Perimeter Solutions (NYSE:PRM) Releases Quarterly Earnings Results, Misses Expectations By $0.11 EPS

Key Points

• Perimeter Solutions reported Q3 adjusted EPS of $0.85, missing analysts’ $0.96 estimate by $0.11. Revenue was $389.9 million, above consensus of $381.5 million, while net sales fell 24% year over year and adjusted EBITDA rose 20% to $223.5 million.
• Fire Safety and Specialty Products both grew: revenue and adjusted EBITDA each increased 14% in Fire Safety, while Specialty Products revenue rose 84% and adjusted EBITDA more than doubled.
• PDI supply reliability remains a challenge. The company is expanding production and adding suppliers, but expects elevated transition costs and suppressed PDI EBITDA; it generated $150.4 million in free cash flow and ended the quarter with 2.7x net leverage.

Perimeter Solutions (NYSE:PRM - Get Free Report) posted its earnings results on Thursday. The company reported $0.85 earnings per share for the quarter, missing analysts' consensus estimates of $0.96 by ($0.11), FiscalAI reports. The company had revenue of $389.87 million during the quarter, compared to the consensus estimate of $381.45 million. Perimeter Solutions had a negative net margin of 44.86% and a positive return on equity of 19.15%.

Here are the key takeaways from Perimeter Solutions' conference call:

• Q3 adjusted EBITDA rose 20% to $223.5 million, while net sales declined 24% to $389.9 million. Adjusted EPS was $0.85, compared with $0.82 a year earlier.
• Fire Safety revenue and adjusted EBITDA each increased 14%, with strength across product lines and geographies. DLA foam deliveries resumed, and the segment reported a 64.5% adjusted EBITDA margin despite the federal contract’s first-year pricing step-down.
• Specialty Products revenue rose 84% and adjusted EBITDA more than doubled, with MMT and IMS contributing to the segment’s growth. Management said MMT’s installed-base aftermarket business and IMS’s replacement electronics fit its recurring-revenue strategy.
• PDI’s supply reliability remains below customer requirements, and the company is expanding production and bringing on alternate suppliers. Management expects elevated costs and suppressed PDI EBITDA during the transition, without specifying when results will normalize.
• Perimeter generated $150.4 million of Q3 free cash flow and ended the quarter at 2.7x net leverage, with about $316 million in total liquidity. The company said this leaves capacity for customer-focused investment and potential acquisitions.

Perimeter Solutions Stock Performance

Perimeter Solutions stock traded up $0.26 during mid-day trading on Thursday, reaching $28.36. 2,850,004 shares of the company's stock were exchanged, compared to its average volume of 1,301,838. The business's fifty day simple moving average is $29.12 and its 200 day simple moving average is $29.59. The company has a quick ratio of 0.93, a current ratio of 1.57 and a debt-to-equity ratio of 1.19. Perimeter Solutions has a one year low of $20.38 and a one year high of $38.17. The firm has a market capitalization of $4.64 billion, a PE ratio of -12.72 and a beta of 1.91.

Analyst Ratings Changes

A number of equities research analysts recently commented on the company. Zacks Research raised Perimeter Solutions from a "strong sell" rating to a "hold" rating in a research report on Thursday, October 15th. UBS Group cut their price objective on shares of Perimeter Solutions from $42.00 to $38.00 and set a "buy" rating on the stock in a report on Tuesday, September 29th. Wall Street Zen downgraded shares of Perimeter Solutions from a "buy" rating to a "hold" rating in a report on Sunday, July 12th. Weiss Ratings upgraded shares of Perimeter Solutions from a "sell (d)" rating to a "sell (d+)" rating in a research note on Monday, October 19th. Finally, JPMorgan Chase & Co. lowered their target price on shares of Perimeter Solutions from $45.00 to $40.00 and set an "overweight" rating for the company in a report on Tuesday, October 13th. Four equities research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average price target of $41.50.

Perimeter Solutions Company Profile

Perimeter Solutions, Inc NYSE: PRM is a specialty chemicals and fire-safety company that develops and supplies products used to prevent, control and suppress fires, as well as chemicals used in industrial applications. Its operations are organized primarily around fire-safety products and performance chemicals.

The company's fire-safety portfolio includes PHOS-CHEK-branded wildfire retardants, firefighting foams, gels and other suppression products. These solutions are used by government agencies, fire departments, aviation and industrial customers, and other organizations involved in wildfire response, emergency preparedness and fire protection.

Perimeter Solutions also produces phosphorus-based specialty chemicals, including phosphorus pentasulfide, which is used in applications such as lubricant additives and other industrial processes.

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