40,00040,0000001880319Q3--12-31false0001880319per:ManagementFeesAndExpensesMember2020-01-012020-09-300001880319us-gaap:RevolvingCreditFacilityMemberper:SwingLineSubFacilityMember2021-09-300001880319per:TermLoanMember2021-01-012021-09-300001880319us-gaap:RevolvingCreditFacilityMemberper:PerimeterSolutionsSAMemberper:SwingLineSubFacilityMemberus-gaap:SubsequentEventMember2021-10-050001880319us-gaap:CostOfSalesMember2020-07-012020-09-300001880319us-gaap:RetainedEarningsMember2020-06-300001880319country:US2020-01-012020-09-300001880319per:TermLoanMember2021-07-012021-09-300001880319us-gaap:AdditionalPaidInCapitalMember2021-09-300001880319us-gaap:AdditionalPaidInCapitalMember2021-06-300001880319us-gaap:RetainedEarningsMember2021-06-300001880319us-gaap:SalesRevenueNetMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2020-01-012020-09-300001880319us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001880319country:CA2021-07-012021-09-300001880319per:OtherForeignCountriesMember2021-07-012021-09-300001880319us-gaap:RevolvingCreditFacilityMember2020-12-310001880319per:OtherMember2021-07-012021-09-300001880319us-gaap:RevolvingCreditFacilityMember2021-01-012021-09-300001880319country:DE2021-01-012021-09-300001880319us-gaap:RetainedEarningsMember2021-09-300001880319us-gaap:PublicUtilitiesInventoryRawMaterialsMember2020-01-012020-09-300001880319per:DefiniteLivedIntangibleAssetsMemberus-gaap:TradeNamesMember2020-12-310001880319us-gaap:RetainedEarningsMember2021-01-012021-09-300001880319us-gaap:SubsequentEventMember2021-10-050001880319per:FireSafetyMember2021-09-3000018803192021-01-012021-09-300001880319us-gaap:MachineryAndEquipmentMember2021-09-300001880319us-gaap:IndefinitelivedIntangibleAssetsMember2021-09-300001880319us-gaap:CostOfSalesMember2021-01-012021-09-300001880319per:LaderaTechIncMember2021-09-300001880319us-gaap:LeaseholdImprovementsMember2021-09-300001880319per:RevolverMember2020-12-310001880319us-gaap:FurnitureAndFixturesMember2020-12-310001880319country:DE2020-12-310001880319us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001880319us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300001880319per:LaderaTechMember2020-12-310001880319us-gaap:FairValueMeasurementsRecurringMember2021-09-300001880319us-gaap:RevolvingCreditFacilityMemberus-gaap:StandbyLettersOfCreditMember2021-09-300001880319us-gaap:CommonStockMember2021-06-300001880319per:TermLoanMemberper:FirstLienAmendmentMember2018-11-230001880319us-gaap:ProductMember2021-07-012021-09-300001880319per:OtherForeignCountriesMember2020-07-012020-09-300001880319per:PerimeterSolutionsSAMember2021-06-300001880319country:US2021-07-012021-09-300001880319per:CustomerOneMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2021-01-012021-09-300001880319us-gaap:ServiceMember2021-01-012021-09-300001880319per:OilAdditivesMemberper:CustomerThreeMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2020-01-012020-12-310001880319per:SecondLienMember2020-12-310001880319per:DefiniteLivedIntangibleAssetsMemberus-gaap:PatentsMember2021-01-012021-09-300001880319per:ManagementFeesAndExpensesMember2020-07-012020-09-300001880319per:ExistingTechnologyMemberper:DefiniteLivedIntangibleAssetsMember2021-01-012021-09-300001880319per:OilAdditivesMember2020-12-310001880319us-gaap:SalesRevenueNetMemberper:CustomerOneMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2021-07-012021-09-300001880319us-gaap:RevolvingCreditFacilityMemberper:SwingLineSubFacilityMember2020-12-310001880319per:FireSafetyMember2021-07-012021-09-300001880319per:SupplyAgreementMember2021-07-012021-09-300001880319per:FireSafetyMember2021-01-012021-09-3000018803192020-12-310001880319us-gaap:RevolvingCreditFacilityMemberper:PerimeterSolutionsSAMemberus-gaap:SubsequentEventMember2021-10-050001880319us-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:RevolvingCreditFacilityMembersrt:MaximumMemberper:PerimeterSolutionsSAMemberus-gaap:SubsequentEventMember2021-10-050001880319us-gaap:RevolvingCreditFacilityMemberper:PerimeterSolutionsSAMemberus-gaap:SubsequentEventMemberus-gaap:BaseRateMember2021-10-050001880319per:SecondLienMember2020-01-012020-09-300001880319per:OilAdditivesMember2020-07-012020-09-300001880319per:DefiniteLivedIntangibleAssetsMemberus-gaap:PatentsMember2020-12-310001880319per:DefiniteLivedIntangibleAssetsMemberus-gaap:TradeNamesMember2020-01-012020-12-310001880319per:OtherMember2021-01-012021-09-300001880319per:FireSafetyMember2021-01-012021-09-300001880319per:SecondLienMember2021-07-012021-09-300001880319us-gaap:IndefinitelivedIntangibleAssetsMember2020-12-310001880319per:OilAdditivesMember2021-01-012021-09-300001880319per:FirstLienMember2021-01-012021-09-300001880319per:OilAdditivesMember2021-01-012021-09-300001880319per:DefiniteLivedIntangibleAssetsMember2020-12-310001880319per:RevolverMember2021-09-3000018803192021-07-012021-09-300001880319per:TermLoanMember2020-07-012020-09-300001880319per:DefiniteLivedIntangibleAssetsMemberus-gaap:PatentsMember2021-09-300001880319per:TermLoanMember2020-01-012020-09-300001880319us-gaap:ProductMember2020-07-012020-09-300001880319per:FirstLienMember2020-07-012020-09-300001880319us-gaap:CostOfSalesMember2021-07-012021-09-300001880319us-gaap:RevolvingCreditFacilityMember2020-01-012020-09-300001880319per:PerimeterAcquisitionMemberus-gaap:SubsequentEventMember2021-11-092021-11-090001880319per:DefiniteLivedIntangibleAssetsMember2021-09-300001880319per:OtherForeignCountriesMember2021-09-300001880319us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-01-012021-09-3000018803192020-06-300001880319us-gaap:CostOfSalesMember2020-01-012020-09-300001880319us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-01-012020-09-300001880319per:FirstLienMember2021-09-300001880319country:CA2021-01-012021-09-300001880319per:CustomerOneMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2020-01-012020-12-310001880319us-gaap:SalesRevenueNetMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-09-300001880319us-gaap:SalesRevenueNetMemberper:CustomerOneMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-09-300001880319country:CA2020-12-310001880319us-gaap:CommonStockMember2020-09-3000018803192020-07-012020-09-300001880319per:OilAdditivesMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2020-01-012020-12-310001880319per:ExistingTechnologyMemberper:DefiniteLivedIntangibleAssetsMember2021-09-300001880319us-gaap:CommonStockMember2020-06-300001880319us-gaap:CommonStockMember2020-12-310001880319per:FirstLienMemberper:TermLoanMember2021-09-300001880319us-gaap:SalesRevenueNetMemberper:CustomerTwoMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2020-01-012020-09-300001880319us-gaap:ProductMember2021-01-012021-09-300001880319us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-09-300001880319per:ExistingTechnologyMemberper:DefiniteLivedIntangibleAssetsMember2020-01-012020-12-3100018803192020-01-012020-12-310001880319us-gaap:SalesRevenueNetMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2020-07-012020-09-300001880319per:CustomerTwoMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2020-01-012020-12-310001880319us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-07-012020-09-300001880319us-gaap:AdditionalPaidInCapitalMember2020-06-300001880319us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001880319us-gaap:SalesRevenueNetMemberper:CustomerOneMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2020-01-012020-09-300001880319country:US2020-12-310001880319per:DefiniteLivedIntangibleAssetsMemberus-gaap:CustomerListsMember2020-01-012020-12-310001880319per:ExistingTechnologyMemberper:DefiniteLivedIntangibleAssetsMember2020-12-310001880319per:FireSafetyMember2020-12-310001880319per:FireSafetyMember2020-01-012020-09-300001880319per:FireSafetyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2020-01-012020-12-310001880319us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001880319country:US2020-07-012020-09-300001880319us-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:RevolvingCreditFacilityMemberper:PerimeterSolutionsSAMemberus-gaap:SubsequentEventMember2021-10-050001880319per:OilAdditivesMember2020-01-012020-09-300001880319us-gaap:AdditionalPaidInCapitalMember2020-09-300001880319us-gaap:PublicUtilitiesInventoryRawMaterialsMember2021-07-012021-09-300001880319us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001880319us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001880319us-gaap:FairValueMeasurementsRecurringMember2020-12-310001880319per:FireSafetyMember2020-07-012020-09-300001880319per:PerimeterSolutionsSAMemberus-gaap:SubsequentEventMember2021-10-050001880319per:DefiniteLivedIntangibleAssetsMemberus-gaap:TradeNamesMember2021-01-012021-09-300001880319us-gaap:RevolvingCreditFacilityMember2020-07-012020-09-300001880319per:SupplyAgreementMember2021-01-012021-09-300001880319us-gaap:FederalFundsEffectiveSwapRateMemberus-gaap:RevolvingCreditFacilityMemberper:PerimeterSolutionsSAMemberus-gaap:SubsequentEventMember2021-10-050001880319country:DE2021-09-300001880319us-gaap:RevolvingCreditFacilityMemberper:PerimeterSolutionsSAMemberus-gaap:SubsequentEventMemberus-gaap:StandbyLettersOfCreditMember2021-10-050001880319us-gaap:SalesRevenueNetMemberper:CustomerOneMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2020-07-012020-09-300001880319per:OtherMember2020-01-012020-09-300001880319us-gaap:PublicUtilitiesInventoryRawMaterialsMember2020-07-012020-09-300001880319per:FirstLienMember2020-01-012020-09-300001880319us-gaap:SalesRevenueNetMemberper:CustomerTwoMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-09-300001880319us-gaap:VehiclesMember2021-09-300001880319per:OtherForeignCountriesMember2021-01-012021-09-300001880319per:ManagementFeesAndExpensesMember2021-01-012021-09-300001880319us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001880319us-gaap:ConstructionInProgressMember2021-09-300001880319us-gaap:RevolvingCreditFacilityMemberper:FirstLienMember2021-09-300001880319us-gaap:ProductMember2020-01-012020-09-300001880319us-gaap:BuildingMember2020-12-310001880319country:DE2020-01-012020-09-300001880319per:OilAdditivesMember2021-07-012021-09-300001880319per:PerimeterSolutionsSAMemberus-gaap:SeniorNotesMemberus-gaap:SubsequentEventMember2021-10-050001880319per:FirstLienMember2020-12-310001880319us-gaap:IndefinitelivedIntangibleAssetsMemberus-gaap:TradeNamesMember2020-12-310001880319us-gaap:AdditionalPaidInCapitalMember2019-12-310001880319us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300001880319per:FirstLienMember2021-07-012021-09-300001880319per:OtherForeignCountriesMember2020-01-012020-09-300001880319us-gaap:SubsequentEventMember2021-10-052021-10-050001880319us-gaap:RetainedEarningsMember2020-07-012020-09-300001880319country:US2021-01-012021-09-300001880319us-gaap:ConstructionInProgressMember2020-12-310001880319per:CustomerTwoMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2020-01-012020-12-310001880319us-gaap:LondonInterbankOfferedRateLiborSwapRateMemberus-gaap:RevolvingCreditFacilityMemberper:PerimeterSolutionsSAMemberus-gaap:SubsequentEventMember2021-10-0500018803192018-03-280001880319us-gaap:AdditionalPaidInCapitalMember2020-12-310001880319per:LaderaTechMember2020-01-012020-12-310001880319per:LaderaTechIncMember2020-12-310001880319us-gaap:RetainedEarningsMember2020-12-310001880319per:SupplyAgreementMember2020-07-012020-09-300001880319per:OtherMember2020-07-012020-09-300001880319us-gaap:ServiceMember2021-07-012021-09-300001880319us-gaap:LeaseholdImprovementsMember2020-12-310001880319per:EverarcHoldingsLtdMember2021-06-210001880319per:ManagementFeesAndExpensesMember2021-01-012021-03-310001880319per:SecondLienMember2020-07-012020-09-300001880319us-gaap:SubsequentEventMember2021-12-092021-12-0900018803192021-06-300001880319per:CustomerThreeMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2021-01-012021-09-300001880319country:CA2021-09-300001880319us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001880319us-gaap:RevolvingCreditFacilityMember2021-07-012021-09-300001880319us-gaap:PublicUtilitiesInventoryRawMaterialsMember2021-01-012021-09-300001880319us-gaap:RetainedEarningsMember2020-01-012020-09-300001880319country:CA2020-07-012020-09-300001880319country:DE2020-07-012020-09-300001880319us-gaap:FurnitureAndFixturesMember2021-09-300001880319us-gaap:IndefinitelivedIntangibleAssetsMemberus-gaap:TradeNamesMember2021-09-300001880319per:SecondLienMember2021-09-300001880319us-gaap:RevolvingCreditFacilityMember2021-09-3000018803192020-01-012020-09-300001880319per:OilAdditivesMember2021-09-300001880319us-gaap:SalesRevenueNetMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2021-07-012021-09-300001880319us-gaap:VehiclesMember2020-12-310001880319per:PerimeterSolutionsSAMember2021-09-300001880319us-gaap:RetainedEarningsMember2020-09-300001880319us-gaap:RetainedEarningsMember2019-12-310001880319per:LaderaTechMember2021-01-012021-09-300001880319us-gaap:CustomerListsMemberper:DefiniteLivedIntangibleAssetsMember2021-09-300001880319country:DE2021-07-012021-09-300001880319per:LaderaTechMember2021-09-300001880319us-gaap:ServiceMember2020-07-012020-09-300001880319per:PerimeterSolutionsSAMemberper:PerimeterAcquisitionMemberus-gaap:SubsequentEventMember2021-11-090001880319per:SupplyAgreementMember2020-01-012020-09-3000018803192019-12-310001880319us-gaap:SalesRevenueNetMemberper:CustomerTwoMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2020-07-012020-09-300001880319us-gaap:CustomerListsMemberper:DefiniteLivedIntangibleAssetsMember2020-12-310001880319per:PerimeterSolutionsSAMemberper:PerimeterAcquisitionMemberus-gaap:SubsequentEventMember2021-11-092021-11-090001880319per:FirstLienMember2020-01-012020-12-310001880319us-gaap:SalesRevenueNetMemberper:CustomerTwoMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMember2021-07-012021-09-300001880319us-gaap:ServiceMember2020-01-012020-09-300001880319country:CA2020-01-012020-09-300001880319us-gaap:RetainedEarningsMember2021-07-012021-09-300001880319us-gaap:MachineryAndEquipmentMember2020-12-310001880319per:SecondLienMember2021-01-012021-09-3000018803192021-09-300001880319us-gaap:CommonStockMember2019-12-310001880319us-gaap:RevolvingCreditFacilityMemberper:PerimeterSolutionsSAMemberus-gaap:SubsequentEventMemberper:MinimumFloorRateMember2021-10-050001880319us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300001880319us-gaap:BuildingMember2021-09-300001880319per:OtherForeignCountriesMember2020-12-310001880319per:CustomerTwoMemberper:FireSafetyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2021-01-012021-09-300001880319per:DefiniteLivedIntangibleAssetsMemberus-gaap:PatentsMember2020-01-012020-12-310001880319per:DefiniteLivedIntangibleAssetsMemberus-gaap:TradeNamesMember2021-09-300001880319us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001880319us-gaap:RevolvingCreditFacilityMemberper:PerimeterSolutionsSAMemberus-gaap:SubsequentEventMember2021-10-052021-10-050001880319per:PerimeterSolutionsSAMember2021-01-012021-09-300001880319us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001880319us-gaap:CommonStockMember2021-09-300001880319us-gaap:AccountsReceivableMember2021-09-300001880319per:TermLoanMemberper:SecondLienMember2021-09-300001880319per:FireSafetyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2021-01-012021-09-3000018803192020-09-300001880319us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001880319us-gaap:CustomerListsMemberper:DefiniteLivedIntangibleAssetsMember2021-01-012021-09-3000018803192021-12-100001880319country:US2021-09-30xbrli:pureper:Segmentsper:Customerxbrli:sharesiso4217:USDxbrli:sharesiso4217:USD

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period from _____ to _____

Commission File Number: 001-41027

Perimeter Solutions, SA

(Exact name of registrant as specified in its charter)

Luxembourg

 

98-1632942

(State or Other Jurisdiction of

Incorporation)

 

(IRS Employer

Identification Number)

 

12E rue Guillaume Kroll, L-1882 Luxembourg

Grand Duchy of Luxembourg

352 2668 62-1

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Ordinary Shares, nominal value of $1.00 per share

 

PRM

 

New York Stock Exchange

 

 

 

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

 

 

Accelerated filer

 

Non-accelerated filer

 

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No ☐

As of December 10, 2021, the registrant had 157,137,635 ordinary shares, nominal value of $1.00 per share, outstanding.

 

ACTIVE 61487311v1


 

Table of Contents

 

Part I.

FINANCIAL INFORMATION

2

 

Item 1.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

2

 

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

27

 

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

40

 

Item 4.

CONTROLS AND PROCEDURES

41

Part II.

OTHER INFORMATION

42

 

Item 1.

LEGAL PROCEEDINGS

42

 

 

ITEM 1A.

RISK FACTORS

42

 

Item 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

68

 

Item 3.

DEFAULTS UPON SENIOR SECURITIES

68

 

Item 4.

MINE SAFETY DISCLOSURES

68

 

Item 5.

OTHER INFORMATION

68

 

Item 6.

EXHIBITS

69

SIGNATURE

70

 

 

Explanatory Note

On November 9, 2021 (the “Closing”), the registrant, Perimeter Solutions, SA, a newly-formed public company limited by shares (société anonyme) governed by the laws of the Grand Duchy of Luxembourg, consummated the transactions contemplated by the previously announced business combination with EverArc Holdings Limited, a company limited by shares incorporated with limited liability in the British Virgin Islands and the former parent company of registrant, SK Invictus Holdings S.à r.l., a limited liability company (société à responsabilité limitée) governed by the laws of the Grand Duchy of Luxembourg, SK Invictus Intermediate S.à r.l., a limited liability company (société à responsabilité limitée) governed by the laws of the Grand Duchy of Luxembourg, and EverArc (BVI) Merger Sub Limited, a company limited by shares incorporated with limited liability in the British Virgin Islands and a wholly-owned subsidiary of registrant, pursuant to the business combination agreement dated June 15, 2021.

 

For more information, see the section of this Report titled “Perimeter Solutions’ Management’s Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments” and the registrant’s other filings with the Securities and Exchange Commission.

Unless otherwise stated, in this Report, the word “Perimeter” refers to SK Invictus Intermediate S.à r.l., and words “the Company,” "we," "us," and “our" refer to Perimeter Solutions, SA, prior to the Closing and Perimeter Solutions, SA and its wholly owned subsidiaries including Perimeter following the Closing.

i

ACTIVE 61487311v1


 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

A. PERIMETER SOLUTIONS, SA FINANCIAL STATEMENTS

PERIMETER SOLUTIONS SA

Unaudited Interim Balance Sheets

(expressed in thousands of U.S. Dollars, unless otherwise stated)

 

 

 

September 30, 2021

 

 

June 30,
2021

 

Assets

 

 

 

 

 

 

Cash

 

$

36

 

 

$

 

Total assets

 

 

36

 

 

 

 

Liabilities

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Note receivable from EverArc Holdings Ltd.

 

 

 

 

 

(40

)

Share capital ($1.00 par value, 40,000 shares authorized, issued
   and outstanding)

 

 

40

 

 

 

40

 

Accumulated deficit

 

 

(4

)

 

 

 

Total equity

 

 

36

 

 

 

 

Total liabilities and equity

 

$

36

 

 

$

 

 

See accompanying notes to unaudited interim financial statement.

2

ACTIVE 61487311v1


 

PERIMETER SOLUTIONS SA

Notes to Unaudited Interim Financial Statement

As of September 30, 2021

(expressed in thousands of U.S. Dollars, unless otherwise stated)

1.
Overview

General Information

Perimeter Solutions SA (the “Company”), was incorporated in Luxemburg on June 21, 2021. Pursuant to a reorganization into a holding company structure, the Company is a holding company with its principal asset being a controlling ownership interest in SK Invictus Intermediate, S.à r.l. (“Invictus”) and its subsidiaries, doing business as Perimeter Solutions (“Perimeter”).

2.
Basis of Presentation

The accompanying financial statement has been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). Through September 30, 2021, there have only been nominal activities in this entity, therefore the statements of income, stockholder’s equity and cash flows have been omitted. For the period ended September 30, 2021, the Company incurred a total of $4 in bank service fees. There have been no other transactions involving the Company as of September 30, 2021.

3.
Stockholders’ Equity

On June 21, 2021, the Company issued 40,000 shares of common stock, $1.00 par value, all of which are owned by Everarc Holdings Ltd. (“Everarc”). Payment for the shares was received July 20, 2021.

4.
Subsequent Events

Perimeter Acquisition

On November 9, 2021, the Company acquired all of the net assets of Perimeter and its subsidiaries for consideration conveyed of $1.39 billion as part of a Business Combination (the “Business Combination”). Perimeter has operations in the United States, Canada, Europe, Mexico, Australia and Israel.

The Perimeter acquisition will be accounted for as a business combination under ASC 805 Business Combinations, which requires the allocation of the total consideration to the identifiable assets and liabilities assumed measured at fair value at the acquisition date. This consideration includes payment to SK Invictus Holdings S.à r.l. ("SK Holdings") the sole stockholder of Invictus prior to the closing of the Business Combination as per the Business Combination Agreement, dated June 15, 2021, in the form of $1.29 billion in cash and $100.0 million in Preferred Equity Contributions. Preferred Equity Contributions were issued to existing Perimeter equity holders at par upon the acquisition. Par value is considered to approximate fair value as this amount is equal to the redemption value as of November 8, 2021 (the “Closing”). These instruments have been assessed for classification, and it was determined that the instrument should be classified as a liability due to mandatory redemption features. In addition to the consideration conveyed to SK Holdings, $702.4 million is being used to pay down existing Perimeter debt.

The cash consideration for the Business Combination was funded through cash on hand, proceeds from the sale of Ordinary Shares to the EverArc subscribers, proceeds from the issuance of senior notes, and proceeds from a draw on a revolving credit facility.

The preliminary purchase price was allocated among the identified assets to be acquired, based on a preliminary analysis. All valuation procedures were related to Perimeter’s existing assets as no new assets were identified as a

3

ACTIVE 61487311v1


 

result of the procedures performed. Goodwill was recognized as a result of the acquisition, which represents the excess fair value of consideration over the fair value of the underlying net assets, largely arising from the extensive industry expertise that has been established by Perimeter. A deferred tax liability was recorded as part of the purchase price allocation, based on an analysis of the tax impacts of the Business Combination by location and by asset.

The estimates of fair value are based upon preliminary valuation assumptions believed to be reasonable but which are inherently uncertain and unpredictable; and, as a result, actual results are expected to differ from estimates.

Assets Identified

 

Fair Value

 

Property, Plant, and Equipment

 

$

57,074

 

Inventory

 

 

90,103

 

Other intangible assets

 

 

100,061

 

Customer lists

 

 

789,000

 

Existing technology and patents

 

 

257,000

 

Goodwill

 

 

1,079,195

 

Working capital

 

 

32,287

 

Other assets

 

 

980

 

LaderaTech Contingent Earnout(1)

 

 

(22,208

)

Debt

 

 

(690,356

)

Deferred tax liabilities

 

 

(303,216

)

Total Fair Value

 

$

1,389,920

 

 

 

 

 

Value Conveyed

 

 

 

Cash to SK Holdings

 

$

1,289,920

 

Preferred Equity Contributions

 

 

100,000

 

Total preliminary purchase price consideration

 

$

1,389,920

 

 

(1)
Refer to Note 3 to the Unaudited Interim Condensed Consolidated Financial Statements of Perimeter for further information related to the LaderaTech Contingent Earnout.

The Company estimated the fair value of its property, plant, and equipment, inventory, intangible assets, and the LaderaTech earnout as of the acquisition date as well as all other identifiable assets and liabilities. Such fair values were determined in accordance with FASB ASC Topic 820, Fair Value Measurement (FASB Topic 820), using unobservable inputs or an income approach, which represents Level 3 inputs under FASB ASC Topic 820.

The actual results of operations of the acquisition will be included in the consolidated statements of operations and comprehensive income (loss) from the date of acquisition.

Revolving Credit Facility

In connection with the consummation of the Business Combination, SK Invictus Intermediate II S.à r.l., a private limited liability company governed by the laws of the Grand Duchy of Luxembourg ("Invictus II"), as borrower, entered into a five-year revolving credit facility (the “Revolving Credit Facility”), which provides for a senior secured revolving credit facility in an aggregate principal amount of up to $100.0 million. The Revolving Credit Facility matures on November 9, 2026. The Revolving Credit Facility includes a $20.0 million swingline sub-facility and a $25.0 million letter of credit sub-facility. The Revolving Credit Facility allows Invictus II to increase commitments under the Revolving Credit Facility up to an aggregate amount not to exceed the greater of (i) $143.0 million and (ii) 100.00% of consolidated EBITDA for the most recent four-quarter period (minus the aggregate outstanding principal amount of certain ratio debt permitted to be incurred thereunder). All borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including the absence of a default and the accuracy of representations and warranties, subject to certain exceptions.

Borrowings under the Revolving Credit Facility bear interest at a rate equal to (i) an applicable margin, plus (ii) at Invictus II’s option, either (x) LIBOR determined by reference to the cost of funds for U.S. dollar deposits for the

4

ACTIVE 61487311v1


 

interest period relevant to such borrowing, adjusted for certain additional costs (but which will not be less than a 0.00% LIBOR floor) or (y) a base rate determined by reference to the highest of (a) the prime commercial lending rate published by the Wall Street Journal, (b) the federal funds rate plus 0.50%, (c) the one-month LIBOR rate plus 1.00% and (d) a minimum floor of 1.00%. The applicable margin is 3.25% in the case of LIBOR-based loans and 2.25% in the case of base rate-based loans, with two step downs of 0.25% each based upon the achievement of certain leverage ratios.

 

High Yield Offering

In order to finance a portion of the cash consideration payable in the Business Combination and the costs and expenses incurred in connection therewith, on October 5, 2021, EverArc Escrow S.à r.l. (“Escrow Issuer”), a newly-formed limited liability company governed by the laws of the Grand Duchy of Luxembourg and a wholly owned subsidiary of EverArc, launched a private offering of $675,000 principal amount of 5.0% senior secured notes due 2029 (the “Senior Notes”) pursuant to that certain Indenture dated as of October 22, 2021 between SK Invictus Intermediate II S.à r.l., a private limited liability company governed by the laws of the Grand Duchy of Luxembourg (“Invictus II”), a subsidiary of Perimeter, and U.S. Bank National Association, as Trustee and Collateral Agent (the “Trustee”). Upon the consummation of the Business Combination, Invictus II became a wholly owned subsidiary of the Company and assumed the Escrow Issuer’s obligations under the Senior Notes. Additionally, upon closing of the Business Combination, Invictus II borrowed $40,000 against the Revolving Credit Facility. The outstanding $40,000 borrowed against the Revolving Credit Facility was repaid in full by Invictus II on December 9, 2021.

Stock Repurchase Program

On December 8, 2021, the board of directors of the Company (the “Board”) authorized a stock repurchase program (the “Stock Repurchase Program”). Under the Stock Repurchase Program, the Company is authorized to repurchase up to $100,000 of its issued and outstanding common Stock over a period of 24-months, expiring December 8, 2023. Repurchases under the Stock Repurchase Program may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations.

5

ACTIVE 61487311v1


 

B. SK INVICTUS INTERMEDIATE, S. À R.L. AND SUBSIDIARIES FINANCIAL STATEMENTS

SK INVICTUS INTERMEDIATE, S. À R.L. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)

 

 

 

As of
September 30, 2021

 

 

As of
December 31, 2020

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

39,581

 

 

$

22,478

 

Accounts receivable, net of allowance for doubtful accounts of $987 and $1,044 as of September 30, 2021 and December 31, 2020, respectively

 

 

97,107

 

 

 

28,896

 

Inventories (1)

 

 

64,792

 

 

 

58,784

 

Income tax receivable

 

 —

 

 

 

11,457

 

Prepaid expenses and other current assets

 

 

7,973

 

 

 

11,406

 

Total current assets

 

 

209,453

 

 

 

133,021

 

Property, plant, and equipment—net

 

 

48,496

 

 

 

48,235

 

Goodwill

 

 

486,375

 

 

 

482,041

 

Customer lists—net

 

 

271,390

 

 

 

304,308

 

Existing technology and patents—net

 

 

126,967

 

 

 

135,928

 

Other intangible assets—net

 

 

33,232

 

 

 

33,464

 

Other assets

 

 

863

 

 

 

1,209

 

Total assets

 

$

1,176,776

 

 

$

1,138,206

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of long-term debt, net of unamortized debt issuance costs

 

$

5,610

 

 

$

6,723

 

Accounts payable

 

 

22,840

 

 

 

9,869

 

Deferred revenue

 

 

1,117

 

 

 

286

 

Accrued expenses and other current liabilities

 

 

21,296

 

 

 

16,045

 

Total current liabilities

 

 

50,863

 

 

 

32,923

 

Long-term debt, less current portion, net of unamortized debt issuance costs

 

 

679,540

 

 

 

680,548

 

Deferred income taxes

 

 

106,792

 

 

 

112,162

 

Other liabilities

 

 

20,951

 

 

 

21,151

 

Total liabilities

 

$

858,146

 

 

$

846,784

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Common stock, $1 par value per share; 53,045,510 shares authorized as of September 30, 2021 and December 31, 2020; 53,045,510 shares issued and outstanding as of September 30, 2021 and December 31, 2020

 

 

53,046

 

 

 

53,046

 

Additional paid-in capital

 

 

289,344

 

 

 

289,344

 

Accumulated other comprehensive loss

 

 

(5,598

)

 

 

(3,174

)

Accumulated deficit

 

 

(18,162

)

 

 

(47,794

)

Total shareholders’ equity

 

 

318,630

 

 

 

291,422

 

Total liabilities and shareholders’ equity

 

$

1,176,776

 

 

$

1,138,206

 

 

(1)
Amounts include $542 and $2,505 of inventory purchased from the former owners of the original Invictus business as of September 30, 2021 and December 31, 2020, respectively. Please also read Note 15—Related Parties to our condensed consolidated financial statements.

See accompanying notes to interim condensed consolidated financial statements.

6

ACTIVE 61487311v1


 

SK INVICTUS INTERMEDIATE, S. À R.L. AND SUBSIDIARIES
Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except share and per share data)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

Net sales

 

$

195,414

 

 

$

174,259

 

 

$

316,460

 

 

$

283,758

 

Cost of goods sold

 

 

86,081

 

 

 

76,264

 

 

 

159,895

 

 

 

145,704

 

Gross profit

 

 

109,333

 

 

 

97,995

 

 

 

156,565

 

 

 

138,054

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

 

15,333

 

 

 

8,845

 

 

 

42,544

 

 

 

26,579

 

Amortization expense

 

 

13,276

 

 

 

12,836

 

 

 

39,818

 

 

 

38,264

 

Other operating expense

 

 

313

 

 

 

360

 

 

 

1,066

 

 

 

1,051

 

Total operating expenses

 

 

28,922

 

 

 

22,041

 

 

 

83,428

 

 

 

65,894

 

Operating income

 

 

80,411

 

 

 

75,954

 

 

 

73,137

 

 

 

72,160

 

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense—net

 

 

8,065

 

 

 

9,244

 

 

 

23,951

 

 

 

33,494

 

Loss on contingent earnout

 

 —

 

 

 —

 

 

 

2,763

 

 

 —

 

Unrealized foreign currency (gain) loss

 

 

1,634

 

 

 

(2,615

)

 

 

3,892

 

 

 

(2,768

)

Other (income) expense—net

 

 

66

 

 

 

(271

)

 

 

(252

)

 

 

(351

)

Total other expenses, net

 

 

9,765

 

 

 

6,358

 

 

 

30,354

 

 

 

30,375

 

Income before income taxes

 

 

70,646

 

 

 

69,596

 

 

 

42,783

 

 

 

41,785

 

Income tax expense

 

 

(18,637

)

 

 

(16,966

)

 

 

(13,151

)

 

 

(11,242

)

Net income

 

 

52,009

 

 

 

52,630

 

 

 

29,632

 

 

 

30,543

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign translation adjustments

 

 

(2,020

)

 

 

2,209

 

 

 

(2,424

)

 

 

(1,234

)

Total comprehensive income

 

$

49,989

 

 

$

54,839

 

 

$

27,208

 

 

$

29,309

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.98

 

 

$

0.99

 

 

$

0.56

 

 

$

0.58

 

Diluted

 

$

0.98

 

 

$

0.99

 

 

$

0.56

 

 

$

0.58

 

Weighted-average shares used in
   computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

53,045,510

 

 

 

53,045,510

 

 

 

53,045,510

 

 

 

53,045,510

 

Diluted

 

 

53,045,510

 

 

 

53,045,510

 

 

 

53,045,510

 

 

 

53,045,510

 

 

See accompanying notes to interim condensed consolidated financial statements.

7

ACTIVE 61487311v1


 

SK INVICTUS INTERMEDIATE, S. À R.L. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)
(in thousands, except share data)

 

 

 

Common Stock

 

 

Additional Paid-in

 

 

Accumulated Other Comprehensive

 

 

Accumulated

 

 

Total Shareholders’

 

Three Months Ended September 30, 2020

 

Shares

 

 

Amount

 

 

 Capital

 

 

 Loss

 

 

Deficit

 

 

Equity

 

Balance as of June 30, 2020

 

 

53,045,510

 

 

$

53,046

 

 

$

289,344

 

 

$

(11,404

)

 

$

(94,130

)

 

$

236,856

 

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 

52,630

 

 

 

52,630

 

Foreign translation adjustments

 

 —

 

 

 —

 

 

 —

 

 

 

2,209

 

 

 —

 

 

 

2,209

 

Balance as of September 30, 2020

 

 

53,045,510

 

 

$

53,046

 

 

$

289,344

 

 

$

(9,195

)

 

$

(41,500

)

 

$

291,695

 

 

 

 

Common Stock

 

 

Additional Paid-in

 

 

Accumulated Other Comprehensive

 

 

Accumulated

 

 

Total Shareholders’

 

Three Months Ended September 30, 2021

 

Shares

 

 

Amount

 

 

 Capital

 

 

 Loss

 

 

Deficit

 

 

Equity

 

Balance as of June 30, 2021

 

 

53,045,510

 

 

$

53,046

 

 

$

289,344

 

 

$

(3,578

)

 

$

(70,171

)

 

$

268,641

 

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 

52,009

 

 

 

52,009

 

Foreign translation adjustments

 

 —

 

 

 —

 

 

 —

 

 

 

(2,020

)

 

 —

 

 

 

(2,020

)

Balance as of September 30, 2021

 

 

53,045,510

 

 

$

53,046

 

 

$

289,344

 

 

$

(5,598

)

 

$

(18,162

)

 

$

318,630

 

 

 

 

Common Stock

 

 

Additional Paid-in

 

 

Accumulated Other Comprehensive

 

 

Accumulated

 

 

Total Shareholders’

 

Nine Months Ended September 30, 2020

 

Shares

 

 

Amount

 

 

 Capital

 

 

 Loss

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2019

 

 

53,045,510

 

 

$

53,046

 

 

$

289,344

 

 

$

(7,961

)

 

$

(72,043

)

 

$

262,386

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,543

 

 

 

30,543

 

Foreign translation adjustments

 

 

 

 

 

 

 

 —

 

 

 

(1,234

)

 

 

 

 

 

(1,234

)

Balance as of September 30, 2020

 

 

53,045,510

 

 

$

53,046

 

 

$

289,344

 

 

$

(9,195

)

 

$

(41,500

)

 

$

291,695

 

 

 

 

Common Stock

 

 

Additional Paid-in

 

 

Accumulated Other Comprehensive

 

 

Accumulated

 

 

Total Shareholders’

 

Nine Months Ended September 30, 2021

 

Shares

 

 

Amount

 

 

Capital

 

 

 Loss

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2020

 

 

53,045,510

 

 

$

53,046

 

 

$

289,344

 

 

$

(3,174

)

 

$

(47,794

)

 

$

291,422

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29,632

 

 

 

29,632

 

Foreign translation adjustments

 

 

 

 

 

 

 

 

 

 

 

(2,424

)

 

 

 

 

 

(2,424

)

Balance as of September 30, 2021

 

 

53,045,510

 

 

$

53,046

 

 

$

289,344

 

 

$

(5,598

)

 

$

(18,162

)

 

$

318,630

 

 

See accompanying notes to interim condensed consolidated financial statements.

8

ACTIVE 61487311v1


 

SK INVICTUS INTERMEDIATE, S. À R.L. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)

 

 

As of
September 30, 2021

 

 

As of
September 30, 2020

 

 

 

(unaudited)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

29,632

 

 

$

30,543

 

Adjustments to reconcile net income to net cash provided
   by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization expense

 

 

45,593

 

 

 

43,371

 

Deferred income taxes

 

 

(5,195

)

 

 

(6,884

)

Amortization of deferred financing costs

 

 

2,432

 

 

 

2,649

 

Loss on contingent earnout

 

 

2,763

 

 

 —

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

Accounts receivable

 

 

(68,211

)

 

 

(65,763

)

Inventories

 

 

(5,554

)

 

 

15,529

 

Income tax receivable

 

 

11,457

 

 

 

6,528

 

Prepaid expenses and other current assets

 

 

3,104

 

 

 

(2,490

)

Other assets

 

 

346

 

 

 

592

 

Accounts payable,

 

 

12,971

 

 

 

(1,613

)

Deferred revenue

 

 

831

 

 

 

831

 

Accrued expenses and other current liabilities

 

 

2,448

 

 

 

7,831

 

Other liabilities

 

 

(200

)

 

 

576

 

Net cash provided by operating activities

 

 

32,417

 

 

 

31,700

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(5,149

)

 

 

(5,695

)

Purchase of businesses, net of cash acquired

 

 

(7,464

)

 

 

(1,970

)

Net cash used in investing activities

 

 

(12,613

)

 

 

(7,665

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from revolving credit facility

 

 

19,500

 

 

 

72,100

 

Repayments of revolving credit facility

 

 

(19,500

)

 

 

(93,700

)

Repayment of long-term debt

 

 

(4,211

)

 

 

(4,208

)

Net cash used in financing activities

 

 

(4,211

)

 

 

(