Perimeter Solutions, Inc. Q1 FY2025 earnings call

• Strategy: Built on three pillars - own exceptional businesses, apply operational value drivers, decentralized operation. • IMS Acquisition: Completed first add-on product line acquisitions in Q1 for $10 million. IMS produces PCB-centered components for mission-critical applications, focusing on proprietary components and flexible short-run production. • Operational Update: Wildfire activity elevated in North America and international markets; Specialty Products had plant downtime issues affecting EBITDA.

Fire Safety: Revenue was $37.2 million, up 48% from prior year, and adjusted EBITDA was $10.1 million compared to a small loss in the same period last year. Specialty Products: Q1 net sales increased $7.5 million due to IMS acquisition, offset by a $6.5 million decrease in the base business due to unplanned plant downtime, resulting in a net increase of $1 million. Consolidated: First quarter sales up 22% to $72 million and adjusted EBITDA rising 49% to $18.1 million as compared to $12.1 million a year ago.

• First quarter adjusted EBITDA reached $18.1 million. • Invested $23 million in Q1 across capital expenditures, IMS acquisitions, and share repurchases. • Expect returns on capital allocation to exceed 15% targeted equity returns. • Anticipate earnings power of Specialty Products to rebound to normalized levels in 2026.

• Trade policy could have a modest direct impact (2%-3% of annual EBITDA). • Specialty Products plant downtime issues could affect earnings if not resolved. • Economic fluctuations could impact certain business lines like phosphorus pentasulfide.

Q: On tariffs, the 2% to 3% EBITDA exposure risk, is it primarily cost and can you talk about ability to offset?

A: Kyle Sable said it's almost entirely cost-based, and they believe they can mitigate a reasonable proportion but are still uncertain on fully offsetting.

Q: On customer sales exposure related to supply chains?

A: Kyle Sable said they have less visibility but don't see material impact on demand.

Q: On suppressants comps, if 2Q and 3Q are tough comps?

A: Kyle Sable said Q1 last year was an unusually tough comp, and as the year builds, they should get better.

Q: On competitive dynamics in fire retardants and USDA goal?

A: Haitham Khouri said competitive environment has changed with less likelihood of alternate chemistries soon, and Perimeter is the gold standard.

Q: On business line sensitivities to broader market trends?

A: Haitham Khouri said retardant business has no economic sensitivity, suppressant has little, and phosphorus pentasulfide is tied to miles driven with modest impact.

Q: On fluorine-free switching and macroeconomic uncertainty?

A: Haitham Khouri said no signs of customers slowing the switch yet.

Q: On long-term assumptions for 2025?

A: Kyle Sable said no changes to full year view as Q1 networking capital benefit is noise.