Q2 2024 Bridger Aerospace Group Holdings Inc Earnings Call

August 12, 2024

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Speaker Change: Good day everyone and welcome to today's Bridger Aerospace second quarter 2024 conference call. At this time all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question and answer session.

Speaker Change: Please note, today's call will be recorded. And I will be standing by should you need any assistance.

Operator: Eric Gerratt

Operator: It is now my pleasure to turn the conference over to CFO Eric Gerratt. Please go ahead.

Eric Gerratt: Good afternoon, and thank you for joining us today. Joining me on the call this afternoon is Interim Chief Executive Officer Sam Davis and John Saunders, who has recently joined Bridger as Senior Vice President of Finance and Capital Markets. 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 Security 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.

Operator: To all sites on hold, we appreciate your patience and please continue to stand by.

Speaker Change: Good afternoon, and thank you for joining us today.

Speaker Change: Joining me on the call this afternoon is Interim Chief Executive Officer Sam Davis and John Saunders who has recently joined Bridger as Senior Vice President of Finance and Capital Markets.

Eric Gerratt: Factors that could cause results to differ materially from those expressed include but are not limited to those discussed 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.

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Speaker Change: 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 Security Litigation Reform Act of 1995.

Speaker Change: 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.

Speaker Change: Factors that could cause results to differ materially from those expressed include but are not limited to those discussed in the company's filings with the Securities and Exchange Commission including expectations regarding financial results for 2024.

Speaker Change: 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.

Operator: Good day everyone, and welcome to today's Bridger Aerospace second quarter 2024 conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. Please note, today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to CFO Eric Gerratt. Please go ahead.

Speaker Change: 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.

Eric Gerratt: Listeners should not place undue reliance on forward-looking statements, which reflect management's views only as of today. 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 today's earnings release and our call today, we refer to the non-GAAP financial measure adjusted EBITDA. The definition, calculation, and reconciliation of 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 reported results under GAAP. With that, I'd like to turn the call over to Sam.

Eric Gerratt: Throughout today's earnings release and our call today, we refer to the non-GAAP financial measure adjusted EBITDA. The definition, calculation, and reconciliation of 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, reported results under GAAP. With that, I'd like to turn the call over to Sam. Thank you, Eric. Good afternoon.

Speaker Change: throughout today's earnings release and our call today.

Speaker Change: We refer to non-GAAP financial measure adjusted EBITDA.

Speaker Change: The definition, calculation, and reconciliation of the financial statements of adjusted EBITDA can be found in Exhibit A of our earnings release, which is available on our website.

Sam Davis: We believe adjusted EBITDA is useful in evaluating our reported results as a supplement to, and not a substitute for, reported results under GAAP. With that, I'd like to turn the call over to Sam.

Sam Davis: I'm excited to be joining today's call, my first since being named interim chief executive officer on July. While Bridger employees and customers know me well, I'd like to provide a brief introduction given our recent CEO transition. I joined Bridger in 2019 as controller and more recently served as chief of staff. While this title is typically more common in the military, in essence, it meant I was Tim's, our former CEO's, right-hand man.

Sam Davis: Good afternoon. I'm excited to be joining today's call, my first since being named Interim Chief Executive Officer on July 1st. While Bridger employees and customers know me well, I'd like to provide a brief introduction given our recent CEO transition. I joined Bridger in 2019 as controller and more recently served as chief of staff. While this title is typically more common in the military, in essence, it meant I was Tim's, our former CEO's, right-hand man.

Sam Davis: Thank you, Eric.

Sam Davis: Good afternoon. I'm excited to be joining today's call, my first since being named Interim Chief Executive Officer on July 1st.

Sam Davis: While Bridger employees and customers know me well, I'd like to provide a brief introduction given our recent CEO transition.

Sam Davis: I joined Bridger in 2019 as controller and more recently served as chief of staff.

Sam Davis: While this title is typically more common in the military, in essence it meant I was Tim's, our former CEO's, right-hand man.

Sam Davis: In my five years at Bridger, I have been deeply involved in both the development and the execution of our strategy. I held pivotal roles as the company transitioned from private to public, assisted in multiple capital raises, implemented operational efficiencies, and executed strategic initiatives to expand our services and geographic footprint. The opportunities that brought me to Bridger back in 2019 are even more compelling today. Bridger is fortunate to have a deep bench of talent throughout our organization, and this team is committed to delivering value creation for our customers and shareholders. As previously announced, the Nominating and Corporate Governance Committee of the Board has embarked on a comprehensive process to search for a permanent CEO and will consider both internal and external candidates.

Sam Davis: In my five years at Bridger, I have been deeply involved in both the development and execution of our strategy.

Sam Davis: I held pivotal roles as the company transitioned from private to public, assisted in multiple capital raises, implemented operational efficiencies, and executed strategic initiatives to expand our services and geographic footprint.

Sam Davis: The opportunities that brought me to Bridger back in 2019 are even more compelling today.

Sam Davis: And this team is committed to delivering value creation for our customers and shareholders. As previously announced, the nominating and corporate governance committee of the board has embarked on a comprehensive process to search for a permanent CEO and will consider both internal and external candidates. While there is no specified timeline for completion, the search will likely become more active after the peak of the 2024 wildfire season is behind. I am fully committed to being part of the process, and I'm confident that the board's ultimate decision will be in the best interest of Bridger shareholders.

Sam Davis: Bridger is fortunate to have a deep bench of talent throughout our organization and this team is committed to delivering value creation for our customers and shareholders.

Sam Davis: While there is no specified timeline for completion, the search will likely become more active after the peak of the 2024 wildfire season is behind us. I am fully committed to being part of the process and am confident that the board's ultimate decision will be in the best interest of Bridger shareholders. Now, let me move on to our second quarter results.

Speaker Change: As previously announced, the Nominating and Corporate Governance Committee of the Board has embarked on a comprehensive process to search for a permanent CEO and will consider both internal and external candidates.

Speaker Change: While there is no specified timeline for completion, the search will likely become more active after the peak of the 2024 wildfire season is behind us.

Speaker Change: I am fully committed to being part of the process and am confident that the board's ultimate decision will be in the best interest of Bridger shareholders.

Sam Davis: Now, let me move on to our second quarter results. After starting the year off with the earliest seasonal deployment in Bridger history, activity moderated in the second quarter, with our entire fleet not being fully deployed until July, around the time the National Interagency Fire Center, or NIFC, raised the national preparedness level to five. NPL 5, the highest level, has not been breached since 2021, and it signifies that major fire incidents are occurring across multiple geographic areas with the potential to exhaust all agency fire resources as states scramble to secure aerial firefighting resources.

Speaker Change: Now, let me move on to our second quarter results.

Sam Davis: After starting the year off with the earliest seasonal deployment in Bridger history, activity moderated in the second quarter, with our entire fleet not being fully deployed until July, around the time the National Interagency Fire Center, or NIFC, raised the national preparedness level to five. NPL-5, the highest level, has not been breached since 2021, and it signifies that major fire incidents are occurring across multiple geographic areas with the potential to exhaust all agency fire resources as states scramble to secure aerial firefighting resources.

Speaker Change: After starting the year off with the earliest seasonal deployment in Bridger history, activity moderated in the second quarter, with our entire fleet not being fully deployed until July, around the time the National Interagency Fire Center, or NIFC, elevated the national preparedness level to five.

Speaker Change: NPL-5, the highest level, has not been breached since 2021, and it signifies that major fire incidents are occurring across multiple geographic areas with the potential to exhaust all agency fire resources.

Speaker Change: As states scramble to secure aerial firefighting resources, we have continued to evaluate our mix of contracts to increase our asset utilization.

Sam Davis: We've continued to evaluate our mix of contracts to increase our asset utilization. For the first time in our history, we have secured exclusive use task orders for four out of our six AirAttack aircraft, two multi-mission aircraft, and four out of our six super scoopers. These aircraft are committed for a guaranteed minimum period, ensuring they remain dedicated to critical wildfire response. Some of these contracts are multi-year.

Sam Davis: We have continued to evaluate our mix of contracts to increase our asset utilization. For the first time in our history, we have secured exclusive use task orders for four out of our six AirAttack aircraft, two multi-mission aircraft, and four out of our six Super Scoopers. These aircraft are committed for a guaranteed minimum period, ensuring they remain dedicated to critical wildfire response efforts. Some of these contracts are multi-year.

Speaker Change: For the first time in our history, we have secured exclusive use task orders for four out of our six AirAttack aircraft.

Speaker Change: two multi-mission aircraft, and four out of our six Super Scoopers.

Speaker Change: These aircraft are committed for a guaranteed minimum period, ensuring they remain dedicated to critical wildfire response efforts.

Sam Davis: As we move to a greater number of exclusive use contracts versus call when needed, we expect to be able to help smooth out revenue during the wildfire season with a goal of maximizing price and flight hours. Additionally, the task orders for both of our Pilatus PC-12 multi-mission aircraft, MMA, have been extended into the fall, marking a record 200 plus days of deployment this year, up from the originally scheduled 150. Furthermore, all of our Dyer Kodiak 100s are under multi-day exclusive use task orders and are actively deployed in Washington and Alaska.

Sam Davis: As we move to a greater number of exclusive use contracts versus call when needed, we expect to be able to help smooth out revenue during the wildfire season with the goal of maximizing price and flight hours. Additionally, the task orders for both of our Pilatus PC-12 multi-mission aircraft, MMA, have been extended into the fall, marking a record 200 plus days of deployment this year, up from the originally scheduled 150. Furthermore, all of our Dyer Kodiak 100s are under a multi-day exclusive use task order and are actively deployed in Washington and Alaska.

Speaker Change: Some of these contracts are multi-year. As we move to a greater number of exclusive use contracts versus call when needed, we expect to be able to help smooth out revenue during the wildfire season with a goal of maximizing price and flight hours.

Speaker Change: Additionally, the task orders for both of our Pilatus PC-12 Multimission Aircraft, MMA, have been extended into the fall, marking a record 200-plus days of deployment this year, up from the originally scheduled 150 days.

Speaker Change: Furthermore, all of our Dyer Kodiak 100s are all under multi-day exclusive use task orders and are actively deployed in Washington and Alaska.

Sam Davis: The remaining two light fixed-wing aircraft and two super-scoopers operating on call-when-needed contracts have been called out and are actively flying missions. As a result, we remain on budget through the first half of 2024 and are on track to meet our published guidance for the year. I also want to spend a little time discussing the strategy behind our acquisition of FMS Aerospace, which closed on June 28, 2024. By the numbers, the FMS transaction was an equity-only deal with a total value of approximately $21 million.

Sam Davis: The remaining two light fixed-wing aircraft and two super scoopers operating on call-when-needed contracts have been called out and are actively flying missions. As a result, we remain on budget through the first half of 2024 and are on track to meet our published guidance for the year. I also want to spend a little time discussing the strategy behind our acquisition of FMS Aerospace, which closed on June 28, 2024. By the numbers, the FMS transaction was an equity only deal with a total value of approximately $21 million.

Speaker Change: The remaining two light fixed-wing aircraft and two super-scoopers operating on call-when-needed contracts have been called out and are actively flying missions.

Speaker Change: As a result, we remain on budget through the first half of 2024 and are on track to meet our published guidance for the year.

Speaker Change: I also want to spend a little time discussing the strategy behind our acquisition of FMS Aerospace, which closed on June 28, 2024.

Speaker Change: By the numbers, the FMS transaction was an equity-only deal with a total value of approximately $21 million.

Sam Davis: Annually, FMS generates approximately $10.5 million in revenue with a net income of approximately $2.5 million. We became acquainted with FMS when we partnered with them to develop our MMA program. FMS is a turnkey provider of airframe modification and integration solutions for government and commercial customers. Their engineering and modification work on two of our PC-12s enabled us to secure a five-year contract last year with the Department of the Interior and Bureau of Indian Affairs for high-resolution surveillance, mapping, software, and intelligence operations, critical components of tactical fire.

Speaker Change: Annually, FMS generates approximately $10.5 million of revenue, with net income of approximately $2.5 million.

Speaker Change: We became acquainted with FMS when we partnered with them to develop our MMA program.

Speaker Change: FMS is a turnkey provider of airframe modification and integration solutions for government and commercial customers.

Sam Davis: Their engineering and modification work on two of our PC-12s enabled us to secure a five-year contract last year with the Department of the Interior and Bureau of Indian Affairs for high-resolution surveillance, mapping, software, and intelligence operations, critical components of tactical fire. Bringing FMS into the Bridger family will bring these critical capabilities closer to help and allow us to continue to grow in mission-critical areas, including emergency air services, aerospace modifications, and defense systems engineering. In turn, Bridger provides FMS with physical facilities, including hangars and equipment, qualified aviation personnel, and repair station and flight testing capabilities, to grow its business and enhance margin.

Speaker Change: Their engineering and modification work on two of our PC-12s enabled us to secure the five year contract last year with the Department of the Interior and Bureau of Indian Affairs for high resolution surveillance, mapping, software, and intelligence operations.

Sam Davis: Bringing FMS into the Bridger family will bring these critical capabilities in-house and allow us to continue to grow in mission-critical areas, including emergency air services, aerospace modifications, and defense systems engineering. In turn, Bridger provides FMS with physical facilities, including hangars and equipment, qualified aviation personnel, and repair station and flight testing capabilities to grow its business and enhance margins.

Speaker Change: critical components of tactical firefighting.

Speaker Change: Bringing FMS into the Bridger family will bring these critical capabilities in-house and allow us to continue to grow in mission-critical areas including emergency air services, aerospace modifications, and defense systems engineering.

Speaker Change: In turn, Bridger provides FMS with physical facilities including hangars and equipment, qualified aviation personnel and repair station and flight testing capabilities to grow their business and enhance margins.

Sam Davis: Together, we believe we will be able to land larger contracts than either company could bid alone. We are optimistic we could receive additional Department of Defense work as early as 2025. While we are not making forecasts, we expect meaningful operational synergies as well as opportunities to add more year-round revenue. FMS is expected to be immediately accretive to earnings.

Sam Davis: Together, we believe we will be able to land larger contracts than either company could bid alone. We are optimistic that we could receive additional Department of Defense work as early as 2025. While we are not making forecasts, we expect meaningful operational synergies as well as opportunities to add more year-round revenue. FMS is expected to be immediately accretive to earnings. In addition to our strategy to offset fluctuations in wildfire activity by expanding our aerial firefighting services to new mission critical areas, we continue to look to expand into new geographies as well. We remain on track with plans to expand into Europe.

Speaker Change: Together we believe we will be able to land larger contracts than either company could bid alone.

Speaker Change: We are optimistic we could receive additional Department of Defense work as early as 2025.

Speaker Change: While we are not making forecasts, we expect meaningful operational synergies as well as opportunities to add more year-round revenue.

Speaker Change: FMS is expected to be immediately accretive to earnings.

Sam Davis: In addition to our strategy to offset fluctuations in wildfire activity by expanding our aerial firefighting services to new mission-critical areas, we continue to look to expand into new geographies as well. We remain on track with plans to expand into Europe, through our partnership with Marathon Asset Management LP and Avenue Sustainable Solutions Fund. We completed the purchase of four super scoopers from the Spanish government last fall, and our Spanish subsidiary, Albacete Aero, is overseeing the return to service work on the four Spanish scoopers.

Speaker Change: In addition to our strategy to offset fluctuations in wildfire activity by expanding our aerial firefighting services to new mission-critical areas, we continue to look to expand into new geographies as well.

Sam Davis: Our partnership with Marathon Asset Management LP and Avenue Sustainable Solutions Fund completed the purchase of four super scoopers from the Spanish government last fall, and our Spanish subsidiary, Albacete Aero, is overseeing the return to service work on the four Spanish scoopers.

Speaker Change: We remain on track with plans to expand into Europe.

Speaker Change: Our partnership with Marathon Asset Management LP and Avenue Sustainable Solutions Fund completed the purchase of four super scoopers from the Spanish government last fall and our Spanish subsidiary Albacete Aero is overseeing the return to service work on the four Spanish scoopers.

Sam Davis: We are pleased with the progress and remain on schedule for all four scoopers to be available by the 2025 fire. A quick update on our subsidiary Ignis Technology. We're excited to announce the launch of our mobile app for wildland fires.

Sam Davis: We are pleased with the progress and remain on schedule for all four scoopers to be available by the 2025 fire season. Here is a quick update on our subsidiary, Ignis Technology. We're excited to announce the launch of our mobile app for wildland firefighters. Released in June, the free version offers real-time wildfire updates, weather conditions, and essential tools for mapping fire-specific points, lines, and polygons. The paid version provides additional features for fire crews and organizations, including a built-in mesh network for offline data synchronization, 3D mapping, a web platform, and other advanced capabilities.

Speaker Change: We are pleased with the progress and remain on schedule for all four scoopers to be available by the 2025 fire season.

Speaker Change: A quick update on our subsidiary, Ignis Technologies.

Speaker Change: We're excited to announce the launch of our mobile app for wildland firefighters.

Sam Davis: Released in June, the free version offers real-time wildfire updates, weather conditions, and essential tools for mapping fire-specific points, lines, and polygons. The paid version provides additional features for fire crews and organizations, including a built-in mesh network for offline data synchronization, 3D mapping, a web platform, and other advanced capabilities. We're also exploring the integration of the app with our aerial surveillance technology to provide the latest fire intelligence, enabling firefighters and decision makers to use near real-time data to enhance safety and operational efficiency.

Speaker Change: Released in June, the free version offers real-time wildfire updates, weather conditions, and essential tools for mapping fire-specific points, lines, and polygons.

Speaker Change: The paid version provides additional features for fire crews and organizations, including a built-in mesh network for offline data synchronization, 3D mapping, a web platform, and other advanced capabilities.

Sam Davis: We are also exploring the integration of the app with our aerial surveillance technology to provide the latest fire intelligence, enabling firefighters and decision makers to use near real-time data to enhance safety and operational effectiveness. As we look ahead to the third quarter, the wildfire season remains very active, continuing the overall trend of larger wildfires and longer fire seasons and driving continued long-term demand for our aerial surveillance and suppression services. In 2023, we saw 80% of our total revenue in the third quarter, which is generally the trend in a typical fire season.

Speaker Change: We are also exploring the integration of the app with our aerial surveillance technology to provide the latest fire intelligence, enabling firefighters and decision makers to use near real-time data to enhance safety and operational effectiveness.

Sam Davis: As we look ahead to the third quarter, the wildfire season remains very active, continuing the overall trend of larger wildfires and longer fires, and driving continued long-term demand for our aerial surveillance and suppression services. In 2023, we saw 80% of our total revenue in the third quarter, which is generally the trend in a typical fire season. Year to date, we have dropped just shy of 5 million gallons of water on wildfires from our. Let me now turn it back to Eric, who will talk about our financial performance and guidance. Thanks, Sam.

Speaker Change: As we look ahead to the third quarter, the wildfire season remains very active, continuing the overall trend of larger wildfires and longer fire seasons.

Speaker Change: and driving continued long-term demand for our aerial surveillance and suppression services.

Speaker Change: In 2023, we saw 80% of our total revenue in the third quarter, which is generally the trend in a typical fire season.

Sam Davis: Year to date, we have dropped just shy of 5 million gallons of water on wildfires from our schools. Let me now turn it back to Eric, who will talk about our financial performance and guidance for the year.

Speaker Change: Year to date, we have dropped just shy of 5 million gallons of water on wildfires from our scoopers.

Speaker Change: Let me now turn it back to Eric who will talk about our financial performance and guidance for the year.

Eric Gerratt: Looking at our results for the second quarter of 2024, revenue was $13 million compared to $11.6 million in the second quarter of 2023, up 12%. Revenue in the second quarter of 2024 benefited from $1.8 million related to return-to-service work performed on the Spanish Super Scoopers by our Spanish subsidiary, Albacete Aero, as part of our partnership.

Eric Gerratt: Looking at our results for the second quarter of 2024, revenue was $13 million compared to $11.6 million in the second quarter of 2023, up 12%. Revenue in the second quarter of 2024 benefited from $1.8 million related to return to service work performed on the Spanish Super Scoopers by our Spanish subsidiary, Albacete Aero, as part of our partnership. This was partially offset by lower flight revenue compared to last year, which benefited from the company's deployment to Canada beginning in June 2023.

Eric: Thanks, Sam.

Eric: Looking at our results for the second quarter of 2024, revenue was $13 million compared to $11.6 million in the second quarter of 2023, up 12%.

Eric: Revenue in the second quarter of 2024 benefited from 1.8 million dollars related to return-to-service work performed on the Spanish Super Scoopers by our Spanish subsidiary Albacete Aero as part of our partnership agreement.

Eric Gerratt: This was partially offset by lower flight revenue compared to last year, which benefited from the company's deployment to Canada beginning in June 2023. Cost of revenues was $9.9 million in the second quarter of 2024, down 6% from $10.5 million in the second quarter of last year. The cost of revenues for the second quarter of 2024 was comprised of flight operation expenses of $5.1 million and maintenance expenses of $4.8 million. This compares with $6.3 million in flight operation expenses and $4.2 million in maintenance expenses in the second quarter of 2023.

Eric: This was partially offset by lower flight revenue compared to last year, which benefited from the company's deployment to Canada beginning in June 2023.

Eric Gerratt: Cost of revenues was $9.9 million in the second quarter of 2024, down 6% from $10.5 million in the second quarter of last year. Cost of revenues for the second quarter of 2024 was comprised of flight operation expenses of $5.1 million and maintenance expenses of $4.8 million. This compares to $6.3 million in flight operation expenses and $4.2 million in maintenance expenses in the second quarter of 2023. The decreased quarter over quarter is due to lower flight operation expenses related to fewer flight hours in the second quarter of 2024 compared to the second quarter of 2023, which benefited from the company's deployment to Canada last year.

Eric: Cost of revenues was $9.9 million in the second quarter of 2024, down 6% from $10.5 million in the second quarter last year.

Eric: Cost of revenues for the second quarter of 2024 was comprised of flight operation expenses of $5.1 million and maintenance expenses of $4.8 million.

Eric: This compares the $6.3 million flight operation expenses and $4.2 million of maintenance expenses in the second quarter of 2023.

Eric Gerratt: The decreased quarter-over-quarter is due to lower flight operation expenses related to fewer flight hours in the second quarter of 2024 compared to the second quarter of 2023, which benefited from the company's deployment to Canada last year. Selling general administrative expenses were $7.9 million in the second quarter of 2024 compared to $15.2 million in the second quarter of 2023. The decrease is partially attributable to a decrease in the fair value of outstanding warrants in the second quarter of this year compared to the second quarter of 2023.

Eric: The decreased quarter-over-quarter is due to lower flight operation expenses related to fewer flight hours in the second quarter of 2024 compared to the second quarter of 2023, which benefited from the company's deployment to Canada last year.

Eric Gerratt: Selling general administrative expenses were $7.9 million in the second quarter of 2024, compared to $15.2 million in the second quarter of 2023. The decrease is partially attributable to a decrease in the fair value of outstanding warrants in the second quarter this year compared to the second quarter of 2023. The decrease was also partially attributable to lower non-cash stock-based compensation expense in the second quarter of 2024 compared to the second quarter of 2023. Interest expense for the second quarter was $5.9 million, compared to $5.5 million in the second quarter of last year.

Eric: Selling general administrative expenses were $7.9 million in the second quarter of 2024, compared to $15.2 million in the second quarter of 2023.

Eric: The decrease is partially attributable to the decrease in the fair value of outstanding warrants in the second quarter this year compared to the second quarter of 2023.

Eric Gerratt: The decrease was also partially attributable to lower non-cash stock-based compensation expense in the second quarter of 2024 compared to the second quarter of 2023. Interest expense for the second quarter was $5.9 million, compared to $5.5 million in the second quarter of last year. Bridger also reported other income of $0.1 million in the second quarter of 2024 compared to $0.6 million in the second quarter of 2023. For the second quarter of 2024, we reported a net loss of $10 million compared to a net loss of $19 million in the second quarter of last year.

Eric: The decrease was also partially attributable to lower non-cash stock-based compensation expense in the second quarter of 2024 compared to the second quarter of 2023.

Eric: Interest expense for the second quarter was $5.9 million compared to $5.5 million in the second quarter last year. Bridger also reported other income of $0.1 million in the second quarter of 2024 compared to $0.6 million in the second quarter of 2023.

Eric Gerratt: Bridger also reported other income of $0.1 million in the second quarter of 2024 compared to $0.6 million in the second quarter of 2023. For the second quarter of 2024, we reported a net loss of $10 million compared to a net loss of $19 million in the second quarter of last year. The decrease in net loss is primarily driven by the decrease in SG&A and cost of revenue; adjusted EBITDA was $0.2 million compared to $1 million in the second quarter of 2023. A reconciliation of adjusted EBITDA to net loss is included in Exhibit A of our earnings release available on our website.

Eric: For the second quarter of 2024, we reported a net loss of $10 million compared to a net loss of $19 million in the second quarter last year.

Eric Gerratt: The decrease in net loss is primarily driven by the decrease in SG&A and cost of revenue; adjusted EBITDA was $0.2 million compared to $1 million in the second quarter of 2023. A reconciliation of adjusted EBITDA to net loss is included in Exhibit A of our earnings release available on our website. Due to our seasonality, the company typically generates a net loss, a negative EBITDA, in the first and fourth quarters each year, with positive adjusted EBITDA generated primarily in the second and third quarters coinciding with the U.S. wildfire season, with the third quarter being the most profitable.

Eric: The decrease in net loss is primarily driven by the decrease in SG&A and cost of revenues.

Eric: Adjusted EBITDA was $0.2 million, compared to $1 million in the second quarter of 2023. A reconciliation of adjusted EBITDA to net loss is included in Exhibit A of our earnings release, available on our website.

Eric Gerratt: Due to our seasonality, the company typically generates a net loss and negative EBITDA in the first and fourth quarters each year, with positive adjusted EBITDA generated primarily in the second and third quarters coinciding with the U.S. wildfire season, with the third quarter being the most profitable. Looking at our results for the first six months of 2024, revenue was $18.5 million compared to $12 million in the first six months of 2023. The cost of revenues was $19.1 million, comprised of flight operation expenses of $10.1 million and maintenance expenses of $9 million.

Eric: Due to our seasonality, the company typically 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 coinciding with the U.S. wildfire season, with the third quarter being the most profitable.

Eric Gerratt: The cost of revenues for the first six months of 2023 was $17.8 million and comprised $10 million of flight operation expenses and $7.7 million in maintenance expenses. SG&A expenses were $19.5 million compared to $48.4 million in the first six months of 2023, with the decrease primarily driven by a decrease in non-cash stock-based compensation expense of $32.4 million in the first six months of 2023 compared to $9.6 million in the first six months of 2024. Interest expense for the first six months of 2024 was $11.8 million, compared to $11.2 million in the first six months of last year.

Eric Gerratt: Looking at our results for the first six months of 2024, revenue was $18.5 million compared to $12 million in the first six months of 2023. The cost of revenues was $19.1 million, comprised of flight operation expenses of $10.1 million and maintenance expenses of $9 million. The cost of revenues for the first six months of 2023 was $17.8 million and comprised $10 million of flight operation expenses and $7.7 million in maintenance expenses. SG&A expenses were $19.5 million compared to $48.4 million in the first six months of 2023, with the decrease primarily driven by a decrease in non-cash stock-based compensation expense of $32.4 million in the first six months of 2023 compared to $9.6 million in the first six months of 2024.

Eric: Looking at our results for the first six months of 2024, revenue was $18.5 million compared to $12 million in the first six months of 2023.

Eric: Cost of revenues was $19.1 million, comprised of flight operation expenses of $10.1 million and maintenance expenses of $9 million.

Eric: Cost of revenues for the first six months of 2023 was $17.8 million and comprised of $10 million of flight operation expenses and maintenance expenses of $7.7 million.

Eric: SG&A expenses were $19.5 million compared to $48.4 million in the first six months of 2023.

Eric: with the decrease primarily driven by a decrease in non-cash stock-based compensation expense of $32.4 million in the first six months of 2023 compared to $9.6 million in the first six months of 2024.

Eric Gerratt: Interest expense for the first six months of 2024 was $11.8 million compared to $11.2 million in the first six months of last year. Bridger also reported other income of $1.2 million for the first six months of 2024 compared to $1.7 million for the first six months of 2023. The net loss was $30.1 million in the first six months of 2024 compared to a net loss of $63.7 million in the first six months of 2023. Adjusted EBITDA was negative 6.7 million dollars for the first six months of 2024 compared to negative 9.7 million dollars in the same period last year.

Eric: Interest expense for the first 6 months of 2024 was $11.8 million compared to $11.2 million in the first 6 months last year.

Eric Gerratt: Bridger also reported other income of $1.2 million for the first six months of 2024 compared to $1.7 million for the first six months of 2023. The net loss was $30.1 million in the first six months of 2024, compared to a net loss of $63.7 million in the first six months of 2023. Adjusted EBITDA was negative $6.7 million for the first six months of 2024 compared to negative $9.7 million in the same period last year. Turning to the balance sheet, we ended the second quarter with total cash and restricted cash of $22.5 million.

Eric: Bridger also reported other income of 1.2 million dollars for the first six months of 2024 compared to 1.7 million dollars for the first six months of 2023.

Eric: Net loss was $30.1 million in the first six months of 2024, compared to a net loss of $63.7 million in the first six months of 2023.

Eric: adjusted EBITDA was negative 6.7 million dollars for the first six months of 2024 compared to negative 9.7 million dollars in the same period last year

Eric Gerratt: Turning to the balance sheet, we ended the second quarter with total cash and restricted cash of $22.5 million. Incoming receivables from the fire season are expected to increase the cash balance in the coming month. With that, I'd like to now turn the call over to John to discuss our 2024 guidance.

Eric: Turning to the balance sheet, we ended the second quarter with total cash and restricted cash of $22.5 million.

John Saunders: Incoming receivables from the fire season are expected to increase the cash balance in the coming months. With that, I'd like to now turn the call over to John to discuss our 2024 guidance. Thank you, Eric. Supported by the earlier than normal flight activity in the first quarter, an acceleration in activity beginning in July, and the expected contribution from FMS Aerospace in the second half of the year, we have increased confidence in our outlook for adjusted EBITDA of $35 million to $51 million on revenue of $70 million to $86 million for 2024. This guidance range is consistent with guidance first issued in November 2023, and we expect that after we report our third quarter results in November of this year, we will be able to fine-tune the range.

Eric: Incoming receivables from the fire season are expected to increase the cash balance in the coming months.

Eric: With that, I'd like to now turn the call over to John to discuss our 2024 guidance.

John Saunders: Supported by the earlier-than-normal flight activity in the first quarter, an acceleration in activity beginning in July, and the expected contribution from FMS Aerospace in the second half of the year, we have increased confidence in our outlook of adjusted EBITDA of $35 million to $51 million on revenue of $70 million to $86 million for 2024. This guidance range is consistent with guidance first issued in November 2023, and we expect that after we report our third-quarter results in November of this year, we will be able to fine-tune the range.

John Saunders: Thank you, Eric.

John Saunders: We have increased confidence in our outlook of adjusted EBITDA of $35 million to $51 million on revenue of $70 million to $86 million for 2024.

John Saunders: This guidance range is consistent with guidance first issued in November 2023, and we expect that after we report our third quarter results in November of this year, we will be able to fine-tune the range.

John Saunders: Our international expansion into Spain, which commenced in the fourth quarter of 2023, is also on schedule and expected to provide meaningful operational and revenue growth in future years. With that, I would like to turn the call back to Sam. Thank you, John. I would like to conclude the call by taking the opportunity to draw attention to the most important contributor to our business, our employees. I've had the good fortune of working for Bridger since 2019, partnering with tremendously talented men and women as we pursue Bridger's mission to save lives, property, and habitats affected by wildlife.

John Saunders: With that, I would like to turn the call back to Sam for final comments.

Sam Davis: Thank you, John. I would like to conclude the call by taking the opportunity to draw attention to the most important contributor to our business, our employees. I've had the good fortune of working for Bridger since 2019, partnering with tremendously talented men and women as we pursue Bridger's mission to save lives, property, and habitats affected by wildfires. The hard work, creativity, and dedication of our team of maintenance, operations, and aircraft personnel is best in class, and their unwavering selflessness has resulted in the provision of multiple resources to combat wildfires and the dropping of greater than 4.9 million gallons of water per year year to date in 2024.

Sam Davis: Thank you, John. I would like to conclude the call by taking the opportunity to draw attention to the most important contributor to our business, our employees.

Sam Davis: I've had the good fortune of working for Bridgers since 2019, partnering with tremendously talented men and women as we pursue Bridgers' mission to save lives, property, and habitats affected by wildfires.

John Saunders: The hard work, creativity, and dedication of our team of maintenance, operations, and aircraft personnel is best in class, and their unwavering selflessness has resulted in the provision of multiple resources to combat wildfires and the dropping of greater than 4.9 million gallons of water a year to date in 2020.

Sam Davis: The hard work, creativity, and dedication of our team of maintenance, operations, and aircraft personnel is best in class.

Sam Davis: and their unwavering selflessness has resulted in the provision of multiple resources to combat wildfires and the dropping of greater than 4.9 million gallons of water year-to-date in 2024 alone.

Sam Davis: To this team, keep up the great work. Many of you put your lives on the line every day, and our customers, fellow citizens, and cities and towns across the country greatly appreciate you. As we all know, wildfire does not discriminate based on economics, religion, background, or political affiliation, and we continue to pursue our mission indiscriminately and without desire for recognition or public adulation.

Sam Davis: To this team, keep up the great work. Many of you put your lives on the line every day, and our customers, fellow citizens, and cities and towns across the country greatly appreciate your sacrifice. As we all know, wildfire does not discriminate based on economics, religion, background, or political affiliation, and we continue to pursue our mission indiscriminately and without desire for recognition or public adulation.

Speaker Change: To this team, keep up the great work. Many of you put your lives on the line every day, and our customers, fellow citizens, and cities and towns across the country greatly appreciate your sacrifice.

Speaker Change: As we all know, wildfire does not discriminate based on economics, religion, background, and or political affiliation. And we continue to pursue our mission indiscriminately and without desire for recognition or public adulation.

Sam Davis: You all play a critical role in the preservation of life, property, and livelihoods across the nation, and you should be proud of the work. To our investors, thank you for your continuing support of our company and our mission. I appreciate your confidence in our employees, management team, and board of directors as we execute on our business plan and long-term objectives. We are confident in our prospects for the future and appreciate the faith that you have placed in our entire organization.

Operator: You all play a critical role in the preservation of life, property, and livelihoods across the nation, and you should be proud of the work you do. To our investors, thank you for your continuing support of our company and our mission. I appreciate your confidence in our employees, management team, and board of directors as we execute on our business plan and long-term objectives. We are confident in our prospects for the future and appreciate the faith that you have placed in our entire organization.

Speaker Change: You all play a critical role in the preservation of life, property, and livelihoods across the nation, and you should be proud of the work you do.

Speaker Change: To our investors, thank you for your continuing support of our company and our mission. I appreciate your confidence in our employees, management team, and Board of Directors as we execute on our business plan and long-term objectives.

Speaker Change: We are confident in our prospects for the future and appreciate the faith that you have placed in our entire organization.

Operator: Bridger is a critical piece of the nation's aerial firefighting responder network, and with year-to-date total acres burned at already over 5.2 million acres ahead of the total acres burned in each of the last five years, we expect to report a strong third quarter. I'm honored to lead such an incredibly talented team, and I look forward to continuing to pursue and execute our business plans in the future. And with that, I would like to open up the call to any questions.

Sam Davis: Bridger is a critical piece of the nation's aerial firefighting responder network, and with year-to-date total acres burned at already over 5.2 million acres, ahead of the total acres burned in each of the last five years, we expect to report a strong third quarter.

Speaker Change: Bredger is a critical piece of the nation's aerial firefighting responder network and with year-to-date total acres burned at already over 5.2 million acres ahead of the total acres burned in each of the last five years we expect to report a strong third quarter.

Operator: I'm honored to lead such an incredibly talented team, and I look forward to continuing to pursue and execute our business plans. And with that, I would like to open up the call to any questions. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star. And we'll take a question from Austin Moeller with Canaccord. Your line is open. Hi, good afternoon.

Speaker Change: I'm honored to lead such an incredibly talented team and I look forward to continuing to pursue and execute our business plans in the future.

Speaker Change: And with that, I would like to open up the call for any questions.

Operator: At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star 2. And we'll take a question from Austin Moeller on Canaccord. Your line is open.

Speaker Change: At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star 2.

Austin Moeller: Hi, good afternoon. My first question here is, can you just talk about Bridger's cash needs and the estimated upgrade costs for those four Spanish Super Scoopers since you anticipate having them operational in the 2025 fire season? Yeah, thank you for the question, Austin.

Austin Moeller: My first question here is, can you just talk about Bridger's cash needs and the estimated upgrade costs for those four Spanish Super Scoopers since you anticipate having them operational in the 2025 fire season? Yeah, thank you for the question, Austin. I'll field this one and then open it up to either Eric or John if they have anything to add. Bridger's operating cash flow is positive based on its current path.

Speaker Change: Hi, good afternoon. My first question here, can you just talk about Bridger's cash needs and the estimated upgrade costs for those four Spanish Super Scoopers since you anticipate having operational in the 2025 fire season?

Sam Davis: Yeah, thank you for the question Austin. I'll field this one and then open it up to either Eric or John if they have anything to add.

Speaker Change: Thank you for the question, Austin. I'll field this one and then open it up to either Eric or John if they have anything to add. Bridger's operating cash flow is positive based on its current path.

Sam Davis: Bridger's operating cash flow is positive based on its current path. While the majority of cash collections come in from the company in Q3, as we all know, we do believe this is enough to sustain operations until the next fire season. The return to service budget specific for the Spanish Scoopers is factored into the deal with Marathon and Avenue, and currently, we're on budget and on time to be able to complete that refurbishment through those. Okay, I have nothing from John or Eric. I think. Does that answer your question, Austin?

Sam Davis: While the majority of cash collections come in from the company in Q3, as we all know, we do believe this is enough to sustain operations until the next fire season. The return to service budget specific for the Spanish scoopers is factored into the deal with Marathon and Avenue, and currently, we're on budget and on time to be able to complete that refurbishment through those. Okay, and nothing from John or Eric, I think.

Speaker Change: While the majority of cash collections come in from the company in Q3, as we all know, we do believe this is enough to sustain operations until the next fire season.

Speaker Change: The return to service budget specific for the Spanish scoopers is factored into the deal with Marathon and Avenue, and currently we're on budget and on time to be able to complete that refurbishment through those funds.

Sam Davis: Does that answer your question, Austin? Yes, that's helpful. And just a follow-up here. Will the Ignis contracts be one at the federal and state level or at the local level? Who are you really targeting? Did you say Ignis?

Speaker Change: And nothing from John or Eric, I think. Does that answer your question, Austin?

Austin Moeller: Yes, that's helpful. And just a follow-up here. Will the Ignis contracts be at the federal and state level or at the local level? Who are you really targeting?

Austin: Yes, that's helpful. And just a follow-up here, will the Ignis contracts be won at the federal and state level or at the local level? Who are you really targeting there?

Sam Davis: Did you say Ignis? I kind of missed you there.

Austin Moeller: I kind of missed you there. Yes, the Ignis app. Will contracts be won at the federal or state and local level? Mostly at the state and local level.

Austin Moeller: Yes, the IGNIS app. Will contracts be won at the federal or state and local level? Mostly at the state and local level right now.

Speaker Change: Did you say Ignis? I kind of missed you there.

Speaker Change: Yes, the Ignis app will contracts be won at the federal or state and local level.

Sam Davis: Right now, as we build out the application, we do plan to land larger federal contracts. We will need to build out the application as we continue. The goal is to reach the state and local firefighting teams to meet their needs, and then those needs in the application will develop at the incident management team level and federally.

Sam Davis: As we build out the application, we do plan to land larger federal contracts. We will need to build out the application as we continue. The goal is to get the state and local firefighting teams to meet their needs, and then those needs in the application will develop at the incident management team level at federal Great. And just one more, if I may. Do you have any ballpark estimate on what you would charge for a subscription to an organization yet?

Speaker Change: Mostly at the state and local level right now, as we build out the application, we do plan to land larger federal contracts.

Speaker Change: We will need to build out the application as we continue. The goal is to corner the state and local firefighting teams to meet their needs.

Speaker Change: And then those needs in the application will develop at the incident management team level and federally.

Austin Moeller: Great. And just one more question, if I may, do you have any ballpark estimate on what you would charge for a subscription to an organization yet? I don't have that right at my fingertips. We are meeting on that right now as we speak to make sure we optimize that pricing. I will say that we are working closely with a strong pipeline of customers and giving them introductory pricing to make sure that we build this out well and scale the pricing so that, based on features, functionality, and user base, it's something that Bridger can benefit from while not punishing the customer with a heavy introductory price.

Speaker Change: Great, and just one more if I may. Do you have any ballpark estimate on what you would charge for a subscription to an organization yet?

Austin Moeller: I don't have that right at my fingertips. We are meeting on that right now as we speak to make sure we optimize that pricing. I will say that we are working closely with a strong pipeline of customers and giving them introductory pricing to make sure that we build this out well and scale the pricing so that, based on features, functionality, and user base, it's something that Bridger can benefit from while not punishing the customer with the price.

Speaker Change: I don't have that right at my fingertips. We are meeting on that right now as we speak to make sure we optimize that pricing. I will say that.

Speaker Change: We are working closely with a strong pipeline of customers.

Speaker Change: and giving them introductory pricing to make sure that we build this out well and scale the pricing so that based on features, functionality, and user base, it's something that Bridger can benefit from while not punishing the customer with a heavy introductory price.

Sam Davis: Excellent. Thanks for all the details. You bet. And it does appear that there are no further questions at this time. I'd now like to turn it back to Sam Davis for any closing or additional remarks.

Sam Davis: Excellent. Thanks for all the detail. You bet.

Speaker Change: Excellent. Thanks for all the details. You bet.

Operator: And it does appear that there are no further questions at this time. I'd now like to turn it back to Sam Davis for any closing or additional remarks. Thank you for watching.

Speaker Change: And it does appear that there are no further questions at this time. I'd now like to turn it back to Sam Davis for any closing or additional remarks.

Sam Davis: Thank you. Thanks again for joining our conference call today. We look forward to updating you on our progress when we report our third quarter results in November. We also plan to be at the Canaccord Growth Conference in Boston, presenting this Wednesday, August 14th, and in New York, presenting at the Gabelli Aerospace and Defense Conference on September 5th. Hopefully, we'll see some of you there.

Sam Davis: Thanks again for joining our conference call today. We look forward to updating you on our progress when we report our third quarter results in November. We also plan to be at the Canaccord Growth Conference in Boston, presenting this Wednesday, August 14th, and in New York, presenting at the Gabelli Aerospace and Defense Conference on September 5th. Hopefully, we'll see some of you there. And if anyone has any follow-up questions, please reach out to our Investor Relations team. Thank you, and have a good day.

Sam Davis: And if anyone has any follow-up questions, please reach out to our investor relations team. Thank you and have a good day. This does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful evening, and Sam Davis.

Sam Davis: Thank you. Thanks again for joining our conference call today. We look forward to updating you on our progress when we report our third quarter results in November.

Speaker Change: We also plan to be at the Canaccord Growth Conference in Boston presenting this Wednesday, August 14th, and in New York presenting at the Gabelli Aerospace and Defense Conference on September 5th.

Sam Davis: Hopefully we will see some of you there.

Sam Davis: And if anyone has any follow-up questions, please reach out to our Investor Relations team.

Sam Davis: Thank you and have a good day.

Operator: This does conclude today's program. Thank you for your participation.

Speaker Change: This does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful evening.

Sam Davis: Thank you. Thank you. Thank you.

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Speaker Change: Music

Unknown Executive: and please continue to stand by. Eric Gerratt, Austin Moeller.

Unknown Executive: Later you will have the opportunity to ask questions during the question and answer session.

Unknown Executive: Please note today's call will be recorded and I will be standing by. Should you need any assistance?

Eric Gerratt: It is now my pleasure to turn the conference over to CSO, Eric Gerratt. Please go ahead. Good afternoon and thank you for joining us today.

Eric Gerratt: Joining me on the call this afternoon is interim chief executive officer Sam Davis and John Thunders, who has recently joined Bridger as senior vice president of finance and capital markets.

Eric Gerratt: Before we begin please note that certain statements contained in this conference call that do not describe historical facts are forward-looking statements defined in the private security litigation reform act of 1995. In 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 discussed 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 views only as of today.

Eric Gerratt: 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 statements.

Eric Gerratt: Throughout today's earnings release and our call today, we refer to non-GAP financial measure adjusted EBITDA. The definition calculation and reconciliation of 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 reported results under GAP.

Sam Davis: With that, I'd like to turn the call over to Sam. Thank you, Eric. Good afternoon.

Sam Davis: I'm excited to be joining today's call, my first since being named Interim Chief Executive Officer on July 1st. While Bridger employees and customers know me well, I'd like to provide a brief introduction given our recent CEO transition. I joined Bridger in 2019 as controller and more recently served as Chief of Staff. While this title is typically more common in the military, in essence it meant I was Tim's or former CEO's right-hand man.

Sam Davis: In my five years at Bridger, I have been deeply involved in both the development and execution of our strategy. I held pivotal roles as the company transitioned from private to public, assisted in multiple capital raises, implemented operational efficiencies and executed strategic initiatives to expand our services and geographic footprint. The opportunities that brought me to Bridger back in 2019 are even more compelling today. Bridger is fortunate to have a deep bench of talent throughout our organization, and this team is committed to delivering value creation for our customers and shareholders.

Sam Davis: As previously announced, the nominating and corporate governance committee of the board has embarked on a comprehensive process to search for a permanent CEO, and will consider both internal and external candidates. While there is no specified timeline for completion, the search will likely become more active after the peak of the 2024 wildfire season is behind us. I am fully committed to being part of the process, and I'm confident that the board's ultimate decision will be in the best interest of Bridger shareholders.

Sam Davis: Now, let me move on to our second quarter results. After starting the year off with the earliest seasonal deployment in Bridger history, activity moderated in the second quarter with our entire fleet not being fully deployed until July, around the time the National Interagency Fire Center, or NIFC, elevated the national preparedness level to five. NPL-5, the highest level has not been breached since 2021, and it signifies that major fire incidents are occurring across multiple geographic areas with the potential to exhaust all agency fire resources.

Sam Davis: As state scramble to secure aerial firefighting resources, we have continued to evaluate our mix of contracts to increase our asset utilization, for the first time in our history, we have secured exclusive use task orders for four out of our six air attack aircraft, two multi-mission aircraft and four out of our six super scoopers. These aircraft are committed for a guaranteed minimum period, ensuring they remain dedicated to critical wildfire response efforts. Some of these contracts are multi-year.

Sam Davis: As we move to a greater number of exclusive use contracts versus call when needed, we expect to be able to help smooth out revenue during the wildfire season with the goal of maximizing price and flight hours. Additionally, the task orders for both of our Pilates PC-12 multi-mission aircraft, MMA, have been extended into the fall, marking a record 200 plus days of deployment this year, up from the originally scheduled 150 days. Furthermore, all of our dire Kodiak 100s are all under multi-day exclusive use task orders and are actively deployed in Washington and Alaska. The remaining two light six swing aircraft and two super scoopers operating on call when needed contracts have been called out and are actively flying missions.

Sam Davis: As a result, we remain on budget through the first half of 2024 and are on track to meet our published guidance for the year.

Sam Davis: I also want to spend a little time discussing the strategy behind our acquisition of FMS Aerospace, which closed on June 28, 2024. By the numbers, the FMS transaction was an equity only deal with the total value of approximately $21 million. Annually, FMS generates approximately $10.5 million revenue with net income of approximately $2.5 million. We became acquainted with FMS when we partnered with them to develop our MMA program. FMS is a turn-keep provider of airframe modification and integration solutions for government and commercial customers.

Sam Davis: Their engineering and modification work on two of our PC12s enabled us to secure the five-year contract last year with the Department of the Interior and Bureau of Indian Affairs for high-resolution surveillance, mapping software and intelligence operations, critical components of tactical firefighting. Bringing FMS into the Bridger family will bring these critical capabilities in-house and allow us to continue to grow in mission-critical areas, including emergency air services, aerospace modifications and defense systems engineering.

Sam Davis: In turn, Bridger provides FMS with physical facilities, including hangars and equipment, qualified aviation personnel and repair station and flight testing capabilities to grow their business and enhance margins. Together we believe we will be able to land larger contracts than either company could bid along. We are optimistic we could receive additional Department of Defense work as early as 2025. While we are not making forecasts, we expect meaningful operational synergies, as well as opportunities to add more year-round revenue.

Sam Davis: FMS is expected to be immediately accretive to earnings. In addition to our strategy to offset fluctuations in wildfire activity by expanding our aerial firefighting services to new mission-critical areas, we continue to look to expand into new geographies as well. We remain on track with plans to expand into Europe. Our partnership with Marathon Asset Management LP and Avenue Sustainable Solutions Fund completed the purchase of four super scoopers from the Spanish government last fall and our Spanish subsidiary, Albacete Arrow, is overseeing the returns of service work on the four Spanish scoopers. We are pleased with the progress and remain on schedule for all four scoopers to be available by the 2025 fire season.

Sam Davis: A quick update on our subsidiary, Ignis Technologies. We're excited to announce the launch of our mobile app for Wildland firefighters. Released in June, the free version offers real-time wildfire updates, weather conditions and essential tools for mapping fire specific points, lines and polygons. The paid version provides additional features for fire crews and organizations, including a built-in mesh network for offline data synchronization, 3D mapping, a web platform and other advanced capabilities. We are also exploring the integration of the app with our aerial surveillance technology to provide the latest fire intelligence, enabling firefighters and decision makers to use near real-time data to enhance safety and operational effectiveness.

Sam Davis: As we look ahead to the third quarter, the wildfire season remains very active, continuing the overall trend of larger wildfires and longer fire seasons, and driving continued long-term demand for our aerial surveillance and suppression services. In 2023, we saw 80% of our total revenue in the third quarter, which is generally the trend in the typical fire season. Year to date, we have dropped just shy of 5 million gallons of water on wildfires from our scoopers.

Eric Gerratt: Let me now turn it back to Eric who will talk about our financial performance and guidance for the year. Thanks, Sam. Looking at our results for the second quarter of 2024, revenue was $13 million compared to $11.6 million in the second quarter of 2023, up 12%. Revenue in the second quarter of 2024 benefited from $1.8 million related to return-to-service work performed on the Spanish superscoopers by our Spanish subsidiary Albacete Aero, as part of our partnership agreement.

Eric Gerratt: This was partially offset by lower flight revenue compared to last year, which benefited from the company's deployment to Canada, beginning in June 2023. Cost of revenues was $9.9 million in the second quarter of 2024, down 6% from $10.5 million in the second quarter last year. Cost of revenues for the second quarter of 2024 was comprised of flight operation expenses of $5.1 million and maintenance expenses of $4.8 million. This compares to $6.3 million flight operation expenses and $4.2 million of maintenance expenses in the second quarter of 2023.

Eric Gerratt: The decreased quarter of recorder is due to lower flight operation expenses related to fewer flight hours in the second quarter of 2024 compared to the second quarter of 2023, which benefited from the company's deployment to Canada last year. Selling general administrative expenses were $7.9 million in the second quarter of 2024, compared to $15.2 million in the second quarter of 2023. The decrease was partially attributable to the decrease in the fair value of outstanding warrants in the second quarter of this year compared to the second quarter of 2023.

Eric Gerratt: The decrease was also partially attributable to lower non-cash stock based compensation expense in the second quarter of 2024 compared to the second quarter of 2023. Interest expense for the second quarter was $5.9 million compared to $5.5 million in the second quarter last year. Bridger also reported other income of $0.1 million in the second quarter of 2024 compared to $0.6 million in the second quarter of 2023. For the second quarter of 2024, we reported a net loss of $10 million compared to a net loss of $19 million in the second quarter last year.

Eric Gerratt: The decrease in net losses primarily driven by the decrease in S-GNA and cost of revenues. Adjusted EBITDA was $0.2 million compared to $1 million in the second quarter of 2023. A reconciliation of adjusted EBITDA to net loss is included in the exhibit A of our earnings release, available on our website.

Eric Gerratt: Due to our seasonality, the company typically generates a net loss of a negative EBITDA in the first and fourth quarters each year with positive adjusted EBITDA generated primarily in the second and third quarters, coinciding with the U.S, wildfire season with the third quarter being the most profitable.

Eric Gerratt: Looking at our results for the first six months of 2024, revenue was $18.5 million compared to $12 million in the first six months of 2023. Cost of revenues was $19.1 million, comprised of flight operation expenses of $10.1 million and maintenance expenses of $9 million. Cost of revenues for the first six months of 2023 was $17.8 million and comprised of $10 million of flight operation expenses and maintenance expenses of $7.7 million.

Eric Gerratt: S-GNA expenses were $19.5 million compared to $48.4 million in the first six months of 23 with the decrease primarily driven by a decrease in non-cash stock-based compensation expense of $32.4 million in the first six months of 2023 compared to $9.6 million in the first six months of 2024. Interest expense for the first six months of 2024 was $11.8 million compared to $11.2 million in the first six months last year. Bridger also reported other income of $1.2 million for the first six months of 2024 compared to $1.7 million for the first six months of 2023.

Eric Gerratt: Net loss was $30.1 million in the first six months of 2024 compared to a net loss of $63.7 million in the first six months of 2023. Adjusted EBITDA was negative $6.7 million for the first six months of 2024 compared to negative $9.7 million in the same period last year.

Eric Gerratt: Turning to the balance sheet, we ended the second quarter with total cash and restricted cash of $22.5 million in coming receivables from the fire season are expected to increase the cash balance in the coming months.

John Thunders: With that, I'd like to now turn the call over to John to discuss our 2024 guidance. Thank you, Eric. Supported by the earlier than normal flight activity in the first quarter, an acceleration in activity beginning in July, and the expected contribution from FMS Aerospace in the second half of the year, we have increased confidence in our outlook of adjusted EBIT up 35 million to 51 million on revenue of 70 million to 86 million for 2024.

John Thunders: This guidance range is consistent with guidance first issued in November 2023, and we expect that after we report our third quarter results in November of this year, we will be able to fine tune the range. Our international expansion into Spain, which commenced in the fourth quarter of 2023, is also on schedule and expected to provide meaningful operational and revenue growth in future years.

Sam Davis: With that, I would like to turn the call back to Sam for final comments. Thank you, John.

Sam Davis: I would like to conclude the call by taking the opportunity to draw attention to the most important contributor to our business, our employees. I've had the good fortune of working for Bridger since 2019, partnering with tremendously talented men and women as we pursue Bridger's mission to save lives, property and habitats affected by wildfires. The hard work, creativity and dedication of our team has of maintenance, operations, and aircraft personnel is best in class, and they're unwavering selflessness has resulted in the provision of multiple resources to combat wildfires, and the dropping of greater than 4.9 million gallons of water a year to date in 2024 along.

Sam Davis: To this team, keep up the great work. Many of you put your lives on the line every day, and our customers, fellow citizens, and cities and towns across the country greatly appreciate your sacrifice. As we all know, wildfire does not discriminate based on economics, religion, background, and or political affiliation, and we continue to pursue our mission indiscriminately and without desire for recognition or public adulation. You all play a critical role in the preservation of life, property, and livelihoods across the nation, and you should be proud of the work you do.

Sam Davis: To our investors, thank you for your continuing support of our company and our mission. I appreciate your confidence in our employees, management team, and board of directors as we execute on our business plan and long-term objectives. We are confident in our prospects for the future and appreciate the faith that you have placed in our entire organization. Regere is a critical piece of the nation's aerial firefighting responder network, and with your-to-date total acres burned at already over 5.2 million acres, ahead of the total acres burned in each of the last five years, we expect to report a strong third quarter. I'm honored to lead such an incredibly talented team, and I look forward to continuing to pursue and execute our business plans in the future.

Unknown Executive: And with that, I would like to open up the call for any questions. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw yourself from the queue at any time by pressing star 2.

Austin Moeller: And we'll pick a question from Austin Moller with Canada Court. Your line is open. Hi, good afternoon. My first question here. Can you just talk about Bridger's past needs and the upgrade costs for those four-manage super-scoopers since you anticipate having an operational in the 2025 Thank you for the question, Austin. I'll feel this one and then open it up to either Eric or John, if they have anything to add. Bridger's operating cash flow is positive based on its current path.

Austin Moeller: While the majority of cash collections come in from the company in Q3, as we all know, we do believe this is enough to sustain operations until the next fire season. The return to service budget specific for the Spanish scoopers is factored into the deal with marathon and avenue, and currently we're on budget and on time to be able to complete that refurbishment through those funds. Okay, nothing from John or Eric. I think does that answer your question, Austin?

Austin Moeller: Oh, yes, that's helpful. And just a follow up here. Will the business contracts be one at the federal and state level or the local level? Who are you really targeting there? Did you say Ignis and kind of missed you there? Yes, the Ignis will contracts be one as the federal or state and local level? Mostly at the state and local level right now, as we build out the application, we do plan to land larger federal contracts.

Austin Moeller: We will offer the state and local firefighting teams to meet their needs, and then those needs and the application will develop at the incident management team level and federally. Great, and just one more if I may. Do you have any ballpark estimate on what you would charge for a subscription to an organization yet? I don't have that right at my fingertips. We are meeting on that right now as we speak to make sure we optimize that pricing.

Austin Moeller: I will say that we are working closely with a strong pipeline of customers and giving them introductory pricing to make sure that we build this out well and scale the pricing so that based on features, functionality and user base, it's something that Bridger can benefit from while not punishing the customer with a heavy introductory price. Excellent, thanks for all the details. You bet. And it does appear that there are no further questions at this time.

Sam Davis: I'd now like to turn it back to Sam Davis for any closing or additional remarks. Thank you. Thanks again for joining our conference call today. We look forward to updating you on our progress when we report our third quarter results in November. We also plan to be at the Canacord Growth Conference in Boston, presenting this Wednesday, August 14th, and in New York, presenting at the Gabelli Aerospace and Defense Conference on September 5th. Hopefully, we'll see some of you there. And if anyone has any follow-up questions, please reach out to our investor relations team.

Unknown Executive: Thank you and have a good day. This does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful evening. University of New York, Austin Moeller, Unknown Executive, Timothy Sheehy, Sam Davis, Bridger Dr.

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