Perimeter Solutions, Inc.

Previous wording

The Specialty Products segment includes operations that develop, produce and market products for non-fire safety markets. The Company’s largest end market application for the Specialty Products segment is Phosphorus Pentasulfide (“P2S5”) based lubricant additives. P2S5 is also used in pesticide and mining chemicals applications, and emerging electric battery technologies. The Specialty Products Segment also includes Intelligent Manufacturing Solutions (“IMS”), which is a manufacturer of electronic or electro-mechanical components of larger solutions. IMS has a flexible, vertically integrated production facility centered on its printed circuit board (“PCB”) line that allows it to acquire and produce a variety of product lines across a range of end markets, including large medical systems, communications infrastructure, energy infrastructure, defense systems, and industrial systems, with a substantial focus on aftermarket repair and replacement.

Current wording

The Specialty Products segment includes operations that develop, produce and market products for non-fire safety markets. The Company’s largest end market application for the Specialty Products segment is Phosphorus Pentasulfide (“P 2 S 5”) based lubricant additives. P 2 S 5 is also used in pesticide and mining chemicals applications, and emerging electric battery technologies. The Specialty Products Segment also includes Intelligent Manufacturing Solutions (“IMS”), which is a manufacturer of electronic or electro-mechanical components of larger solutions. IMS has a flexible, vertically integrated production facility centered on its printed circuit board (“PCB”) line that allows it to acquire and produce a variety of product lines across a range of end markets, including large medical systems, communications infrastructure, energy infrastructure, defense systems, and industrial systems, with a substantial focus on aftermarket repair and replacement.

Previous wording

When analyzing changes in the Results of Operations section below, we define our base business as our existing operations plus operations of an acquired business once it has been owned for a full four quarters after the date of acquisition.

Current wording

Our focus is on maintaining our existing customers, expanding their utilization of our products and services, growing our business in the emerging technologies markets and growth through business acquisitions. When analyzing changes in the Results of Operations section below, we define our base business as our existing operations plus operations of an acquired business once it has been owned for a full four quarters after the date of acquisition.

Previous wording

Our business is highly dependent on the needs of government agencies to suppress fires. As such, our financial condition and results of operations are significantly impacted by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given year. Historically, sales of our products have been higher in the summer season in the northern hemisphere of each fiscal year due to weather patterns which are generally correlated to a higher prevalence of wildfires. This is in part offset by the disbursement of our operations in both the northern and southern hemispheres, where the summer seasons alternate.

Current wording

Our financial condition and results of operations are significantly impacted by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given year. Historically, sales of our products have been higher in the summer season in the northern hemisphere of each fiscal year due to weather patterns which are generally correlated to a higher prevalence of wildfires. This is in part offset by the disbursement of our operations in both the northern and southern hemispheres, where the summer seasons alternate.

Previous wording

Additionally, amid broader volatility in the global economy, certain raw materials and components used in our manufacturing processes may be subject to the recently announced tariffs on imported goods by the United States, Canada, and other countries. However, tariffs have not had, and we do not currently expect tariffs to have, a material impact on our consolidated financial statements, as substantially all of the Company’s products sold in the United States are supported by domestic manufacturing capabilities. The Company prioritizes sourcing raw materials domestically and continues to maintain alternative supply sources. Although the ultimate impact of tariff policies, coupled with broader macroeconomic challenges, remains uncertain, the Company is actively monitoring developments to identify necessary actions to maintain its competitiveness and adapt to changing economic conditions.

Current wording

Additionally, amid broader volatility in the global economy, certain raw materials and components used in our manufacturing processes may be subject to the recently announced tariffs on imported goods by the United States, Canada, and other countries. However, tariffs have not had, and we do not currently expect tariffs to have, a material impact on our financial position or results of operations, as substantially all of the Company’s products sold in the United States are supported by domestic manufacturing capabilities. The Company prioritizes sourcing raw materials domestically and continues to maintain alternative supply sources. Although the ultimate impact of tariff policies, coupled with broader macroeconomic challenges, remains uncertain, the Company is actively monitoring developments to identify necessary actions to maintain its competitiveness and adapt to changing economic conditions.

Previous wording

Cost of Goods Sold. Cost of goods sold increased $5.5 million for the three months ended March 31, 2025 compared to the same period in 2024. The increase in the Fire Safety segment of $1.6 million was primarily due to a $0.4 million increase in material, manufacturing and freight costs and a $1.2 million increase in personnel related expenses, each as a result of increased sales. The $3.9 million increase in the Specialty Products segment was primarily due to a $4.9 million increase from a recently acquired business, offset by a decrease in base business due to unplanned plant downtime.

Current wording

Cost of Goods Sold. Cost of goods sold increased $7.1 million for the three months ended June 30, 2025 compared to the same period in 2024. The decrease in the Fire Safety segment of $0.7 million was primarily due to a $2.0 million decrease in material, manufacturing and freight costs offset by a $1.3 million increase in personnel related expenses. The $7.8 million increase in the Specialty Products segment was primarily due to $6.1 million from recently acquired businesses.

Previous wording

Selling, General and Administrative Expense. Selling, general and administrative expense increased by $2.8 million for the three months ended March 31, 2025 compared to the same period in 2024. The increase was primarily due to a $3.4 million increase in personnel related and share-based compensation expenses, offset by a $0.6 million decrease in professional fees, and other costs.

Current wording

Selling, General and Administrative Expense. Selling, general and administrative expense increased by $2.1 million for the three months ended June 30, 2025 compared to the same period in 2024. The increase was primarily due to a $1.4 million increase in personnel related and stock-based compensation expenses.

Previous wording

March 31, 2025 of $80.6 million was primarily due to a decrease in the Company’s average price per share from $12.85 at December 31, 2024 to $9.67 as of March 31, 2025. The increase in the fair value of the Annual Advisory Amount for the three months ended March 31, 2024 of $68.3 million was primarily due to an increase in the average price per share from $4.51 as of December 31, 2023, to $6.81 as of March 31, 2024.

Current wording

Founder Advisory Fees - related party. Founder advisory fees - related party represents the change in the fair value of the liability-classified Fixed Annual Advisory Amount and Variable Annual Advisory Amount (collectively, the “Annual Advisory Amounts”). The increase in the fair value of the Annual Advisory Amounts for the three months ended June 30, 2025 of $96.9 million was primarily due to an increase in the Company’s average price per share from $9.67 at March 31, 2025 to $13.62 as of June 30, 2025. The increase in the fair value of the Annual Advisory Amount for the three months ended June 30, 2024 of $0.6 million was primarily due to an increase in the average price per share from $6.81 as of March 31, 2024, to $7.75 as of June 30, 2024.

Previous wording

Income Tax Expense. Income tax expense increased by $16.8 million for the three months ended March 31, 2025 compared to the same period in 2024. The increase is due primarily to changes in earnings in certain jurisdictions.

Current wording

Income Tax Benefit (Expense). Income tax benefit was $1.7 million for the three months ended June 30, 2025, compared to income tax expense of $12.5 million in the same period in 2024. The change is primarily due to changes in earnings in jurisdictions that were not covered by a valuation allowance and the impact of non-deductible compensation and accrued withholding taxes on the annualized effective tax rate.

Previous wording

Net Sales. Net sales increased by $13.0 million for the three months ended March 31, 2025, compared to the same period in 2024. Net sales in the Fire Safety segment increased by $12.0 million, representing higher fire retardant sales of $17.5 million offset by lower fire suppressant sales of $5.5 million. Fire retardant sales increased $14.2 million in North America and $3.3 million in other geographies. The increase in North America fire retardant sales was driven by above average fire activity in multiple states, most notably in California, during the three months ended March 31, 2025. Fire suppressant sales decreased $7.0 million in North America offset by $1.5 million increase in other geographies. A significant launch of our Suppressants products occurred in the North American market in the first quarter of 2024 and the same level of sales did not repeat as no comparable product launch occurred in the first quarter of 2025. Net sales in the Specialty Products segment increased $1.0 million, including a $7.5 million increase in revenue due to a recently acquired business, offset by a $6.5 million decrease in the base business due to unplanned plant downtime. The Company considers that revenue attributable to base business includes revenue from an acquired business that has been owned for a full four quarters after the date of acquisition.

Current wording

Net Sales. Net sales increased by $48.3 million for the six months ended June 30, 2025, compared to the same period in 2024. Net sales in the Fire Safety segment increased by $33.7 million, representing higher fire retardant sales of $36.5 million, offset by lower fire suppressant sales of $2.8 million. Fire retardant sales increased $30.2 million in North America and $6.3 million in other geographies. The increase in U.S. fire retardant sales was driven by an increase in fire activity during the six months ended June 30, 2025, as compared to mild fire activity during the six months ended June 30, 2024. Net sales in the Specialty Products segment increased $14.6 million, including a $16.9 million increase in revenue due to recently acquired businesses, offset by a $2.3 million decrease in the base business due to unplanned plant downtime. The Company considers that revenue attributable to base business includes revenue from an acquired business that has been owned for a full four quarters after the date of acquisition.

Previous wording

We use segment net sales and segment adjusted earnings before interest, taxes, depreciation and amortization (“Segment Adjusted EBITDA”) to evaluate operating performance by segment, for business planning purposes and to allocate resources. The following tables provide information for our net sales and Segment Adjusted EBITDA (in thousands) for the three months ended March 31, 2025 compared to the same periods in 2024:

Current wording

Segment Adjusted EBITDA is defined as income (loss) before income taxes plus net interest and other financing expenses, and depreciation and amortization, adjusted on a consistent basis for certain non-recurring, unusual or non-operational items. These items include (i) restructuring and transaction related costs (ii) founder advisory fee expenses, (iii) stock-based compensation expense and (iv) foreign currency loss (gain). We use Segment Adjusted EBITDA to evaluate operating performance by segment for business planning purposes and to allocate resources. The following tables provide information for our net sales and Segment Adjusted EBITDA (in thousands) for the three and six months ended June 30, 2025 compared to the same periods in 2024:

Previous wording

Adjusted EBITDA for our Specialty Products segment decreased by $4.4 million during the three months ended March 31, 2025 compared with the same period in 2024. The decrease was primarily due to higher cost of goods sold, as described above.

Current wording

Adjusted EBITDA for our Specialty Products segment increased by $4.4 million during the three months ended June 30, 2025 compared with the same period in 2024. The increase was primarily due to higher net sales, as described above.

Previous wording

The following table provides a reconciliation of financial measures that are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to Non-GAAP measures. Segment Adjusted EBITDA should not be considered an alternative to net income (loss), operating income (loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP (in thousands).

Current wording

The following table provides a reconciliation of financial measures that are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to Non-GAAP measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide investors with a better understanding of the Company’s past financial performance and future results. The Company’s management uses these non-GAAP financial measures when it internally evaluates the performance of its business and makes operating decisions, including internal operating budgeting, performance measurement, and discretionary compensation. Segment Adjusted EBITDA should not be considered an alternative to net income (loss), operating income (loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP (in thousands).

Previous wording

(1) For the three months ended March 31, 2025, $0.6 million was related to acquisition costs, $0.4 million was related to the Redomiciliation Transaction and $0.5 million was related to restructuring and other non-recurring costs. For the three months ended March 31, 2024, $0.5 million was related to restructuring and other non-recurring costs.

Current wording

(1) For the six months ended June 30, 2025, $0.8 million was related to acquisition costs, $0.4 million was related to the Redomiciliation Transaction and $0.6 million was related to restructuring and other non-recurring costs. For the six months ended June 30, 2024, $0.5 million was related to the Redomiciliation Transaction and other non-recurring Luxembourg related costs, and $0.1 million was related to other non-recurring costs.

Previous wording

We believe that our existing cash and cash equivalents of approximately $200 million, net cash flows generated from operations and availability under the Revolving Credit Facility as of March 31, 2025 will be sufficient to meet our current capital expenditures, working capital, and debt service requirements for at least 12 months from the filing date of this Quarterly Report. As of March 31, 2025, we expect our remaining fiscal year 2025 capital expenditure budget to cover both our maintenance and growth capital expenditures. We may also utilize borrowings under other various financing sources available to us, including the issuance of equity and/or debt securities through public offerings or private placements, to fund our acquisitions, the Annual Advisory Amounts and long-term liquidity needs. Our ability to complete future offerings of equity or debt securities and the timing of these offerings will depend upon various factors including prevailing market conditions and our financial condition.

Current wording

We believe that our existing cash and cash equivalents of $140.7 million, net cash flows generated from operations and availability under the Revolving Credit Facility as of June 30, 2025 will be sufficient to meet our current capital expenditures, working capital, and debt service requirements for at least 12 months from the filing date of this Quarterly Report. As of June 30, 2025, we expect our remaining fiscal year 2025 capital expenditure budget to cover both our maintenance and growth capital expenditures. We may also utilize borrowings under other various financing sources available to us, including the issuance of equity and/or debt securities through public offerings or private placements, to fund our acquisitions, the Annual Advisory Amounts and long-term liquidity needs. Our ability to complete future offerings of equity or debt securities and the timing of these offerings will depend upon various factors including prevailing market conditions and our financial condition.

Previous wording

Under the Share Repurchase Plan, we are authorized to repurchase, from time-to-time, shares of our Common Stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by the securities laws and as determined by management at such time and in such amounts as management may decide. The Share Repurchase Plan does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time. The timing, manner, price and amount of any repurchases are determined by management in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions.

Current wording

Under our share repurchase plan (the “Share Repurchase Plan”), we are authorized to repurchase, from time-to-time, shares of our Common Stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by the securities laws and as determined by management at such time and in such amounts as management may decide. The Share Repurchase Plan does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time. The timing, manner, price and amount of any repurchases are determined by management in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions.

Previous wording

On February 21, 2024, the Board re-established the limit for Common Stock repurchases at $100.0 million. The approximate dollar value of shares that may yet be repurchased under the Share Repurchase Plan was $89.0 million as of

Current wording

On May 7, 2025, the Board re-established the limit for Common Stock repurchases at $100.0 million. The approximate dollar value of shares that may yet be repurchased under the Share Repurchase Plan was $78.3 million as of June 30, 2025. We repurchased 2,886,221 and 3,774,675 shares during the three and six months ended June 30, 2025. For the comparable period in 2024, we repurchased 18,535 and 2,987,892 shares, respectively. The repurchased shares were recorded at cost and are being held in treasury.

Previous wording

On November 9, 2021, the Company assumed the advisory agreement entered into on December 12, 2019 by EverArc (“Founder Advisory Agreement”) with EverArc Founders, LLC, a Delaware limited liability company (“EverArc Founder Entity”), pursuant to which the EverArc Founder Entity, for the services provided to the Company, including strategic and capital allocation advice, is entitled to receive both a fixed amount (the “Fixed Annual Advisory Amount”) and a variable amount (the “Variable Annual Advisory Amount,” each an “Advisory Amount” and collectively, the “Advisory Amounts”) until the years ending December 31, 2027 and 2031, respectively. Under the Founder Advisory Agreement, at the election of the EverArc Founder Entity, at least 50% of the Advisory Amounts will be paid in shares of Common Stock and the remainder in cash.

Current wording

Founder Entity”), pursuant to which the EverArc Founder Entity, for the services provided to the Company, including strategic and capital allocation advice, is entitled to receive both a fixed amount (the “Fixed Annual Advisory Amount”) and a variable amount (the “Variable Annual Advisory Amount,” each an “Advisory Amount” and collectively, the “Advisory Amounts”) until the years ending December 31, 2027 and 2031, respectively. Under the Founder Advisory Agreement, at the election of the EverArc Founder Entity, at least 50% of the Advisory Amounts will be paid in shares of Common Stock and the remainder in cash.

Previous wording

For additional information about the Founder Advisory Agreement, refer to Note 11, “Stock-Based Compensation” and Note 13, “Related Parties,” in the notes to the condensed consolidated financial statements included in this Quarterly Report.

Current wording

For additional information about the Founder Advisory Agreement, refer to Note 11, “Stock-Based Compensation,” Note 12 “Fair Value Measurements” and Note 13, “Related Parties,” in the notes to the condensed consolidated financial statements included in this Quarterly Report.

Previous wording

Net cash provided by operating activities was $23.7 million and $2.8 million for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025, the primary components of operating cash flows were net income of $56.7 million, non-cash benefits of $49.6 million and net operating asset reductions of $16.6 million. For thethree months ended March 31, 2024, the primary components of operating cash flows were net loss of$82.6 million, non-cash charges of $86.6 million, and net operating asset investments of $1.2 million. The net operating asset reduction for thethree months ended March 31, 2025 was primarily related to accounts receivable.

Current wording

Net cash provided by operating activities was $20.9 million and $11.4 million for the six months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025, the primary components of operating cash flows were net income of $24.5 million, non-cash charges of $48.9 million and net operating asset investments of $52.5 million. For thesix months ended June 30, 2024, the primary components of operating cash flows were a net loss of$60.9 million, non-cash charges of $110.2 millionand net operating asset investments of $37.9 million.

Previous wording

Cash used in investing activities was $14.8 million and $0.5 million for the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 2025, we purchased a business for $10.0 million and purchased property and equipment of $4.8 million. During the three months ended March 31, 2024, we purchased property and equipment of $1.6 million offset by cash received from maturity of Euro denominated certificate of deposit of $1.1 million.

Current wording

Cash used in investing activities was $42.8 million for the six months ended June 30, 2025. During the six months ended June 30, 2025, we purchased property and equipment of $17.6 million, purchased intangible assets of $15.2 million, and purchased a business for $10.0 million. Cash provided by investing activities was $0.2 million for the six months ended June 30, 2024. During the six months ended June 30, 2024, we received cash from the maturity of Euro denominated certificate of deposit of $5.4 million, offset by the purchase of property and equipment of $5.2 million.

Previous wording

Cash used in financing activities was $8.4 million and $14.5 million for the three months ended March 31, 2025 and 2024, respectively. During the quarter ended March 31, 2025, we repurchased shares of outstanding Common Stock for $8.2 million, and made $0.2 million in principal payments on finance lease obligations. During the three months ended March 31, 2024, we repurchased outstanding Ordinary Shares for $14.3 million and made $0.2 million in principal payments on finance lease obligations.

Current wording

Cash used in financing activities was $40.6 million and $14.8 million for the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2025, we repurchased shares of outstanding Common Stock for $40.4 million, received proceeds from exercises of options of $0.3 million and made $0.5 million in principal payments on finance lease obligations. During the six months ended June 30, 2024, we repurchased outstanding Ordinary Shares for $14.4 million and made $0.4 million in principal payments on finance lease obligations.

Previous wording

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements which have been prepared in accordance with U.S. GAAP. Our significant accounting policies and estimates are consistent with those discussed in Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” of our consolidated financial statements included in our 2024 Annual Report filed on Form 10-K with the SEC on February 20, 2025. Significant estimates made by management in connection with the preparation of the accompanying condensed consolidated financial statements include the useful lives of long-lived and intangible assets, the fair value of financial assets and liabilities, stock options, founder advisory fees and realizability of deferred tax assets. We are not presently aware of any events or circumstances that would require us to update our estimates, assumptions or revise the carrying value of our assets or liabilities. Our estimates may change, however, as new events occur and additional information is obtained. As a result, actual results may differ significantly from our estimates, and any such differences may be material to our financial statements. For information on the impact of recently issued accounting pronouncements, see Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” in the notes to the condensed consolidated financial statements included in this Quarterly Report.

Current wording

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements which have been prepared in accordance with U.S. GAAP. Our significant accounting policies and estimates are consistent with those discussed in Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” of our consolidated financial statements included in our 2024 Annual Report filed on Form 10-K with the SEC on February 20, 2025. Significant estimates made by management in connection with the preparation of the accompanying condensed consolidated financial statements include the fair value of purchase consideration and assets acquired and liabilities assumed in a business combination, the useful lives of long-lived assets, the fair value of financial assets and liabilities, indefinite life intangible assets, stock options, and founder advisory fees. We are not presently aware of any events or circumstances that would require us to update our estimates, assumptions or revise the carrying value of our assets or liabilities. Our estimates may change, however, as new events occur and additional information is obtained. As a result, actual results may differ significantly from our estimates, and any such differences may be material to our financial statements. For information on the impact of recently issued accounting pronouncements, see Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” in the notes to the condensed consolidated financial statements included in this Quarterly Report.