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Blue Bird Corporation

(Nasdaq: BLBD)

Joint Alternative Infrastructure &



Macon, GA

September 12, 2016Slide2



This presentation includes forward-looking

statements, including statements regarding full-year guidance and seasonality, that are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters we have noted in our latest earnings release and filings with the SEC. Blue Bird disclaims any obligation to update information in this presentation. Additional information regarding forward-looking statements and the use of Non-GAAP financial measures is presented in the Appendix to this presentation.

Industry OverviewBlue Bird OverviewLeadership in Alternative FuelsWhy Propane Wins Q&ASlide3

Industry Overview

School buses are an important part of America’s infrastructure


~10,000SchoolDistricts~3,400ContractorsSchool Bus CustomersSlide4

Iconic History


Blue Bird Key Facts

We design, build, sell and service the world’s finest school bus


Leading independent designer and manufacturer of school busesOver 2000 Employees Fabrication and assembly plants in Fort Valley, GA Service parts distribution center in Delaware, OHType A small bus joint venture in Drummondville, QuebecAlmost 90% of volume is sold through an exclusive dealer network~250 service locations throughout the U.S. and CanadaThree primary brands in marketBlue Bird IC Bus (division of Navistar)Thomas Built Bus (division of Freightliner)We are the fastest growing company, fueled by our undisputed leadership in sales of propane-powered school busesProduce and sell approx. one third of all school buses, equating to nearly 11,000 buses this yearSlide6

Leadership in Alternative Fuels

Undisputed leader, led by our winning propane product


Introduced first propane, CNG and electric buses in 1990’sNew alternative fuel products introduced in the last decadeSold ~5x more alternative-fuel buses than all competitors combined since 2010Propane-powered buses is the fastest growing powertrain segment in market, and Blue Bird is the clear leaderSlide7

Propane Leadership

Propane growth is strong and market acceptance is growing


Propane Market LeadershipClass-leading alternative fuelMore than 10,000 buses on the road9x more propane-powered buses registered than other manufacturers1 Number of customers growing each yearBlue Bird propane-powered Vision has the highest owner loyalty of any school bus in the market1Represents 20% of our sales and unit sales will grow by more than 30% this yearMore than 2,000 propane buses sold this year, while we are the leader in CNG-powered buses, propane outsells CNG 12:11 Based on R.L. Polk dataSlide8

Why Propane Wins

Saves ~$

3k per year in fuel and maintenance cost vs. diesel

8“Broward County saves over $600,000 with Blue Bird propane-powered buses”School Transportation NewsAugust 14, 2015“Washingtonville Central School District maintenance costs drop 30% with propane-powered buses”New York State School Boards AssociationApril 27, 2015

“DeKalb County adds environmentally-friendly propane school buses”Propane is much cheaper (than diesel), at 89 cents a gallonDistrict hopes to transition all buses over to propaneNews Channel 15 wane.comAugust 4, 2015

Our exclusive product is best in industry

It is affordable – saves $3k per year in fuel and maintenance cost vs. diesel

$45k over lifetime; half the cost of the vehicle!

Small upcharge for bus, but customer will recover in 2-3 years



Affordable and easy fuel-filling infrastructure

Great cold weather starting

performance Slide9

Propane in Georgia

11 school districts are running over 130 propane buses in


9Macon-Bibb County Currently has a fleet of 58 propane-powered Blue Bird Vision busesPlanning to purchase 10-20 additional unitsCompared with diesel, currently paying $0.85 less per gallon for propane (before any rebates)Hall CountyCurrently has a fleet of 33 propane-powered Blue Bird Vision buses Slide10

Propane vs. CNG

Propane is the

best fit

for the school bus duty cycle10Significantly lower upcharge for propane productPrice difference primarily driven by Kevlar-coated tanks required for CNG (to meet pressure requirements)Affordable, simple, local filling infrastructureCNG can be attractive where infrastructure is in place, but it has limitationsComparison: Propane vs. Compressed Natural GasPropane

CNGBus Volume Growth2010 – 2015352%12%


60.0% less carbon monoxide; 25.0% less greenhouse gas

90.0% less carbon monoxide; 25.0% less greenhouse gas

Gallon of Gasoline Equivalent (“GGE”)


- 60.0% less

~50.0% - 60.0% less


Price Premium to Diesel

$4k - $8k

$25k - $30k

Payback Period

~3 years


10 years

Fuel Tanks

Steel tanks:

175 psi





Fuel Station

Installation Cost





of natural gas and petroleum


Natural gas

or methane stored at high pressure

Source: Blue Bird Management, R.L. Polk U.S. DataSlide11

What We Need

Opportunity to be a leader in alternative


transportation of our children 11Your support in promoting alternative fuels in GeorgiaA subsidy to reduce the cost of a propane bus to make it comparable to diesel would drive sales and environmental leadership in transportationGeorgia wins because our buses are made here and we have the best alternative-fuel products in the industrySlide12



Market Recovery

Housing price recovery and aged fleet driving industry growth


Type C/D School Bus RecoveryMean: 30,530Source: Historical results are based on RL Polk vehicle registration data, and the estimated 2014-2016 periods are based on Blue Bird management’s forecast model, which takes into account RL Polk vehicle registration data, population of school age children forecasts from the National Center for Education Statistics and bus ridership

data collected and published by an industry magazine (School Transportation News)Slide14

Positive Outlook

Property taxes are a key funding source for school bus purchases and are related to housing values


Source: HPI data from CoreLogic, normalized to Jan of 2005(000’s of Enrolled Students)Total Projected U.S. EnrollmentNew School Bus Registrations vs. CoreLogic Housing Price Index

2015 – 2023 Enrollment Growth of +2 Million Students Source: Enrollment data from NCES projections Slide15

Attributes Considered When Buying a Bus

Safety is the most important attribute considered


Product Attributes Ranked in Order of Importance#1 Safety#2 Quality, Reliability and Durability#3 Operating Costs#4 Acquisition Cost

#5 How the Bus Drives

Source: Freedonia Custom Research, Inc. 9/4/2013 (study commissioned by Blue Bird


Fuel Information

Energy content per gallon of fuel

Diesel – 128,488 BTUs

Gasoline – 112,114 BTUsPropane – 84,250 BTUsWhat does this mean?CNG only has approximately 75% the energy content per gallon as a gallon of dieselPropane only has approximately 65% the energy content per gallon as a gallon of dieselYou will get fewer miles per gallon than you currently get with diesel16Slide17

Fuel Information

Cost per Mile


As much as gasoline and diesel has dropped in price, propane has followed suitOn a national average, propane is 59% less expensive than dieselThere is a Federal fuel rebate through the end of 2016Propane - $0.36CNG - $0.50Slide18

Real World Savings

Return on Investment


Our customers report$0.77 per mile on diesel buses$0.43 per mile on propane busesThat’s a savings of $0.34 per mileWhich means:If you drive 12,000 miles per year and operate for 15 years…1 bus saves $4,080 in 1 year1 bus saves $61,200 in its lifetimeSlide19


Propane meets NOx and PM emission standards without the need for expensive and maintenance intensive after-treatment systems

Propane is in a better place to meet future GHG emission standards



Propane engines run up to 50% quieter than diesels, more like what you would experience driving your own vehicle

Studies have shown students are calmer with fewer disturbances riding in quieter vehicles since they don’t have to compete with the engine noise to be heard by their peers

Drivers enjoy the quieter operation as they can talk and hear the students in the back row of the bus without raising their voicesSome parents have commented their children have missed the bus because they couldn’t hear it coming20Slide21

Cold Weather

Propane Autogas is the perfect fuel for cold weather environments

Starts in temperatures as cold as -40

oFVehicle warm-up is quick and easyNo issues with diesel fuel gellingNo need for fuel additivesNo need for block heaters21Slide22

Ford/Roush Propane Units Deployed in GA


Important Disclaimers

Forward Looking Statements


presentation includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. Specifically, forward-looking statements include statements in this press release regarding guidance, seasonality, product mix and gross profits and may include statements relating to:Inherent limitations of internal controls impacting financial statementsGrowth opportunitiesFuture profitabilityAbility to expand market shareCustomer demand for certain productsEconomic conditions that could affect fuel costs, commodity costs, industry size and financial conditions of our dealers and suppliersLabor or other constraints on the Company’s ability to maintain a competitive cost structureVolatility in the tax base and other funding sources that support the purchase of buses by our end customersLower or higher than anticipated market acceptance for our products Other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressionsThese forward-looking statements are based on information available as of the date of this presentation, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. The factors described above, as well as risk factors described in reports filed with the SEC by Hennessy Capital Acquisition Corp. or Blue Bird Corporation (available at, could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements.23Slide24



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Blue Bird Corporation - Description

Nasdaq BLBD Joint Alternative Infrastructure amp Vehicles Study Macon GA September 12 2016 Agenda 2 This presentation includes forwardlooking statements including statements regarding fullyear guidance and seasonality that ID: 528698 Download Presentation

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