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.

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 Founders, 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 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 the 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's fees 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 statements or to make any other forward-looking statements. Throughout today's earnings release and our call today, we refer to non-GAAP financial measure adjusted EBITDA. The definition, calculation and 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 reported results under GAAP. With that, I'd like to turn the call over to Sam.

Thank you, Eric. 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. 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. 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. 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…

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 Super Scoopers by our Spanish subsidiary Albacete Aero as part of our partnership agreement. 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. The decrease 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 and 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. The decrease was also partially attributable to lower noncash 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…

Thank you, Eric. Supported by the earlier-than-normal flight activity in the first quarter and 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. 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 for final comments.

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 selfisness 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. 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. 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. 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 for any questions.

[Operator Instructions] And we'll take a question from Austin Moeller with Canaccord. Your line is open.

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 Scooper since you anticipate having operational in the 2025 fire season?

Yes. 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. While the majority of cash collections coming 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?

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 that?

Did you say Ignis? I kind of missed you there.

Yes. The Ignis app will contracts be won at the federal or state and local level.

Over mostly at the state and local level. 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 corner 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 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. 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. 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 Canaccord Growth Conference in Boston presenting this Wednesday August 14 and in New York presenting at the Gabelli Aerospace and Defense Conference on September 5. Hopefully, we will 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.

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