Bridger Aerospace Group Holdings, Inc. one of the nation’s largest aerial firefighting companies, announced November 13, 2023, record results for the third quarter ended September 30, 2023 and an update on guidance including the establishment of initial 2024 Revenue and Adjusted EBITDA estimates.
Highlights:
- Achieved record quarterly revenue, net income, and Adjusted EBITDA of $53.6 million, $17.5 million and $38.7 million, respectively, in the third quarter of 2023
- Bridger’s Super Scooper fleet experienced its highest level of utilization ever during the third quarter despite a shorter-than-average North American wildfire season
- In the process of acquiring four Spanish Super Scoopers won at auction by the Spanish government in September 2023, positioning Bridger for revenue and cash flow growth for the next several years
Third Quarter 2023 Results
“Bridger’s Super Scooper fleet experienced its highest level of utilization in Bridger’s history during the third quarter of 2023, driving record results, including Adjusted EBITDA of $38.7 million,” commented Tim Sheehy, Bridger’s Chief Executive Officer. “This is a testament to the rapid adoption of our initial attack platform enabled by the Super Scooper’s superior capabilities to suppress wildfires. We continue to pursue opportunities to further expand our fleet both in the U.S and abroad and while the fire season will always remain unpredictable, we see continued demand for our services and look forward to supporting the needs of our state and federal customers.”
Revenue for the third quarter of 2023 was $53.6 million compared to $32.5 million in the third quarter of 2022, up approximately 65%. After the later start to the 2023 U.S. wildfire season, fire activity increased in the third quarter in the U.S. driving record utilization of the Company’s growing Super Scooper fleet despite a shorter-than-average North American wildfire season.
Cost of revenues was $15.2 million in the third quarter of 2023 and was comprised of flight operations expenses of $9.7 million and maintenance expenses of $5.5 million. This compares to $12.6 million in the third quarter of 2022, which included $7.1 million of flight operations expenses and $5.5 million of maintenance expenses. The increase primarily relates to higher depreciation, maintenance and other expenses related to the two additional Super Scooper aircraft that were placed into service in September 2022 and February 2023, respectively.
Selling, general and administrative expenses (“SG&A”) were $15.8 million in the third quarter of 2023 compared to $18.1 million in the third quarter of 2022. The decrease in SG&A compared to the third quarter of 2022 was primarily due to transaction related bonuses for employees and executives and higher offering related costs recorded in the third quarter of 2022. These decreases were partially offset by higher stock-based compensation in the third quarter of 2023 compared to the same period in 2022.
Interest expense for the third quarter of 2023 decreased to $6.0 million from $7.0 million in the third quarter of 2022 was primarily due to lower interest expense for the Series A preferred stock in the third quarter of 2023 compared to the third quarter of 2022. The decrease was partially offset by additional interest expense for the Gallatin municipal bond that closed in the third quarter of 2022. Bridger also reported Other Income of $0.6 million for the quarter ended September 30, 2023, primarily comprised of interest income for the embedded derivative of its preferred equity of $0.4 million.
Bridger reported net income of $17.5 million in the third quarter of 2023 compared to a net loss of $5.7 million in the third quarter of 2022. Net income was driven by strong fleet utilization in the third quarter of 2023. Adjusted EBITDA was $38.7 million in the third quarter of 2023, compared to $19.1 million in the third quarter of 2022. Adjusted EBITDA excludes interest expense, depreciation and amortization, income tax benefit, gains and losses on disposals of assets, offering costs related to financing and other transactions, stock-based compensation, business development and integration expenses, loss on extinguishment of debt and one-time discretionary bonuses to employees and executives.
Definitions and reconciliations of net loss to EBITDA and Adjusted EBITDA, are attached as Exhibit A to this release.
At September 30, 2023, cash and short term investments rose to $33.9 million from $25.7 million at June 30, 2023 driven by seasonality and the strong third quarter performance.
Year to Date Results
Revenue for the first nine months of 2023 was $65.6 million compared to $45.3 million in the first nine months of 2022.
Cost of revenues was $33.0 million in the first nine months of 2023 and was comprised of flight operations expenses of $19.7 million and maintenance expenses of $13.3 million. This compares to $28.6 million in the first nine months of 2022, which included $16.6 million of flight operations expenses and $11.9 million of maintenance expenses.
SG&A expenses were $64.2 million in the first nine months of 2023 compared to $28.6 million for the first nine months of 2022. The increase was primarily driven by non-cash stock-based compensation expense of $40.9 million for grants of restricted stock units (“RSUs”).
Interest expense for the first nine months of 2023 increased to $17.2 million from $13.0 million in the first nine months of 2022. Bridger also reported Other income of $2.3 million for the first nine months of 2023 compared to $0.2 million of Other expenses for the first nine months of 2022.
Bridger reported a net loss of $46.2 million in the first nine months of 2023 compared to a net loss of $25.1 million in the first nine months of 2022. Adjusted EBITDA was $29.0 million in the first nine months of 2023, compared to $12.2 million in the first nine months of 2022.
Business Outlook
While the Company saw record results in the third quarter after the late start to the wildfire season, the last two weeks of September brought cooler, wet weather to the U.S. and Canada. With limited wildfire activity continuing in the first part of the seasonally slower fourth quarter, we are now expecting 2023 to be the shortest North American wildfire season in the past 10 years. As a result, we are reducing our previous annual 2023 revenue guidance range from $84 million to $96 million to a range of $66 million to $68 million.
Given the Company’s largely fixed cost structure and seasonality, Bridger typically generates positive Adjusted EBITDA in the second and third quarters each year, during the bulk of the wildfire season and negative Adjusted EBITDA in the first and fourth quarters. In response to the shorter 2023 wildfire season, Bridger has identified reductions to its largely fixed cost structure that will benefit the fourth quarter and the full year 2024. Even with these cuts, the Company expects to report negative Adjusted EBITDA of $10.0 million to $11.0 million in the fourth quarter of 2023 and now projects Adjusted EBITDA of $18 million to $19 million for the full year 2023 compared to its prior estimate of $37 million to $45 million. These estimates assume wildfire conditions will remain unchanged for the remainder of the fourth quarter of 2023 and additional aircraft will not be deployed.
Looking at Bridger’s standalone operations for the full year 2024, Adjusted EBITDA is anticipated to range from $35 million to $51 million on revenue of $70 million to $86 million. This guidance excludes any impact of Bridger’s acquisition of the Super Scoopers to be sold by the Spanish government but includes the impact of expected reductions to the Company’s largely fixed cost structure, which are anticipated to total approximately $16 million annually.
Below is a breakout of revenue and Adjusted EBITDA on a quarterly basis to demonstrate the seasonality of the Company’s business.
