Perimeter Solutions, SA

Please note this call is being recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn today's program over to Seth Barker, Head of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining Perimeter Solutions' first quarter 2025 earnings call. Speaking on today's call are Haytham Corey, Chief Executive Officer, and Kyle Sable, Chief Financial Officer. We want to remind anyone who may be listening to a replay of this call that all statements made are as of today, May 8, 2025, and these statements have not been nor will they be updated subsequent to today's call. Also, today's call may contain forward-looking statements. These statements made today are based on management's current expectations, assumptions, and beliefs about our business and the environment in which we operate, and our actual results may materially differ from those expressed or implied on today's call. Please review our SEC filings, particularly any risk factors included in our filings, for a more complete discussion of factors that could impact our results. The company would also like to advise you that during the call we will be referring to non-GAAP financial measures, including adjusted EBITDA, adjusted EPS, and free cash flow. The reconciliation of and other information regarding these items can be found in our earnings press release and presentation, both of which will be available on our website and on the SEC's website. With that, I will turn the call over to Hatem Khoury, Chief Executive Officer.

Thank you, Seth, and good morning, everyone. We're pleased to report Perimeter's strong start to 2025. First quarter adjusted EBDA reached 18.1 million, reflecting solid execution of our operational value drivers, as well as fire activity in both North America and international markets. We accelerated capital deployment during the first quarter, investing $23 million across a range of priorities, including increased capital expenditures, our first product line acquisitions at IMS, and share repurchases. Before getting into the details on the quarter, I'll provide a summary of our strategy, offer context on our IMS acquisition, and give a brief operational update. After that, Kyle will walk through the core financial results and capital allocation in more detail. Starting on slide three with a summary of our strategy. Our goal is to fulfill our critical mission by providing our customers with high-quality products and exceptional service while delivering our investors private equity-like returns with the liquidity of the public market. Our strategy is built on three operational pillars. First, we seek to own exceptional businesses. These are typically niche market leaders that play critical roles in solving complex customer problems, qualities that support high returns on invested capital and durable earnings growth. Second, we rigorously apply our three operational value drivers to the businesses we own. We drive profitable new business, achieve continual productivity improvements, and provide increasing value to customers, which we share in through value-based pricing. And third, we operate our businesses in a highly decentralized manner. Decentralization is a principle we discussed extensively within Perimeter and which we're happy to discuss with investors today as the third pillar of our operating strategy. We believe our operational pillars will optimize our durable free cash flow. We then seek to maximize long-term per share equity value through a clear focus on the allocation of our capital, as well as the management of our capital structure. I'll now spend a moment on the importance of decentralization to our operating model. Perimeter currently consists of multiple business units. And we expect that number to grow through future acquisitions. Each of our business units operate independently with minimal integration at the corporate level. Our general managers have full autonomy to run their businesses and drive long-term performance. In turn, they're held accountable to deliver results across each of our three operational value drivers. And finally, they are incentivized to do so as we closely align compensation to outcomes. This decentralized approach accelerates and improves operational decision making by placing it in the hands of those closest to the customer. We believe that there is no substitute for empowered and incentivized managers focused on driving value creation via the rigorous implementation of our three operational value drivers. Our highly decentralized operating philosophy also supports our acquisition strategy. If a business meets our exceptional quality criteria, we believe we can drive value creation through our proven operational playbook and without relying on unproven synergies. Our recently acquired IMS business described in detail on slide four demonstrates this point well. IMS is a high quality platform where we see meaningful opportunity to apply our operational value drivers and deploy capital into targeted product line acquisitions to generate returns above our threshold. IMS produces printed circuit board centered components used in mission critical applications. These components are typically used in the repair and replacement aftermarket for larger, higher value systems. small in cost, but essential in function, and are well suited to our strategy of building durable, high margin, high return businesses. IMS's strategy has two critical components that differentiate it from a typical PCV manufacturer. First, IMS increasingly owns the intellectual property of the components it manufactures, both through developing production IP and owning the underlying designs, certifications, and specifications necessary to develop these components. Second, IMS is focused on highly flexible, short-run production. This enables IMS to own niche aftermarket components with smaller volumes, which larger manufacturers often struggle to service. The result of these two differentiating characteristics is that IMS is often the sole source provider of critical components into niche aftermarket applications. Our goal is to expand IMS's portfolio of proprietary components by acquisition. IMS completed its first add-on product line acquisitions in the first quarter for a total purchase price of $10 million. we anticipate deploying significant capital annually into add-on acquisitions at IMS or at expected IRRs, which exceed our return threshold based on our ability to apply our operational value driver playbook to these acquired product lines. Turning to recent operational developments on slide five. Wildfire activity in the early part of the North America fire season was elevated, including devastating wildfires in Southern California and activity across Texas, Oklahoma, Florida, and the Carolinas. This early season activity reinforces the critical importance of resource readiness. Finally, availability of firefighting assets not only improves response effectiveness, but also delivers a meaningful return on investment for government and communities, reducing long-term costs, protecting property and the environment, and most importantly, helping safeguard lives in the threatened communities. International markets also contributed positively to the quarter with a return to more typical fire activity levels in Australia and increased use of retardant across several international markets. Our suppressants product line faced a more difficult comparison in Q1 as it lacked a stronger prior year period due to the launch of our fluorine-free mil-spec products in late 2023. In our specialty products business, we experienced operational challenges at our US P2S5 manufacturing facility, which is operated by a third party via tolling arrangement. The extended Q1 plant outage, excuse me, weighed on EBDA for the segment. we are actively addressing the downtime issues with our tolling partner. With that, I'll turn the call over to Kyle for a more detailed review of our financials and capital allocations in the first quarter.