Perimeter Solutions Reports First Quarter 2023 Financial Results

May 10, 2023 6:00 AM EDT | Source: Perimeter Solutions

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 (, 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.




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

Three Months Ended
March 31, 2023
 Three Months Ended
March 31, 2022
Net sales$43,858 $57,758
Cost of goods sold31,012 41,343
       Gross profit12,846 16,415
Operating expenses:   
       Selling, general and administrative expense10,465 19,154
       Amortization expense13,763 13,855
       Founders advisory fees - related party(24,236) (59,848)
       Other operating expense2 196
              Total operating expenses(6) (26,643)
Operating income12,852 43,058
Other expense (income):   
       Interest expense, net10,146 10,496
       Loss on contingent earn-out246 
       Unrealized foreign currency (gain) loss(721) 880
       Other expense, net72 165
              Total other expense, net9,743 11,541
Income before income taxes3,109 31,517
Income tax benefit6,322 5,446
Net income9,431 36,963
Other comprehensive income , net of tax:   
       Foreign currency translation adjustments1,593 126
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:   
       Basic157,700,326 160,251,199
       Diluted169,485,631 174,777,232



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

March 31, 2023 December 31, 2022
Current assets: 
       Cash and cash equivalents$91,789 $126,750
       Accounts receivable, net24,715 26,646
       Inventories156,257 142,961
       Income tax receivable1,580 214
       Prepaid expenses and other current assets11,626 11,951
              Total current assets285,967 308,522
Property, plant, and equipment, net59,221 58,846
Operating lease right-of-use assets17,274 18,582
Goodwill1,032,802 1,031,460
Customer lists, net 701,590 710,329
Technology and patents, net230,078 232,818
Tradenames, net93,128 94,293
Other assets1,654 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 liabilities35,939 32,705
       Founders advisory fees payable - related party9,108 4,655
              Total current liabilities70,992 74,154
Long-term debt665,577 665,280
Operating lease liabilities, net of current portion14,496 15,484
Deferred income taxes272,158 278,270
Founders advisory fees payable - related party 137,374 170,718
Redeemable preferred shares102,700 101,279
Redeemable preferred shares - related party2,807 3,209
Other non-current liabilities9,624 9,322
              Total liabilities1,275,728 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 capital1,693,875 1,698,781
       Accumulated other comprehensive loss(23,878) (25,471)
       Accumulated deficit(638,873) (648,304)
              Total shareholders' equity1,145,986 1,138,900
              Total liabilities and shareholders' equity$2,421,714 $2,456,616



Condensed Consolidated Statements of Cash Flows
(in thousands)

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 expense16,087 16,371
       Interest and payment-in-kind on preferred shares1,698 1,634
       Share-based compensation(3,074) 4,963
       Non-cash lease expense1,153 1,309
       Deferred income taxes(6,322) 843
       Amortization of deferred financing costs410 395
       Amortization of acquisition related inventory step-up 6,122
       Loss on contingent earn-out246 
       Unrealized (gain) loss on foreign currency(721) 880
       Loss on disposal of assets5 
       Changes in operating assets and liabilities, net of acquisitions:   
              Accounts receivable1,670 (9,801)
              Inventories(13,119) (16,782)
              Prepaid expenses and current other assets360 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 liabilities8,785 8,094
              Founders advisory fees - related party (cash settled)(4,655) (53,547)
              Operating lease liabilities(1,169) (1,240)
              Other liabilities94 (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 period126,750 225,554
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 amortization16,087 16,371
       Interest and financing expense10,146 10,496
       Founders advisory fees - related party(24,236) (59,848)
       Non-recurring expenses 11,559 1,476
       Share-based compensation expense(3,074) 4,963
       Non-cash purchase accounting impact 2 6,122
       Loss on contingent earn-out246 
       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.

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