Perimeter Solutions, SA (NYSE:PRM) is a global solutions provider for the fire safety and specialty products industries. The company reported annual net income of $67,486,000, annual revenue of $322,108,000, annual operating cash flow of $193,000, and annual free cash flow of -$9,242,000 in its most recent fiscal year.
Business Overview
Perimeter Solutions operates in two reporting segments: Fire Safety and Specialty Products. The Fire Safety business is a formulator and manufacturer of fire management products that help customers combat various types of fires, including wildland, structural, flammable liquids and other types. The company's Fire Safety business also offers specialized equipment and services, typically in conjunction with its fire management products, to support firefighting operations. The Specialty Products segment produces and sells Phosphorus Pentasulfide (P2S5) used in several end markets and applications, including lubricant additives, various agricultural applications, various mining applications, and emerging electric battery technologies.Approximately 65% of Perimeter Solutions' 2023 annual revenues were derived in the United States, 15% in Europe, 14% in Canada, and the remaining 6% spread across various other countries. The company's business is organized and managed in two reporting segments: Fire Safety and Specialty Products.
Fire Safety Segment Performance
In the first quarter of 2024, the Fire Safety segment delivered a 34% year-over-year increase in net sales to $25.2 million, while the segment's adjusted EBITDA improved from a loss of $3.4 million in Q1 2023 to a near-breakeven result. The year-over-year improvement was primarily driven by the company's suppressants business, where its 3P's operating strategy - focused on profitable new business, pricing to value, and productivity improvements - continues to drive performance. Specifically, Perimeter's investments in fluorine-free technology are driving profitable new business, while its pricing discipline and cost-reduction initiatives are expanding margins.Specialty Products Segment Performance
The Specialty Products segment also performed well in the first quarter of 2024, with net sales increasing 35% year-over-year to $33.9 million and adjusted EBITDA margin reaching 37%, roughly in line with pre-destocking levels. Management noted that the segment's solid results reflect a natural rebound in demand rather than any significant restocking activity.Capital Allocation and Liquidity
Perimeter Solutions repurchased approximately 3 million shares in the first quarter of 2024 at an average price of $4.79 per share, building on its repurchase of 12.2 million shares in 2023 at an average price of $5.24. The company has approximately $97 million remaining on its existing share repurchase authorization.As of March 31, 2024, Perimeter Solutions had $34 million in cash on its balance sheet and $675 million in senior notes outstanding. The company's long-term expectations for interest expense, depreciation, tax rate, and capital expenditures remain unchanged.