with D.A. Davidson. Your line is open. Please go ahead.

Michael Shlisky: Good afternoon, and thanks for taking my questions. I was curious—you did not change your margin outlook all that much despite 90% of the buses going to this new facility, which I assume would be state-of-the-art with some substantial margin opportunities. Why not raise more? And as part of this process, do you need any CapEx at the old plant to accommodate those larger Type D’s, or is this all one big package of CapEx strictly about the brand-new building?

John Wyskiel: I will start, and then Razvan will provide a bit more color. On automation, we have a number of use cases that will go into start-up at the new plant. We view the automation as upside in our longer-term outlook—that “plus side” you see in our targets. A big point, Mike, is the contingency we built in. Competitors have stumbled without start-up contingency in more mechanized or automated factories. We will maintain Type C capacity in the current plant to protect volume during start-up, which helps protect the downside while we pursue the upside.

Razvan Radulescu: In terms of CapEx for the old building, it does not require any additional CapEx. It already produces both Type C and Type D today. Once Type C moves to the new plant, Type D will remain in the current facility, and it will also make room for more capacity in terms of strip chassis that we could ramp at that point. The CapEx we are talking about on this call is for the new plant.

Michael Shlisky: Understood. A quick broad question about market share—do you believe that Blue Bird Corporation may have gained market share so far this year from what has been delivered and the orders you have taken? Do you think you may gain market share over the next few quarters?

John Wyskiel: Our order intake has been positive. The market was down; we were up. From that aspect, it was positive. But I would not read too much further into it. It is only a half-year view, and we do not chase market share—that has always been our philosophy.

Razvan Radulescu: Also, we operate now almost at max capacity on one shift, so production is more of a gating factor at this point.

Michael Shlisky: Great. I will pass it along. Thank you.

Operator: Our next question comes from the line of Christopher Alan Pierce with Needham. Your line is open. Please go ahead.

Christopher Alan Pierce: Hey, good afternoon. Following along the lines of that last question—if you look at the alt power mix, it has come down a little bit over the past couple of years. Is that because you are able to deliver what the market wants and alt power is somewhat out of favor near term versus prior years, so you are delivering more diesel buses? Or should we think of it as short-term share fluctuations?

John Wyskiel: Probably more short-term share fluctuation. Diesel is also a little bit heavier now in terms of market share, maybe due to new legislation coming in and potential prebuying. That could have an impact. Fortunately, we are strong in diesel too. Looking at our numbers, we are up, which proves we are competitive in that segment.

Christopher Alan Pierce: Thanks. On absolute bus backlog—this second quarter versus prior years—you have described elevated backlog as unhealthy in the past. Can you remind us what a healthy backlog should be and what to expect as you come out of that aggressive ordering period?

John Wyskiel: We always look at 3,000 to 4,000 units as the sweet spot. Too shallow and it is hard to schedule; too deep and you are vulnerable to inflation, tariffs, etc. The post-COVID period had unusually high backlogs that were problematic. Where we are now is more normalized. COVID may have helped flatten seasonality, which helps quality, production, and people.

Mark Benfield: Chris, I will add: for us, one to two quarters of production visibility is really the way to think about that sweet spot in backlog.

Christopher Alan Pierce: Great. Lastly, can you touch on Section 232 tariffs and raw materials—hedging, pass-through pricing—how do those pieces fit together?

Razvan Radulescu: Thanks, Chris. We have been dealing with a medley of tariffs in the last year-plus, and Section 232 is one of them. We are managing that very well, targeting a margin-neutral outcome, as you can see from our results. We are working with dealers and customers on pricing to address some of those tariffs and, at the same time, working with our suppliers to mitigate or resource to minimize other types of tariffs.

Operator: There are no further questions at this time. I will now turn the call back to John Wyskiel for closing remarks.

John Wyskiel: Thank you, and thanks to each of you for joining us on the call today. Blue Bird Corporation has delivered a great start to 2026 with strong results, meeting expectations, and raising our guidance despite the challenging environment. With the fundamentals of the industry and the key elements of our strategy, I remain very enthusiastic for Blue Bird Corporation and its future. We look forward to updating you on our progress next quarter. Should you have any follow-up questions, please do not 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-hundred-year anniversary.

Thanks again from all of us at Blue Bird Corporation, and have a great evening.

Operator: This concludes today’s call. Thank you for attending. You may now disconnect.