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Perimeter Solutions (PRM) 1 Aug 24 2024 Q2 Earnings call transcript

AInvestThursday, Aug 1, 2024 10:06 pm ET
1min read

Perimeter Solutions recently held its Second Quarter 2024 Earnings Call, providing insights into the company's strategic growth, operational excellence, and financial performance. The call was led by Haitham Khouri, Chief Executive Officer, and Kyle Sable, Chief Financial Officer, who shared updates on the company's key business segments and future outlook.

Strategic Growth and Operational Excellence

Perimeter Solutions' strategy is centered on delivering private equity-like returns with the liquidity of a public market. The company seeks to achieve this goal by owning, operating, and growing uniquely high-quality businesses with recurring and predictable revenue streams, long-term secular growth tailwinds, products that account for critical but small portions of larger value streams, significant free cash flow generation with high returns on tangible capital, and the potential for opportunistic consolidation. This strategic focus on operational excellence and value creation is evident in the company's financial results.

Financial Performance

The company's Fire Safety business experienced significant growth in the second quarter, with revenue increasing by 85% and adjusted EBITDA more than tripling year-over-year. This growth can be attributed to both internal and external factors, including the increasing use of aerial attack by customers, the conversion of airports to fluorine-free aircraft rescue foam, and the company's rigorous implementation of operational value drivers. The Specialty Products business also showed robust growth, with adjusted EBITDA roughly doubling in both the second quarter and first half of 2024.

Capital Allocation and M&A

Perimeter Solutions is actively seeking M&A targets that align with its operational value driver strategy and the five target economic criteria. The company expects to deploy all of its excess cash flow and incremental leverage capacity towards the highest expected IRR combination of M&A, share repurchases, and special dividends. This strategic focus on value creation through M&A is a testament to Perimeter Solutions' commitment to long-term growth and shareholder value.

Looking Ahead

Perimeter Solutions' financial performance in the second quarter underscores the company's operational excellence and strategic focus. As the company looks ahead, it remains committed to delivering value to its customers, driving productivity improvements, and pricing its products and services to reflect their unique value. With a clear focus on growth and value creation, Perimeter Solutions is well-positioned for continued success in the future.

In conclusion, Perimeter Solutions' Second Quarter 2024 Earnings Call provided a comprehensive overview of the company's strategic growth, operational excellence, and financial performance. The company's focus on operational value drivers, capital allocation, and strategic M&A positions it for continued success and value creation for its shareholders. As Perimeter Solutions moves forward, it remains committed to delivering on its mission of providing critical products and services to its customers, while generating sustainable, long-term growth and value for its stakeholders.

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