Bridger Aerospace Group Q1 2024 Earnings Report

Bridger Aerospace Group EPS Results

• Actual EPS: -$0.55
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Bridger Aerospace Group Revenue Results

• Actual Revenue: $5.51 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Bridger Aerospace Group Announcement Details

• Quarter: Q1 2024
• Date: 5/13/2024
• Time: N/A
• Conference Call Date: Monday, May 13, 2024
• Conference Call Time: 5:00PM ET

Bridger Aerospace Group (NASDAQ:BAER) is an aerial firefighting and aviation services company headquartered in Bozeman, Montana. The company provides wildfire suppression services primarily to federal, state and local government agencies, helping protect communities, natural resources and critical infrastructure during wildfire events.

Bridger Aerospace operates a specialized aircraft fleet that includes firefighting airtankers and amphibious aircraft used to deliver water or retardant to active fires. In addition to wildfire suppression, the company provides aerial intelligence, surveillance, mapping, and other aviation services that support emergency response and government operations.

Founded in 2014, Bridger Aerospace serves customers across the United States and operates in regions affected by seasonal wildfire activity. The company became publicly traded on the Nasdaq under the ticker symbol BAER in 2023 through a business combination with a special purpose acquisition company.

Bridger Aerospace Group Q1 2024 Earnings Call Transcript

Key Takeaways

• Record Q1 revenue: Bridger Aerospace generated $5.5 million in Q1 FY2024—the highest quarter in company history—driven by early deployments of SuperScoopers and surveillance aircraft in Texas and Oklahoma.
• Operational momentum: The company deployed two Pilatus PC-12 MMAs for aerial intelligence and four CL-415 SuperScoopers on the earliest-ever seasonal task orders, positioning Bridger for an expected active 2024 wildfire season.
• Financial improvements: Net loss narrowed to $20.1 million from $44.7 million year-over-year, and adjusted EBITDA improved to negative $6.9 million versus negative $10.7 million, reflecting enhanced cost efficiency.
• Strengthened liquidity: Bridger raised $9.2 million in April via a direct offering, boosting total cash and restricted cash to $26.5 million ahead of peak wildfire operations.
• Growth and expansion strategy: The company secured regulatory approval for ongoing operations in Canada and advanced plans for European expansion through four acquired Spanish SuperScoopers, with the first scheduled for return to service by the end of the 2025 fire season.

Presentation

[Operator]

Greetings and welcome to the Bridger Aerospace First Quarter Fiscal 2024 Investor Conference Call. As a reminder, today's call is being recorded. It is now my pleasure to introduce your host, Mr. Eric Gerratt, Chief Financial Officer. Mr. Gerratt, you may begin.

[Eric Gerratt, CFO at Bridger Aerospace]

Good afternoon, and thank you for joining us today. Joining me on the call this afternoon is Chief Executive Officer, Founder, and Director Tim Sheehy. Before we begin, please note that certain statements contained in this conference call that do not describe historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Since forward-looking statements are based on various assumptions, risks, and uncertainties, actual results may differ materially from those expressed or implied by such statements. Factors that could cause results to differ materially from those expressed include but are not limited to those disclosed in the company's filings with the Securities and Exchange Commission, including expectations regarding financial results for 2024. Management cannot control or predict many factors that ultimately impact future results. Listeners should not place undue reliance on forward-looking statements which reflect management's views only as of today.

[Eric Gerratt, CFO at Bridger Aerospace]

We anticipate that subsequent events and developments will cause our assessments to change. However, we undertake no obligation to revise or update any forward-looking statement or to make any other forward-looking statement. Throughout this afternoon's earnings release and our call today, we refer to the non-GAAP financial measure of Adjusted EBITDA. The definition, calculation, and a reconciliation to the financial statements of Adjusted EBITDA can be found in Exhibit A of our earnings release, which is available on our website. We believe Adjusted EBITDA is useful in evaluating our reported results as a supplement to and not a substitute for the reported results under GAAP. With that, I'd like to turn the call over to Tim.

[Timothy Sheehy, CEO at Bridger Aerospace]

Thanks, Eric. Good afternoon, and thanks for joining the call today. Our first quarter, while the most capital-intensive, is critical to allow us to finish winter maintenance on our fleet and complete flight training and agency carding so that we are ready to mobilize when the North American wildfire season begins, historically, in late May or early June. Each fire season has its own complexity and regional fluctuations. While last year we saw a late start due to heavy snowpack in the slowest wildfire season in 20 years, this year, with the dry and arid weather in Oklahoma and Texas, we experienced the earliest seasonal deployment in company history, with many predicting a more active 2024 fire season. In February, we deployed one of our Pilatus PC-12 multi-mission aircraft, or MMA, to Oklahoma to provide aerial intelligence for early-season wildfires, with a second PC-12 deployed in April.

[Timothy Sheehy, CEO at Bridger Aerospace]

Our MMA program, a critical component of incident planning, decision-making, and tactical firefighting, leverages the architecture of our proprietary data platform and leading-edge sensor and mapping capabilities. Our 2 multi-mission aircraft operate under a 5-year contract with the Department of Interior and Bureau of Indian Affairs, and both remain on task orders today. In early March, we received a task order for 2 CL-415EAF Super Scoopers aircraft from the U.S. Forest Service at the request of the state of Texas, which is battling the largest wildfire in state history. This was the earliest seasonal deployment of our scoopers in history. In our history, our scoopers were deployed in Texas for 6 weeks before recently returning to Montana. This early wildfire activity and operational activity led to the highest first-quarter revenue in our company history at $5.5 million. Looking at 2024, early indications for the U.S.

[Timothy Sheehy, CEO at Bridger Aerospace]

are that due to drier and warmer conditions, the 2024 wildfire season should be very active, continuing the overall trend of larger wildfires and longer fire seasons, driving continued long-term demand for our aerial surveillance and suppression services. An important part of our strategy is to offset fluctuations in wildfire activity by expanding our aerial firefighting services to new mission-critical areas and geographies. Our deployment in Canada last year translated into the most territory covered in the history of the company, and having gone through the regulatory process in Canada last year, we are hopeful that Bridger can assist in Canada as part of normal operations going forward. In fact, wildfire risk is predicted to be above average in Canada in 2024, according to the North American Seasonal Fire Assessment and Outlook, with fires erupting over the weekend in Vancouver, British Columbia, sending smoke back into Minnesota and Wisconsin.

[Timothy Sheehy, CEO at Bridger Aerospace]

Also complicating the situation above the border are zombie fires, blazes that have continued to smolder underground throughout the winter. Fires from 2023 are still burning, and new fires have ignited. Beyond North America, we are on track with plans to expand into Europe. Our partnership with Marathon Asset Management and Avenue Sustainable Solutions Fund completed the purchase of four Super Scoopers from the Spanish government last fall and positions us to meaningfully expand our fleet over the coming years. As part of this future expansion into Europe, our Spanish subsidiary, Albacete Aero, is overseeing the return-to-service work on the four Spanish Scoopers, which I am pleased to say is on schedule with the first Scooper to be available by the end of the 2025 fire season.

[Timothy Sheehy, CEO at Bridger Aerospace]

Touching on our Ignis Technologies subsidiary, we continue to build and develop our pioneering mobile and web platform that elevates firefighters' situational awareness and produces real-time, high-value data to better manage wildfire risk. As we approach the seasonal start to the fire season, we are winding up our maintenance, training, and other activities. With our full spectrum of aviation resources, we are uniquely positioned to assist our state, federal, and international customers in protecting lives and property from the growing threat of wildfires. Let me now turn it back to Eric, who will talk about our financial performance.

[Eric Gerratt, CFO at Bridger Aerospace]

Thank you, Tim. Looking at our results for the first quarter of 2024, revenue was a record $5.5 million compared to $365,000 in the first quarter of 2023. First-quarter revenue benefited this year from the early deployment of Super Scooper and surveillance aircraft to Texas and Oklahoma. Typically, first-quarter revenue is minimal due to seasonality while we complete our annual fleet maintenance activities in preparation for the start of the U.S. wildfire season. This year, first-quarter revenue also included approximately $1 million related to return-to-service work performed on the Spanish Super Scoopers by our Spanish subsidiary, Albacete Aero, as part of our partnership agreement with Marathon Asset Management and Avenue Sustainable Solutions Fund. We expect to realize similar amounts in future quarters. Cost of revenues was $9.2 million in the first quarter of 2024, up 27% over $7.2 million in the first quarter last year.

[Eric Gerratt, CFO at Bridger Aerospace]

Cost of revenues for the first quarter of 2024 was comprised of flight operation expenses of $5 million and maintenance expenses of $4.2 million. This compares to $3.7 million of flight operations expenses and $3.5 million of maintenance expenses in the first quarter of 2023. The increase relates to higher flight operation expenses related to the earlier-than-typical fleet deployment, as well as higher employee labor and other expenses associated with an additional Super Scooper aircraft that was placed into service in February of 2023. Selling general and administrative expenses were $11.6 million in the first quarter of 2024 compared to $33.2 million in the first quarter of 2023.

[Eric Gerratt, CFO at Bridger Aerospace]

The decrease was primarily attributable to lower non-cash, stock-based compensation expense in the first quarter of 2024 when compared to the first quarter of 2023 as a result of the restricted stock units issued in connection with the January 2023 business combination with Jack Creek Investment Corp. The decrease was also partially attributable to lower professional services fees in the first quarter of 2024 compared to the first quarter of 2023, which included fees in connection with the aforementioned business combination. Interest expense for the first quarter of 2024 increased to $5.9 million from $5.7 million in the first quarter of 2023. Bridger also reported other income of $1.2 million for the first quarter compared to $1.1 million for the first quarter last year.

[Eric Gerratt, CFO at Bridger Aerospace]

For the first quarter of 2024, we reported a net loss of $20.1 million compared to a net loss of $44.7 million in the first quarter of 2023. Adjusted EBITDA improved to $-6.9 million compared to $-10.7 million in the first quarter of 2023. Due to our largely fixed cost structure and seasonality, the company historically generates a net loss of negative EBITDA in the first and fourth quarters each year, with positive adjusted EBITDA generated primarily in the second and third quarters, which coincides with the U.S. wildfire season. Turning to our balance sheet, as Tim mentioned, the first quarter of every year is typically the most working capital constrained due to fleet maintenance and training activities in the winter months, coupled with minimal revenue. As a result, we ended the quarter with total cash and restricted cash of $16.1 million.

[Eric Gerratt, CFO at Bridger Aerospace]

In April 2024, the company raised net proceeds of approximately $9.2 million through our registered direct offering, resulting in an improved cash position going into the wildfire season. Our total cash and restricted cash balance was $26.5 million as of April 30, 2024. Supported by the earlier-than-normal flight activity in Texas and Oklahoma in the quarter, we remain on target with the guidance we issued in November 2023 and then reiterated in February 2024 in conjunction with the release of our fourth quarter results. Bridger is projected to generate Adjusted EBITDA of $35 million-$51 million on revenue of $70 million-$86 million. This guidance includes the impact of recent reductions to the company's largely fixed cost structure and excludes any impact from the Spanish Super Scoopers acquired by the joint venture partnership, which are undergoing maintenance work in order to be returned to service.

[Eric Gerratt, CFO at Bridger Aerospace]

With that, I'd like to turn the call back to Tim for final comments.

[Eric Gerratt, CFO at Bridger Aerospace]

Thanks, Eric, and thanks to everyone for joining us on today's call. I'm incredibly proud of our team and our performance with a jumpstart to the season in the first quarter, a profitable business model and strong fundamentals, a more efficient operating structure, and a seasoned management team. We are well positioned to report another record quarter, another record year in 2024. We are also excited to welcome two new seasoned executives to our board this past quarter. They each bring a wealth of experience which we believe will prove invaluable to help guide the continued growth and value creation at Bridger Aerospace. We look forward to updating on our progress when we report our second quarter results in August. If anyone has any follow-up questions, please reach out to our investor relations contact found on the IR section of our website. Thank you.

[Operator]

Thank you. This does conclude today's presentation. We appreciate your participation. You may disconnect at any time.

Participants

Analysts

• Eric Gerratt, CFO at Bridger Aerospace
• Timothy Sheehy, CEO at Bridger Aerospace