8-K
Blue Bird Corp (BLBD)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 5, 2025
BLUE BIRD CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 001-36267 | 46-3891989 |
|---|---|---|
| (State or Other Jurisdiction of<br>Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
3920 Arkwright Road
2nd Floor
Macon, Georgia 31210
(Address of principal executive offices and zip code)
(478) 822-2801
(Registrant's telephone number including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, $0.0001 par value | BLBD | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
In accordance with General Instruction B.2. to Form 8-K, the following information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
The information regarding the results of operations and financial condition of Blue Bird Corporation (the “Company”) responsive to this Item 2.02, and contained in Exhibit 99.1 filed herewith, is incorporated into this Item 2.02 by reference.
ITEM 7.01 REGULATION FD DISCLOSURE
In accordance with General Instruction B.2. to Form 8-K, the following information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
The Company, which is the leading independent designer and manufacturer of school buses, announced it will present via live web cast its fiscal 2025 first quarter financial results on February 5, 2025. A live web cast is scheduled at approximately 4:30 p.m. Eastern Time. Speakers on the web cast will include: Philip Horlock, Chief Executive Officer; Razvan Radulescu, Chief Financial Officer; and other company leaders.
The webcast can be accessed through a link on the investor relations page of Company’s web site at http://blue-bird.com. Investors are advised to log on to the website at least 15 minutes prior to the start of the web cast to allow sufficient time for downloading any necessary software. The web cast will be available for replay at the same address approximately three hours following its conclusion, and will remain available for a period of at least 12 months.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit No. Description
99.1 Press release of the Company, dated February 5, 2025.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Blue Bird Corporation | ||
|---|---|---|
| Dated: | February 5, 2025 | /s/ Ted M. Scartz |
| Ted M. Scartz | ||
| Senior VP and General Counsel |
Exhibit Index
Exhibit No. Description
99.1 Press release of the Company, dated February 5, 2025.
Document
BLUE BIRD REPORTS FISCAL 2025 FIRST QUARTER RESULTS;
BEATS FIRST QUARTER GUIDANCE;
REAFFIRMS 2025 GUIDANCE AND LONG-TERM OUTLOOK
Net Sales of $314M and GAAP Net Income of $29M
Adj. EBITDA of $46M with 15% Margin and 2,130 Buses Sold
FY2025 Adj. EBITDA Reaffirmed at $200M or 14% of Revenue
MACON, Ga. (February 5, 2025) – Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2025 first quarter results.
Highlights
| (in millions except Unit Sales and EPS data) | Three Months Ended December 28, 2024 | B/(W) Prior Year | ||
|---|---|---|---|---|
| Unit Sales | 2,130 | 1 | ||
| GAAP Measures: | ||||
| Revenue | $ | 313.9 | $ | (3.8) |
| Net Income | $ | 28.7 | $ | 2.6 |
| Diluted EPS | $ | 0.86 | $ | 0.05 |
| Non-GAAP Measures1: | ||||
| Adjusted EBITDA | $ | 45.8 | $ | (1.9) |
| Adjusted Net Income | $ | 30.6 | $ | 0.9 |
| Adjusted Diluted EPS | $ | 0.92 | $ | 0.01 |
1 Reconciliation to relevant GAAP metrics shown below
“I am incredibly proud of our team’s achievements in delivering another outstanding result and near record profit in the first quarter,” said Phil Horlock, President & CEO of Blue Bird Corporation. “The Blue Bird team continued to exceed expectations, improving operations, driving new orders, and expanding our leadership in alternative-powered buses. Market demand remains very strong with nearly 4,400 units in our order backlog at the end of the first quarter. Unit sales were about the same as last year, with revenue down by $3.8M, driven by product mix, and we delivered an exceptional 14.6% Adj. EBITDA margin. With 94% of our first quarter unit sales mix comprised of internal combustion engine (ICE) buses, this result demonstrates the very strong earnings power of our base business.
“In our push to expand our leadership in alternative-powered school buses, we delivered over 130 electric-powered buses this quarter, ahead of the plan we communicated in November. We also saw strong growth in EV orders from both the EPA’s Clean School Bus Program and state/local level programs. As of today, we have approximately 1,000 EV buses either sold or in our firm order backlog, which supports our EV sales target for 2025.
“Based on our strong Q1 performance, we’ve reaffirmed our full-year financial guidance for Adjusted EBITDA at $200 million, with a 14% margin. This will be an all-time full-year record for Blue Bird, and we look forward to sustained profitable growth in the coming years.”
FY2025 Guidance and Long-Term Outlook Reaffirmed
“We are very pleased with the first quarter results, with the second highest ever Q1 Adj. EBITDA” said Razvan Radulescu, CFO of Blue Bird Corporation. “Our business is in a very strong position and we continue to deliver ahead of the plan we have been messaging. We are reaffirming our full-year 2025 guidance for Net Revenue to $1.4-1.5 Billion, Adj. EBITDA to $185-215 million and
Adj. Free Cash Flow to $40-60 million. Additionally, we are confirming our long-term profit outlook towards an Adjusted EBITDA margin of 15%+ on ~$2 billion in revenues.”
Fiscal 2025 First Quarter Results
Net Sales
Net sales were $313.9 million for the first quarter of fiscal 2025, a decrease of $3.8 million, or 1.2%, from the first quarter of last year. Bus sales decreased $5.3 million, reflecting a 1.9% decrease in average sales price per unit, primarily due to customer and product mix changes (lower EV volumes). In the first quarter of fiscal 2025, 2,130 units were booked compared with 2,129 units booked for the same period in fiscal 2024. Additionally, Parts sales increased $1.5 million, or 6.2%, for the first quarter of fiscal 2025 compared with the first quarter of fiscal 2024. This increase is primarily attributed to price increases, driven by ongoing inflationary pressures, as well as higher fulfillment volumes and slight variations due to product and channel mix.
Gross Profit
First quarter gross profit of $60.3 million represented a decrease of $3.2 million from the first quarter of last year. The decrease was primarily driven by the $3.8 million decrease in net sales, discussed above, and partially offset by a corresponding decrease of $0.5 million in cost of goods sold.
Net Income
Net income was $28.7 million for the first quarter of fiscal 2025, which was a $2.6 million increase from the first quarter of last year. The increase was primarily driven by $2.6 million in emission credits that the Company sold in the first quarter of fiscal 2025, recorded in other income (expense), net, with no similar income in the first quarter of fiscal 2024.
Adjusted Net Income
Adjusted net income was $30.6 million, largely consistent with the $29.7 million from the same period last year.
Adjusted EBITDA
Adjusted EBITDA was $45.8 million, which was a decrease of $1.9 million compared with the first quarter of fiscal 2024. This decrease results primarily from the lower gross profit, partially offset by improvements in other income(expense), net, as described above..
Conference Call Details
Blue Bird will discuss its first quarter 2025 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. The access code is 393430.
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. School buses carry the most precious cargo in the world – 25 million children twice a day – making them the most trusted mode of student transportation. 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, as and when applicable, to determine (a) the annual cash bonus payouts, if any, to be made to certain employees 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 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 as well as certain charges such as (i) transaction related costs or (ii) discrete expenses related to major cost cutting and/or operational transformation initiatives. While certain of the charges that are added back in the Adjusted EBITDA calculation, such as transaction related costs and major cost cutting and/or operational transformation 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.
Contact:
Mark Benfield
Investor Relations
(478) 822-2315
Mark.Benfield@blue-bird.com
BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (in thousands of dollars, except for share data) | December 28, 2024 | September 28, 2024 | ||
|---|---|---|---|---|
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 136,119 | $ | 127,687 |
| Accounts receivable, net | 13,996 | 59,099 | ||
| Inventories | 163,120 | 127,798 | ||
| Other current assets | 17,623 | 8,795 | ||
| Total current assets | $ | 330,858 | $ | 323,379 |
| Property, plant and equipment, net | $ | 98,384 | $ | 97,322 |
| Goodwill | 18,825 | 18,825 | ||
| Intangible assets, net | 43,087 | 43,554 | ||
| Equity investment in affiliates | 34,393 | 32,089 | ||
| Deferred tax assets | 2,112 | 2,399 | ||
| Finance lease right-of-use assets | 156 | 332 | ||
| Pension | 5,156 | 4,649 | ||
| Other assets | 2,251 | 2,345 | ||
| Total assets | $ | 535,222 | $ | 524,894 |
| Liabilities and Stockholders' Equity | ||||
| Current liabilities | ||||
| Accounts payable | $ | 137,757 | $ | 143,156 |
| Warranty | 7,059 | 7,166 | ||
| Accrued expenses | 46,738 | 55,775 | ||
| Deferred warranty income | 9,907 | 9,421 | ||
| Finance lease obligations | 436 | 975 | ||
| Other current liabilities | 22,530 | 14,480 | ||
| Current portion of long-term debt | 5,000 | 5,000 | ||
| Total current liabilities | $ | 229,427 | $ | 235,973 |
| Long-term liabilities | ||||
| Revolving credit facility | $ | — | $ | — |
| Long-term debt | 88,828 | 89,994 | ||
| Warranty | 9,068 | 9,013 | ||
| Deferred warranty income | 19,652 | 18,541 | ||
| Deferred tax liabilities | 368 | 2,783 | ||
| Finance lease obligations | 6 | 6 | ||
| Other liabilities | 8,168 | 9,020 | ||
| Total long-term liabilities | $ | 126,090 | $ | 129,357 |
| Guarantees, commitments and contingencies | ||||
| Stockholders' equity | ||||
| Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at December 28, 2024 and September 28, 2024 | $ | — | $ | — |
| Common stock, $0.0001 par value, 100,000,000 shares authorized, 32,111,078 and 32,268,022 shares issued and outstanding at December 28, 2024 and September 28, 2024, respectively | 3 | 3 | ||
| Additional paid-in capital | 187,379 | 185,977 | ||
| Retained earnings | 18,686 | — | ||
| Accumulated other comprehensive loss | (26,363) | (26,416) | ||
| Total stockholders' equity | $ | 179,705 | $ | 159,564 |
| Total liabilities and stockholders' equity | $ | 535,222 | $ | 524,894 |
BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | ||||
|---|---|---|---|---|
| (in thousands of dollars except for share data) | December 28, 2024 | December 30, 2023 | ||
| Net sales | $ | 313,872 | $ | 317,660 |
| Cost of goods sold | 253,555 | 254,102 | ||
| Gross profit | $ | 60,317 | $ | 63,558 |
| Operating expenses | ||||
| Selling, general and administrative expenses | 27,275 | 25,602 | ||
| Operating profit | $ | 33,042 | $ | 37,956 |
| Interest expense | (1,915) | (3,631) | ||
| Interest income | 1,568 | 1,088 | ||
| Other income (expense), net | 2,916 | (1,221) | ||
| Loss on debt refinancing | — | (1,558) | ||
| Income before income taxes | $ | 35,611 | $ | 32,634 |
| Income tax expense | (8,693) | (8,446) | ||
| Equity in net income of non-consolidated affiliates | 1,804 | 1,962 | ||
| Net income | $ | 28,722 | $ | 26,150 |
| Earnings per share: | ||||
| Basic weighted average shares outstanding | 32,227,723 | 32,170,779 | ||
| Diluted weighted average shares outstanding | 33,360,940 | 32,429,127 | ||
| Basic earnings per share | $ | 0.89 | $ | 0.81 |
| Diluted earnings per share | $ | 0.86 | $ | 0.81 |
BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended | ||||
|---|---|---|---|---|
| (in thousands of dollars) | December 28, 2024 | December 30, 2023 | ||
| Cash flows from operating activities | ||||
| Net income | $ | 28,722 | $ | 26,150 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization expense | 3,856 | 3,618 | ||
| Non-cash interest expense | 84 | 132 | ||
| Share-based compensation expense | 2,506 | 2,051 | ||
| Equity in net income of non-consolidated affiliates | (1,804) | (1,962) | ||
| Dividend from equity investment in affiliates | — | 2,991 | ||
| Loss on disposal of fixed assets | 20 | 4 | ||
| Deferred income tax expense | (2,145) | 1,143 | ||
| Amortization of deferred actuarial pension losses | 70 | 172 | ||
| Loss on debt refinancing | — | 1,558 | ||
| Changes in assets and liabilities: | ||||
| Accounts receivable | 45,103 | 1,467 | ||
| Inventories | (35,322) | (7,171) | ||
| Other assets | (9,241) | (3,095) | ||
| Accounts payable | (5,473) | (23,103) | ||
| Accrued expenses, pension and other liabilities | 34 | (3,738) | ||
| Total adjustments | $ | (2,312) | $ | (25,933) |
| Total cash provided by operating activities | $ | 26,410 | $ | 217 |
| Cash flows from investing activities | ||||
| Cash paid for fixed assets | $ | (4,594) | $ | (2,904) |
| Equity investment in affiliates | (500) | — | ||
| Total cash used in investing activities | $ | (5,094) | $ | (2,904) |
| Cash flows from financing activities | ||||
| Revolving credit facility borrowings | $ | — | $ | 36,220 |
| Term loan borrowings | — | 100,000 | ||
| Term loan repayments | (1,250) | (131,800) | ||
| Principal payments on finance leases | (538) | (145) | ||
| Cash paid for debt costs | — | (3,128) | ||
| Repurchase of common stock in connection with repurchase program | (10,036) | — | ||
| Repurchase of common stock in connection with stock award exercises | (1,445) | (301) | ||
| Cash received from stock option exercises | 385 | 149 | ||
| Total cash (used in) provided by financing activities | $ | (12,884) | $ | 995 |
| Change in cash and cash equivalents | 8,432 | (1,692) | ||
| Cash and cash equivalents at beginning of period | 127,687 | 78,988 | ||
| Cash and cash equivalents at end of period | $ | 136,119 | $ | 77,296 |
Reconciliation of Net Income to Adjusted EBITDA
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| (in thousands of dollars) | December 28, 2024 | December 30, 2023 | ||||
| Net income | $ | 28,722 | $ | 26,150 | ||
| Adjustments: | ||||||
| Interest expense, net (1) | 433 | 2,655 | ||||
| Income tax expense | 8,693 | 8,446 | ||||
| Depreciation, amortization, and disposals (2) | 4,243 | 4,210 | ||||
| Share-based compensation expense | 2,506 | 2,051 | ||||
| Stockholder transaction costs | — | 1,221 | ||||
| Loss on debt refinancing | — | 1,558 | ||||
| Micro Bird Holdings, Inc. total interest expense, net; income tax expense or benefit; depreciation expense and amortization expense | 1,156 | 1,395 | ||||
| Other | — | (82) | ||||
| Adjusted EBITDA | $ | 45,753 | $ | 47,604 | ||
| Adjusted EBITDA margin (percentage of net sales) | 14.6 | % | 15.0 | % |
(1) Includes $0.1 million for both fiscal periods, 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 $0.4 million and $0.6 million for the three months ended December 28, 2024 and December 30, 2023, 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 | ||||
|---|---|---|---|---|
| (in thousands of dollars) | December 28, 2024 | December 30, 2023 | ||
| Net cash provided by operating activities | $ | 26,410 | $ | 217 |
| Cash paid for fixed assets | (4,594) | (2,904) | ||
| Free cash flow | $ | 21,816 | $ | (2,687) |
| Cash paid for stockholder transaction costs | — | 1,221 | ||
| Cash paid for other items | — | (82) | ||
| Adjusted free cash flow | 21,816 | (1,548) |
Reconciliation of Net Income to Adjusted Net Income
| Three Months Ended | ||||
|---|---|---|---|---|
| (in thousands of dollars) | December 28, 2024 | December 30, 2023 | ||
| Net income | $ | 28,722 | $ | 26,150 |
| Adjustments, net of tax benefit or expense (1) | ||||
| Share-based compensation expense | 1,854 | 1,518 | ||
| Stockholder transaction costs | — | 904 | ||
| Loss on debt modification | — | 1,153 | ||
| Other | — | (61) | ||
| Adjusted net income, non-GAAP | $ | 30,576 | $ | 29,664 |
(1) Amounts are net of estimated tax rates of 26%.
Reconciliation of Diluted EPS to Adjusted Diluted EPS
| Three Months Ended | ||||
|---|---|---|---|---|
| December 28, 2024 | December 30, 2023 | |||
| Diluted earnings per share | $ | 0.86 | $ | 0.81 |
| One-time charge adjustments, net of tax benefit or expense | 0.06 | 0.10 | ||
| Adjusted diluted earnings per share, non-GAAP | $ | 0.92 | $ | 0.91 |
| Adjusted weighted average dilutive shares outstanding | 33,360,940 | 32,429,127 |
9