PRM

Image source: The Motley Fool. Friday, July 31, 2026 at 8:30 a.m. ET Head of Investor Relations - Seth Barker Chief Executive Officer - Haitham Khouri Chief Financial Officer - Kyle Sable Operator: Greetings. Welcome to Perimeter Solutions Second Quarter 2026 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I'll now turn the conference over to Seth Barker, Head of Investor Relations. Thank you. You may now begin. Seth Barker: Thank you, operator. Good morning, everyone, and thank you for joining Perimeter Solutions Second Quarter 2026 Earnings Call. Speaking on today's call are Haitham Khouri, 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, July 31, 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 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, 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 Khouri, Chief Executive Officer. Haitham Khouri: Thank you, Seth. Good morning, everyone. We're pleased to report second quarter adjusted EBITDA of $105.6 million, up 16% year-over-year and year-to-date adjusted EBITDA of $146.7 million, up 34% year-over-year. We're also excited to announce the acquisition of Monaco Enterprises for approximately $120 million in cash. Monaco designs and manufactures the fire alarm reporting and mass notification networks that are the installed standard on more than 200 U.S. military installations globally, where system compatibility requirements make Monaco the sole compatible supplier of spare parts, upgrades and expansions and support across its installed base. Monaco fits the economic criteria we consistently target in every business we acquire, and we will implement the same operational value driver playbook you've seen across our portfolio. With Monaco's addition, Perimeter now comprises 6 businesses across our 2 reporting segments, 3 in Fire Safety, our retardant business, which carries the Perimeter name; our suppressants business, Solberg; and Monaco, our new fire detection and notification business; and 3 businesses in Specialty Products, PDI, our P2S5-based lubricant additives business; MMT, our medical device manufacturing business; and IMS, our aftermarket electronics business. I'll now provide a summary of our strategy, followed by an operational update and then return to Monaco in more detail. After that, Kyle will walk through the quarter's financial results and capital allocation. 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 3 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 3 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. Third, we operate our businesses in a highly decentralized manner, granting our business unit managers full operating autonomy paired with the accountability to deliver results with a tightly aligned incentive structure for our managers to think and act like owners. We believe that these 3 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 now to our Fire Safety operations on Slide 4. Second quarter Fire Safety adjusted EBITDA increased 1%, while year-to-date adjusted EBITDA increased 11%. As Kyle will quantify shortly, 2 factors weighed on the second quarter. First, the 5% pricing step down baked into the first year of our federal retardant contract; and second, minimal foam deliveries to our U.S. federal customers as the DLA transitioned its ordering onto the vendor-managed inventory structure we implemented under the 5-year contract with a maximum value of $500 million that we announced last quarter. Excluding these 2 items, second quarter Fire Safety adjusted EBITDA grew at a double-digit rate. Both these dynamics improved in the third quarter. Foam deliveries to our federal customers resume and new pricing under our CAL FIRE agreement should offset the federal pricing step down. Most pertinent to our long-term fire safety earnings power are several encouraging developments from the first half of 2026. In Canada, we are supporting the country's first federally funded aerial firefighting fleet. The pan-Canadian aerial asset program backed by $316.7 million over 5 years, gives every province and territory access to a 10 aircraft national search fleet, including 4 retardant capable air tankers and extends retardant operations into provinces that have historically relied on other suppression methods. In fact, 2026 marks the first time in decades that the province of Ontario has used retardant, supported in this case by one of our mobile retardant bases. The program reflects a pattern we've observed for many years. Following periods of elevated fire activity, governments reassess the resources available to respond to future fire seasons. Australia transformed its aerial firefighting infrastructure after the 2019, 2020 bushfires, and France significantly enhanced its aerial resources after the particularly severe 2022 season. Both countries became meaningfully larger retardant customers following these investments. In Canada's case, the severe 2023 and 2025 fire seasons, the worst and second worst in the country's history, have prompted a similar investment cycle. While the impact this year is modest, we believe the program establishes a foundation for increased retardant use over time. We see similar dynamics emerging in other regions. Elevated fire activity, particularly in Europe, should support higher retardant use this year and more importantly, continued investment in aerial firefighting resources over the coming years. Beyond retardants, we continue to see attractive opportunities to expand our suppressants business. Our success in building new international distribution relationships, together with the ramp of our DLA contract in the second half of the year reflects growing customer investment in higher performance fire suppression technologies across a broad range of end markets. Taken together, these developments reinforce our expectation of solid long-term organic growth across our Fire Safety business. Turning now to our Specialty Products segment and starting with PDI. PDI's adjusted EBITDA declined year-over-year in the second quarter due primarily to continued production issues at the Sauget, Illinois P2S5 facility. This facility is operated by Flexsys, which is owned by One Rock Capital. On June 10, the Circuit Court of St. Clair County, Illinois entered an order appointing an independent receiver over the Sauget plant. In its order, the court made a series of findings that we believe validate the concerns we have raised on previous calls regarding the plant's performance since Flexsys was acquired. The court found the plant to be at risk of waste, loss, dissipation or impairment absent court-supervised intervention. As part of this finding, the court cited several safety lapses, including fires, at least one explosion, releases of highly poisonous H2S gas resulting in injuries as well as the storage of decaying P2S5 on site rather than proper disposal. These conditions developed under One Rock's ownership and control, and we believe it bears direct responsibility for the decisions that led to them. A court-appointed receiver is now in place with authority to manage Sauget's day-to-day operations, and we expect that oversight to bring a measure of stability that has been absent. Importantly, we are not waiting. We are taking concrete action to eliminate PDI's reliance on Flexsys and we'll provide further updates in due course. As we've promised repeatedly, we will do what's necessary to protect our customers, our employees and the long-term value of this business while enforcing our contractual rights to their full conclusion and holding One Rock accountable for its actions. Turning to MMT, our medical device manufacturing business. MMT continues to run ahead of our operating model with strong adjusted EBITDA growth in the second quarter versus the same period last year under prior ownership. As discussed on prior calls, while our pricing and productivity actions are driving immediate benefits, the most exciting value creation lever at MMT is the significant organic growth potential through profitable new business. We're investing behind MMT's innovation pipeline and meaningfully accelerating new product launches to capitalize on this growth opportunity. Finally, IMS, our aftermarket electronics business, also delivered a strong second quarter. Integration of the product lines we acquired in the fourth quarter is proceeding well, and we're applying our operational value drivers across each of them. We're optimistic about the earnings power of IMS's current portfolio, and we look forward to adding new product lines over time. Turning to M&A. Yesterday, we closed the acquisition of Monaco Enterprises for approximately $120 million in cash. As I referenced earlier, Monaco designs and manufactures the fire alarm reporting and mass notification networks that are the installed standard on more than 200 U.S. military installations globally. Monaco checks every box you look for in a Perimeter business. First, we target businesses that solve a critical complicated customer need. Monaco systems connect the hundreds of buildings on a typical DoD installation into a single base-wide fire and life safety dispatch and response network using proprietary communication protocols transmitted over dedicated hard-to-disrupt radio frequencies. These systems protect lives and mission-critical assets around the clock, and they're required by the codes that govern military construction. Second, we evaluate the solution's cost relative to its criticality. The cost of a Monaco system is miniscule relative to base construction and operating budgets, an important context when assessing the value Monaco delivers to its customers. Third, we target businesses that are leaders in niche markets. Monaco's market, network fire alarm reporting and mass notification for military installations is genuinely niche with highly specialized requirements, namely base wide radio networks built in military specifications and supported for decades after installation. A market with these characteristics is well suited to a focused leader. Fourth, we target businesses with sustainable differentiation. Within its niche, Monaco's competitive position is exceptionally strong. Its systems run on a proprietary communications protocol. So expanding or maintaining an installed network requires Monaco equipment and displacing Monaco means replacing an entire multimillion dollar base-wide system rather than winning a single order. Fifth and finally, we target businesses that possess recurring revenue, high returns on capital and opportunities for reinvestment and add-on positions. The vast majority of Monaco's revenue comes from proprietary products, often customized to DoD specifications. And with 50 years of operating history, more than 95% of Monaco's sales come from its existing installed base, spares, repairs, expansions, upgrade and support, creating an annuity-like aftermarket revenue stream. Putting these attributes together yields an attractive investment thesis. When a product needs to be replaced or a new building goes up on a base, the customer adds an incremental Monaco product for a few thousand dollars, a de minimis cost relative to the building and systems it protects and a small fraction of what replacing base-wide infrastructure would cost, which often runs into the millions. We expect to accelerate investment in Monaco in service, capacity and innovation and to earn the right to share and the resulting value creation. Monaco will operate under our decentralized model led by its existing management team. We're excited to welcome the Monaco team to Perimeter. With that, I'll turn the call over to Kyle to walk through the quarter's financial results and capital allocation. Kyle? Kyle Sable: Thanks, Haitham. Perimeter's Q2 2026 net sales increased 31% to $213.8 million, while adjusted EBITDA rose 16% to $105.6 million. For the quarter, we reported a net loss of $181.6 million or $1.11 per diluted share compared to a net loss of $32.2 million or $0.22 per diluted share in the second quarter of 2025. Adjusted net income increased to $59.6 million from $57.1 million, translating to adjusted diluted earnings per share of $0.35 versus $0.39 in the prior year quarter. In the first half, net sales rose 44% to $338.9 million, while adjusted EBITDA increased 34% to $146.7 million. Our first half net loss was $108.7 million or $0.69 per diluted share compared to net income of $24.5 million or $0.16 per diluted share in the prior year period. Adjusted net income increased to $68.6 million from $61.2 million last year, while adjusted diluted earnings per share remained constant at $0.41. Our consolidated results reflect the impact of the ongoing execution of our operational value drivers, continued secular tailwinds and our acquisition strategy. Moving into the details of Fire Safety. Revenue for the quarter rose 7% to $129.1 million, while adjusted EBITDA increased to $78.8 million from $77.7 million in the prior year period. First half revenue totaled $174.5 million, an increase of 11% year-over-year, while adjusted EBITDA increased to $97.5 million from $87.87 million in the prior year period. Fire Safety performance benefited from continued execution of our operational value drivers. Our strongest value driver contribution came from profitable new business, where we established new relationships with significant international Class B foam customers. These wins continue to broaden the reach of our suppressants business and position us well for future growth. The financial benefit of our value drivers efforts was partially offset by 2 temporary factors that we expect to moderate in the second half of the year. First, our first half reflected the pricing step down under our new U.S. federal government contract while capturing only a limited benefit from our recently signed CAL FIRE agreement. As fire activity shifts towards California during the second half, we expect the CAL FIRE contribution to offset a larger portion of the federal pricing impact. Second, sales to the Defense Logistics Agency were minimal during the quarter as we prepared for production under the $500 million contract awarded last quarter. We are expanding our production facility. We have developed customer-specific IT interchange and logistics capabilities, and we secured the necessary supply chain inputs to support this expansion. We expect deliveries under the new contract to begin ramping during the second half of this year, providing an incremental contribution through 2027 and 2028 as discussed in previous calls. Excluding the impact of these 2 factors, we believe Fire Safety EBITDA would have grown at a double-digit rate year-over-year. Beyond these quarter-specific dynamics, the underlying Fire Safety market continues to evolve broadly in line with our long-term expectations. We have frequently discussed the secular growth drivers supporting retardant demand, particularly increasing fire activity over time, combined with expanding aerial firefighting resources. Our second quarter volumes support that framing, growing year-over-year despite a mix of conditions across our geographies. The U.S. experienced stronger demand, supported by continued aggressive initial attack strategies and increased underlying activity, while Canadian activity was notably lower than the prior year. As is typically the case, change in acres burn did not translate directly into changes in our volumes. U.S. volumes increased by less than acres burned, while Canadian volumes declined by less than the reduction in fire activity. Similarly, strength in Europe offset slower activity from Asia-Pacific. The diversification of our geographic footprint continues to moderate these regional fluctuations and contributes to a more stable earnings profile over time. In the near term, having observed global fire activity within the normal range through the second quarter and into early third quarter, we believe the season is becoming more representative of a normal year. Conditions are currently in the normal range and volumes for the remainder of the year could still finish above or below normal, and we remain prepared to support our customers across the full range of potential outcomes. Overall, we continue to see the Fire Safety business progressing in line with our long-term expectations. Our operational value drivers continue to enhance the business while expanding firefighting demand and increasing geographic diversification reinforce the durability of our growth profile. We believe these structural trends position the segment to continue creating value over time. Turning now to our Specialty Products portfolio. Revenue from the quarter doubled from previous year to $84.7 million, while adjusted EBITDA increased to $26.8 million from $13.7 million in the prior year period. For the year-to-date period, revenue totaled $164.3 million, an increase of 113% year-over-year, while adjusted EBITDA rose to $49.3 million from $21.7 million last year. The year-over-year increase was driven primarily by contributions from recent acquisitions, particularly MMT. MMT provides a good example of how we seek to create value following an acquisition. The business continues to perform ahead of our underwriting model, supported by its large and growing installed base, which generates recurring aftermarket demand. Since acquiring MMT, we have invested behind research and development, new product introductions and productivity initiatives. We've put our operational value drivers into action through pricing updates that better reflect the value of MMT's highly engineered products and reengineering processes and investing in CapEx that supports productivity. While these initiatives remain in the early stages, we believe they establish a meaningfully runway for long-term earnings growth. PDI illustrates a different stage of that same value creation process. The business continued to make operational progress during the quarter, although the production disruption at the Flexsys facility discussed in prior quarters continue to weigh on near-term financial performance. As production capacity is restored during the second half of the year, we expect those impacts to diminish progressively. Importantly, the underlying business remains healthy, and we believe the operational improvements implemented over the past several quarters position PDI well as we enter 2027. At IMS, disciplined product line acquisitions continue to expand the business' opportunity set. During the quarter, IMS continued integrating intellectual property acquired through recent acquisitions while actively evaluating additional product lines that fit its strategy of extending equipment life cycles through proprietary replacement products. As the portfolio of proprietary products grows, so does the opportunity to apply our operational value drivers through pricing, productivity and profitable new business. We believe this combination provides a repeatable avenue for creating long-term value at IMS. Overall, the Specialty Products portfolio demonstrates that our operational value drivers are not specific to any one business, but rather a repeatable framework for creating value across a diverse portfolio of niche industrial companies. While each platform is at a different stage of its value creation journey, they share the same disciplined approach to operational execution, capital allocation and reinvestment. As we continue to expand the broader portfolio through acquisitions such as Monaco, we broadened the opportunity set to apply our value drivers framework across more products and solutions. Turning to our cash flow expectations on Slide 8. Our assumptions are unchanged and with minimal quarterly variation, second quarter results are consistent with those expectations. Our framework contemplates annual cash interest expense of approximately $75 million. And in the second quarter, cash interest expense was $19.6 million. We expect tax deductible depreciation and amortization in the range of $60 million to $65 million annually, and second quarter taxable depreciation and amortization was $11.7 million. We expect our cash tax rate to be approximately 20% or better over time. And in the second quarter, cash taxes paid were $7.7 million compared to $12.3 million in Q2 2025, primarily reflecting timing dynamics. We continue to expect annual capital expenditures of $30 million to $40 million. Capital expenditures in the second quarter were $12.7 million, bringing year-to-date spending broadly in line with our expectations. We have discussed previously, investments across the business, including new retardant bases, expanded suppressants production facility and productivity initiatives at MMT are expected to drive full year capital expenditures toward the upper end of our guidance range. Finally, we expect working capital investment of approximately 10% to 15% of revenue growth and working capital performance in the quarter was consistent with that framework, reflecting seasonal dynamics and the impact of recent acquisitions. Overall, the quarter tracks in line with our long-term assumptions. Moving to capital allocation on Slide 9. As Haitham mentioned, we completed the acquisition of Monaco Enterprises following quarter end, funding the transaction with cash on hand and borrowings under our existing credit facility. Monaco is another example of the type of business we believe fits our strategy, a mission-critical business with attractive competitive positioning and meaningful opportunities to create value through the application of our operational value drivers. It also expands Perimeter into a sixth distinct product platform, broadening the opportunity set over which we can deploy that playbook. Monaco will be reported in our Fire Safety segment. One of the advantages of the Perimeter operating model is it allows us to integrate acquisitions without disrupting what makes them successful. Our decentralized approach preserves the autonomy that keeps businesses closer to customers while aligning incentives around our operational value drivers and providing a consistent framework for accountability across the portfolio. We also continue to invest organically in our businesses through capital expenditures. These investments are focused on projects that enhance our ability to serve customers while driving productivity improvements and supporting profitable growth. As with all capital allocation decisions, we underwrite these investments to generate returns above our targeted threshold, and we continue to see an attractive pipeline of opportunities across the business. Looking forward, we have ample capital to deploy even after funding our organic investment pipeline. Once those capital needs are met, our primary focus remains M&A. Our acquisition framework remains consistent. We target businesses that provide a small but essential component within a broader solution to critical customer needs, operate in niche markets with sustainably differentiated solutions and exhibit characteristics such as recurring revenue, high returns on capital and opportunities for reinvestment in add-on acquisitions. Importantly, we believe value creation comes not from completing acquisitions, but from what happens after closing. Our operational value drivers provide a repeatable framework to improve businesses over time, allowing us to consistently create value across an expanding portfolio. From a capital standpoint, we retain significant flexibility. Even after the MMT and Monaco acquisitions, we remain modestly levered with meaningful capacity to continue deploying capital into attractive opportunities. We remain active in evaluating a robust pipeline of acquisition opportunities and are focused on deploying capital where we believe it can generate attractive long-term returns for shareholders. Turning to our capital structure. We maintain a disciplined and flexible capital structure comprised of long-dated fixed rate debt maturing in 2029 and 2034. Blended coupon rate is 5.6% across both tranches. Quarter end, we were approximately 3.1x net debt to LTM adjusted EBITDA, remaining below our target leverage level and preserving substantial financial flexibility. We also retained strong liquidity, including approximately $83 million of cash on the balance sheet and as of quarter end, a fully undrawn $200 million revolving credit facility. Following our acquisition of Monaco, our total liquidity between cash on hand and undrawn revolving credit facility capacity exceeds $150 million, which will increase over the course of the third quarter as we enter peak cash generation months for the company. This liquidity provides significant flexibility to continue investing in the business while pursuing M&A opportunities. We ended the quarter with approximately 163.7 million basic shares outstanding. Our second quarter demonstrates the strength of the model we have built. Earnings growth reflected contributions from our operational value drivers, favorable long-term demand trends across our businesses and the continued expansion of our portfolio through disciplined acquisitions. We continue to identify opportunities to apply our operational value drivers across the portfolio and remain focused on acquisitions that fit our strategy and further expand that opportunity set. We believe this combination of operational value drivers, growing end markets and disciplined capital allocation positions us to continue compounding earnings and shareholder value over time. With that, I'll turn the call back to the operator for Q&A. Operator: Ladies and gentleman, Haitham. You may please proceed here in line is live. Haitham Khouri: Thanks, operator. Good morning, folks. I'm sorry, there was a little glitch there as I was ending my remarks and Kyle was beginning his my very enthusiastic comments about how pumped we are about Monaco were repeated twice, which, by the way, is arguably not a bad thing because we are very pumped about Monaco, and I don't mind repeating it. Unfortunately, I did inadvertently talk over Kyle's opening remarks. The key point to just reiterate from there is our Q2 net sales increased 31% to $213.8 million. Our adjusted EBITDA rose 16% year-over-year to $105.6 million. A couple of other snippets got spoken over from Kyle, you can find those in our earnings press release. And with that, operator, back to you, and we'll take questions. Operator: [Operator Instructions] And our first question comes from the line of Tomo Sano with JPMorgan. Tomohiko Sano: On Fire Safety EBITDA margins, if we adjust for 2 specific headwinds you talk about, the EBITDA margins could have been north of 66%. And you talked about some improvement in third quarters. Could you walk us through the key drivers that should lift Fire Safety profitability from second quarter into back half? And then how you expect the cadence to evolve the quarter-by-quarter, please? Kyle Sable: Tomo, it's Kyle. Thanks for the question. I'll say yes, I think you have it exactly right. There were 2 large headwinds in Q2 that impacted the quarter that we expect to abate in the back half. Those 2 are the step-down in pricing under our new federal contract, the pause in sales to the Defense Logistics Agency. Each of those things had a material impact in Q2. Absent those, we would have been double-digit EBITDA growth. And exactly as you highlighted, that would have had a positive impact on both our EBITDA margins, and we expect those to be more in line with their historical averages in the back half of the year. Tomohiko Sano: Okay. On a follow-up, integration, acquisitions, Monaco, could you talk about the strategies for the talent retention and customer executions, if you could talk about the culture integrations as well. Haitham Khouri: Tomo, it's Haitham. Our stance on that is very consistent. We're typically buying exceptional businesses and those typically come with very talented management teams that got them there. Our goal is always to fully and deeply partner with those teams and retain them over the long term. Our hope is they fit into our decentralized operating culture and are attracted to our very high levels of autonomy, very high levels of accountability and very high levels of incentive alignment. And we hope we're fired up about taking a good company to great or a great company even greater with us high [ F3Ps ] application. And I very much hope and expect that's going to be the outcome with Monaco, which appears to have a truly excellent management team. Operator: Our next question is from the line of Josh Spector with UBS. Joshua Spector: I enjoyed you guys hammering home the acquisition comments. I'll start there with just -- I think the value driver of that acquisition is very clear. I think the piece which I'm just curious on is really, is there a volume opportunity in that business really at all? I think your kind of slide says it's the majority of the TAM. So like kind of expand beyond air bases into municipal or some other markets? Or is that kind of really not the strategy of that business? Haitham Khouri: Josh, so I would say industry growth is volumetrically in the low single digits. And we will -- we certainly expect to get that. We do think there is an opportunity to do materially better by driving B&B. Monaco is extremely strong today in the Air Force, which for obvious reasons, tends to have especially large sophisticated bases. There are significant expansion opportunities in other branches of the DoD, where Monaco is present today, but does not have the dominant market position they have with the Air Force. And then there are very interesting potential opportunities in sort of highly regulated government areas around the 3 main branches of the military. So combining low single-digit underlying industry growth with a meaningful new business opportunity, I think we can do very nicely here from a volumetric perspective. I'll emphasize our underwriting model, which, as always, suggests a well over 20% IRR doesn't assume any PNB. We typically don't assume P&D in our models. We run with low single-digit industry growth and any volumetric upside under our ownership is IRR upside. Joshua Spector: Okay. No, that makes sense. And I wanted to follow up on Fire Safety. I guess it's pretty clear and it's very helpful for you guys to get that comment to what growth would have been kind of ex those items. But on suppressants specifically, I guess, if I was modeling $30 million a quarter for that business, and let's say it was $10 million, I guess we'll figure that out in the queue later. Do you make up that $20 million in the back half? Or are we still at that $30 million rate, just giving examples of numbers. It sounded like the implementation wasn't immediate. So I'm not sure if some of that pushes into '27 or if you make that up in '26. Kyle Sable: Josh, it's Kyle. Great question. And let me see if I can add some more color to this. So the way this contract works is we have historic -- well, the way the relationship works, historically, we've had shorter-term sales, and that's what you see already in the run rate in 2025. This year, we continued in the first quarter to be operating on that PO to PO basis. As we signed this larger contract, there was a pause in that PO activity that also corresponded with us spending a good chunk of money and capital on getting ready to take a big step up. That was the slowdown that we experienced in Q2. As we look into the back half of the year, we're going to see a resumption of that activity and starting to ramp into the more substantial activity that we've outlined from the overall scope of the contract. So we will get a little bit of that lift back in the back half, and then you'll see the more substantial ramp as we enter 2027. Haitham Khouri: Josh, this is Haitham. Just to reiterate, and I think Kyle has done a nice job making this clear, but for the avoidance of doubt here. Q2 was tricky with our DoD foam sales in that we had essentially full run rate costs of everything we've put in place to service the contract, the vendor managed inventory system, the warehousing, the logistics, et cetera, the expanded facility, yet hardly any sales. And so from an EBITDA perspective, you lose a good amount of revenue, but you're run rating a good amount of cost. And we got caught in that in Q2. Sales resume the ramp in Q3, and therefore, that impact essentially falls away. Operator: Our next question is from the line of Will Gildea with CJS Securities. Will Gildea: So on the Monaco deal, 10.5x EBITDA multiple, I mean, that's pretty reasonable for a company generating 35% margin. So was it a competitive process? Just curious why the multiple wasn't somewhat higher. Haitham Khouri: It was a competitive process. We're very, very happy we prevailed and we're not in the business of asking people to make us pay more. So we're pretty happy with the outcome. Will Gildea: Yes. Fair enough. Congratulations on that. And then just record-breaking wildfires in Oregon as we speak. Should we think about these acres as more remote, low retardant usage similar to the Nebraska fires in Q1? Or should we think of these acres is more typical in terms of retardant deployment? Haitham Khouri: More typical. California, the Pacific Northwest, most of the Southwest is much more intensive retardant per acre burned or usage than some of the acres you saw burn in Florida and Georgia and Nebraska early in Q2. These are retardant heavy acres burn in Q3. Operator: Our next question is from the line of Dan Kutz with Morgan Stanley. Daniel Kutz: So I just wanted to ask a few clarifying questions on the updates from Canada. And then, I guess, maybe some follow-up questions that could maybe help us think through how we might quantify that opportunity. But just to kick it off, I wanted to clarify that I think you said there's 10 aircraft, 10 incremental aircraft that will be dedicated. 4 of them are retardant capable air tankers. Are the other 6 like tactical aircraft or other aircraft that are used in wildfire-fighting efforts that don't deploy retardant? Or are they retardant capable aircraft, but is not air tankers? And then I guess, on top of that, for the 4 air tankers, would you happen to be able to share or know specifically what type of air tanker they are because there's a -- there could be like a 10x difference in the retardant capacity of like a very large air tanker versus a single engine air tanker and then the large air tankers are somewhere in between. But yes, just the composition of those 10 aircraft and then the type of air tanker for the four, thanks. Haitham Khouri: Sure. So composition-wise, the other 6 are going to be a mix of air attacks,coopers, et cetera, essentially rotary wings or helicopters, typically non-retardant dropping aircraft, in some cases, to support retardant dropping aircraft. As far as the 4 retardant planes, these are genuine, by the way, brand-new build additions to the fleet, large air tankers with 3,000, 4,000 gallons of [ Pop ] capacity. So quite a meaningful long-term capacity expansion to the fleet. Daniel Kutz: Great. That's really helpful. And then, yes, I mean, the next question is around like trying to think through how much of an incremental opportunity this could be? And if you have a better way that you'd point us to think through this, please feel free, but a couple of ideas I have was just if I look back at just credit, this is an older report, but I think a couple of years ago, the U.S. had 20 exclusive use large and very large air tankers and then another 10 or 15 when needed plus the MAPS aircraft. And so if the U.S. and those 20 exclusive use, they kind of would contribute the lion's share of retardant deployment. So 4 aircraft in Canada could be pretty meaningful if you just use that U.S. baseline number. And then I guess the other data point that I thought was interesting is you'd mentioned that Australia after 2019, 2020 brushfires, they really increased their wildfire fighting capacity. I think I assume that Australia is a decent chunk of the rest of world revenue that you disclosed. And if you look at 2019, 2020 versus the subsequent 5 or 6 years, it kind of looks like your rest of world revenue has doubled. So between those 2 examples, would you say that either of those would be decent analogs for the incremental Canada opportunity? Or is there a different way that you might point us to helping think through that? Haitham Khouri: Let me take that in 2 chunks. I would say the addition of the 4 air tankers to the fleet could be a significant long-term driver. There are 30-something air tankers in service today globally, and those carry essentially 100% of our retardant. We have seen very nice growth in that fleet over the past several years, and we're seeing that growth actually meaningfully accelerate. So 4 air tankers in Canada is a 10-plus percent addition to the fleet, which you'll see over the next couple of years. We are working with Texas to meaningfully modernize their airbase infrastructure and actually build them one specific state-of-the-art Airbase, which is well underway, and you'll see in our capital expenditures and Texas plans to buy a fleet of several brand-new air tankers will be in addition to the fleet. We're seeing several U.S. states in the Pacific Northwest and otherwise order bespoke state-owned air tankers, which will be additions to the fleet. And then you see a lot of fleet additions in Europe with a new product from Airbus that got used this summer for the first time with our retardant with significant capacity. And so yes, the 4 air tankers in Canada are a meaningful addition to the fleet, and there are several other similar additions happening, and we expect that to potentially be a very material volumetric driver for us over the coming years. As you know, virtually every fire season, in fact, every fire season, we can drop more retardant than we do, but we are volume constrained during peak periods by a lack of air tankers. And therefore, these additions are very welcome from a safety of life and property perspective and will drive our business for sure. Your second question on Australia and France being analogs, yes, 100%. The consistency with which kind of events play out in new geographies is remarkably consistent. You get a severe fire season, you got a lot of political attention, you get significant capital allocated typically by federal or provincial authorities. They work with us in all cases. We build out the infrastructure for them. They buy the air tankers or lease the air tankers and a small market becomes a large market or a large market becomes a very large market. And we believe that is on the come in several areas building out infrastructure now. Again, Australia being a good example, Texas being an excellent example. and several others we haven't necessarily talked about where we are hard at work building out national infrastructures and working with them to get their hands on air tankers. Operator: We've reached the end of our question-and-answer session. I'll turn the floor back to Haitham for any closing remarks. Haitham Khouri: No, not at all. Josh, Dan, Tomo, Will, appreciate what you guys do for us very much. Thank you for the great questions. Thank you to our investors for their support, and we'll speak in 90 days. Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day. Before you buy stock in Perimeter Solutions, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Perimeter Solutions wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* Now, it’s worth noting Stock Advisor’s total average return is 953% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Perimeter Solutions (PRM) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Perimeter Solutions, Inc. PRM reported a net loss of $181.6 million or $1.11 per share for the second quarter of 2026 compared with a loss of $32.2 million or 22 cents reported a year ago.  Barring one-time items, adjusted earnings for the reported quarter were 35 cents per share compared with 39 cents a year ago. It missed the Zacks Consensus Estimate of 43 cents. The company posted revenues of $213.8 million, up around 31% year over year. It missed the Zacks Consensus Estimate of $220.3 million.  Adjusted EBITDA was $105.6 million, up 16% year over year, with a margin of 49% compared with 56% a year ago. Continued Value Driver execution and recent acquisitions supported second-quarter growth. Fire Safety delivered modest sales and adjusted EBITDA growth, while Specialty Products nearly doubled adjusted EBITDA and doubled revenues year over year. Perimeter Solutions, SA price-consensus-eps-surprise-chart | Perimeter Solutions, SA Quote Fire Safety's $129.1 million revenues rose 7% year over year while adjusted EBITDA increased 1% to $78.8 million. Segment adjusted EBITDA margin was about 61% compared with 65% a year ago. Specialty Products' $84.7 million in revenues increased 100%. Adjusted EBITDA of $26.8 million rose 96%, with segment margin of about 32%, flat year over year. The company ended the second quarter with $82.8 million in cash. Long-term debt, net, was $1.21 billion as of June 30, 2026.  Operating cash flow was an outflow of $89.6 million for the first six months of 2026 compared with an inflow of $20.9 million a year ago. The company invested $12.7 million in capital expenditures during the second quarter. Perimeter did not provide formal quarterly or full-year financial guidance with the second-quarter earnings release. The company highlighted continued Value Driver execution and portfolio expansion through acquisitions. On July 30, 2026, Perimeter acquired Monaco Enterprises for $120 million in cash, funded with cash on hand and existing credit facilities. Monaco is expected to contribute more than $11 million of annualized adjusted EBITDA and is included in the Fire Safety segment.  The Monaco acquisition adds proprietary, mission-critical life safety and emergency management systems for U.S. government facilities. Shares of Perimeter have gained 107.5% in the past year compared with the Zacks Chemical – Specialty industry’s 4.7% rise. Image Source: Zacks Investment Research PRM currently carries a ZacksbRank #3 (Hold). Some better-ranked stocks in the Basic Materials space are Almonty Industries Inc. ALM, Neo Performance Materials Inc. NOPMF and Skeena Resources Limited SKE. Almonty is expected to report second-quarter results on Aug. 13. The Zacks Consensus Estimate for ALM’s second-quarter earnings is pegged at 10 cents per share. It carries a Zacks Rank #2 (Buy) at present. NOPMF is slated to report second-quarter results on Aug. 11. The Zacks Consensus Estimate for earnings is pegged at 50 cents per share. NOPMF has a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Skeena Resources is expected to report second-quarter results on Aug. 13. The Zacks Consensus Estimate for SKE’s second-quarter loss is pegged at 11 cents per share. It currently carries a Zacks Rank #2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Perimeter Solutions, SA (PRM) : Free Stock Analysis Report Skeena Resources Limited (SKE) : Free Stock Analysis Report Almonty Industries Inc. (ALM) : Free Stock Analysis Report Neo Performance Materials Inc. (NOPMF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Perimeter Solutions (PRM) is back in focus after its Q2 2026 earnings release on July 31, which showed higher sales alongside a substantially larger net loss. Investors now have fresh numbers to reassess the stock. See our latest analysis for Perimeter Solutions. The latest Q2 2026 results land after a year in which Perimeter Solutions has seen a 90 day share price return of 21.31% and a 1 year total shareholder return of 108.33%. The stock is now trading at $33.25, and recent daily moves suggest momentum remains sensitive to changing views on its growth prospects and risks. If Perimeter Solutions’ recent swing in sentiment has you reassessing your watchlist, this is a useful time to see what else is moving through 19 top founder-led companies Perimeter Solutions’ share price has raced ahead of the past year’s returns, while analyst targets and intrinsic value estimates still sit meaningfully higher. Is the current $33.25 level already rich, or is fair value even further up the curve? Perimeter Solutions is trading at $33.25 while the most followed narrative pins fair value at about $43.33, which puts a spotlight on its long term contracts and earnings potential. Read the complete narrative. Want to see what sits behind that confidence in Perimeter Solutions? The narrative leans on rapid earnings expansion, wider margins and a future profit multiple below the sector. Curious which specific growth and profitability assumptions are doing the heavy lifting in that $43.33 fair value? Result: Fair Value of $43.33 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, the Perimeter Solutions story also depends on key contracts staying in place and on the successful integration of acquired Specialty Products businesses, which can both still go off track. Find out about the key risks to this Perimeter Solutions narrative. The first narrative leans on analyst targets and long term contracts to argue Perimeter Solutions is undervalued at $33.25 versus a fair value near $43.33. Yet the P/S ratio of 7.2x looks steep beside a fair ratio of 4.4x, the US Chemicals industry at 1.1x, and peers at 3.2x. Does that premium reflect quality, or does it build in extra valuation risk for new buyers? See what the numbers say about this price — find out in our valuation breakdown. Mixed messages in the Perimeter Solutions story right now. If you want to act while sentiment is still forming, weigh the 3 key rewards and 1 important warning sign for yourself. Do not stop your research with Perimeter Solutions. Use the Simply Wall Street Screener to spot other stocks that could fit your portfolio before the crowd does. Target potential mispricings by scanning for quality companies on attractive valuations through the 52 high quality undervalued stocks. Strengthen your income stream by focusing on companies with robust payouts using the 7 dividend fortresses. Prioritise stability and capital protection by filtering for companies that pass strict risk checks via the 82 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include PRM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Second quarter Fire Safety performance was impacted by a planned 5% pricing step-down in the federal retardant contract and a temporary pause in foam deliveries during a transition to vendor-managed inventory. The acquisition of Monaco Enterprises adds a sixth product platform, providing proprietary fire alarm and mass notification networks for over 200 U.S. military installations. Management attributes long-term growth in Fire Safety to a global pattern where severe fire seasons, like those in Canada and Europe, trigger multi-year government investment cycles in aerial firefighting infrastructure. Operational challenges at the Sauget P2S5 facility led to a court-appointed receiver, prompting a strategic move to eliminate reliance on the current supplier to protect the Specialty Products segment. The decentralized operating model remains a core pillar, granting business unit managers autonomy and accountability to drive productivity and value-based pricing across diverse niche markets. Growth in the Specialty Products segment was primarily driven by the MMT acquisition, which is outperforming underwriting models through new product launches and pricing updates. Management expects Fire Safety margins to return to historical averages in the second half of 2026 as CAL FIRE pricing offsets federal step-downs and foam deliveries resume. The $500 million DLA contract is expected to provide an incremental contribution through 2027 and 2028 as production facilities expand and logistics capabilities ramp up. Canada's new federally funded aerial fleet, including four new retardant-capable air tankers, establishes a foundation for increased long-term retardant demand in previously underserved provinces. The company maintains a robust M&A pipeline, targeting niche industrial businesses with high recurring revenue and sustainable differentiation to compound shareholder value. Capital expenditures for the full year are expected to trend toward the upper end of the $30 million to $40 million range due to investments in new retardant bases and productivity initiatives. A court-appointed receiver was installed at the Sauget plant following safety lapses and production issues under the ownership of Flexsys, a third-party supplier. The Monaco acquisition was funded with $120 million in cash and existing credit, maintaining a net debt to LTM adjusted EBITDA ratio of 3.1x, which is below the target leverage level. Management flagged that Q2 EBITDA was weighed down by full run-rate costs for the new DLA contract infrastructure despite minimal sales during the transition period. The company is actively working to modernize airbase infrastructure in Texas, including building a state-of-the-art base to support a new fleet of state-owned air tankers. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that the abatement of the federal pricing step-down and the resumption of DLA foam sales are the primary catalysts for margin normalization. The shift of fire activity toward California will allow the higher-margin CAL FIRE agreement to contribute more significantly to the mix. While the underwriting model assumes only low single-digit industry growth, management sees significant 'Profitable New Business' potential in non-Air Force DoD branches. Monaco's proprietary protocols create high switching costs, as displacing the system would require replacing entire multimillion-dollar base-wide infrastructures. The addition of four tankers in Canada represents a 10-plus percent increase to the global fleet, addressing a historical volume constraint during peak fire periods. Management noted that similar fleet expansions are occurring in Texas and Europe, which serves as a leading indicator for future volumetric growth.

Interested in Perimeter Solutions, SA? Here are five stocks we like better. Strong second-quarter performance: Perimeter Solutions reported net sales of $313.8 million, up 31% year over year, while adjusted EBITDA rose 16% to $105.6 million. Adjusted net income increased to $68.6 million, although adjusted diluted EPS remained $0.41. Fire Safety faced temporary pressures: A first-year federal contract pricing reduction and limited Defense Logistics Agency deliveries during a vendor-managed inventory transition constrained quarterly growth. Management expects deliveries to ramp in the second half of 2026, with a larger contribution beginning in 2027. Acquisitions are expanding growth: Specialty Products revenue doubled, driven largely by the MMT medical-device business, while the company completed its approximately $120 million acquisition of Monaco Enterprises. Monaco adds recurring, installed-base revenue from fire alarm and mass-notification systems used across more than 200 U.S. military installations. 2 gene editing stocks to keep on your 2024 watchlist Perimeter Solutions (NYSE:PRM) reported second-quarter 2026 adjusted EBITDA of $105.6 million, up 16% from a year earlier, as growth in its Specialty Products portfolio and acquisitions helped offset temporary pressures in Fire Safety. The company said adjusted net income increased to $68.6 million from $61.2 million, while adjusted diluted earnings per share was unchanged at $0.41. Chief Executive Officer Haitham Khouri said second-quarter net sales increased 31% to $313.8 million. Year-to-date adjusted EBITDA rose 34% to $146.7 million. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now The company also announced that it closed the acquisition of Monaco Enterprises for approximately $120 million in cash following the end of the quarter. Monaco designs and manufactures fire alarm reporting and mass-notification networks used at more than 200 U.S. military installations globally. Fire Safety revenue rose 7% year over year to $129.1 million in the second quarter, while adjusted EBITDA increased to $78.8 million from $77.7 million. For the first half, segment revenue grew 11% to $174.5 million and adjusted EBITDA increased to $97.5 million from $87.8 million. → Microsoft Just Flipped the AI Spending Narrative Overnight Khouri and Chief Financial Officer Kyle Sable attributed the relatively modest quarterly EBITDA increase to two temporary factors: a 5% pricing reduction in the first year of the company’s federal retardant contract and minimal foam deliveries to the Defense Logistics Agency during a transition to a vendor-managed inventory model. Sable said the company incurred costs associated with preparing for the Defense Logistics Agency contract, including facility expansion, IT and logistics capabilities, and supply-chain inputs, while sales remained limited during the quarter. He said deliveries are expected to begin ramping in the second half of 2026, with a more substantial contribution anticipated beginning in 2027. → Carrier Earnings Could Send the Stock to a New All-Time High “Absent those, we would’ve been double-digit EBITDA growth,” Sable said in response to an analyst question on the Fire Safety segment’s performance. Management expects the impact of the federal pricing step-down to be increasingly offset by contributions from its CAL FIRE agreement as fire activity shifts toward California in the second half. Khouri said recent fire activity in California, the Pacific Northwest and much of the Southwest represents “retardant-heavy acres,” compared with earlier-season fires in areas such as Florida, Georgia and Nebraska. Perimeter said fire-retardant demand in the U.S. was stronger year over year, supported by increased fire activity and aggressive initial-attack strategies. Canadian activity was lower than in the prior year, while strength in Europe offset slower conditions in Asia-Pacific. The company said global fire activity through the second quarter and early third quarter had been within a normal range, though full-year volumes could still finish above or below normal levels. Khouri highlighted Canada’s federally funded Pan-Canadian Aerial Asset Program, which is supported by C$316.7 million over five years and includes a national surge fleet of 10 aircraft, including four retardant-capable air tankers. He said the four tankers will be newly built large air tankers with 4,000-gallon capacity. The program has expanded access to aerial firefighting resources for provinces and territories, and Ontario used retardant in 2026 for the first time in decades, supported by one of Perimeter’s mobile retardant bases, according to Khouri. Management said the Canadian initiative could support long-term demand growth. Khouri noted that there are roughly 30 air tankers currently in service globally, carrying virtually all of the company’s retardant products. He also cited new air tanker activity in Texas, several U.S. states and Europe. “Virtually every fire season, in fact, every fire season, we can drop more retardant than we do,” Khouri said, adding that the company is constrained during peak periods by the availability of air tankers. Specialty Products revenue doubled from the prior-year quarter to $84.7 million, while adjusted EBITDA rose to $26.8 million from $13.7 million. Year-to-date revenue increased 113% to $164.3 million and adjusted EBITDA rose to $49.3 million from $21.7 million. The increase primarily reflected acquired businesses, particularly MMT, the company’s medical-device manufacturing operation. Perimeter said MMT continued to perform ahead of its underwriting model, supported by its installed base and recurring aftermarket demand. The company has invested in research and development, product launches, productivity projects and pricing actions at MMT. At PDI, Perimeter’s P2S5-based lubricant additives business, adjusted EBITDA declined year over year due largely to production disruptions at the Sauget, Illinois, facility operated by Flexsys. On June 10, the Circuit Court of St. Clair County, Illinois, appointed an independent receiver over the plant. Khouri said the court’s order cited safety lapses, including fires, at least one explosion, hydrogen sulfide gas releases that resulted in injuries, and the storage of decaying P2S5. Perimeter said it is taking steps to eliminate PDI’s reliance on Flexsys and expects the effects of capacity constraints to diminish progressively during the second half as production capacity is restored. IMS, Perimeter’s aftermarket electronics business, also posted a strong quarter, according to management. The company said integration of product lines acquired during the fourth quarter is progressing and that IMS continues to evaluate further product-line acquisitions. Monaco will be reported within the Fire Safety segment and becomes Perimeter’s sixth operating business. Khouri said more than 95% of Monaco’s sales come from its installed base through spare parts, repairs, expansions, upgrades and support. Monaco’s systems use proprietary communications protocols, meaning that maintaining or expanding an installed network requires Monaco equipment, management said. Khouri said Monaco has a particularly strong position with the U.S. Air Force and opportunities to expand within other Department of Defense branches and related regulated government markets. He said the company’s underwriting model assumes low-single-digit industry growth and does not include profitable-new-business assumptions. Perimeter funded the transaction with cash on hand and borrowings under its existing credit facility. At quarter-end, the company had approximately $83 million of cash, a fully undrawn $200 million revolving credit facility, and net debt of about 3.1 times last-12-month adjusted EBITDA. Following the Monaco acquisition, Perimeter said its liquidity exceeded $150 million. The company reiterated expectations for annual cash interest expense of about $75 million, capital expenditures of $30 million to $40 million, and a cash tax rate of approximately 20% or better over time. Management said full-year capital spending is expected to trend toward the upper end of its range as it invests in retardant bases, suppressant-production capacity and MMT productivity initiatives. Perimeter Solutions Ltd. (NYSE: PRM) is a global specialty chemicals company focused on delivering performance-driven solutions for the oil and gas, coatings, plastics, water treatment and packaging markets. Established as an independent publicly traded company in December 2019 following its spin-off from NewMarket Corporation, Perimeter Solutions has positioned itself as a leading provider of highly engineered chemical products designed to optimize upstream oil recovery, protect infrastructure and enhance the performance of industrial processes. The company's core product portfolio spans several key segments. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Perimeter Solutions Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Adjusted EBITDA: $105.6 million in Q2 2026, up 16% year-over-year; year-to-date adjusted EBITDA of $146.7 million, up 34%. Adjusted Net Income: Increased to $68.6 million from $61.2 million in the prior year period. Adjusted Diluted EPS: Remained constant at $0.41. Fire Safety Revenue: Rose 7% to $129.1 million for the quarter; first-half revenue totaled $174.5 million, up 11% year-over-year. Fire Safety Adjusted EBITDA: Increased to $78.8 million from $77.7 million in Q2 2025; first-half adjusted EBITDA rose to $97.5 million from $87.87 million. Specialty Products Revenue: Doubled from the previous year to $84.7 million in Q2; year-to-date revenue totaled $164.3 million, up 113%. Specialty Products Adjusted EBITDA: Increased to $26.8 million from $13.7 million in Q2 2025; year-to-date adjusted EBITDA rose to $49.3 million from $21.7 million. Cash Interest Expense: $19.6 million in Q2, with annual cash interest expense expected at approximately $75 million. Cash Taxes Paid: $7.7 million in Q2, compared to $12.3 million in Q2 2025. Capital Expenditures: $12.7 million in Q2, with annual expectations of $30 million to $40 million. Net Debt Leverage: Approximately 3.1 times net debt to LTM adjusted EBITDA at quarter end. Liquidity: Approximately $83 million cash on hand and a fully undrawn $200 million revolving credit facility at quarter end; total liquidity exceeds $150 million post-Monaco acquisition. Shares Outstanding: Approximately 163.7 million basic shares outstanding at quarter end. Warning! GuruFocus has detected 6 Warning Signs with PRM. Is PRM fairly valued? Test your thesis with our free DCF calculator. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Perimeter Solutions Inc (NYSE:PRM) reported strong Q2 2026 results with adjusted EBITDA of $105.6 million, up 16% year-over-year, and year-to-date adjusted EBITDA up 34%. The acquisition of Monocle Enterprises adds a highly defensible, niche market leader with over 95% recurring revenue from its installed base, enhancing the fire safety segment. Fire safety volumes grew year-over-year despite mixed conditions, supported by secular growth drivers like expanding aerial firefighting fleets in Canada, Europe, and the U.S. The Specialty Products segment, particularly MMP, continues to outperform underwriting models, with strong adjusted EBITDA growth and a robust pipeline of new product launches. Perimeter Solutions Inc (NYSE:PRM) maintains a strong balance sheet with net leverage at 3.1x, ample liquidity exceeding $150 million post-acquisition, and a clear capital allocation strategy focused on M&A. The company is taking concrete actions to resolve PDI's production issues, including court-appointed receiver oversight, which should stabilize operations and reduce reliance on Flexus. Fire safety adjusted EBITDA growth was only 1% in Q2, impacted by a 5% pricing step-down in the federal retardant contract and minimal foam deliveries to the DLA. PDI's adjusted EBITDA declined year-over-year due to ongoing production issues at the Flexus-operated facility, which have persisted for multiple quarters. The DLA contract ramp-up is slower than expected, with minimal sales in Q2 and a gradual recovery expected only in the second half of 2026, delaying potential revenue contributions. The company faces temporary cost pressures from maintaining full run-rate costs for the DLA contract without corresponding sales, negatively impacting Q2 EBITDA margins. Fire activity in Canada was notably lower than the prior year, leading to reduced volumes in that region, although partially offset by strength in the U.S. and Europe. The acquisition of Monocle Enterprises, while strategic, adds integration risks and increases leverage, though the company remains modestly levered. Q: On Fire Safety EBITDA margins, if we adjust for the two specific headwinds (the federal pricing step-down and the pause in DLA foam deliveries), could you walk us through the key drivers that should lift profitability from Q2 into the back half of the year?A: Kyle Sable (CFO) confirmed that the two large headwinds impacting Q2 were the step-down in pricing under the new federal contract and the pause in sales to the Defense Logistics Agency (DLA). He stated that absent these items, the company would have seen double-digit EBITDA growth and higher margins. He expects these headwinds to abate in the back half of the year, with margins returning to historical averages as DLA deliveries resume and the Cal Fire agreement offsets the federal pricing impact. Q: On the Monaco acquisition, is there a volume opportunity to expand beyond the current installed base, or is the strategy primarily focused on the existing annuity-like revenue stream?A: Haitham Khouri (CEO) stated that while the underlying industry growth is low single-digits, there is a significant opportunity to do better through profitable new business. He highlighted expansion opportunities in other branches of the DoD where Monaco is present but not dominant, as well as potential in highly regulated government areas. He emphasized that the underwriting model, which assumes over 20% IRR, does not include any new business wins, so any volumetric upside is pure upside to the model. Q: Regarding the DLA contract, if Q2 sales were minimal, will you make up that lost revenue in the back half of 2026, or does the ramp push more into 2027?A: Kyle Sable (CFO) explained that the Q2 pause was due to the transition from a PO-to-PO basis to the new vendor-managed inventory structure. He stated that activity will resume and ramp in the back half of the year, providing an incremental contribution, but the more substantial ramp will occur as the company enters 2027. Haitham Khouri (CEO) added that Q2 was tricky because the company had full run-rate costs in place to service the contract but hardly any sales, an impact that falls away as sales resume in Q3. Q: On the Monaco deal, the 10.5x multiple seems reasonable for a company with 35% margins. Was it a competitive process, and why wasn't the multiple higher?A: Haitham Khouri (CEO) confirmed that it was a competitive process and that the company is very happy it prevailed. He declined to speculate on why the multiple wasn't higher, simply stating they are not in the business of asking people to make them pay more. Q: Regarding the record-breaking wildfires in Oregon, should we think about these acres as remote with low retardant usage, or are they more typical in terms of retardant deployment?A: Haitham Khouri (CEO) clarified that the Oregon fires are more typical of high retardant usage. He contrasted them with the early-season fires in Florida, Georgia, and Nebraska, which were less retardant-intensive. The California, Pacific Northwest, and Southwest acres are much more intensive in retardant per acre, and these are running in Q3. Q: On the Pan-Canadian aerial asset program, can you clarify the composition of the 10 aircraft and the type of air tankers being added?A: Haitham Khouri (CEO) explained that the other six aircraft are a mix of air attack and hooper aircraft, which are typically non-retardant dropping aircraft that support the retardant carriers. The four retardant planes are brand new, large air tankers with 3,000 to 4,000 gallons of capacity, representing a meaningful long-term capacity expansion to the fleet. Q: How should we think about the incremental opportunity from the Canadian air tanker additions, and are Australia and France good analogs for the potential growth?A: Haitham Khouri (CEO) stated that the addition of four air tankers is a significant long-term driver, representing a 10%-plus addition to the global fleet of roughly 30-something air tankers. He noted that the fleet is growing and accelerating, with additions in Texas, the Pacific Northwest, and Europe. He confirmed that Australia and France are perfect analogs, as severe fire seasons consistently lead to government investment in aerial firefighting resources, which historically transforms small markets into large ones. Q: On the integration of Monaco, what is the strategy for talent retention and customer execution?A: Haitham Khouri (CEO) stated that the company's stance is consistent: they buy exceptional businesses with talented management teams and aim to fully partner with them for the long-term. He emphasized the decentralized operating culture, high levels of autonomy, accountability, and incentive alignment, and expressed confidence that Monaco's management team will be fired up about applying the company's operational value drivers to take a good company to great. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Second quarter Net Loss of $181.6M and Adjusted Net Income of $59.6M Continued Value Driver execution and recent acquisitions drove second quarter Adjusted EBITDA of $105.6M Second quarter Loss Per Diluted Share of $1.11 and Adjusted Earnings Per Diluted Share of $0.35 Acquired Monaco Enterprises, a leading provider of proprietary, mission-critical life safety and emergency management systems for U.S. government facilities CLAYTON, Mo., July 31, 2026 (GLOBE NEWSWIRE) -- Perimeter Solutions, Inc. (NYSE: PRM) (“Perimeter,” “Perimeter Solutions,” or the “Company”), a leading provider of industrial products and services that support critical and complex customer missions across a range of niche applications, today reported financial results for its second quarter ended June 30, 2026. Second Quarter 2026 Results Net sales increased 31% to $213.8 million in the second quarter, as compared to $162.6 million in the prior year quarter. Net loss during the second quarter was $181.6 million, or $1.11 loss per diluted share, as compared to a net loss of $32.2 million, or $0.22 loss per diluted share in the prior year quarter. Second quarter non-GAAP adjusted earnings per diluted share was $0.35, as compared to non-GAAP adjusted earnings per diluted share of $0.39 in the prior year quarter. Adjusted EBITDA increased 16% to $105.6 million in the second quarter, as compared to $91.3 million in the prior year quarter. Reconciliation tables for non-GAAP measures are available in the attached schedules. Year-to-Date 2026 Results Net sales increased 44% to $338.9 million during the year-to-date period, as compared to $234.7 million in the prior year period. Net loss during the year-to-date period was $108.7 million, or $0.69 loss per diluted share, as compared to net income of $24.5 million, or $0.16 earnings per diluted share in the prior year period. Non-GAAP adjusted earnings per diluted share was $0.41 for both the year-to-date period and the prior year period. Adjusted EBITDA increased 34% to $146.7 million in the year-to-date period, as compared to $109.4 million in the prior year period. Reconciliation tables for non-GAAP measures are available in the attached schedules. Capital Allocation On July 30, 2026, the Company acquired the outstanding capital stock of Monaco Enterprises, Inc. (“Monaco”) for a total cash purchase price, net of cash acquired of $120.0 million which was funded with cash on hand and proceeds from existing credit facilities. The Company expects Monaco to contribute more than $11 million of annualized Adjusted EBITDA, corresponding to a purchase multiple of approximately 10.5x enterprise value to Adjusted EBITDA. Monaco is included within the Fire Safety segment. EC M&A served as the exclusive financial adviser to Perimeter Solutions, while William Blair & Company, L.L.C. served as the exclusive adviser to Monaco Enterprises. The Company invested $12.7 million in capital expenditures during the quarter ended June 30, 2026. Conference Call and Webcast As previously announced, Perimeter Solutions management will hold a conference call at 8:30 a.m. ET on Friday, July 31, 2026 to discuss financial results for the second quarter 2026. The conference call can be accessed by dialing (877) 407-9764 (toll-free) or (201) 689-8551 (toll). The conference call will also be webcast simultaneously on Perimeter’s website (https://ir.perimeter-solutions.com), accessed under the Investor Relations page. The webcast link will be made available on the Company's website prior to the start of the call; go to the investor relations page of our website to the News & Events menu and click on “Events & Presentations.” A slide presentation will also be available for reference during the conference call; go to the investor relations page of our website to the News & Events menu and click on “Events & Presentations.” Following the live webcast, a replay will be available on the Company’s website. A telephonic replay will also be available approximately three hours after the call and can be accessed by dialing (877) 660-6853 (toll-free) or (201) 612-7415 (toll) and using Access ID “13758350”. The telephonic replay will be available until August 31, 2026 (11:59 p.m. ET). About Perimeter Solutions Perimeter Solutions (NYSE: PRM) is a leading provider of industrial products and services that support critical and complex customer missions across a range of niche applications. Perimeter’s focus on superior customer service, paired with our Value Driver-focused operating strategy, decentralized operating model, and focus on driving value via capital allocation and capital structure management, fulfills our dual mandate: to serve customers and create value for stockholders. Perimeter is comprised of two segments, Fire Safety, including fire retardants and fire suppressants, and Specialty Products, which currently spans lubricant additives, electronic and electro-mechanical components, and highly engineered machinery for the medical device industry. Perimeter expects to continue expanding its portfolio through organic growth and value creating acquisitions. Forward-looking Information This press release may contain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar references to future periods. Any such forward-looking statements are not guarantees of performance or results, and involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. Although Perimeter believes any forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect the Company’s actual financial results and cause them to differ materially from those anticipated in any forward-looking statements, including the risk factors described from time to time by us in our filings with the Securities and Exchange Commission (“SEC”), including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Stockholders, potential investors and other readers should consider these factors carefully in evaluating the forward-looking statements. Any forward-looking statement made by Perimeter in this press release speaks only as of the date on which it is made. Perimeter undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. The Company has not provided a GAAP reconciliation of Monaco’s expected contribution to annualized adjusted EBITDA, which is a forward-looking statement, in this press release as a result of the uncertainty regarding, and the potential variability of, reconciling items. Accordingly, a reconciliation of this non-GAAP measure to its corresponding GAAP equivalent is not available without unreasonable effort. However, it is important to note that material changes to reconciling items could have a significant effect on future GAAP results. SOURCE: Perimeter Solutions, Inc. CONTACT: [email protected] Non-GAAP Financial Metrics The Company provides non-GAAP financial measures for Adjusted EBITDA, Segment Adjusted EBITDA, Adjusted Net Income, and Adjusted Earnings Per Share data as supplemental information regarding the Company’s business performance. The Company believes that these non-GAAP financial measures are useful to investors because they provide investors with a better understanding of the Company’s past financial performance and future results. The Company’s management uses these non-GAAP financial measures when it internally evaluates the performance of its business and makes operating decisions, including internal operating budgeting, performance measurement, and discretionary compensation. Adjusted EBITDA and Segment Adjusted EBITDA Adjusted EBITDA and Segment Adjusted EBITDA are defined as income (loss) before income taxes plus net interest and other financing expenses, and depreciation and amortization, adjusted on a consistent basis for certain non-recurring, unusual or non-operational items. These items include (i) restructuring, (ii) acquisition related costs, (iii) founder advisory fee expenses, (iv) stock-based compensation expense, (v) purchase accounting impact - inventory step up and (vi) foreign currency loss (gain). To supplement the Company’s condensed consolidated financial statements presented in accordance with U.S. GAAP, Perimeter is providing a summary to show the computations of Adjusted EBITDA and Segment Adjusted EBITDA, which are non-GAAP measures used by the Company's management and by external users of Perimeter’s financial statements, such as debt and equity investors, commercial banks and others, to assess the Company’s operating performance as compared to that of other companies, without regard to financing methods, capital structure or historical cost basis. Adjusted EBITDA and Segment Adjusted EBITDA should not be considered an alternative to net income (loss), operating income (loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. Adjusted Net Income and Adjusted Earnings Per Share The computation of Adjusted Earnings Per Share (“Adjusted EPS”) is defined as Adjusted Net Income divided by adjusted diluted shares. Adjusted Net Income is defined as net income (loss) plus amortization, certain non-recurring, unusual or non-operational items, and the tax impact of these non-GAAP adjustments. These adjustments include (i) restructuring, (ii) acquisition related costs, (iii) founder advisory fee expenses, (iv) stock-based compensation expense, (v) purchase accounting impact - inventory step up and (vi) foreign currency loss (gain). Adjusted diluted shares is the weighted average diluted shares outstanding, adjusted by adding dilution for options excluded under U.S. GAAP due to a net loss, less dilution related to founders advisory fees. To supplement the Company’s condensed consolidated financial statements presented in accordance with U.S. GAAP, Perimeter is providing a summary to show the computations of Adjusted Net Income and Adjusted EPS, which are non-GAAP measures used by the Company's management and by external users of Perimeter’s financial statements, such as debt and equity investors, commercial banks and others, to assess the Company's operating performance as compared to that of other companies, without regard to financing methods, capital structure or historical cost basis. Adjusted EPS and Adjusted Net Income should not be considered alternatives to GAAP earnings (loss) per share (“GAAP EPS”), net income (loss), operating income (loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP.

Perimeter Solutions, SA (PRM) came out with quarterly earnings of $0.35 per share, missing the Zacks Consensus Estimate of $0.43 per share. This compares to earnings of $0.39 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -18.61%. A quarter ago, it was expected that this company would post earnings of $0.02 per share when it actually produced earnings of $0.06, delivering a surprise of +200%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Perimeter Solutions, SA, which belongs to the Zacks Chemical - Specialty industry, posted revenues of $213.81 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 2.95%. This compares to year-ago revenues of $162.64 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Perimeter Solutions, SA shares have added about 35.2% since the beginning of the year versus the S&P 500's gain of 8.7%. While Perimeter Solutions, SA has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Perimeter Solutions, SA was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.97 on $382.31 million in revenues for the coming quarter and $1.66 on $888.22 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Chemical - Specialty is currently in the top 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, International Flavors (IFF), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This ingredients producer for food, cosmetics and consumer products industries is expected to post quarterly earnings of $1.14 per share in its upcoming report, which represents a year-over-year change of -0.9%. The consensus EPS estimate for the quarter has been revised 2.5% lower over the last 30 days to the current level. International Flavors' revenues are expected to be $2.68 billion, down 2.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Perimeter Solutions, SA (PRM) : Free Stock Analysis Report International Flavors & Fragrances Inc. (IFF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CSW Industrials (CSW) came out with quarterly earnings of $3.84 per share, beating the Zacks Consensus Estimate of $3.66 per share. This compares to earnings of $2.85 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.92%. A quarter ago, it was expected that this industrial products and coatings maker would post earnings of $2.43 per share when it actually produced earnings of $3.14, delivering a surprise of +29.22%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. CSW Industrials, which belongs to the Zacks Chemical - Specialty industry, posted revenues of $350.65 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.96%. This compares to year-ago revenues of $263.65 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. CSW Industrials shares have lost about 7.1% since the beginning of the year versus the S&P 500's gain of 6.9%. While CSW Industrials has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for CSW Industrials was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.73 on $355.65 million in revenues for the coming quarter and $12.52 on $1.28 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Chemical - Specialty is currently in the top 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Perimeter Solutions, SA (PRM), has yet to report results for the quarter ended June 2026. The results are expected to be released on July 31. This company is expected to post quarterly earnings of $0.43 per share in its upcoming report, which represents a year-over-year change of +10.3%. The consensus EPS estimate for the quarter has been revised 10.1% lower over the last 30 days to the current level. Perimeter Solutions, SA's revenues are expected to be $220.31 million, up 35.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CSW Industrials, Inc. (CSW) : Free Stock Analysis Report Perimeter Solutions, SA (PRM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research