Good day everyone and welcome to today's Bridger Aerospace Third 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. [Operator Instructions]. It is now my pleasure to turn the conference over to CFO of Bridger Aerospace, Eric Gerratt. Please go ahead.

Good afternoon and thank you for joining us today. Joining me on the call this afternoon is Chief Executive Officer Sam Davis; and Senior Vice President of Finance and Capital Markets John Founders. Before we begin, please note that certain statements contained in this conference call that do not describe historical facts are forward-looking statements as defined in the Private Securities Litigation Reform act of 1995. Since forward-looking statements are based on various assumptions, risks and uncertainties, actual results may differ materially from those expressed or implied by such statements. Factors that could cause results to differ materially from those expressed include, but are not limited to, those discussed in the company's filings with the U.S. Securities and Exchange Commission, including expectations regarding financial results for 2024. Management cannot control or predict many factors that ultimately impact future results. Listeners should not place undue reliance on forward-looking statements which reflect management's views only as of today. We anticipate that subsequent events and developments will cause our assessments to change. However, we undertake no obligation to revise or update any forward-looking statement or to make any other forward-looking statement. Throughout this afternoon's earnings release and our call today, we refer to the non-GAAP financial measure 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 results reported under GAAP. With that, I'd like to turn the call over to Sam.

Thank you, Eric.Before I begin, I just want to recognize all of our veterans today on Veterans Day. We thank you all for your service, including those veterans at Bridger who play a critical role in our operations. We are extremely proud to announce our third quarter results which include the height of the 2024 wildfire season. With revenue reaching nearly $65 million, net income of $27.3 million and adjusted EBITDA of $47 million. Our dedicated operations team facilitated high levels of deployment of our entire fleet throughout the year, ensuring our fleet was ready as early as February and through our current deployment in Texas for the latest and longest wildfire season in Bridger's history. 2024 is representative of the trend of longer and more intense wildfire seasons and the financial results Bridger can generate with its current fleet of six scoopers and six air attack aircraft. Overall, we consider 2024 a more typical wildfire season, particularly when compared to last year. While we saw a late start to the peak in the season, the US spent a total of 59 days at preparedness level five, which we refer to as PL5, including 10 days in October. As a reminder, PL5 is the national Interagency Fire Center's highest level and it signifies that major fire incidents are occurring across multiple geographic areas with the potential to exhaust all agency fire resources. In comparison, last year there were zero days at PL5 and only 21 days at PL4. The last time we saw PL5 was actually in 2021 with 68 days at PL5 and an additional 31 at PL4. Through November 1, 2024, over 8 million acres have burned nationally. This compares to just 2.7 million acres burned last year. For comparison, the five-year average is 7.7 million total acres…

Thanks, Sam. Looking at Results for the third quarter of 2024 revenue increased approximately 20% to $64.5 million from $53.6 million in the third quarter of 2023. Revenue in the third quarter of 2024 benefited from higher flight revenue as well as approximately $2.2 million related to return to service work performed on the Spanish super scoopers buyer Spanish subsidiary Albacete Aero as part of our partnership agreement MAB Funding, LLC. As well as approximately $1.6 million of revenue from the company's June acquisition of FMS. Cost of revenues was $23 million in the third quarter of 2024, up from $16 million in the third quarter last year. Cost of revenues for the third quarter of 2024 was comprised of flight operation expenses of $15.1 million and maintenance expenses of $7.9 million. This compares the $10.2 million of flight operation expenses and $5.7 million of maintenance expenses in the third quarter of 2023. The increase in cost of revenues is primarily due to increased flight hours in the third quarter this year compared to the third quarter of 2023, resulting in increased depreciation, maintenance and travel expenses tied to higher utilization in the field. Also reflected were the expenses associated with the return to service work for the Spanish scoopers which is largely pass through, as well as the addition of FMS and some inflationary pressure. Selling general Administrative expenses were $8.6 million in the third quarter of 2024 components compared to $15.1 million in the third quarter of 2023. The increase was primarily due to a decline in the fair value of outstanding warrants as of the end of the third quarter of 2024 compared to the third quarter of 2023. The decrease was also partially attributable to lower non cash stock-based compensation expense in the third quarter of…

Thank you, Eric. As the bulk of the wildfire season has come to an end, Bridger is in a position to refine its guidance. supported by record results in the third quarter and continued dry weather in the Western U.S. that has led to multiple aircraft operating into October and even November. We are increasing our 2024 revenue guidance. We now expect revenue to be in a range of $90 million to $95 million. This is an increase of between 35% and 42% in over our reported 2023 revenue and an increase from our initial guidance of $70 million to $86 million. It is also important to note that approximately $6 million to $7 million of anticipated 2024 revenue relates to pass-through return to service work performed on our four Spanish Super scoopers by our Spanish subsidiary Albacete Aero, as well as the June 2024 acquisition of FMS Aerospace, neither of which was included in the initial guidance range. Given the company's largely fixed cost and seasonality of its revenue, Bridger typically generates the majority of adjusted EBITDA in the third quarter each year during the bulk of the wildfire season. As a result, 2024 adjusted EBITDA is expected to grow by over 85% and to a range of $35 million to $40 million compared to the company's initial adjusted EBITDA guidance range of $30 million to $51 million, first provided last November. We have not fully realized the benefits from targeted reductions to our cost structure that we estimated a year ago. This includes the exit of certain subscription maintenance programs and leasing costs for aviation assets that we kept in place to support the high level of fire activity. We also experienced some inflationary pressures. Collectively, these factors are expected to prevent us from reaching the high end of our initial guidance range for 2024 adjusted EBITDA. In addition, we also pivoted from some EBITDA boosting opportunities to focus on growth of our non-fire revenue to help smooth seasonality, which are expected to benefit 2025 operations. Based on this latest guidance, we expect to report positive free cash flow for the first time in Bridger's history in a range of $1 million to $10 million. Free cash flow is defined as adjusted EBITDA, less debt service and less maintenance capital expenditures. Bridger intends to put a portion of this capital to work on low-cost, high benefit aviation investments to find new and expanded revenue opportunities. This includes aircraft modifications for additional customer opportunities, sensor enhancements and download capabilities that will provide increased utilization, opportunity for new contracts and multiyear work and increased customer satisfaction and brand awareness. With that, I would like to turn the call back to Sam for final comments.

Thank you, John. At the heart of Bridger Aerospace remains the unshakable focus on the mission to protect lives, property and habitat threatened by wildfires. This year when 16 states and provided support for 385 fires and gathered numerous success stories from suppression on major fires preventing the loss of structures to early detection, preventing small lightning strikes from becoming large incidents. Bridger employees worked long days and nights in some of the harshest conditions to readily serve fellow Americans facing the rising threat of wildfires. Being able to see the results of our hard work to protect others from loss while supporting firefighters on the front lines is at the core of Bridger's makeup. What makes the effort of the Bridger team even more commendable was the onslaught of politically motivated attacks we endured as a company as our former CEO ran for public office in a highly contested race. Regardless of political affiliation, Bridger employees, customers and partners were subject to a torrent of speculative for boating designed to tarnish the company's reputation and sabotage its laudable efforts to deliver record results while executing on a critical mission to save lives and property. Today, we confidently let the integrity of our -- speak for themselves. And we will continue to protect employees, customers and investors from those negative voices that attempt to defame or mischaracterize our efforts to carry out our mission of protecting lives, property and habitat. Ultimately, leadership team at Bridger's strength of its Board has guided through a crucial period in Bridger's life cycle, where it has finally stepped into its stride by exceeding expectations and we continue to be ready and able to answer the call to fight wildfires around the country. Now that the election is decided and our Founder and former CEO,…

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

Hi, good afternoon. Congrats on the quarter, everyone. Just my first question here. Can you go into a little bit more detail about the inflation in the quarter the EBITDA guidance? And was that in like aftermarket maintenance or pilot compensation, fuel costs? How should we think about that?

Thanks for the question. I'll turn this one over to Eric, if you wouldn't mind speaking to some of the inflationary pressures?

Yes. Sure, Austin. So yes, you mentioned a few. So, we definitely saw some inflationary pressure in like most companies in various salaries, wages, benefits, kind of on that piece of the puzzle as well as we -- especially during fire season incur costs in terms of travel with our crews and mechanics going all over the country to support our efforts and differently inflationary pressures there. In terms of maintenance, in addition to the labor and side of things and travel, we also saw some pressures in terms of some of our small parts and replacement parts that we use. We're looking at opportunities and have done some things to try to make inventory as efficient as possible to try to reduce those impacts and kind of manage those costs on the travel side. We also have looked at a have done some things in some areas where we leverage some crew housing things like that. So, we're not always in hotels and things of that nature. So, we've done a decent job of managing it, but there's definitely been those pressures there.

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

Yes. I'll take that one. Yes. So, you're right, and we speak to this all the time, wildfires are a very bipartisan issue because they affect everybody and it's a national threat and a rising one year-over-year. Bridger has done what we will do what we've always done, which is continue to work with the administration and be on the forefront of talking with these different committees as we effect a lot on the legislative slide, to increase some of our strategy in terms of getting more exclusive contracts and guaranteed days because that is at the core of what everybody is trying to do to solve this threat. Even right now, as we speak, there's fires on the East Coast outside of New York and in New Jersey. So, this is becoming a rising problem. There will may be some potential changes to the committees that we live, but Bridger continues to do work, especially in the off-season meeting with those folks and being on the forefront of chanting solutions that we have.

Great. And just one more, if I may. Should we expect to see a reduction in cost structure, operating costs and improved revenue volumes in the off-season now that you required up as you might be getting some other government services work?

Yes. I'll turn this one over to John, who's been working on this, especially as we look at guidance for the end of the year and beyond.

Yes, Austin, that's a great question. Absolutely, we expect to see OpEx down with lower flight levels throughout the winter. I would also comment that the cost rationalization that the company put in place in 2023 going into 2024, we're seeing the effect and impact of that cost rationalization, really starting to go into the P&L in the back half of '24 and into 2025. So, we have some cost rationalization over personnel and Eric mentioned travel policy vendors, professional services. We have some things that we believe we will significantly reduce OpEx throughout the winter. On the revenue side, absolutely FMS has been a winning contracts and continues to deliver on engineering service contracts throughout Q4, Q1, helping to reduce seasonality. Also, the company has been successful with fire and nonfire work with its aviation assets this year. So, we expect significant revenue from the core business in Q4 this year. So, a very significant change with revenue levels in the outside of fire season quarters, Q4 and Q1.

Excellent. That's very exciting. Thanks for all the details.

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 additional or closing remarks.

Thanks again for joining our conference call today. We look forward to updating you on our progress when we report our final annual results in March. And if anyone has any follow-up questions, please reach out to our Investor Relations directly. Thank you.

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