Perimeter Solutions(PRM) - 2024 Q2 - Quarterly Results

Financial Performance Highlights Second Quarter 2024 Performance Perimeter Solutions reported substantial Q2 2024 sales and Adjusted EBITDA growth, despite a net income decrease from non-operational factors Q2 2024 Key Financial Metrics (vs. Q2 2023, in millions) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $127.3M | $76.1M | +67% | | Net Income | $21.7M | $52.0M | -58% | | Diluted EPS | $0.14 | $0.31 | -55% | | Adjusted EBITDA | $64.9M | $21.0M | +209% | Q2 2024 Segment Performance (vs. Q2 2023, in millions) | Segment | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | :--- | | Fire Safety | Sales | $98.5M | $53.1M | +85% | | | Adj. EBITDA | $55.6M | $16.5M | +237% | | Specialty Products | Sales | $28.7M | $23.0M | +25% | | | Adj. EBITDA | $9.3M | $4.5M | +108% | Year-to-Date 2024 Performance Strong YTD 2024 sales and Adjusted EBITDA growth were offset by a significant net loss, primarily due to non-cash founders advisory fees YTD 2024 Key Financial Metrics (vs. YTD 2023, in millions) | Metric | YTD 2024 | YTD 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $186.3M | $120.0M | +55% | | Net (Loss) Income | ($60.9M) | $61.4M | - | | Diluted EPS | ($0.42) | $0.36 | - | | Adjusted EBITDA | $77.0M | $24.1M | +220% | YTD 2024 Segment Performance (vs. YTD 2023, in millions) | Segment | Metric | YTD 2024 | YTD 2023 | Change | | :--- | :--- | :--- | :--- | :--- | | Fire Safety | Sales | $123.7M | $71.9M | +72% | | | Adj. EBITDA | $55.4M | $13.2M | +321% | | Specialty Products | Sales | $62.6M | $48.1M | +30% | | | Adj. EBITDA | $21.6M | $10.9M | +98% | - The significant swing from a net income of $61.4 million in YTD 2023 to a net loss of $60.9 million in YTD 2024 was a key highlight of the year-to-date results[3] Consolidated Financial Statements Statements of Operations Consolidated statements show increased net sales and gross profit, though operating income and net results were significantly impacted by 'Founders advisory fees' Key Income Statement Items (in thousands) | Metric | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $127,276 | $76,137 | $186,320 | $119,995 | | Gross Profit | $73,267 | $29,326 | $93,969 | $39,724 | | Operating Income (Loss) | $45,018 | $63,347 | ($29,846) | $76,199 | | Net Income (Loss) | $21,650 | $52,014 | ($60,908) | $61,445 | - A significant factor affecting profitability was the 'Founders advisory fees - related party', which was a $588 thousand expense in Q2 2024 versus a $60.0 million credit in Q2 2023, and a $68.9 million expense YTD 2024 versus an $84.3 million credit YTD 2023[7] Balance Sheets Total assets remained stable as of June 30, 2024, but increased liabilities and decreased cash led to a reduction in total shareholders' equity Key Balance Sheet Items (in thousands) | Metric | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $295,317 | $251,014 | | Total Assets | $2,321,630 | $2,315,422 | | Total Current Liabilities | $81,852 | $55,051 | | Total Liabilities | $1,246,456 | $1,163,127 | | Total Shareholders' Equity | $1,075,174 | $1,152,295 | - Cash and cash equivalents decreased from $47.3 million at the end of 2023 to $43.2 million as of June 30, 2024[8] Statements of Cash Flows Net cash provided by operating activities significantly improved YTD 2024, despite a net loss, with financing activities leading to an overall cash decrease YTD Cash Flow Summary (in thousands) | Category | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $11,418 | ($72,936) | | Net cash provided by (used in) investing activities | $187 | ($4,375) | | Net cash used in financing activities | ($14,784) | ($27,315) | | Net change in cash and cash equivalents | ($4,114) | ($104,632) | - The company repurchased $14.4 million of ordinary shares in the first six months of 2024[9] Non-GAAP Financial Metrics Adjusted EBITDA Reconciliation The company reconciles income before taxes to Adjusted EBITDA, a key non-GAAP performance metric, by adjusting for non-recurring and non-operational items - Adjusted EBITDA is defined as net income plus taxes, interest, D&A, and adjusted for non-recurring or non-operational items such as severance costs, founder advisory fees, and stock compensation[10] Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :--- | :--- | :--- | :--- | :--- | | Income (loss) before income taxes | $34,130 | $52,747 | ($52,702) | $55,856 | | Adjustments | $30,778 | ($31,757) | $129,746 | ($31,750) | | Adjusted EBITDA | $64,908 | $20,990 | $77,044 | $24,106 | Company Overview and Other Information About Perimeter Solutions Perimeter Solutions is a global provider of firefighting products and specialty chemicals, operating through Fire Safety and Specialty Products segments - The company operates through two reporting segments: Fire Safety and Specialty Products[5] - The Fire Safety business provides fire retardants, foams, specialized equipment, and services for combating various types of fires, serving a global customer base including government agencies[5] - The Specialty Products business primarily produces Phosphorus Pentasulfide (P2S5), used in lubricant additives like ZDDP, as well as in pesticide and mining chemicals[5] Conference Call and Webcast Information A conference call and webcast are scheduled for August 1, 2024, at 8:30 a.m. ET to discuss Q2 2024 financial results - A conference call to discuss Q2 2024 results is scheduled for 8:30 a.m. ET on Thursday, August 1, 2024[4]