Bridger Aerospace Group Holdings, Inc. Common Stock Noble Capital Markets Virtual Equity Investor Conference

Good morning and welcome to the Noble Capital Markets Virtual Equity Conference. I'm Joe Gomes, Managing Director and Senior Analyst at Noble Capital. Today I have the pleasure of introducing Bridger Aerospace Holdings, following the presentation we will have some time for Q&A. With us today from the company is Sam Davis, President and CEO. The floor is yours, Sam.

Awesome. Thank you, Joe. Pleasure to be with you all, and really excited to talk to you today about Bridger Aerospace. I will flip through slides here and give you an overview of the company, some background, and then we'll open it up for Q&A. Bridger Aerospace is an aerial firefighting company. Our mission is to protect lives, property, and the environment. It influences everything we do, from our early days and our mission has grown stronger than ever. Through the years, we've been pretty rapidly growing company, and really taking the industry by storm. We're one of the premier national aerial firefighting companies, and even in the globe, as we expand. What we offer and services is quite simply: we deliver water and intelligence, and modifications and services to other aviation providers. We deliver water, via our super scoopers, which are the most efficient. Purpose-built aircraft, we have the largest privately owned fleet in the world. We can scoop and drop water and deliver a large amount when seconds matter, when lives and homes are threatened. We provide real-time aerial surveillance, intelligence from overhead, and eye-in-the-sky. Both with command and control missions, with government officials on radios, helping ground crews, and air assets provide suppression and containment efforts, as well as real-time intelligence with sensor technology that we livestream down to the ground.

And then also, we offer integration solutions for our defense sector customers. A lot of which we bring into FHIR, and then vice versa. Which is a pretty solid part of the business and growing. Just as way of reference for our revenue last year, about 65% of it was suppression, mods and integration were around 17, and surveillance was 15% of that. We operate all over the U.S., fighting FHIR. We're based in Belgrade, Montana, which is near big sky country, at the Bozeman Airport. And we have a location in Huntsville, Alabama. Our customers, which I'll talk about a little bit more, are primarily federal and state agencies. As well as other branches in the military, we have about 100% renewal rate on our FHIR contracts, and we have 100% collectibility. So the resilience of our revenue is there, and growing and improving over time. Our investment thesis, what's kind of set us apart, what makes us different, is obviously our super scooper fleet, which is the largest private fleet of super scoopers. We have 8 in total, 6 of those are based in the U.S., and there are only 10 in total in the U.S., so we have 6 of them.

There was a RAND report in 2009, which largely influenced our business to get into the scooper world, and that said that at the time, 43 scoopers at least were needed to serve the U.S. to scoop and drop water. So Bridger saw our entry point and convinced the OEM at the time to restart the type certificate and receive 6 of them into the U.S., we ended last year with getting 2 of them from the Spanish military, and plan to bring those into the U.S. as well. We have 20 total aircraft, continues to grow. As we see unmet demand across the country for suppression and surveillance, both driven by Mother Nature, as well as the agencies and the government funding stepping up to commit our aircraft to provide protection year-round. We continue to see national headline grabbing FHIRs, unfortunately, like the Palisades Fire in California in January, Texas was the year before in February, with the Smokehouse Creek Fire, which are driving change with unfortunate events to fortunately benefit Americans with how FHIR is managed. And Bridger's at the tip of that. By way of reference, we see unmet demand near 50% for our scoopers, and some of our surveillance planes, meaning there's just not enough aircraft to go around.

That's largely driving how we look at organic growth and buying planes and continuing to grow. And this is against a backdrop of the aerial firefighting market as well. Seeing continuous growth in demand year over year. Underpinning that is the high-performance that these aircraft can do and the profit that they bring on a standalone basis with nearly 40% pass-through to the bottom line. Really quickly, just a visual representation of both our aircraft and what we do in the field. You can see the mix of our aircraft and what they do specifically. They each perform different missions, and we've used them as both feeder program to grow internally, as well as to capture market share for what we call the FHIR stack, which is on the right-hand side of the screen. What we do is operating in theater. From low altitudes, the scoopers drop about 100 to 150 feet above the ground. They'll drop water just above tree lines to be effective on dropping water. And then up above them, we have surveillance planes which are doing command and control, both with ground crews and coordinating suppression efforts below them. And even above that stack, we have our sensor-enhanced aircraft, which this year we introduced our King Air with multiple sensors to do both command and control with thermal detection, real-time video, downlink with Starlink, and then as well perimeter mapping so that we can predict what FHIRs are doing and understand what makes ground crews and suppression aircraft effective in managing the FHIR.

The scoopers which are the flagship of the company are pretty incredible machines. There is a very scarce supply of them worldwide. The production line is now restarting. With orders to be delivered through the 2030s. But those orders are all accounted for by provinces and countries. So Bridger and our one competitor we own the entire private fleet of the modern versions. Bridger grew that, like I mentioned, from 6 to 8 last year. We continue to look for ways to grow that while the new platform is still yet to come online and serve the demand we see in the U.S. and even around the world. The purchase price, or the average market value of these scoopers, is $35 million. That's for return to service and near zero-time machines. The new 515, which is next-gen, is around a sticker price of $60 million. So we really have a unique airplane that is very effective in creating revenue in a short payback period. And a very effective and wildly popular at what it does. As you can see on the screen, it scoops on an open body of water, about 12 seconds. A 1,400-gallon tank of water. And can continuously drop water on FHIR until it needs to land and refill for fuel.

Which is unique because in a day, a couple of these scoopers can drop hundreds of thousands of gallons of water and only need to land and refuel once. Sets us apart from a lot of our tanker competitors, where they need to land at a tanker base, refill with the hose with retardant, and then return to the FHIR oftentimes costing an hour in total turnaround time. So very effective, and a lot of incident commanders now that they have scoopers in the U.S. request us by name specifically to control FHIRs. A little bit of our strategy and how we've grown the company is shown on this slide. Again, around the scoopers, a lot of this pertains to the Air Attack assets as well. As we've grown our scooper fleet, methodically over time, you can see that we've started in our early days with federal contracts with the Forest Service under a pure call when needed standpoint. And that means when we were called, we went and were deployed for FHIR and created a lot of uncertainty and us predicting what kind of FHIR activity we thought we would have, as well as how we should price our scoopers.

We're paid by day and by hour. So a daily availability rate and a flight hour rate both determined by the customer what those days and hours are. We chipped away at that very, very methodically, and you can see from 2023 through 2026, we were able to guarantee days of work for our scooper fleet this year arriving at 4 on 160-day task order this year in the U.S., and the 2 that we acquired in Spain were on a 90-day task order in Portugal. Why this is significant, obviously, is we know what our floor is to be paid for availability in revenue, which is very significant for us. And you can also see that this is just methodically driven up. Our utilization and therefore our margins to expand both for the scoopers that means that we're seeing more hours which is the variable component of our pay, just for the more days that we're out. Why that matters is our scoopers are purpose-built to be initial and direct attack. They need to be pre-positioned and they're most effective when FHIRs are started in the 48 hours. That's how FHIR should be managed, is being managed more and we see more days of work regardless of mega FHIRs grabbing headlines or continued increase in FHIR activity year-round.

Another couple things to touch on there. We do see some pretty strong protection. Fuel for the scoopers on contract is all passed through to the government. We're asked quite often how much we're affected by fuel prices. Actually, not that much. The scooper fleet is all passed through, like I said, but the Air Attack side of the business, we factor in some inflation year over year for our fuel and get discounts on some volume fuel contracts. One of the things we're most excited about with our fleet and growing is the capacity in the market for sensor-enhanced aircraft. These are not only extremely disruptive to the industry, they are bringing military-grade technology and situational awareness to ground firefighters. This is near and dear to our mission. We see this expanding greatly over the next few years, and it's very incredible margins. Not only are we bringing unique proprietary configurations and sensors into the space, we're able to do every mission possible. We've even mapped floods with these, managed prescribed burns, detected thermal spots real-time, video for ground crews, perimeter mapping, and even doing FHIR modeling. And this is also being coupled with our software, which is proprietary to us and being delivered as part of our aviation contracts.

Why this matters is intelligence needs to be real-time, but it needs to be delivered in one place for people. As you can imagine, in an emergency situation, to make real-time decisions to save lives and property. This is both on desktop and mobile apps. So we even have ground firefighters to see video imagery from overhead from Bridger Aircraft by simply scanning a QR code and joining an incident. Basically, overnight this year, when we launched this, we had about 30,000 users, most of them firefighters. Really excited about this part of the business and how we can fill out our mission, make our aviation contracts stickier as well as tap into a market of the software need that's out there that does not have data in one ecosystem. To touch on our Bridger growth map, which you've seen in the slides previously, we continue to expand our fleet. We continue to evolve our contracts. Both the guaranteed work there, as well as how we price and lean on more flight hours to get more pass-through profit. We continue to lead in technology by introducing military-grade solutions into wildfire. We're doing that at the federal level, and the first to market in all fronts.

And coupling that with our software. And then looking for those opportunities to diversify I even consider diversification expanding our sensor fleet because those are used for multi-missions more year-round than just the suppression efforts and obviously coupled with software and so on. As we look at FHIR as an essential service in a year-round mission. A quick highlight of our financials, just to show our growth. Again, this is against a backdrop of moderate but not a crazy amount of addition of aircraft, showing our improvement as a company on producing what we have producing more with what we have, as well as the aircraft we're choosing, which are contributing much more revenue and higher margins. Last year finishing at 45 adjusted EBITDA and this year on track for 55 to 60. This is helping us kind of grow into our capital stack, which has been early on the early days one that we had to take on to build the fleet and the infrastructure. And now we're able to deliver free cash flow and really unlock some value there. This is a highlight of kind of the full-year outlook, which I think I touched on most of this.

Very exciting time for Bridger as we look to 2026 and beyond. I think I'll skip to this slide in the interest of time. We have continued trends that are increasing. What demand we have for everything that Bridger chooses to do. And then we have legislation behind all of this that is really driving primarily standards of cover and increase in number of aircraft needed across the entire country year-round work and the adoption of technology, which we all see on the horizon. We're already benefiting from a lot of this, even in draft status. And we see this as kind of the guiding North Star for us as we continue to invest and expand the business. I know that was a lot trying to keep it short, but maybe I would like to turn it over for any questions if there are any.

Thanks, Sam. Great insightful presentation. Let's turn to some questions. Now, you just walked through a number of growth opportunities in the presentation. When you step back, what has changed most about Bridger over the last 12 to 18 months and why is the company better positioned today?

Yeah. Yeah, great question, Joe. I think it's really been on the fruition of our vision of what we saw the wildfire industry needing. Primarily around scoopers. So we took a lot of risk to capital on early to get that fleet into the US. There was a lot of infrastructure and so on that we had to do both you can imagine capital expenditures, pilots maintainers, trucks, trailers. To be able to operate all over the US. But we saw that finally come into play once we locked in those guaranteed task orders with the Forest Service, once everybody saw how effective and high demand our scoopers were. I tell everybody they're the best marketing tool out there. They're incredible to watch, but they're very effective at what they do. That is unlocked value for the company to get us the profit we need to go invest in the other part that I see, which is technology. The technology or sensor enhanced planes that we have have about the same percentage-wise pass-through on their margins as the scoopers. They have more of a year-round calendar of how they operate. And they're continuing to open up opportunities for what other data we bring in and software.