So, there is room for higher numbers, but at this point, we want to have a conservative business case also for entering into the market, and we have to execute on it, grow it. And as you know, also, there is some cyclicality into this market. When you look at the RV business, that can have its ups and downs, and then also based on the large fleet acquisitions on the last mile delivery, you can also have some cyclicality. So look at this as our base case with upside potential from here.

Okay, great, great. You also mentioned that there'll be rapid net production in the first part, very early 2027, it sounds like. Over the last bunch of quarters, they've been making a ton of these vehicles. They ran up like 5X to what they were making at the top of the cycle. But once the deal is completed, I'm guessing that between now and then they're going to build a ton more of these and that they can sell off them during the time when they stopped making them and you've started to ramp up if i'm not if i'm wrong correct me there but i guess once they stop producing them who will be in charge of selling that that that inventory down through the 2028 2029 uh wrap up of the new model and are you but are you as part of the purchase price or part of the purchase buying all that inventory or exactly all still held by ford until they're down to you zero yeah no hey mike i'll clarify a couple points so the current f53 f59 will be managed by ford

motor company so they'll handle all of that they're going to work with detroit on the build out they'll have the inventory uh they'll manage everything we won't be involved with any of that part of the transaction where we step in is with the new design with the new engine that'll come out uh new engine comes out of course next year um and the chassis will come out with the new engine in 2028 so we're stepping in post ford uh exiting and ford will have all the responsibility with uh the current uh current design so just so unclear the the next gen product will be roughly the same dimensions just a different engine roughly the same layout so we happen to allow collaboration with the upfitters and then also will you be able to do propane in this facility that comes from the ford roush you know just done as well yeah great question so um first first part of the uh question yeah similar um dimensions obviously the same space uh class five and six so don't anticipate any changes there uh for sure there won't be any changes there there will be of course some integration changes with this because you have to accommodate the new engine it's got a wider bank for water cool jackets etc so there'll be things that we'll do um obviously to accommodate the powertrain and there'll be uh there'll be a level of carryover as well of the current chassis um and then as far as propane initially we're going to get into gas i mean that's that's the whole announcement really is working with ford and with and of course the acquisition of detroit putting in the gas chassis and in uh or redesigning and and launching the new gas chassis uh down the road we'll see what we do with propane but for sure there's a an opportunity there we have a great history with uh with roush and then as well um roush and ford and bluebird have worked together on the current propane so for sure it's a great

opportunity down the road okay uh i'll hop back in the queue thank you thanks mike the next question comes from the line of chris pierce with needham chris your line is open please go ahead hey guys how you doing tonight can we just shift back to the school bus market for a second i guess I just want to understand or I guess what are you hearing from distributors or distributors hearing from customers as you enter the fourth quarter giving you know get where gas prices where they are with you know I think you'd quoted bluebird units down seven percent in the third quarter but I want to make sure that was the school bus also yeah hi Chris this is Razvan so the year

over year volumes were down and this is because we had a relatively high number of finished goods inventory so in q3 we'll build a large number of gsa and fleet units and this take a longer time until their revenue recognized so we build the units but they will be rev rec during q4 and also we will build some more of this in q4 which will lead into fiscal 27 so that's the seven percent year over year explanation in terms of the general backlog our backlog is fairly stable we are solid into Q4 right now and obviously we are taking order for next year at this point okay perfect

and then I think you in the press release I don't see a price paid for the transaction I feel like you referenced an asset swap on the call I don't want to think about dilution it's in the 8k the asset acquisition is $7 million with cash there is no dilution okay so you're acquiring the manufacturing facility for seven million bucks yes the assets yes yes in Detroit okay and then can you just talk about our other exchange with uh for directly in this in terms of the entering the segment the collaboration thank you it's not an M&A transaction but to your point Chris it is a pretty low cost entry into the into the space in terms of M&A yes it's a 90 million dollar investment correct and understood so under 100 million dollars at this point time it looks like versus for something that could generate 70 million and adjust the EBITDA in 2030 based on slide 1917. that's right you got it okay And then can you just, can you just last for me, just kind of talk about it being a two-player market, kind of like, how should we think about, you know, is it similar to the school bus market where you've got sort of a very warm handoff to customer orders? And like, I'm just kind of thinking what could, what could go wrong or what I'm not thinking about some sort of unknown unknown where this doesn't just sort of become, I'm assuming the end customer doesn't technically care what chassis they have. They just want their vehicle. So I just want to make sure I'm thinking about the market correctly.

Yeah, I mean, look, it's a two-player market. I think, you know, you know Ford's history in this space. They've been very successful with the gas chassis and on the RV side in particular. I think they practically own the market in this space. So the carryover, we think, is a great opportunity. Now, the other part of this agreement is we will work with Ford Pro on continuity of the customer base. So that's with the fleets, the bodybuilders, the RV manufacturers, all of that. Ford and Bluebird will work hand in hand. And we think that mitigates risk. We also think it gives us a great opportunity coming into the market and not having a lag. So we think from our perspective, it's a lot of risk mitigated. and really, I think, should catapult us into this space pretty well.

And that was actually trying to kind of squeeze your way in with your own chassis? Is that fair to say? Like this is a pivot?

Oh, apologies. We got a fire alarm went off. We got a little bit of noise in the back. Even the fire alarms are excited about this transaction. But, no, look, we were working on our chassis, but simultaneously we were working with Ford on this opportunity. And when things started to heat up and got a lot closer, of course, we took the forward path to bring this to market.

Chris, as I said in my remarks, this is a 10 times bigger opportunity to enter the segment. So we had to pivot, take this one, and then we will come back to the propane and also EV later on as the market develops that way as well.

I get it. No, that makes sense. That all makes sense. thank you for the detail and good luck with all of this. Talk to you in a little bit. Thank you.

Yeah. Thanks, Chris.

The next question comes from the line of Ben Summers with U.S. Bancorp. Ben, your line is now open.

Hey, good afternoon. Thanks for taking my questions and congrats on all the progress. So just curious, kind of you guys mentioned, you know, some read across or read throughs to the bus market.

Just kind of curious on where you see that and potentially any more color on the sarajeezy potentially expect with the new forward collaboration yeah for sure i'll talk a little bit about that look i think um you know one of the one of the areas for sure that'll be an opportunity for read across would be the ee architecture and then you also get things like adas that will read across and there's going to be likely legislation in the school bus market down the road in the near future for ADAS as well. So we see those things as read across. Additionally, we see in terms of the scalability, some real opportunities there. We're in the position where right now we're redesigning next generation bus. We're redesigning or designing this current chassis. And I think that brings almost like building blocks of opportunities down the road that we can scale this thing and that other vehicle opportunities or other body opportunities. So lots of, I think lots of exciting things, you know, down the road. First step is launch, of course, we're going to get this gas chassis to market, but good things to come down the road for sure.

Super helpful. And then back to the school bus market. So I think in the past, you guys have said something around like 3,000 to 4,000 units in the backlog is kind of that sweet spot.

I know if we net out the micro bird units in the backlog, that's kind of where we sit today so i guess kind of curious about how we think about you know that target backlog range now with micro bird micro bird integrated into the platform yeah so uh definitely we have to look at both of them combined um for uh for micro bird the backlog between 1 000 to 1500 units it's something that we like to see but their backlog is a lot more seasonal than our bus backlog has been for the the last couple of years so as we work together we will you know determine the desired levels of backlog based on seasonality right now for the type c and d our backlog is fairly stable it's around 3 500 units or so and we like to keep it that way for us the lower end is about 3 000 which is the point where it could get a bit more challenging to work with the supply chain on lead times. But you have to remember, we worked pre-COVID with 1,500 units backlog, or under 2,000. So it can be done. It's just a matter of setting the appropriate supply chain expectations right as well. So overall, we feel good about our backlog, and we are executing now on Q4 and working to bring this fiscal year to a strong end.

Super helpful. Thank you for taking my questions.

The next question comes from the line of Mike Schlisky with DA Davidson. Mike, your line is open.

Mike, we like this. You can't get enough of this announcement, which we really appreciate.

Well, there's two topics here. There's the Ford and there's also the core Bluebird. And I wanted to ask a couple questions here about the core Bluebird business. I guess, first, a little bit more about the $10,000 average ASP increase in the core in the Bluebird C&D business. How much of that, without being calculated, how much of that was a mix of EV, how much of it was just inflation, how much of it was features and other things? Just a little more detail there.

Yeah, the majority is year-over-year price increases. There are some increased tariff recovery elements in that, and there is also a bit of EV mix. So, those are the three main elements, so we're not going to split them up in more details right now.

Okay. Fair enough. And then I know it's only August here, and orders don't even really heat up for well over a quarter, if not more than that. Any thoughts on what you're hearing from your major dealers or large school districts about their plans to buy buses in the coming school year?

Yeah, I mean, we're coming into our business planning process now, so we're looking at the order book for next year. But look, a couple things remain the same. The fundamentals are all there. You have an aging fleet. Over 250,000 of these buses are greater than 10 years old. we're coming into our placement cycle the average volume between 2017 and 19 was 36,000 units a year those buses are coming up for replacement and then during the COVID period there was pent up demand so I think from our perspective when we look at that we have great fundamentals there and the funding is still there as well from property taxes so overall I think coming into the business plan and as we start to prepare for next year we believe things should be fairly solid coming into the next season okay i will leave it there thank you so much thanks mike there are no further questions at this time i will now turn the call back to john weiskill for closing remarks thanks piercie and thanks to each of you for joining us on the call today just a quick announcement before i wrap up earlier today we were notified by the georgia chamber of commerce that bluebird's vision electric school bus won the coolest thing made in georgia contest the coolest thing made in georgia contest is a program designed to celebrate and showcase the great state of georgia's outstanding innovation and craftsmanship bluebird is a pioneer and a leader in the ev space and i think this award is a recognition of amazing work and success of the team so congratulations rather to the entire Bluebird team. So back to the wrap-up. Bluebird has delivered great results for Q3 2026, meeting expectations and raising our guidance. We also continue to deliver exciting announcements on new opportunities like the Microbird acquisition and the Ford commercial strip chassis collaboration announced today. With the fundamentals of the industry and the key elements of our strategy i remain enthusiastic for bluebird and its future and 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 bluebird continues to be stronger than ever and has an amazing future head as we wrap up or as we approach rather a 100 year anniversary next year thanks again from all of us at bluebird and have a great evening.

This concludes today's call. Thank you for attending. You may now disconnect.