Perimeter Solutions, Sa ((PRM)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Perimeter Solutions, SA, revealed a generally positive sentiment, underscored by remarkable financial achievements and strategic initiatives. The company reported significant growth in EBITDA, successful mergers and acquisitions, and a robust share repurchase program. However, challenges were noted, particularly in the areas of increased cash tax payments and higher capital expenditures. The operational response to Southern California wildfires demonstrated the company’s strength but also highlighted the need for additional resources.
Significant Growth in Adjusted EBITDA
Perimeter Solutions reported a substantial increase in consolidated adjusted EBITDA, which doubled from $141 million in 2021 to $280 million in 2024. This impressive growth represents a three-year compound annual growth rate (CAGR) of 26%, showcasing the company’s strong financial trajectory.
Fire Safety Segment Performance
The fire safety segment experienced a remarkable performance, with fourth-quarter revenue increasing by 72% to $60.7 million and full-year revenue growing by 93% to $436.3 million. Adjusted EBITDA for this segment rose by 289% in Q4 and 215% for the full year, reflecting the segment’s critical contribution to the company’s overall success.
Successful M&A Activity
In a strategic move, Perimeter Solutions acquired Intelligent Manufacturing Solutions for $33 million, expecting to achieve synergies in the printed circuit board (PCB) market. This acquisition is anticipated to bolster the company’s market position and drive future growth.
Strong Share Repurchase Program
The company engaged in a robust share repurchase program, buying back approximately 3 million shares in 2024 at an average price of $4.81. This program yielded an approximate 160% return on investment, reflecting the company’s commitment to delivering strong shareholder value.
Increased Cash Tax Payments
One of the challenges highlighted during the earnings call was the increase in cash paid for income taxes, which rose to $74.6 million for the full year. This increase impacted the company’s cash flow, presenting a financial challenge amidst its broader growth story.
High CapEx
Capital expenditures for Perimeter Solutions increased to between $15 million and $20 million annually. This rise indicates the company’s higher spending to support its ongoing business growth and expansion efforts.
Impact of Southern California Wildfires
While the financial impact of the Southern California wildfires was modest relative to the company’s full-year earnings, the incident required a significant operational response and resources. This highlighted both the company’s operational strength and the ongoing need for increased resources to handle such events.
Forward-Looking Guidance
Looking ahead, Perimeter Solutions is focused on continuing its strategic growth through various initiatives. CEO Haitham Khouri emphasized the company’s commitment to increasing normalized earnings power via an operational value driver strategy. This involves focusing on profitable new business, productivity improvements, and value-based pricing. The company plans to allocate capital towards high-return internal reinvestments, mergers and acquisitions, share repurchases, and special dividends, aiming for private equity-like returns with the liquidity of a public market.
In summary, Perimeter Solutions’ earnings call conveyed a positive outlook, driven by strong financial performance and strategic initiatives. Key takeaways include significant growth in EBITDA, robust performance in the fire safety segment, and strategic acquisitions. While challenges such as increased cash tax payments and high capital expenditures were noted, the company’s forward-looking strategy suggests continued growth and strong shareholder returns.