Bridger Aerospace Group Holdings, Inc. Warrant Q3 FY2024 earnings call

• 2024 wildfire season saw revenue reach nearly $65 million, net income of $27.3 million, and adjusted EBITDA of $47 million. The operations team ensured high fleet deployment. The US spent 59 days at PL5, compared to zero days at PL5 in 2023. - FMS acquisition in June contributed approximately $1.6 million to revenue, adding growth opportunities in aerospace modifications and defense systems engineering. - Ignis Technologies' mobile platform was piloted, with plans to link with real-time sensor imagery. - Return to service work on Spanish super scoopers generated approximately $2.2 million in the quarter. - Anticipated record year in 2024 with positive free cash flow after maintenance, capital expenditures, and debt service.

In the third quarter of 2024, revenue increased approximately 20% to $64.5 million from $53.6 million in the third quarter of 2023. The revenue growth was benefited by higher flight revenue, approximately $2.2 million related to return to service work on Spanish super scoopers, and approximately $1.6 million of revenue from the June 2024 acquisition of FMS. Cost of revenues was $23 million in the third quarter of 2024, up from $16 million in the third quarter of 2023, mainly due to increased flight hours leading to higher depreciation, maintenance, and travel expenses, as well as expenses from the Spanish scooper return to service work and the addition of FMS and inflationary pressure. For the first nine months of 2024, revenue was $83 million compared to $65.6 million in the first nine months of 2023. Adjusted EBITDA was $47 million in the third quarter of 2024 and $40.2 million for the first nine months of 2024.

• Increased 2024 revenue guidance to a range of $90 million to $95 million, an increase from initial guidance. - 2024 adjusted EBITDA expected to be in the range of $35 million to $40 million, growing by over 85%, but inflationary pressures and unfulfilled cost structure reductions affected the high end of initial guidance. - Expect positive free cash flow for the first time in a range of $1 million to $10 million, with plans to invest in aviation for new revenue opportunities.

• The company endured politically motivated attacks as its former CEO ran for public office, which aimed to tarnish the company's 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 there were inflationary pressures in salaries, wages, benefits, travel costs for crews and mechanics, maintenance parts, etc., and measures were taken to manage costs but pressures existed.

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 a bipartisan issue and Bridger will continue to work with the administration and committees to get more exclusive contracts and guaranteed days.

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 expected OpEx down with lower flight levels in winter, cost rationalization effects seen, FMS delivering contracts, and significant revenue from core business in Q4.