Bridger Aerospace Group Conference Summary Company Overview - **Company Name**: Bridger Aerospace Group (Ticker: BAER) - **Industry**: Aerial firefighting and aerospace services - **Headquarters**: Bozeman, Montana - **Founded**: 2014 by a former Navy SEAL Key Points and Arguments Market Demand and Growth - The demand for aerial firefighting services is increasing due to growing wildfire intensity and duration globally [2][5] - Bridger identified an underserved market for water scooping aircraft, specifically the Super Scooper, and relaunched its type certificate to bring six operational units to the U.S. [3][4] - The company has seen a consistent increase in utilization and demand for its Super Scoopers and surveillance aircraft [3][11] Wildfire Management Strategy - Bridger has shifted its operational philosophy to year-round readiness, ensuring aircraft and crews are prepared for rapid deployment [8][9] - The company emphasizes the importance of early detection and real-time surveillance in wildfire management, utilizing technology previously used in military applications [5][10] - Bridger's assets are positioned to combat wildfires effectively, especially during the initial attack phase [10][11] Legislative and Regulatory Environment - There is bipartisan support for wildfire management initiatives, which is crucial for securing funding and resources [12] - Recent executive orders focus on improving wildfire management through rapid response and effective resource allocation [9][10] Financial Performance and Projections - Bridger expects to achieve over $120 million in revenue and EBITDA between $42 million and $48 million for the current year [22] - The company has successfully refinanced its debt, securing a $210 million term loan and a $100 million deferred draw facility to support growth [23][37] Competitive Advantage - Bridger is the largest owner-operator of Super Scoopers globally, creating a scarcity that enhances demand for its services [17][28] - The company is exploring additional aerial platforms, such as retrofitting ATR 72-600 passenger planes for firefighting purposes [30][32] - Bridger's unique capabilities in surveillance and firefighting technology differentiate it from competitors [18][19] Additional Important Information - Bridger's operational flexibility allows it to deploy aircraft quickly across various states, enhancing its geographic footprint [15][16] - The company has developed a robust logistics and parts management system to ensure aircraft availability and minimize downtime [35] - Pricing strategies vary by geography, influenced by budget appropriations and operational costs [38][39] This summary encapsulates the key insights from the Bridger Aerospace Group conference, highlighting the company's strategic positioning, market opportunities, and financial outlook in the aerial firefighting industry.

Group 1: Broadcom Inc. (AVGO) - Broadcom's shares have outperformed the Zacks Electronics - Semiconductors industry with a year-to-date increase of 68.7% compared to 48% for the industry [5] - The company is experiencing strong momentum driven by growth in AI semiconductors and successful VMware integration, with AI revenues expected to rise 66% year over year to $6.2 billion in Q4 fiscal 2025 [6][7] - Over 90% of Broadcom's largest 10,000 customers have adopted VCF, although gross margin is expected to contract sequentially due to high debt levels [7] Group 2: Meta Platforms, Inc. (META) - Meta's shares have outperformed the Zacks Internet - Software industry with a year-to-date increase of 9.1% compared to 5.4% for the industry [8] - The company benefits from steady user growth, particularly in Asia Pacific, and increased engagement across platforms like Instagram and WhatsApp [9] - Meta plans to invest significantly in developing advanced AI models, although monetization of these services may take time [9] Group 3: The Coca-Cola Co. (KO) - Coca-Cola's shares have outperformed the Zacks Beverages - Soft drinks industry with a year-to-date increase of 19.3% compared to 10.3% for the industry [10] - The company's performance is supported by solid organic revenue growth, effective pricing, and gains in global market share [10][11] - Despite facing pressures from soft volumes in key regions and currency headwinds, Coca-Cola's focus on innovation and digital transformation enhances its competitive edge [11][12] Group 4: Landmark Bancorp, Inc. (LARK) - Landmark Bancorp's shares have outperformed the Zacks Financial - Savings and Loan industry with a year-to-date increase of 24.7% compared to 2.9% for the industry [13] - The company benefits from a stable economic backdrop in Kansas, supporting demand for various credit types [13][14] - Ongoing loan expansion and improving asset yields contribute to steady net interest income and resilient margins [14][15] Group 5: Bridger Aerospace Group Holdings, Inc. (BAER) - Bridger Aerospace's shares have underperformed the Zacks Aerospace - Defense industry with a year-to-date decrease of 13.2% compared to a 26.8% increase for the industry [16] - The company faces cash flow pressure due to concentrated receivables and high fixed costs, with delays in the Spanish Scooper program impacting monetization [16][17] - Despite challenges, Bridger benefits from a global undersupply of amphibious aircraft, which supports strong pricing and high utilization [18]

Core Insights - Bridger Aerospace Group Holdings, Inc. (BAER) has been upgraded to "Outperform" due to its improved balance sheet and disciplined expansion strategy in aerial firefighting [1] - The company is experiencing a structural undersupply in the amphibious firefighting market, with global demand for amphibious aircraft projected to rise significantly from 574 requests in 2023 to 1,048 in 2024 [2] - BAER's fleet expansion is strategically planned, with a $50 million agreement to acquire two additional Super Scoopers, increasing its fleet from six to eight aircraft by the 2026 season [3] Financial Performance - The average purchase cost for a Super Scooper is $32 million, with an estimated payback period of less than five years based on projected adjusted EBITDA [4] - Year-to-date 2025 adjusted EBITDA increased by 36.2% to $54.8 million, with revenue reaching $114.3 million, reflecting strong operational performance [6] - The company has raised its full-year 2025 revenue outlook to between $118 million and $122 million, while maintaining adjusted EBITDA guidance at $42 million to $48 million [6] Strategic Positioning - BAER operates the world's largest privately owned Super Scooper fleet and is the only U.S. operator of the CL-415EAF, providing it with significant scale advantages in a capacity-constrained market [10] - The business model is supported by multi-year government contracts, including a recent five-year, $20.1 million exclusive-use contract in Alaska [11] - The company is positioned for long-term growth due to rising wildfire intensity and a persistent shortage of amphibious firefighting aircraft [10] Challenges and Risks - Liquidity and cash-flow quality are areas of concern, with a single customer accounting for 80% of trade receivables [7] - The fleet growth strategy tied to the Spanish Super Scooper program carries execution and timing risks, with potential delays in return-to-service work [9] - Continued reliance on asset monetization and concentrated collections could limit financial flexibility if cash conversion weakens [8]

Core Insights - Bridger Aerospace has announced a strategic acquisition of two Canadair CL-215T Amphibious Aircraft, increasing its Super Scooper fleet from six to eight aircraft, thereby solidifying its position as the owner of the largest private Super Scooper fleet globally [1][2][4] Company Overview - Bridger Aerospace Group Holdings, Inc. is one of the largest aerial firefighting companies in the United States, providing services to federal and state government agencies, including the U.S. Forest Service [5] - The company is based in Belgrade, Montana, and operates internationally [5] Acquisition Details - The acquisition involves a $50 million transaction for the two Super Scoopers, expected to close before the end of the year, subject to customary closing conditions [2] - This expansion is anticipated to enhance the company's ability to combat severe wildfires and better serve government agency partners [2][4] Operational Impact - With the addition of the two aircraft, Bridger Aerospace is positioned for expanded contract awards and increased mission capability heading into the 2026 fire season [4] - The company is also working on returning two additional Super Scooper aircraft to service at its Spanish subsidiary, Albacete Aero, with completion scheduled for 2026 [3]

Core Viewpoint - Bridger Aerospace Group Holdings, Inc. announced the planned retirement of CFO Eric Gerratt and the succession plan involving Anne Hayes as Deputy CFO and Ernie Freedman as Chairman of the Audit Committee, aiming for a smooth transition and continued growth in the aerial firefighting sector [1][2][3]. Company Leadership Transition - Eric Gerratt will retire after the filing of the Company's 10-K in March 2026, having played a crucial role in recent initiatives and financial management during the company's growth [1][2]. - Anne Hayes, currently the Director and Audit Committee Chair, will transition to the CFO role, bringing two decades of financial leadership experience and a strong background in capital markets [2][3]. - Ernie Freedman joins as the new Chair of the Audit Committee, with over 30 years of experience in executive finance and audit leadership, previously serving as CFO of Invitation Homes Inc. [3][4]. Company Background - Bridger Aerospace is one of the largest aerial firefighting companies in the U.S., providing services to federal and state agencies, including the U.S. Forest Service [5].

Core Insights - Bridger Aerospace Group Holdings, Inc. (BAER) reported a strong performance for the quarter ended September 30, 2025, with a 5.2% year-over-year revenue increase to $67.9 million, outperforming the S&P 500 Index [1][2] - The company achieved a net income increase of 26.2% to $34.5 million, and diluted earnings per share rose 19.4% to $0.37 [2][4] - BAER's strong operational metrics and strategic positioning in wildfire management are expected to drive future growth [10][13] Financial Performance - Revenue for the first nine months of 2025 surged 37.6% to $114.3 million from $83 million a year earlier, with underlying revenues at $101.1 million [6] - Adjusted EBITDA increased 36.2% to $54.8 million from $40.2 million, and the company transitioned from a net loss of $2.7 million to net income of $19.3 million [6] - Gross profit expanded 12.6% to $46.8 million, lifting the gross margin to 68.9% from 64.3% [4] Cost Management - Cost of revenues declined 8.1% to $21.1 million, and SG&A expenses fell 10.6% to $7.7 million, reflecting lower non-cash stock-based compensation [3] - Interest expense decreased 3.1% to $5.8 million, contributing to the bottom-line improvement [4] Operational Metrics - Fleet activity remained robust, with multi-mission aircraft nearly doubling flight hours year-over-year, and Super Scoopers recorded a 9% increase in average flight hours [5][9] - The company noted record task orders and nearly 10% year-over-year growth in days on contract across the fleet [9] Strategic Context - Management highlighted the importance of federal initiatives in wildfire management, which are expected to provide structural tailwinds for BAER [10][13] - The federal government's proposed increase in wildfire budget to $3.7 billion is anticipated to strengthen BAER's long-term revenue base [13] Guidance and Outlook - BAER raised its 2025 revenue outlook to between $118 million and $123 million, up from previous guidance of $105 million to $111 million [14] - Adjusted EBITDA guidance remains at $42 million to $48 million, with expectations of continued improvement in cash provided by operating activities [14] Other Developments - The company completed a $49 million sale-leaseback of its Bozeman campus facilities and closed a new senior secured credit facility of up to $331.5 million [15] - Management is integrating the FMS acquisition and Ignis Technologies mobile platform to enhance engineering capabilities and create additional revenue streams [16]

Revenue Growth - Revenues increased by $3.4 million, or 5%, to $67.9 million for the three months ended September 30, 2025, compared to $64.5 million for the same period in 2024[207] - Fire suppression revenue rose by $2.4 million, or 5%, to $52.6 million for the three months ended September 30, 2025, driven by favorable rate increases for Super Scoopers[207] - Aerial surveillance revenue increased by $3.2 million, or 43%, to $10.8 million for the three months ended September 30, 2025, due to increased flight hours for surveillance aircraft[208] - Total revenues increased by $31.3 million, or 38%, to $114.3 million for the nine months ended September 30, 2025, compared to $83.0 million for the same period in 2024[222] - United States revenue increased by $23.1 million, or 30%, to $101.1 million for the nine months ended September 30, 2025, from $78.1 million for the same period in 2024[226] - Aerial surveillance revenue increased by $4.9 million, or 42%, to $16.5 million for the nine months ended September 30, 2025, from $11.6 million for the same period in 2024[223] Income and Profitability - Gross income increased by $5.2 million, or 13%, to $46.8 million for the three months ended September 30, 2025, compared to $41.5 million for the same period in 2024[206] - Operating income rose by $6.2 million, or 19%, to $39.0 million for the three months ended September 30, 2025, from $32.9 million in the same period of 2024[206] - Net income increased by $7.2 million, or 26%, to $34.5 million for the three months ended September 30, 2025, compared to $27.3 million for the same period in 2024[206] - Net income increased by $22.0 million, or 809%, to $19.3 million for the nine months ended September 30, 2025, compared to a net loss of $2.7 million for the same period in 2024[220] - EBITDA for the nine months ended September 30, 2025, was $50.4 million, representing a 72% increase from $29.3 million in the same period of 2024[240] - Adjusted EBITDA for the nine months ended September 30, 2025, was $54.8 million, a 36% increase from $40.2 million in the same period of 2024[240] Costs and Expenses - Total cost of revenues decreased by $1.9 million, or 8%, to $21.1 million for the three months ended September 30, 2025, from $23.0 million in the same period of 2024[206] - Maintenance expenses increased by $14.0 million, or 83%, to $30.8 million for the nine months ended September 30, 2025, from $16.8 million for the same period in 2024[230] - Flight operations expenses increased by $1.0 million, or 4%, to $26.2 million for the nine months ended September 30, 2025, from $25.2 million for the same period in 2024[229] - Selling, general and administrative expense decreased by $5.3 million, or 19%, to $22.8 million for the nine months ended September 30, 2025, from $28.2 million for the same period in 2024[231] - Total cost of revenues increased by $15.0 million, or 36%, to $57.0 million for the nine months ended September 30, 2025, from $42.1 million for the same period in 2024[228] Cash Flow and Liquidity - The company expects existing cash and cash equivalents, along with cash generated from operations, to be sufficient for at least 12 months from the date of the report[190] - As of September 30, 2025, cash and cash equivalents totaled $55.1 million, with an additional $9.3 million in restricted cash[242] - For the nine months ended September 30, 2025, net cash provided by operating activities was $24.8 million, a significant increase from a net cash used of $2.8 million in the same period of 2024[270] - Net cash used in investing activities was $10.5 million for the nine months ended September 30, 2025, compared to net cash provided of $3.1 million in 2024[271] - The Company has met the minimum liquidity requirement of $8 million in unrestricted cash and cash equivalents as of September 30, 2025[253] Debt and Financing - The company anticipates the need to raise additional funds through equity or debt financing to pursue significant acquisition opportunities[245] - The Series 2022 Bonds, totaling $160.0 million, have an annual interest rate of 11.5% and mature on September 1, 2027[247] - Following the refinancing on October 28, 2025, the company has a committed cash flow revolving credit facility of $21.5 million for working capital and general corporate purposes[246] - The Company entered into a Credit Agreement on October 28, 2025, consisting of initial term loans of $210 million and a revolving facility of $21.5 million[260] - The Credit Agreement includes a Total Leverage Ratio requirement not exceeding 7.00x through December 31, 2026, decreasing to 5.50x from March 31, 2028, onwards[263] Operational Risks and Challenges - The company is exposed to risks related to limited suppliers for specialized aircraft and parts, which may lead to increased costs and operational delays[197] - The North American fire season is expected to continue to impact operational results significantly, with approximately 8.8 million acres burned in 2024, 25.7% above the 2001-2020 annual average[196] - Risks include competition, operational disruptions, and challenges in managing growth and expansion[310] Accounting and Compliance - The company recognizes revenue primarily under ASC 606, with most contracts having a single performance obligation satisfied over time[282] - The company evaluates its accounting estimates and assumptions on an ongoing basis, which may lead to significant differences between estimates and actual results[279] - The Company is classified as an "emerging growth company" and has elected to take advantage of the extended transition period for complying with new accounting standards[305] - The company has not established any relationships with special purpose or variable interest entities for off-balance sheet arrangements as of September 30, 2025[276] - The company assesses goodwill for impairment annually, with the last assessment indicating fair value exceeded carrying value[296] Future Outlook and Strategy - Bridger anticipates expansion of operations and increased deployment of its aircraft fleet[310] - Current demand for aerial firefighting services is influenced by the duration and severity of wildfire seasons[310] - The company plans to integrate any future acquisitions successfully to achieve synergies and cost reductions[310] - Bridger's growth strategy includes developing, selling, and expanding its services[310] - Bridger's management acknowledges the uncertainty of actual results differing from forward-looking statements[310]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased to a record $67.9 million, up 5% from $64.5 million in Q3 2024 [13] - Net income for Q3 2025 was $34.5 million compared to $27.3 million in Q3 2024, with earnings per diluted share rising to $0.37 from $0.31 [16] - Adjusted EBITDA for Q3 2025 was $49.1 million, compared to $47 million in the same quarter last year [16] - For the first nine months of 2025, revenue was $114.3 million, a 38% increase from $83 million in the same period of 2024 [18] Business Line Data and Key Metrics Changes - FMS contributed $2.4 million in revenue during Q3 2025, with ongoing contracting opportunities primarily with the DOD [6][8] - Revenue from ongoing operations, excluding return-to-service work, grew 5% to approximately $65.7 million compared to $62.4 million in Q3 2024 [13] Market Data and Key Metrics Changes - Wildfires in 2025 have been above average, with over 54,000 incidents reported, a 50% increase over last year [4] - Despite the increased number of fires, the area burned was down 40% compared to last year, indicating effective firefighting efforts [4] Company Strategy and Development Direction - The company is focused on developing long-term contracts with the Forest Service and individual states, which has led to record-breaking financial performance [5] - Bridger is positioned to capitalize on federal initiatives aimed at restructuring the national wildland firefighting system, which is expected to drive future growth [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about meeting the high end of adjusted EBITDA guidance for 2025, with revenue expected to be between $118 million and $123 million [19] - The company is prepared for year-round work and is focused on fleet expansion to support organic growth [23] Other Important Information - The company completed a $49 million sale leaseback of its campus facilities and entered into a new $331 million expanded debt facility [5][19] - Bridger's operational performance has been strong, with a focus on preparedness and early detection in firefighting efforts [21] Q&A Session Summary Question: Free cash flow tracking and usage plans - Management expects to end the year with around $14 million in free cash flow, which will be used for fleet expansion opportunities [27][28] Question: Future of Spanish scoopers - The company is exploring options for the Spanish scoopers, considering both strategic and economic benefits for deployment [28][29]

Revenue and Income - Revenue for Q3 2025 was $67.9 million, a 5% increase from $64.5 million in Q3 2024[5] - Net income for Q3 2025 rose 26% to $34.5 million compared to $27.3 million in Q3 2024[8] - Year-to-date revenue for the first nine months of 2025 reached $114.3 million, a 38% increase from $83.0 million in the same period of 2024[10] - Revenues for Q3 2025 reached $67,886 million, a 5.3% increase from $64,507 million in Q3 2024[22] - Net income for Q3 2025 was $34,519 million, up from $27,346 million in Q3 2024, marking a 26.5% increase[22] - Operating income for the nine months ended September 30, 2025, was $34,406 million, significantly higher than $12,801 million for the same period in 2024[22] Cash and Assets - Cash and cash equivalents as of September 30, 2025, were $55.1 million, up from $39.3 million at the end of 2024[9] - Total current assets increased to $88,193 million as of September 30, 2025, from $63,809 million as of December 31, 2024[25] - Cash and cash equivalents at the end of Q3 2025 were $55,118 million, up from $39,336 million at the end of 2024[25] - Total assets increased to $310,986 million as of September 30, 2025, from $290,809 million as of December 31, 2024[25] Expenses and Costs - SG&A expenses decreased to $7.7 million in Q3 2025 from $8.6 million in Q3 2024, reflecting lower non-cash stock-based compensation[7] - Interest expense for Q3 2025 was $5.8 million, down from $6.0 million in Q3 2024[7] - Stock-based compensation for Q3 2025 was $1,101,000, a decrease from $3,369,000 in Q3 2024, showing a reduction of about 67.3%[39] - Depreciation and amortization for Q3 2025 was $8,196,000, down from $11,471,000 in Q3 2024, representing a decline of about 28.5%[39] - Business development and integration expenses for Q3 2025 were $331,000, compared to $287,000 in Q3 2024, an increase of approximately 15.3%[39] Financial Guidance and Projections - The company expects 2025 revenue to be between $118 million to $122 million, exceeding previous guidance of $105 million to $111 million[15] - The company is on track to achieve the higher end of its 2025 Adjusted EBITDA guidance of $42 million to $48 million[15] Other Financial Metrics - Adjusted EBITDA for Q3 2025 increased 4% to $49.1 million from $47.0 million in Q3 2024[8] - Adjusted EBITDA for the nine months ended September 30, 2025, was $54,821,000, compared to $40,237,000 for the same period in 2024, reflecting a growth of about 36.3%[39] - EBITDA for Q3 2025 was $47,677,000, up from $44,806,000 in Q3 2024, indicating an increase of approximately 6.2%[39] - Interest expense for the nine months ended September 30, 2025, totaled $17,274,000, slightly down from $17,766,000 in the same period of 2024, a decrease of approximately 2.8%[39] Liabilities and Tax - Total liabilities decreased to $233,064 million as of September 30, 2025, from $237,332 million as of December 31, 2024[25] - The company reported a tax benefit of $(840,000) for Q3 2025, compared to no tax benefit in Q3 2024[39]

Core Insights - Bridger Aerospace reported record results for Q3 2025, highlighting a strong performance despite a below-average fire year, driven by strategic prepositioning and diversification of revenue streams [1][3][6] Financial Performance - Q3 2025 revenue reached $67.9 million, a 5% increase from $64.5 million in Q3 2024, with adjusted revenue of $65.7 million after excluding specific return-to-service work [5][6] - Net income for Q3 2025 was $34.5 million, a 26% increase from $27.3 million in Q3 2024, with adjusted EBITDA rising 4% to $49.1 million [6][8] - Year-to-date revenue for the first nine months of 2025 was $114.3 million, up 38% from $83.0 million in the same period of 2024 [10][14] Cost Management - Cost of revenues in Q3 2025 was $21.1 million, down from $23.0 million in Q3 2024, while SG&A expenses decreased to $7.7 million from $8.6 million [7][12] - Interest expense for Q3 2025 was $5.8 million, slightly lower than $6.0 million in Q3 2024 [8][13] Business Outlook - The company is on track to achieve the higher end of its 2025 Adjusted EBITDA guidance of $42-$48 million, with revenue expected to be between $118 million to $122 million [15] - Recent financing transactions, including a $49 million sale leaseback and a $331 million financing package, are expected to provide growth capital for fleet expansion [6][15] Industry Context - The establishment of the Wildland Fire Service Plan and the passage of the Fire Ready Nation Act are expected to enhance the focus on wildfire preparedness and suppression efforts [6]