Bridger Aerospace Group Holdings, Inc. Q3 FY2024 earnings call

• Wildfire season overview: 2024 was an above-average year in duration with over 8 million acres burned nationally, compared to 2.7 million acres last year. Bridger's fleet was highly utilized, with exclusive use minimum day task orders secured for air attack and scooper aircraft, driving increased utilization.
• FMS acquisition: FMS contributed to revenue and brought engineering, modification, and manufacturing capabilities, creating growth opportunities in aerospace modifications and defense systems engineering.
• Ignis Technologies: Launched a mobile platform for firefighters, with plans to transition to a subscription-based model and link real-time sensor imagery for enhanced situational awareness.
• Spanish scoopers: Return to service work on four Super Scoopers generated ~$2.2 million in revenue in the quarter, with plans to source operating contracts for these assets.

In the third quarter of 2024, Bridger Aerospace had revenue of approximately $64.5 million. Cost of revenues was $23 million. Adjusted EBITDA was $47 million. FMS, acquired on June 28, contributed approximately $1.6 million to revenue in the third quarter. For the first nine months of 2024, revenue was $83 million, cost of revenues was $42.1 million, and adjusted EBITDA was $40.2 million.

• Increased 2024 revenue guidance to a range of $90 million to $95 million, up from initial guidance.
• Adjusted EBITDA expected to grow to a range of $35 million to $40 million, over 85% growth from prior year.
• Expect positive free cash flow in a range of $1 million to $10 million for 2024.

• Inflationary pressures affecting salaries, wages, benefits, travel, maintenance parts.
• Political attacks on the company during the former CEO's political campaign that could impact reputation.

Q: Can you go into a little bit more detail about the inflation in the quarter the EBITDA guidance? And was that in like aftermarket maintenance or pilot compensation, fuel costs? How should we think about that?

A: Eric Gerratt mentioned inflationary pressures in salaries, wages, benefits, travel (crews/mechanics traveling), maintenance parts, and efforts to manage inventory and travel costs to mitigate impacts.

Q: How do you view the new administration's impact on federal firefighting funds? Presumably, the committees that oversee the Department of the Interior and the forest service or bipartisan on this issue?

A: Sam Davis stated wildfires are bipartisan, and Bridger will continue working with the administration and committees to secure exclusive contracts and guaranteed days to address the wildfire threat.

Q: Should we expect to see a reduction in cost structure, operating costs and improved revenue volumes in the off-season now that you required up as you might be getting some other government services work?

A: John Founders said OpEx is expected to be down with lower flight levels in winter, and cost rationalization implemented in 2023 is affecting the P&L. FMS is delivering contracts to reduce seasonality, and significant revenue from core business is expected in Q4 outside fire season quarters.