Delaware | 46-3891989 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
3920 Arkwright Road 2nd Floor Macon, Georgia | 31210 |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer | o | Accelerated filer | x | |||
Non-accelerated filer | o | Smaller reporting company | o | |||
Emerging growth company | x |
• | the future financial performance of the Company; |
• | changes in the market for Blue Bird products; and |
• | expansion plans and opportunities. |
1. | Alternative Fuel Initiatives — Blue Bird is the clear leader in alternative fuel school buses (defined as buses that do not operate on diesel fuel) and we continue to introduce new products to support growing consumer demand for these products. |
• | Propane — In 2012, we entered into our exclusive relationship with Ford Motor Company and Roush Clean Tech to offer propane-powered Type C school buses. We have continued to lead the industry with this offering. |
• | We launched the industry’s first .05g/bhp-hr NOx propane engine in 2017. This engine operates four times cleaner than the current emission standard and is significantly better for the environment than competitors published offerings. |
• | We launched the industry’s first .02g/bhp-hr NOx propane engine in August 2018. This engine complies with Ultra Low NOx classification and has an emissions level at 10% of the current standard and competitive offerings. |
• | CNG — Blue Bird was the first OEM to introduce a CNG powertrain for the Rear Engine Type D bus using Cummins Westport technology. In 2016, we launched a new CNG product using a Ford engine and transmission and a Roush Clean Tech fuel delivery system to provide CNG in a Type C bus. |
• | Electric — Blue Bird is the first major manufacturer to market, and presently the only manufacturer among major OEMs, to offer electric school buses, which we developed with our exclusive partners, EDI and Adomani. We are offering electric solutions in both our Type C and Type D buses and commenced delivery to customers in 2018. |
• | Gasoline — In 2016, we re-introduced gasoline engines in school buses, again using a Ford engine and transmission and a Roush Clean Tech fuel delivery. This product has been an immediate success and continues to grow the Blue Bird customer base. |
2. | Diesel — Blue Bird works closely with Cummins on diesel engines which continue to be the power source for the majority of school buses sold. We have provided diesel customers with more choice by offering an Eaton transmission as an option. |
3. | Product Initiatives — We continue to update and improve our products. |
• | Blue Bird introduced the first Electronic Stability Control system on school buses as an optional offering. |
• | In 2017, we announced that we were commencing work on a major product enhancement. We are continuing to develop this product for future launch. |
4. | Manufacturing and Process Initiatives — We have commenced a number of initiatives to continue to build customer loyalty, reduce cost, and enhance competitiveness. |
• | We will launch our all-new, state of the art paint facility in 2019. This facility will drive greater reliability and capacity at a lower cost. |
• | We contracted with industry leaders to revise our production techniques in our plant. |
• | We commenced an initiative with industry leaders to make structural reductions in cost on existing and future products to enhance our cost competitiveness. |
5. | Access to Capital — We refinanced our term debt on substantially better terms in December 2016, resulting in a decrease of $9.8 million in interest expense from the fiscal year ended 2016 compared to the fiscal year ended 2018. In September 2018, we entered into a first amendment of the December, 2016 credit agreement, which increased the revolving credit facility to $100.0 million, a $25.0 million increase, providing more liquidity at lower interest rates. |
Component | OEM Supplier | |
Diesel engines | Cummins Inc. | |
Diesel emissions kits | Cummins Inc. | |
Propane, gasoline, and CNG (Type C) engines and transmissions | Ford Motor Company | |
Diesel transmissions | Allison Transmission | |
Propane, gasoline, and CNG (Type C) fueling kits | Roush CleanTech |
(dollars in millions) | Units | Value | ||||
2018 | 1,415 | $ | 125.2 | |||
2017 | 1,446 | $ | 128.7 |
• | actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; |
• | changes in the market’s expectations about our operating results; |
• | success of competitors; |
• | our operating results failing to meet the expectation of securities analysts or investors in a particular period; |
• | changes in financial estimates and recommendations by securities analysts concerning us or the school bus market in general; |
• | operating and stock price performance of other companies that investors deem comparable to us; |
• | our ability to market new and enhanced products on a timely basis; |
• | changes in laws and regulations affecting our business; |
• | commencement of, or involvement in, litigation involving us; |
• | our ability to access the capital markets as needed; |
• | changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of shares of our Common Stock available for public sale; |
• | any major change in our board or management; |
• | sales of substantial amounts of Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and |
• | general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism. |
• | no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; |
• | the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director with or without cause by stockholders, which prevents stockholders from being able to fill vacancies on our board of directors; |
• | subject to any rights of holders of existing preferred shares, the ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; |
• | a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; |
• | the requirement that a special meeting of stockholders may be called only by the chairman of the board of directors, the chief executive officer, or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; |
• | limiting the liability of, and providing indemnification to, our directors and officers; |
• | controlling the procedures for the conduct and scheduling of stockholder meetings; |
• | providing for a staggered board, in which the members of the board of directors are divided into three classes to serve for a period of three years from the date of their respective appointment or election; |
• | permitting the removal of directors with or without cause by stockholders voting a majority of the votes cast if, at any time and for so long as, American Securities beneficially owns, in the aggregate, capital stock representing at least 40% of the outstanding shares of our Common Stock; |
• | advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our Company; |
• | requiring an affirmative vote of at least two-thirds (2/3) of our entire board of directors and by the holders of at least 66.67% of the voting power of our outstanding voting stock in order to adopt an amendment to our certificate of incorporation if, at any time and for so long as, American Securities beneficially owns, in the aggregate, capital stock representing at least 50% of the outstanding shares of our Common Stock; and |
• | requiring an affirmative vote of at least two-thirds (2/3) of our entire board of directors or by the holders of at least 66.67% of the voting power of our outstanding voting stock to amend our bylaws if, at any time and for so long as, American Securities beneficially owns, in the aggregate, capital stock representing at least 50% of the outstanding shares of our Common Stock. |
Common Stock | Warrants | ||||||||||||||
High | Low | High | Low | ||||||||||||
2018 | |||||||||||||||
Fourth Quarter | $ | 25.65 | $ | 21.15 | $ | 7.09 | $ | 4.63 | |||||||
Third Quarter | 24.60 | 18.75 | 6.66 | 3.67 | |||||||||||
Second Quarter | 24.00 | 18.35 | 6.22 | 3.45 | |||||||||||
First Quarter | 21.65 | 17.95 | 5.09 | 3.34 | |||||||||||
2017 | |||||||||||||||
Fourth Quarter | $ | 20.60 | $ | 16.95 | $ | 4.50 | $ | 2.75 | |||||||
Third Quarter | 19.35 | 16.70 | 3.95 | 2.65 | |||||||||||
Second Quarter | 17.15 | 15.50 | 3.00 | 2.15 | |||||||||||
First Quarter | 17.35 | 14.10 | 3.00 | 1.57 |
Cumulative Total Return | |||||||||||||||||
March 20, 2014 | September 27, 2014 | October 3, 2015 | October 1, 2016 | September 30, 2017 | September 29, 2018 | ||||||||||||
Blue Bird Corporation | 100 | 102 | 107 | 152 | 214 | 255 | |||||||||||
Russell 3000 | 100 | 105 | 106 | 120 | 142 | 167 | |||||||||||
Peer Group | 100 | 90 | 80 | 97 | 128 | 118 |
Allison Transmission Holdings Inc. | Federal Signal Corp. | Nfi Group Inc. | Spartan Motors Inc. | |||
Astec Industries Inc. | Harley-Davidson Inc. | Oshkosh Corp. | Thor Industries Inc. | |||
Briggs & Stratton Corp. | Manitex International Inc. | Paccar Inc. | Wabash National Corp | |||
Commercial Vehicle Group Inc. | Meritor Inc. | Power Solutions International Inc. | Wabco Holdings Inc. | |||
Cummins Inc. | Navistar International Corp | Rev Group Inc. | Winnebago Industries Inc. |
Plan Category (1) | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights | (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) | |||||||
Equity compensation plans approved by security holders | 286,369 | $ | 10.98 | 826,857 |
Period by fiscal month | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) | ||||||||||
Repurchases from July 1, 2018 - July 28, 2018 | 250,182 | $ | 22.88 | 250,182 | $ | 16,023 | ||||||||
Repurchases from July 29, 2018 - August 25, 2018 | 75,324 | 22.12 | 75,324 | 14,356 | ||||||||||
Repurchases from August 26, 2018 - September 29, 2018 | — | — | — | — | ||||||||||
Total | 325,506 | 325,506 |
in thousands, except per share data | Fiscal Year | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
RESULTS OF OPERATIONS DATA | ||||||||||||||||||||
Net sales | $ | 1,024,976 | $ | 990,602 | $ | 932,010 | $ | 919,128 | $ | 855,735 | ||||||||||
Cost of goods sold | 902,988 | 863,234 | 802,654 | 798,733 | 746,362 | |||||||||||||||
Gross profit | 121,988 | 127,368 | 129,356 | 120,395 | 109,373 | |||||||||||||||
Operating expenses | ||||||||||||||||||||
Selling, general and administrative expenses | 88,755 | 72,831 | 102,711 | 84,561 | 91,445 | |||||||||||||||
Operating profit | 33,233 | 54,537 | 26,645 | 35,834 | 17,928 | |||||||||||||||
Interest expense | (6,661 | ) | (7,251 | ) | (16,412 | ) | (19,078 | ) | (6,156 | ) | ||||||||||
Interest income | 70 | 140 | 133 | 113 | 102 | |||||||||||||||
Other income (expense), net | 231 | 66 | (539 | ) | (201 | ) | 138 | |||||||||||||
Loss on debt extinguishment | — | (10,142 | ) | — | — | — | ||||||||||||||
Income before income taxes | 26,873 | 37,350 | 9,827 | 16,668 | 12,012 | |||||||||||||||
Income tax benefit (expense) | 2,620 | (11,856 | ) | (5,804 | ) | (4,370 | ) | (10,465 | ) | |||||||||||
Equity in net income of non-consolidated affiliate | 1,327 | 3,307 | 2,877 | 2,634 | 1,210 | |||||||||||||||
Net income | 30,820 | 28,801 | 6,900 | 14,932 | 2,757 | |||||||||||||||
Less: preferred stock dividends | 1,896 | 4,261 | 3,878 | 2,438 | — | |||||||||||||||
Less: preferred stock repurchase | — | 6,091 | — | — | — | |||||||||||||||
Net income available to common stockholders | $ | 28,924 | $ | 18,449 | $ | 3,022 | $ | 12,494 | $ | 2,757 | ||||||||||
EARNINGS PER SHARE DATA | ||||||||||||||||||||
Basic earnings per share | $ | 1.15 | $ | 0.79 | $ | 0.14 | $ | 0.59 | $ | 0.13 | ||||||||||
Diluted earnings per share | 1.08 | 0.74 | 0.14 | 0.59 | 0.13 | |||||||||||||||
BALANCE SHEET DATA | ||||||||||||||||||||
Total assets | $ | 307,430 | $ | 295,816 | $ | 277,866 | $ | 266,725 | $ | 290,455 | ||||||||||
Long-term debt | 132,239 | 143,224 | 140,366 | 175,418 | 209,640 | |||||||||||||||
Total liabilities | 335,766 | 354,326 | 364,840 | 387,955 | 439,250 | |||||||||||||||
Total stockholders' deficit | (28,336 | ) | (58,510 | ) | (86,974 | ) | (121,230 | ) | (148,795 | ) |
• | Property tax revenues. Property tax revenues are one of the major sources of funding for school districts, and therefore 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 has 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. The seasonality and annual variations of 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 due to changes in sales volume, 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, productivity of plant labor, delays in receiving materials and other logistical challenges, 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. |
• | 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. |
• | 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. |
(in thousands of dollars) | 2018 | 2017 | |||||
Net sales | $ | 1,024,976 | $ | 990,602 | |||
Cost of goods sold | 902,988 | 863,234 | |||||
Gross profit | $ | 121,988 | $ | 127,368 | |||
Operating expenses | |||||||
Selling, general and administrative expenses | 88,755 | 72,831 | |||||
Operating profit | $ | 33,233 | $ | 54,537 | |||
Interest expense | (6,661 | ) | (7,251 | ) | |||
Interest income | 70 | 140 | |||||
Other income, net | 231 | 66 | |||||
Loss on debt extinguishment | — | (10,142 | ) | ||||
Income before income taxes | $ | 26,873 | $ | 37,350 | |||
Income tax benefit (expense) | 2,620 | (11,856 | ) | ||||
Equity in net income of non-consolidated affiliate | 1,327 | 3,307 | |||||
Net income | $ | 30,820 | $ | 28,801 | |||
Other financial data: | |||||||
Adjusted EBITDA | $ | 70,379 | $ | 68,904 | |||
Adjusted EBITDA margin | 6.9 | % | 7.0 | % |
(in thousands of dollars) | 2018 | 2017 | |||||
Net Sales by Segment | |||||||
Bus | $ | 962,769 | $ | 930,738 | |||
Parts | 62,207 | 59,864 | |||||
Total | $ | 1,024,976 | $ | 990,602 | |||
Gross Profit by Segment | |||||||
Bus | $ | 100,002 | $ | 106,462 | |||
Parts | 21,986 | 20,906 | |||||
Total | $ | 121,988 | $ | 127,368 |
• | Release of a $7.6 million reserve for uncertain tax positions; |
• | A total of $1.7 million of tax benefits from accelerated deductions reported on our prior year return; and |
• | Tax expense adjustments of $2.1 million related to the Tax Cuts and Jobs Act, which was enacted during our first fiscal quarter of 2018 (enacted on December 22, 2017). |
(in thousands of dollars) | 2018 | 2017 | |||||
Net income | $ | 30,820 | $ | 28,801 | |||
Adjustments: | |||||||
Discontinued operations income | (81 | ) | (65 | ) | |||
Interest expense, net | 6,591 | 7,111 | |||||
Income tax (benefit) expense | (2,620 | ) | 11,856 | ||||
Depreciation, amortization, and disposals | 9,214 | 8,205 | |||||
Loss on debt extinguishment | — | 10,142 | |||||
Operational transformation initiatives | 17,708 | — | |||||
Unrealized gains on foreign currency hedges | (109 | ) | — | ||||
Share-based compensation | 2,628 | 1,270 | |||||
Product redesign initiatives | 6,253 | 1,758 | |||||
Other | (25 | ) | (174 | ) | |||
Adjusted EBITDA | $ | 70,379 | $ | 68,904 | |||
Adjusted EBITDA margin (percentage of net sales) | 6.9 | % | 7.0 | % |
(in thousands of dollars) | 2017 | 2016 | |||||
Net sales | $ | 990,602 | $ | 932,010 | |||
Cost of goods sold | 863,234 | 802,654 | |||||
Gross profit | $ | 127,368 | $ | 129,356 | |||
Operating expenses | |||||||
Selling, general and administrative expenses | 72,831 | 102,711 | |||||
Operating profit | $ | 54,537 | $ | 26,645 | |||
Interest expense | (7,251 | ) | (16,412 | ) | |||
Interest income | 140 | 133 | |||||
Other income (expense), net | 66 | (539 | ) | ||||
Loss on debt extinguishment | (10,142 | ) | — | ||||
Income before income taxes | $ | 37,350 | $ | 9,827 | |||
Income tax expense | (11,856 | ) | (5,804 | ) | |||
Equity in net income of non-consolidated affiliate | 3,307 | 2,877 | |||||
Net income | $ | 28,801 | $ | 6,900 | |||
Other financial data: | |||||||
Adjusted EBITDA | $ | 68,904 | $ | 72,210 | |||
Adjusted EBITDA margin | 7.0 | % | 7.7 | % |
(in thousands of dollars) | 2017 | 2016 | |||||
Net Sales by Segment | |||||||
Bus | $ | 930,738 | $ | 876,087 | |||
Parts | 59,864 | 55,923 | |||||
Total | $ | 990,602 | $ | 932,010 | |||
Gross Profit by Segment | |||||||
Bus | $ | 106,462 | $ | 108,232 | |||
Parts | 20,906 | 21,124 | |||||
Total | $ | 127,368 | $ | 129,356 |
(in thousands of dollars) | 2017 | 2016 | |||||
Net income | $ | 28,801 | $ | 6,900 | |||
Adjustments: | |||||||
Discontinued operations (income) loss | (65 | ) | 512 | ||||
Interest expense, net | 7,111 | 16,279 | |||||
Income tax (benefit) expense | 11,856 | 5,804 | |||||
Depreciation, amortization, and disposals | 8,205 | 8,176 | |||||
Loss on debt extinguishment | 10,142 | — | |||||
Special compensation payment | — | 17,128 | |||||
Operational transformation initiatives | — | — | |||||
Business combination expenses | — | 3,798 | |||||
One-time post-retirement benefit adjustment | — | 896 | |||||
Share-based compensation | 1,270 | 12,717 | |||||
Product redesign initiatives | 1,758 | — | |||||
Other | (174 | ) | — | ||||
Adjusted EBITDA | $ | 68,904 | $ | 72,210 | |||
Adjusted EBITDA margin (percentage of net sales) | 7.0 | % | 7.7 | % |
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 and less than 3.25x | 1.50% | 2.50% | |||
V | Greater than or equal to 3.25x and less than 3.50x | 1.75% | 2.75% | |||
VI | Greater than 3.50x | 2.00% | 3.00% |
• | $2,475,000 per quarter beginning on the last day of the Company’s first fiscal quarter of 2019 through the last day of the Company’s third fiscal quarter in 2021; |
• | $3,712,500 per quarter beginning on the last day of the Company’s fourth fiscal quarter in 2021 through the last day of the Company’s third fiscal quarter in 2022; |
• | $4,950,000 per quarter beginning on the last day of the Company’s fourth fiscal quarter in 2022 through the last day of the Company’s second fiscal quarter in 2023, with the remaining principal amount due at maturity. |
Period | Maximum Total Net Leverage Ratio | |
September 13, 2018 through the second quarter of the 2019 fiscal year | 4.00:1.00 | |
Second quarter of the 2019 fiscal year through the fourth quarter of the 2021 fiscal year | 3.75:1.00 | |
Fourth quarter of the 2021 fiscal year and thereafter | 3.50:1.00 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Cash and cash equivalents, beginning of year | $ | 62,616 | $ | 52,309 | $ | 52,861 | |||||
Total cash provided by operating activities | 48,353 | 47,641 | 25,105 | ||||||||
Total cash used in investing activities | (32,104 | ) | (9,204 | ) | (9,583 | ) | |||||
Total cash used in financing activities | (18,605 | ) | (28,130 | ) | (16,074 | ) | |||||
Change in cash and cash equivalents | (2,356 | ) | 10,307 | (552 | ) | ||||||
Cash and cash equivalents, end of year | $ | 60,260 | $ | 62,616 | $ | 52,309 | |||||
Depreciation and amortization expense | 9,042 | 8,180 | 8,046 | ||||||||
Cash paid for fixed assets and acquired intangible assets | $ | 32,118 | $ | 9,252 | $ | 9,583 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Total cash provided by operating activities | $ | 48,353 | $ | 47,641 | $ | 25,105 | |||||
Cash paid for fixed assets and acquired intangible assets | (32,118 | ) | (9,252 | ) | (9,583 | ) | |||||
Free cash flow | $ | 16,235 | $ | 38,389 | $ | 15,522 |
Payments Due by Period | |||||||||||||||||||
(in thousands of dollars) | Total | Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | ||||||||||||||
Debt obligations (1) | $ | 146,150 | $ | 9,900 | $ | 19,800 | $ | 116,450 | $ | — | |||||||||
Interest expense on long-term debt obligations (2) | 27,812 | 6,545 | 11,845 | 9,422 | — | ||||||||||||||
Accrued warranty costs (3) | 22,646 | 9,142 | 9,048 | 4,456 | — | ||||||||||||||
Operating lease obligations (4) | 11,632 | 1,305 | 2,837 | 2,866 | 4,624 | ||||||||||||||
Future pension plan contributions (5) | 17,735 | — | 6,797 | 4,943 | 5,995 | ||||||||||||||
Capital lease obligations (6) | 235 | 175 | 36 | 24 | — | ||||||||||||||
Purchase commitments (7) | 88,806 | 84,850 | 3,956 | — | — | ||||||||||||||
Total commitments and contractual obligations | $ | 315,016 | $ | 111,917 | $ | 54,319 | $ | 138,161 | $ | 10,619 |
(in thousands except per share data) | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
2018 | ||||||||||||||||
Net sales | $ | 162,549 | $ | 216,628 | $ | 314,186 | $ | 331,613 | ||||||||
Gross profit | 20,648 | 21,668 | 36,973 | 42,699 | ||||||||||||
Operating (loss) profit | (5,270 | ) | 2,927 | 16,023 | 19,553 | |||||||||||
Net (loss) income | (7,839 | ) | 1,836 | 21,891 | 14,932 | |||||||||||
Earnings per share: | ||||||||||||||||
Net (loss) income (from above) | $ | (7,839 | ) | $ | 1,836 | $ | 21,891 | $ | 14,932 | |||||||
Less: preferred stock dividends | 770 | 763 | 182 | 181 | ||||||||||||
Net (loss) income available to common stockholders | $ | (8,609 | ) | $ | 1,073 | $ | 21,709 | $ | 14,751 | |||||||
Basic (loss) earnings per share | (0.36 | ) | 0.04 | 0.83 | 0.55 | |||||||||||
Diluted (loss) earnings per share | (0.36 | ) | 0.04 | 0.77 | 0.52 | |||||||||||
2017 | ||||||||||||||||
Net sales | $ | 136,660 | $ | 208,651 | $ | 332,604 | $ | 312,687 | ||||||||
Gross profit | 18,198 | 24,649 | 45,010 | 39,511 | ||||||||||||
Operating profit | 6 | 5,390 | 28,679 | 20,462 | ||||||||||||
Net (loss) income | $ | (8,523 | ) | $ | 2,748 | $ | 20,032 | $ | 14,544 | |||||||
Earnings per share: | ||||||||||||||||
Net (loss) income (from above) | $ | (8,523 | ) | $ | 2,748 | $ | 20,032 | $ | 14,544 | |||||||
Less: preferred stock dividends | 953 | 1,017 | 974 | 1,317 | ||||||||||||
Less: preferred stock repurchase | — | — | — | 6,091 | ||||||||||||
Net (loss) income available to common stockholders | $ | (9,476 | ) | $ | 1,731 | $ | 19,058 | $ | 7,136 | |||||||
Basic (loss) earnings per share | $ | (0.42 | ) | $ | 0.08 | $ | 0.81 | $ | 0.30 | |||||||
Diluted (loss) earnings per share | (0.42 | ) | 0.07 | 0.68 | 0.28 |
(in thousands except for share data) | September 29, 2018 | September 30, 2017 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 60,260 | $ | 62,616 | |||
Accounts receivable, net | 24,067 | 10,148 | |||||
Inventories | 57,333 | 76,155 | |||||
Other current assets | 8,183 | 11,528 | |||||
Total current assets | $ | 149,843 | $ | 160,447 | |||
Property, plant and equipment, net | 66,054 | 34,708 | |||||
Goodwill | 18,825 | 18,825 | |||||
Intangible assets, net | 55,472 | 57,481 | |||||
Equity investment in affiliate | 11,123 | 11,625 | |||||
Deferred tax asset | 4,437 | 11,755 | |||||
Other assets | 1,676 | 975 | |||||
Total assets | $ | 307,430 | $ | 295,816 | |||
Liabilities and Stockholders' Deficit | |||||||
Current liabilities | |||||||
Accounts payable | $ | 95,780 | $ | 87,331 | |||
Warranty | 9,142 | 8,573 | |||||
Accrued expenses | 21,935 | 18,229 | |||||
Deferred warranty income | 8,159 | 6,776 | |||||
Other current liabilities | 3,941 | 9,847 | |||||
Current portion of senior term debt | 9,900 | 8,000 | |||||
Total current liabilities | $ | 148,857 | $ | 138,756 | |||
Long-term liabilities | |||||||
Long-term debt | $ | 132,239 | $ | 143,224 | |||
Warranty | 13,504 | 12,337 | |||||
Deferred warranty income | 15,032 | 12,519 | |||||
Deferred tax liabilities | 197 | — | |||||
Other liabilities | 4,924 | 15,064 | |||||
Pension | 21,013 | 32,426 | |||||
Total long-term liabilities | $ | 186,909 | $ | 215,570 | |||
Guarantees, commitments and contingencies (Note 10) | |||||||
Stockholders' deficit | |||||||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 93,000 issued with liquidation preference of $9,300 at September 29, 2018 and 400,000 issued with liquidation preference of $40,000 at September 30, 2017 | $ | 9,300 | $ | 40,000 | |||
Common stock, $0.0001 par value, 100,000,000 shares authorized, 27,259,262 and 23,739,344 issued and outstanding at September 29, 2018 and September 30, 2017, respectively. | 3 | 2 | |||||
Additional paid-in capital | 70,023 | 45,418 | |||||
Accumulated deficit | (69,235 | ) | (100,055 | ) | |||
Accumulated other comprehensive loss | (38,427 | ) | (43,875 | ) | |||
Total stockholders' deficit | $ | (28,336 | ) | $ | (58,510 | ) | |
Total liabilities and stockholders' deficit | $ | 307,430 | $ | 295,816 |
Fiscal Years Ended | |||||||||||
(in thousands except for share data) | 2018 | 2017 | 2016 | ||||||||
Net sales | $ | 1,024,976 | $ | 990,602 | $ | 932,010 | |||||
Cost of goods sold | 902,988 | 863,234 | 802,654 | ||||||||
Gross profit | $ | 121,988 | $ | 127,368 | $ | 129,356 | |||||
Operating expenses | |||||||||||
Selling, general and administrative expenses | 88,755 | 72,831 | 102,711 | ||||||||
Operating profit | $ | 33,233 | $ | 54,537 | $ | 26,645 | |||||
Interest expense | (6,661 | ) | (7,251 | ) | (16,412 | ) | |||||
Interest income | 70 | 140 | 133 | ||||||||
Other income (expense), net | 231 | 66 | (539 | ) | |||||||
Loss on debt extinguishment | — | (10,142 | ) | — | |||||||
Income before income taxes | $ | 26,873 | $ | 37,350 | $ | 9,827 | |||||
Income tax benefit (expense) | 2,620 | (11,856 | ) | (5,804 | ) | ||||||
Equity in net income of non-consolidated affiliate | 1,327 | 3,307 | 2,877 | ||||||||
Net income | $ | 30,820 | $ | 28,801 | $ | 6,900 | |||||
Earnings per share: | |||||||||||
Net income (from above) | $ | 30,820 | $ | 28,801 | $ | 6,900 | |||||
Less: preferred stock dividends | 1,896 | 4,261 | 3,878 | ||||||||
Less: preferred stock repurchase | — | 6,091 | — | ||||||||
Net income available to common stockholders | $ | 28,924 | $ | 18,449 | $ | 3,022 | |||||
Basic weighted average shares outstanding | 25,259,595 | 23,343,772 | 21,252,616 | ||||||||
Diluted weighted average shares outstanding | 28,616,862 | 24,877,729 | 21,315,619 | ||||||||
Basic earnings per share | $ | 1.15 | $ | 0.79 | $ | 0.14 | |||||
Diluted earnings per share | $ | 1.08 | $ | 0.74 | $ | 0.14 |
Fiscal Years Ended | |||||||||||
(in thousands) | 2018 | 2017 | 2016 | ||||||||
Net income | $ | 30,820 | $ | 28,801 | $ | 6,900 | |||||
Other comprehensive income (loss), net of tax | |||||||||||
Net change in defined benefit pension plan | 5,448 | 15,003 | (7,104 | ) | |||||||
Net unrealized gain (loss) on cash flow hedges | — | 13 | (13 | ) | |||||||
Total other comprehensive income (loss), net of tax | $ | 5,448 | $ | 15,016 | $ | (7,117 | ) | ||||
Comprehensive income (loss) | $ | 36,268 | $ | 43,817 | $ | (217 | ) |
Fiscal Years Ended | |||||||||||
(in thousands) | 2018 | 2017 | 2016 | ||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 30,820 | $ | 28,801 | $ | 6,900 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 9,042 | 8,180 | 8,046 | ||||||||
Amortization of debt costs | 771 | 1,107 | 3,007 | ||||||||
Share-based compensation | 2,628 | 1,270 | 12,717 | ||||||||
Equity in net income of affiliate | (1,327 | ) | (3,307 | ) | (2,877 | ) | |||||
Loss (gain) on disposal of fixed assets | 114 | (33 | ) | 72 | |||||||
Deferred taxes | 5,655 | (1,202 | ) | 8,957 | |||||||
Provision for bad debt | — | — | (5 | ) | |||||||
Amortization of deferred actuarial pension losses | 3,521 | 6,291 | 4,787 | ||||||||
Loss on debt extinguishment | — | 10,142 | — | ||||||||
Unrealized gains on foreign currency hedges | (109 | ) | — | — | |||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (13,920 | ) | 10,167 | (6,564 | ) | ||||||
Inventories | 17,786 | (22,349 | ) | (4,626 | ) | ||||||
Other assets | 2,755 | (5,469 | ) | (2,457 | ) | ||||||
Accounts payable | 3,096 | 8,404 | (330 | ) | |||||||
Accrued expenses, pension and other liabilities | (14,307 | ) | 1,013 | (4,838 | ) | ||||||
Dividend from equity investment in affiliate | 1,828 | 4,626 | 2,316 | ||||||||
Total adjustments | $ | 17,533 | $ | 18,840 | $ | 18,205 | |||||
Total cash provided by operating activities | $ | 48,353 | $ | 47,641 | $ | 25,105 | |||||
Cash flows from investing activities | |||||||||||
Cash paid for fixed assets and acquired intangible assets | $ | (32,118 | ) | $ | (9,252 | ) | $ | (9,583 | ) | ||
Proceeds from sale of fixed assets | 14 | 48 | — | ||||||||
Total cash used in investing activities | $ | (32,104 | ) | $ | (9,204 | ) | $ | (9,583 | ) | ||
Cash flows from financing activities | |||||||||||
Repayments under the former senior term loan | — | (161,500 | ) | (36,750 | ) | ||||||
Borrowings under the new term loan | — | 156,887 | — | ||||||||
Repayments under the new term loan | (7,850 | ) | (6,000 | ) | — | ||||||
Cash paid for capital leases | (158 | ) | (155 | ) | (221 | ) | |||||
Cash paid for debt issuance costs | (2,006 | ) | (299 | ) | (1,117 | ) | |||||
Cash paid to extinguish debt | — | (507 | ) | — | |||||||
Contributions from former majority stockholder | — | — | 16,971 | ||||||||
Payment of dividends on preferred stock | (1,896 | ) | (4,261 | ) | (2,881 | ) | |||||
Cash paid for employee taxes on vested restricted shares and stock option exercises | (2,211 | ) | (1,013 | ) | (3,892 | ) | |||||
Proceeds from exercises of warrants | 22,102 | 23,045 | 11,816 | ||||||||
Common stock, preferred stock, and warrant repurchases under the share repurchase program | (26,586 | ) | (34,327 | ) | — | ||||||
Total cash used in financing activities | $ | (18,605 | ) | $ | (28,130 | ) | $ | (16,074 | ) | ||
Change in cash and cash equivalents | (2,356 | ) | 10,307 | (552 | ) | ||||||
Cash and cash equivalents, beginning of year | 62,616 | 52,309 | 52,861 | ||||||||
Cash and cash equivalents, end of year | $ | 60,260 | $ | 62,616 | $ | 52,309 | |||||
Fiscal Years Ended | |||||||||||
(in thousands) | 2018 | 2017 | 2016 | ||||||||
Supplemental disclosures of cash flow information | |||||||||||
Cash paid during the period for: | |||||||||||
Interest paid, net of interest received | $ | 5,782 | $ | 6,081 | $ | 13,315 | |||||
Income tax paid, net of tax refunds | 3,673 | 8,420 | 159 | ||||||||
Non-cash Investing and Financing Activities: | |||||||||||
Capital expenditures funded by capital lease borrowings | $ | — | $ | — | $ | 100 | |||||
Capital additions to property, plant and equipment and intangible assets from change in accounts payable and transfers from other assets and inventory | 6,389 | (1,719 | ) | 2,081 | |||||||
Common stock dividend on Series A preferred stock (market value of common shares) | — | — | 998 | ||||||||
Cashless exercise of stock options | 3,570 | 4,216 | 2,312 |
Common Stock | Convertible Preferred Stock | ||||||||||||||||||||||||||||
(in thousands except for share data) | Shares | Par Value | Additional Paid-In-Capital | Shares | Amount | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Deficit | |||||||||||||||||||||
Balance, October 3, 2015 | 20,874,882 | $ | 2 | $ | 15,887 | 500,000 | $ | 50,000 | $ | (51,774 | ) | $ | (135,345 | ) | $ | (121,230 | ) | ||||||||||||
Business combination tax adjustment | — | — | — | — | — | — | (411 | ) | (411 | ) | |||||||||||||||||||
Exercise of stock warrants | 1,027,493 | — | 11,816 | — | — | — | — | 11,816 | |||||||||||||||||||||
Restricted stock activity | 455,465 | — | (3,511 | ) | — | — | — | — | (3,511 | ) | |||||||||||||||||||
Exercise of stock options, cashless | 40,611 | — | (381 | ) | — | — | — | — | (381 | ) | |||||||||||||||||||
Employee stock purchase plan activity | 23,673 | — | 247 | — | — | — | — | 247 | |||||||||||||||||||||
Series A preferred stock dividends | 95,934 | — | (2,881 | ) | — | — | — | — | (2,881 | ) | |||||||||||||||||||
Contribution from former majority stockholder | — | — | 16,971 | — | — | — | — | 16,971 | |||||||||||||||||||||
Share-based compensation expense | — | — | 12,623 | — | — | — | — | 12,623 | |||||||||||||||||||||
Net income | — | — | — | — | — | — | 6,900 | 6,900 | |||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | (7,117 | ) | — | (7,117 | ) | |||||||||||||||||||
Balance, October 1, 2016 | 22,518,058 | $ | 2 | $ | 50,771 | 500,000 | $ | 50,000 | $ | (58,891 | ) | $ | (128,856 | ) | $ | (86,974 | ) | ||||||||||||
Exercise of stock warrants | 2,003,914 | — | 23,045 | — | — | — | — | 23,045 | |||||||||||||||||||||
Exercise of stock options, cashless | 82,124 | — | (1,013 | ) | — | — | — | — | (1,013 | ) | |||||||||||||||||||
Series A preferred stock dividends | — | — | (4,261 | ) | — | — | — | — | (4,261 | ) | |||||||||||||||||||
Share repurchase program | (864,752 | ) | — | (24,282 | ) | (100,000 | ) | (10,000 | ) | — | — | (34,282 | ) | ||||||||||||||||
Share-based compensation expense | — | — | 1,158 | — | — | — | — | 1,158 | |||||||||||||||||||||
Net income | — | — | — | — | — | — | 28,801 | 28,801 | |||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | 15,016 | — | 15,016 | |||||||||||||||||||||
Balance, September 30, 2017 | 23,739,344 | $ | 2 | $ | 45,418 | 400,000 | $ | 40,000 | $ | (43,875 | ) | $ | (100,055 | ) | $ | (58,510 | ) | ||||||||||||
Exercise of stock warrants | 1,921,901 | 1 | 22,102 | — | — | — | — | 22,103 | |||||||||||||||||||||
Restricted stock activity | 33,963 | — | (370 | ) | — | — | — | — | (370 | ) | |||||||||||||||||||
Exercise of stock options, cashless | 97,504 | — | (1,841 | ) | — | — | — | — | (1,841 | ) | |||||||||||||||||||
Series A preferred stock dividends | — | — | (1,896 | ) | — | — | — | — | (1,896 | ) | |||||||||||||||||||
Share repurchase program | (1,183,412 | ) | — | (26,586 | ) | — | — | — | — | (26,586 | ) | ||||||||||||||||||
Preferred stock conversion | 2,649,962 | — | 30,700 | (307,000 | ) | (30,700 | ) | — | — | — | |||||||||||||||||||
Share-based compensation expense | — | — | 2,496 | — | — | — | — | 2,496 | |||||||||||||||||||||
Net income | — | — | — | — | — | — | 30,820 | 30,820 | |||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | 5,448 | — | 5,448 | |||||||||||||||||||||
Balance, September 29, 2018 | 27,259,262 | $ | 3 | $ | 70,023 | 93,000 | $ | 9,300 | $ | (38,427 | ) | $ | (69,235 | ) | $ | (28,336 | ) |
Years | ||
Buildings | 15 - 33 | |
Machinery and equipment | 5 - 10 | |
Office furniture, equipment and other | 3 - 10 | |
Computer equipment and software | 3 - 7 |
(in thousands of dollars) | September 29, 2018 | September 30, 2017 | |||||
Accounts receivable | $ | 24,167 | $ | 10,248 | |||
Allowance for doubtful accounts | (100 | ) | (100 | ) | |||
Accounts receivable, net | $ | 24,067 | $ | 10,148 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Balance at beginning of period | $ | 20,910 | $ | 19,444 | $ | 17,661 | |||||
Add: current period accruals | 11,454 | 11,075 | 10,452 | ||||||||
Less: current period reductions of accrual | (9,718 | ) | (9,609 | ) | (8,669 | ) | |||||
Balance at end of period | $ | 22,646 | $ | 20,910 | $ | 19,444 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Balance at beginning of period | $ | 19,295 | $ | 16,187 | $ | 14,145 | |||||
Add: current period deferred income | 10,854 | 9,146 | 7,186 | ||||||||
Less: current period recognition of income | (6,958 | ) | (6,038 | ) | (5,144 | ) | |||||
Balance at end of period | $ | 23,191 | $ | 19,295 | $ | 16,187 |
(in thousands of dollars) | September 29, 2018 | September 30, 2017 | |||||
Current portion | $ | 3,332 | $ | 3,194 | |||
Long-term portion | 1,901 | 2,251 | |||||
Total accrued self-insurance | $ | 5,233 | $ | 5,445 |
(in thousands of dollars) | September 29, 2018 | September 30, 2017 | |||||
Raw materials | $ | 42,439 | $ | 54,379 | |||
Work in process | 13,141 | 14,660 | |||||
Finished goods | 1,753 | 7,116 | |||||
Total inventories | $ | 57,333 | $ | 76,155 |
(in thousands of dollars) | September 29, 2018 | September 30, 2017 | |||||
Land | $ | 2,159 | $ | 1,187 | |||
Buildings | 22,514 | 18,420 | |||||
Machinery and equipment | 68,782 | 63,988 | |||||
Office furniture, equipment and other | 2,059 | 1,389 | |||||
Computer equipment and software | 17,250 | 16,765 | |||||
Construction in process | 27,983 | 2,544 | |||||
Property, plant and equipment, gross | 140,747 | 104,293 | |||||
Accumulated depreciation and amortization | (74,693 | ) | (69,585 | ) | |||
Property, plant and equipment, net | $ | 66,054 | $ | 34,708 |
(in thousands of dollars) | Gross Goodwill | Accumulated Impairments | Net Goodwill | ||||||||
September 29, 2018 | |||||||||||
Bus | $ | 15,139 | $ | — | $ | 15,139 | |||||
Parts | 3,686 | — | 3,686 | ||||||||
Total | $ | 18,825 | $ | — | $ | 18,825 | |||||
September 30, 2017 | |||||||||||
Bus | $ | 15,139 | $ | — | $ | 15,139 | |||||
Parts | 3,686 | — | 3,686 | ||||||||
Total | $ | 18,825 | $ | — | $ | 18,825 |
September 29, 2018 | September 30, 2017 | ||||||||||||||||||||||
(in thousands of dollars) | Gross Carrying Amount | Accumulated Amortization | Total | Gross Carrying Amount | Accumulated Amortization | Total | |||||||||||||||||
Finite lived: Engineering designs | $ | 982 | $ | 280 | $ | 702 | $ | 982 | $ | 141 | $ | 841 | |||||||||||
Finite lived: Customer relationships | 37,425 | 22,471 | 14,954 | 37,425 | 20,601 | 16,824 | |||||||||||||||||
Total amortized intangible assets | 38,407 | 22,751 | 15,656 | 38,407 | 20,742 | 17,665 | |||||||||||||||||
Indefinite lived: Trade name | 39,816 | — | 39,816 | 39,816 | — | 39,816 | |||||||||||||||||
Total intangible assets | $ | 78,223 | $ | 22,751 | $ | 55,472 | $ | 78,223 | $ | 20,742 | $ | 57,481 |
Fiscal Years Ending | Amortization Expense | |||
2019 | $ | 2,009 | ||
2020 | 2,009 | |||
2021 | 2,009 | |||
2022 | 2,009 | |||
2023 | 2,009 | |||
Thereafter | 5,611 | |||
Total amortization expense | $ | 15,656 |
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 and less than 3.25x | 1.50% | 2.50% | |||
V | Greater than or equal to 3.25x and less than 3.50x | 1.75% | 2.75% | |||
VI | Greater than 3.50x | 2.00% | 3.00% |
(in thousands of dollars) | September 29, 2018 | September 30, 2017 | |||||
2023 and 2021 term loans, net of deferred financing costs of $4,011 and $2,776, respectively | $ | 142,139 | $ | 151,224 | |||
Less: Current portion of long-term debt | 9,900 | 8,000 | |||||
Long-term debt, net of current portion | $ | 132,239 | $ | 143,224 |
(in thousands of dollars) | ||||
Year | Principal Payments | |||
2019 | $ | 9,900 | ||
2020 | 9,900 | |||
2021 | 9,900 | |||
2022 | 14,850 | |||
2023 | 101,600 | |||
Total remaining principal payments | $ | 146,150 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Current tax provision: | |||||||||||
Federal | $ | (8,925 | ) | $ | 11,705 | $ | (3,377 | ) | |||
State | 559 | 1,353 | 224 | ||||||||
Foreign | 91 | — | — | ||||||||
Total current tax (benefit) provision | $ | (8,275 | ) | $ | 13,058 | $ | (3,153 | ) | |||
Deferred tax provision: | |||||||||||
Federal | $ | 6,816 | $ | (767 | ) | $ | 9,052 | ||||
State | (1,161 | ) | (435 | ) | (95 | ) | |||||
Total deferred tax provision (benefit) | 5,655 | (1,202 | ) | 8,957 | |||||||
Income tax (benefit) expense | $ | (2,620 | ) | $ | 11,856 | $ | 5,804 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Federal taxes at statutory rate | $ | 6,584 | $ | 13,073 | $ | 3,439 | |||||
Increase (reduction) in income taxes resulting from: | |||||||||||
State taxes, net | (1,501 | ) | 307 | (20 | ) | ||||||
Change in uncertain tax positions | (7,606 | ) | 651 | 821 | |||||||
Share-based compensation | (735 | ) | (210 | ) | 1,001 | ||||||
Permanent items | (366 | ) | (701 | ) | (84 | ) | |||||
Valuation allowance | 783 | 90 | 27 | ||||||||
Tax credits | (470 | ) | (530 | ) | (470 | ) | |||||
Return to accrual true-ups | (1,699 | ) | (646 | ) | (78 | ) | |||||
Investor tax on non-consolidated affiliate income | (1,734 | ) | (271 | ) | 582 | ||||||
Tax rate adjustments | 3,756 | 144 | 535 | ||||||||
Other | 368 | (51 | ) | 51 | |||||||
Income tax expense | $ | (2,620 | ) | $ | 11,856 | $ | 5,804 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Balance, beginning of year | $ | 6,389 | $ | 6,389 | $ | 6,389 | |||||
Lapses of applicable statute of limitations | (6,389 | ) | — | — | |||||||
Balance, end of year | $ | — | $ | 6,389 | $ | 6,389 |
(in thousands of dollars) | September 29, 2018 | September 30, 2017 | |||||
Deferred tax liabilities | |||||||
Property, plant and equipment | $ | (4,012 | ) | $ | (2,282 | ) | |
Other intangible assets | (11,584 | ) | (18,030 | ) | |||
Investor tax on non-consolidated affiliate income | (496 | ) | (2,230 | ) | |||
Other assets | (534 | ) | (527 | ) | |||
Total deferred tax liabilities | $ | (16,626 | ) | $ | (23,069 | ) | |
Deferred tax assets | |||||||
NOL carryforward | $ | 577 | $ | 550 | |||
Accrued expenses | 6,280 | 9,575 | |||||
Indirect effect of uncertain tax position | — | 2,869 | |||||
Compensation | 6,540 | 14,095 | |||||
Inventories | 1,194 | 1,576 | |||||
Unearned income | 3,069 | 4,000 | |||||
Tax credits | 4,638 | 2,809 | |||||
Total deferred tax assets | $ | 22,298 | $ | 35,474 | |||
Less: valuation allowance | (1,432 | ) | (650 | ) | |||
Deferred tax assets less valuation allowance | $ | 20,866 | $ | 34,824 | |||
Net deferred tax assets | $ | 4,240 | $ | 11,755 |
(in thousands of dollars) | |||
Years Ended | Amount | ||
2019 | $ | 1,305 | |
2020 | 1,428 | ||
2021 | 1,409 | ||
2022 | 1,424 | ||
2023 | 1,442 | ||
Thereafter | 4,624 | ||
Total operating lease commitments | $ | 11,632 |
(in thousands of dollars) | September 29, 2018 | September 30, 2017 | |||||
Leased property under capital leases | $ | 1,071 | $ | 1,071 | |||
Accumulated amortization | (870 | ) | (715 | ) | |||
Leased property under capital leases, net | $ | 201 | $ | 356 |
(in thousands of dollars) | ||||
Years Ended | Amount | |||
2019 | $ | 175 | ||
2020 | 18 | |||
2021 | 18 | |||
2022 | 18 | |||
2023 | 6 | |||
Thereafter | — | |||
Total minimum lease payments | 235 | |||
Amount of lease payments representing interest | (15 | ) | ||
Present value of future minimum capital lease payments | $ | 220 | ||
Current obligations under capital leases | $ | 169 | ||
Long-term obligations under capital leases | 51 |
(in thousands of dollars) | ||||
Years Ended | Amount | |||
2019 | $ | 84,850 | ||
2020 | 3,956 | |||
Total purchase commitments | $ | 88,806 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Bus | $ | 962,769 | $ | 930,738 | $ | 876,087 | |||||
Parts | 62,207 | 59,864 | 55,923 | ||||||||
Segment net sales | $ | 1,024,976 | $ | 990,602 | $ | 932,010 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Bus | $ | 100,002 | $ | 106,462 | $ | 108,232 | |||||
Parts | 21,986 | 20,906 | 21,124 | ||||||||
Segment gross profit | $ | 121,988 | $ | 127,368 | $ | 129,356 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Segment gross profit | $ | 121,988 | $ | 127,368 | $ | 129,356 | |||||
Adjustments: | |||||||||||
Selling, general and administrative expenses | (88,755 | ) | (72,831 | ) | (102,711 | ) | |||||
Interest expense | (6,661 | ) | (7,251 | ) | (16,412 | ) | |||||
Interest income | 70 | 140 | 133 | ||||||||
Other income (expense), net | 231 | 66 | (539 | ) | |||||||
Loss on debt extinguishment | — | (10,142 | ) | — | |||||||
Income before income taxes | $ | 26,873 | $ | 37,350 | $ | 9,827 |
(in thousands of dollars) | 2018 | 2017 | 2016 | |||||||
United States | $ | 911,558 | $ | 878,631 | 838,418 | |||||
Canada | 106,762 | 104,016 | 83,669 | |||||||
Rest of world | 6,656 | 7,955 | 9,923 | |||||||
Total net sales | $ | 1,024,976 | $ | 990,602 | 932,010 |
(in thousands except share data) | 2018 | 2017 | 2016 | ||||||||
Numerator: | |||||||||||
Net income | $ | 30,820 | $ | 28,801 | $ | 6,900 | |||||
Less: preferred stock dividends | 1,896 | 4,261 | 3,878 | ||||||||
Less: preferred stock repurchase | — | 6,091 | — | ||||||||
Net income available to common stockholders | $ | 28,924 | $ | 18,449 | $ | 3,022 | |||||
Basic earnings per share (1): | |||||||||||
Weighted average common shares outstanding | 25,259,595 | 23,343,772 | 21,252,616 | ||||||||
Basic earnings per share | $ | 1.15 | $ | 0.79 | $ | 0.14 | |||||
Diluted earnings per share (2): | |||||||||||
Weighted average common shares outstanding | 25,259,595 | 23,343,772 | 21,252,616 | ||||||||
Weighted average dilutive securities, convertible preferred stock | 2,294,205 | — | — | ||||||||
Weighted average dilutive securities, restricted stock | 50,891 | 19,073 | 60,401 | ||||||||
Weighted average dilutive securities, warrants | 737,183 | 1,280,265 | — | ||||||||
Weighted average dilutive securities, stock options | 274,988 | 234,619 | 2,602 | ||||||||
Weighted average shares and dilutive potential common shares | 28,616,862 | 24,877,729 | 21,315,619 | ||||||||
Diluted earnings per share | $ | 1.08 | $ | 0.74 | $ | 0.14 |
2018 | |||||||
Restricted Stock Activity | Number of Shares | Weighted-Average Grant Date Fair Value | |||||
Balance, beginning of year | 75,590 | $ | 15.83 | ||||
Granted | 118,450 | 18.59 | |||||
Vested | (67,890 | ) | 15.86 | ||||
Forfeited | (8,076 | ) | 15.62 | ||||
Balance, end of year | 118,074 | 18.59 |
2018 | |||||||
Number of Options | Weighted Average Exercise Price per Share ($) | ||||||
Outstanding options, beginning of year | 623,962 | $ | 11.15 | ||||
Granted | 215,530 | 16.61 | |||||
Exercised (1) | (322,035 | ) | 11.09 | ||||
Forfeited | (19,030 | ) | 15.50 | ||||
Outstanding options, end of year (2) | 498,427 | $ | 13.38 | ||||
Fully vested and exercisable options, end of year (3) | 286,369 | $ | 10.98 |
2018 | 2017 | 2016 | ||||||||||
Expected volatility | 29.2 | % | 33.7 | % | 33.7 | % | ||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | ||||||
Risk-free interest rate | 2.16 | % | 1.9 | % | 1.7 | % | ||||||
Expected term (in years) | 5.0 - 5.5 | 5.5 | 4.7 | |||||||||
Weighted-average grant-date fair value | $ | 6.15 | $ | 5.35 | $ | 3.72 |
Benefit Obligation | |||||||
(in thousands of dollars) | 2018 | 2017 | |||||
Projected benefit obligation balance, beginning of year | $ | 144,737 | $ | 157,030 | |||
Interest cost | 5,428 | 5,063 | |||||
Assumption changes (1) | 770 | (9,621 | ) | ||||
Actuarial gain | 686 | (798 | ) | ||||
Benefits paid | (7,137 | ) | (6,937 | ) | |||
Projected benefit obligations balance, end of year | $ | 144,484 | $ | 144,737 |
Plan Assets | |||||||
(in thousands of dollars) | 2018 | 2017 | |||||
Fair value of plan assets, beginning of year | $ | 112,311 | $ | 100,662 | |||
Actual return on plan assets | 13,457 | 14,702 | |||||
Employer contribution | 5,949 | 5,414 | |||||
Expenses | (1,109 | ) | (1,530 | ) | |||
Benefits paid | (7,137 | ) | (6,937 | ) | |||
Fair value of plan assets, end of year | $ | 123,471 | $ | 112,311 |
Funded Status | ||||||||
(in thousands of dollars) | September 29, 2018 | September 30, 2017 | ||||||
Benefit obligation | $ | 144,484 | $ | 144,737 | ||||
Fair value of plan assets | 123,471 | 112,311 | ||||||
Funded status | (21,013 | ) | (32,426 | ) | ||||
Net pension liability recognized | $ | (21,013 | ) | $ | (32,426 | ) |
Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities | |
Level 2 | Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability | |
Level 3 | Unobservable inputs for the asset or liability |
(in thousands of dollars) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
September 29, 2018 | ||||||||||||||||
Assets: | ||||||||||||||||
Equity securities | $ | — | $ | 86,410 | $ | — | $ | 86,410 | ||||||||
Debt securities | — | 37,061 | — | 37,061 | ||||||||||||
Total assets at fair value | $ | — | $ | 123,471 | $ | — | $ | 123,471 | ||||||||
September 30, 2017 | ||||||||||||||||
Assets: | ||||||||||||||||
Equity securities | $ | — | $ | 80,795 | $ | — | $ | 80,795 | ||||||||
Debt securities | — | 31,516 | — | 31,516 | ||||||||||||
Total assets at fair value | $ | — | $ | 112,311 | $ | — | $ | 112,311 |
(in thousands of dollars) | 2018 | 2017 | 2016 | ||||||||
Interest cost | $ | 5,428 | $ | 5,063 | $ | 5,063 | |||||
Expected return on plan assets | (7,105 | ) | (6,358 | ) | (6,112 | ) | |||||
Amortization of net loss | 3,521 | 6,291 | 4,787 | ||||||||
Net periodic benefit cost | $ | 1,844 | $ | 4,996 | $ | 3,738 | |||||
Net (gain) loss | $ | (3,787 | ) | $ | (17,232 | ) | $ | 15,716 | |||
Amortization of net loss | (3,521 | ) | (6,291 | ) | (4,787 | ) | |||||
Total (gain) loss recognized in other comprehensive income | $ | (7,308 | ) | $ | (23,523 | ) | $ | 10,929 | |||
Total (gain) loss recognized in net periodic pension benefit cost and other comprehensive income | $ | (5,464 | ) | $ | (18,527 | ) | $ | 14,667 |
Weighted-average assumptions used to determine benefit obligations: | September 29, 2018 | September 30, 2017 | ||||
Discount rate | 4.30 | % | 3.85 | % | ||
Rate of compensation increase | N/A | N/A |
Weighted-average assumptions used to determine net periodic benefit cost: | September 29, 2018 | September 30, 2017 | ||||
Discount rate | 3.85 | % | 3.30 | % | ||
Expected long-term return on plan assets | 6.37 | % | 6.37 | % | ||
Rate of compensation increase | N/A | N/A |
September 29, 2018 | September 30, 2017 | |||||
Equity securities | 70 | % | 72 | % | ||
Debt securities | 30 | % | 28 | % | ||
100 | % | 100 | % |
(in thousands of dollars) | Expected Payments | ||
2019 | $ | 7,738 | |
2020 | 7,833 | ||
2021 | 8,016 | ||
2022 | 8,227 | ||
2023 | 8,430 | ||
2024 - 2028 | 43,423 | ||
Total expected future benefit payments | $ | 83,667 |
(in thousands) | Defined Benefit Pension Plan | Cash Flow Hedges (Effective Portion) | Total AOCI | ||||||||
Balance, October 3, 2015 | $ | (51,774 | ) | $ | — | $ | (51,774 | ) | |||
Other comprehensive loss, gross | (15,716 | ) | (236 | ) | (15,952 | ) | |||||
Amounts reclassified from other comprehensive income and included in earnings | 4,787 | 216 | 5,003 | ||||||||
Total other comprehensive loss, before taxes | (10,929 | ) | (20 | ) | (10,949 | ) | |||||
Income tax benefit | 3,825 | 7 | 3,832 | ||||||||
Balance, October 1, 2016 | $ | (58,878 | ) | $ | (13 | ) | $ | (58,891 | ) | ||
Other comprehensive income, gross | 17,232 | 344 | 17,576 | ||||||||
Amounts reclassified from other comprehensive income and included in earnings | 6,291 | (324 | ) | 5,967 | |||||||
Total other comprehensive income, before taxes | 23,523 | 20 | 23,543 | ||||||||
Income tax expense | (8,520 | ) | (7 | ) | (8,527 | ) | |||||
Balance, September 30, 2017 | $ | (43,875 | ) | $ | — | $ | (43,875 | ) | |||
Other comprehensive income, gross | 3,787 | — | 3,787 | ||||||||
Amounts reclassified from other comprehensive income and included in earnings | 3,521 | — | 3,521 | ||||||||
Total other comprehensive income, before taxes | 7,308 | — | 7,308 | ||||||||
Income tax expense | (1,860 | ) | — | (1,860 | ) | ||||||
Balance, September 29, 2018 | $ | (38,427 | ) | $ | — | $ | (38,427 | ) |
2.1† |
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10.1 |
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10.20†† |
10.21 |
10.22 |
21.1* |
23.1* |
31.1* |
31.2* |
32.1* |
32.2* |
101* | The following materials from the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2018 formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income (Loss); (iv) Consolidated Statements of Changes in Stockholders' Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to the Consolidated Financial Statements. |
(in thousands of dollars) | Allowance for Doubtful Accounts | |||||||||||||||
Fiscal Year Ended | Beginning Balance | Charges to Expense/(Income) | Doubtful Accounts Written Off, Net | Ending Balance | ||||||||||||
October 1, 2016 | $ | 105 | $ | (5 | ) | $ | — | $ | 100 | |||||||
September 30, 2017 | 100 | — | — | 100 | ||||||||||||
September 29, 2018 | 100 | — | — | 100 |
(in thousands of dollars) | Deferred Tax Valuation Allowance | |||||||||||||||
Fiscal Year Ended | Beginning Balance | Charges to Expense/(Income) | Charges utilized/Write offs | Ending Balance | ||||||||||||
October 1, 2016 | $ | 671 | $ | (86 | ) | $ | (27 | ) | $ | 558 | ||||||
September 30, 2017 | 558 | 92 | — | 650 | ||||||||||||
September 29, 2018 | 650 | 847 | (65 | ) | 1,432 |
Person | Capacity | Date | ||
/s/ Phil Horlock | President, Chief Executive Officer and Director | |||
Phil Horlock | (Principal Executive Officer) | December 12, 2018 | ||
/s/ Phil Tighe | Chief Financial Officer | |||
Phil Tighe | (Principal Financial and Accounting Officer) | December 12, 2018 | ||
/s/ Gurminder S. Bedi | ||||
Gurminder S. Bedi | Director | December 12, 2018 | ||
/s/ Chan Galbato | ||||
Chan Galbato | Director | December 12, 2018 | ||
/s/ Douglas Grimm | ||||
Douglas Grimm | Director | December 12, 2018 | ||
/s/ Daniel J. Hennessy | ||||
Daniel J. Hennessy | Director | December 12, 2018 | ||
/s/ Kevin Penn | ||||
Kevin Penn | Director | December 12, 2018 | ||
/s/ Connor Wentzell | ||||
Connor Wentzell | Director | December 12, 2018 | ||
/s/ Alan H. Schumacher | ||||
Alan H. Schumacher | Director | December 12, 2018 | ||
Organized under the laws of: | ||
Subsidiaries that are 100% owned | ||
School Bus Holdings Inc. | Delaware | |
Peach County Holdings Inc. | Delaware | |
Blue Bird Global Corporation | Delaware | |
Blue Bird Body Co. | Georgia | |
Canadian Blue Bird Coach, Ltd. | Canada | |
Subsidiaries that are 50% owned | ||
Micro Bird Holdings, Inc. | Canada | |
Corporation Micro Bird Inc. | Canada | |
Micro Bird USA Corporation | New York |
Dated: | December 12, 2018 | By: /s/ Philip Horlock | |
Philip Horlock | |||
President and Chief Executive Officer | |||
(principal executive officer) |
Dated: | December 12, 2018 | By: /s/ Phillip Tighe | |
Phillip Tighe | |||
Chief Financial Officer | |||
(principal financial officer) |
Dated: | December 12, 2018 | By: /s/ Philip Horlock | |
Philip Horlock | |||
President and Chief Executive Officer | |||
(principal executive officer) |
Dated: | December 12, 2018 | By: /s/ Phillip Tighe | |
Phillip Tighe | |||
Chief Financial Officer | |||
(principal financial officer) |
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Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Dec. 04, 2018 |
Mar. 31, 2018 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Blue Bird Corp | ||
Entity Central Index Key | 0001589526 | ||
Current Fiscal Year End Date | --09-29 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 29, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 26,331,075 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Public Float | $ 270.3 | ||
Entity Emerging Growth Company | true | ||
Entity Small Business | false | ||
Entity Ex Transition Period | false |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
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 | 93,000 | 400,000 |
Preferred Stock, Liquidation Preference, Value | $ 9,300,000 | $ 40,000,000 |
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 | 27,259,262 | 23,739,344 |
Common Stock, Shares Outstanding | 27,259,262 | 23,739,344 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 30,820 | $ 28,801 | $ 6,900 |
Net change in defined benefit pension plan | 5,448 | 15,003 | (7,104) |
Net unrealized gain (loss) on cash flow hedges | 0 | 13 | (13) |
Total other comprehensive income (loss), net of tax | 5,448 | 15,016 | (7,117) |
Comprehensive income (loss) | $ 36,268 | $ 43,817 | $ (217) |
Nature of Business and Basis of Presentation |
12 Months Ended |
---|---|
Sep. 29, 2018 | |
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"), a special purpose acquisition company (SPAC), 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”). 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 ($100.0 million) and in shares of HCAC’s Common Stock (12,000,000 shares valued at a total of $120.0 million). In connection with the closing of the Business Combination, we changed our name from Hennessy Capital Acquisition Corp. to Blue Bird Corporation. 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 Macon, 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 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 Company’s fiscal year ends on the Saturday closest to September 30 with its quarters consisting of thirteen weeks in most years. In fiscal years 2018, 2017, and 2016, there were a total of 52 weeks. 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. |
Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2018 | ||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies and Recently Issued Accounting Standards 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 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. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Allowance for Doubtful Accounts Accounts receivable consist of amounts owed to the Company by customers. The Company monitors collections and payments from customers, and generally does not require collateral. Accounts receivable are generally due within 30 to 90 days. The Company provides for the possible inability to collect accounts receivable by recording an allowance for doubtful accounts. The Company reserves for an account when it is considered potentially uncollectible. The Company estimates its allowance for doubtful accounts based on historical experience, aging of accounts receivable and information regarding the creditworthiness of its customers. To date, losses have been within the range of management’s expectations. The Company writes off accounts receivable if it determines that the account is uncollectible. Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, ownership has transferred to the customer, the selling price is fixed or determinable, and collectability is reasonably assured. Generally, the Company recognizes revenue, net of sales concessions, when the product is delivered or when the product has been completed, is ready for delivery, has been paid for, its title has transferred and is awaiting pickup by the customer, which generally occurs within 30 days of completion. The Company 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. The Company classifies shipping and handling revenues and costs billed to a customer as net sales on the Consolidated Statements of Operations and the related costs incurred by the Company are included in cost of goods sold on the Consolidated Statements of Operations. See Note 3, Supplemental Financial Information, for further information on warranties and shipping and handling costs. Self-Insurance The Company is self-insured for the majority of its workers’ compensation and medical claims. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability. Self-insurance losses for claims filed and claims incurred but not reported are accrued based upon estimates of the aggregate liability for uninsured claims, using loss development factors and actuarial assumptions followed in the insurance industry and historical loss development experience. See Note 3, Supplemental Financial Information, and Note 15, Benefit Plans, for further information. Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, accounts payable, revolving credit facilities and long-term debt. The carrying amounts of cash and cash equivalents, trade receivables and accounts payable approximate their fair values because of the short-term maturity and highly liquid nature of these instruments. The carrying value of the Company’s senior term loan approximates fair value due to the variable interest rate. See Note 8, Debt, for further discussion. Inventories The Company values inventories at the lower of cost or net realizable value. The Company uses a standard costing methodology, which approximates cost on a first-in, first-out (“FIFO”) 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. Obsolete inventory amounts are based on historical usage and assumptions about future demand. Property, Plant and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis using the following periods, which represent the estimated useful lives of the assets:
Costs, including capitalized interest and certain design, construction and installation costs related to assets that are under construction and are in the process of being readied for their intended use, are recorded as construction in progress and are not depreciated until such time as the subject asset is placed in service. Repairs and maintenance that do not extend the useful life of the asset are expensed as incurred. Upon sale, retirement, or other disposition of these assets, the costs and related accumulated depreciation are removed from the respective accounts and any gain or loss on the disposition is included on our Consolidated Statements of Operations. Impairment of Long-Lived Assets The Company reviews its long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If we are required to analyze recoverability based on a triggering event, undiscounted future cash flows over the estimated remaining life of the asset, or asset group, are projected. If these projected cash flows are less than the carrying amount, an impairment loss is recognized to the extent the fair value of the asset less any costs of disposition is less than the carrying amount of the asset. Judgments regarding the existence of impairment indicators are based on market and operational performance. Evaluating potential impairment also requires estimates of future operating results and cash flows. No impairment charge was recognized in any of the periods presented. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of acquired businesses over the fair value of the assets acquired less liabilities assumed in connection with such acquisition. In accordance with the provisions of ASC 350, Intangibles—Goodwill and Other, goodwill and intangible assets with indefinite useful lives acquired in an acquisition are not amortized, but instead are tested for impairment at least annually or more frequently should an event occur or circumstances indicate that the carrying amount may be impaired. Such events or circumstances may be a significant change in business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition, changes in strategy or disposition of a reporting unit or a portion thereof. We have two reporting units for which we test goodwill for impairment: Bus and Parts. In the evaluation of goodwill for impairment, we have the option to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If, under the quantitative assessment, the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, must be measured under step two of the impairment analysis. In step two of the analysis, we would record an impairment loss equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value, should such a circumstance arise. Fair value of the reporting units is estimated primarily using the income approach, which incorporates the use of discounted cash flow (DCF) analysis. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including markets and market shares, sales volumes and prices, costs to produce, tax rates, capital spending, discount rate and working capital changes. The cash flow forecasts are based on approved strategic operating plans and long-term forecasts. In the evaluation of indefinite lived assets for impairment, we have the option to perform a qualitative assessment to determine whether further impairment testing is necessary, or to perform a quantitative assessment by comparing the fair value of an asset to its carrying amount. The Company’s intangible asset with an indefinite useful life is the "Blue Bird" trade name. Under the qualitative assessment, an entity is not required to calculate the fair value of the asset unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If a qualitative assessment is not performed or if a quantitative assessment is otherwise required, then the entity compares the fair value of an asset to its carrying amount and the amount of the impairment loss, if any, is the difference between fair value and carrying value. The fair value of our trade name is derived by using the relief from royalty method, which discounts the estimated cash savings we realized by owning the name instead of otherwise having to license or lease it. Our intangible assets with a definite useful life are amortized over their estimated useful lives, 7 or 20 years, using the straight-line method. The useful lives of our intangible assets are reassessed annually and they are tested for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Debt Issue Costs Amounts paid directly to lenders or as an original issue discount and amounts classified as issuance costs are recorded as a reduction in the carrying value of the debt, for which the Company had deferred financing costs totaling $4.0 million and $2.8 million at September 29, 2018 and September 30, 2017, respectively, incurred in connection with its debt facilities and related amendments. All deferred financing costs are amortized to interest expense. The effective interest method is used for debt discounts related to the term loan. The Company’s amortization of these costs was $0.8 million, $1.1 million and $3.0 million for the fiscal years ended 2018, 2017 and 2016, respectively, and are reflected in the Consolidated Statements of Operations as a component of interest expense. See Note 8, Debt, for a discussion of the Company’s indebtedness. Pensions The Company accounts for its pension benefit obligations using actuarial models. The measurement of plan obligations and assets was made at September 29, 2018. Effective January 1, 2006, the benefit plan was frozen to all participants. No accrual of future benefits is earned or calculated beyond this date. Accordingly, our obligation estimate is based on benefits earned at that time discounted using an estimate of the single equivalent discount rate determined by matching the plan’s future expected cash flows to spot rates from a yield curve comprised of high quality corporate bond rates of various durations. The Company recognizes the funded status of its pension plan obligations in its Consolidated Balance Sheet and records in other comprehensive income (loss) certain gains and losses that arise during the period, but are deferred under pension accounting rules. Product Warranty Costs 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 a unit is sold. The methodology to determine the warranty reserve calculates the 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 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 Consolidated Statements of Operations. The current methodology to determine 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. See Note 3, Supplemental Financial Information, for further information. Research and Development Research and development costs are expensed as incurred and included in selling, general and administrative expenses in our Consolidated Statements of Operations. For the fiscal years ended 2018, 2017 and 2016, the Company expensed $8.4 million, $7.0 million and $5.4 million, respectively, in the Consolidated Statements of Operations, related to research and development. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the financial statement and tax basis of assets and liabilities. The Company evaluates its ability, based on the weight of evidence available, to realize future tax benefits from deferred tax assets and establishes a valuation allowance to reduce a deferred tax asset to a level which, more likely than not, will be realized in future years. The Company recognizes uncertain tax positions based on a cumulative probability assessment if it is more likely than not that the tax position will be sustained upon examination by an appropriate tax authority with full knowledge of all information. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Amounts recorded for uncertain tax positions are periodically assessed, including the evaluation of new facts and circumstances, to ensure sustainability of the positions. The Company records interest and penalties related to unrecognized tax benefits in income tax expense. Environmental Liabilities The Company records reserves for environmental liabilities on a discounted basis when environmental investigation and remediation obligations are probable and related costs are reasonably estimable. See Note 10, Guarantees, Commitments and Contingencies, for further information. Segment Reporting Operating segments are components of an entity that engage in business activities with discrete financial information available that is regularly reviewed by the chief operating decision maker (“CODM”) in order to assess performance and allocate resources. The Company’s CODM is the Company’s President and Chief Executive Officer. As discussed further in Note 11, Segment Information, the Company determined its operating and reportable segments to be Bus and Parts. The Bus segment includes the manufacturing and assembly of school 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. Recently Adopted Accounting Standards ASU 2015-11 — In the first quarter of fiscal 2018, the Company adopted Accounting Standards Update ("ASU") No. 2015-11, Simplifying the Measurement of Inventory, which requires inventory to be measured at the lower of cost or net realizable value. The adoption of this pronouncement did not have any impact on any component of our financial statements. Recently Issued Accounting Standards ASU 2018-15 — In August 2018, the Financial Accounting Standards Board ("FASB") issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods. Early adoption is permitted for annual or interim periods. We plan to early adopt this standard in the first quarter of fiscal 2019 and do not anticipate a significant impact on the consolidated financial statements. ASU 2018-14 — In August, 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement benefit plans. The guidance removes disclosures that are no longer considered cost beneficial, and adds new and clarifies other disclosure requirements. The guidance will be effective for annual and interim periods beginning after December 15, 2020, which is effective for the Company in the first quarter of fiscal 2022. Early adoption is permitted and adoption is required on a retrospective basis. We are currently evaluating the impact the standard will have on our disclosures. ASU 2018-13 — In August, 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates disclosures such as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and adds new disclosure requirements for Level 3 measurements. The ASU is effective for fiscal years beginning after December 15, 2019, which is effective for the Company in the first quarter of fiscal 2020. Early adoption is permitted. The impact of this guidance will dependent on any future hierarchy changes or any future addition of Level 3 assets or liabilities. ASU 2018-07 — In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting, which provides guidance on accounting for non-employee share-based awards for goods or services received by a company. We have not granted any share-based awards to non-employees. The impact of this guidance will be dependent on future grants, if any, of these forms of share-based awards. ASU 2018-05 — In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which updates income tax accounting to reflect the SEC's interpretive guidance released on December 22, 2017, when the Tax Cuts and Jobs Act (the "Tax Act") was signed into law. For more information regarding the impact of the Tax Act, see Note 9. Income Taxes. ASU 2018-02 — In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220). This ASU provides guidance on a reclassification from accumulated other comprehensive income ("AOCI") to retained earnings for the effect of the tax rate change resulting from the Tax Cuts and Jobs Act (H.R.1) (the "Tax Act"). The amendments eliminate the stranded tax effects resulting from the Tax Act and will improve the usefulness of information reported to financial statement users. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Should we elect to apply this optional ASU, it will be effective for us in the first quarter of fiscal 2020. We are currently evaluating the impact this ASU may have on our consolidated financial statements. ASU 2017-12 — In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which intends to simplify the application of hedge accounting guidance and better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The Company will adopt this amended guidance during the first quarter of fiscal 2019 and apply it to applicable transactions. We do not expect the impact on the Company's consolidated financial statements to be material. ASU 2016-15 — In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We will adopt this standard in the first quarter of fiscal 2019 and make a policy election to classify distributions received from our equity method investment using the nature of distribution approach. Adoption of the standard will not have an impact on the Company's consolidated financial statements, as this is the manner in which we've recorded previous distributions from our equity method investee. ASU 2016-12 and 2016-10 — In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and in April 2016 issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, both of which provide further clarification to be considered when implementing ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The ASUs are effective concurrently with ASU 2014-09, which is effective for the Company in fiscal 2019. We will adopt this standard on September 30, 2018 using the modified retrospective transition approach. We are finalizing our evaluation of the impact this guidance will have on our financial statements, but currently estimate we will adjust retained earnings and increase accrued liabilities by approximately $0.9 million to account for specific sales incentives offered to our customers. ASU 2016-02 — In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize assets on the balance sheet for the rights and obligations created by all leases with terms greater than 12 months. The standard will also require certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. This standard will not be effective for us until fiscal 2020. We anticipate early adoption of this standard in the first quarter of fiscal 2019 using the modified retrospective adoption approach with a cumulative-effect adjustment recognized to the opening balance on the adoption date with prior periods not recast, and electing the practical expedients allowed under the standard. We are still analyzing the impact the standard will have on our consolidated financial statements, but expect an increase in total assets and total liabilities of approximately $9.3 million. The impact on our results of operations and cash flows is not expected to be material. |
Supplemental Financial Information |
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Supplemental Financial Information | 3. Supplemental Financial Information Accounts Receivable Accounts receivable, net, consisted of the following at the dates indicated:
Product Warranties The following table reflects activity in accrued warranty cost (current and long-term portion combined) for the fiscal years presented:
Extended Warranties 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 fiscal years presented:
Self-Insurance The following table reflects the 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 included in accrued expenses and other liabilities, respectively, on the accompanying Consolidated Balance Sheets. Shipping and Handling Shipping and handling revenues represent costs billed to customers and are presented as part of net sales on the accompanying Consolidated Statements of Operations. Shipping and handling costs incurred are included in cost of goods sold. Shipping and handling revenues recognized were $20.7 million, $19.1 million and $17.6 million for the fiscal years ended 2018, 2017 and 2016, respectively. The related cost of goods sold were $17.8 million, $17.0 million and $15.4 million for the fiscal years ended 2018, 2017 and 2016, respectively. |
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Inventories | 4. Inventories The following table presents components of inventories at the dates indicated:
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Property, Plant and Equipment | 5. Property, Plant and Equipment Property, plant and equipment consisted of the following at the dates indicated:
Depreciation and amortization expense for property, plant and equipment was $7.0 million, $6.2 million, and $6.1 million for the fiscal years ended 2018, 2017, and 2016, respectively. |
Goodwill |
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Goodwill | 6. Goodwill The carrying amounts of goodwill by reporting unit are as follows at the dates indicated:
In the fourth quarters of the fiscal years ended 2018 and 2017, we performed our annual impairment assessment of goodwill which did not indicate that an impairment existed; therefore, no impairments of goodwill have been recorded. |
Intangible Assets |
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Intangible Assets | 7. Intangible Assets The gross carrying amounts and accumulated amortization of intangible assets are as follows at the dates indicated:
Management considers the "Blue Bird" trade name to have an indefinite useful life and, accordingly, it is not subject to amortization. Management reached this conclusion principally due to the longevity of the Blue Bird name and because management considers renewal upon reaching the legal limit of the trademarks related to the trade name as perfunctory. The Company expects to maintain usage of the trade name on existing products and introduce new products in the future that will also display the trade name. During the fourth quarters of the fiscal years ended 2018 and 2017, we performed our annual impairment assessment of our trade name, which did not indicate that an impairment existed; therefore, no impairments of our indefinite lived intangibles have been recorded. Customer relationships are amortized on a straight-line basis over an estimated life of 20 years. Engineering designs are amortized on a straight-line basis over an estimated life of 7 years. Total amortization expense for intangible assets was $2.0 million, $2.0 million, and $1.9 million for the fiscal years ended 2018, 2017, and 2016, respectively. Amortization expense for finite lived intangible assets for the next five years is expected to be as follows:
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Debt |
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Debt | 8. Debt Original Credit Agreement On December 12, 2016, Blue Bird Body Company, a wholly-owned subsidiary of the Company, executed a $235.0 million five-year credit agreement with 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 consisted 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”). The obligations under the Credit Agreement and the related loan documents (including without limitation, the borrowings under the Credit Facilities and obligations in respect of certain cash management and hedging obligations owing to the agents, the lenders or their affiliates), are, in each case, secured by a lien on and security interest in substantially all of the assets of the Company and its subsidiaries including the Borrower, with certain exclusions as set forth in a Collateral Agreement entered into on the Closing Date. 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. Amended Credit Agreement On September 13, 2018, the Company entered into a first amendment of the December 12, 2016 credit agreement. The amendment provided for additional funding of $50.0 million with intended use as funds for the announced tender offer and remained unfunded at September 29, 2018. The amendment also increased the revolving credit facility to $100.0 million, a $25.0 million increase. The amendment extended the maturity date to September 13, 2023, five years from the effective date of the first amendment. The first amendment also amended the interest rate pricing matrix (as follows) as well as the principal payment schedule (as disclosed at the end of this footnote). In connection with the first amendment, we incurred $2.0 million of debt discount and issuance costs, which have been recorded as contra-debt and will be amortized over the life of the amended credit agreement using the effective interest method. The interest rate on the Term Loan Facility is (i) from the first amendment effective date until the first quarter ended on or about September 30, 2018, LIBOR plus 2.25% and (ii) commencing with the fiscal quarter ended on or about September 30, 2018 and thereafter, dependent on the Total Net Leverage Ratio of the Company, an election of either base rate or LIBOR pursuant to the table below:
Additional Disclosures Debt consisted of the following at the dates indicated:
Term loans are recognized on the Consolidated Balance Sheets at the unpaid principal balance, and are not subject to fair value measurement. 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 September 29, 2018 and September 30, 2017, $146.2 million and $154.0 million, respectively, were outstanding on the term loans. At September 29, 2018 and September 30, 2017, the stated interest rates on the term loans were 4.5% and 2.8%, respectively. At September 29, 2018 and September 30, 2017, the weighted-average annual effective interest rates for the term loans were 4.1% and 4.5%, respectively, which included amortization of the deferred financing costs. No borrowings were outstanding on the Revolving Credit Facility at September 29, 2018; however, since there were $6.9 million of Letters of Credit outstanding on September 29, 2018, the Company would have been able to borrow $93.1 million on the revolving line of credit. Interest expense on all indebtedness for the fiscal years ended 2018, 2017 and 2016 was $6.7 million, $7.3 million and $16.4 million, 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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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | 9. Income Taxes The components of income tax expense were as follows for the fiscal years presented:
During the fiscal year ended 2016, the Company had a Change in Control of its majority stockholder and does not expect any Section 382 limitations to impair the Company's ability to realize all tax attributes. At September 29, 2018, the Company had no federal tax credit carryforwards. The effective tax rates for the fiscal years ended 2018, 2017 and 2016 were (9.7)%, 31.7% and 59.1%, respectively. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (“Tax Act”), which significantly changed U.S. tax law. The Tax Act lowered the Company’s U.S. statutory federal income tax rate from 35% to 21% effective January 1, 2018, while also imposing a deemed repatriation tax on previously deferred foreign income. By operation of law, the Company applied a transitional or blended U.S. statutory federal income tax rate of 24.5% for 2018. The impact of the Tax Act increased our provision for income taxes by $2.1 million in 2018. This increase was composed of $2.0 million related to the re-measurement of net deferred tax assets and liabilities and $0.1 million associated with the deemed repatriation tax. Although additional guidance is expected from the IRS for the new law, we do not expect any changes would have a material impact on our results and thus have finalized our estimates under SAB 118. The effective tax rate for the fiscal year ended 2018 significantly differed from the statutory federal income tax rate of 24.5%, mainly due to one-time events like the decrease in our uncertain tax positions and a re-measurement of our deferred tax assets and liabilities as a result of the Tax Act. The rate was also favorably impacted by normal tax rate benefit items, such as the domestic production activities deduction, federal and state tax credits, and share based award related deductions in excess of recorded book expense. The effective tax rate for the fiscal year ended 2017 differed from the statutory federal income tax rate of 35%, reflecting the benefits of income tax credits, the domestic production activities deduction, and recording a tax windfall from share-based compensation awards exercised, which were offset by the application of tax credits claimed as offsets against our payroll tax liabilities, and interest and penalties on uncertain tax positions. The effective tax rate for the fiscal year ended 2016 differed from the statutory federal income tax rate of 35%, primarily as a result of discrete items increasing tax expense in the 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, limitations of the deductibility of certain share-based compensation, a net tax shortfall associated with the vesting of share-based compensation awards pursuant to adoption of ASU 2016-09, which were partially offset by recording the impact of new tax legislation. A reconciliation between the reported income tax expense for continuing operations and the amount computed by applying the statutory federal income tax rate as follows:
The Company’s liability arising from uncertain tax positions was recorded in other non-current liabilities on the Consolidated Balance Sheets. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The accrued interest and penalties were $0.0 million and $2.9 million at September 29, 2018 and September 30, 2017, respectively. The Company is subject to taxation mostly in the United States and various state jurisdictions. At September 29, 2018, tax years prior to 2015 are generally no longer subject to examination by federal and most state tax authorities. The following table sets forth the sources of and differences between the financial accounting and tax bases of the Company’s assets and liabilities which give rise to the net deferred tax assets at the dates indicated:
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Guarantees, Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees, Commitments and Contingencies | 10. Guarantees, Commitments and Contingencies Litigation At September 29, 2018, 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 impact 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. Our environmental liability using a discount rate of 11.5%, included in current accrued expenses and other long-term liabilities on the Consolidated Balance Sheets, was $0.4 million and $0.5 million at September 29, 2018 and September 30, 2017, respectively. The estimated aggregate undiscounted amount that will be incurred over the next 9 years is $0.9 million. The estimated payments for each of the next five years are $0.1 million per year and the aggregate amount thereafter is $0.4 million. Future expenditures may exceed the amounts accrued and estimated. Lease Commitments The Company leases certain buildings, machinery and equipment under operating leases expiring at various dates through 2027. Total rent expense was $2.0 million, $1.3 million and $1.2 million for the fiscal years ended 2018, 2017 and 2016, respectively. Operating Leases The following table sets forth future minimum lease payments under non-cancelable operating leases with original terms exceeding one year at September 29, 2018:
Capital Leases The Company leases from third party vendors various office and plant equipment which qualify for capital lease treatment under the provisions of ASC 840. On the Consolidated Balance Sheets, amounts due under capital lease obligations are included in other liabilities, current and long-term, with the related assets recorded in property, plant and equipment, net. Depreciation of assets recorded under capital lease obligations is included in cost of goods sold or selling, general and administrative expenses, depending upon use of leased property, on the Consolidated Statements of Operations. These leases have remaining lease terms ranging from 1.0 to 4.3 years. Leased property under capital leases at the dates indicated is presented in the following table:
The following table summarizes the Company’s future minimum lease payments under capital leases at September 29, 2018:
Purchase Commitments In the ordinary course of business, the Company enters into short-term contractual purchase orders for inventory and other assets. The amount of these commitments for the next five fiscal years is expected to be as follows:
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Segment Information |
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Segment Information | 11. 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 fiscal years presented: Net sales
Gross profit
The following table is a reconciliation of segment gross profit to consolidated income before income taxes for the fiscal years presented:
Sales are attributable to geographic areas based on customer location and were as follows for the fiscal years presented:
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Stockholders' Deficit |
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Equity [Abstract] | |
Stockholders' Deficit | 12. Stockholders’ Deficit Convertible Preferred Stock Dividends Holders of the Company's 7.625% Series A Convertible Cumulative Preferred Stock, par value $0.0001 ("Preferred Stock") are entitled to receive when, as and if declared by the Board, dividends which are payable at a rate of 7.625% per annum. The dividends are payable in cash, common shares, preferred shares, or any combination thereof. The form of dividend payment is at the sole discretion of the Company. In fiscal 2018, we paid four cash dividends totaling $1.9 million. As we are in an accumulated deficit position, we reduce additional paid-in capital for the dividend payments made in shares of common stock at the same amount we record additional paid-in-capital for the issuance of the common stock, which results in no net change to our Stockholders' Deficit. The fair value of all dividends are reflected as a deductions from net income to calculate net income available to common stockholders in our Consolidated Statements of Operations. Repurchase of Preferred Stock On September 23, 2017, the Company entered into a Securities Purchase Agreement with one holder of preferred stock, pursuant to which the preferred stock holder agreed to sell and the Company agreed to purchase all of (i) the shares of common stock, par value $0.0001 (the “Common Stock”) of the Company, (ii) the shares of the Preferred Stock, and (iii) the warrants to acquire Common Stock, in each case, owned by the preferred stock holder (the “Transaction Securities”). The Company purchased the Transaction Securities for an aggregate purchase price of $32.1 million, reflecting a price per share of Common Stock of $18.65. As disclosed in Note 18, Subsequent Events, all Preferred Stock was converted to Common Stock. Warrants At September 29, 2018, there were a total of 1,081,384 warrants outstanding to purchase 540,692 shares of our Common Stock. Change in Control Pursuant to, and subject to the terms of, a Purchase and Sale Agreement, dated as of May 26, 2016 (the “Purchase and Sale Agreement”), by and among The Traxis Group B.V. ("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 of the Company owned by Traxis (the “Transaction Shares”). Subject to the terms and conditions set forth in the Purchase and Sale 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. Rights held by Traxis under the Registration Rights Agreement were transferred to ASP in conjunction with the Purchase and Sale Agreement. The Company was not a part of the transaction and there were no proceeds to the Company, resulting in no required accounting treatment; however, the sale of Transaction Shares did trigger a phantom equity compensation payment. The payment was primarily funded by Traxis and not by the Company. |
Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | 13. Earnings Per Share The following table presents the basic and diluted earnings per share computation for the fiscal years presented:
(1) Basic earnings per share is calculated by dividing income available to common stockholders 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 fiscal year ended 2017, 4,302,212 shares of potentially dilutive convertible preferred stock were excluded from the calculation since the if-converted impact would be anti-dilutive and, as a result, the numerator used in the calculation included the impact on income of preferred stock dividends and the excess of fair value over carrying value for preferred stock repurchase. Potentially dilutive common stock equivalents totaling 12,295 and 173,009 shares were excluded from the fiscal years ended 2017 and 2016, respectively, calculations since their impact would be anti-dilutive. |
Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Based Compensation | 14. Share-Based Compensation In fiscal 2015, we adopted the Omnibus Equity Incentive Plan (the "Plan"). The Plan is administered by the Compensation Committee of our Board of Directors. Under the Plan, the Committee may grant awards for the issuance up to an aggregate of 3,700,000 shares of common stock in the form of non-qualified stock options, incentive stock options, stock appreciation rights (collectively, “SARs” and each individually a “SAR”), restricted stock, restricted stock units, performance shares, performance units, incentive bonus awards, other cash-based awards and other stock-based awards. The exercise price of a share subject to a stock option may not be less than 100% of the fair market value of a share of the Company's common stock with respect to the grant date of such stock option. In fiscal years prior to 2015, we had not granted any stock options or other stock-settled awards. No portion of the options shall vest and become exercisable after the date on which the Optionee’s service with the Company and its subsidiaries terminates. The vesting of all unvested shares of common stock subject to an option will automatically be accelerated in connection with a “Change in Control,” as defined in the Plan. New shares of the Company's common stock are issued upon stock option exercises, or at the time of vesting for restricted stock. Stock-based payments to employees, including grants of stock options, restricted stock awards ("RSAs") and restricted stock units ("RSUs"), are recognized in the financial statements based on their fair value. The fair value of each stock option award on the grant date is estimated using the Black-Scholes option-pricing model with the following assumptions: expected dividend yield, expected stock price volatility, weighted-average risk-free interest rate and weighted average expected term of the options. The volatility assumption used in the Black-Scholes option-pricing model is based on peer group volatility because we do not have a sufficient trading history as a stand-alone public company. Because we do not have sufficient history with respect to stock option activity and post-vesting cancellations, the expected term assumption is based on the simplified method under GAAP, which is based on the vesting period and contractual term for each vesting tranche of awards. The mid-point between the vesting date and the expiration date is used as the expected term under this method. The risk-free interest rate used in the Black-Scholes model is based on the implied yield curve available on U.S. Treasury zero-coupon issues at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a cash dividend on common shares. Restricted stock units and restricted stock awards are valued based on the intrinsic value of the difference between the exercise price, if any, of the award and the fair market value of our common stock on the grant date. We expense any award with graded-vesting features using a straight-line attribution method. All outstanding share-based compensation awards vested upon the change in control which took place on June 8, 2016. Concurrent with the change in control, certain awards not considered as granted under GAAP due to fiscal 2017 and 2018 performance criteria which had not been established, were granted for accounting purposes and immediately vested and expensed with the change in control. Restricted Stock Awards The following table summarizes the Company's RSA and RSU award activity for the fiscal year presented:
The weighted-average grant date fair value of restricted stock awards granted in the fiscal years ended 2017 and 2016 was $15.82 and $10.82, respectively. Compensation expense for restricted stock awards, recognized in selling, general and administrative expenses on the Consolidated Statements of Operations, was $1.6 million, $0.8 million, and $8.7 million for the fiscal years ended 2018, 2017, and 2016, respectively, with associated tax benefits of $0.4 million, $0.3 million, and $3.0 million, respectively. At September 29, 2018, unrecognized compensation cost related to restricted stock awards totaled $0.4 million and is expected to be recognized over a weighted-average period of four months. Stock Option Awards The following table summarizes the Company's stock option activity for the fiscal year presented:
(1) Stock options exercised during the fiscal year had an aggregate intrinsic value totaling $4.2 million. (2) Stock options outstanding at the end of the fiscal year had an aggregate intrinsic value totaling $5.5 million. (3) Fully vested and exercisable options at fiscal year end had an aggregate intrinsic value totaling $3.9 million with a weighted average contractual term of 6.9 years. The total aggregate intrinsic value of stock options exercised during the fiscal years ended 2017 and 2016 were $2.3 million and $1.0 million, respectively. Compensation expense for stock option awards, recognized in selling, general and administrative expenses on the Consolidated Statements of Operations, was $0.9 million, $0.4 million, and $4 million for the fiscal years ended 2018, 2017, and 2016, respectively, with associated tax benefits of $0.2 million, $0.1 million, and $1.4 million, respectively. At September 29, 2018, unrecognized compensation cost related to stock option awards totaled $0.2 million and is expected to be recognized over a weighted-average period of three months. The fair value of each option award at grant date was estimated using the Black-Scholes option-pricing model with the following assumptions made and resulting grant-date fair values during the fiscal years presented:
Phantom Award A phantom stock award plan was adopted by the Company in February 2007 (as amended and restated from time to time, the “Phantom Award Plan”). Upon vesting of a phantom award, the participants (including employees, directors, officers and consultants of the Company) were eligible to receive a cash payment subject to the initial investors in the Company receiving an agreed upon return of capital. There have been three events that met the required return on capital to our investors to trigger a Phantom Award Plan payment: (a) in June 2016, in conjunction with the change in control of the Company's major stockholder, the board of directors approved for all Phantom Award Plan participants a payment of $17.1 million, which was primarily funded by a $17.0 million contribution from our former major stockholder, (b) in February 2015, in conjunction with the Business Combination, the board of directors approved for all Phantom Award Plan participants a payment of $13.8 million, which was primarily funded by a $13.6 million contribution from our former major stockholder. With the 2016 payment and change in control, the incentive program was terminated. |
Benefit Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Plans | 15. Benefit Plans Defined Benefit Pension Plans The Company has a defined benefit pension plan (the “Defined Benefit Plan”) covering U.S. hourly and salaried personnel. On May 13, 2002, the Defined Benefit Plan was amended to freeze new participation as of May 15, 2002, and therefore, any new employees who started on or after May 15, 2002 were not permitted to participate in the Defined Benefit Plan. Effective January 1, 2006, the benefit plan was frozen to all participants. No accrual of future benefits will be calculated beyond this date. The Company contributed $5.9 million and $5.4 million to the Defined Benefit Plan during the fiscal years ended September 29, 2018 and September 30, 2017, respectively. For the fiscal years ended September 29, 2018 and September 30, 2017, benefits paid were $7.1 million and $6.9 million, respectively. The projected benefit obligation (“PBO”) for the Defined Benefit Plan was $144.5 million and $144.7 million at September 29, 2018 and September 30, 2017, respectively. The reconciliation of the beginning and ending balances of the PBO for the Defined Benefit Plan for the fiscal years indicated is presented in the following table:
(1) The assumption changes referenced in the table above result from (i) changes in the utilized discount rate to value Blue Bird’s future obligations and (ii) updates to the mortality table projections used in the calculation of the benefit obligations. Plan Assets: The summary and reconciliation of the beginning and ending balances of the fair value of the plan assets are as follows:
Funded Status: The following table reconciles the benefit obligations, plan assets, funded status and net liability information of the Defined Benefit Plan at the dates indicated. The net pension liability is reflected in long-term liabilities on the Consolidated Balance Sheets.
Fair Value of Plan Assets: The Company determines the fair value of its financial instruments in accordance with the Fair Value Measurements and Disclosures Topic of the ASC. Fair value is the price to hypothetically sell an asset or transfer a liability in an orderly manner in the principal market for that asset or liability. This topic provides a hierarchy that gives highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities. This topic requires that financial assets and liabilities are classified into one of the following three categories:
The Company evaluates fair value measurement inputs on an ongoing basis in order to determine if there is a change of sufficient significance to warrant a transfer between levels. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company's valuation process. The Defined Benefit Plan assets are comprised of various investment funds, which are valued based upon their quoted market prices. The invested pension plan assets of the Defined Benefit Plan are all Level 2 assets under ASC 820, Fair Value Measurements (“ASC 820”). During the fiscal years ended 2018 and 2017, there were no transfers between levels. There are no sources of significant concentration risk in the invested assets at September 29, 2018, the measurement date. The following table sets forth, by level within the fair value hierarchy, a summary of the Defined Benefit Plan’s investments measured at fair value:
The following table represents net periodic benefit cost and changes in plan assets and benefit obligations recognized in other comprehensive income, before tax effect, for the fiscal years presented:
The estimated net loss for the Defined Benefit Plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $2.8 million. The unrecognized gain or loss is amortized as follows: the total unrecognized gain or loss, less the larger of 10% of the liability or 10% of the assets, is divided by the average future working lifetime of active plan participants. The following actuarial assumptions were used to determine the benefit obligations at the dates indicated:
The benchmark for the discount rates is an estimate of the single equivalent discount rate determined by matching the Defined Benefit Plan’s future expected cash flows to spot rates from a yield curve comprised of high quality corporate bond rates of various durations. The Defined Benefit Plan asset allocations at the dates indicated, the measurement date, are as follows:
There was no Company common stock included in equity securities. Assets of the Defined Benefit Plan are invested primarily in common stock funds. Assets are valued using quoted prices in active markets. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the PBO. In estimating that rate, appropriate consideration is given to the returns being earned by the plan assets in the fund and rates of return expected to be available for reinvestment and a building block method. The expected rate of return on each asset class is broken down into three components: (1) inflation, (2) the real risk-free rate of return (i.e., the long term estimate of future returns on default free U.S. government securities) and (3) the risk premium for each asset class (i.e., the expected return in excess of the risk-free rate). The investment strategy for pension plan assets is to limit risk through asset allocation, diversification, selection and timing. Assets are managed on a total return basis, with dividends and interest reinvested in the account. The Company expects to contribute no funds to its Defined Benefit Plan in fiscal year 2019. The following benefit payments are expected to be paid to the Company’s pension plan participants in the fiscal years indicated:
Defined Contribution Plans The Company offers a defined contribution 401(k) plan covering substantially all U.S. employees and a defined contribution plan for Canadian employees. During the fiscal years ended 2018, 2017 and 2016, the Company offered a 50% match on the first 6% of the employee’s contributions. The plans also provide for an additional discretionary match depending on Company performance. Compensation expense related to defined contribution plans totaled $1.9 million, $1.9 million and $1.7 million for the fiscal years ended 2018, 2017 and 2016, respectively. Health Benefits The Company provides and is predominantly self-insured for medical, dental, and accident and sickness benefits. A liability related to this obligation is recorded on the Company’s Consolidated Balance Sheets as accrued expenses. Total expense related to this plan recorded for the fiscal years ended 2018, 2017, and 2016, was $14.3 million, $13.6 million, and $12.3 million, respectively. Employee Compensation Plans The Management Incentive Plan (the “MIP”) compensates certain key salaried management employees and is based on earnings before interest, taxes, depreciation and amortization (“EBITDA”) performance as well as a net debt metric. MIP bonus liabilities of $2.4 million and $3.5 million are included in accrued expenses on the Consolidated Balance Sheets at September 29, 2018 and September 30, 2017, respectively. |
Equity Investment in Affiliate |
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Sep. 29, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investment in Affiliate | 16. Equity Investment in Affiliate On October 14, 2009, Blue Bird and Girardin Minibus entered into a venture, Micro Bird Holdings, Inc. (“Micro Bird”), to combine the complementary expertise of the two separate manufacturers. Blue Bird Micro Bird by Girardin Type A buses are produced in Drummondville, Quebec by Micro Bird. The Company holds a 50% equity interest in Micro Bird Holdings, Inc. ("Micro Bird"), and accounts for Micro Bird under the equity method of accounting as the Company does not have control to direct the activities that most significantly impact Micro Bird’s financial performance based on the shared powers of the venture partners. The carrying amount of the equity method investment is adjusted for the Company’s proportionate share of net earnings or losses and reduced by any dividends received. At September 29, 2018 and September 30, 2017, the Company had an investment of $11.1 million and $11.6 million, respectively. During fiscal years ended 2018, 2017 and 2016, Micro Bird paid dividends to all common stockholders, and the Company received $1.8 million, $4.6 million, and $2.3 million, respectively, net of required withholding taxes. The dividends reduced the carrying value of our investment and are presented as cash inflows in the operating section of our Consolidated Statements of Cash Flows. In recognizing the Company’s 50% portion of Micro Bird net income, the Company recorded $1.3 million, $3.3 million and $2.9 million in equity in net income of non-consolidated affiliate for the fiscal years ended 2018, 2017 and 2016, respectively. |
Accumulated Other Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | 17. Accumulated Other Comprehensive Income The following table provides information on changes in accumulated other comprehensive income (“AOCI”) for the periods presented:
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Subsequent Events |
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Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Credit Facility Amendment and Tender Offer On October 15, 2018, the Company received $50.0 million in funding from the amended credit facility. Refer to Note 8, Debt, for more information on the credit facility amendment. In conjunction with the debt funding, we conducted a Tender Offer and accepted for purchase (i) 1,782,568 shares of our Common Stock, $0.0001 par value per share at a price of $28.00 per share, and (ii) 364 shares of our 7.625% Series A Convertible Cumulative Preferred Stock, par value $0.0001 per share, at a price of $241.69 per share, for an aggregate cost of approximately $50.0 million, excluding fees and expenses relating to the tender offer. These shares represented approximately 6.54% of the shares of Common Stock outstanding and 0.39% of the shares of Preferred Stock outstanding as of October 15, 2018, the date the Tender Offer commenced. Preferred Stock Conversion On November 13, 2018, the Company converted all remaining outstanding shares of Preferred Stock, and issued 799,615 shares of Common Stock. There were no dividends paid with the conversion. |
Schedule II - Valuation and Qualifying Accounts |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II- VALUATION AND QUALIFYING ACCOUNTS
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying 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 Company’s fiscal year ends on the Saturday closest to September 30 with its quarters consisting of thirteen weeks in most years. In fiscal years 2018, 2017, and 2016, there were a total of 52 weeks. 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. |
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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 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. |
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Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
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Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Accounts receivable consist of amounts owed to the Company by customers. The Company monitors collections and payments from customers, and generally does not require collateral. Accounts receivable are generally due within 30 to 90 days. The Company provides for the possible inability to collect accounts receivable by recording an allowance for doubtful accounts. The Company reserves for an account when it is considered potentially uncollectible. The Company estimates its allowance for doubtful accounts based on historical experience, aging of accounts receivable and information regarding the creditworthiness of its customers. To date, losses have been within the range of management’s expectations. The Company writes off accounts receivable if it determines that the account is uncollectible. |
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Revenue Recognition | Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, ownership has transferred to the customer, the selling price is fixed or determinable, and collectability is reasonably assured. Generally, the Company recognizes revenue, net of sales concessions, when the product is delivered or when the product has been completed, is ready for delivery, has been paid for, its title has transferred and is awaiting pickup by the customer, which generally occurs within 30 days of completion. The Company 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. The Company classifies shipping and handling revenues and costs billed to a customer as net sales on the Consolidated Statements of Operations and the related costs incurred by the Company are included in cost of goods sold on the Consolidated Statements of Operations. |
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Self-Insurance | Self-Insurance The Company is self-insured for the majority of its workers’ compensation and medical claims. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability. Self-insurance losses for claims filed and claims incurred but not reported are accrued based upon estimates of the aggregate liability for uninsured claims, using loss development factors and actuarial assumptions followed in the insurance industry and historical loss development experience. |
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Financial Instruments | Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, accounts payable, revolving credit facilities and long-term debt. The carrying amounts of cash and cash equivalents, trade receivables and accounts payable approximate their fair values because of the short-term maturity and highly liquid nature of these instruments. The carrying value of the Company’s senior term loan approximates fair value due to the variable interest rate. |
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Inventories | Inventories The Company values inventories at the lower of cost or net realizable value. The Company uses a standard costing methodology, which approximates cost on a first-in, first-out (“FIFO”) 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. Obsolete inventory amounts are based on historical usage and assumptions about future demand. |
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Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis using the following periods, which represent the estimated useful lives of the assets:
Costs, including capitalized interest and certain design, construction and installation costs related to assets that are under construction and are in the process of being readied for their intended use, are recorded as construction in progress and are not depreciated until such time as the subject asset is placed in service. Repairs and maintenance that do not extend the useful life of the asset are expensed as incurred. Upon sale, retirement, or other disposition of these assets, the costs and related accumulated depreciation are removed from the respective accounts and any gain or loss on the disposition is included on our Consolidated Statements of Operations. |
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If we are required to analyze recoverability based on a triggering event, undiscounted future cash flows over the estimated remaining life of the asset, or asset group, are projected. If these projected cash flows are less than the carrying amount, an impairment loss is recognized to the extent the fair value of the asset less any costs of disposition is less than the carrying amount of the asset. Judgments regarding the existence of impairment indicators are based on market and operational performance. Evaluating potential impairment also requires estimates of future operating results and cash flows. No impairment charge was recognized in any of the periods presented. |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of acquired businesses over the fair value of the assets acquired less liabilities assumed in connection with such acquisition. In accordance with the provisions of ASC 350, Intangibles—Goodwill and Other, goodwill and intangible assets with indefinite useful lives acquired in an acquisition are not amortized, but instead are tested for impairment at least annually or more frequently should an event occur or circumstances indicate that the carrying amount may be impaired. Such events or circumstances may be a significant change in business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition, changes in strategy or disposition of a reporting unit or a portion thereof. We have two reporting units for which we test goodwill for impairment: Bus and Parts. In the evaluation of goodwill for impairment, we have the option to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If, under the quantitative assessment, the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, must be measured under step two of the impairment analysis. In step two of the analysis, we would record an impairment loss equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value, should such a circumstance arise. Fair value of the reporting units is estimated primarily using the income approach, which incorporates the use of discounted cash flow (DCF) analysis. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including markets and market shares, sales volumes and prices, costs to produce, tax rates, capital spending, discount rate and working capital changes. The cash flow forecasts are based on approved strategic operating plans and long-term forecasts. In the evaluation of indefinite lived assets for impairment, we have the option to perform a qualitative assessment to determine whether further impairment testing is necessary, or to perform a quantitative assessment by comparing the fair value of an asset to its carrying amount. The Company’s intangible asset with an indefinite useful life is the "Blue Bird" trade name. Under the qualitative assessment, an entity is not required to calculate the fair value of the asset unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If a qualitative assessment is not performed or if a quantitative assessment is otherwise required, then the entity compares the fair value of an asset to its carrying amount and the amount of the impairment loss, if any, is the difference between fair value and carrying value. The fair value of our trade name is derived by using the relief from royalty method, which discounts the estimated cash savings we realized by owning the name instead of otherwise having to license or lease it. Our intangible assets with a definite useful life are amortized over their estimated useful lives, 7 or 20 years, using the straight-line method. The useful lives of our intangible assets are reassessed annually and they are tested for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. |
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Debt Issue Costs | Debt Issue Costs Amounts paid directly to lenders or as an original issue discount and amounts classified as issuance costs are recorded as a reduction in the carrying value of the debt, for which the Company had deferred financing costs totaling $4.0 million and $2.8 million at September 29, 2018 and September 30, 2017, respectively, incurred in connection with its debt facilities and related amendments. All deferred financing costs are amortized to interest expense. The effective interest method is used for debt discounts related to the term loan. The Company’s amortization of these costs was $0.8 million, $1.1 million and $3.0 million for the fiscal years ended 2018, 2017 and 2016, respectively, and are reflected in the Consolidated Statements of Operations as a component of interest expense. |
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Pensions | Pensions The Company accounts for its pension benefit obligations using actuarial models. The measurement of plan obligations and assets was made at September 29, 2018. Effective January 1, 2006, the benefit plan was frozen to all participants. No accrual of future benefits is earned or calculated beyond this date. Accordingly, our obligation estimate is based on benefits earned at that time discounted using an estimate of the single equivalent discount rate determined by matching the plan’s future expected cash flows to spot rates from a yield curve comprised of high quality corporate bond rates of various durations. The Company recognizes the funded status of its pension plan obligations in its Consolidated Balance Sheet and records in other comprehensive income (loss) certain gains and losses that arise during the period, but are deferred under pension accounting rules. |
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Product Warranty Costs | Product Warranty Costs 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 a unit is sold. The methodology to determine the warranty reserve calculates the 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. |
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Extended Product Warranty Costs | 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 Consolidated Statements of Operations. The current methodology to determine 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. |
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Research and Development | Research and Development Research and development costs are expensed as incurred and included in selling, general and administrative expenses in our Consolidated Statements of Operations. |
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Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the financial statement and tax basis of assets and liabilities. The Company evaluates its ability, based on the weight of evidence available, to realize future tax benefits from deferred tax assets and establishes a valuation allowance to reduce a deferred tax asset to a level which, more likely than not, will be realized in future years. The Company recognizes uncertain tax positions based on a cumulative probability assessment if it is more likely than not that the tax position will be sustained upon examination by an appropriate tax authority with full knowledge of all information. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Amounts recorded for uncertain tax positions are periodically assessed, including the evaluation of new facts and circumstances, to ensure sustainability of the positions. The Company records interest and penalties related to unrecognized tax benefits in income tax expense. |
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Environmental Expenditures | Environmental Liabilities The Company records reserves for environmental liabilities on a discounted basis when environmental investigation and remediation obligations are probable and related costs are reasonably estimable. |
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Segment Reporting | Segment Reporting Operating segments are components of an entity that engage in business activities with discrete financial information available that is regularly reviewed by the chief operating decision maker (“CODM”) in order to assess performance and allocate resources. The Company’s CODM is the Company’s President and Chief Executive Officer. As discussed further in Note 11, Segment Information, the Company determined its operating and reportable segments to be Bus and Parts. The Bus segment includes the manufacturing and assembly of school 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. |
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Recently Issued and Adopted Accounting Standards | Recently Adopted Accounting Standards ASU 2015-11 — In the first quarter of fiscal 2018, the Company adopted Accounting Standards Update ("ASU") No. 2015-11, Simplifying the Measurement of Inventory, which requires inventory to be measured at the lower of cost or net realizable value. The adoption of this pronouncement did not have any impact on any component of our financial statements. Recently Issued Accounting Standards ASU 2018-15 — In August 2018, the Financial Accounting Standards Board ("FASB") issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods. Early adoption is permitted for annual or interim periods. We plan to early adopt this standard in the first quarter of fiscal 2019 and do not anticipate a significant impact on the consolidated financial statements. ASU 2018-14 — In August, 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement benefit plans. The guidance removes disclosures that are no longer considered cost beneficial, and adds new and clarifies other disclosure requirements. The guidance will be effective for annual and interim periods beginning after December 15, 2020, which is effective for the Company in the first quarter of fiscal 2022. Early adoption is permitted and adoption is required on a retrospective basis. We are currently evaluating the impact the standard will have on our disclosures. ASU 2018-13 — In August, 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates disclosures such as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and adds new disclosure requirements for Level 3 measurements. The ASU is effective for fiscal years beginning after December 15, 2019, which is effective for the Company in the first quarter of fiscal 2020. Early adoption is permitted. The impact of this guidance will dependent on any future hierarchy changes or any future addition of Level 3 assets or liabilities. ASU 2018-07 — In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting, which provides guidance on accounting for non-employee share-based awards for goods or services received by a company. We have not granted any share-based awards to non-employees. The impact of this guidance will be dependent on future grants, if any, of these forms of share-based awards. ASU 2018-05 — In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which updates income tax accounting to reflect the SEC's interpretive guidance released on December 22, 2017, when the Tax Cuts and Jobs Act (the "Tax Act") was signed into law. For more information regarding the impact of the Tax Act, see Note 9. Income Taxes. ASU 2018-02 — In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220). This ASU provides guidance on a reclassification from accumulated other comprehensive income ("AOCI") to retained earnings for the effect of the tax rate change resulting from the Tax Cuts and Jobs Act (H.R.1) (the "Tax Act"). The amendments eliminate the stranded tax effects resulting from the Tax Act and will improve the usefulness of information reported to financial statement users. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Should we elect to apply this optional ASU, it will be effective for us in the first quarter of fiscal 2020. We are currently evaluating the impact this ASU may have on our consolidated financial statements. ASU 2017-12 — In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which intends to simplify the application of hedge accounting guidance and better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The Company will adopt this amended guidance during the first quarter of fiscal 2019 and apply it to applicable transactions. We do not expect the impact on the Company's consolidated financial statements to be material. ASU 2016-15 — In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We will adopt this standard in the first quarter of fiscal 2019 and make a policy election to classify distributions received from our equity method investment using the nature of distribution approach. Adoption of the standard will not have an impact on the Company's consolidated financial statements, as this is the manner in which we've recorded previous distributions from our equity method investee. ASU 2016-12 and 2016-10 — In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and in April 2016 issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, both of which provide further clarification to be considered when implementing ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The ASUs are effective concurrently with ASU 2014-09, which is effective for the Company in fiscal 2019. We will adopt this standard on September 30, 2018 using the modified retrospective transition approach. We are finalizing our evaluation of the impact this guidance will have on our financial statements, but currently estimate we will adjust retained earnings and increase accrued liabilities by approximately $0.9 million to account for specific sales incentives offered to our customers. ASU 2016-02 — In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize assets on the balance sheet for the rights and obligations created by all leases with terms greater than 12 months. The standard will also require certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. This standard will not be effective for us until fiscal 2020. We anticipate early adoption of this standard in the first quarter of fiscal 2019 using the modified retrospective adoption approach with a cumulative-effect adjustment recognized to the opening balance on the adoption date with prior periods not recast, and electing the practical expedients allowed under the standard. We are still analyzing the impact the standard will have on our consolidated financial statements, but expect an increase in total assets and total liabilities of approximately $9.3 million. The impact on our results of operations and cash flows is not expected to be material. |
Summary of Significant Accounting Policies (Tables) |
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Property, Plant and Equipment | Depreciation and amortization are calculated on a straight-line basis using the following periods, which represent the estimated useful lives of the assets:
Property, plant and equipment consisted of the following at the dates indicated:
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Supplemental Financial Information (Tables) |
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Condensed Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable, net, consisted of the following at the dates indicated:
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Schedule of Product Warranty Liability | 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 fiscal years presented:
The following table reflects activity in accrued warranty cost (current and long-term portion combined) for the fiscal years presented:
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Schedule of Self Insurance Reserve | The following table reflects the total accrued self-insurance liability, comprised of workers' compensation and health insurance related claims, at the dates indicated:
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Inventories (Tables) |
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Schedule of Inventories, Current | The following table presents components of inventories at the dates indicated:
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Property, Plant and Equipment (Tables) |
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Property, Plant and Equipment | Depreciation and amortization are calculated on a straight-line basis using the following periods, which represent the estimated useful lives of the assets:
Property, plant and equipment consisted of the following at the dates indicated:
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Goodwill (Tables) |
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Schedule of Goodwill | The carrying amounts of goodwill by reporting unit are as follows at the dates indicated:
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Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | The gross carrying amounts and accumulated amortization of intangible assets are as follows at the dates indicated:
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Schedule of Indefinite-Lived Intangible Assets | The gross carrying amounts and accumulated amortization of intangible assets are as follows at the dates indicated:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization expense for finite lived intangible assets for the next five years is expected to be as follows:
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | 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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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax (Benefit) Expense | The components of income tax expense were as follows for the fiscal years presented:
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Schedule of Effective Income Tax Rate Reconciliation | A reconciliation between the reported income tax expense for continuing operations and the amount computed by applying the statutory federal income tax rate as follows:
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Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
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Schedule of Deferred Tax Assets and Liabilities | The following table sets forth the sources of and differences between the financial accounting and tax bases of the Company’s assets and liabilities which give rise to the net deferred tax assets at the dates indicated:
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Guarantees, Commitments and Contingencies (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | The following table sets forth future minimum lease payments under non-cancelable operating leases with original terms exceeding one year at September 29, 2018:
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Schedule of Capital Leased Assets | Leased property under capital leases at the dates indicated is presented in the following table:
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Schedule of Future Minimum Lease Payments for Capital Leases | The following table summarizes the Company’s future minimum lease payments under capital leases at September 29, 2018:
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The tables below present segment net sales and gross profit for the fiscal years presented: Net sales
Gross profit
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Reconciliation of Operating Profit from Segments to Consolidated | The following table is a reconciliation of segment gross profit to consolidated income before income taxes for the fiscal years 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 fiscal years presented:
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Earnings Per Common Share (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the basic and diluted earnings per share computation for the fiscal years presented:
(1) Basic earnings per share is calculated by dividing income available to common stockholders 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 fiscal year ended 2017, 4,302,212 shares of potentially dilutive convertible preferred stock were excluded from the calculation since the if-converted impact would be anti-dilutive and, as a result, the numerator used in the calculation included the impact on income of preferred stock dividends and the excess of fair value over carrying value for preferred stock repurchase. Potentially dilutive common stock equivalents totaling 12,295 and 173,009 shares were excluded from the fiscal years ended 2017 and 2016, respectively, calculations since their impact would be anti-dilutive. |
Share Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 RSA and RSU award activity for the fiscal year 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 fiscal year presented:
(1) Stock options exercised during the fiscal year had an aggregate intrinsic value totaling $4.2 million. (2) Stock options outstanding at the end of the fiscal year had an aggregate intrinsic value totaling $5.5 million. (3) Fully vested and exercisable options at fiscal year end had an aggregate intrinsic value totaling $3.9 million with a weighted average contractual term of 6.9 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 made and resulting grant-date fair values during the fiscal years presented:
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Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Projected Benefit Obligations | The reconciliation of the beginning and ending balances of the PBO for the Defined Benefit Plan for the fiscal years indicated is presented in the following table:
(1) The assumption changes referenced in the table above result from (i) changes in the utilized discount rate to value Blue Bird’s future obligations and (ii) updates to the mortality table projections used in the calculation of the benefit obligations. |
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Schedule of Changes in Fair Value of Plan Assets | The summary and reconciliation of the beginning and ending balances of the fair value of the plan assets are as follows:
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Schedule of Net Funded Status | The net pension liability is reflected in long-term liabilities on the Consolidated Balance Sheets.
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Schedule of Allocation of Plan Assets | The following table sets forth, by level within the fair value hierarchy, a summary of the Defined Benefit Plan’s investments measured at fair value:
The Defined Benefit Plan asset allocations at the dates indicated, the measurement date, are as follows:
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Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) | The following table represents net periodic benefit cost and changes in plan assets and benefit obligations recognized in other comprehensive income, before tax effect, for the fiscal years presented:
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Schedule of Assumptions Used | The following actuarial assumptions were used to determine the benefit obligations at the dates indicated:
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Schedule of Expected Benefit Payments | The following benefit payments are expected to be paid to the Company’s pension plan participants in the fiscal years indicated:
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Accumulated Other Comprehensive Income (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table provides information on changes in accumulated other comprehensive income (“AOCI”) for the periods presented:
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Nature of Business and Basis of Presentation - Narrative (Details) - School Bus Holdings, Inc. $ in Millions |
Feb. 24, 2015
USD ($)
shares
|
---|---|
Business Combination, Separately Recognized Transactions [Line Items] | |
Cash paid | $ 100.0 |
Shares issued for acquisition (in shares) | shares | 12,000,000 |
Shares issued for acquisition, value | $ 120.0 |
Summary of Significant Accounting Policies - Useful Lives of Property, Plant and Equipment (Details) |
12 Months Ended |
---|---|
Sep. 29, 2018 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 15 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 33 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
Office furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Office furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Supplemental Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Condensed Financial Information [Abstract] | ||
Accounts receivable | $ 24,167 | $ 10,248 |
Allowance for doubtful accounts | (100) | (100) |
Accounts receivable, net | $ 24,067 | $ 10,148 |
Supplemental Financial Information - Product Warranty Rollforward (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
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Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Balance at beginning of period | $ 20,910 | $ 19,444 | $ 17,661 |
Add: current period accruals | 11,454 | 11,075 | 10,452 |
Less: current period reductions of accrual | (9,718) | (9,609) | (8,669) |
Balance at end of period | $ 22,646 | $ 20,910 | $ 19,444 |
Supplemental Financial Information - Extended Warranty Income (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Movement in Extended Product Warranty Accrual [Roll Forward] | |||
Balance at beginning of period | $ 19,295 | $ 16,187 | $ 14,145 |
Add: current period deferred income | 10,854 | 9,146 | 7,186 |
Less: current period recognition of income | (6,958) | (6,038) | (5,144) |
Balance at end of period | $ 23,191 | $ 19,295 | $ 16,187 |
Supplemental Financial Information - Self Insurance (Details) - USD ($) $ in Thousands |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Condensed Financial Information [Abstract] | ||
Current portion | $ 3,332 | $ 3,194 |
Long-term portion | 1,901 | 2,251 |
Total accrued self-insurance | $ 5,233 | $ 5,445 |
Supplemental Financial Information - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Condensed Financial Information [Abstract] | |||
Shipping and handling revenue | $ 20.7 | $ 19.1 | $ 17.6 |
Shipping and handling costs | $ 17.8 | $ 17.0 | $ 15.4 |
Inventories (Details) - USD ($) $ in Thousands |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 42,439 | $ 54,379 |
Work in process | 13,141 | 14,660 |
Finished goods | 1,753 | 7,116 |
Total inventories | $ 57,333 | $ 76,155 |
Goodwill (Details) - USD ($) $ in Thousands |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Goodwill [Line Items] | ||
Gross Goodwill | $ 18,825 | $ 18,825 |
Accumulated Impairments | 0 | 0 |
Net Goodwill | 18,825 | 18,825 |
Bus | ||
Goodwill [Line Items] | ||
Gross Goodwill | 15,139 | 15,139 |
Accumulated Impairments | 0 | 0 |
Net Goodwill | 15,139 | 15,139 |
Parts | ||
Goodwill [Line Items] | ||
Gross Goodwill | 3,686 | 3,686 |
Accumulated Impairments | 0 | 0 |
Net Goodwill | $ 3,686 | $ 3,686 |
Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 38,407 | $ 38,407 |
Gross Carrying Amount | 78,223 | 78,223 |
Accumulated Amortization | 22,751 | 20,742 |
Total | 15,656 | 17,665 |
Total | 55,472 | 57,481 |
Trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Nonamortized intangible assets | 39,816 | 39,816 |
Engineering designs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 982 | 982 |
Accumulated Amortization | 280 | 141 |
Total | 702 | 841 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 37,425 | 37,425 |
Accumulated Amortization | 22,471 | 20,601 |
Total | $ 14,954 | $ 16,824 |
Intangible Assets - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense for intangible assets | $ 2.0 | $ 2.0 | $ 1.9 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated life | 20 years | ||
Engineering designs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated life | 7 years |
Intangible Assets Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense, 2019 | $ 2,009 | |
Amortization expense, 2020 | 2,009 | |
Amortization expense, 2021 | 2,009 | |
Amortization expense, 2022 | 2,009 | |
Amortization expense, 2023 | 2,009 | |
Amortization expense, thereafter | 5,611 | |
Total | $ 15,656 | $ 17,665 |
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Less: Current portion of long-term debt | $ 9,900 | $ 8,000 |
Long-term debt, net of current portion | 132,239 | 143,224 |
Senior Term Loan | Term Loan Facility | ||
Debt Instrument [Line Items] | ||
2023 and 2021 term loans, net of deferred financing costs of $4,011 and $2,776, respectively | 142,139 | 151,224 |
Deferred financing costs | $ 4,011 | $ 2,776 |
Debt - Maturity Schedule (Details) $ in Thousands |
Sep. 29, 2018
USD ($)
|
---|---|
Long-term Debt, Fiscal Year Maturity | |
2019 | $ 9,900 |
2020 | 9,900 |
2021 | 9,900 |
2022 | 14,850 |
2023 | 101,600 |
Total remaining principal payments | $ 146,150 |
Income Taxes - Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Current tax provision: | |||
Federal | $ (8,925) | $ 11,705 | $ (3,377) |
State | 559 | 1,353 | 224 |
Foreign | 91 | 0 | 0 |
Total current tax (benefit) provision | (8,275) | 13,058 | (3,153) |
Deferred tax provision: | |||
Federal | 6,816 | (767) | 9,052 |
State | (1,161) | (435) | (95) |
Total deferred tax provision (benefit) | 5,655 | (1,202) | 8,957 |
Income tax (benefit) expense | $ (2,620) | $ 11,856 | $ 5,804 |
Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Federal tax credit carryforward | $ 0.0 | ||
Effective tax rate (as a percent) | (9.70%) | 31.70% | 59.10% |
Statutory Federal income tax rate (as a percent) | 24.50% | 35.00% | 35.00% |
Tax Cuts And Jobs Act Of 2017, tax expense (benefit) | $ 2.1 | ||
Tax Cuts And Jobs Act Of 2017, change in tax rate, provisional income tax expense (benefit) | 2.0 | ||
Tax Cuts And Jobs Act Of 2017 , transition tax for accumulated foreign earnings | 0.1 | ||
Accrued interest and penalties | $ 0.0 | $ 2.9 |
Income Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Federal taxes at statutory rate | $ 6,584 | $ 13,073 | $ 3,439 |
State taxes, net | (1,501) | 307 | (20) |
Change in uncertain tax positions | (7,606) | 651 | 821 |
Share-based compensation | (735) | (210) | 1,001 |
Permanent items | (366) | (701) | (84) |
Valuation allowance | 783 | 90 | 27 |
Tax credits | (470) | (530) | (470) |
Return to accrual true-ups | (1,699) | (646) | (78) |
Investor tax on non-consolidated affiliate income | (1,734) | (271) | 582 |
Tax rate adjustments | 3,756 | 144 | 535 |
Other | 368 | (51) | 51 |
Income tax (benefit) expense | $ (2,620) | $ 11,856 | $ 5,804 |
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance, beginning of year | $ 6,389 | $ 6,389 | $ 6,389 |
Lapses of applicable statute of limitations | (6,389) | 0 | 0 |
Balance, end of year | $ 0 | $ 6,389 | $ 6,389 |
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Deferred tax liabilities | ||
Property, plant and equipment | $ (4,012) | $ (2,282) |
Other intangible assets | (11,584) | (18,030) |
Investor tax on non-consolidated affiliate income | (496) | (2,230) |
Other assets | (534) | (527) |
Total deferred tax liabilities | (16,626) | (23,069) |
Deferred tax assets | ||
NOL carryforward | 577 | 550 |
Accrued expenses | 6,280 | 9,575 |
Indirect effect of uncertain tax position | 0 | 2,869 |
Compensation | 6,540 | 14,095 |
Inventories | 1,194 | 1,576 |
Unearned income | 3,069 | 4,000 |
Tax credits | 4,638 | 2,809 |
Total deferred tax assets | 22,298 | 35,474 |
Less: valuation allowance | (1,432) | (650) |
Deferred tax assets less valuation allowance | 20,866 | 34,824 |
Net deferred tax assets | $ 4,240 | $ 11,755 |
Guarantees, Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Operating Leased Assets [Line Items] | |||
Accrual for environmental loss contingencies, discount rate (as a percent) | 12.00% | ||
Accrual for environmental loss contingencies | $ 400 | $ 500 | |
Period for aggregate undiscounted amount | 9 years | ||
Accrual for environmental loss contingencies, gross | $ 900 | ||
Accrual for Environmental Loss Contingencies, Fiscal Year Maturity [Abstract] | |||
2019 | 100 | ||
2020 | 100 | ||
2021 | 100 | ||
2022 | 100 | ||
2023 | 100 | ||
Thereafter | 400 | ||
Rent expense | 2,000 | $ 1,300 | $ 1,200 |
Commitments for future production material | $ 88,806 | ||
Minimum | |||
Operating Leased Assets [Line Items] | |||
Lease term | 1 year | ||
Maximum | |||
Operating Leased Assets [Line Items] | |||
Lease term | 4 years 4 months |
Guarantees, Commitments and Contingencies - Future Minimum Operating Lease Payments (Details) $ in Thousands |
Sep. 29, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 1,305 |
2020 | 1,428 |
2021 | 1,409 |
2022 | 1,424 |
2023 | 1,442 |
Thereafter | 4,624 |
Future minimum lease payments under operating leases | $ 11,632 |
Guarantees, Commitments and Contingencies - Schedule of Capital Leases (Details) - USD ($) $ in Thousands |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Leased property under capital leases | $ 1,071 | $ 1,071 |
Accumulated amortization | (870) | (715) |
Leased property under capital leases, net | $ 201 | $ 356 |
Guarantees, Commitments and Contingencies - Future Minimum Capital Lease Payments (Details) $ in Thousands |
Sep. 29, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 175 |
2020 | 18 |
2021 | 18 |
2022 | 18 |
2023 | 6 |
Thereafter | 0 |
Total minimum lease payments | 235 |
Amount of lease payments representing interest | (15) |
Present value of future minimum capital lease payments | 220 |
Current obligations under capital leases | 169 |
Long-term obligations under capital leases | 51 |
Purchase Commitments [Abstract] | |
2019 | 84,850 |
2020 | 3,956 |
Total purchase commitments | $ 88,806 |
Segment Information (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018
USD ($)
segment
|
Sep. 30, 2017
USD ($)
|
Oct. 01, 2016
USD ($)
|
|
Segment Reporting Information [Line Items] | |||
Number of Operating Segments | segment | 2 | ||
Net sales | $ 1,024,976 | $ 990,602 | $ 932,010 |
Gross profit | 121,988 | 127,368 | 129,356 |
United States | |||
Segment Reporting Information [Line Items] | |||
Net sales | 911,558 | 878,631 | 838,418 |
Canada | |||
Segment Reporting Information [Line Items] | |||
Net sales | 106,762 | 104,016 | 83,669 |
Rest of world | |||
Segment Reporting Information [Line Items] | |||
Net sales | 6,656 | 7,955 | 9,923 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,024,976 | 990,602 | 932,010 |
Gross profit | 121,988 | 127,368 | 129,356 |
Operating Segments | Bus | |||
Segment Reporting Information [Line Items] | |||
Net sales | 962,769 | 930,738 | 876,087 |
Gross profit | 100,002 | 106,462 | 108,232 |
Operating Segments | Parts | |||
Segment Reporting Information [Line Items] | |||
Net sales | 62,207 | 59,864 | 55,923 |
Gross profit | $ 21,986 | $ 20,906 | $ 21,124 |
Share Based Compensation - Fair Value Assumptions (Details) - Options - $ / shares |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 29.20% | 33.70% | 33.70% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 2.20% | 1.90% | 1.70% |
Expected term (in years) | 5 years 6 months | 4 years 8 months 12 days | |
Weighted-average grant-date fair value (in dollars per share) | $ 6.15 | $ 5.35 | $ 3.72 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years 6 months |
Benefit Plans - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of employees' contribution | 50.00% | ||
Employer matching contribution, percent of employees' gross pay | 6.00% | ||
Employer discretionary contribution amount | $ 1,900 | $ 1,900 | $ 1,700 |
Medical, dental and accident and sickness benefit expense | 14,300 | 13,600 | 12,300 |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contribution | 5,949 | 5,414 | |
Benefits paid | 7,137 | 6,937 | |
Benefit obligation | 144,484 | 144,737 | $ 157,030 |
Estimated net loss to be amortized from accumulated other comprehensive loss over next fiscal year | 2,800 | ||
Estimated future employer contributions in next fiscal year | 0 | ||
Employee Compensation Plan | Management | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Bonus liabilities | $ 2,400 | $ 3,500 |
Benefit Plans - Projected Benefit Obligation (Details) - Pension Plan - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Change in benefit obligation | |||
Projected benefit obligation balance, beginning of year | $ 144,737 | $ 157,030 | |
Interest cost | 5,428 | 5,063 | $ 5,063 |
Assumption changes | 770 | (9,621) | |
Actuarial gain | 686 | (798) | |
Benefits paid | (7,137) | (6,937) | |
Projected benefit obligations balance, end of year | $ 144,484 | $ 144,737 | $ 157,030 |
Benefit Plans - Change in Plan Assets (Details) - Pension Plan - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
|
Change in plan assets | ||
Fair value of plan assets, beginning of year | $ 112,311 | $ 100,662 |
Actual return on plan assets | 13,457 | 14,702 |
Employer contribution | 5,949 | 5,414 |
Expenses | (1,109) | (1,530) |
Benefits paid | (7,137) | (6,937) |
Fair value of plan assets, end of year | $ 123,471 | $ 112,311 |
Benefit Plans - Net Funded Status (Details) - Pension Plan - USD ($) $ in Thousands |
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
---|---|---|---|
Defined Benefit Plan Disclosure [Line Items] | |||
Benefit obligation | $ 144,484 | $ 144,737 | $ 157,030 |
Fair value of plan assets | 123,471 | 112,311 | $ 100,662 |
Funded status | (21,013) | (32,426) | |
Net pension liability recognized | $ (21,013) | $ (32,426) |
Benefit Plans - Amounts Recognized in Other Comprehensive Income (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Net (gain) loss | $ (30,820) | $ (28,801) | $ (6,900) |
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | 5,428 | 5,063 | 5,063 |
Expected return on plan assets | (7,105) | (6,358) | (6,112) |
Amortization of net loss | 3,521 | 6,291 | 4,787 |
Net periodic benefit cost | 1,844 | 4,996 | 3,738 |
Net (gain) loss | (3,787) | (17,232) | 15,716 |
Amortization of net loss | (3,521) | (6,291) | (4,787) |
Total (gain) loss recognized in other comprehensive income | (7,308) | (23,523) | 10,929 |
Total (gain) loss recognized in net periodic pension benefit cost and other comprehensive income | $ (5,464) | $ (18,527) | $ 14,667 |
Benefit Plans - Assumptions Used to Determine Benefit Obligations (Details) |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 4.30% | 3.85% |
Benefit Plans - Assumptions Used to Determine Net Benefit Cost (Details) - Pension Plan |
12 Months Ended | |
---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 3.85% | 3.30% |
Expected long-term return on plan assets | 6.37% | 6.37% |
Benefit Plans - Weighted Average Asset Allocations (Details) - Pension Plan |
Sep. 29, 2018 |
Sep. 30, 2017 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted average allocations of plan assets | 100.00% | 100.00% |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted average allocations of plan assets | 70.00% | 72.00% |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted average allocations of plan assets | 30.00% | 28.00% |
Benefit Plans - Expected Benefit Payments (Details) $ in Thousands |
Sep. 29, 2018
USD ($)
|
---|---|
Retirement Benefits [Abstract] | |
2019 | $ 7,738 |
2020 | 7,833 |
2021 | 8,016 |
2022 | 8,227 |
2023 | 8,430 |
2024 - 2028 | 43,423 |
Total expected future benefit payments | $ 83,667 |
Equity Investment in Affiliate - Narrative (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Sep. 29, 2018
USD ($)
|
Sep. 30, 2017
USD ($)
|
Oct. 01, 2016
USD ($)
|
Oct. 14, 2009
manufacturer
|
|
Schedule of Equity Method Investments [Line Items] | ||||
Number of manufacturers before venture | manufacturer | 2 | |||
Equity investment in affiliate | $ 11,123 | $ 11,625 | ||
Equity in net income of non-consolidated affiliate | $ 1,327 | 3,307 | $ 2,877 | |
Micro Bird Holdings, Inc. | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interest in equity method investment (as a percent) | 50.00% | |||
Equity investment in affiliate | $ 11,100 | 11,600 | ||
Proceeds from equity method investment, distribution | 1,800 | 4,600 | 2,300 | |
Equity in net income of non-consolidated affiliate | $ 1,300 | $ 3,300 | $ 2,900 |
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 29, 2018 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Allowance for Doubtful Accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | $ 100 | $ 100 | $ 105 |
Charges to Expense/(Income) | 0 | 0 | (5) |
Doubtful Accounts Written Off, Net | 0 | 0 | 0 |
Ending Balance | 100 | 100 | 100 |
Deferred Tax Valuation Allowance | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | 650 | 558 | 671 |
Charges to Expense/(Income) | 847 | 92 | (86) |
Doubtful Accounts Written Off, Net | (65) | 0 | (27) |
Ending Balance | $ 1,432 | $ 650 | $ 558 |
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