Perimeter Solutions Inc (PRM) 2023 Q2 法說會逐字稿

Ladies and gentlemen, good morning and welcome to the Perimeter Solutions Second Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

女士們、先生們，早上好，歡迎參加 Perimeter Solutions 2023 年第二季度收益電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Seth Barker, Head of Investor Relations. Please go ahead.

現在我很高興向您介紹主持人，投資者關係主管塞思·巴克(Seth Barker)。請繼續。

Thank you, operator. Good morning, everyone, and thank you for joining Perimeter Solutions Second Quarter 2023 Earnings Call. Speaking on today's call are Haitham Khouri, Chief Executive Officer; and Chuck Kropp, Chief Financial Officer.

謝謝你，接線員。大家早上好，感謝您參加 Perimeter Solutions 2023 年第二季度收益電話會議。首席執行官 Haitham Khouri 在今天的電話會議上發言。和首席財務官查克·克羅普(Chuck Kropp)。

We want to remind anyone who may be listening to a replay of this call that all statements made are as of today, August 3, 2023, and these statements have not been nor will they be updated subsequent to today's call.

我們想提醒任何可能正在收聽本次電話會議重播的人，所有聲明均截至今天（2023 年 8 月 3 日），並且這些聲明在今天的電話會議之後尚未也不會更新。

Also, today's call may contain forward-looking statements. These statements made today are based on management's current expectations, assumptions and beliefs about our business and the environment in which we operate, and our actual results may materially differ from those expressed or implied on today's call. Please review our SEC filings for a more complete discussion of factors that could impact our results.

此外，今天的電話會議可能包含前瞻性陳述。今天發表的這些聲明基於管理層當前對我們的業務和運營環境的預期、假設和信念，我們的實際結果可能與今天電話會議中明示或暗示的結果存在重大差異。請查看我們向 SEC 提交的文件，以更完整地討論可能影響我們結果的因素。

The company would also like to advise you that during the call, we will be referring to non-GAAP financial measures, including EBITDA. The reconciliation of and other information regarding these items can be found in our earnings press release and presentation, both of which will be available on our website and on the SEC's website.

該公司還想提醒您，在電話會議中，我們將提及非 GAAP 財務指標，包括 EBITDA。有關這些項目的核對和其他信息可以在我們的收益新聞稿和演示文稿中找到，這兩者都可以在我們的網站和 SEC 的網站上找到。

With that, I will turn the call over to Haitham Khouri, Chief Executive Officer.

接下來，我將把電話轉給首席執行官 Haitham Khouri。

Thank you, Seth. Good morning, everyone. Thank you for joining us. I'll start with summary comments on our strategy, then discuss our financial performance and capital allocation before turning the call over to Chuck.

謝謝你，賽斯。大家，早安。感謝您加入我們。我將首先對我們的戰略進行總結評論，然後討論我們的財務業績和資本配置，然後再將電話轉給查克。

Starting with our strategy on Slide 3. Our goal is to deliver private equity-like returns with the liquidity of a public market. We plan to attain this goal by owning, operating and growing uniquely high-quality businesses.

從幻燈片 3 中的策略開始。我們的目標是利用公開市場的流動性提供類似私募股權的回報。我們計劃通過擁有、經營和發展獨特的高質量企業來實現這一目標。

We define uniquely high-quality businesses through the following 5 very specific economic criteria: one, recurring and predictable revenue streams; two, long-term secular growth tailwinds; three, products that account for critical but small portions of larger value streams; four, significant free cash flow generation with high returns on tangible capital; and five, the potential for opportunistic consolidation. We believe that these 5 economic criteria are present at our current businesses, and we use these criteria to evaluate potential new acquisitions.

我們通過以下5個非常具體的經濟標準來定義獨特的高質量業務：一、經常性和可預測的收入流；二、長期長期增長順風；第三，在較大價值流中佔關鍵但小部分的產品；四、可觀的自由現金流產生，有形資本回報率高；第五，機會性整合的潛力。我們相信這 5 項經濟標準存在於我們當前的業務中，並且我們使用這些標準來評估潛在的新收購。

As described on Slide 4, we seek to drive long-term equity value creation via consistent improvement in our 3 operational value drivers, which are: profitable new business, continual productivity improvements and pricing to reflect the value we provide. In addition to our 3 operational value drivers, we seek to maximize equity value creation through a clear focus on the allocation of our capital as well as the management of our capital structure.

如幻燈片4 中所述，我們尋求通過持續改進3 個運營價值驅動因素來推動長期股權價值創造，這3 個驅動因素是：盈利的新業務、持續的生產力提高以及反映我們提供的價值的定價。除了我們的三個運營價值驅動因素之外，我們還尋求通過明確關注資本配置和資本結構管理來最大化股權價值創造。

Turning to our financial results for the second quarter, starting with Fire Safety. As we've noted in the past, while we expect predictable long-term growth in our Fire Safety business, we also expect an element of quarterly and annual variability tied primarily to the severity of the North American fire season.

轉向我們第二季度的財務業績，首先是消防安全。正如我們過去所指出的，雖然我們預計消防安全業務將實現可預測的長期增長，但我們也預計季度和年度的變化因素主要與北美火災季節的嚴重程度有關。

On our first quarter call, we observed that this past winter and spring were particularly wet in some of the most fire-prone regions of the United States, and therefore, that the 2023 fire season would likely experience a delayed start. This expectation materialized. As of the end of Q2, year-to-date, U.S. acres burned ex Alaska were down 70% year-over-year and more than 50% below their 10-year average. The very mild early U.S. fire season is reflected in our first half Fire Safety results, where second quarter and year-to-date adjusted EBITDA decreased 32% and 37%, respectively.

在第一季度電話會議中，我們觀察到，美國一些最容易發生火災的地區去年冬季和春季特別潮濕，因此 2023 年火災季節可能會延遲開始。這個期望實現了。截至今年第二季度末，美國除阿拉斯加以外的燒毀面積同比下降 70%，比 10 年平均水平低 50% 以上。我們上半年的消防安全業績反映了美國早期火災季節非常溫和，第二季度和年初至今的調整後 EBITDA 分別下降了 32% 和 37%。

Fire Safety's results significantly outperformed the 70% decline in the U.S. acres burned ex Alaska for 3 primary reasons. First, our U.S. retardant business benefited from ongoing productivity and value-based pricing initiatives. Second, our international retardant results were strong with the second quarter particularly active in Canada. And third, our global suppressants business also delivered very strong results with significant year-over-year revenue growth and margin expansion.

消防安全部門的業績顯著優於美國阿拉斯加地區被燒毀面積 70% 的下降，原因有 3 個主要原因。首先，我們的美國阻燃劑業務受益於持續的生產力和基於價值的定價舉措。其次，我們的國際阻燃劑業績強勁，第二季度在加拿大尤其活躍。第三，我們的全球抑製劑業務也取得了非常強勁的業績，收入同比大幅增長，利潤率擴大。

We've commented previously on the solid organic revenue and profit growth in our international retardant markets. We're again experiencing excellent results here in 2023 with international retardant revenue more than doubling year-over-year in the first half and adjusted EBITDA posting excellent growth as well. We expect solid revenue growth and consistent margin expansion to continue in our international retardant markets going forward.

我們之前曾評論過國際阻燃劑市場的穩健有機收入和利潤增長。 2023 年，我們再次取得了優異的業績，上半年國際阻燃劑收入同比增長了一倍多，調整後的 EBITDA 也實現了出色的增長。我們預計未來國際阻燃劑市場將繼續實現穩健的收入增長和持續的利潤增長。

Let me also take a moment to discuss the performance of our global suppressants business. While we won't make a habit of breaking out suppressants results, I would like to highlight our progress over the past 18 months in order to provide another example of how our operating strategy is impacting our business' financial performance.

我還想花點時間討論一下我們全球抑製劑業務的業績。雖然我們不會養成公佈抑製劑結果的習慣，但我想強調一下我們在過去 18 個月中取得的進展，以便提供另一個例子來說明我們的運營策略如何影響我們業務的財務業績。

In 2021, our suppressants business delivered an adjusted EBITDA margin in the mid-teens. In the first half of 2023, our suppressants business delivered adjusted EBITDA margin in the low 30s. We expect our full year 2023 suppressants adjusted EBITDA margin to be in line with, if not slightly above, our low 30s first half margins.

2021 年，我們的抑製劑業務調整後的 EBITDA 利潤率達到了十幾歲。 2023 年上半年，我們的抑製劑業務調整後 EBITDA 利潤率在 30 左右。我們預計 2023 年全年經抑製劑調整後的 EBITDA 利潤率將與我們上半年 30 年代的低利潤率保持一致（如果不是略高於）。

This near doubling of sustainable margins over an 18-month period, coupled with an organic revenue CAGR well into the double digits, reflects strong progress by our suppressants business unit leaders in implementing all 3 aspects of our 3Ps operating model: first, driving profitable new business primarily through our market-leading fluorine-free foam offerings; second, making solid progress on our productivity initiatives; and third, pricing our products and services to more accurately reflect the value they provide our customers.

18 個月內可持續利潤率幾乎翻了一番，加上有機收入複合年增長率達到兩位數，反映出我們的抑製劑業務部門領導者在實施3P 運營模式的所有3 個方面取得了巨大進展：首先，推動盈利的新業務主要通過我們市場領先的無氟泡沫產品開展業務；二是生產力工作紮實推進。第三，對我們的產品和服務進行定價，以更準確地反映它們為客戶提供的價值。

Turning now to Specialty Products. As evidenced by the fact that our Q2 sales didn't improve versus Q1 and were down notably versus the prior year second quarter, the inventory destock activity that commenced in late 2022 persisted throughout the first half of 2023. Despite weak end-market demand, we believe that pricing and market share in our Specialty Products business remained solid in the first half of this year.

現在轉向特色產品。我們第二季度的銷售額與第一季度相比沒有改善，並且與去年第二季度相比顯著下降，這一事實證明，2022 年末開始的庫存去庫存活動在2023 年上半年持續存在。儘管終端市場需求疲軟，但我們相信，今年上半年我們的特種產品業務的定價和市場份額保持穩定。

As I mentioned on the Q1 call, while it's difficult to predict precisely when inventory destocks will abate, they are definitionally temporary in nature and should end when channel inventories are depleted, which we believe will inevitably occur in this case as well.

正如我在第一季度電話會議上提到的，雖然很難準確預測庫存去庫存何時會減弱，但庫存去庫存本質上是暫時的，應該在渠道庫存耗盡時結束，我們認為在這種情況下也將不可避免地發生這種情況。

Before moving away from our operating results, let me make a summary comment reflecting on our first 18-or-so months as a public company. In summary, we are very confident in our 3Ps operating strategy and believe that we are driving significant improvement across each of our business lines through this operating strategy. The results are very clear in suppressants. The results are also very clear in our international retardant markets. The results are clear in Specialty Products when comparing 2022 to 2021, both of which we believe to be roughly similar market demand years.

在談論我們的經營業績之前，讓我對我們作為一家上市公司的頭 18 個月左右的時間做一個總結評論。總而言之，我們對 3P 運營策略非常有信心，並相信通過這一運營策略，我們正在推動各業務線的顯著改進。抑製劑的結果非常明顯。在我們的國際阻燃劑市場上，結果也非常明顯。比較 2022 年和 2021 年，特種產品的結果很明顯，我們認為這兩個年份的市場需求大致相似。

As I just discussed, the soft chemicals end market is temporarily obscuring the improvement so far this year. The results are not yet clear to investors in our retardant business. This is primarily because our first couple of wildfire seasons have been very mild with 2022, U.S. acres burned ex Alaska down 36% year-over-year and first half 2023 acres burned down a further 70%. That's it.

正如我剛才所討論的，軟化學品終端市場暫時掩蓋了今年迄今為止的改善。我們阻燃劑業務的投資者尚不清楚結果。這主要是因為 2022 年前幾個野火季節非常溫和，除阿拉斯加以外的美國燒毀面積同比減少了 36%，2023 年上半年燒毀面積進一步減少了 70%。就是這樣。

With everything we've learned over the past 18 months, we feel strongly that our retardant business fits our long-term criteria for businesses we want to own and is a business in which our value-creation playbook applies. We feel excellent about the underlying improvement in our retardant business, and we are confident that this improvement will be visible to investors in a more normal fire season.

憑藉過去 18 個月中我們學到的一切，我們強烈認為我們的阻燃劑業務符合我們想要擁有的企業的長期標準，並且是我們的價值創造策略適用的業務。我們對阻燃劑業務的根本改善感到非常滿意，並且我們相信，在更正常的火災季節，投資者將看到這種改善。

Turning now to cash and capital allocation. We repurchased approximately 4 million shares in the second quarter at an average purchase price of $6.58. We have approximately $71.6 million remaining on our existing repurchase authorization, and we ended the second quarter with approximately $22 million of cash on our balance sheet.

現在轉向現金和資本配置。我們在第二季度以 6.58 美元的平均購買價格回購了約 400 萬股股票。我們現有的回購授權還剩大約 7160 萬美元，第二季度結束時，我們的資產負債表上還有大約 2200 萬美元的現金。

Turning to M&A. Over the past 12 to 18 months, capital markets have been challenging and overall M&A activity has been tepid. This challenging market backdrop, combined with the consecutive mild fire seasons over the same time frame, have impacted our M&A efforts. However, we believe that slow M&A markets and soft fire seasons are transitory phenomena.

轉向併購。過去12至18個月，資本市場充滿挑戰，整體併購活動不溫不火。這種充滿挑戰的市場背景，加上同一時期連續出現的溫和火災季節，影響了我們的併購工作。然而，我們認為併購市場緩慢和淡季只是暫時現象。

In the meantime, we are honing our operational playbook and building our M&A pipeline. We are confident that we will eventually acquire the right business where our 3Ps playbook applies, and therefore, where we expect to drive improvements in line with what we've delivered at our different businesses so far at Perimeter. M&A remains a key part of our long-term value-creation playbook.

與此同時，我們正在完善我們的運營策略並建立我們的併購渠道。我們相信，我們最終將獲得適用我們的 3P 策略的正確業務，因此，我們期望根據 Perimeter 迄今為止在不同業務中所交付的內容來推動改進。併購仍然是我們長期價值創造策略的關鍵部分。

Between our available cash balance and the significant free cash flow we expect to generate in the second half of 2023, which Chuck will touch on here shortly, we believe that we're well positioned to take advantage of any potential compelling capital allocation opportunities that might arise, including potential acquisitions, significant share repurchases or otherwise.

在我們的可用現金餘額和我們預計在2023 年下半年產生的大量自由現金流之間（查克將很快在這裡談到），我們相信我們處於有利地位，可以利用任何潛在的引人注目的資本配置機會，這些機會可能會出現的情況，包括潛在收購、重大股份回購或其他情況。

Let me now comment on the competitive environment in our retardant business. We don't control what will occur around the potential introduction of competing retardant products. We do, however, control how we prepare for potential competition, and we are preparing vigorously.

現在讓我評論一下我們阻燃劑業務的競爭環境。我們無法控制潛在引入競爭性阻燃產品時會發生什麼。然而，我們確實控制著如何為潛在的競爭做準備，而且我們正在積極準備。

Perimeter is the gold standard as far as the efficacy and safety of our products, quality of our service and the passion, dedication and integrity of our people. However, we will not get complacent. We are pushing harder than ever to raise the bar on ourselves in every aspect of our business. We believe this competitive mentality will make us an even better company irrespective of the what, when and how of potential competition.

Perimeter 是我們產品的功效和安全性、服務質量以及我們員工的熱情、奉獻和誠信的黃金標準。然而，我們不會自滿。我們比以往任何時候都更加努力，在業務的各個方面提高自己的標準。我們相信，無論潛在競爭的內容、時間和方式如何，這種競爭心態將使我們成為一家更好的公司。

Turning finally to our full year 2023 financial expectations. We're confident that the unit economics of all our businesses are improved in 2023 versus 2022. Therefore, we're confident that with similar year-over-year end-market conditions in 2023 versus 2022, each of our businesses should deliver notably improved year-over-year financial results.

最後談談我們 2023 年全年的財務預期。我們相信，與2022 年相比，我們所有業務的單位經濟效益在2023 年都會有所改善。因此，我們相信，在2023 年與2022 年終端市場狀況相似的情況下，我們的每項業務都應實現顯著改善同比財務業績。

That said, our 2023 financial results will largely depend on these end-market conditions, namely the severity of the U.S. fire season and the timing of the normalization of the Specialty Products end market. Specifically, if the second half of the U.S. fire season is severe to the point where it compensates for the mild first half such that the overall '23 U.S. fire season is an on-trend fire season and if the Specialty Products end market normalizes in the second half, we are comfortable that consolidated adjusted EBITDA of approximately $180 million is a reasonable expectation for 2023.

也就是說，我們 2023 年的財務業績將在很大程度上取決於這些終端市場狀況，即美國火災季節的嚴重程度以及特種產品終端市場正常化的時間。具體來說，如果美國火災季節的後半段嚴重到足以彌補上半年的溫和程度，那麼整個 23 年美國火災季節就是一個流行的火災季節，並且如果特種產品終端市場在下半年，我們對2023 年綜合調整後EBITDA 約為1.8 億美元的合理預期感到滿意。

That said, if these end markets fail to recover as I just articulated in the second half, we'd expect to deliver a softer year. In either case, we will focus on what we can control. We will continue to press on each of our value drivers across each of our business units and grow our latent long-term earnings power.

也就是說，如果這些終端市場未能像我在下半年所闡述的那樣復甦，我們預計今年的表現會更加疲軟。無論哪種情況，我們都會專注於我們可以控制的事情。我們將繼續推動每個業務部門的每個價值驅動因素，並增強我們潛在的長期盈利能力。

With that, I'll turn the call over to Chuck.

這樣，我就把電話轉給查克。

Thanks, Haitham. Turning to Slide 6. Second quarter sales in our Fire Safety business were $53.1 million, down 20% versus the prior year; and $71.9 million year-to-date, down 15% versus the prior year. The decline was driven by lower fire retardant sales in the United States, partially offset by higher international retardant sales and higher suppressant sales.

謝謝，海瑟姆。轉向幻燈片 6。我們消防安全業務第二季度的銷售額為 5,310 萬美元，比去年同期下降 20%；年初至今為 7190 萬美元，比上年下降 15%。下降的原因是美國阻燃劑銷售額下降，但部分被國際阻燃劑銷售額和抑製劑銷售額增加所抵消。

Second quarter adjusted EBITDA in our Fire Safety business was $16.5 million, down 32% versus the prior year; and $13.2 million year-to-date, down 37% versus the prior year. Second quarter sales in our Specialty Products business were $23 million, down 33% versus the prior year; and $48.1 million year-to-date, down 35% versus the prior year.

第二季度消防安全業務調整後 EBITDA 為 1,650 萬美元，比上年下降 32%；年初至今為 1,320 萬美元，比上年下降 37%。我們的特種產品業務第二季度銷售額為 2,300 萬美元，比去年同期下降 33%；年初至今為 4810 萬美元，比上年下降 35%。

Second quarter adjusted EBITDA in our Specialty Products business was $4.5 million, down 61% versus the prior year; and $10.9 million year-to-date, down 59% versus the prior year. As Haitham noted, we believe that our pricing and market share in Specialty Products are similar to last year and that the first half weakness is primarily attributable to temporarily soft end-market demand.

第二季度我們特種產品業務的調整後 EBITDA 為 450 萬美元，比上年下降 61%；今年迄今為 1,090 萬美元，比上年下降 59%。正如海瑟姆指出的那樣，我們認為我們特種產品的定價和市場份額與去年相似，上半年的疲軟主要歸因於終端市場需求暫時疲軟。

Moving on to the consolidated business. Second quarter consolidated sales were $76.1 million, down 25% versus the prior year; and $120 million year-to-date, down 24% versus the prior year. Second quarter consolidated adjusted EBITDA was $21 million, down 41% versus the prior year; and $24.1 million year-to-date, down 49% versus the prior year.

轉向合併業務。第二季度綜合銷售額為 7610 萬美元，比去年同期下降 25%；年初至今為 1.2 億美元，比上年下降 24%。第二季度綜合調整後 EBITDA 為 2100 萬美元，比上年下降 41%；年初至今為 2,410 萬美元，比上年下降 49%。

Moving below adjusted EBITDA. Interest expense in the second quarter was $10.3 million, in line with our regular quarterly run rate. Depreciation was approximately $2.4 million, while amortization expense was $13.8 million. Cash paid for income tax was $8.2 million in Q2. CapEx was approximately $1.9 million in Q2.

低於調整後的 EBITDA。第二季度的利息支出為 1,030 萬美元，與我們的常規季度運行率一致。折舊約為 240 萬美元，攤銷費用為 1,380 萬美元。第二季度所得稅支付現金為 820 萬美元。第二季度資本支出約為 190 萬美元。

Our full year 2023 expectations for interest expense, depreciation, taxes, working capital and CapEx are unchanged. We ended the quarter with approximately $675 million of senior notes, cash of approximately $22.1 million and approximately 154.5 million basic shares outstanding.

我們對 2023 年全年利息支出、折舊、稅收、營運資本和資本支出的預期保持不變。本季度結束時，我們持有約 6.75 億美元的優先票據、約 2210 萬美元的現金和約 1.545 億股已發行基本股。

Slide 8 bridges our basic and diluted share count, which includes shares issuable under the Founder Advisory Agreement in future periods. We expect our second half cash generation to be strong as we draw down from our peak inventory levels. Even if the second half fire season is relatively mild such that the 2023 U.S. fire season looks like the mild 2022 U.S. season, we expect to generate approximately $100 million or more in second half 2023 free cash flow and end the year with over $120 million in cash on our balance sheet. This figure will, of course, change if the second half of the fire season is extremely mild or if we deploy capital towards M&A or share repurchases.

幻燈片 8 連接了我們的基本股和稀釋股數，其中包括未來根據創始人諮詢協議可發行的股票。我們預計，隨著庫存水平從峰值水平下降，下半年現金生成能力將強勁。即使下半年火災季節相對溫和，例如2023 年美國火災季節看起來與2022 年美國火災季節相似，我們預計2023 年下半年自由現金流將產生約1 億美元或更多，並在年底產生超過1.2 億美元的自由現金流。我們資產負債表上的現金。當然，如果下半年火災季節極其溫和，或者我們將資金用於併購或股票回購，這個數字將會改變。

With that, I'll hand the call back to the operator for Q&A.

這樣，我會將電話轉交給接線員進行問答。

(Operator Instructions) Our first question comes from the line of Josh Spector with UBS.

（操作員說明）我們的第一個問題來自瑞銀集團的 Josh Spector。

So I actually want to follow up on one of the last points that Chuck made just on free cash flow, so $100 million in second half if you have similar year-on-year performance. What's the implied EBITDA behind that?

所以我實際上想跟進 Chuck 在自由現金流方面提出的最後一點，如果你有類似的同比表現，那麼下半年將有 1 億美元。這背後隱含的 EBITDA 是多少？

You asked what the EBITDA assumption is behind that?

您問其背後的 EBITDA 假設是什麼？

Yes.

是的。

We haven't disclosed that, Josh. I mean it's not the hardest thing in the world to back solve too, but we haven't disclosed it.

我們還沒有透露這一點，喬什。我的意思是，這也不是世界上最難解決的問題，但我們還沒有透露它。

Yes. I guess the variable is working capital. So I assume in that scenario that you'd have a pretty significant working capital release. Can you size that?

是的。我猜變量是營運資金。因此，我假設在這種情況下，您將釋放相當可觀的營運資金。你能確定那個尺寸嗎？

So definitely going to convert some inventory to cash, no question, but in terms of overall working capital, in line with our expectations.

因此，毫無疑問，肯定會將一些庫存轉換為現金，但就整體營運資金而言，符合我們的預期。

Okay. Let me try it a different way here. So I mean, Haitham, you were -- it's helpful to kind of understand your view if we get back to a normal fire season. I mean, is there a way to think about if things are similar year-on-year to still remain down 50%? I guess, what levers are in your control to have EBITDA growth?

好的。讓我在這裡嘗試一下不同的方式。所以我的意思是，海瑟姆，如果我們回到正常的火災季節，了解您的觀點會有所幫助。我的意思是，有沒有辦法考慮如果情況與去年同期相似，仍然保持下降 50% 的情況？我想，您可以控制哪些槓桿來實現 EBITDA 增長？

Because you talked about, I think, delivering growth even in that scenario. Maybe exclude specialty because I think we can make our own assumptions on destocking there. But within fire solutions, I think probably the uplift you described in suppressant is maybe a few million. I guess, what on the retardant side gives you conviction that you could deliver growth in that scenario?

因為我認為你談到了即使在這種情況下也能實現增長。也許排除專業產品，因為我認為我們可以對那裡的去庫存做出自己的假設。但在消防解決方案中，我認為您所描述的抑製劑的提升可能是幾百萬。我想，在阻燃劑方面，是什麼讓您確信自己可以在這種情況下實現增長？

It's just a question of unit economics, Josh. At this point in the fire season, frankly, the cake is largely baked on -- I don't know what the economics are. What we sort of harvest today are the efforts we've put in over the past 12, 18 months. And the question is just what we've been able to do as far as, number one, offering more value to our customers and being fairly compensated for the value in the formal pricing; and number two, reducing and improving our costs through productivity.

這只是單位經濟學的問題，喬什。坦率地說，在火災季節的這個時候，蛋糕基本上已經烤好了——我不知道經濟學是什麼。我們今天的收穫是我們過去12、18個月的努力。問題是我們能做些什麼，第一，為我們的客戶提供更多價值，並在正式定價中獲得公平的補償；第二，通過生產力降低和提高成本。

The net of both of those is unit economics, and we feel like we've done enough on a unit economic basis to do meaningfully better than last year, all things being equal. It's almost impossible to do enough on unit economics to overcome the 70% decline in acres we had in the first half. So the ultimate second half result will be based on the ultimate second half severity or lack thereof of the fire season. But we feel very good about the work we've done on what we control here, which is unit economics per gallon sold.

這兩者的總和就是單位經濟效益，我們覺得在所有條件相同的情況下，我們在單位經濟基礎上已經做了足夠多的工作，比去年做得更好。在單位經濟效益方面採取足夠措施來克服上半年面積下降 70% 的情況幾乎是不可能的。因此，下半年的最終結果將取決於火災季節下半年的最終嚴重程度或缺乏程度。但我們對我們在控制方面所做的工作感到非常滿意，即每加侖銷售的單位經濟效益。

Okay. And if I could just ask one more and just go on hit specialty briefly. I mean, I imagine you're not going to want to break out price or volume for us. So I'd just ask like with what we're seeing, majority destocking, has anything changed on the pricing side in terms of what you're getting? So when destocking ends, is that unit economic for you guys better or worse than where you exited last year?

好的。如果我能再問一個，然後簡單地繼續熱門專業。我的意思是，我想您不會想為我們透露價格或數量。所以我只想問，就像我們所看到的那樣，大部分去庫存，就您所得到的而言，定價方面有什麼變化嗎？那麼，當去庫存結束時，這個單位的經濟效益對你們來說比去年退出時更好還是更差？

We feel very good, very good that it is no worse than last year, i.e. our unit economics, if anything, have improved versus last year. Everything you're seeing there is lower volume. And I'll add, you can have lower volume due to lower market demand or lower market share, and we feel very good that it is not a function of lower market share but rather a function of a destock, which has persisted throughout the first half. But like we said in the prepared remarks, will end at some point. Hard to predict when exactly.

我們感覺非常好，非常好，不比去年差，也就是說，我們的單位經濟效益，如果有的話，比去年有所改善。你看到的所有東西的音量都較低。我還要補充一點，由於市場需求下降或市場份額下降，銷量可能會下降，我們感覺很好，這不是市場份額下降的結果，而是庫存減少的結果，這種情況在整個第一季度一直持續存在。一半。但就像我們在準備好的發言中所說的那樣，將在某個時候結束。很難預測具體時間。

Our next question comes from the line of Brian DiRubbio with Baird.

我們的下一個問題來自 Brian DiRubbio 和 Baird 的對話。

Just a couple of questions for me. On -- want to focus on working capital and specifically just the inventory build over the last year. I think by my numbers, inventories are up about 32.5%. Can you help us get a sense of -- I understand the fire season has been crushed versus last year, probably versus expectations. But just would love to get a sense of what that inventory is comprised of. How much of that is retardants versus maybe Specialty Products? And how is that going to impact your plant operating rates going forward? Just love to get the dynamics here.

只是問我幾個問題。想要關注營運資金，特別是去年的庫存建設。我認為根據我的數據，庫存增加了約 32.5%。您能否幫助我們了解一下——據我所知，與去年相比，火災季節已經被壓垮了，可能與預期相比。但只是想了解一下該庫存的組成部分。其中有多少是阻燃劑與特種產品？這將如何影響您工廠未來的開工率？只是喜歡在這裡了解動態。

Sure. Majority of it is in the Fire Safety retardant market. There is some impact on Specialty Products with the destock but not nearly as impactful as Fire Safety. And there is some impact to the operations. But in terms of just being prepared for the customer, that's what we're focused on, and that's what that inventory is there for.

當然。其中大部分是在消防安全阻燃劑市場。庫存減少對特種產品產生了一些影響，但影響不如消防安全。而且對運營也有一定的影響。但就為客戶做好準備而言，這就是我們關注的重點，這就是庫存的用途。

Okay. Understood. And just as we think about cash flow, cash needs, capital allocation, what's the minimum liquidity level that you're comfortable running the business at over a year period?

好的。明白了。正如我們考慮現金流、現金需求、資本配置一樣，您在一年多的時間內可以放心經營業務的最低流動性水平是多少？

I'm not going to give you an exact number, Brian, but the answer is not much at all. We ended the second quarter with a little over $20 million on the balance sheet and are very, very comfortable at that level. So it's some number meaningfully lower than that. And keep in mind, we have a $100 million revolver, which is undrawn and has, in fact, never been drawn. So we're very comfortable with our liquidity situation.

布萊恩，我不會給你一個確切的數字，但答案並不多。第二季度結束時，我們的資產負債表上有略多於 2000 萬美元的資金，對於這個水平我們感到非常非常滿意。所以這個數字明顯低於這個數字。請記住，我們有一把價值 1 億美元的左輪手槍，尚未拔出，事實上從未被拔出過。因此，我們對流動性狀況感到非常滿意。

And maybe just if you don't mind, to put it a different way, would you be comfortable drawing your revolver for the right opportunity in terms of capital allocation?

也許如果你不介意的話，換句話說，你會願意在資本配置方面抓住合適的機會嗎？

Temporarily, we would. I don't think you want to run long term with a drawn revolver as part of your permanent capital structure. But would we go into our revolver to capture a very high-IRR, short-term opportunity with good visibility into paying it down relatively quickly? Yes, we would.

暫時，我們會的。我不認為你想用一把拔出的左輪手槍作為你永久資本結構的一部分來長期經營。但是，我們會用左輪手槍來捕捉一個內部收益率非常高的短期機會，並且能夠相對較快地償還債務嗎？是的，我們會的。

(Operator Instructions) Our next question comes from the line of Dan Kutz with Morgan Stanley.

（操作員指令）我們的下一個問題來自摩根士丹利的丹·庫茨（Dan Kutz）。

So I just wanted to ask on -- I'm sure you guys have been getting a lot of questions we have on the severe Canada wildfire season. And I appreciate that maybe you guys -- kind of revenue and earnings in that market is maybe less of a direct correlation to acres burned than it is in the U.S. because of the way -- because of differences in the way that Canada fights wildfires. But I just wanted to ask a question if there's anything that you could share that might help us kind of triangulate the potential benefit to Perimeter of the significantly above-trend Canada wildfire season for a business that has kind of been a mid-, high single-digit business from that market for you guys historically.

所以我只是想問——我相信你們已經收到了很多關於嚴重的加拿大野火季節的問題。我很欣賞你們——由於加拿大撲滅野火的方式不同，該市場的收入和收益與燒毀面積的直接相關性可能不如美國。但我只是想問一個問題，您是否可以分享任何內容，以幫助我們對加拿大野火季節明顯高於趨勢的周邊地區的潛在利益進行三角測量，對於一家一直處於中、高單一業務的企業來說-歷史上為你們提供的來自該市場的數字業務。

So thanks for bringing that topic up, Dan. The first thing I'll say is how just remarkably proud I am, and we all are, of what our team has done up in Canada. Just unbelievably hectic, stressful yet critical time, and they delivered with absolute perfection, didn't miss a single load. We sent a bunch of production folks from all over the world, teams from Australia, teams came from the U.S. Some spend up to 2 months working in Canada. It's been an incredible exemplary example of what Perimeter Solutions and only Perimeter Solutions can do for our customers.

謝謝你提出這個話題，丹。我要說的第一件事是，我和我們所有人都為我們的團隊在加拿大取得的成就感到非常自豪。在令人難以置信的忙碌、壓力和關鍵時刻，他們以絕對完美的方式交付，沒有錯過任何一個負載。我們派出了一群來自世界各地的製作人員，團隊來自澳大利亞，團隊來自美國，有些團隊在加拿大工作長達兩個月。這是一個令人難以置信的典範，展示了周邊解決方案並且只有周邊解決方案可以為我們的客戶做些什麼。

As far as quantifying it for you, so you can look at our last couple of Ks. Canada is roughly 5% of our business from a revenue perspective. I made a comment in the prepared remarks that our national business more than doubled in the first half. Clearly, Canada was a big part of that. So revenue growth and profit growth in Canada were excellent in the first half, though it wasn't only a story of Canada. Chile was quite strong in the first quarter. Australia was quite strong in the first quarter. We had a lot of good stocking activity in Europe in the second quarter as they stock up a lot more based on how severe last fire season was. So there was broad-based strength in international, but Canada was clearly a standout.

至於為您量化它，您可以看看我們最後的幾個 K。從收入角度來看，加拿大大約占我們業務的 5%。我在準備好的發言稿中評論說，上半年我們的全國業務增長了一倍多。顯然，加拿大是其中的重要組成部分。因此，加拿大上半年的收入增長和利潤增長非常出色，儘管這不僅僅是加拿大的故事。智利第一季度表現相當強勁。澳大利亞第一季度表現相當強勁。第二季度，我們在歐洲進行了很多良好的庫存活動，因為他們根據上個火災季節的嚴重程度進行了更多庫存。因此，國際上有廣泛的實力，但加拿大顯然是佼佼者。

That said, like I said, Canada is roughly 5% of our business. And as well as it has done this year, it's just not going to mathematically offset down 70% acres in the U.S.

也就是說，正如我所說，加拿大大約占我們業務的 5%。儘管今年已經做到了這一點，但從數學上來說，這並不能抵消美國 70% 的土地面積減少。

Got it. That's all really helpful. Appreciate it. And then maybe just one on capital allocation and, I guess, specifically M&A. Could you kind of remind us or just high-level talk through when you're building the M&A pipeline, what the kind of puts and takes are in terms of what you're looking for.

知道了。這一切都非常有幫助。欣賞它。然後也許只是關於資本配置，我想，特別是併購。您能否提醒我們，或者只是在建立併購管道時進行高層談話，您正在尋找什麼樣的看跌期權和拿走期權。

Is it geographic expansion, vertical integration, things that might bolster your core retardant, suppressant and also Specialty Products businesses? Or are you guys kind of indifferent to the end market and you're just looking for opportunities to check the -- your target economic criteria and kind of value drivers? How do you think through those different puts and takes when you're building your M&A pipeline?

是地理擴張、垂直整合，還是可以增強您的核心阻燃劑、抑製劑和特種產品業務的因素？或者你們對終端市場漠不關心，只是在尋找機會檢查您的目標經濟標準和價值驅動因素？當您構建併購渠道時，您如何考慮這些不同的投入和獲取？

It is 100% a question of long-term equity value creation. There simply are no qualitative M&A criteria. We're not looking to get bigger. We're not looking to get smaller. We're not looking for synergies. We're not looking to tell a story. We're looking for businesses that fit the 5 target criteria because if the business fits the 5 target criteria, we are very confident we can apply the 3Ps playbook.

這100%是長期股權價值創造的問題。根本沒有定性的併購標準。我們並不尋求變得更大。我們不希望變得更小。我們並不是在尋求協同效應。我們不想講故事。我們正在尋找符合 5 個目標標準的企業，因為如果該企業符合 5 個目標標準，我們就非常有信心能夠應用 3P 策略。

And as evidenced by our suppressants margins, which have doubled in 18 months, our Specialty Products margins, where we doubled the EBITDA in our first year, if we find the right business consistent with the criteria, therefore, where the 3Ps playbook is applicable, we can materially increase profitability in a relatively short period of time and do so sustainably, and therefore, create sustainable equity value and shareholder value. And that's really the one input into the evaluation.

我們的抑製劑利潤率在18 個月內翻了一番，我們的特種產品利潤率（我們在第一年的EBITDA 翻了一番）就證明了這一點，如果我們找到符合標準的正確業務，因此，在3P 策略適用的情況下，我們可以在相對較短的時間內大幅提高盈利能力，並且可持續地提高盈利能力，從而創造可持續的股權價值和股東價值。這確實是評估的輸入之一。

(Operator Instructions) As there are no further questions, I would now hand the conference over to Haitham Khouri for closing comments.

（操作員指示）由於沒有其他問題，我現在將會議交給 Haitham Khouri 進行總結評論。

Thank you very much, everybody, and talk to everybody 90 days from now.

非常感謝大家，90天后跟大家聊聊。

Thank you. The conference of Perimeter Solutions has now concluded. Thank you for your participation. You may now disconnect your lines.

謝謝。周邊解決方案會議現已結束。感謝您的參與。您現在可以斷開線路。