Hello, everyone. Thank you for attending today's Blue Bird fiscal 2026 first quarter earnings call.

My name is William, and I'll be your moderator today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end.

If you would like to ask a question, please press star one on your telephone keypad. At this time, I would now like to pass the conference over to our host, Mark Benfield, Blue Bird's Head of Investor Relations.

Mark?

Thank you, and welcome to Blue Bird's fiscal 2026 first quarter earnings conference call. The audio for our call is webcast live on blue-bird.com under the Investor Relations tab.

You can access the supporting slides on our website by clicking on the presentations box on the IR landing page. Our comments today include forward-looking statements that are subject to risks that could cause actual results to be materially different.

Those risks include, among others, matters we have noted on the following two slides and in our filings with the SEC. Blue Bird disclaims any obligation to update the information in this call.

This afternoon, you will hear from Blue Bird's President and CEO, John Wyskiel?] , and CFO, Razvan Radulescu.

Then we'll take some questions. Let's get started.

John?

Thanks, Mark, and good afternoon, everyone, and thanks for joining us today. It's great to be here, and we are excited to share with you our fiscal 2026 first quarter financial results.

Once again, the Blue Bird team delivered outstanding Q1 sales and adjusted EBITDA, and we are off to a great start. Razvan will take you through the details of our financial results shortly, but I will walk you through some of the key takeaways for the first quarter on slide six.

First, Blue Bird beat guidance on all metrics for the quarter. This is despite the impact and volatility associated with the administration's policy on tariffs.

We continue to navigate this situation well and have beat guidance for the last 13 quarters, validating the strength in our management and business model. Order intake for the period was exceptionally strong.

Our Q1 order intake was up 45% from the first quarter of 2025, which pushed our backlog to a seasonally strong 3,400 units. This is a great start to the year, especially as we come into the order season.

Operationally, we continue to perform with all metrics pointing in the right direction, and the team has been able to execute on a day-to-day basis while simultaneously developing detailed manufacturing plans for the future. In terms of pricing, we remain extremely disciplined.

Bus prices remain higher than the previous year and the previous quarter. As I've communicated before, this process is just how we manage the business.

In the alt-power segment, our dominance continues. Our EV backlog is now into 2027.

We remain exclusive in propane, which has the lowest total cost of operation, and our gas variant continues to be a leader. Alt-power is a segment we created more than 15 years ago, and we continue to maintain our lead position.

We continue to develop our investment theses as explained before. Our manufacturing strategy encompasses many factory-of-the-future concepts that will be rolled into our new assembly plant.

During the quarter, we completed our analysis of automation use cases and have locked in on a roadmap. The initiative has a strong return, but this strategy also creates a path for ongoing cost improvement through other Industry 3.0 and 4.0 opportunities.

Finally, we continue to manage the impact of the administration's executive orders and tariff volatility. We are fortunate to be well positioned to navigate this situation to a margin-neutral outcome.

Consistent with past communications, it is our objective to position this business to be a strong long-term investment. Let's turn the page and take a closer look at the financial and key business highlights for the quarter on slide seven.

We sold 2,135 buses in Q1 and recorded revenue of $333 million, 6% ahead of last year. On the EV side, we sold 121 vehicles, 6% of unit volume, and our long-term outlook for EVs remains optimistic.

Adjusted EBITDA for the quarter came in at $50 million, $4 million stronger than last year, and free cash flow came in at an outstanding $31 million. Razvan will talk more to this and our outlook later in the call.

Turning to the right side of the page, I'll touch on a few points. With the strong order intake I spoke about earlier, our backlog finished the quarter at 3,400 units.

This puts us in a good position coming into the order season. I continue to reiterate, the overall market fundamentals are still there.

The fleet is aging, we are coming into a heavy replacement cycle, and there's been industry supply issues the last few years leaving pent-up demand. The horizon ahead looks very good for school bus volumes.

In January, we also took our first order for commercial chassis. The market remains excited about this product.

We are continuing with the testing, validation, and normal engineering change loops. We are projecting to start production in late Q4, which pushes sales into fiscal 2027.

Our emphasis is to get this product right from a design, cost, and quality perspective, and not force timing that can jeopardize any one of those elements. Back to school bus, year-over-year selling price for buses was up almost $8,800 per unit.

Of course, this also includes tariff recovery as part of our margin-neutral strategy. With tariffs excluded, pricing was still up year-over-year, and part sales totaled $25 million for the quarter.

Alt-powered buses represented a strong 48% of mix for unit sales in the quarter. Our powertrain strategy is a differentiator in the market and allows us to maintain stronger margins, but we are not dependent on it.

If you look at Q1, our alt-power mix dipped below 50%, but there was no compromise in profitability. At the end of the quarter, we had 121 EVs booked and 855 EVs in our order backlog pushing into 2027.

Our updated guidance reflects approximately 800 EV unit sales for fiscal 2026. Again, we remain optimistic on EVs in the school bus sector.

EVs are a perfect fit for school buses when you look at the duty cycle, available charging intervals, range, and the proven health benefits for children. Rounds two and three of the EPA Clean School Bus Program remained intact with funds flowing to our end customers.

Earlier this month, it seems it was some misinterpretation of media coverage and quotes that suggested rounds four and five would be discontinued. I will highlight from our subsequent discussions in Washington, there has been no such indication.

It is our understanding that the EPA is still working through how and when these funds will be administered, and that the program is still bipartisan in support. Overall, when you look at state funding and the fleet EV mandates, we believe this market will remain relevant, and our short-term guidance is not dependent on federal funding for rounds four and five.

Finally, the $80 million MESC contract with the DOE remains intact. This is for their funding towards our new plant in Fort Valley.

There's been a lot of rumor in the area of MESC grants, but again, there's been no unfavorable direction provided to us from the DOE. As a reminder, this project adds 400 well-paying American jobs to a century-old company with an iconic brand to build clean school buses, providing our children with the benefits of clean air.

As I've said in prior earnings calls, it's a great story. Overall, we beat guidance for the 13th consecutive quarter with a 15% percentage of EBITDA.

This continued performance reflects the strength in the entire Blue Bird enterprise. I'm very proud of the team's accomplishments.

I'd like to now hand it over to Razvan to walk through our fiscal '26 first quarter financial results as well as our full year updated guidance in more detail. Razvan?

Thanks, John, and good afternoon. It's my pleasure to share with you the financial highlights from Blue Bird's fiscal 2026 first quarter results.

The quarter end is based on a close date of December 27th, 2025, whereas the prior year was based on a close date of December 28th, 2024. We will file the 10-Q today, February 4th, after market close.

Our 10-Q includes additional material and disclosures regarding our business and financial performance. We encourage you to read the 10-Q and the important disclosures that it contains.

The appendix attached to today's presentation includes reconciliations of differences between GAAP and non-GAAP measures mentioned on this call, as well as other important disclaimers. Slide nine is a summary of the fiscal 2026 first quarter record financial results.

It was a strong operating quarter for Blue Bird, a great start for the new fiscal year, and we beat our guidance provided in the last earnings call on all metrics. In fact, we delivered the best Q1 ever for Blue Bird, with $333 million in revenue and $50 million in adjusted EBITDA, a 15% margin.

The team pushed hard and continued doing a fantastic job, and generated 2,135 unit sales volume, which was just above prior year level. Record Q1 consolidated net revenue of $333 million was $19 million higher than prior year, driven by pricing actions, including tariffs, that materialized in this quarter.

Adjusted EBITDA for the quarter was a record $50 million, driven by high margins, partially offset by increased labor and engineering costs. The adjusted free cash flow was also a record Q1 of $31 million and $9 million higher than the prior year first quarter.

This result was due to the continued strong profitability across all bus and powertrain types. Our liquidity position at the end of this quarter was a record $385 million.

Moving on to slide 10, as mentioned before by John, our backlog at the end of Q1 continues to be solid at 3,400 units, including a record 25% EVs. In fact, at the end of January, we have now close to 1,000 EVs sold in Q1 and in backlog, with some of them scheduled to be built and delivered in fiscal 2027 Q1.

Breaking down the Q1 $333 million in revenue into our two business segments, the bus net revenue was $308 million, up $20 million versus prior year due to increased prices across all products, including tariffs. As a result, our average bus revenue per unit increased by $9,000, from $135,000 to $144,000, or 6.5%.

EV sales in Q1 were 121 units, just 11 units lower than last year, as planned. Parts revenue for the quarter was almost flat at a strong $25 million.

This great performance was in part due to increased demand for our parts as the fleet is aging, as well as supply chain-driven pricing actions and throughput improvements. Gross margin for the quarter was a record 21.4%, or 220 basis points higher than last year, due to pricing actions, manufacturing efficiencies, and quality improvements.

Adjusted EBITDA of $50 million, or 15%, was higher compared with prior year by $4 million and 40 basis points. In fiscal 2026 Q1, adjusted net income was a record Q1 at $32.5 million, or $2 million higher than last year.

Adjusted diluted earnings per share of $1 was up 8 cents versus the prior year. Slide 11 shows the walk from fiscal 2025 Q1 adjusted EBITDA to the fiscal 2026 Q1 results.

Starting on the left at $45.8 million, the impact of the bus segment gross profit in total was $11.1 million, split between volume and pricing effects net of material cost increases of $7 million, and operational and quality improvements of $4.1 million. The parts segment gross profit was almost flat, and our fixed costs and other income were unfavorable year-over-year by $6.6 million.

Out of this, $2.6 million comprises of EV emission credits that were sold in fiscal 2025 Q1, sale which did not repeat again so far this year. The sum total of all the above-mentioned developments drives our record fiscal 2026 Q1 reported adjusted EBITDA result of $50.1 million, or 15%.

Moving on to slide 12, we have extremely positive developments year-over-year also on the balance sheet. We ended the quarter with a record $242 million in cash and reduced our debt by $5 million over the last year.

Our liquidity sits very strong at a record $385 million at the end of fiscal 2026 Q1, a $106 million increase compared to a year ago. Additionally, we have executed another tranche of shares buyback of $15 million during fiscal 2026 Q1, $10 million of which concludes our $60 million prior stock buyback program, and $5 million began our new $100 million program, with another $95 million left to go.

The operating cash flow was very strong for Q1 at $37 million, driven by great operational execution and margins, combined with a large advance payment received for future EV units, which more than offset a seasonal increase in working capital. On slide 13, we want to share with you our updated fiscal 2026 guidance.

Looking at Q1 actuals, we have beat in every metric our guidance this past quarter, we had a very strong start for the fiscal year. Q2 is forecasted to be a repeat of Q1, with additional cost pressures coming from tariffs and labor costs and inflation on our SG&A.

We continue to plan for a strong second half at 15% to 16% adjusted EBITDA margins, with an [unclear] of 800 EVs now scheduled for the year. We are maintaining our revenue to a range of $1.45 to $1.55 billion, and given our beat on Q1, we are raising our adjusted EBITDA to $225 million, or 15%, with a range of $215 to $235 million.

We will provide further updates at the beginning of May after we close Q2. Moving to slide 14, in summary, we are forecasting an improvement year-over-year to a new record, with revenue up to approximately $1.5 billion, adjusted EBITDA in the range of $215 to $235 million, or approximately 15%, and adjusted free cash flow of $40 to $60 million, in line with our typical target of 50% of adjusted EBITDA, and after accounting for the extraordinary CapEx of $75 million as our 50% fiscal 2026 portion of the new plant investment funded by a DOE MESC grant, which is currently proceeding with the detailed planning and permitting phase.

Moving on to slide 15. Today we are reconfirming the medium-term outlook at 15% margin, with volumes of up to 10,500 units, including 500 stripped chassis, generating revenues around $1.6 billion and with adjusted EBITDA of $240 million.

Starting in 2029 and beyond, our long-term target remains to drive profitable growth to higher levels, towards $1.8 to $2 billion in revenue, comprising of 12,000 to 12,500 units, including 1,000 to 1,500 stripped chassis, and generate EBITDA of $280 to $320-plus million, or 15.5% to 16%-plus, at best-in-class levels. The growth comes not only from improved EV mix driven by sustained state funding and improved total cost of ownership over time, but also from our new Blue Bird commercial chassis addressable market expansion, as well as our Micro Bird joint venture new plant expansion in the US.

We continue to be incredibly excited about Blue Bird's future, and now I will turn it back over to John.

Thank you, Razvan. Let's move on to slide 17.

Blue Bird is off to a great start for 2026. Starting at the top, we're tracking to 9,500 units for fiscal 2026.

With a 6% CAGR projected for the school bus market, as well as entering new market adjacencies, we see our long-term volume growing to 13,500 units between school bus and commercial chassis. This translates to a revenue of $1.5 billion for 2026, with an adjusted EBITDA moving up to $225 million.

When you factor our growth opportunities, our long-term outlook moves up to $2 billion in revenue and $320 million in adjusted EBITDA, expanding to 16%-plus. At the bottom of the page, you'll see EV is still very relevant.

This year, we are guiding 800 EVs, but continue to see 750 to 1,000 units per annum in our long-term outlook. Overall, Q1 has been a great start.

With the strong fundamentals of the industry, our investment in the future, and our strength in this team, the outlook for Blue Bird is very strong. As I close in on my one-year anniversary and return to Blue Bird, I wanted to share a few high-level details about our updated strategy on slide 18.

It is based off of four key elements and positions the company for the future. First, as an almost 100-year-old company, business continuity and long-term stability is a core element.

This includes investing and updating our manufacturing facilities and products. A great example is our new assembly plant, which is scheduled to launch in 2028.

Infrastructure and competitive products are an essential part of our plan. The next element is a theme that has been consistent the last few years, profitable growth.

Of course, the school bus market is projected to grow over the next few years, and our new plant will allow us to capitalize on that. For Blue Bird, it also means organically expanding our total addressable market by entering new adjacencies.

The Blue Bird commercial chassis and the Micro Bird JV Buy America shuttle bus is a great example of profitable growth opportunities. Margin expansion is the next element.

This area focuses on advancing competitiveness and cost reduction. For Blue Bird, this means continuing our Industry 3.0 automation initiative as I discussed at the beginning of the call.

We are on a good path in this area with a strong automation roadmap that will be incorporated into our new assembly plant. As well, the new plant will allow us to further factory-of-the-future opportunities, including Industry 4.0 initiatives.

The last area is putting the balance sheet to work. Blue Bird has strong liquidity and generates solid cash flows.

Our balance sheet position allows us to be strategically opportunistic. We have the ability to grow through acquisitions or exploit vertical integration.

This is a tremendous area of opportunity for us. Overall, we have a balanced strategy that positions this great company for the future and delivers value to shareholders.

I'll wrap it up on slide 19. This great company, an iconic brand, is almost 100 years old.

Blue Bird has stood the test of time. We delivered outstanding results in the first quarter of 2026.

We continue to demonstrate credibility by delivering on our targets. Looking ahead, our strategy, discipline, and demonstrated execution will set this great company up for the future and deliver value to our shareholders.

As always, I want to thank our employees, our dealer network, our supply partners, and, of course, our investors. All are critical to our success.

I remain excited about Blue Bird, and we had a great start for 2026. This company is a great American story with such a rich history and an exciting future ahead.

Thank you. That concludes our formal presentation for today, and I'd now like to hand it back to our moderator for the Q&A session.

Thank you. We will now begin the Q&A session.

If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to remove that question, please press star followed by two.

Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question.

We will pause here briefly as questions are registered. Our first question comes from the line of Greg Lewis with BTIG.

Greg, your line is now open.

Hi. Thank you, and good afternoon, and thanks for taking my questions.

I guess I'd like to start off maybe talking a little bit about margins. It was a good quarter around margins.

You called out the benefit of maybe some of the cost efficiencies you're driving, and you've also called out having the kind of pass-through the tariffs. Could you kind of give us some color around how much of that was pricing versus how much of that was maybe efficiencies that you've been able to squeeze out of the company?

Hi, Greg, this is Razvan. If you look at the slide 11, about two-thirds came from

net

pricing, and about one-third,

roughly

more or less, is from better efficiency and quality. That's, I think, the split that we have

year-over-year. As we look out through the rest of the year, is that kind of how we should be thinking about the benefit of pricing, i.e., does it seem like we have the opportunity to kind of keep pushing that pricing through?

I would say on the efficiency and quality, these are sustaining improvements that we are making. On the pricing side, however, this is pricing net of material cost increases, you have the variability of the cost of goods sold, supplier inflation, maybe volatility in tariffs, while, at the same time, our last pricing action was in November for the new model year, and those pricing effects will come in the second half of this fiscal year.

It's a bit too early to tell, especially on the cost of goods sold, how the second half of the year is going to develop.

Great. Thanks for that.

Then I did have a question around the backlog. As we think about the outlook for EV and, just given some of the delays maybe we've seen and the potential for that backlog to build, have customers kind of been shifting to the other alternatives?

I guess what I'm trying to understand is, as a percentage of the market, has diesel been gaining share here over the last couple quarters?

This is Razvan. I'll start, and then my colleagues can join in for sure.

In terms of the EV, we have a very strong backlog, actually between what we sold in Q1 and the backlog, we have over 1,000 units, and we said already some of these are bleeding into 2027 Q1 fiscal,

and

this is because of the timing it takes for the infrastructure to be ready at the sites of our customers. I would say on the EV, it's very strong, and we are already starting to fill 2027.

In terms of diesel, we had a strong quarter for the diesel, which, you could notice, it didn't affect our overall profitability because we have very strong margins across all our powertrains and product types. However, as people look at the emission regulations potentially for 2027, there is still some uncertainty regarding where that's going to land, we may see a little bit pre-buy or a pull-forward for some diesel units into this year.

I don't have anything to add. We've always said diesel's sticky and, like you say, you've got this potential pull-forward maybe for pricing with the new regs.

Super helpful. Thank you very much.

Thanks, Greg.

Thank you. Our next question comes from the line of Eric Stine with Craig-Hallum.

Eric, your line is now open.

Hi, everyone. Maybe we could just stick with that last question and maybe ask it a little bit differently.

Obviously EV has continued to be pretty strong here, and I know you've been in alt-fuels for what, 15-plus years, but I'm just curious specific to propane. I know you're exclusive there.

School districts still, by and large want to get off diesel, so, what kind of trends are you seeing, whether it's this quarter or going forward in propane? What type of advantage is that?

I would think that that continues to resonate quite a bit in the market, and how do you see that kind of playing out going forward?

I'll start with a couple comments. I think from a marketplace, they still recognize propane as the best total cost of operation.

They also like, I guess, the ease of converting a fleet over because with propane, you can go to a propane seller, they can install the infrastructure relatively easily, and it's part of the contract for fuel. There's still a pretty strong acceptance and, I guess, compared to EV, they really like the infrastructure side.

In terms of trends, not sure I can comment anything there. Maybe my colleagues might be able to.

There's no significant change at this point in dynamics there.

Okay. Fair enough.

Maybe just then talking about orders. I know on your last conference call, you talked about how it hadn't necessarily shown up in terms of order improvement in the quarter that you had reported, but that you were starting to see it in Q1.

Obviously, that came to fruition. You mentioned a little bit about EVs, but just curious, as we're part of the way into Q2, maybe what you're seeing just on the overall order front, and then how you view, as you said, you're about to get into where order season kind of starts to pick up, how do you feel about that?

What kind of trends you're seeing?

Great question. A couple comments.

Just first, very strong order intake period. I think we've mentioned 45% increase, and I think that's validation of what we did in terms of stabilizing pricing.

That giving that certainty just allowed districts to go ahead and purchase. I think that was a strong sign.

Then, look, whenever we talk about even in the backlog side, I'll talk a little bit just for a minute on EV, continued strong state funding. New York, California, Oregon, Illinois, Michigan all have strong funding, $1.5 billion, all of that helped contribute as well.

Order intake, I'd say good quarter, strong validation, perhaps a little bit of catch-up from Q4 was in there as well, again, pumping up the numbers in terms of 45%. Some of that's just catching up from orders that weren't placed.

Overall, good validation.

Okay. Then last one for me just on the capital allocation strategy.

Obviously, balance sheet quite strong. You mentioned some potential acquisitions.

I'm just wondering if you can just expand on your thoughts there a little bit. Vertical integration makes sense.

I would assume if it's something else, it wouldn't be too far afield from what you currently do.

This is Razvan. Thanks for the question.

On capital allocation, we have a very strong balance sheet, and we continue to remain focused and evaluate opportunities strategically, both on the growth side, but also on the vertical integration side. At this point, nothing special to talk about.

However, our balance sheet is now stronger, it's as it has ever been, and therefore it enables us to look strategically at different opportunities.

Eric, maybe the only thing I'll add is, look where we are. We can be opportunistic.

Lots of options there for us in that regard. I think, for us, safe, accretive, those are key elements of anything we would do in that area.

That's great. Thank you.

Thank you. Our next question comes from the line of Mike Shlisky with D.A.

Davidson. Mike, your line is now open.

Good afternoon, and thanks for taking my questions here. Can you help me frame the potential impact from your comments, John, about adding more like automation to the process?

I was curious whether that was already baked in to what you said last quarter, two quarters ago about getting that to that 15%-plus, or does adding more automation is that the plus? Do you have more you can do?

Just sense of just any kind of sense of the size of the impact that it might have on your margins, given what you know today?

Great question, Mike. Look, we're, I guess the best way to say it is we've done the use-case analysis, we know what the returns are, they're favorable, anything we're putting through.

I think, the way we look at it, we have a longer-term outlook there, and this, fits within the outlook. Maybe it helps us in in terms of being some some tailwinds as we kind of move towards that.

A good story overall in terms of the manufacturing store- manufacturing strategy, rather, coming together.

Great. I also want to ask a question about the balance sheet and capital allocation.

Pre-pandemic, you were operating with cash of $60 million, now you're at 240. Adding together your portion of the CapEx for the new facility, what you've got left on your buyback, and other things you've got going on, and what you've got probably from a cash flow perspective the rest of the year here, you're going to have probably more cash than you know what to do with.

I'm just curious, if no M&A comes into view anytime soon, what is your kind of regular plan? Is it just to buy back more shares, or some other way to put that cash to use?

I'm just not sure what else you could do if you don't find a deal going forward.

Mike, thanks for the question. We outlined our capital allocation strategy in the last earnings call.

We didn't repeat it here today. However, you are correct.

We have the share buyback program up to $100 million approved by the board. We spent $5 million already in Q1 out of this program.

We are looking at a big capital investment for the new plant of our portion of $200 million or so over two years. We also are increasing a bit our regular CapEx spending, and we are investing also a lot in engineering with the different engineering projects and emissions regulations that are coming in the next couple of years.

Obviously, as time developed, at least on a yearly basis, we are going to revisit that strategy, and then potentially consider other avenues. Maybe in the future, we could evaluate a dividend program, but we are not quite there yet.

Got it. Could I just squeeze one more in here about market share going forward?

Because there were some previous issues the last year or two about one of your competitors having special issues with producing on time and getting things at the door, there were some weird swings in market share. Do you have anything that's on your radar screen for the rest of calendar '26 here as far as any company that's been also acting strangely, or new models, or things like that that might affect your share one way or the other, or is it pretty steady from here?

No, I think maybe a couple things. One of our competitors had some supply issues, seems like they've gotten through that.

I think it's maybe normalized the market share that we're seeing right now. I don't know if Mark or Razvan has anything else to add.

I'd say from what we see from order intake, business as usual, Mike.

Outstanding. I'll pass it along.

Thank you.

Thanks, Mike.

Thank you. Our next question comes from the line of Chris Pierce with Needham.

Chris, your line is now open.

Hey, just one question for me. I know that it's tariff pass-throughs on pricing, but I guess I'm just curious about what you're hearing from distributors, the industry.

When you talk about that $9,000 per bus, is there any sort of pushback out there from buyers or, kind of what are buyers saying to you? Then what role does pricing play as far as long-term margin guidance as well?

Chris. Our tariffs are very different between internal combustion engine buses and EVs.

Our tariffs for internal combustion are now below $5,000 per bus, but the EVs are above $10,000 per bus. I'm not sure where the 9,000 it's coming from.

Definitely we see tariffs as a tax imposed by the government, and we are working very hard with our supply chain partners to minimize those in a volatile environment where different countries go on different lists from time to time. It's a bit difficult to come up with a consistent supply and sourcing strategy geographically in this environment, but we are working to minimize those.

At the same time, we are working with our dealers and our customers and providing them certainty going forward, right now all the way through June, for fixed tariff pricing for future delivery. At this point, our target remains to be margin neutral on tariffs.

I think maybe where that 9,000, I just want to clarify, Chris, might come from at the beginning we talked about our $8,800 change in price from prior year, which we said roughly half is tariff, half is pricing action.

For sure. In the end, the customer still has to pay that price.

I was kind of curious if you're hearing anything from distributors as far as elevated pricing, which I know is because of tariff, but I'm just kind of curious what the market is saying.

Look, a couple things. I know there could be some of, here we were 45% up for the quarter on order intake, some of that maybe catch-up from the prior year.

The reality is, unfortunately there's tariffs now that they're all dealing with. In terms of if you were to compare to is there any fatigue, maybe they're not happy, but at the end of the day, they recognize all the manufacturers have them, and then I think the other side of it is they recognize they have to change the fleet out.

There are buses that are coming into that 10-year window right now, a heavy number, that they simply have to change, and it becomes a matter of economics. It's more effective to replace the unit than to keep it going.

That makes sense. Appreciate the detail.

Thank you.

Thanks, Chris.

Thank you. Our next question comes from the line of Craig Irwin with ROTH Capital Partners.

Craig, your line is now open.

Hey, guys. It's Andrew on for Craig.

First one for me. Provide a lot of detail on kind of the alt-fuel buses, but looks like within EVs, you guys kind of nudged up the midpoint of your annual guide.

Backlog remained solid. You talked about still seeing EPA funding flowing.

Can you just provide a bit more color on what you're seeing in the overall EV market?

Andrew, thanks for the question. This is Razvan.

We see strong orders supported both by the EPA rounds two and three and the state funding, subsidies that are out there. Yes, we raised our guidance for this year to 800 units, and I would say part of the upside to our guidance to go higher on both revenues and EBITDA for the year comes from EV.

To the extent that we can build more and deliver them, we will do that in this year, and this gives the upside to our guidance. On the other side, the downside to our guidance comes from tariffs and the cost coming from tariffs that we can't fully predict right now.

Those are the two puts and takes for the guidance, and we feel very good about the EV right now.

Maybe just a couple other things. Of course, there's a federal side that we just talked to with rounds one through five, but then on the state side, I always reiterate New York, California, Oregon, Illinois, Michigan, there's about a billion five in funding there.

Then a lot of these big fleets just have mandates. They want to get to certain thresholds in terms of EVs as a portion of their fleet, and that includes both big fleets as well as states.

When you roll it all together, we continue to say EV is relevant.

Great. Appreciate the color.

Then, second for me, I know it's not a big driver in '26, but and then last quarter you provided an update on the commercial chassis, your prototyping, some models with some different body types. Can you just provide some additional color and update there, and if we can still kind of expect around 100 units towards the latter half of the year?

For sure. We took our first of 30, I guess is the best way to say it, from one customer.

This is a customer that helped us with the development and working through what they wanted to see from a field standpoint. What we're doing now is we're going through normal engineering loops, and then we're kind of rolling up our bill of materials, and working that process.

Our production SOP now looks like it's going to be, I would say later fourth quarter, which is going to push out units into next year. Again, our focus on this whole thing, this is a new entry, we want to make sure we got it right from quality, from a durability perspective, from a price perspective.

Getting all that right is important. It matters.

Maybe just to clarify, in terms of guidance, we substituted those 100 sales with buses for the total year, we maintain the 9,500. Due to the timing of production, these stripped chassis will start to be revenue recognized and sold for the income statement purposes in fiscal 2027 Q1.

Thanks again for taking the questions.

No worries. Thank you.

Thank you. There are currently no questions registered, so as a brief reminder, if you would like to ask a question, please press star one on your telephone keypad.

We will pause here briefly as questions are registered. There are no more questions waiting at this time, I would like to pass the conference back over to John for any closing remarks.

Thank you, William, and thanks to each of you for joining us on the call today. Blue Bird has delivered a great start for 2026 with strong results, beating expectations, and raising our guidance, and this is despite a challenging environment.

With the fundamentals of the industry and the key elements of our strategy, I remain very optimistic for Blue Bird and its future, and we look forward to updating you on our progress next quarter. Should you have any follow-up questions, please don't hesitate to contact our Head of Investor Relations, Mark Benfield.

Blue Bird continues to be stronger than ever and has an amazing future ahead as we approach our 100th anniversary next year. Thanks again from all of us at Blue Bird, and have a great evening.

Thank you. That concludes the Blue Bird fiscal 2026 first quarter earnings call.

Thank you for your participation. You may now disconnect your lines.