Bridger Aerospace (Ticker: Unspecified) has announced record revenue and adjusted EBITDA for the fourth quarter of 2023, despite experiencing one of the slowest fire seasons in the United States in 25 years. The company's revenue for the full year reached nearly $67 million, with adjusted EBITDA at $18.7 million. These results were driven by a record contract awards, including a significant $60 million contract with the Department of the Interior and a $166 million contract from the U.S. Forest Service.
Bridger Aerospace also expanded its operations internationally, notably to Canada, and entered into a joint venture to purchase aircraft from the Government of Spain. The company has provided guidance for 2024, anticipating adjusted EBITDA to range from $35 million to $51 million on revenues of $70 million to $86 million.
Key Takeaways
- Bridger Aerospace achieved record revenue of nearly $67 million and adjusted EBITDA of $18.7 million for 2023.
- The company secured a five-year $60 million contract with the Department of the Interior and a 10-year $166 million contract with the U.S. Forest Service.
- Bridger Aerospace expanded its international operations to Canada during a slow U.S. fire season.
- A joint venture was formed to purchase four Spanish Scoopers, with a new subsidiary established in Spain for their service.
- The company acquired Ignis Technologies, integrating its fire surveillance intelligence SaaS assets.
- Revenue for 2024 is projected to be between $70 million to $86 million, with adjusted EBITDA expected to range from $35 million to $51 million.
Company Outlook
- Bridger Aerospace anticipates a record year of growth in 2024.
- The company has already deployed scooper and surveillance aircraft earlier than usual in Texas and Oklahoma.
- 2024 guidance remains consistent with previous estimates issued in November 2023.
Bearish Highlights
- The U.S. fire season had a slow start in 2023.
- Bridger Aerospace reported a net loss of $77.4 million for 2023, compared to $42.1 million in 2022.
- Negative adjusted EBITDA is expected in the first quarter of 2024 due to the company's largely fixed cost structure.
Bullish Highlights
- Bridger Aerospace responded to the slow fire season by expanding operations to Canada and Europe.
- The acquisition of Ignis Technologies and integration of fire surveillance intelligence SaaS assets bolster the company's offerings.
- Early deployment in 2024 sets the company up for another record year of growth.
Misses
- Despite record revenue and adjusted EBITDA, Bridger Aerospace's net loss widened in 2023.
- The fourth quarter of 2023 saw negative adjusted EBITDA of $10.4 million, which was worse than the $8.5 million in the same period of the previous year.
Q&A Highlights
- Bridger Aerospace's leadership emphasized the company's profitable business model and strong fundamentals despite challenges in its first year as a public company.
- The company is seeing an unprecedented influx of requests from foreign governments for wildfire suppression and technology services due to global demand and limited supply of functional Super Scoopers and surveillance aircraft.
- Bridger Aerospace plans to update stakeholders on its progress in the first quarter results report scheduled for May.
Bridger Aerospace's fourth quarter earnings call concluded with a positive outlook for the future, as the company continues to expand its global presence and capitalize on the growing demand for aerial firefighting services and technology.
InvestingPro Insights
Bridger Aerospace, with its record revenue and EBITDA for the fourth quarter of 2023, presents a mixed financial landscape that investors might find intriguing. The InvestingPro Data shows a robust revenue growth of 45.19% over the last twelve months as of Q3 2023, reflecting the company's successful expansion and contract wins. This growth is further highlighted by the company's nearly $67 million in revenue for the full year, closely aligning with the reported data.
However, Bridger Aerospace's aggressive growth strategy seems to come at a cost, as indicated by the InvestingPro Tip that the company is quickly burning through cash. This could be a point of concern for investors, given that it could impact the company's long-term sustainability and ability to finance its operations without additional capital.
Another InvestingPro Tip suggests that Bridger Aerospace is trading at a low P/E ratio relative to near-term earnings growth, which stands at 11.23. This might appeal to value investors looking for stocks with earnings potential that may not be fully recognized by the market yet. Moreover, the company's stock has experienced a significant return over the last week, with a 12.22% price total return, which could signal a positive investor sentiment in the short term.
For those considering an investment in Bridger Aerospace, there are more InvestingPro Tips available that could provide a deeper understanding of the company's financial health and market position. With these additional insights, investors can make a more informed decision. Remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for access to these valuable tips. Currently, there are 9 additional InvestingPro Tips listed that could further guide investment decisions regarding Bridger Aerospace.
Full transcript - Jack Creek Investment (BAER) Q4 2023:
Operator: Good afternoon, everyone. Welcome to today's Bridger Aerospace Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Also, today's call is being recorded and I will be standing by if anyone should need any assistance. Now, at this time, I would like to turn the call over to the Chief Financial Officer, Mr. Eric Gerratt. Please go ahead, sir.
Eric Gerratt: Good afternoon, and thank you for joining us today. Joining me on the call this afternoon is Chief Executive Officer, Founder and Director, Tim Sheehy. Before we begin, please note that certain statements contained in this conference call that do not describe historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Since forward-looking statements are based on various assumptions, risks and uncertainties, actual results may differ materially from those expressed or implied by such statements. Factors that could cause results to differ materially from those expressed include, but are not limited to those 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 views only as of today. We anticipate that subsequent events and developments will cause our assessment to change. However, we undertake no obligation to revise or update any forward-looking statement or to make any other forward-looking statements. Throughout this afternoon's earnings release and our call today, we refer to the non-GAAP financial measure of adjusted EBITDA. The definition, calculation and 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 our substitute for our results reported under GAAP. With that, I'd like to turn the call over to Tim.
Tim Sheehy: Thank you, Eric. Good afternoon. Thank you for joining today. Bridger accomplished a great deal in the fourth quarter and in 2023 as a whole. We achieved record revenue of nearly $67 million and record adjusted EBITDA of $18.7 million for the full year. This record performance was despite one of the slowest fire seasons in 25 years in the United States. While these fire season has its own seasonal and regional fluctuations and complexions, the overall trend of larger wildfires and longer fire seasons continues. This drives continued long term demand for our aerial surveillance suppression, services and technology capabilities. In fact, 2023 saw a record contract awards for Bridger including a five year $60 million exclusive use fire surveillance and technology contract in support of the Department of the Interior and a 10-year Air Attack contract for up to $166 million from the U.S. Forest Service awarded in the third quarter. While we saw a slow start to the U.S. fire season last year, we offset the impact by expanding our aerial firefighting operations internationally to Canada for the first-time in our history where wildfires kicked off early and record acreage was burned. In fact, there are still over 100 wildfires that continue to burn underneath the snow today across Canada. These overwintering fires or zombie fires as they are called, burn slowly below the surface during the cold months and have become more common in recent years. Having gone through the regulatory process in Canada last year, we are hopeful that Bridger could assist in Canada in the future as part of normal operations. Our deployment in Canada last year translated into the most territory covered in the history of the company, and we continue to make strides to further expand our aerial firefighting services to new mission critical areas and geographies. In late 2023, we entered into a joint venture partnership with Marathon Asset Management LP and Avenue Sustainable Solutions Fund to complete the purchase of four Spanish Coopers recently awarded from the Government of Spain. This transaction was kept several years in the making and positions us to meaningfully expand our fleet over the coming years. As part of our expansion into Europe, we have established a new Spanish subsidiary, Albacete Aero to oversee the return to service work on the four Spanish Scoopers, which has already begun. It is important to note that we are not including any impact of the Spanish Coopers in our current 2024 guidance. We also acquired a hangar in Spain in the fourth quarter to support our growth in Europe. I also want to touch on our September acquisition of Ignis Technologies, which has been fully integrated with our investments in fire surveillance intelligence SaaS assets. Through development with federal, state and local fire organizations, this pioneering mobile and web platform elevates firefighters' situational awareness, creates a common operating picture across firefighting units, and produces real time high value data to better manage wildfire risk. Recent software and surveillance contracts showcase this unique and differentiated offering in the marketplace. Turning to 2024. It's important to remember we’ve historically used our first quarter to finish winter maintenance of our fleet and to complete flight training and carding so that we are ready to mobilize come spring. While fire season typically begins in late April or May, this year we saw our earliest seasonal deployment of scooper and surveillance aircraft in company history to Texas and Oklahoma, where wildfires are being driven by air conditions in the Central U.S. While this revenue will not be sufficient to offset spending in Q1 and seasonally negative adjusted EBITDA, it is helpful to set the company up for another record year of growth. And I'll turn it back to Eric to talk about our financial performance.
Eric Gerratt: Thanks, Tim. Looking at our results for 2023, revenue grew 44% to a record $66.7 million compared to $46.4 million in 2022. After the late start to the 2023 U.S. wildfire season, fire activity increased in the third quarter driving record utilization of the company's growing Super Scooper fleet despite the shorter than average North American wildfire season. Cost of revenues was $41.3 million and was comprised of flight operations expenses of $24.4 million and maintenance expenses of $16.9 million. This compared to cost of revenues of $33.9 million in 2022, which included $18.8 million of flight operations expenses and $15.1 million of maintenance expenses. The increase primarily relates to higher employee labor and depreciation expenses related to the two additional Super Scooper Aircraft that were placed into service in September 2022 and February 2023 respectively. Gross margin increased to 38% in 2023, up from 27% in 2022, driven primarily by the record utilization of the company's Super Scooper fleet. Selling, general and administrative or SG&A expenses were $82.9 million compared to $35.1 million in 2022 with the increase primarily attributable to $45.7 million of non-cash stock-based compensation related to RSUs granted to management and employees in 2023. The remaining increase was primarily attributable to an increase in business development, insurance, professional services and other expenses associated with operating as a publicly traded company in 2023, as well as impairment charges of $2.4 million associated with our plan to phase out certain aging aircraft platforms in our aerial surveillance operations. The increase was partially offset by $10.1 million of transaction related bonuses for employees recorded in the third quarter of 2022 in connection with the business combination and preparation of becoming a public company. Interest expense for 2023 increased to $23.2 million from $20 million in 2022. Bridger also reported other income of $3.1 million for 2023 compared to $0.5 million of other expenses for 2022. Net loss was $77.4 million in 2023 compared to $42.1 million in 2022. Adjusted EBITDA was $18.7 million for 2023 compared to $3.7 million in 2022. Adjusted EBITDA excludes income tax expense or benefit, depreciation and amortization, interest expense, stock-based compensation, business development and integration expenses, operating -- offering costs related to financing and other transactions, loss on disposal and non-cash impairment charges, changes in fair value of earn-out consideration, changes in fair value of warrants, loss on extinguishment of debt and one-time discretionary bonuses to employees and executives. Turning to our results for the fourth quarter of 2023. Revenue was $1.1 million compared to $1.1 million in the fourth quarter last year. Cost of revenues was $8.4 million and was comprised flight operation expenses of $4.7 million and maintenance expenses of $3.7 million. his compares the cost of revenues of $5.3 million in the fourth quarter last year, which included $2.1 million of flight operations expenses and $3.2 million of maintenance expenses. SG&A expenses were $18.6 million in the fourth quarter of 2023 compared to $6.5 million in the fourth quarter of 2022. The increase was primarily driven by the non-cash stock-based compensation related to RSUs, as well as an increase in professional services and insurance, and other expenses associated with operating the publicly traded companies. The increase is also partially due to the non-cash impairment charges associated with our plan to phase out certain aging aircraft as I mentioned before. Interest expense for the fourth quarter of 2023 decreased to $6 million down from $7 million in the fourth quarter of 2022. For the fourth quarter, we reported a net loss of $31.1 million compared to a net loss of $17 million in the fourth quarter of 2022. Adjusted EBITDA was negative $10.4 million compared to negative $8.5 million in the fourth of 2022. We ended the year with cash, restricted cash and short-term investments of $37.9 million and outstanding long-term debt of just under $207 million. Looking at Bridger's standalone operations for the full year 2024, including our six Scoopers, adjusted EBITDA is anticipated to range from $35 million to $51 million on revenues of $70 million to $86 million. This guidance, which is in line with our prior guidance issued in November 2023, includes the impact of recent reductions to the company's largely fixed cost structure and excludes any impact from the Spanish Super Scoopers acquired by the joint venture partnership between Marathon Asset Management LP, Avenue Sustainable Solutions Fund and Bridger Aerospace, which are undergoing maintenance work in order to be returned to service. Also despite the early start to the wildfire season, given the company's largely fixed cost structure, Bridger is expected to generate negative adjusted EBITDA in the first quarter of 2024 with positive adjusted EBITDA anticipated in the second and third quarters. With that, I'd like to turn the call back to Tim for final comments.
Tim Sheehy: Thanks, Eric, and thank you to everyone for joining us on today's call and for your support. While our first year as a public company was not without its challenges with a profitable business model, strong fundamentals and strict cost controls, we reported record results and are well positioned for 2024. We continue to pursue opportunities to expand our aerial firefighting services to new mission critical areas and geographies, and are receiving an unprecedented influx of requests from multiple foreign governments for wildfire suppression and technology services. This is due both to the global demand for Super Scoopers and surveillance aircraft fed by the limited supply of functional Super Scooper and the heightened awareness of the effectiveness of these purpose built aircraft. With these specialized aircraft, our high quality team and innovative use of technology and data, we are uniquely positioned to drive stakeholder returns while supporting our federal and state government clients in the growing battle against wildfires. We look forward to updating you on our progress when we report our first quarter results in May. If anyone has any follow-up questions, please reach out to our Investor Relations contact found on the IR section of our website. Thank you and have a great day.
End of Q&A: Thank you, Mr. Sheehy. Ladies and gentlemen, that will conclude the Bridger Aerospace fourth quarter 2023 earnings conference call. We'd like to thank you all so much for joining us and wish you all a great remainder of your day. Good-bye.
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