Perimeter Solutions Reports Fourth Quarter 2023 Financial Results

2023 Fire Safety Revenue, Adjusted EBITDA, and Adjusted EBITDA margin roughly flat versus 2022, despite an almost 50% reduction in U.S. acres burned ex-Alaska

2023 Specialty Products' financial results impacted by inventory destock activity throughout the year

Repurchased 6.3 million shares in Q4 at an average price of $4.21; new $100M repurchase authorized

Clayton, Missouri--(Newsfile Corp. - February 22, 2024) - Perimeter Solutions, SA (NYSE: PRM) ("Perimeter" or the "Company"), a leading provider of mission-critical firefighting products and services, as well as high-quality specialty chemicals, today reported financial results for its fourth quarter, and full-year, ended December 31, 2023.

Full Year 2023 Results

  • Full year net sales decreased 11% to $322.1 million, as compared to $360.5 million in the prior year.

    • Fire Safety sales decreased less than 0.5% to $225.6 million, as compared to $226.6 million in the prior year.

    • Specialty Products sales decreased 28% to $96.6 million, as compared to $133.9 million in the prior year.

  • Full year net income was $67.5 million, or $0.41 per diluted share, a decrease of $24.3 million from $91.8 million, or $0.52 per diluted share in the prior year.

  • Full year adjusted EBITDA decreased 23% to $96.8 million, as compared to $125.4 million in the prior year.

    • Fire Safety Adjusted EBITDA decreased 1% to $76.2 million, as compared to $77.4 million in the prior year.

    • Specialty Products Adjusted EBITDA decreased 57% to $20.6 million, as compared to $48.0 million in the prior year.

Fourth Quarter 2023 Results

  • Net sales increased 44% to $59.5 million in the fourth quarter, as compared to $41.3 million in the prior year quarter.

    • Fire Safety sales increased 81% to $35.4 million, as compared to $19.6 million in the prior year quarter.

    • Specialty Products sales increased 11% to $24.1 million, as compared to $21.7 million in the prior year quarter.

  • Net loss during the fourth quarter was $13.2 million, or $(0.09) per diluted share, a decrease of $47.2 million from a loss of $60.4 million, or $(0.38) per diluted share in the prior year quarter.

  • Adjusted EBITDA increased 433% to $11.2 million in the fourth quarter, as compared to $2.1 million in the prior year quarter.

    • Fire Safety Adjusted EBITDA increased to $7.0 million, as compared to $(3.9) million in the prior year quarter.

    • Specialty Products Adjusted EBITDA decreased 30% to $4.2 million, as compared to $6.0 million in the prior year quarter.

Conference Call and Webcast

As previously announced, Perimeter Solutions management will hold a conference call at 8:30 a.m. ET on Thursday, February 22, 2024 to discuss financial results for the fourth 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 March 23, 2024.

About Perimeter Solutions

Perimeter Solutions is a leading global solutions provider, providing high-quality firefighting products and specialty chemicals. 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 specialty chemicals, 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, 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
Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except share and per share data)
(Unaudited)


    Three Months Ended December 31,
 
Year Ended December 31,  

    2023
 
2022
 
2023
 
2022  
Net sales   $ 59,455
  $ 41,273
  $ 322,108
  $ 360,505
Cost of goods sold     38,744
 
30,699
 
183,253
 
217,853  
Gross profit     20,711
 
10,574
 
138,855
 
142,652  
Operating expenses:  
 
 
 
 
 
 
 
Selling, general and administrative expense  
15,550
 
19,836
 
57,073
 
74,319
Amortization expense  
13,753
 
13,710
 
55,065
 
55,105
Founders advisory fees - related party  
325
 
36,724
 
(108,481 )  
(117,302 )
Intangible impairment  
-
 
-
 
40,738
 
-
Other operating expense     -
 
60
 
10
 
465  
Total operating expenses     29,628
 
70,330
 
44,405
 
12,587  
Operating (loss) income     (8,917 )  
(59,756 )  
94,450
 
130,065  
Other expense (income):  
 
 
 
 
 
 
 
Interest expense, net  
10,440
 
10,003
 
41,378
 
42,585
Loss (gain) on contingent earn-out  
-
 
336
 
(7,273 )  
(12,706 )
Unrealized foreign currency (gain) loss  
(2,411 )  
(5,279 )  
(1,655 )  
3,462
Other expense (income), net     388
 
317
 
417
 
(503 )
Total other expense, net     8,417
 
5,377
 
32,867
 
32,838  
(Loss) income before income taxes  
(17,334 )  
(65,133 )  
61,583
 
97,227
Income tax benefit (expense)     4,093
 
4,774
 
5,903
 
(5,469 )
Net (loss) income  
(13,241 )  
(60,359 )  
67,486
 
91,758
Other comprehensive income (loss), net of tax:  
 
 
 
 
 
 
 
Foreign currency translation adjustments     10,626
 
16,090
 
5,761
 
(18,336 )
Total comprehensive (loss) income   $ (2,615 )   $ (44,269 )   $ 73,247  
  $ 73,422  
(Loss) earnings per share:  
 
 
 
 
 
 
 
Basic   $ (0.09 )   $ (0.38 )   $ 0.44
  $ 0.57
Diluted   $ (0.09 )   $ (0.38 )   $ 0.41
  $ 0.52
Weighted average number of ordinary shares outstanding:  
 
 
 
 
 
 
 
Basic  
150,833,523
 
157,945,813
 
154,666,717
 
160,937,575
Diluted  
150,833,523
 
157,945,813
 
166,452,022
 
175,079,941

 

PERIMETER SOLUTIONS, SA AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share data)
(Unaudited)


    December 31, 2023
 
December 31, 2022  
Assets  


 


Current assets:  


 


Cash and cash equivalents   $ 47,276
  $ 126,750
Accounts receivable, net  
39,593
 
26,646
Inventories  
145,652
 
142,961
Prepaid expenses and other current assets     18,493
 
12,165  
Total current assets  
251,014
 
308,522
Property, plant, and equipment, net  
59,402
 
58,846
Operating lease right-of-use assets  
16,339
 
18,582
Finance lease right-of-use assets, net  
6,064
 
-
Goodwill  
1,036,279
 
1,031,460
Customer lists, net  
674,786
 
710,329
Technology and patents, net  
180,653
 
232,818
Tradenames, net  
89,568
 
94,293
Other assets     1,317
 
1,766  
Total assets   $ 2,315,422
  $ 2,456,616  
Liabilities and Shareholders' Equity  
 
 
 
Current liabilities:  
 
 
 
Accounts payable   $ 21,639
  $ 36,794
Accrued expenses and other current liabilities  
30,710
 
32,705
Founders advisory fees payable - related party     2,702
 
4,655  
Total current liabilities  
55,051
 
74,154
Long-term debt, net  
666,494
 
665,280
Operating lease liabilities, net of current portion  
14,908
 
15,484
Finance lease liabilities, net of current portion  
5,547
 
-
Deferred income taxes  
253,454
 
278,270
Founders advisory fees payable - related party  
56,917
 
170,718
Redeemable preferred shares  
105,799
 
101,279
Redeemable preferred shares - related party  
2,764
 
3,209
Other non-current liabilities     2,193
 
9,322  
Total liabilities     1,163,127
 
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; 146,451,005 and 156,797,806 shares outstanding at December 31, 2023 and 2022, respectively  
165,067
 
163,235
Treasury shares, at cost; 18,615,190 and 6,436,736 shares at December 31, 2023 and 2022, respectively  
(113,407 )  
(49,341 )
Additional paid-in capital  
1,701,163
 
1,698,781
Accumulated other comprehensive loss  
(19,710 )  
(25,471 )
Accumulated deficit     (580,818 )  
(648,304 )
Total shareholders' equity     1,152,295
 
1,138,900  
Total liabilities and shareholders' equity   $ 2,315,422
  $ 2,456,616  

 

PERIMETER SOLUTIONS, SA AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)


    Year Ended December 31,  

    2023
 
2022  
Cash flows from operating activities:  


 


Net income   $ 67,486
  $ 91,758
Adjustments to reconcile net income to net cash provided by (used in) operating activities:  
 
 
 
Founders advisory fees - related party (change in accounting fair value)  
(108,481 )  
(117,302 )
Depreciation and amortization expense  
64,855
 
65,795
Interest and payment-in-kind on preferred shares  
6,792
 
6,537
Share-based compensation  
1,596
 
14,649
Non-cash lease expense  
5,248
 
5,390
Deferred income taxes  
(25,816 )  
(17,000 )
Intangible impairment  
40,738
 
-
Amortization of deferred financing costs  
1,664
 
1,602
Amortization of acquisition related inventory step-up  
-
 
24,796
Gain on contingent earn-out  
(7,273 )  
(12,706 )
Unrealized (gain) loss on foreign currency  
(1,655 )  
3,462
Loss on disposal of assets  
139
 
9
Changes in operating assets and liabilities, net of acquisitions:  
 
 
 
Accounts receivable  
(14,435 )  
(6,190 )
Inventories  
(2,044 )  
(61,934 )
Prepaid expenses  
1,014
 
1,922
Accounts payable  
(15,335 )  
9,696
Deferred revenue  
-
 
(383 )
Income taxes payable, net  
(3,498 )  
8,920
Accrued expenses and other current liabilities  
(1,758 )  
(647 )
Founders advisory fees - related party (cash settled)  
(4,655 )  
(53,547 )
Operating lease liabilities  
(4,182 )  
(5,072 )
Finance lease liabilities  
(282 )  
-
Other liabilities     75
 
73  
Net cash provided by (used in) operating activities  
193
 
(40,172 )
Cash flows from investing activities:  
 
 
 
Purchase of property and equipment  
(9,435 )  
(8,613 )
Change in short-term investments  
(5,459 )  
-
Purchase price adjustment under Business Combination Agreement     -
 
(1,638 )
Net cash used in investing activities  
(14,894 )  
(10,251 )
Cash flows from financing activities:  
 
 
 
Ordinary shares repurchased  
(64,066 )  
(49,341 )
Proceeds from exercise of warrants  
-
 
529
Principal payments on finance lease obligations     (387 )  
-  
Net cash used in financing activities     (64,453 )  
(48,812 )
Effect of foreign currency on cash and cash equivalents     (320 )  
431  
Net change in cash and cash equivalents  
(79,474 )  
(98,804 )
Cash and cash equivalents, beginning of period     126,750
 
225,554  
Cash and cash equivalents, end of period   $ 47,276
  $ 126,750  
Supplemental disclosures of cash flow information:  
 
 
 
Cash paid for interest   $ 37,005
  $ 35,488
Cash paid for income taxes   $ 25,960
  $ 13,488
Non-cash investing and financing activities:  
 
 
 
Liability portion of founders advisory fees - related party reclassified to additional paid in capital   $ 2,618
  $ 19,568

 

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 intangible impairment 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 December 31,
 
Year Ended December 31,
 
2023
 
2022
 
2023
 
2022  
(Loss) income before income taxes   $ (17,334 )   $ (65,133 )   $ 61,583
  $ 97,227
Depreciation and amortization  
16,362
 
16,259
 
64,855
 
65,795
Interest and financing expense  
10,440
 
10,003
 
41,378
 
42,585
Founders advisory fees - related party  
325
 
36,724
 
(108,481 )  
(117,302 )
Intangible impairment 1  
-
 
-
 
40,738
 
-
Non-recurring expenses 2  
2,104
 
2,097
 
4,046
 
6,885
Share-based compensation expense  
1,726
 
7,098
 
1,596
 
14,649
Non-cash purchase accounting impact 3  
-
 
-
 
-
 
24,796
Loss (gain) on contingent earn-out  
-
 
336
 
(7,273 )  
(12,706 )
Unrealized foreign currency (gain) loss  
(2,411 )  
(5,279 )  
(1,655 )  
3,462  
Adjusted EBITDA   $ 11,212
  $ 2,105
  $ 96,787
  $ 125,391  
Net sales   $ 59,455
  $ 41,273
  $ 322,108
  $ 360,505  

 
____________________
(1) Represents the carrying value of technology underlying the contingent earn-out eligible fire retardant product acquired by the Company in May 2020 during the purchase of LaderaTech, Inc.
(2) Adjustment to reflect non-recurring expenses; severance costs and fees related to internal audit support.
(3) 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/198809

SOURCE Perimeter Solutions