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Perimeter Solutions Reports First Quarter 2023 Financial Results

Solid Fire Safety performance in the seasonally small first quarter

Improved sequential results in Specialty Products

Over $10 million in share repurchases year to date in 2023

Clayton, Missouri--(Newsfile Corp. - May 10, 2023) - Perimeter Solutions, SA (NYSE: PRM) ("Perimeter" or the "Company"), a leading provider of mission-critical firefighting products and services, as well as high-quality lubricant additives, today reported financial results for its first quarter ended March 31, 2023.

First Quarter 2023 Results

  • Net sales decreased 24% to $43.9 million in the first quarter, as compared to $57.8 million in the prior year quarter.

    • Fire Safety sales increased 1% to $18.7 million, as compared to $18.5 million in the prior year quarter.

    • Specialty Products sales decreased 36% to $25.1 million, as compared to $39.3 million in the prior year quarter.

  • Net income during the first quarter was $9.4 million, or $0.06 per diluted share, a decrease of $27.6 million from $37.0 million, or $0.21 per diluted share in the prior year quarter.

  • Adjusted EBITDA decreased 74% to $3.1 million in the first quarter, as compared to $12.0 million in the prior year quarter.

    • Fire Safety Adjusted EBITDA decreased 1% to a loss of $3.4 million, as compared to a loss of $3.3 million in the prior year quarter.

    • Specialty Products Adjusted EBITDA decreased 58% to $6.5 million, as compared to $15.3 million in the prior year quarter.

CEO Haitham Khouri commented: "Fire Safety outperformed in first quarter, with strong results in our global suppressants businesses, as well as in our international retardant markets, all of which built on their strong 2022 performance." Mr. Khouri continued, "As expected, and as evidenced by our Q1 23 results relative to our Q4 22 results, end-market demand for our Specialty Products business improved sequentially, though remained soft relative to normalized levels."

Conference Call and Webcast

As previously announced, Perimeter Solutions management will hold a conference call at 8:30 a.m. ET on Wednesday, May 10, 2023 to discuss financial results for the first quarter 2023 . The conference call can be accessed by dialing (877) 407-9764 (toll-free) or (201) 689-8551 (toll).

The conference call will also be webcast simultaneously on Perimeter's website (https://ir.perimeter-solutions.com), accessed under the Investor Relations page. The webcast link will be made available on the Company's website prior to the start of the call; go to the investor relations page of our website to the News & Events menu and click on "Events & Presentations."

A slide presentation will also be available for reference during the conference call; go to the investor relations page of our website to the News & Events menu and click on "Events & Presentations."

Following the live webcast, a replay will be available on the Company's website. A telephonic replay will also be available approximately two hours after the call and can be accessed by dialing (877) 660-6853 (toll-free) or (201) 612-7415 (toll). The telephonic replay will be available until June 9, 2023.

About Perimeter Solutions

Perimeter Solutions is a leading global solutions provider, providing high-quality firefighting products and lubricant additives. The Company's business is organized and managed in two reporting segments: Fire Safety and Specialty Products.

The Fire Safety business consists of formulating, manufacture and sale of fire retardants and firefighting foams that assist in combating various types of fires, including wildland, structural, flammable liquids and others. Our Fire Safety business also offers specialized equipment and services, typically in conjunction with our fire management products, to support our customers' firefighting operations. Our specialized equipment includes airbase retardant storage, mixing, and delivery equipment; mobile retardant bases; retardant ground application units; mobile foam equipment; and equipment that we custom design and manufacture to meet specific customer needs. Our service network can meet the emergency resupply needs of over 150 air tanker bases in North America, as well as many other customer locations in North America and internationally. The segment is built on the premise of superior technology, exceptional responsiveness to our customers' needs, and a "never-fail" service network. The segment sells products to government agencies and commercial customers around the world.

The Specialty Products business produces and sells high quality Phosphorus Pentasulfide ("P2S5") primarily used in the preparation of lubricant additives, including a family of compounds called Zinc Dialkyldithiophosphates ("ZDDP") that provide critical anti-wear protection to engine components. P2S5 is also used in pesticide and mining chemicals applications.

Forward-looking Information

This press release may contain "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods.

Any such forward-looking statements are not guarantees of performance or results, and involve risks, uncertainties (some of which are beyond the Company's control) and assumptions. Although Perimeter believes any forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Perimeter's actual financial results and cause them to differ materially from those anticipated in any forward-looking statements, including the risk factors described from time to time by us in our filings with the Securities and Exchange Commission ("SEC"), including, but not limited to, the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023. Shareholders, potential investors and other readers should consider these factors carefully in evaluating the forward-looking statements.

Any forward-looking statement made by Perimeter in this press release speaks only as of the date on which it is made. Perimeter undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

SOURCE: Perimeter Solutions, SA.

CONTACT: ir@perimeter-solutions.com

 

PERIMETER SOLUTIONS, SA AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Income
(in thousands, except share and per share data)
(Unaudited)

Three Months Ended
March 31, 2023

 

Three Months Ended
March 31, 2022

 

Net sales

$

43,858

 

$

57,758

Cost of goods sold

31,012

 

41,343

     Gross profit

12,846

 

16,415

Operating expenses:

 

 

 

     Selling, general and administrative expense

10,465

 

19,154

     Amortization expense

13,763

 

13,855

     Founders advisory fees - related party

(24,236

)

 

(59,848

)

     Other operating expense

2

 

196

            Total operating expenses

(6

)

 

(26,643

)

Operating income

12,852

 

43,058

Other expense (income):

 

 

 

     Interest expense, net

10,146

 

10,496

     Loss on contingent earn-out

246

 

     Unrealized foreign currency (gain) loss

(721

)

 

880

     Other expense, net

72

 

165

            Total other expense, net

9,743

 

11,541

Income before income taxes

3,109

 

31,517

Income tax benefit

6,322

 

5,446

Net income

9,431

 

36,963

Other comprehensive income , net of tax:

 

 

 

     Foreign currency translation adjustments

1,593

 

126

Total comprehensive income

$

11,024

 

$

37,089

Earnings per share:

 

 

 

     Basic

$

0.06

 

$

0.23

     Diluted

$

0.06

 

$

0.21

Weighted average number of ordinary shares outstanding:

 

 

 

     Basic

157,700,326

 

160,251,199

     Diluted

169,485,631

 

174,777,232

 

PERIMETER SOLUTIONS, SA AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)

March 31, 2023

 

December 31, 2022

Assets

(Unaudited)

 

Current assets:

 

     Cash and cash equivalents

$

91,789

 

$

126,750

     Accounts receivable, net

24,715

 

26,646

     Inventories

156,257

 

142,961

     Income tax receivable

1,580

 

214

     Prepaid expenses and other current assets

11,626

 

11,951

            Total current assets

285,967

 

308,522

Property, plant, and equipment, net

59,221

 

58,846

Operating lease right-of-use assets

17,274

 

18,582

Goodwill

1,032,802

 

1,031,460

Customer lists, net

701,590

 

710,329

Technology and patents, net

230,078

 

232,818

Tradenames, net

93,128

 

94,293

Other assets

1,654

 

1,766

            Total assets

$

2,421,714

 

$

2,456,616

Liabilities and Shareholders Equity

 

 

 

Current liabilities:

 

 

 

     Accounts payable

$

25,945

 

$

36,794

     Accrued expenses and other current liabilities

35,939

 

32,705

     Founders advisory fees payable - related party

9,108

 

4,655

            Total current liabilities

70,992

 

74,154

Long-term debt

665,577

 

665,280

Operating lease liabilities, net of current portion

14,496

 

15,484

Deferred income taxes

272,158

 

278,270

Founders advisory fees payable - related party

137,374

 

170,718

Redeemable preferred shares

102,700

 

101,279

Redeemable preferred shares - related party

2,807

 

3,209

Other non-current liabilities

9,624

 

9,322

            Total liabilities

1,275,728

 

1,317,716

Commitments and contingencies

 

 

 

Shareholders' equity:

 

 

 

     Ordinary shares, $1 nominal value per share; 4,000,000,000 shares


 


     authorized; 165,066,195 and 163,234,542 shares issued; 158,513,889 and

 

 

 

 

 

 

 

     156,797,806 shares outstanding at March 31, 2023 and December 31,

 

 

 

 

 

 

 

     2022, respectively

 

165,067

 

 

 

163,235

 

     Treasury shares, at cost; 6,552,306 and 6,436,736 shares at March 31,



 



     2023 and December 31, 2022, respectively

 

(50,205

)

 

 

(49,341

)

     Additional paid-in capital

1,693,875

 

1,698,781

     Accumulated other comprehensive loss

(23,878

)

 

(25,471

)

     Accumulated deficit

(638,873

)

 

(648,304

)

            Total shareholders' equity

1,145,986

 

1,138,900

            Total liabilities and shareholders' equity

$

2,421,714

 

$

2,456,616

 

PERIMETER SOLUTIONS, SA AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

Three Months Ended
March 31, 2023

 

Three Months Ended
March 31, 2022

Cash flows from operating activities:

 

Net income

$

9,431

 

$

36,963

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

     Founders advisory fees - related party (change in accounting fair value)

(24,236

)

 

(59,848

)

     Depreciation and amortization expense

16,087

 

16,371

     Interest and payment-in-kind on preferred shares

1,698

 

1,634

     Share-based compensation

(3,074

)

 

4,963

     Non-cash lease expense

1,153

 

1,309

     Deferred income taxes

(6,322

)

 

843

     Amortization of deferred financing costs

410

 

395

     Amortization of acquisition related inventory step-up

 

6,122

     Loss on contingent earn-out

246

 

     Unrealized (gain) loss on foreign currency

(721

)

 

880

     Loss on disposal of assets

5

 

     Changes in operating assets and liabilities, net of acquisitions:

 

 

 

            Accounts receivable

1,670

 

(9,801

)

            Inventories

(13,119

)

 

(16,782

)

            Prepaid expenses and current other assets

360

 

4,164

            Other assets

 

599

            Accounts payable

(10,878

)

 

(6,143

)

            Deferred revenue

 

372

            Income taxes payable, net

(7,381

)

 

(6,229

)

            Accrued expenses and other current liabilities

8,785

 

8,094

            Founders advisory fees - related party (cash settled)

(4,655

)

 

(53,547

)

            Operating lease liabilities

(1,169

)

 

(1,240

)

            Other liabilities

94

 

(15

)

                   Net cash used in operating activities

(31,616

)

 

(70,896

)

Cash flows from investing activities:

 

 

 

     Purchase of property and equipment

(2,456

)

 

(1,313

)

     Purchase price adjustment under Business Combination Agreement

 

(1,638

)

            Net cash used in investing activities

(2,456

)

 

(2,951

)

Cash flows from financing activities:

 

 

 

     Ordinary shares repurchased

(864

)

 

     Proceeds from exercise of warrants

 

529

            Net cash (used in) provided by financing activities

(864

)

 

529

            Effect of foreign currency on cash and cash equivalents

(25

)

 

1,307

     Net change in cash and cash equivalents

(34,961

)

 

(72,011

)

Cash and cash equivalents, beginning of period

126,750

 

225,554

Cash and cash equivalents, end of period

$

91,789

 

$

153,543

Supplemental disclosures of cash flow information:

 

 

 

     Cash paid for interest

$

142

 

$

145

     Cash paid (received) for income taxes

$

10,155

 

$

(17

)

Non-cash investing and financing activities:

 

 

 

     Liability portion of founders advisory fees - related party reclassified



 



     to additional paid in capital

$

 

 

$

13,783

 

 

Non-GAAP Financial Metrics

Adjusted EBITDA

The computation of Adjusted EBITDA is defined as net income plus income tax expense, net interest and other financing expenses, and depreciation and amortization, adjusted on a consistent basis for certain non-recurring, unusual or non-operational items in a balanced manner. These items include (i) expenses related to the Business Combination, (ii) founder advisory fee expenses, (iii) stock compensation expense, (iv) non-cash impact of purchase accounting on the cost of inventory sold and (v) unrealized foreign currency loss (gain). To supplement the Company's condensed consolidated financial statements presented in accordance with U.S. GAAP, Perimeter is providing a summary to show the computations of Adjusted EBITDA, which is a non-U.S.GAAP measure used by the Company's management and by external users of Perimeter's financial statements, such as investors, commercial banks and others, to assess the Company's operating performance as compared to that of other companies, without regard to financing methods, capital structure or historical cost basis. Adjusted EBITDA should not be considered an alternative to net income (loss), operating income (loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP (in thousands).

(Unaudited)

Three Months Ended
March 31, 2023

 

Three Months Ended
March 31, 2022

Income before income taxes

$

3,109

 

$

31,517

     Depreciation and amortization

16,087

 

16,371

     Interest and financing expense

10,146

 

10,496

     Founders advisory fees - related party

(24,236

)

 

(59,848

)

     Non-recurring expenses 1

1,559

 

1,476

     Share-based compensation expense

(3,074

)

 

4,963

     Non-cash purchase accounting impact 2

 

6,122

     Loss on contingent earn-out

246

 

     Unrealized foreign currency loss

(721

)

 

880

Adjusted EBITDA

$

3,116

 

$

11,977

Net sales

$

43,858

 

$

57,758

 

____________________

(1) Adjustment to reflect non-recurring expenses; severance costs and fees related to internal audit support.
(2) Represents the non-cash impact of purchase accounting on the cost of inventory sold in connection with the business combination with Perimeter Solutions. The inventory acquired received a purchase accounting step-up in basis, which is a non-cash adjustment to the cost.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/165406

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