[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 46-3891989 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | o | Accelerated filer | o | |||
Non-accelerated filer | o | (Do not check if a smaller reporting company) | Smaller reporting company | x | ||
Emerging growth company | x |
• | the future financial performance of the Company; |
• | changes in the market for Blue Bird products; and |
• | expansion plans and opportunities. |
(in thousands except for share data) | July 1, 2017 | October 1, 2016 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 50,311 | $ | 52,309 | |||
Accounts receivable, net | 34,180 | 20,315 | |||||
Inventories | 126,602 | 53,806 | |||||
Other current assets | 12,074 | 6,104 | |||||
Total current assets | $ | 223,167 | $ | 132,534 | |||
Property, plant and equipment, net | 34,156 | 33,466 | |||||
Goodwill | 18,825 | 18,825 | |||||
Intangible assets, net | 57,984 | 59,491 | |||||
Equity investment in affiliate | 13,455 | 12,944 | |||||
Deferred tax assets | 18,289 | 19,080 | |||||
Other assets | 904 | 1,526 | |||||
Total assets | $ | 366,780 | $ | 277,866 | |||
Liabilities and Stockholders' Deficit | |||||||
Current liabilities | |||||||
Accounts payable | $ | 135,417 | $ | 80,646 | |||
Warranty | 8,316 | 7,972 | |||||
Accrued expenses | 20,976 | 20,455 | |||||
Deferred warranty income | 6,508 | 5,666 | |||||
Other current liabilities | 11,138 | 4,032 | |||||
Current portion of long-term debt | 8,000 | 11,750 | |||||
Total current liabilities | $ | 190,355 | $ | 130,521 | |||
Long-term liabilities | |||||||
Long-term debt | $ | 145,028 | $ | 140,366 | |||
Warranty | 11,966 | 11,472 | |||||
Deferred warranty income | 12,022 | 10,521 | |||||
Other liabilities | 15,131 | 15,592 | |||||
Pension | 51,910 | 56,368 | |||||
Total long-term liabilities | $ | 236,057 | $ | 234,319 | |||
Guarantees, commitments and contingencies (Note 6) | |||||||
Stockholders' deficit | |||||||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 500,000 issued with liquidation preference of $50,000 | $ | 50,000 | $ | 50,000 | |||
Common stock, $0.0001 par value, 100,000,000 shares authorized, 23,730,211 and 22,518,058 issued and outstanding at July 1, 2017 and October 1, 2016, respectively | 2 | 2 | |||||
Additional paid-in capital | 60,760 | 50,771 | |||||
Accumulated deficit | (114,599 | ) | (128,856 | ) | |||
Accumulated other comprehensive loss | (55,795 | ) | (58,891 | ) | |||
Total stockholders' deficit | $ | (59,632 | ) | $ | (86,974 | ) | |
Total liabilities and stockholders' deficit | $ | 366,780 | $ | 277,866 |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands except for share data) | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||
Net sales | $ | 332,604 | $ | 323,055 | $ | 677,915 | $ | 645,596 | |||||||
Cost of goods sold | 287,594 | 276,247 | 590,058 | 554,921 | |||||||||||
Gross profit | $ | 45,010 | $ | 46,808 | $ | 87,857 | $ | 90,675 | |||||||
Operating expenses | |||||||||||||||
Selling, general and administrative expenses | 16,331 | 45,505 | 53,782 | 81,329 | |||||||||||
Operating profit | $ | 28,679 | $ | 1,303 | $ | 34,075 | $ | 9,346 | |||||||
Interest expense | (1,398 | ) | (4,040 | ) | (5,801 | ) | (12,736 | ) | |||||||
Interest income | 50 | 7 | 63 | 118 | |||||||||||
Other (expense) income, net | (11 | ) | — | 13 | 16 | ||||||||||
Loss on debt extinguishment | — | — | (10,142 | ) | — | ||||||||||
Income (loss) before income taxes | $ | 27,320 | $ | (2,730 | ) | $ | 18,208 | $ | (3,256 | ) | |||||
Income tax expense | (8,302 | ) | (887 | ) | (5,806 | ) | (2,069 | ) | |||||||
Equity in net income of non-consolidated affiliate | 1,036 | 696 | 1,997 | 1,494 | |||||||||||
Net income (loss) from continuing operations | $ | 20,054 | $ | (2,921 | ) | $ | 14,399 | $ | (3,831 | ) | |||||
Loss from discontinued operations, net of tax | (22 | ) | (13 | ) | (142 | ) | (46 | ) | |||||||
Net income (loss) | $ | 20,032 | $ | (2,934 | ) | $ | 14,257 | $ | (3,877 | ) | |||||
Defined benefit pension plan, net of tax expense of $566, $419, $1,698, and $1,257, respectively | 1,007 | 777 | 3,020 | 2,333 | |||||||||||
Cash flow hedge (loss) gain, net of tax (benefit) expense of ($13), ($33), $41, and ($149), respectively | (26 | ) | (60 | ) | 76 | (276 | ) | ||||||||
Comprehensive income (loss) | $ | 21,013 | $ | (2,217 | ) | $ | 17,353 | $ | (1,820 | ) | |||||
Earnings per share: | |||||||||||||||
Net income (loss) (from above) | $ | 20,032 | $ | (2,934 | ) | $ | 14,257 | $ | (3,877 | ) | |||||
Less: preferred stock dividends | 974 | 964 | 2,944 | 2,915 | |||||||||||
Net income (loss) available to common stockholders | $ | 19,058 | $ | (3,898 | ) | $ | 11,313 | $ | (6,792 | ) | |||||
Basic weighted average shares outstanding | 23,659,057 | 21,084,878 | 23,101,685 | 20,989,737 | |||||||||||
Diluted weighted average shares outstanding | 29,527,612 | 21,084,878 | 24,654,158 | 20,989,737 | |||||||||||
Basic earnings (loss) per share, continuing operations | $ | 0.81 | $ | (0.18 | ) | $ | 0.50 | $ | (0.32 | ) | |||||
Basic earnings (loss) per share, discontinued operations | — | — | (0.01 | ) | — | ||||||||||
Basic earnings (loss) per share | $ | 0.81 | $ | (0.18 | ) | $ | 0.49 | $ | (0.32 | ) | |||||
Diluted earnings (loss) per share, continuing operations | $ | 0.68 | $ | (0.18 | ) | $ | 0.46 | $ | (0.32 | ) | |||||
Diluted earnings (loss) per share, discontinued operations | — | — | — | — | |||||||||||
Diluted earnings (loss) per share | $ | 0.68 | $ | (0.18 | ) | $ | 0.46 | $ | (0.32 | ) |
Nine Months Ended | |||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | |||||
Cash flows from operating activities | |||||||
Net income (loss) | $ | 14,257 | $ | (3,877 | ) | ||
Loss from discontinued operations, net of tax | 142 | 46 | |||||
Adjustments to reconcile net income (loss) to net cash provided by continuing operations | |||||||
Depreciation and amortization | 6,106 | 6,025 | |||||
Amortization of debt costs | 912 | 2,232 | |||||
Share-based compensation | 904 | 12,717 | |||||
Unfunded portion of Phantom Equity Plan | — | 1,355 | |||||
Equity in net income of affiliate | (1,997 | ) | (1,494 | ) | |||
(Gain) loss on disposal of fixed assets | (43 | ) | 29 | ||||
Deferred taxes | (874 | ) | 8,461 | ||||
Provision for bad debt | — | (5 | ) | ||||
Amortization of deferred actuarial pension losses | 4,718 | 3,590 | |||||
Loss on debt extinguishment | 10,142 | — | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (13,701 | ) | (6,003 | ) | |||
Inventories | (72,796 | ) | (52,232 | ) | |||
Other assets | (5,941 | ) | (6,055 | ) | |||
Accounts payable | 56,671 | 50,332 | |||||
Accrued expenses, pension and other liabilities | 6,060 | 3,870 | |||||
Dividend from equity investment in affiliate | 1,412 | 2,316 | |||||
Total adjustments | $ | (8,427 | ) | $ | 25,138 | ||
Net cash provided by continuing operations | $ | 5,972 | $ | 21,307 | |||
Net cash used in discontinued operations | (221 | ) | (46 | ) | |||
Total cash provided by operating activities | $ | 5,751 | $ | 21,261 | |||
Cash flows from investing activities | |||||||
Cash paid for fixed assets | (7,193 | ) | (6,511 | ) | |||
Proceeds from sale of fixed assets | 47 | — | |||||
Total cash used in investing activities | $ | (7,146 | ) | $ | (6,511 | ) | |
Cash flows from financing activities | |||||||
Repayments under the former senior term loan | $ | (161,500 | ) | $ | (33,812 | ) | |
Borrowings under the new term loan | 156,887 | — | |||||
Repayments under the new term loan | (4,000 | ) | — | ||||
Cash paid for capital leases | (117 | ) | (168 | ) | |||
Cash paid for debt issuance costs | (299 | ) | (1,117 | ) | |||
Cash paid to extinguish debt | (507 | ) | — | ||||
Contributions from former majority stockholder | — | 15,616 | |||||
Payment of dividends on preferred stock | (2,944 | ) | (1,917 | ) | |||
Cash paid for employee taxes on stock option exercises and vested restricted shares | (981 | ) | (3,511 | ) | |||
Proceeds from exercises of warrants | 12,858 | — | |||||
Total cash used in financing activities | $ | (603 | ) | $ | (24,909 | ) | |
Change in cash and cash equivalents | (1,998 | ) | (10,159 | ) | |||
Cash and cash equivalents, beginning of period | 52,309 | 52,861 | |||||
Cash and cash equivalents, end of period | $ | 50,311 | $ | 42,702 | |||
Nine Months Ended | |||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | |||||
Supplemental disclosures of cash flow information | |||||||
Cash paid during the period for: | |||||||
Interest paid, net of interest received | 4,775 | 9,411 | |||||
Income tax paid, net of tax refunds | 1,318 | 1,073 | |||||
Non-cash Investing and Financing activities | |||||||
Capital expenditures funded by capital lease borrowings | — | 100 | |||||
Change in accounts payable for capital additions to property, plant and equipment | (1,900 | ) | (220 | ) | |||
Common stock dividend on Series A preferred stock (market value of common shares) | — | 998 | |||||
Cashless exercise of stock options | 4,124 | — | |||||
Cash receivable for warrant exercises | 164 | — |
(in thousands of dollars) | July 1, 2017 | October 1, 2016 | |||||
Raw materials | $ | 71,718 | $ | 40,940 | |||
Work in process | 39,008 | 10,011 | |||||
Finished goods | 15,876 | 2,855 | |||||
Total inventory | $ | 126,602 | $ | 53,806 |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||
Balance at beginning of period | $ | 18,612 | $ | 16,768 | $ | 19,444 | $ | 17,661 | |||||||
Add current period accruals | 3,775 | 3,691 | 7,555 | 7,195 | |||||||||||
Current period reductions of accrual | (2,105 | ) | (1,956 | ) | (6,717 | ) | (6,353 | ) | |||||||
Balance at end of period | $ | 20,282 | $ | 18,503 | $ | 20,282 | $ | 18,503 |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||
Balance at beginning of period | $ | 16,654 | $ | 14,060 | $ | 16,187 | $ | 14,145 | |||||||
Add current period deferred income | 3,396 | 2,952 | 6,769 | 5,446 | |||||||||||
Current period recognition of income | (1,520 | ) | (1,261 | ) | (4,426 | ) | (3,840 | ) | |||||||
Balance at end of period | $ | 18,530 | $ | 15,751 | $ | 18,530 | $ | 15,751 |
(in thousands of dollars) | July 1, 2017 | October 1, 2016 | |||||
Current portion | $ | 3,167 | $ | 3,679 | |||
Long-term portion | 2,396 | 2,786 | |||||
Total accrued self-insurance | $ | 5,563 | $ | 6,465 |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||
Interest cost | $ | 1,266 | $ | 1,411 | $ | 3,797 | $ | 4,232 | |||||||
Expected return on plan assets | (1,590 | ) | (1,528 | ) | (4,769 | ) | (4,584 | ) | |||||||
Amortization of prior loss | 1,573 | 1,196 | 4,718 | 3,590 | |||||||||||
Net periodic benefit cost | $ | 1,249 | $ | 1,079 | $ | 3,746 | $ | 3,238 | |||||||
Amortization of prior loss, recognized in other comprehensive income | 1,573 | 1,196 | 4,718 | 3,590 | |||||||||||
Total recognized in net periodic pension benefit cost and other comprehensive income | $ | (324 | ) | $ | (117 | ) | $ | (972 | ) | $ | (352 | ) |
Level | Total Net Leverage Ratio | ABR Loans | Eurodollar Loans | |||
I | Less than 2.00x | 0.75% | 1.75% | |||
II | Greater than or equal to 2.00x and less than 2.50x | 1.00% | 2.00% | |||
III | Greater than or equal to 2.50x and less than 3.00x | 1.25% | 2.25% | |||
IV | Greater than or equal to 3.00x | 1.50% | 2.50% |
(in thousands of dollars) | July 1, 2017 | October 1, 2016 | |||||
2021 term loan, net of deferred financing costs of $2,972 | $ | 153,028 | $ | — | |||
2020 term loan, net of deferred financing costs of $9,384 | — | 152,116 | |||||
Less: Current portion of long-term debt | 8,000 | 11,750 | |||||
Long-term debt, net of current portion | $ | 145,028 | $ | 140,366 |
(in thousands of dollars) | ||||
Year | Principal Payments | |||
2017 | $ | 2,000 | ||
2018 | 8,000 | |||
2019 | 8,000 | |||
2020 | 11,000 | |||
2021 | 15,000 | |||
Thereafter | 112,000 | |||
Total remaining principal payments | $ | 156,000 |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||
Bus | $ | 317,333 | $ | 309,432 | $ | 633,499 | $ | 604,832 | |||||||
Parts | 15,271 | 13,623 | 44,416 | 40,764 | |||||||||||
Segment net sales | $ | 332,604 | $ | 323,055 | $ | 677,915 | $ | 645,596 |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||
Bus | $ | 39,843 | $ | 41,594 | $ | 72,234 | $ | 75,108 | |||||||
Parts | 5,167 | 5,214 | 15,623 | 15,567 | |||||||||||
Segment gross profit | $ | 45,010 | $ | 46,808 | $ | 87,857 | $ | 90,675 |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||
Segment gross profit | $ | 45,010 | $ | 46,808 | $ | 87,857 | $ | 90,675 | |||||||
Adjustments: | |||||||||||||||
Selling, general and administrative expenses | (16,331 | ) | (45,505 | ) | (53,782 | ) | (81,329 | ) | |||||||
Interest expense | (1,398 | ) | (4,040 | ) | (5,801 | ) | (12,736 | ) | |||||||
Interest income | 50 | 7 | 63 | 118 | |||||||||||
Other income, net | (11 | ) | — | 13 | 16 | ||||||||||
Loss on debt extinguishment | — | — | (10,142 | ) | — | ||||||||||
Income (loss) before income taxes | $ | 27,320 | $ | (2,730 | ) | $ | 18,208 | $ | (3,256 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||
United States | $ | 291,672 | $ | 298,532 | $ | 608,350 | $ | 591,549 | |||||||
Canada | 40,550 | 21,642 | 66,535 | 46,261 | |||||||||||
Rest of world | 382 | 2,881 | 3,030 | 7,786 | |||||||||||
Total net sales | $ | 332,604 | $ | 323,055 | $ | 677,915 | $ | 645,596 |
(in thousands of dollars) | Three Months Ended | Nine Months Ended | ||||||||||||||||
Foreign Exchange Contracts | Location | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||||
Amount of (loss) gain recognized in income on derivatives (effective portion) | OCI | $ | (39 | ) | $ | (93 | ) | $ | 344 | $ | (425 | ) | ||||||
Amount of loss (gain) reclassified from AOCI into income (effective portion) | Other expense | — | — | (227 | ) | — | ||||||||||||
Total amount recognized in other comprehensive (loss) income | $ | (39 | ) | $ | (93 | ) | $ | 117 | $ | (425 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands except for share data) | July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | |||||||||||
Numerator: | |||||||||||||||
Net income (loss) | $ | 20,032 | $ | (2,934 | ) | $ | 14,257 | $ | (3,877 | ) | |||||
Less: Loss from discontinued operations, net of tax | (22 | ) | (13 | ) | (142 | ) | (46 | ) | |||||||
Income (loss) from continuing operations, net of tax | 20,054 | (2,921 | ) | 14,399 | (3,831 | ) | |||||||||
Less: convertible preferred stock dividends | 974 | 964 | 2,944 | 2,915 | |||||||||||
Income (loss) from continuing operations available to common stockholders, net of tax | $ | 19,080 | $ | (3,885 | ) | $ | 11,455 | $ | (6,746 | ) | |||||
Basic earnings per share (1): | |||||||||||||||
Weighted average common shares outstanding | 23,659,057 | 21,084,878 | 23,101,685 | 20,989,737 | |||||||||||
Basic earnings per share, continuing operations | 0.81 | (0.18 | ) | 0.50 | (0.32 | ) | |||||||||
Basic earnings per share, discontinued operations | — | — | (0.01 | ) | — | ||||||||||
Basic earnings per share | $ | 0.81 | $ | (0.18 | ) | $ | 0.49 | $ | (0.32 | ) | |||||
Diluted earnings per share (2): | |||||||||||||||
Weighted average common shares outstanding | 23,659,057 | 21,084,878 | 23,101,685 | 20,989,737 | |||||||||||
Weighted average dilutive securities, convertible preferred stock | 4,314,064 | — | — | — | |||||||||||
Weighted average dilutive securities, restricted stock | 2,383 | — | 484 | — | |||||||||||
Weighted average dilutive securities, warrants | 1,326,916 | — | 1,314,161 | — | |||||||||||
Weighted average dilutive securities, stock options | 225,192 | — | 237,828 | — | |||||||||||
Weighted average shares and dilutive potential common shares | 29,527,612 | 21,084,878 | 24,654,158 | 20,989,737 | |||||||||||
Diluted earnings per share, continuing operations | 0.68 | (0.18 | ) | 0.46 | (0.32 | ) | |||||||||
Diluted earnings per share, discontinued operations | — | — | — | — | |||||||||||
Diluted earnings per share | $ | 0.68 | $ | (0.18 | ) | $ | 0.46 | $ | (0.32 | ) |
Nine Months Ended July 1, 2017 | |||||||
Restricted Stock Activity | Number of Shares | Weighted-Average Grant Date Fair Value | |||||
Balance, beginning of period | — | $ | — | ||||
Granted | 77,451 | 15.82 | |||||
Balance, end of period | 77,451 | 15.82 |
Nine Months Ended July 1, 2017 | |||||||
Stock Option Award Activity | Number of Options | Weighted Average Exercise Price per Share ($) | |||||
Outstanding options, beginning of period | 918,749 | $ | 10.08 | ||||
Granted | 133,484 | 15.50 | |||||
Exercised (1) | (409,044 | ) | 10.08 | ||||
Outstanding options, end of period (2) | 643,189 | 11.20 | |||||
Fully vested and exercisable options, end of period (3) | 509,705 | 10.07 |
Nine Months Ended July 1, 2017 | ||||
Expected volatility | 33.7 | % | ||
Expected dividend yield | 0 | % | ||
Risk-free interest rate | 1.94 | % | ||
Expected term (in years) | 5.5 | |||
Weighted-average grant-date fair value | $ | 5.35 |
• | Property tax revenues. Property tax revenues are one of the major sources of funding for new school buses. Property tax revenues are a function of land and building prices, relying on assessments of property value by state or county assessors and millage rates voted by the local electorate. |
• | Student enrollment. Increases or decreases in the number of school bus riders have a direct impact on school district demand. |
• | Revenue mix. We are able to charge more for certain of our products (e.g., Type C propane-powered school buses, Type D buses and buses with higher option content) than other products. The mix of products sold in any fiscal period can directly impact our revenues for the period. |
• | Strength of the dealer network. We rely on our dealers, as well as a small number of major fleet operators, to be the direct point of contact with school districts and their purchasing agents. An effective dealer is capable of expanding revenues within a given school district by matching that district’s needs to our capabilities, offering options that would not otherwise be provided to the district. |
• | Pricing. Our products are sold to school districts throughout the United States and Canada. Each state and each Canadian province has its own set of regulations that govern the purchase of products, including school buses, by their school districts. We and our dealers must navigate these regulations, purchasing procedures and the districts’ specifications in order to reach mutually acceptable price terms. Pricing may or may not be favorable to us, depending upon a number of factors impacting purchasing decisions. |
• | Buying patterns of major fleets. Major fleets regularly compete against one another for existing accounts. Fleets are also continuously trying to win the business of school districts that operate their own transportation services. These activities can have either a positive or negative impact on our sales, depending on the brand preference of the fleet that wins the business. Major fleets also periodically review their fleet sizes and replacement patterns due to funding availability as well as the profitability of existing routes. These actions can impact total purchases by fleets in a given year. |
• | Seasonality. Our sales are subject to seasonal variation based on the school calendar. The peak season has historically been during our third and fourth fiscal quarters. Sales during the third and fourth fiscal quarters are typically greater than the first and second fiscal quarters due to the desire of municipalities to have any new buses that they order available to them at the beginning of the new school year. There are, however, variations in the seasonal demands from year to year depending in large part upon municipal budgets, distinct replacement cycles and student enrollment. This seasonality and annual variations of this seasonality could impact the ability to compare results between fiscal periods. |
• | Cost of goods sold. The components of our cost of goods sold consist of material costs (principally powertrain components, steel and rubber, as well as aluminum and copper), labor expense and overhead. Our cost of goods sold may vary from period to period in part due to changes in sales volume and in part due to efforts by certain suppliers to pass through the economics associated with key commodities, design changes with respect to specific components, design changes with respect to specific bus models, wage increases for plant labor, the productivity of plant labor, delays in receiving materials and other logistical problems and the impact of overhead items such as utilities. |
• | Selling, general and administrative expenses. Our selling, general and administrative expenses include costs associated with our selling and marketing efforts, engineering, centralized finance, human resources, purchasing and information technology services, as well as other administrative matters and functions. In most instances, other than direct costs associated with sales and marketing programs, the principal component of these costs is salary expense. Changes from period to period are typically driven by the number of our employees, as well as by merit increases provided to experienced personnel. |
• | Regulatory expenses. We must comply with laws, regulations and requirements for public companies, including certain provisions of the Sarbanes-Oxley Act and related SEC regulations, as well as NASDAQ listing requirements. Compliance with the requirements of being a public company increases operating expenses in order to pay employees, legal counsel and accountants to assist us in, among other things, external reporting, instituting and monitoring a more comprehensive compliance and board governance function, establishing and maintaining internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, and preparing and distributing periodic public reports in compliance with our obligations under the federal securities laws. |
• | Interest expense. Our interest expense relates to costs associated with our debt instruments and reflects both the amount of indebtedness and the interest rate that we are required to pay on our debt. In December 2016, we entered into a new $160.0 million first lien credit agreement and a new $75.0 million revolving credit agreement. Proceeds from the agreement were used to fully extinguish our prior debt obligations. |
• | Income taxes. We make estimates of the amounts to recognize for income taxes in each tax jurisdiction in which we operate. In addition, provisions are established for withholding taxes related to the transfer of cash between jurisdictions and for uncertain tax positions taken. |
• | Equity in net income of non-consolidated affiliate. We include in this line item our share of income or loss from our investment in Micro Bird, our unconsolidated 50/50 Canadian joint venture. |
Three Months Ended | |||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | |||||
Net sales | $ | 332,604 | $ | 323,055 | |||
Cost of goods sold | 287,594 | 276,247 | |||||
Gross profit | $ | 45,010 | $ | 46,808 | |||
Operating expenses | |||||||
Selling, general and administrative expenses | 16,331 | 45,505 | |||||
Operating profit | $ | 28,679 | $ | 1,303 | |||
Interest expense | (1,398 | ) | (4,040 | ) | |||
Interest income | 50 | 7 | |||||
Other expense, net | (11 | ) | — | ||||
Income (loss) before income taxes | $ | 27,320 | $ | (2,730 | ) | ||
Income tax expense | (8,302 | ) | (887 | ) | |||
Equity in net income of non-consolidated affiliate | 1,036 | 696 | |||||
Net income (loss) from continuing operations | $ | 20,054 | $ | (2,921 | ) | ||
Loss from discontinued operations, net of tax | (22 | ) | (13 | ) | |||
Net income (loss) | $ | 20,032 | $ | (2,934 | ) | ||
Other financial data: | |||||||
Adjusted EBITDA | $ | 32,206 | $ | 32,484 | |||
Adjusted EBITDA margin | 9.7 | % | 10.1 | % |
(in thousands of dollars) | Three Months Ended | ||||||
Net Sales by Segment | July 1, 2017 | July 2, 2016 | |||||
Bus | $ | 317,333 | $ | 309,432 | |||
Parts | 15,271 | 13,623 | |||||
Total | $ | 332,604 | $ | 323,055 | |||
Gross Profit by Segment | |||||||
Bus | $ | 39,843 | $ | 41,594 | |||
Parts | 5,167 | 5,214 | |||||
Total | $ | 45,010 | $ | 46,808 |
Three Months Ended | |||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | |||||
Net income (loss) | $ | 20,032 | $ | (2,934 | ) | ||
Loss from discontinued operations, net of tax | (22 | ) | (13 | ) | |||
Net income (loss) from continuing operations | $ | 20,054 | $ | (2,921 | ) | ||
Interest expense | 1,398 | 4,040 | |||||
Interest income | (50 | ) | (7 | ) | |||
Income tax expense | 8,302 | 887 | |||||
Depreciation, amortization, and disposals | 2,008 | 2,022 | |||||
Special compensation payment | — | 17,112 | |||||
Business combination expenses | — | 185 | |||||
One-time post-retirement benefit adjustment | — | 896 | |||||
Share-based compensation | 494 | 10,270 | |||||
Adjusted EBITDA | $ | 32,206 | $ | 32,484 | |||
Adjusted EBITDA margin (percentage of net sales) | 9.7 | % | 10.1 | % |
Nine Months Ended | |||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | |||||
Net sales | $ | 677,915 | $ | 645,596 | |||
Cost of goods sold | 590,058 | 554,921 | |||||
Gross profit | $ | 87,857 | $ | 90,675 | |||
Operating expenses | |||||||
Selling, general and administrative expenses | 53,782 | 81,329 | |||||
Operating profit | $ | 34,075 | $ | 9,346 | |||
Interest expense | (5,801 | ) | (12,736 | ) | |||
Interest income | 63 | 118 | |||||
Other income, net | 13 | 16 | |||||
Loss on debt extinguishment | (10,142 | ) | — | ||||
Income (loss) before income taxes | $ | 18,208 | $ | (3,256 | ) | ||
Income tax expense | (5,806 | ) | (2,069 | ) | |||
Equity in net income of non-consolidated affiliate | 1,997 | 1,494 | |||||
Net income (loss) from continuing operations | $ | 14,399 | $ | (3,831 | ) | ||
Loss from discontinued operations, net of tax | (142 | ) | (46 | ) | |||
Net income (loss) | $ | 14,257 | $ | (3,877 | ) | ||
Other financial data: | |||||||
Adjusted EBITDA | $ | 42,878 | $ | 47,874 | |||
Adjusted EBITDA margin | 6.3 | % | 7.4 | % |
(in thousands of dollars) | Nine Months Ended | ||||||
Net Sales by Segment | July 1, 2017 | July 2, 2016 | |||||
Bus | $ | 633,499 | $ | 604,832 | |||
Parts | 44,416 | 40,764 | |||||
Total | $ | 677,915 | $ | 645,596 | |||
Gross Profit by Segment | |||||||
Bus | $ | 72,234 | $ | 75,108 | |||
Parts | 15,623 | 15,567 | |||||
Total | $ | 87,857 | $ | 90,675 |
Nine Months Ended | |||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | |||||
Net income (loss) | $ | 14,257 | $ | (3,877 | ) | ||
Loss from discontinued operations, net of tax | (142 | ) | (46 | ) | |||
Net income (loss) from continuing operations | $ | 14,399 | $ | (3,831 | ) | ||
Interest expense | 5,801 | 12,736 | |||||
Interest income | (63 | ) | (118 | ) | |||
Income tax expense | 5,806 | 2,069 | |||||
Depreciation, amortization, and disposals | 6,063 | 6,054 | |||||
Loss on debt extinguishment | 10,142 | — | |||||
Special compensation payment | — | 17,112 | |||||
Business combination expenses | (174 | ) | 239 | ||||
One-time post-retirement benefit adjustment | — | 896 | |||||
Share-based compensation | 904 | 12,717 | |||||
Adjusted EBITDA | $ | 42,878 | $ | 47,874 | |||
Adjusted EBITDA margin (percentage of net sales) | 6.3 | % | 7.4 | % |
Level | Total Net Leverage Ratio | ABR Loans | Eurodollar Loans | |||
I | Less than 2.00x | 0.75% | 1.75% | |||
II | Greater than or equal to 2.00x and less than 2.50x | 1.00% | 2.00% | |||
III | Greater than or equal to 2.50x and less than 3.00x | 1.25% | 2.25% | |||
IV | Greater than or equal to 3.00x | 1.50% | 2.50% |
Period | Maximum Total Net Leverage Ratio | |
Closing Date through the third fiscal quarter of the 2017 fiscal year | 4.00:1.00 | |
Fourth fiscal quarter of the 2017 fiscal year through the first fiscal quarter of the 2019 fiscal year | 3.75:1.00 | |
Second fiscal quarter of the 2019 fiscal year and thereafter | 3.50:1.00 |
Nine Months Ended | |||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | |||||
Cash and cash equivalents at beginning of period | $ | 52,309 | $ | 52,861 | |||
Total cash provided by operating activities | 5,751 | 21,261 | |||||
Total cash used in investing activities | (7,146 | ) | (6,511 | ) | |||
Total cash used in financing activities | (603 | ) | (24,909 | ) | |||
Change in cash and cash equivalents | $ | (1,998 | ) | $ | (10,159 | ) | |
Cash and cash equivalents at end of period | $ | 50,311 | $ | 42,702 | |||
Depreciation and amortization | $ | 6,106 | $ | 6,025 | |||
Capital expenditures | 7,193 | 6,511 |
Nine Months Ended | |||||||
(in thousands of dollars) | July 1, 2017 | July 2, 2016 | |||||
Net cash provided by continuing operations | $ | 5,972 | $ | 21,307 | |||
Cash paid for fixed assets | (7,193 | ) | (6,511 | ) | |||
Free cash flow | $ | (1,221 | ) | $ | 14,796 |
2.1† | Purchase Agreement, dated as of September 21, 2014, by and among the registrant, Hennessy Capital Partners I LLC (solely for purposes of Section 10.01(a) thereof) and The Traxis Group B.V. (incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K, filed by the registrant with the SEC on September 24, 2014). |
2.2 | Amendment No. 1 to Purchase Agreement, dated as of February 10, 2015, by and among the registrant, Hennessy Capital Partners I LLC (solely for purposes of Section 10.01(a) thereof) and The Traxis Group B.V. (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K, filed by the registrant with the SEC on February 11, 2015). |
2.3 | Amendment No. 2 to Purchase Agreement, dated as of February 18, 2015, by and among the registrant, Hennessy Capital Partners I LLC (solely for purposes of Section 10.01(a) thereof) and The Traxis Group B.V. (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K, filed by the registrant with the SEC on February 19, 2015). |
3.1 | The registrant’s Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K, filed by the registrant with the SEC on February 26, 2015). |
3.2 | The registrant’s Certificate of Designations establishing its Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K, filed by the registrant with the SEC on February 26, 2015). |
3.3 | Bylaws of Blue Bird Corporation (incorporated by reference to the Company’s Form S-1, filed with the SEC on December 20, 2013). |
4.1 | Specimen stock certificate for the registrant’s Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K, filed by the registrant with the SEC on March 2, 2015). |
4.2 | The registrant’s Certificate of Designations establishing its Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K, filed by the registrant with the SEC on February 26, 2015). |
4.3 | Credit Agreement dated as of December 12, 2016 by and among Blue Bird Corporation, School Bus Holdings, Inc. and certain of its subsidiaries and affiliates and Bank of Montreal, as Administrative Agent and an Issuing Bank, Fifth Third Bank, as Co-Syndication Agent and an Issuing Bank and Regions Bank, as Co-Syndication Agent, and the other lenders party thereto, together with certain exhibits (incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K, filed by the registrant with the SEC on December 15, 2016). |
31.1* | Chief Executive Officer’s Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. |
31.2* | Chief Financial Officer’s Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. |
32.1* | Chief Executive Officer and Chief Financial Officer joint Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS*^ | XBRL Instance Document. |
101.SCH*^ | XBRL Taxonomy Extension Schema Document. |
101.CAL*^ | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF*^ | XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB*^ | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE*^ | XBRL Taxonomy Extension Presentation Linkbase Document. |
* | Filed herewith. |
† | The exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request. |
^ | In accordance with Regulation S-T, XBRL (Extensible Business Reporting Language) related information in Exhibit No. 101 to this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. |
Blue Bird Corporation | ||
Dated: | August 3, 2017 | /s/ Philip Horlock |
Philip Horlock | ||
Chief Executive Officer | ||
Dated: | August 3, 2017 | /s/ Phillip Tighe |
Phillip Tighe | ||
Chief Financial Officer |
Dated: | August 3, 2017 | /s/ Philip Horlock |
Philip Horlock | ||
Chief Executive Officer |
Dated: | August 3, 2017 | /s/ Phillip Tighe |
Phillip Tighe | ||
Chief Financial Officer |
Dated: | August 3, 2017 | /s/ Philip Horlock |
Philip Horlock | ||
Chief Executive Officer | ||
Dated: | August 3, 2017 | /s/ Phillip Tighe |
Phillip Tighe | ||
Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Jul. 01, 2017 |
Jul. 31, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Blue Bird Corp | |
Entity Central Index Key | 0001589526 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Jul. 01, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 24,233,924 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) |
Jul. 01, 2017 |
Oct. 01, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par Value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 500,000 | 500,000 |
Preferred Stock, Liquidation Preference, Value | $ 50,000,000 | $ 50,000,000 |
Common Stock, Par Value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued | 23,730,211 | 22,518,058 |
Common Stock, Shares Outstanding | 23,730,211 | 22,518,058 |
Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (Parentheticals) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Income Statement [Abstract] | ||||
Defined benefit pension plan, net of tax expense of $566, $419, $1,698, and $1,257, respectively | $ 566 | $ 419 | $ 1,698 | $ 1,257 |
Cash flow hedge (loss) gain, net of tax (benefit) expense of ($13), ($33), $41, and ($149), respectively | $ (13) | $ (33) | $ 41 | $ (149) |
Nature of Business and Basis of Presentation |
9 Months Ended |
---|---|
Jul. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | 1. Nature of Business and Basis of Presentation Nature of Business On February 24, 2015, Hennessy Capital Acquisition Corp. ("HCAC") consummated its business combination (the “Business Combination”), pursuant to which HCAC acquired all of the outstanding capital stock of School Bus Holdings, Inc. (“SBH”) from The Traxis Group B.V. (the “Seller” or "Traxis"). SBH operates its business of designing and manufacturing school buses through subsidiaries and under the Blue Bird Corporation (“Blue Bird”) name. In the Business Combination, the total purchase price was paid in a combination of cash ($100 million) and in shares of HCAC’s Common Stock (12,000,000 shares valued at a total of $120 million). In connection with the closing of the Business Combination, we changed our name from Hennessy Capital Acquisition Corp. to Blue Bird Corporation. Upon consummation of the Business Combination, SBH became a wholly-owned subsidiary of Blue Bird Corporation and SBH’s direct and indirect subsidiaries became indirect subsidiaries of our parent corporation. Pursuant to, and subject to the terms of, a Purchase and Sale Agreement, dated as of May 26, 2016 (the “Purchase Agreement”), by and among Traxis, ASP BB Holdings LLC, a Delaware limited liability company (“ASP”), and the Company, Traxis agreed to sell and ASP agreed to purchase all of the 12,000,000 shares of common stock, par value $0.0001 (the “Common Stock”), of the Company owned by Traxis (the “Transaction Shares”). Subject to the terms and conditions set forth in the Purchase Agreement, ASP acquired 7,000,000 Transaction Shares at an initial closing on June 3, 2016 for an amount in cash equal to $10.10 per share and 5,000,000 Transaction Shares at a second closing on June 8, 2016 for an amount in cash equal to $11.00 per share, for an aggregate purchase price of $125.7 million. There were no proceeds to the Company from this transaction. The sale of Transaction Shares triggered a phantom equity compensation payment. This payment was primarily funded by Traxis and not by the Company. Blue Bird Body Company, a wholly-owned subsidiary of Blue Bird, was incorporated in 1958 and has manufactured, assembled and sold school buses to a variety of municipal, federal and commercial customers since 1927. The majority of Blue Bird’s sales are made to an independent distributor network, which in turn sells buses to ultimate end users. We are headquartered in Fort Valley, Georgia. References in these notes to financial statements to “Blue Bird”, the “Company,” “we,” “our,” or “us” refer to Blue Bird Corporation and its wholly-owned subsidiaries, unless the context specifically indicates otherwise. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company transactions and accounts have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and Article 8 of Regulation S-X. The Company’s fiscal year ends on the Saturday closest to September 30 with its quarters consisting of thirteen weeks in most years. In fiscal year 2017, there are a total of 52 weeks. For fiscal years 2017 and 2016, the third quarters both included 13 weeks and the nine months ended both included 39 weeks. In the opinion of management, all adjustments considered necessary for a fair presentation of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for any interim period are not necessarily indicative of the results that may be expected for the entire year. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The Condensed Consolidated Balance Sheet data as of October 1, 2016 was derived from the Company’s audited financial statements but do not include all disclosures required by generally accepted accounting principles. For additional information, including the Company’s significant accounting policies, refer to the consolidated financial statements and related footnotes for the fiscal year ended October 1, 2016 as set forth in the Company's 2016 Form 10-K filed on December 15, 2016. The Business Combination was accounted for as a reverse acquisition, since immediately following completion of the transaction, the sole stockholder of SBH immediately prior to the Business Combination maintained effective control of Blue Bird Corporation, the post-combination company. For accounting purposes, SBH is deemed the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of SBH (i.e., a capital transaction involving the issuance of stock and payment of cash by HCAC for the stock of SBH). Accordingly, the consolidated assets, liabilities and results of operations of SBH are the historical financial statements of Blue Bird Corporation, and HCAC assets, liabilities and results of operations are consolidated with SBH beginning on the acquisition date. No step-up in basis of intangible assets or goodwill was recorded in this transaction. We have effected this treatment through opening stockholders' deficit by adjusting the number of our common shares outstanding. Other than transaction costs paid and a contribution from our majority stockholder for payment of management incentive compensation related to the transaction, the transaction was primarily non-cash and involved exchanges of consideration and equity between our majority stockholder and HCAC and its related entities. Use of Estimates and Assumptions The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions. At the date of the financial statements, these estimates and assumptions affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, and during the reporting period, these estimates and assumptions affect the reported amounts of revenues and expenses. For example, significant management judgments are required in determining excess, obsolete, or unsalable inventory, allowance for doubtful accounts, potential impairment of long-lived assets, goodwill and intangibles, the accounting for self-insurance reserves, warranty reserves, pension obligations, income taxes, environmental liabilities and contingencies. Future events and their effects cannot be predicted with certainty, and, accordingly, the Company’s accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the Company’s condensed consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. The Company evaluates and updates its assumptions and estimates on an ongoing basis and may employ outside experts to assist in the Company’s evaluations. Actual results could differ from the estimates that the Company has used. |
Summary of Significant Accounting Policies and Recently Issued Accounting Standards |
9 Months Ended |
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Jul. 01, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Recently Issued Accounting Standards | 2. Summary of Significant Accounting Policies and Recent Accounting Standards The Company’s significant accounting policies are described in the Company’s 2016 Form 10-K, filed with the SEC on December 15, 2016. Our senior management has reviewed these significant accounting policies and related disclosures and determined that there were no significant changes in our critical accounting policies in the nine months ended July 1, 2017. Recently Adopted Accounting Standards ASU 2015-17 — In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities to be classified as non-current on the balance sheet. The standard is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company elected to early adopt this standard on a retrospective basis in the first quarter of fiscal 2017, and reclassified $7.6 million of current deferred tax assets to long-term deferred tax assets, resulting in a total of $19.1 million of long-term deferred tax assets at October 1, 2016, compared to the prior presentation of $11.5 million. All future deferred tax assets and liabilities will be recorded as long-term. |
Supplemental Financial Information |
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Condensed Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information | 3. Supplemental Financial Information Inventory The Company values inventories at the lower of cost or market value. The Company uses a standard costing methodology, which approximates cost on a first-in, first-out basis. The Company reviews the standard costs of raw materials, work-in-process and finished goods inventory on a periodic basis to ensure that its inventories approximate current actual costs. Manufacturing cost includes raw materials, direct labor and manufacturing overhead. The following table presents the components of inventory at the dates indicated:
Product Warranties The Company’s products are generally warranted against defects in material and workmanship for a period of one to five years. A provision for estimated warranty costs is recorded at the time the unit is sold. The methodology to determine warranty reserve calculates average expected warranty claims using warranty claims by body type, by month, over the life of the bus, which is then multiplied by remaining months under warranty, by warranty type. Management believes the methodology provides an accurate reserve estimate. Actual claims incurred could differ from the original estimates, requiring future adjustments. The following table reflects activity in accrued warranty cost (current and long-term portion combined) for the periods presented:
The Company also sells extended warranties related to its products. Revenue related to these contracts is recognized on a straight-line basis over the contract period and costs thereunder are expensed as incurred. All warranty expenses are recorded in the cost of goods sold line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The methodology to determine the short-term extended warranty income reserve is based on twelve months of the remaining warranty value for each effective extended warranty at the balance sheet date. The following table reflects activity in deferred warranty income (current and long-term portions combined), for the sale of extended warranties of two to five years, for the periods presented:
Self-Insurance The following table reflects our total accrued self-insurance liability, comprised of workers compensation and health insurance related claims, at the dates indicated:
The current and long-term portions of the accrued self-insurance liability are reflected in accrued expenses and other liabilities, respectively, on the Condensed Consolidated Balance Sheets. Shipping and Handling Revenues Shipping and handling revenues represent costs billed to customers and are included in net sales. Shipping and handling costs incurred are included in cost of goods sold. Shipping and handling revenues were $6.6 million and $6.2 million for the three months ended July 1, 2017 and July 2, 2016, respectively, and $12.8 million and $11.5 million for the nine months ended July 1, 2017 and July 2, 2016, respectively. The related cost of goods sold was $6.0 million and $5.7 million for the three months ended July 1, 2017 and July 2, 2016, respectively, and $11.3 million and $10.1 million for the nine months ended July 1, 2017 and July 2, 2016, respectively. Pension Expense Components of net periodic pension benefit cost were as follows for the periods presented:
Warrants At July 1, 2017, there were a total of 7,180,466 warrants outstanding to purchase 3,590,233 shares of our Common Stock. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | 4. Debt On December 12, 2016, Blue Bird Body Company, a wholly-owned subsidiary of the Company, executed a $235.0 million five-year credit agreement provided by Bank of Montreal, which acts as the administrative agent and an issuing bank, Fifth Third Bank, as co-syndication agent and an issuing bank, and Regions Bank, as Co-Syndication Agent, together with other lenders (the "Credit Agreement"). The credit facility provided for under the Credit Agreement consists of a term loan facility in an aggregate initial principal amount of $160.0 million (the “Term Loan Facility”) and a revolving credit facility with aggregate commitments of $75.0 million. The revolving credit facility includes a $15.0 million letter of credit sub-facility and a $5.0 million swingline sub-facility (the “Revolving Credit Facility,” and together with the Term Loan Facility, each a “Credit Facility” and collectively, the “Credit Facilities”). As a result of the Credit Agreement, we incurred $3.3 million of debt discount and issuance costs, which have been recorded as contra-debt and will be amortized over the life of the Credit Agreement using the effective interest method. Proceeds from the Term Loan Facility were used to fully extinguish our previous credit agreement with Societe Generale. In connection with the extinguishment, we recorded a $10.1 million loss, which was the difference in the reacquisition price of the extinguished debt and the net carrying value at extinguishment. The loss includes the write-off of unamortized deferred financing costs recorded as a reduction of the prior debt, unamortized issuance costs associated with the previous revolving credit facility recorded in other assets, as well as interest and legal fees incurred to extinguish the prior debt. The interest rate on the Term Loan Facility is (i) from the Closing Date until April 1, 2017, an election of either base rate plus 1 point or LIBOR plus 2 points and (ii) commencing with the fiscal quarter ending on April 1, 2017 and thereafter, dependent on the Total Net Leverage Ratio (as defined below) of the Company, an election of either base rate or LIBOR pursuant to the table below:
Debt consisted of the following at the dates indicated:
Term loans are recognized on the Condensed Consolidated Balance Sheets at the unpaid principal balance, and are not subject to fair value measurement; however, given the variable rates on the loans, the Company estimates that the unpaid principal balance approximates fair value. If measured at fair value in the financial statements, the term loans would be classified as Level 2 in the fair value hierarchy. At July 1, 2017 and October 1, 2016, $156.0 million and $161.5 million, respectively, were outstanding on the term loans. At July 1, 2017 and October 1, 2016, the stated interest rates on the term loans were 2.8% and 6.5%, respectively. At July 1, 2017 and October 1, 2016, the weighted-average annual effective interest rates for the term loans were 4.8% and 8.3%, respectively, which included amortization of the deferred financing costs. No borrowings were outstanding on the Revolving Credit Facility at July 1, 2017, however, since there were $5.1 million of Letters of Credit outstanding on July 1, 2017, the Company would have been able to borrow $69.9 million on the revolving line of credit. Interest expense on all indebtedness was $1.4 million and $4.0 million for the three months ended July 1, 2017 and July 2, 2016, respectively, and $5.8 million and $12.7 million for the nine months ended July 1, 2017 and July 2, 2016, respectively. The schedules of remaining principal maturities for the term loan for the next five fiscal years are as follows:
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Income Taxes |
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Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. Income Taxes Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant infrequent or unusual items which are required to be discretely recognized within the current interim period. The effective tax rates in the periods presented are largely based upon the forecast pre-tax earnings mix and allocation of certain expenses in various taxing jurisdictions where the Company conducts its business, primarily the United States. The effective tax rate for the three month period ended July 1, 2017 was 30.4%, which differed from the statutory federal income tax rate of 35% due mainly to tax rate benefit items such as the domestic production activities deduction, foreign tax credits, and stock option deductions in excess of recorded expense. These benefits were partially offset by discrete expense items, the largest being interest and penalties on uncertain tax positions. The effective tax rate for the three month period ended July 2, 2016 was (32.5)% and differed from the statutory federal income tax rate of 35%, primarily from discrete items in the period, including interest and penalties on uncertain tax positions and a net tax shortfall from the vesting of share-based compensation awards pursuant to the adoption of ASU 2016-09, which were partially offset by the benefit from operating losses in the period. The effective tax rate for the nine month period ended July 1, 2017 was 31.9% and differed from the statutory federal income tax rate of 35% primarily from tax rate benefit items such as the domestic production activities deduction, foreign tax credits, and stock option deductions in excess of recorded expense. These benefits were partially offset by discrete expense items, the largest being interest and penalties on uncertain tax positions. The effective tax rate for the nine month period ended July 2, 2016 was (63.5)% and differed from the statutory federal income tax rate of 35%, primarily from discrete items increasing tax expense in the year to date period, including a change in investor tax on our non-consolidated affiliate income, the application of tax credits claimed as offsets against our payroll tax liabilities, interest and penalties on uncertain tax positions, the vesting of share-based compensation awards pursuant to the adoption of ASU 2016-09, which were partially offset by recording the impact of new tax legislation and by the benefit from operating losses in the period. |
Guarantees, Commitments and Contingencies |
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Jul. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees, Commitments and Contingencies | 6. Guarantees, Commitments and Contingencies Litigation At July 1, 2017, the Company had a number of product liability and other cases pending. Management believes that, considering the Company’s insurance coverage and its intention to vigorously defend its positions, the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial statements. Environmental The Company is subject to a variety of environmental regulations relating to the use, storage, discharge and disposal of hazardous materials used in its manufacturing processes. Failure by the Company to comply with present and future regulations could subject it to future liabilities. In addition, such regulations could require the Company to acquire costly equipment or to incur other significant expenses to comply with environmental regulations. The Company is currently not involved in any material environmental proceedings and therefore management believes that the resolution of environmental matters will not have a material adverse effect on the Company’s financial statements. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | 7. Segment Information We manage our business in two operating segments, which are also our reportable segments. The Bus segment includes the manufacturing and assembly of buses to be sold to a variety of customers across the United States, Canada and in international markets. The Parts segment consists primarily of the purchase of parts from third parties to be sold to dealers within the Company’s network. Financial information is reported on the basis that it is used internally by the chief operating decision maker (the “CODM”) in evaluating segment performance and deciding how to allocate resources. The President and Chief Executive Officer of the Company has been identified as the CODM. Management evaluates the segments based primarily upon revenues and gross profit. A measure of assets is not applicable, as segment assets are not regularly reviewed by the CODM for evaluating performance or allocating resources. The tables below present segment net sales and gross profit for the periods presented: Net sales
Gross profit
The following table is a reconciliation of segment gross profit to consolidated income (loss) before income taxes for the periods presented:
Sales are attributable to geographic areas based on customer location and were as follows for the periods presented:
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Foreign Exchange Contracts |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Exchange Contracts | 8. Foreign Exchange Contracts The Company enters into foreign exchange swaps as economic hedges of anticipated cash flows denominated in Canadian Dollars. The contracts are entered into to protect against the risk that the eventual cash flows resulting from certain transactions would be affected by changes in exchange rates between the U.S. Dollar and the Canadian Dollar. At July 1, 2017, the Company had seven foreign exchange swap contracts with an aggregate notional amount of $15.6 million. The foreign exchange contracts qualify for hedge accounting and have been designated as cash flow hedges with the effective portion of the gain or loss on the derivative instruments recorded in other comprehensive income until the underlying transactions occur. Once the anticipated transactions occur, the gain or loss on the swaps is recorded in current period earnings on the Consolidated Statements of Operations and Comprehensive Income (Loss). The fair value of the foreign exchange contracts is based on the forward contract rates, which classifies as a Level 2 fair value measurement. At July 1, 2017, the fair value of all foreign exchange contracts was $0.1 million and included in "other current assets" on the Consolidated Balance Sheet. At October 1, 2016, the fair value of the foreign exchange contracts was $(0.2) million and included in "other current liabilities" on the Consolidated Balance Sheet. The table below presents the effect of the Company's cash flow hedges for the periods presented:
All amounts in accumulated other comprehensive income (loss) are expected to be reclassified into earnings during the next 12 months. |
Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | 9. Earnings Per Share The following table presents the earnings per share computation for the periods presented:
(1) Basic earnings per share is calculated by dividing income available to common stockholders from continuing operations, discontinued operations, and net income by the weighted average common shares outstanding during the period. (2) Diluted earnings per share is calculated by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding during the period, determined by using the treasury-stock method, and adjusting for the dilutive effect of our convertible preferred stock, determined by using the if-converted method. For the nine months ended July 1, 2017, 4,314,064 shares of convertible preferred stock were excluded from the dilutive calculation as the if-converted impact would be anti-dilutive. We incurred a net loss for the three and nine months ended July 2, 2016. As a result, basic and diluted shares outstanding are equal to each other for those periods due to the exclusion of potentially dilutive shares from the calculation of earnings per share as the effect would be anti-dilutive. For the three and nine months ended July 2, 2016, potentially dilutive shares excluded from the calculation were 4,417,141 and 4,356,032, respectively. |
Share Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Based Compensation | 10. Share-Based Compensation Restricted Stock Awards The following table summarizes the Company's restricted stock ("RSAs") and restricted stock units ("RSUs") award activity for the period presented:
Compensation expense for restricted stock awards, recognized in selling, general and administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), was $0.4 million and $0.6 million with associated tax benefits of $0.1 million and $0.2 million for the three and nine months ended July 1, 2017, respectively. At July 1, 2017, unrecognized compensation cost related to restricted stock awards totaled $0.7 million and is expected to be recognized over a weighted-average period of seven months. Stock Option Awards The following table summarizes the Company's stock option activity for the period presented:
(1) Stock options exercised in the period had an aggregate intrinsic value totaling $2.2 million. (2) Stock options outstanding at the end of the period had an aggregate intrinsic value totaling $3.7 million. (3) Fully vested and exercisable options at the end of the period had an aggregate intrinsic value totaling $3.5 million with a weighted average contractual remaining term of 7.8 years. Compensation expense for stock option awards, recognized in selling, general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss), was $0.1 million and $0.3 million with associated tax benefits of $0.0 million and $0.1 million for the three and nine months ended July 1, 2017, respectively. At July 1, 2017, unrecognized compensation cost related to stock option awards totaled $0.4 million and is expected to be recognized over a weighted-average period of six months. The fair value of each option award at grant date was estimated using the Black-Scholes option-pricing model with the following assumptions and resulting grant-date fair value during the period presented:
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Nature of Business and Basis of Presentation (Policies) |
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Jul. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company transactions and accounts have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and Article 8 of Regulation S-X. The Company’s fiscal year ends on the Saturday closest to September 30 with its quarters consisting of thirteen weeks in most years. In fiscal year 2017, there are a total of 52 weeks. For fiscal years 2017 and 2016, the third quarters both included 13 weeks and the nine months ended both included 39 weeks. In the opinion of management, all adjustments considered necessary for a fair presentation of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for any interim period are not necessarily indicative of the results that may be expected for the entire year. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The Condensed Consolidated Balance Sheet data as of October 1, 2016 was derived from the Company’s audited financial statements but do not include all disclosures required by generally accepted accounting principles. For additional information, including the Company’s significant accounting policies, refer to the consolidated financial statements and related footnotes for the fiscal year ended October 1, 2016 as set forth in the Company's 2016 Form 10-K filed on December 15, 2016. The Business Combination was accounted for as a reverse acquisition, since immediately following completion of the transaction, the sole stockholder of SBH immediately prior to the Business Combination maintained effective control of Blue Bird Corporation, the post-combination company. For accounting purposes, SBH is deemed the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of SBH (i.e., a capital transaction involving the issuance of stock and payment of cash by HCAC for the stock of SBH). Accordingly, the consolidated assets, liabilities and results of operations of SBH are the historical financial statements of Blue Bird Corporation, and HCAC assets, liabilities and results of operations are consolidated with SBH beginning on the acquisition date. No step-up in basis of intangible assets or goodwill was recorded in this transaction. We have effected this treatment through opening stockholders' deficit by adjusting the number of our common shares outstanding. Other than transaction costs paid and a contribution from our majority stockholder for payment of management incentive compensation related to the transaction, the transaction was primarily non-cash and involved exchanges of consideration and equity between our majority stockholder and HCAC and its related entities. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions. At the date of the financial statements, these estimates and assumptions affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, and during the reporting period, these estimates and assumptions affect the reported amounts of revenues and expenses. For example, significant management judgments are required in determining excess, obsolete, or unsalable inventory, allowance for doubtful accounts, potential impairment of long-lived assets, goodwill and intangibles, the accounting for self-insurance reserves, warranty reserves, pension obligations, income taxes, environmental liabilities and contingencies. Future events and their effects cannot be predicted with certainty, and, accordingly, the Company’s accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the Company’s condensed consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. The Company evaluates and updates its assumptions and estimates on an ongoing basis and may employ outside experts to assist in the Company’s evaluations. Actual results could differ from the estimates that the Company has used. |
Recently Issued Accounting Standards | Recently Adopted Accounting Standards ASU 2015-17 — In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities to be classified as non-current on the balance sheet. The standard is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. The Company elected to early adopt this standard on a retrospective basis in the first quarter of fiscal 2017, and reclassified $7.6 million of current deferred tax assets to long-term deferred tax assets, resulting in a total of $19.1 million of long-term deferred tax assets at October 1, 2016, compared to the prior presentation of $11.5 million. All future deferred tax assets and liabilities will be recorded as long-term. |
Supplemental Financial Information (Tables) |
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Condensed Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Manufacturing cost includes raw materials, direct labor and manufacturing overhead. The following table presents the components of inventory at the dates indicated:
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Product Warranties | The following table reflects activity in accrued warranty cost (current and long-term portion combined) for the periods presented:
The Company also sells extended warranties related to its products. Revenue related to these contracts is recognized on a straight-line basis over the contract period and costs thereunder are expensed as incurred. All warranty expenses are recorded in the cost of goods sold line in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The methodology to determine the short-term extended warranty income reserve is based on twelve months of the remaining warranty value for each effective extended warranty at the balance sheet date. The following table reflects activity in deferred warranty income (current and long-term portions combined), for the sale of extended warranties of two to five years, for the periods presented:
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Self-Insurance | The following table reflects our total accrued self-insurance liability, comprised of workers compensation and health insurance related claims, at the dates indicated:
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Pension Expense | Components of net periodic pension benefit cost were as follows for the periods presented:
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Debt (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | The interest rate on the Term Loan Facility is (i) from the Closing Date until April 1, 2017, an election of either base rate plus 1 point or LIBOR plus 2 points and (ii) commencing with the fiscal quarter ending on April 1, 2017 and thereafter, dependent on the Total Net Leverage Ratio (as defined below) of the Company, an election of either base rate or LIBOR pursuant to the table below:
Debt consisted of the following at the dates indicated:
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Schedule of Maturities of Long-term Debt | The schedules of remaining principal maturities for the term loan for the next five fiscal years are as follows:
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The tables below present segment net sales and gross profit for the periods presented: Net sales
Gross profit
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Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table is a reconciliation of segment gross profit to consolidated income (loss) before income taxes for the periods presented:
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Revenue from External Customers by Geographic Areas | Sales are attributable to geographic areas based on customer location and were as follows for the periods presented:
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Earnings Per Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the earnings per share computation for the periods presented:
(1) Basic earnings per share is calculated by dividing income available to common stockholders from continuing operations, discontinued operations, and net income by the weighted average common shares outstanding during the period. (2) Diluted earnings per share is calculated by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding during the period, determined by using the treasury-stock method, and adjusting for the dilutive effect of our convertible preferred stock, determined by using the if-converted method. For the nine months ended July 1, 2017, 4,314,064 shares of convertible preferred stock were excluded from the dilutive calculation as the if-converted impact would be anti-dilutive. We incurred a net loss for the three and nine months ended July 2, 2016. As a result, basic and diluted shares outstanding are equal to each other for those periods due to the exclusion of potentially dilutive shares from the calculation of earnings per share as the effect would be anti-dilutive. For the three and nine months ended July 2, 2016, potentially dilutive shares excluded from the calculation were 4,417,141 and 4,356,032, respectively. |
Share Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 01, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes the Company's restricted stock ("RSAs") and restricted stock units ("RSUs") award activity for the period presented:
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Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes the Company's stock option activity for the period presented:
(1) Stock options exercised in the period had an aggregate intrinsic value totaling $2.2 million. (2) Stock options outstanding at the end of the period had an aggregate intrinsic value totaling $3.7 million. (3) Fully vested and exercisable options at the end of the period had an aggregate intrinsic value totaling $3.5 million with a weighted average contractual remaining term of 7.8 years. |
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of each option award at grant date was estimated using the Black-Scholes option-pricing model with the following assumptions and resulting grant-date fair value during the period presented:
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Nature of Business and Basis of Presentation - Narrative (Details) - USD ($) |
Jun. 08, 2016 |
Jun. 08, 2016 |
Jun. 03, 2016 |
Feb. 24, 2015 |
Jul. 01, 2017 |
Oct. 01, 2016 |
May 26, 2016 |
---|---|---|---|---|---|---|---|
Business Combination, Separately Recognized Transactions [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||
School Bus Holdings, Inc. | |||||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||||
Cash paid | $ 100,000,000 | ||||||
Shares issued for acquisition (in shares) | 12,000,000 | ||||||
Shares issued for acquisition, value | $ 120,000,000 | ||||||
The Traxis Group B.V. | ASP BB Holdings LLC | Blue Bird Corporation | |||||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||||
Cash paid | $ 125,700,000 | ||||||
Number of shares acquired | 5,000,000 | 12,000,000 | 7,000,000 | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | ||||||
Price per share acquired (in dollars per share) | $ 11.00 | $ 11.00 | $ 10.10 |
Summary of Significant Accounting Policies and Recently Issued Accounting Standards - Narrative (Details) - USD ($) $ in Thousands |
Jul. 01, 2017 |
Oct. 01, 2016 |
---|---|---|
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Reclassification (from) current deferred tax asset to long-term deferred tax asset | $ 18,289 | $ 19,080 |
New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Reclassification (from) current deferred tax asset to long-term deferred tax asset | (7,600) | |
Scenario, Previously Reported | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Reclassification (from) current deferred tax asset to long-term deferred tax asset | $ 11,500 |
Supplemental Financial Information - Inventory (Details) - USD ($) $ in Thousands |
Jul. 01, 2017 |
Oct. 01, 2016 |
---|---|---|
Condensed Financial Information [Abstract] | ||
Raw materials | $ 71,718 | $ 40,940 |
Work in process | 39,008 | 10,011 |
Finished goods | 15,876 | 2,855 |
Total inventory | $ 126,602 | $ 53,806 |
Supplemental Financial Information - Product Warranty Rollforward (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance at beginning of period | $ 18,612 | $ 16,768 | $ 19,444 | $ 17,661 |
Add current period accruals | 3,775 | 3,691 | 7,555 | 7,195 |
Current period reductions of accrual | (2,105) | (1,956) | (6,717) | (6,353) |
Balance at end of period | $ 20,282 | $ 18,503 | $ 20,282 | $ 18,503 |
Supplemental Financial Information - Extended Warranty Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Movement in Extended Product Warranty Accrual [Roll Forward] | ||||
Balance at beginning of period | $ 16,654 | $ 14,060 | $ 16,187 | $ 14,145 |
Add current period deferred income | 3,396 | 2,952 | 6,769 | 5,446 |
Current period recognition of income | (1,520) | (1,261) | (4,426) | (3,840) |
Balance at end of period | $ 18,530 | $ 15,751 | $ 18,530 | $ 15,751 |
Supplemental Financial Information - Self Insurance (Details) - USD ($) $ in Thousands |
Jul. 01, 2017 |
Oct. 01, 2016 |
---|---|---|
Condensed Financial Information [Abstract] | ||
Current portion | $ 3,167 | $ 3,679 |
Long-term portion | 2,396 | 2,786 |
Total accrued self-insurance | $ 5,563 | $ 6,465 |
Supplemental Financial Information - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Product Warranty Liability [Line Items] | ||||
Shipping and handling revenues | $ 6.6 | $ 6.2 | $ 12.8 | $ 11.5 |
Shipping and handling cost of goods sold | $ 6.0 | $ 5.7 | $ 11.3 | $ 10.1 |
Warrants outstanding (in shares) | 7,180,466 | 7,180,466 | ||
Common stock shares that may be called by warrants (in shares) | 3,590,233 | 3,590,233 | ||
Minimum | ||||
Product Warranty Liability [Line Items] | ||||
Standard product warranty, period | 1 year | |||
Extended product warranty, period | 2 years | |||
Maximum | ||||
Product Warranty Liability [Line Items] | ||||
Standard product warranty, period | 5 years | |||
Extended product warranty, period | 5 years |
Supplemental Financial Information - Pension Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Condensed Financial Information [Abstract] | ||||
Interest cost | $ 1,266 | $ 1,411 | $ 3,797 | $ 4,232 |
Expected return on plan assets | (1,590) | (1,528) | (4,769) | (4,584) |
Amortization of prior loss | 1,573 | 1,196 | 4,718 | 3,590 |
Net periodic benefit cost | 1,249 | 1,079 | 3,746 | 3,238 |
Amortization of prior loss, recognized in other comprehensive income | 1,573 | 1,196 | 4,718 | 3,590 |
Total recognized in net periodic pension benefit cost and other comprehensive income | $ (324) | $ (117) | $ (972) | $ (352) |
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands |
Jul. 01, 2017 |
Oct. 01, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Current portion of long-term debt | $ 8,000 | $ 11,750 |
Long-term debt | 145,028 | 140,366 |
Senior Term Loan | 2021 Term Loan | ||
Debt Instrument [Line Items] | ||
Total debt | 153,028 | 0 |
Deferred financing costs | 2,972 | |
Senior Term Loan | 2020 Senior Term Loan | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | $ 152,116 |
Deferred financing costs | $ 9,384 |
Debt - Maturity Schedule (Details) $ in Thousands |
Jul. 01, 2017
USD ($)
|
---|---|
Long-term Debt, Fiscal Year Maturity | |
2017 | $ 2,000 |
2018 | 8,000 |
2019 | 8,000 |
2020 | 11,000 |
2021 | 15,000 |
Thereafter | 112,000 |
Total debt | $ 156,000 |
Income Taxes (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Effective tax rate (as a percent) | 30.40% | (32.50%) | 31.90% | (63.50%) |
Statutory Federal income tax rate (as a percent) | 35.00% | 35.00% | 35.00% | 35.00% |
Foreign Exchange Contracts - Narrative (Details) - Foreign Exchange Swap $ in Millions |
Jul. 01, 2017
USD ($)
contract
|
Oct. 01, 2016
USD ($)
|
---|---|---|
Derivative [Line Items] | ||
Derivative, Number of contracts | contract | 7 | |
Derivative, notional amount | $ 15.6 | |
Cash Flow Hedge | Other current assets | ||
Derivative [Line Items] | ||
Fair value of foreign exchange contract, net | $ 0.1 | |
Cash Flow Hedge | Other current liabilities | ||
Derivative [Line Items] | ||
Fair value of foreign exchange contract, net | $ (0.2) |
Foreign Exchange Contracts - Other Comprehensive Income (Details) - Foreign Exchange Contract - Cash Flow Hedge - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (loss) gain recognized in income on derivatives (effective portion) | $ (39) | $ (93) | $ 344 | $ (425) |
Amount of loss (gain) reclassified from AOCI into income (effective portion) | 0 | 0 | (227) | 0 |
Total amount recognized in other comprehensive (loss) income | $ (39) | $ (93) | $ 117 | $ (425) |
Earnings Per Share - Narrative (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2017 |
Jul. 02, 2016 |
Jul. 01, 2017 |
Jul. 02, 2016 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 4,417,141 | 4,356,032 | ||
Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 4,314,064 | 4,314,064 | 4,314,064 |
Share Based Compensation - Restricted Stock and Unit Activity (Details) - Restricted Stock and Restricted Stock Units (RSUs) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Jul. 01, 2017
USD ($)
$ / shares
shares
|
Jul. 01, 2017
USD ($)
$ / shares
shares
|
|
Number of Shares | ||
Balance, beginning of period (in shares) | shares | 0 | |
Granted (in shares) | shares | 77,451 | |
Balance, end of period (in shares) | shares | 77,451 | 77,451 |
Weighted-Average Grant Date Fair Value | ||
Balance, beginning of period (in dollars per share) | $ / shares | $ 0.00 | |
Granted (in dollars per share) | $ / shares | 15.82 | |
Balance, end of period (in dollars per share) | $ / shares | $ 15.82 | $ 15.82 |
Share-based compensation | $ | $ 0.4 | $ 0.6 |
Excess tax benefit | $ | 0.1 | 0.2 |
Unrecognized compensation cost | $ | $ 0.7 | $ 0.7 |
Period for recognition of unrecognized compensation costs | 7 months |
Share Based Compensation - Fair Value Assumptions (Details) - Options |
9 Months Ended |
---|---|
Jul. 01, 2017
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected Volatility | 33.70% |
Dividend Yield | 0.00% |
Risk-Free Interest Rate | 1.90% |
Expected Term | 5 years 6 months |
Weighted-average grant date fair value of an option award granted in period (in dollars per share) | $ 5.35 |
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