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Perimeter Solutions Reports First Quarter 2022 Financial Results

PRM

Net sales increased 70% year-over-year, with strong growth in both the Fire Safety and Oil Additives businesses

Fire Safety Adjusted EBITDA increased in the seasonally modest first quarter

Oil Additives Adjusted EBITDA increased 97% in Q1, driven by execution on our operational value drivers

CLAYTON, Mo., May 9, 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 first quarter ended March 31, 2022.

First Quarter 2022 Results

  • Net sales increased 70% to $57.8 million in the first quarter, as compared to $33.9 million in the prior-year quarter.
    • Fire Safety sales increased 141% to $18.5 million, as compared to $7.7 million in the prior year.
    • Oil Additives sales increased 50% to $39.3 million, as compared to $26.3 million in the prior year.
  • Net income during the first quarter was $37.8 million, or $0.22 per diluted share, an increase of $56.3 million from a net loss of $18.5 million, or $0.35 per diluted share, for the same period of 2021.
  • Adjusted EBITDA increased 285% to $12.0 million in the first quarter, as compared to $3.1 million in the prior-year quarter.
    • Fire Safety Adjusted EBITDA increased $1.3 million to an Adjusted EBITDA loss of $3.3 million, as compared to an Adjusted EBITDA loss of $4.6 million in the prior year.
    • Oil Additives Adjusted EBITDA increased 97% to $15.3 million, as compared to $7.8 million in the prior year.

Conference Call and Webcast

As previously announced, Perimeter Solutions management will hold a conference call at 8:30 a.m. ET on Monday, May 9, 2022 to discuss financial results for the first quarter 2022 . 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 June 9, 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 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, 2021 filed with the SEC on March 31, 2022. 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.

CONTACT:
ir@perimeter-solutions.com

PERIMETER SOLUTIONS, SA AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except share and per share data)

(Unaudited)



Successor



Predecessor


Three Months
Ended

March 31, 2022



Three Months
Ended

March 31, 2021






Net sales

$ 57,758



$ 33,925

Cost of goods sold

44,627



24,974

Gross profit

13,131



8,951

Operating expenses:





Selling, general and administrative expense

19,808



8,927

Amortization expense

13,855



13,249

Founders advisory fees - related party

(59,848)



Other operating expense

196



312

Total operating expenses

(25,989)



22,488

Operating income (loss)

39,120



(13,537)

Other expense (income):





Interest expense, net

10,496



7,851

Unrealized foreign currency loss

880



2,798

Other expense (income), net

165



(274)

Total other expense, net

11,541



10,375

Income (loss) before income taxes

27,579



(23,912)

Income tax benefit

10,232



5,383

Net income (loss)

37,811



(18,529)

Other comprehensive income (loss), net of tax:





Foreign currency translation adjustments

126



(966)

Total comprehensive income (loss)

$ 37,937



$ (19,495)

Earning (loss) per share:





Basic

$ 0.24



$ (0.35)

Diluted

$ 0.22



$ (0.35)

Weighted average number of ordinary shares outstanding:





Basic

160,251,199



53,045,510

Diluted

174,777,232



53,045,510

PERIMETER SOLUTIONS, SA AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)



March 31,
2022


December 31,
2021

Assets

(Unaudited)



Current assets:




Cash and cash equivalents

$ 153,543


$ 225,554

Accounts receivable, net

33,331


24,319

Inventories

117,515


110,087

Income tax receivable

17,935


816

Prepaid expenses and other current assets

9,901


14,161

Total current assets

332,225


374,937

Property, plant, and equipment, net

60,773


62,247

Goodwill

1,042,280


1,041,325

Customer lists, net

743,902


753,459

Technology and patents, net

244,008


247,368

Tradenames, net

98,744


100,005

Other assets

1,664


2,219

Total assets

$ 2,523,596


$ 2,581,560

Liabilities and Shareholders Equity




Current liabilities:




Accounts payable

$ 21,258


$ 27,469

Accrued expenses and other current liabilities

28,542


19,025

Founders advisory fees payable - related party

29,503


53,547

Deferred revenue

825


445

Total current liabilities

80,128


100,486

Long-term debt

664,410


664,128

Deferred income taxes

304,974


298,633

Founders advisory fees payable - related party

209,109


312,242

Redeemable preferred shares

97,812


96,867

Redeemable preferred shares - related party

3,735


3,699

Other non-current liabilities

22,145


22,195

Total liabilities

1,382,313


1,498,250

Commitments and contingencies




Shareholders' equity:




Ordinary shares, $1 nominal value per share; 4,000,000,000 shares authorized;
163,234,542 and 157,237,435 shares issued and outstanding at March 31, 2022 and
December 31, 2021, respectively

163,235


157,237

Additional paid-in capital

1,684,071


1,670,033

Accumulated other comprehensive loss

(7,009)


(7,135)

Accumulated deficit

(699,014)


(736,825)

Total shareholders' equity

1,141,283


1,083,310

Total liabilities and shareholders' equity

$ 2,523,596


$ 2,581,560

PERIMETER SOLUTIONS, SA AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)



Successor



Predecessor


Three Months
Ended

March 31, 2022



Three Months
Ended

March 31, 2021

Cash flows from operating activities:





Net income (loss)

$ 37,811



$ (18,529)

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





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

(59,848)



Depreciation and amortization expense

16,371



15,146

Interest and payment-in-kind on preferred shares

1,634



Share-based compensation

5,724



Deferred income taxes

6,239



2,183

Amortization of deferred financing costs

395



811

Amortization of acquisition related inventory step-up

9,299



Changes in operating assets and liabilities, net of acquisitions:





Accounts receivable

(8,921)



11,513

Inventories

(16,782)



(10,970)

Income tax receivable

(16,150)



(7,551)

Prepaid expenses and current other assets

4,164



5,696

Other assets

599



546

Accounts payable

(6,143)



6,445

Deferred revenue

372



(22)

Accrued expenses and other current liabilities

7,833



(5,439)

Founders advisory fees - related party (cash settled)

(53,547)



Other liabilities

54



(11)

Net cash used in operating activities

(70,896)



(182)

Cash flows from investing activities:





Purchase of property and equipment

(1,313)



(1,674)

Purchase price adjustment under Business Combination Agreement

(1,638)



Purchase of businesses, net of cash acquired



(3,607)

Net cash used in investing activities

(2,951)



(5,281)

Cash flows from financing activities:





Proceeds from exercise of warrants

529



Repayments of long-term debt



(1,403)

Net cash provided by (used in) financing activities

529



(1,403)

Effect of foreign currency on cash and cash equivalents

1,307



1,717

Net change in cash and cash equivalents

(72,011)



(5,149)

Cash and cash equivalents, beginning of period

225,554



22,478

Cash and cash equivalents, end of period

$ 153,543



$ 17,329

Supplemental disclosures of cash flow information:





Cash paid for interest

$ 145



$ 7,119

Cash received for income taxes

$ 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 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). The Corporate category includes unallocated costs related to our corporate headquarter activities. To supplement the Company's consolidated financial statements presented in accordance with U.S. GAAP, Perimeter is providing a summary 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 (in thousands).

Consolidated


Successor



Predecessor

(Unaudited)

Three Months
Ended

March 31, 2022



Three Months
Ended

March 31, 2021

Income (loss) before income taxes

$ 27,579



$ (23,912)

Depreciation and amortization

16,371



15,146

Interest and financing expense

10,496



7,851

Founders advisory fees - related party

(59,848)



Transaction expenses 1

1,476



290

Share-based compensation expense

5,724



Non-cash purchase accounting impact 2

9,299



Management fees 3



312

Contingent future payments 4



625

Unrealized foreign currency loss

880



2,798

Adjusted EBITDA

$ 11,977



$ 3,110

Net sales

$ 57,758



$ 33,925






Operating Segments


Fire Safety


Successor



Predecessor

(Unaudited)

Three Months
Ended

March 31, 2022



Three Months
Ended

March 31, 2021

Loss before income taxes

$ (38,425)



$ (24,412)

Depreciation and amortization

12,778



10,738

Interest and financing expense

8,395



7,175

Transaction expenses 1

925



290

Share-based compensation expense

3,630



Non-cash purchase accounting impact 2

9,299



Management fees 3



312

Contingent future payments 4



625

Unrealized foreign currency loss

64



626

Adjusted EBITDA

$ (3,334)



$ (4,646)

Net sales

$ 18,470



$ 7,650


Oil Additives


Successor



Predecessor

(Unaudited)

Three Months
Ended

March 31, 2022



Three Months
Ended

March 31, 2021

Income before income taxes

$ 7,889



$ 500

Depreciation and amortization

3,593



4,408

Interest and financing expense

468



676

Transaction expenses 1

551



Share-based compensation expense

1,994



Unrealized foreign currency loss

816



2,172

Adjusted EBITDA

$ 15,311



$ 7,756

Net sales

$ 39,288



$ 26,275






Corporate


Successor




(Unaudited)

Three Months
Ended

March 31, 2022




Income before income taxes

$ 58,115




Interest and financing expense

1,633




Founders advisory fees - related party

(59,848)




Share-based compensation expense

100




Adjusted EBITDA

$ —





____________________

(1)

Adjustment to reflect non-recurring professional fees and financing costs 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.

Cision View original content:https://www.prnewswire.com/news-releases/perimeter-solutions-reports-first-quarter-2022-financial-results-301542266.html

SOURCE Perimeter Solutions

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