Perimeter Solutions, SA

Greetings and welcome to the Perimeter Solutions first quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Seth Barker, Head of Investor Relations. Thank you. You may begin.

Thank you, Operator. Good morning, everyone, and thank you for joining Perimeter Solutions' first quarter 2026 earnings call. Speaking on today's call are Hatem Khoury, 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 6th, 2026, and these statements have not been nor will they be updated subsequent to today's call. 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 differ materially 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, expectations, or assumptions. 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 EBITDA margin, LTM adjusted EBITDA, adjusted EPS, and free cash flow. The reconciliation of and other information regarding non-GAAP financial measures can be found in our earnings press release and presentation, both of which will be available on our website. With that, I will turn the call over to Haitham Khoury, Chief Executive Officer.

Haitham Khoury Thank you, Seth. Good morning, everyone. We're pleased to report a strong start to 2026 with first quarter adjusted EBDA of 41.2 million, reflecting both organic and acquired growth. Our Q1 results highlight two key points. First, our operational value driver strategy is translating directly to our bottom line. Second, we have built a durable and predictable earnings base. This predictability is driven by three things. Number one, new and improved contracting structures in both our retardant and suppressant businesses. Two, diversification within our fire safety segment due primarily to the growth in our suppressants and international retardant businesses. And three, organic and M&A-driven growth in our specialty product segment. As always, I will start with a summary of our strategy, then provide an operational update, after which Kyle will walk through the quarter's financial results and capital allocation in more detail. Starting 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 a public market. Our strategy is built on three key operational pillars. First, we own exceptional businesses. These are niche market leaders that play critical roles in solving complex customer problems, qualities that support high returns on invested capital and durable earnings power. 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, granting our business unit managers full operating autonomy with the accountability to deliver results with a tightly aligned incentive structure for our managers to think and act like owners. We believe that our operational pillars will optimize our durable long-term 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. Turning to our fire safety operations on slide four. Our Q1 fire safety results are a direct reflection of the two themes I highlighted in my opening. The successful implementation of our operational value drivers and the durability and predictability of our earnings. Starting with our value drivers. Fire safety's Q1 performance was driven by profitable new business. Our international retardant business was strong based on both activity in existing markets and footprint expansion in new and early stage markets. Our global suppressants business also delivered strong results based on both new wins and higher sales to our large install base. In addition to the profitable new business results, we delivered year over year productivity across our business units in fire safety and our internal investment initiatives translated into value-based pricing. Turning to the predictability of our earnings base. The resilience of our model was clear this quarter. We delivered year-over-year adjusted EBDA growth in fire safety despite lower North American retardant sales stemming from the tough comparisons of the Eaton and Palisades fires in Q1 2025. Moving to slide five, where we stay with fire safety, but step back from the first quarter. Last week, Perimeter Inc. two milestone fire safety contracts that will both grow our earnings and enhance their durability. First, suppressants. We've worked hard over the past several years to align our products and services with the specific needs of the Defense Logistics Agency, or the DLA. On the product side, we made significant R&D investments to develop products for the DLA's unique requirements and deployed capital to expand our Green Bay, Wisconsin facility to meet the DLA's demand and redundancy needs. At the same time, we also invested heavily in our service capabilities. including standing up a customized vendor-managed inventory service for the DLA and optimizing our packaging to meet the agency specifications. And we did all this with a U.S.-based manufacturing footprint that supports the DLA's need for reliable domestic supply. These efforts have driven a steady increase in our business with the DLA, specifically on behalf of the Navy, the Coast Guard, and the Army. In line with our efforts to establish mutually beneficial long-term contracting structures within our fire safety business, last week we entered into a five-year agreement to provide foams to the DLA with a maximum contract value of $500 million. Since we already provide suppressants to the DLA, we expect the incremental uplift from this agreement to be approximately two-thirds of the total contract value. We expect that the financial impact will begin in late 2026, ramp up through 2027, and reach a steady state run rate in 2028 and beyond. We're making further investments to support this ramp up, including further expansion of our Green Bay facility and a further increase to our staffing levels. These capital and operating investments directly support U.S. job creation. This contract is an excellent example of how our focus on understanding and meeting our customers' needs translates into profitable new business opportunities. Moving to retardants. Last week, we renewed our fire contract for a new five-year term. Given the time elapsed since the fire renewal, as well as the evolution of our offering on both the product and service sides, pricing on this contract increased relative to the previous CAL FIRE contract, bringing historically lower CAL FIRE pricing in line with our other large retardant customers. No state has more population exposed to wildfire risk than California. We are proud that CAL FIRE has once again trusted Perimeter to protect the lives, properties, and environment of their state. Finally, Let me comment on the national wildfire landscape. The formation of the U.S. Wildland Fire Service is an important development in the wildland firefighting space. Our existing federal contract already spans all of the federal wildfire fighting agencies that will be consolidated into this new service. And our contract will carry forward under this new organizational structure. We believe a more unified structure will improve coordination and streamline decision-making, supporting more effective wildfire response over time. Turning to the next slide, which covers our specialty product segment and starting with PDI. The first quarter of 2026 was the most challenging period of operational performance in the history of our Sauge, Illinois facility. the plant experienced substantial unplanned downtime. This disruption is the direct result of a sustained failure to provide the resources, personnel, and operational discipline required to run the facility safely and reliably, a failure that has persisted ever since One Rock Capital acquired Flexis. As the controlling owner of Flexis, One Rock is responsible for the strategic and financial decisions governing this facility. And One Rock bears the ultimate responsibility for driving performance to its lowest level on record. We are pursuing all available legal avenues to enforce our contractual rights. We have a proven track record of operating P2S5 facilities safely and reliably. And we are confident that upon assuming control of Sarge, we will restore operating discipline, safety standards, and production consistency for the benefit of the facility, its workers, and our customers. Our resolve in this matter is absolute. We are highlighting these operational failures publicly because our investors, our customers, and the workforce at Sarge deserve transparency. We have a duty to protect this critical facility from One Rock's sustained mismanagement, and we will actively manage the near-term impacts while pressing our legal rights to their full conclusion. In contrast to Flexis' performance, we're proud of how Perimeter's PDI team has performed. Despite the greatest operational headwind the business has ever experienced, our team blew revenue and adjusted EBITDA PDI slightly year over year. This result speaks to the power of the operational value driver model and highlights our team's ability to fight through obstacles and deliver results irrespective of the external environment. Turning to MMT, integration is proceeding smoothly and we are making tangible progress across each of our operational value drivers. A key advantage of bringing MMT into Perimeter's forever hold structure is that it immediately unlocks significant new capital and resources for the MMT team. We are actively deploying these resources to implement our value drivers and further accelerate MMT's business. On profitable new business, this capital is directly supporting the MMT team's innovation pipeline. As a result, new product development has accelerated meaningfully, with expected product launches at MMT stepping up from two in 2025 to nine in 2026. On productivity, we are putting these resources to work to eliminate manufacturing bottlenecks and maximize throughput, driving permanent improvements to MMT's cost structure. And on pricing, we are applying our disciplined, value-based approach. By combining our pricing frameworks with the MMT team's deep product expertise and strong customer relationships, we are ensuring that pricing fully reflects the exceptional value MMT delivers to its customers. Just as important as the operating model is the team. Cultural alignment has been excellent. MMT leadership shares our approach to value creation, and our partnership is translating directly into performance. MMT is performing very well early in our ownership period. We see strong potential for upside as we back the MMT team and fully deploy our operating model. Turning finally to IMS. Similar to MMT, IMS's acquisitions benefit from the resources we immediately make available to maximize the potential and value of these acquired product lines. Given the product lines IMS acquires are often orphaned or underinvested in prior to acquisition, the benefits of our forever old structure can be particularly pronounced at IMS. The IMS team is focused on systematically applying our operational value drivers across the product line acquisitions completed in 2025. We are encouraged by our progress and look forward to further investing in these acquired products and to closing future product line acquisitions. In closing, our disciplined Operational Value Driver Strategy is delivering strong financial performance across both of our segments, while our commercial and contracting initiatives are driving durable and predictable long-term earnings. With that, I'll turn the call over to Kyle to walk through the financials in more details. Kyle? Thanks, Ethan.