On August 1, 2024, Perimeter Solutions SA (PRM, Financial) released its 8-K filing for the second quarter of 2024. Perimeter Solutions SA is a global manufacturer of firefighting products and lubricant additives, operating in two business segments: Fire Safety and Specialty Products. The company generates the majority of its revenue from the United States.
Performance Overview
Perimeter Solutions SA (PRM, Financial) reported a significant increase in net sales for Q2 2024, reaching $127.3 million, a 67% rise compared to $76.1 million in the same quarter last year. This growth was driven by an 85% increase in Fire Safety sales to $98.5 million and a 25% increase in Specialty Products sales to $28.7 million.
However, net income for the quarter was $21.7 million, or $0.14 per diluted share, a decrease from $52.0 million, or $0.31 per diluted share, in the prior year quarter. The adjusted EBITDA saw a remarkable increase of 209% to $64.9 million, compared to $21.0 million in the previous year.
Financial Achievements and Challenges
The substantial growth in net sales highlights the company's successful implementation of operational value drivers and supportive demand backdrops in both business segments. The Fire Safety segment, in particular, showed robust performance with an 85% increase in sales, reflecting the company's critical role in supporting firefighting operations during the 2024 fire season.
Despite the impressive revenue growth, the decline in net income indicates challenges in managing costs and expenses. The company's net income decreased by $30.3 million from the prior year, primarily due to increased operating expenses and other costs.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $127.3 million | $76.1 million |
| Net Income | $21.7 million | $52.0 million |
| Adjusted EBITDA | $64.9 million | $21.0 million |
| EPS (Diluted) | $0.14 | $0.31 |
Income Statement Highlights
Perimeter Solutions SA (PRM, Financial) reported a gross profit of $73.3 million for Q2 2024, up from $29.3 million in Q2 2023. Operating expenses increased to $28.2 million from a negative $34.0 million in the prior year, primarily due to higher selling, general, and administrative expenses, and amortization costs.
Interest expense remained relatively stable at $10.6 million, while the company recorded a foreign currency loss of $224,000. The income tax expense for the quarter was $12.5 million, compared to $733,000 in the previous year.
Balance Sheet and Cash Flow
As of June 30, 2024, Perimeter Solutions SA (PRM, Financial) had total assets of $2.32 billion, with cash and cash equivalents amounting to $43.2 million. Accounts receivable increased significantly to $96.3 million from $39.6 million at the end of 2023, reflecting higher sales activity.
The company's total liabilities stood at $1.25 billion, with long-term debt of $667.1 million. Shareholders' equity was $1.08 billion, down from $1.15 billion at the end of 2023.
Cash Flow Statement
For the six months ended June 30, 2024, net cash provided by operating activities was $11.4 million, compared to a net cash outflow of $72.9 million in the same period last year. Net cash used in investing activities was $187,000, while net cash used in financing activities was $14.8 million.
Analysis and Conclusion
Perimeter Solutions SA (PRM, Financial) demonstrated strong revenue growth in Q2 2024, driven by robust performance in both its Fire Safety and Specialty Products segments. However, the decline in net income highlights the need for better cost management and expense control. The company's significant increase in adjusted EBITDA is a positive indicator of its operational efficiency and ability to generate cash flow.
Overall, Perimeter Solutions SA (PRM, Financial) remains a key player in the firefighting and specialty chemicals industry, with strong market demand and operational improvements driving its financial performance. Investors should monitor the company's ability to manage costs and sustain revenue growth in the coming quarters.
Explore the complete 8-K earnings release (here) from Perimeter Solutions SA for further details.
