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Perimeter Solutions Reports Fourth Quarter 2021 Results

PRM

Listed on The New York Stock Exchange under the symbol "PRM" on November 9, 2021

Strong full year performance in the Fire Safety segment despite lapping the record 2020 U.S. fire season

CLAYTON, Mo., March 24, 2022 /PRNewswire/ -- 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 fourth quarter ended December 31, 2021.

Full Year 2021 Results

  • Net sales increased 7% to $362.3 million in 2021, as compared to $339.6 million in 2020.
    • Fire Safety sales increased 7% to $261.2 million, as compared to $245.0 million in 2020.
    • Oil Additives sales increased 7% to $101.2 million, as compared to $94.6 million in 2020.
  • Net loss for 2021 was $659.8 million, or $(9.68) per share, a decrease of $684.1 million from net income of $24.2 million, or $0.46 per share for 2020.
  • Adjusted EBITDA increased 4% to $141.4 million in 2021, as compared to $136.0 million in 2020.
    • Fire Safety Adjusted EBITDA increased 5% to $117.9 million, as compared to $112.0 million in 2020.
    • Oil Additives Adjusted EBITDA decreased 2% to $23.6 million, as compared to $24.0 million in 2020.

Fourth Quarter 2021 Results

  • Net sales decreased 18% to $45.9 million in the 2021 fourth quarter, as compared to $55.8 million in the 2020 fourth quarter.
    • Fire Safety sales decreased 23% to $23.9 million, as compared to $31.1 million in the 2020 fourth quarter.
    • Oil Additives sales decreased 11% to $22.0 million, as compared to $24.8 million in the 2020 fourth quarter.
  • Net loss during the 2021 fourth quarter was $689.5 million, or $(6.10) per share, an increase of $683.2 million from a net loss of $6.3 million, or $(0.12) per share for the 2020 fourth quarter.
  • Adjusted EBITDA decreased 57% to $6.8 million during the 2021 fourth quarter, as compared to $16.0 million in the 2020 fourth quarter.
    • Fire Safety Adjusted EBITDA decreased 87% to $1.2 million, as compared to $9.2 million in the 2020 fourth quarter.
    • Oil Additives Adjusted EBITDA decreased 17% to $5.6 million, as compared to $6.7 million in the 2020 fourth quarter.

CEO Edward Goldberg commented: "We are proud of our performance in 2021, particularly in our Fire Safety business, where, despite an extremely challenging supply chain and logistics backdrop, we met our commitments to our customers with 100% reliability, in support of their mission to save lives, property and the environment. We also grew segment Adjusted EBITDA while lapping the record 2020 U.S. fire season." Mr. Goldberg added: "The 2021 fourth quarter experienced very limited fire activity, and our Fire Safety results were down period-over-period. Fluctuations based on the intensity of the fire season in a given quarter is a feature of our Fire Safety business, and can be especially pronounced in the much smaller fourth and first quarters, as evidenced in 2021 fourth quarter." Mr. Goldberg concluded: "We're very optimistic about our business. Assuming a normalized 2022 fire season, and incorporating our best assumptions around other elements of our business, we expect consolidated 2022 Adjusted EBITDA growth consistent with, and perhaps above, our long-term framework of mid-teens growth."

Conference Call and Webcast

As previously announced, Perimeter Solutions management will hold a conference call at 8:30 a.m. ET on Thursday, March 24, 2022, to discuss 2021 fourth quarter operating results. 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://www.perimeter-solutions.com/en/), 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 April 24, 2022.

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 Oil Additives.

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 Oil Additives 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 contains "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. Forward-looking statements included in this press release include statements regarding expected consolidated 2022 Adjusted EBITDA growth.

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, including, but not limited to, the Company's Annual Report on Form 10-K for the year ended December 31, 2021. Stockholders, 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 Statement of Income and Comprehensive Income (loss)

(in thousands, except share and per share data)



Fourth Quarter


Full Year


Successor



Predecessor


Successor



Predecessor


November 9, 2021

Through

December 31, 2021



October 1, 2021

Through

November 8, 2021


Three Months Ended

December 31, 2020


November 9, 2021

Through

December 31, 2021



January 1, 2021

Through

November 8, 2021


Year Ended

December 31, 2020















Net sales

$ 21,023



$ 24,855


$ 55,819


$ 21,023



$ 341,315


$ 339,577

Cost of goods sold

20,533



12,241


31,828


20,533



172,136


177,532

Gross profit

490



12,614


23,991


490



169,179


162,045

Operating expenses:














Selling, general and administrative expense

16,982



(3,563)


11,168


16,982



38,981


37,747

Amortization expense

8,004



5,606


13,194


8,004



45,424


51,458

Founders advisory fees - related party

652,990





652,990




Other operating expense

92



3,087


313


92



4,153


1,364

Total operating expenses

678,068



5,130


24,675


678,068



88,558


90,569

Operating (loss) income

(677,578)



7,484


(684)


(677,578)



80,621


71,476

Other expense (income):














Interest expense, net

6,352



15,136


8,523


6,352



39,087


42,017

Loss on contingent earn-out

198



202



198



2,965


Unrealized foreign currency loss (gain)

1,006



134


(2,872)


1,006



4,026


(5,640)

Other (income) expense, net

(2)



30


718


(2)



(222)


367

Total other expense (income), net

7,554



15,502


6,369


7,554



45,856


36,744

(Loss) income before income taxes

(685,132)



(8,018)


(7,053)


(685,132)



34,765


34,732

Income tax benefit (expense)

4,675



(985)


759


4,675



(14,136)


(10,483)

Net (loss) income

(680,457)



(9,003)


(6,294)


(680,457)



20,629


24,249

Other comprehensive (loss) income, net of tax:














Foreign currency translation adjustments

(7,135)



2,660


6,021


(7,135)



236


4,787

Total comprehensive (loss) income

$ (687,592)



$ (6,343)


$ (273)


$ (687,592)



$ 20,865


$ 29,036

Net (loss) income per share:














Basic and diluted

$ (4.33)



$ (0.17)


$ (0.12)


$ (4.33)



$ 0.39


$ 0.46

Weighted average number of ordinary shares outstanding:














Basic and diluted

157,158,579



53,045,510


53,045,510


157,158,579



53,045,510


53,045,510

PERIMETER SOLUTIONS, SA AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share and per share data)



Successor



Predecessor


December 31,
2021



December 31,
2020

Assets





Current assets:





Cash and cash equivalents

$ 225,554



$ 22,478

Accounts receivable, net

24,319



28,896

Inventories

110,087



58,784

Income tax receivable

816



11,457

Prepaid expenses and other current assets

14,161



11,406

Total current assets

374,937



133,021

Property, plant, and equipment, net

62,247



48,235

Goodwill

1,051,080



482,041

Customer lists,net

753,459



304,308

Existing technology and patents, net

247,368



135,928

Other intangible assets,net

100,005



33,464

Other assets

2,219



1,209

Total assets

$ 2,591,315



$ 1,138,206

Liabilities and Shareholders Equity





Current liabilities:





Accounts payable

$ 27,469



$ 9,869

Accrued expenses and other current liabilities

19,025



16,045

Founders advisory fees payable - related party

53,547



Deferred revenue

445



286

Current maturities of long-term debt



6,723

Total current liabilities

100,486



32,923

Long-term debt, less current maturities

664,128



680,548

Deferred income taxes

298,633



112,162

Founders advisory fees payable - related party

312,242



Redeemable preferred shares

96,867



Redeemable preferred shares - related party

3,699



Other non-current liabilities

22,195



21,151

Total liabilities

$ 1,498,250



$ 846,784

Commitments and contingencies





Shareholders' equity:





Ordinary shares, $1 nominal value per share; 4,000,000,000 shares authorized; 157,237,435 shares issued and outstanding at December 31, 2021

157,237



Common stock, $1 par value per share; 53,045,510 shares authorized, issued and outstanding at December 31, 2020



53,046

Additional paid-in capital

1,679,788



289,344

Accumulated other comprehensive loss

(7,135)



(3,174)

Accumulated deficit

(736,825)



(47,794)

Total shareholders' equity

1,093,065



291,422

Total liabilities and shareholders' equity

$ 2,591,315



$ 1,138,206

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 and on a segment basis. 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 (v) contingent future payment related to an acquired business (vi) management fees related to the services provided by SK Capital Partners IV-A, L.P. and SK Capital Partners IV-B, L.P (collectively, the "Sponsor") when acting in a management capacity and (vi) unrealized foreign currency loss (gain). To supplement the Company's consolidated financial statements presented in accordance with U.S. GAAP, Perimeter is providing a summary, wherein, the Successor Period and the 2021 Predecessor are combined ("S/P Combined"), to show the computations of adjusted EBITDA, and reconciliations from U.S. GAAP income (loss) before income taxes, taking into account certain charges and gains that were recognized during the periods presented. The Corporate category includes unallocated costs related to our corporate headquarter activities.

Consolidated

Three Months Ended

S/P Combined


Successor



Predecessor


Three Months

Ended

December 31, 2021


November 9, 2021

Through

December 31,
2021



October 1, 2021

Through

November 8, 2021


Three Months Ended

December 31, 2020

Loss before income taxes

$ (693,150)


$ (685,132)



$ (8,018)


$ (7,053)

Depreciation and amortization

15,786


9,379



6,407


14,746

Interest and financing expense

21,488


6,352



15,136


8,523

Founders advisory fees - related party

652,990


652,990




Transaction expenses 1

(2,380)


5,580



(7,960)


1,689

Stock compensation expense

4,977


4,821



156


Non-cash purchase accounting impact 2

2,948


2,948




Loss on contingent earn-out

400


198



202


Management fees 3

136




136


312

Contingent future payments 4

2,500




2,500


625

Unrealized foreign currency loss (gain)

1,140


1,006



134


(2,872)

Adjusted EBITDA

$ 6,835


$ (1,858)



$ 8,693


$ 15,970

Net sales

$ 45,878


$ 21,023



$ 24,855


$ 55,819








Year Ended

S/P Combined


Successor



Predecessor


Year Ended

December 31, 2021


November 9, 2021

Through

December 31, 2021



January 1, 2021

Through

November 8, 2021


Year Ended

December 31, 2020

(Loss) income before income taxes

$ (650,367)


$ (685,132)



$ 34,765


$ 34,732

Depreciation and amortization

61,379


9,379



52,000


58,117

Interest and financing expense

45,439


6,352



39,087


42,017

Founders advisory fees - related party

652,990


652,990




Transaction expenses 1

10,425


5,580



4,845


2,379

Stock compensation expense

4,977


4,821



156


Non-cash purchase accounting impact 2

2,948


2,948




Loss on contingent earn-out

3,163


198



2,965


Management fees 3

1,073




1,073


1,281

Contingent future payments 4

4,375




4,375


3,125

Unrealized foreign currency loss (gain)

5,032


1,006



4,026


(5,640)

Adjusted EBITDA

$ 141,434


$ (1,858)



$ 143,292


$ 136,011

Net sales

$ 362,338


$ 21,023



$ 341,315


$ 339,577


(1)

Adjustment to reflect non-recurring expenses incurred related to business combination with Perimeter Solutions.

(2)

Represents the non-cash impact of purchase accounting on the cost of inventory sold. The inventory acquired received a purchase accounting step-up in basis, which is a non-cash adjustment to the cost.

(3)

Adjustment to reflect fees pertaining to services provided by the Sponsor when acting in a management capacity on strategic and other non-operational matters which do not represent expenses incurred in the normal course of our operations.

(4)

Adjustment to reflect deferred consideration paid with respect to a 2019 acquisition.

Operating Segments

Fire Safety


S/P Combined


Successor



Predecessor

Three Months Ended

Three Months

Ended

December 31, 2021


November 9, 2021

Through

December 31,
2021



October 1, 2021

Through

November 8, 2021


Three Months Ended

December 31, 2020

Loss before income taxes

$ (34,931)


$ (25,125)



$ (9,806)


$ (14,423)

Depreciation and amortization

12,129


7,418



4,711


10,598

Interest and financing expense

19,990


5,029



14,961


10,897

Transaction expenses

(2,524)


5,436



(7,960)


1,649

Stock compensation expense

3,406


3,250



156


Loss on contingent earn-out

400


198



202


Management fees

136




136


312

Deferred future payments

2,500




2,500


625

Unrealized foreign currency loss (gain)

107


98



9


(429)

Adjusted EBITDA

$ 1,213


$ (3,696)



$ 4,909


$ 9,229

Net sales

$ 23,924


$ 7,913



$ 16,011


$ 31,052


S/P Combined


Successor



Predecessor

Year Ended


Year Ended

December 31, 2021


November 9, 2021

Through

December 31, 2021



January 1, 2021

Through

November 8, 2021


Year Ended

December 31, 2020

Income (Loss) before income taxes


$ 7,507


$ (25,125)



$ 32,632


$ 23,110

Depreciation and amortization


44,412


7,418



36,994


41,271

Interest and financing expense


42,358


5,029



37,329


41,879

Transaction expenses


10,281


5,436



4,845


2,300

Stock compensation expense


3,406


3,250



156


Loss on contingent earn-out


3,163


198



2,965


Management fees


1,073




1,073


1,281

Deferred future payments


4,375




4,375


3,125

Unrealized foreign currency loss (gain)


1,318


98



1,220


(932)

Adjusted EBITDA


$ 117,893


$ (3,696)



$ 121,589


$ 112,034

Net sales


$ 261,180


$ 7,913



$ 253,267


$ 244,968

Oil Additives


S/P Combined

Successor



Predecessor

Three Months Ended

Three Months

Ended

December 31,
2021


November 9, 2021

Through

December 31,
2021



October 1, 2021

Through

November 8, 2021


Three Months
Ended

December 31,
2020

(Loss) income before income taxes

$ (3,103)


$ (4,891)



$ 1,788


$ 7,370

Depreciation and amortization

3,657


1,961



1,696


4,148

Interest and financing expense

554


379



175


(2,374)

Transaction expenses

144


144




40

Stock compensation expense

389


389




Non-cash purchase accounting impact

2,948


2,948




Unrealized foreign currency loss (gain)

1,033


908



125


(2,443)

Adjusted EBITDA

$ 5,622


$ 1,838



$ 3,784


$ 6,741

Net sales

$ 21,954


$ 13,110



$ 8,844


$ 24,767








S/P Combined

Successor



Predecessor

Year Ended

Year Ended

December 31, 2021


November 9, 2021

Through

December 31, 2021



January 1, 2021

Through

November 8, 2021


Year Ended

December 31, 2020

(Loss) income before income taxes

$ (2,758)


$ (4,891)



$ 2,133


$ 11,622

Depreciation and amortization

16,967


1,961



15,006


16,846

Interest and financing expense

2,137


379



1,758


138

Transaction expenses

144


144




79

Stock compensation expense

389


389




Non-cash purchase accounting impact

2,948


2,948




Unrealized foreign currency loss (gain)

3,714


908



2,806


(4,708)

Adjusted EBITDA

$ 23,541


$ 1,838



$ 21,703


$ 23,977

Net sales

$ 101,158


$ 13,110



$ 88,048


$ 94,609

Corporate


Successor

Three Months and Year Ended

November 9, 2021

Through

December 31, 2021

(Loss) income before income taxes

$ (655,116)

Interest and financing expense

944

Founders advisory fees - related party

652,990

Stock compensation expense

1,182

Adjusted EBITDA

$ —

Cision View original content:https://www.prnewswire.com/news-releases/perimeter-solutions-reports-fourth-quarter-2021-results-301509641.html

SOURCE Perimeter Solutions

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