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Blue Bird Reports Fiscal 2023 Fourth Quarter and Full Year Record Results; Beats 2023 Guidance and Raises 2024 Guidance

Full Year Net Sales of $1,132.8M, up 41% and GAAP Net Income of $23.8M, up $69.6M

Adjusted EBITDA of $87.9M, up $102.7M with 8,514 Buses Sold, up 25%

FY2024 Adj. EBITDA Guidance Increased to $115M or ~10% Margin

Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2023 fourth quarter and full year results.

Highlights

Three Months Ended

Twelve Months Ended

(in millions except Unit Sales and EPS data)

September 30, 2023

 

B/(W) 2022

 

September 30, 2023

 

B/(W) 2022

Unit Sales

 

2,116

 

 

100

 

 

8,514

 

 

1,692

GAAP Measures:

 

 

 

 

 

 

 

Revenue

$

303.0

 

$

45.3

 

$

1,132.8

 

$

332.2

Net Income

$

18.6

 

$

41.7

 

$

23.8

 

$

69.6

Diluted EPS

$

0.58

 

$

1.30

 

$

0.74

 

$

2.22

Non-GAAP Measures1:

 

 

 

 

 

 

 

Adjusted EBITDA

$

40.7

 

$

57.0

 

$

87.9

 

$

102.7

Adjusted Net Income

$

21.3

 

$

42.7

 

$

34.5

 

$

70.5

Adjusted Diluted EPS

$

0.66

 

$

1.32

 

$

1.07

 

$

2.22

 

1 Reconciliation to relevant GAAP metrics shown below

“I am incredibly proud of our team’s progress in transforming our business in 2023, and the outcome of all the hard work is evident in our record financial results,” said Phil Horlock, CEO of Blue Bird Corporation. “The Blue Bird team executed a rigorous transformational plan over the past two years to improve operations and throughput, control fixed costs, recover economics through pricing and expand our leadership position in alternative-powered buses. The market demand for Blue Bird’s school buses remains very strong with approximately 4,600 units in our order backlog. Unit sales in the year were up 25% from a year ago and we grew revenue by an exceptional 41%, to a record $1.13 billion. Adjusted EBITDA was a record $88 million, which is an outstanding increase of $103 million compared with last year, while our Adjusted Free Cash Flow in 2023 was another record high and $144 million better than last year.

In expanding our leadership position in alternative-powered school buses, we achieved outstanding growth in zero-emission EV unit sales, which more than doubled from last year. Additionally, at fiscal-year end, we had almost 600 electric school bus orders in our backlog, representing a 12% mix. We have seen strong growth in EV orders from the EPA’s Clean School Bus Program, which awarded nearly $1 billion in funding from Phase 1 of the program in 2023. We are excited to see the launch of Phase 2 (A and B) of the 5-year program, offering a combined $900M+ in grant and rebate funding for electric school buses. We’ve been working aggressively with our dealers and school districts in submitting applications and we are confident that exciting growth is ahead for Blue Bird on the EV front!

Based on our substantial progress this year and additional visibility into the 2024 operating environment, we increased our full year financial guidance for next year to 10% Adjusted EBITDA and look forward to sustained profitable growth in the coming years, particularly as the global supply chain recovery progresses.”

FY2024 Guidance Increased

“We are very pleased with the FY2023 results, with record Revenues and Adj. EBITDA coming in above guidance,” said Razvan Radulescu, CFO of Blue Bird Corporation. “Our business transformation is already generating record levels of profitability compared with historical levels, and more improvements are still to come. With the strong finish to 2023 and better line-of-sight into 2024, we are raising our fiscal 2024 guidance to Net Revenue to $1.15-1.25 Billion, Adj. EBITDA of $105-125 million and Adj. Free Cash Flow of $50-60 million. Additionally, we are reconfirming our long-term outlook of profitable growth towards ~$2 billion in revenues and Adjusted EBITDA margins of 12%+.”

Fiscal 2023 Fourth Quarter Results

Net Sales

Net sales were $303.0 million for the fourth quarter of fiscal 2023, an increase of $45.3 million, or 17.6%, from prior year period. Bus sales increased $41.7 million, reflecting a 12.1% increase in average sales price per unit, resulting from product and mix changes, as well as pricing actions taken by management in response to increased inventory purchase costs, and a 5.0% increase in units booked. In the fourth quarter of fiscal 2023, 2,116 units were booked compared with 2,016 units booked for the same period in fiscal 2022. Additionally, Parts sales increased $3.6 million, or 16.7%, for the fourth quarter of fiscal 2023 compared with the fourth quarter of fiscal 2022. This increase is primarily attributed to pricing actions taken by management to offset increases in purchased parts costs, increased demand due to the aging school bus fleet, as well as product mix.

Gross Profit

Fourth quarter gross profit of $50.0 million represented an increase of $54.4 million from the fourth quarter of last year. The increase was primarily driven by the $45.3 million increase in net sales, discussed above, as well as a decrease of $9.1 million in cost of goods sold, primarily due to certain Bus segment inventory that had an approximate $8.8 million cumulative cost in excess of net realizable value that was recognized as a loss in fiscal 2022 with no similar activity in fiscal 2023.

Net Income

Net income was $18.6 million for the fourth quarter of fiscal 2023, which was a $41.7 million increase compared with the same period last year. The increase was primarily driven by the $54.4 million increase in gross profit, discussed above. Partially offsetting this was the corresponding $13.8 million increase in income tax expense.

Adjusted Net Income

Adjusted net income was $21.3 million, representing an increase of $42.7 million compared with the same period last year, primarily due to the $41.7 million increase in net income, discussed above.

Adjusted EBITDA

Adjusted EBITDA was $40.7 million, which was an increase of $57.0 million compared with the fourth quarter last year. This increase primarily results from the $41.7 million increase in net income as a result of the factors discussed above as well as the corresponding $13.8 million increase in income tax expense.

Full Year Fiscal 2023 Results

Net Sales

Net sales were $1,132.8 million for the twelve months ended September 30, 2023, an increase of $332.2 million, or 41.5%, compared with the same period in fiscal 2022. Bus sales increased $311.1 million, or 43.0%, reflecting a 24.8% increase in units booked and a 14.6% increase in average sales price per unit. There were 8,514 units booked in the twelve months ended September 30, 2023 compared with 6,822 units booked during the same period in fiscal 2022. The increase in units sold was primarily due to constraints in the Company's ability to produce and deliver buses due to shortages of critical components in fiscal 2022. The increase in unit price for fiscal 2023 compared to fiscal 2022 reflects pricing actions taken by management as well as product and customer mix changes. Parts sales increased $21.0 million, or 27.3%, for the twelve months ended September 30, 2023 compared with the twelve months ended October 1, 2022. This increase is primarily attributed to pricing actions taken by management to offset increases in purchased parts costs and increased inventory availability as supply chain constraints began to improve during fiscal 2023 relative to fiscal 2022.

Gross Profit

Gross profit for the twelve months ended September 30, 2023 was $138.9 million, an increase of $102.3 million compared with the same period in the prior year. The increase was primarily driven by the $332.2 million increase in net sales. This was partially offset by an increase of $229.9 million in cost of goods sold, primarily corresponding the increase net sales.

Net Income

Net income was $23.8 million for the twelve months ended September 30, 2023, which was a $69.6 million increase from the same period in the prior year. The increase in net income was primarily driven by the $102.3 million increase in gross profit, discussed above, and a $11.1 million increase in equity in net income of non-consolidated affiliate. These increases were partially offset by a corresponding $20.4 million increase in income tax expense, as well as a $9.9 million increase in SG&A, a $3.3 million increase in interest expense, and a $11.3 million increase in other expense. The increase in SG&A was primarily driven by an increase in labor cost, the increase in interest expense was primarily attributable to higher interest rates in fiscal 2023 compared to fiscal 2022, and the increase in other expense was primarily due to expenses we were required to pay on behalf of several stockholders in connection with their sale of shares of common stock during the twelve months ended September 30, 2023, with no similar expense recorded during the same period of fiscal 2022.

Adjusted Net Income

Adjusted net income for the twelve months ended September 30, 2023 was $34.5 million, an increase of $70.5 million compared with the same period last year, primarily due to the $69.6 million increase in net income, discussed above.

Adjusted EBITDA

Adjusted EBITDA was $87.9 million for the twelve months ended September 30, 2023, an increase of $102.7 million compared with the same period in the prior year. This is primarily due to the $69.6 million increase in net income, discussed above, the corresponding $20.4 million increase in income tax expense, $7.4 million for the stockholder transaction costs discussed above, and a $5.5 million increase in Micro Bird's total interest expense, net; income tax expense or benefit; depreciation expense and amortization expense, which primarily resulted from a $4.2 million increase in income tax expense as a result of Micro Bird reporting net income during fiscal 2023 and a net loss in fiscal 2022.

Conference Call Details

Blue Bird will discuss its fourth quarter 2023 results in a conference call at 4:30 PM ET today. Participants may listen to the audio portion of the conference call either through a live audio webcast on the Company's website or by telephone. The slide presentation and webcast can be accessed via the Investor Relations portion of Blue Bird's website at www.blue-bird.com.

  • Webcast participants should log on and register at least 15 minutes prior to the start time on the Investor Relations homepage of Blue Bird’s website at http://investors.blue-bird.com. Click the link in the events box on the Investor Relations landing page.
  • Participants desiring audio only should dial 404-975-4839 or 833-470-1428

A replay of the webcast will be available approximately two hours after the call concludes via the same link on Blue Bird’s website.

About Blue Bird Corporation

Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. Blue Bird buses carry the most precious cargo in the world – the majority of 25 million children twice a day – making us the most trusted brand in the industry. The company is the proven leader in low- and zero-emission school buses with more than 20,000 propane, natural gas, and electric powered buses in operation today. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird's complete product and service portfolio, visit www.blue-bird.com.

Key Non-GAAP Financial Measures We Use to Evaluate Our Performance

This press release includes the following non-GAAP financial measures “Adjusted EBITDA,” "Adjusted EBITDA Margin," "Adjusted Net Income," "Adjusted Diluted Earnings per Share," “Free Cash Flow” and “Adjusted Free Cash Flow”. Adjusted EBITDA and Free Cash Flow are financial metrics that are utilized by management and the board of directors to determine (a) the annual cash bonus payouts, if any, to be made to certain members of management based upon the terms of the Company’s Management Incentive Plan, and (b) whether the performance criteria have been met for the vesting of certain equity awards granted annually to certain members of management based upon the terms of the Company’s Omnibus Equity Incentive Plan. Additionally, consolidated EBITDA, which is an adjusted EBITDA metric defined by our Amended Credit Agreement that could differ from Adjusted EBITDA discussed above as the adjustments to the calculations are not uniform, is used to determine the Company's ongoing compliance with several financial covenant requirements, including being utilized in the denominator of the calculation of the Total Net Leverage Ratio. Accordingly, management views these non-GAAP financial metrics as key for the above purposes and as a useful way to evaluate the performance of our operations as discussed further below.

Adjusted EBITDA is defined as net income or loss prior to interest income; interest expense including the component of operating lease expense (which is presented as a single operating expense in selling, general and administrative expenses in our U.S. GAAP financial statements) that represents interest expense on lease liabilities; income taxes; and depreciation and amortization including the component of operating lease expense (which is presented as a single operating expense in selling, general and administrative expenses in our U.S. GAAP financial statements) that represents amortization charges on right-of-use lease assets; as adjusted for certain non-cash charges or credits that we may record on a recurring basis such as share-based compensation expense and unrealized gains or losses on certain derivative financial instruments; net gains or losses on the disposal of assets as well as certain charges such as (i) significant product design changes; (ii) transaction related costs; (iii) discrete expenses related to major cost cutting and/or operational transformation initiatives; or (iv) costs directly attributed to the COVID-19 pandemic. While certain of the charges that are added back in the Adjusted EBITDA calculation, such as transaction related costs and operational transformation and major product redesign initiatives, represent operating expenses that may be recorded in more than one annual period, the significant project or transaction giving rise to such expenses is not considered to be indicative of the Company’s normal operations. Accordingly, we believe that these, as well as the other credits and charges that comprise the amounts utilized in the determination of Adjusted EBITDA described above, should not be used in evaluating the Company’s ongoing annual operating performance.

We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of net sales. Adjusted EBITDA and Adjusted EBITDA Margin are not measures of performance defined in accordance with U.S. GAAP. The measures are used as a supplement to U.S. GAAP results in evaluating certain aspects of our business, as described below.

We believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share are useful to investors in evaluating our performance because the measures consider the performance of our ongoing operations, excluding decisions made with respect to capital investment, financing, and certain other significant initiatives or transactions as outlined in the preceding paragraph. We believe the non-GAAP measures offer additional financial metrics that, when coupled with the GAAP results and the reconciliation to GAAP results, provide a more complete understanding of our results of operations and the factors and trends affecting our business.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Diluted Earnings per Share should not be considered as alternatives to net income or GAAP earnings per share as an indicator of our performance or as alternatives to any other measure prescribed by GAAP as there are limitations to using such non-GAAP measures. Although we believe the non-GAAP measures may enhance an evaluation of our operating performance based on recent revenue generation and product/overhead cost control because they exclude the impact of prior decisions made about capital investment, financing, and other expenses, (i) other companies in Blue Bird’s industry may define Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share differently than we do and, as a result, they may not be comparable to similarly titled measures used by other companies in Blue Bird’s industry, and (ii) Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share exclude certain financial information that some may consider important in evaluating our performance.

We compensate for these limitations by providing disclosure of the differences between Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share and GAAP results, including providing a reconciliation to GAAP results, to enable investors to perform their own analysis of our operating results.

Our measures of “Free Cash Flow” and "Adjusted Free Cash Flow" are used in addition to and in conjunction with results presented in accordance with GAAP and free cash flow and adjusted free cash flow should not be relied upon to the exclusion of GAAP financial measures. Free cash flow and adjusted free cash flow reflect an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. We strongly encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

We define Free Cash Flow as total cash provided by/used in operating activities as adjusted for net cash paid for the acquisition of fixed assets and intangible assets. We use Free Cash Flow, and ratios based on Free Cash Flow, to conduct and evaluate our business because, although it is similar to cash flow from operations, we believe it is a more conservative measure of cash flow since purchases of fixed assets and intangible assets are a necessary component of ongoing operations.

Forward Looking Statements

This press release includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. Specifically, forward-looking statements include statements in this press release regarding guidance, seasonality, product mix and gross profits and may include statements relating to:

  • Inherent limitations of internal controls impacting financial statements
  • Growth opportunities
  • Future profitability
  • Ability to expand market share
  • Customer demand for certain products
  • Economic conditions (including tariffs) that could affect fuel costs, commodity costs, industry size and financial conditions of our dealers and suppliers
  • Labor or other constraints on the Company’s ability to maintain a competitive cost structure
  • Volatility in the tax base and other funding sources that support the purchase of buses by our end customers
  • Lower or higher than anticipated market acceptance for our products
  • Other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions

These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. The factors described above, as well as risk factors described in reports filed with the SEC by us (available at www.sec.gov), could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements.

BLUE BIRD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

(in thousands of dollars, except for share data)

September 30, 2023

 

October 1, 2022

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

78,988

 

 

$

10,479

 

Accounts receivable, net

 

12,574

 

 

 

12,534

 

Inventories

 

135,286

 

 

 

142,977

 

Other current assets

 

9,215

 

 

 

8,486

 

Total current assets

$

236,063

 

 

$

174,476

 

Property, plant and equipment, net

 

95,101

 

 

 

100,608

 

Goodwill

 

18,825

 

 

 

18,825

 

Intangible assets, net

 

45,424

 

 

 

47,433

 

Equity investment in affiliate

 

17,619

 

 

 

10,659

 

Deferred tax assets

 

2,182

 

 

 

10,907

 

Finance lease right-of-use assets

 

1,034

 

 

 

1,736

 

Other assets

 

1,518

 

 

 

1,482

 

Total assets

$

417,766

 

 

$

366,126

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

137,140

 

 

$

107,937

 

Warranty

 

6,711

 

 

 

6,685

 

Accrued expenses

 

32,894

 

 

 

16,386

 

Deferred warranty income

 

8,101

 

 

 

7,205

 

Finance lease obligations

 

583

 

 

 

566

 

Other current liabilities

 

24,391

 

 

 

6,195

 

Current portion of long-term debt

 

19,800

 

 

 

19,800

 

Total current liabilities

$

229,620

 

 

$

164,774

 

Long-term liabilities

 

 

 

Revolving credit facility

$

 

 

$

20,000

 

Long-term debt

 

110,544

 

 

 

130,390

 

Warranty

 

8,723

 

 

 

9,285

 

Deferred warranty income

 

15,022

 

 

 

11,590

 

Deferred tax liabilities

 

2,513

 

 

 

 

Finance lease obligations

 

987

 

 

 

1,574

 

Other liabilities

 

7,955

 

 

 

11,107

 

Pension

 

2,404

 

 

 

16,024

 

Total long-term liabilities

$

148,148

 

 

$

199,970

 

Stockholders' equity

 

 

 

Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at September 30, 2023 and October 1, 2022

$

 

 

$

 

Common stock, $0.0001 par value, 100,000,000 shares authorized, 32,165,225 and 32,024,911 shares outstanding at September 30, 2023 and October 1, 2022, respectively

 

3

 

 

 

3

 

Additional paid-in capital

 

177,861

 

 

 

173,103

 

Accumulated deficit

 

(55,700

)

 

 

(79,512

)

Accumulated other comprehensive loss

 

(31,884

)

 

 

(41,930

)

Treasury stock, at cost, 1,782,568 shares at September 30, 2023 and October 1, 2022

 

(50,282

)

 

 

(50,282

)

Total stockholders' equity

$

39,998

 

 

$

1,382

 

Total liabilities and stockholders' equity

$

417,766

 

 

$

366,126

 

BLUE BIRD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Three Months Ended

 

Twelve Months Ended

(in thousands of dollars except for share data)

September 30, 2023

 

October 1, 2022

 

September 30, 2023

 

October 1, 2022

Net sales

$

302,963

 

 

$

257,672

 

 

$

1,132,793

 

 

$

800,637

 

Cost of goods sold

 

252,969

 

 

 

262,073

 

 

 

993,943

 

 

 

764,091

 

Gross profit (loss)

$

49,994

 

 

$

(4,401

)

 

$

138,850

 

 

$

36,546

 

Operating expenses

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

20,828

 

 

 

18,650

 

 

 

87,193

 

 

 

77,246

 

Operating profit (loss)

$

29,166

 

 

$

(23,051

)

 

$

51,657

 

 

$

(40,700

)

Interest expense

 

(4,117

)

 

 

(5,194

)

 

 

(18,012

)

 

 

(14,675

)

Interest income

 

746

 

 

 

9

 

 

 

1,004

 

 

 

9

 

Other (expense) income, net

 

(1,308

)

 

 

732

 

 

 

(8,307

)

 

 

2,947

 

Loss on debt modification

 

 

 

 

(71

)

 

 

(537

)

 

 

(632

)

Income (loss) before income taxes

$

24,487

 

 

$

(27,575

)

 

$

25,805

 

 

$

(53,051

)

Income tax (expense) benefit

 

(8,661

)

 

 

5,134

 

 

 

(8,953

)

 

 

11,451

 

Equity in net income (loss) of non-consolidated affiliate

 

2,792

 

 

 

(654

)

 

 

6,960

 

 

 

(4,159

)

Net income (loss)

$

18,618

 

 

$

(23,095

)

 

$

23,812

 

 

$

(45,759

)

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

32,153,959

 

 

 

32,022,690

 

 

 

32,071,940

 

 

 

31,020,399

 

Diluted weighted average shares outstanding

 

32,364,765

 

 

 

32,022,690

 

 

 

32,258,652

 

 

 

31,020,399

 

Basic earnings (loss) per share

$

0.58

 

 

$

(0.72

)

 

$

0.74

 

 

$

(1.48

)

Diluted earnings (loss) per share

$

0.58

 

 

$

(0.72

)

 

$

0.74

 

 

$

(1.48

)

BLUE BIRD CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Twelve Months Ended

(in thousands of dollars)

September 30, 2023

 

October 1, 2022

Cash flows from operating activities

 

 

 

Net income (loss)

$

23,812

 

 

$

(45,759

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization expense

 

15,978

 

 

 

14,050

 

Non-cash interest expense

 

1,470

 

 

 

3,400

 

Share-based compensation expense

 

4,173

 

 

 

3,690

 

Equity in net (income) loss of non-consolidated affiliate

 

(6,960

)

 

 

4,159

 

Loss on disposal of fixed assets

 

64

 

 

 

15

 

Impairment of fixed assets

 

 

 

 

1,354

 

Lower of cost or net realizable value loss

 

 

 

 

8,752

 

Deferred income tax expense (benefit)

 

8,065

 

 

 

(11,071

)

Amortization of deferred actuarial pension losses

 

1,195

 

 

 

3,768

 

Loss on debt modification

 

537

 

 

 

632

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

 

(40

)

 

 

(2,567

)

Inventories

 

7,691

 

 

 

(26,523

)

Other assets

 

453

 

 

 

1,913

 

Accounts payable

 

28,712

 

 

 

35,075

 

Accrued expenses, pension and other liabilities

 

34,778

 

 

 

(15,325

)

Total adjustments

$

96,116

 

 

$

21,322

 

Total cash provided by (used in) operating activities

$

119,928

 

 

$

(24,437

)

Cash flows from investing activities

 

 

 

Cash paid for fixed assets

$

(8,520

)

 

$

(6,453

)

Total cash used in investing activities

$

(8,520

)

 

$

(6,453

)

Cash flows from financing activities

 

 

 

Revolving credit facility borrowings

$

45,000

 

 

$

135,000

 

Revolving credit facility repayments

 

(65,000

)

 

 

(160,000

)

Term loan repayments

 

(19,800

)

 

 

(14,850

)

Principal payments on finance leases

 

(570

)

 

 

(1,132

)

Cash paid for debt costs

 

(3,272

)

 

 

(2,751

)

Sale of common stock

 

 

 

 

75,000

 

Cash paid for common stock issuance costs

 

 

 

 

(202

)

Repurchase of common stock in connection with stock award exercises

 

(376

)

 

 

(1,708

)

Cash received from stock option exercises

 

1,119

 

 

 

303

 

Total cash (used in) provided by financing activities

$

(42,899

)

 

$

29,660

 

Change in cash, cash equivalents, and restricted cash

 

68,509

 

 

 

(1,230

)

Cash, cash equivalents, and restricted cash at beginning of period

 

10,479

 

 

 

11,709

 

Cash, cash equivalents, and restricted cash at end of period

$

78,988

 

 

$

10,479

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

Cash paid or received during the period:

 

 

 

Interest paid, net of interest received

$

15,049

 

 

$

15,171

 

Income tax received, net of tax refunds

 

(29

)

 

 

(79

)

Non-cash investing and financing activities:

 

 

 

Accrued capital additions to property, plant and equipment and other current assets for capitalized intangible assets

$

941

 

 

$

948

 

Right-of-use assets obtained in exchange for operating lease obligations

 

626

 

 

 

1,424

 

Finance lease right-of-use assets removed due to non-renewal of lease

 

 

 

 

(2,451

)

Finance lease obligations removed due to non-renewal of lease

 

 

 

 

2,593

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

 

Three Months Ended

 

Twelve Months Ended

(in thousands of dollars)

September 30, 2023

 

October 1, 2022

 

September 30, 2023

 

October 1, 2022

Net income (loss)

$

18,618

 

 

$

(23,095

)

 

$

23,812

 

 

$

(45,759

)

Adjustments:

 

 

 

 

 

 

 

Interest expense, net (1)

 

3,457

 

 

 

5,277

 

 

 

17,380

 

 

 

14,973

 

Income tax expense (benefit)

 

8,661

 

 

 

(5,134

)

 

 

8,953

 

 

 

(11,451

)

Depreciation, amortization, and disposals (2)

 

4,437

 

 

 

4,425

 

 

 

17,914

 

 

 

15,212

 

Operational transformation initiatives

 

624

 

 

 

1,562

 

 

 

1,757

 

 

 

7,213

 

Loss on debt modification

 

 

 

 

71

 

 

 

537

 

 

 

632

 

Share-based compensation expense

 

1,944

 

 

 

537

 

 

 

4,173

 

 

 

3,690

 

Product redesign initiatives

 

 

 

 

 

 

 

 

 

 

549

 

Stockholder transaction costs

 

1,119

 

 

 

 

 

 

7,371

 

 

 

 

Micro Bird total interest expense, net; income tax expense or benefit; depreciation expense and amortization expense

 

1,850

 

 

 

117

 

 

 

5,456

 

 

 

(90

)

Other

 

 

 

 

 

 

 

574

 

 

 

285

 

Adjusted EBITDA

$

40,710

 

 

$

(16,240

)

 

$

87,927

 

 

$

(14,746

)

Adjusted EBITDA Margin (percentage of net sales)

 

13.4

%

 

 

(6.3

) %

 

 

7.8

%

 

 

(1.8

) %

 

(1) Includes $0.1 million for both three months ended September 30, 2023 and October 1, 2022, and $0.4 million and $0.3 million for the twelve months ended September 30, 2023 and October 1, 2022, respectively, representing interest expense on operating lease liabilities, which are a component of lease expense and presented as a single operating expense in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations.

(2) Includes $0.5 million and $0.2 million for the three months ended September 30, 2023 and October 1, 2022, respectively, and $1.8 million and $1.1 million for the twelve months ended September 30, 2023 and October 1, 2022, respectively representing amortization charges on right-of-use lease assets, which are a component of lease expense and presented as a single operating expense in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations.

Reconciliation of Free Cash Flow to Adjusted Free Cash Flow

 

 

Three Months Ended

 

Twelve Months Ended

(in thousands of dollars)

September 30, 2023

 

October 1, 2022

 

September 30, 2023

 

October 1, 2022

Net cash provided by (used in) operating activities

$

35,797

 

 

$

30,014

 

 

$

119,928

 

 

$

(24,437

)

Cash paid for fixed assets

 

(2,130

)

 

 

(1,705

)

 

 

(8,520

)

 

 

(6,453

)

Free cash flow

$

33,667

 

 

$

28,309

 

 

$

111,408

 

 

$

(30,890

)

Cash paid for product redesign initiatives

 

 

 

 

 

 

 

 

 

 

549

 

Cash paid for operational transformation initiatives

 

624

 

 

 

1,562

 

 

 

1,757

 

 

 

7,213

 

Cash paid for stockholder transaction costs

 

1,119

 

 

 

 

 

 

7,371

 

 

 

 

Cash paid for other items

 

 

 

 

 

 

 

574

 

 

 

285

 

Adjusted free cash flow

 

35,410

 

 

 

29,871

 

 

 

121,110

 

 

 

(22,843

)

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)

 

 

Three Months Ended

 

Twelve Months Ended

(in thousands of dollars)

September 30, 2023

 

October 1, 2022

 

September 30, 2023

 

October 1, 2022

Net income (loss)

$

18,618

 

$

(23,095

)

 

$

23,812

 

$

(45,759

)

Adjustments, net of tax benefit or expense (1)

 

 

 

 

 

 

 

Operational transformation initiatives

 

462

 

 

1,234

 

 

 

1,300

 

 

5,698

 

Product redesign initiatives

 

 

 

 

 

 

 

 

434

 

Share-based compensation expense

 

1,439

 

 

424

 

 

 

3,088

 

 

2,915

 

Stockholder transaction costs

 

828

 

 

 

 

 

5,455

 

 

 

Loss on debt modification

 

 

 

56

 

 

 

397

 

 

499

 

Other

 

 

 

 

 

 

425

 

 

225

 

Adjusted net income (loss), non-GAAP

$

21,347

 

$

(21,381

)

 

 

34,477

 

 

(35,988

)

 

(1) Amounts are net of estimated tax rates of 26% for the three and twelve months ended September 30, 2023, and 21% for the three and twelve months ended October 1, 2022.

Reconciliation of Diluted EPS to Adjusted Diluted EPS

 

 

Three Months Ended

 

Twelve Months Ended

 

September 30, 2023

 

October 1, 2022

 

September 30, 2023

 

October 1, 2022

Diluted earnings (loss) per share

$

0.58

 

$

(0.72

)

 

$

0.74

 

$

(1.48

)

One-time charge adjustments, net of tax benefit or expense

 

0.08

 

 

0.06

 

 

 

0.33

 

 

0.33

 

Adjusted diluted earnings (loss) per share, non-GAAP

$

0.66

 

$

(0.66

)

 

$

1.07

 

$

(1.15

)

Adjusted weighted average dilutive shares outstanding

 

32,364,765

 

 

32,306,574

 

 

 

32,258,652

 

 

31,233,401

 

 

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