BLBD

Blue Bird has executed a real turnaround. Revenue has more than doubled from $684M (FY2021) to $1.48B (FY2025, +9.9% YoY), and the company swung from a -$45.8M loss in FY2022 to $128M net income in FY2025 (+21.0%), with diluted EPS up 22.8% to $3.88. Margins are the proof point management's MD&A describes: pricing actions that 'keep pace with increased costs' have lifted gross margin to 20.5%, operating margin to 11.3% and net margin to 8.6%, with ROE at 50%. The balance sheet is a fortress for a cyclical manufacturer — $229M cash (+79.6%) against just $85.3M long-term and $5.0M current debt, $176M operating cash flow (+58.6%) easily covering $22.9M capex, and equity up 60.1% to $255M. The company even began buying back stock ($9.89M). On quality alone this is a clear winner.

The hesitation is forward demand, which the filing flags plainly. Management attributes 'robust' orders to '(i) pent-up demand resulting from the cumulative effect of the COVID-19 pandemic' and (ii) a supply-constrained industry catching up — both transient drivers. The hard tell is backlog: it fell from ~4,800 units (Sept 2024) to ~3,070 units (Sept 2025), a 36% drop, even as the company sold over 9,400 units in FY2025. Backlog now sits below four months of shipments and is declining, which points to growth deceleration as the pent-up wave clears. The recently reported numbers reflect the peak of that wave, not necessarily its continuation.