What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-01 · 98 added, 84 removed, 168 unchanged (52% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this quarterly report on Form 10‑Q for the quarter ended June 30, 2024 (this “Quarterly Report”).

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, such statements are subject to the “safe harbor” created by those sections and involve risks and uncertainties.

1 unchanged sentence

As a result of many factors, such as those set forth under “Item 1A.

Risk Factors” included in our 2023 Annual Report and Part II, “Item 1A.

Risk Factors” in this Quarterly Report, our actual results may differ materially from those anticipated in these forward-looking statements, accordingly, you should not place undue reliance on these forward-looking statements.

Risk Factors” included in our 2023 Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements, accordingly, you should not place undue reliance on these forward-looking statements.

Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Perimeter Solutions, S.A.

(“PSSA”), a public company limited by shares ( société anonyme ) was incorporated on June 21, 2021 under the laws of the Grand Duchy of Luxembourg.

Perimeter Solutions, SA (“PSSA”), a public company limited by shares ( société anonyme ) was incorporated on June 21, 2021 under the laws of the Grand Duchy of Luxembourg.

PSSA is headquartered in the Grand Duchy of Luxembourg with business operations across the globe.

PSSA's ordinary shares, nominal value, $1.00 per share (the “Ordinary Shares”), are listed on New York Stock Exchange ("NYSE") and trade under the symbol "PRM".

We are a global solutions provider, producing high-quality firefighting products and phosphorus-based specialty chemicals.

On July 31, 2024, the Company filed a registration statement on Form S-4 with a preliminary proxy statement seeking shareholder approval to convert PSSA into a corporation incorporated under the laws of the State of Delaware (the “Redomiciliation Transaction”), after which, PSSA will continue as an entity under the name “Perimeter Solutions, Inc.” and the existing PSSA shareholders would hold shares of common stock in Perimeter Solutions, Inc.

rather than in PSSA.

On October 25, 2024, the Company filed Amendment No.

1 to the registration statement on Form S-4 to amend certain information on the registration statement on Form S-4 filed on July 31, 2024.

The Company expects to complete the Redomiciliation Transaction by December 31, 2024, subject to shareholder approval at a special meeting of shareholders on November 20, 2024.

The Company is currently evaluating the potential impact on deferred taxes, resulting from and subject to the completion of the Redomiciliation Transaction.

We are a global solutions provider, producing high-quality firefighting products and high quality specialty chemicals.

Approximately 65% of our 2023 annual revenues were derived in the United States, approximately 15% in Europe and approximately 14% in Canada with the remaining approximately 6% spread across various other countries.

11 unchanged sentences

Significant end markets include primarily government-related entities and are dependent on approvals, qualifications, and permits granted by the respective governments and commercial customers around the world.

Th e Specialty Products segment produces and sells P 2 S 5 used in several end markets and applications, including lubricant additives, various agricultural applications, various mining applications, and emerging electric battery technologies.

Within the lubricant additives end market, currently the Company’s largest end market application, P 2 S 5, is primarily used in the production of a family of compounds called ZDDP, which is considered an essential component in the formulation of lubricating oils with its main function to provide anti-wear protection to engine components.

Th e Specialty Products segment produces and sells P 2 S 5 used in several end markets and applications, including high quality specialty chemicals, various agricultural applications, various mining applications, and emerging electric battery technologies.

Within the high quality specialty chemicals end market, currently the Company’s largest end market application, P 2 S 5, is primarily used in the production of a family of compounds called ZDDP, which is considered an essential component in the formulation of lubricating oils with its main function to provide anti-wear protection to engine components.

In addition, ZDDP inhibits oxidation of lubricating oil by scavenging free radicals that initiate oil breakdown and sludge formation, resulting in better and longer engine function.

1 unchanged sentence

We offer several grades of P 2 S 5 with varying degrees of phosphorus content, particle size, distribution, and reactivity to our global customers.

We operate seven business units within our two reporting segments.

We operat e four busi ness units within our two reporting segments.

The business unit structure is meant to promote the decentralized execution and accountability and maintain the geography and product-specific focus and granularity necessary to drive continued improvement in our key operational value drivers.

2 unchanged sentences

In 2024, the Company changed the presentation of freight expense from selling, general and administrative expense to cost of goods sold, to better match freight expense with freight income.

The change has been applied retrospectively to the

condensed consolidated financial statements for the prior periods presented in this Quarterly Report.

The impact to the accompanying condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2023 is presented in the following table (in thousands).

The change has been applied retrospectively to the condensed consolidated financial statements for the prior periods presented in this Quarterly Report.

The impact to the accompanying condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2023 is presented in the following table (in thousands).

There was no impact on previously reported balances in the accompanying condensed consolidated balance sheet or statement of cash flows.

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

As Previously Reported As Adjusted Effect of Change As Previously Reported As Adjusted Effect of Change

25 unchanged sentences

While these actions are designed to offset the impact of inflationary pressures, the Company cannot provide assurance that they will be successful in fully offsetting increased costs resulting from inflationary pressure.

In addition, interest payments for borrowings under

the Company’s revolving credit facility are based on variable rates, and any continued increase in interest rates may reduce the Company’s cash flow available for other corporate purposes.

In addition, interest payments for borrowings under the Company’s revolving credit facility are based on variable rates, and any continued increase in interest rates may reduce the Company’s cash flow available for other corporate purposes.

Results of Operations

Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023

Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

Total Company

The following table sets forth our results of operations for each of the periods indicated (in thousands):

Three Months Ended June 30, Change

Three Months Ended September 30, Change

2024 2023 $ %

6 unchanged sentences

Founders advisory fees - related party 184,176 (24,544) 208,720 (850 %)

Other operating expense — 8 (8) (100 %)

Intangible impairment — 40,738 (40,738) (100 %)

Total operating expenses 216,461 42,665 173,796 407 %

Operating income 45,018 63,347 (18,329) (29 %)

Other expense :

Operating (loss) income (35,239) 27,168 (62,407) (230 %)

Other expense (income):

Interest expense, net 10,054 10,448 (394) (4 %)

Loss on contingent earn-out — 146 (146) (100 %)

Foreign currency loss 224 93 131 141 %

Other expense, net 74 17 57 335 %

Gain on contingent earn-out — (7,665) 7,665 (100 %)

Foreign currency (gain) loss (1,354) 1,384 (2,738) (198 %)

Other expense (income), net 151 (60) 211 (352 %)

Total other expense, net 8,851 4,107 4,744 116 %

Income before income taxes 34,130 52,747 (18,617) (35 %)

(Loss) income before income taxes (44,090) 23,061 (67,151) (291 %)

Income tax expense (45,077) (3,779) (41,298) 1093 %

Net income $ 21,650 $ 52,014 $ (30,364) (58 %)

Net product and services sales increased by $51.1 million for the three months ended June 30, 2024 compared to the same period in 202 3.

Net (loss) income $ (89,167) $ 19,282 $ (108,449) (562 %)

Net product and services sales increased by $145.8 million for the three months ended September 30, 2024, compared to the same period in 202 3.

Net sales in the Fire Safety segment increased by $133.6 million, representing a $132.9 million increase in fire retardant sales and a $0.7 million increase in fire suppressant sales.

Fire retardant sales increased $42.5 million in the Americas and $0.6 million in Asia Pacific, partially offset by a decrease of $1.8 million in Europe.

Retardant strength was driven by increasingly proactive use of air attack, and by extension of fire retardant, by our customers, as they combat the growing threat of wildfires, as well as by continued implementation of the Company’s strategies on profitable new business, productivity and pricing our products and services to the value they provide.

Fire suppressant sales increased by $4.5 million in Americas and $0.6 million in Asia Pacific, driven by sales of fluorine-free foam concentrates, offset by a $1.0 million decrease in Europe.

Net sales in the Specialty Products segment increased by $5.7 million, of which $6.3 million was an increase in Americas offset by a $0.6 million decrease in Europe.

The growth in Specialty Products sales reflects an increase in purchases by our lubricant additives customers.

The Company continues to monitor the inventory rationalization activities in its key end markets.

Fire retardant sales increased $131.5 million in the Americas and $1.7 million in Europe, partially offset by a decrease of $0.3 million in Asia Pacific.

Retardant strength was driven by increasingly proactive use of air attack, and by extension of fire retardant, by our customers, as they combat the growing threat of wildfires, and by continued successful implementation of the Company’s strategies on profitable new business, as well as pricing our products and services to the value they provide.

Fire suppressant sales increased by $0.7 million, primarily due to sales of fluorine-free foam concentrates.

Net sales in the Specialty Products segment increased by $12.2 million, of which $8.0 million was an increase in Americas and $4.2 million was an increase in Europe.

The growth in Specialty Products sales reflects an increase in purchases by our high-quality specialty chemicals customers.

Cost of Goods Sold.

Cost of goods sold increased by $7.2 million for the three months ended June 30, 2024 compared to the same period in 2023.

The increase in the Fire Safety segment of $6.1 million was primarily due to an $5.9 million increase in labor, material and freight costs as a result of the increase in revenue and a $0.2 million increase in other costs.

Cost of goods sold increased by $34.4 million for the three months ended September 30, 2024 compared to the same period in 2023.

The increase in the Fire Safety segment of $30.2 million was primarily due to a $29.5 million increase in labor, material and freight costs as a result of the increase in revenue and a $0.7 million increase in other costs.

The $4.2 million increase in the Specialty Products segment was due to a $4.5 million increase in raw material, manufacturing and freight, offset by a $0.3 million decrease in other costs.

Selling, General and Administrative Expense.

Selling, general and administrative expense increased by $1.7 million for the three months ended June 30, 2024 compared to the same period in 2023.

The increase was primarily due to a $1.7

million increase in personnel related and share-based compensation expenses and a $1.2 million increase in other costs partially offset by $1.2 million decrease in professional fees.

Selling, general and administrative expense increased by $5.8 million for the three months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to a $3.3 million increase in personnel related and share-based compensation expenses, a $1.0 million increase in professional fees, and a $1.5 million increase in other costs.

Founder Advisory Fees - related party.

Founder advisory fees - related party represents the change in the fair value of the liability-classified Fixed Annual Advisory Amount and Variable Annual Advisory Amount (collectively, the “Annual Advisory Amounts”).

The increase in the fair value of the Annual Advisory Amounts for the three months ended June 30, 2024 of $0.6 million was primarily due to an increase in the average price per Ordinary Share from $6.81 as of March 31, 2024 to $7.75 as of June 30, 2024.

The decrease in the fair value of the Annual Advisory Amount for the three months ended June 30, 2023 of $60.0 million was primarily due to a reduction in the average price per Ordinary Share from $7.73 as of March 31, 2023 to $5.89 June 30, 2023.

The increase in the fair value of the Annual Advisory Amounts for the three months ended September 30, 2024 of $184.2 million was primarily due to an increase in the average price per Ordinary Share from $7.75 as of June 30, 2024 to $12.85 as of September 30, 2024.

The decrease in the fair value of the Annual Advisory Amount for the three months ended September 30, 2023 of $24.5 million was primarily due to a reduction in the average price per Ordinary Share from $5.89 as of June 30, 2023, to $5.02 September 30, 2023.

Intangible Impairment.

Intangible impairment decreased by $40.7 million for the three months ended September 30, 2024 compared to the same period in 2023.

The decrease was due to the prior year impairment on the carrying value of the technology underlying the contingent earn-out eligible fire retardant product acquired by the Company during the purchase of LaderaTech in May 2020.

Foreign Currency (Gain) Loss.

Foreign currency gain of $1.4 million for the three months ended September 30, 2024 reflects weakening of the U.S.

dollar, primarily against the Euro.

Foreign currency loss of $1.4 million for the three months ended September 30, 2023 reflects strengthening U.S.

dollar, primarily against the Euro.

Income Tax Expense.

Income tax expense increased by $11.7 million for the three months ended June 30, 2024 compared to the same period in 2023.

Income tax expense increased by $41.3 million for the three months ended September 30, 2024 compared to the same period in 2023.

The increase is due primarily to changes in earnings in jurisdictions that were not covered by a valuation allowance and the impact of non-deductible compensation and accrued withholding taxes on the annualized effective tax rate.

Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

Six Months Ended June 30, Change

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

Nine Months Ended September 30, Change

2024 2023 $ %

6 unchanged sentences

Founders advisory fees - related party 253,097 (108,806) 361,903 (333 %)

Intangible impairment — 40,738 (40,738) (100 %)

Other operating expense — 10 (10) (100 %)

3 unchanged sentences

Interest expense, net 31,292 30,938 354 1 %

Loss on contingent earn-out — 392 (392) (100 %)

Foreign currency loss (gain) 1,517 (628) 2,145 (342 %)

Gain on contingent earn-out — (7,273) 7,273 (100 %)

Foreign currency loss 163 756 (593) (78 %)

Other expense, net 252 29 223 769 %

3 unchanged sentences

Net (loss) income $ (150,075) $ 80,727 $ (230,802) (286 %)

Net product and services sales for the six months ended June 30, 2024 increased by $66.3 million compared to the same period in 202 3.

Net product and services sales for the nine months ended September 30, 2024 increased by $212.1 million compared to the same period in 202 3.

Net sales in the Fire Safety segment increased by $185.4 million, representing a $173.6 million increase in fire retardant sales and $11.8 million increase in fire suppressant sales.

Fire retardant sales increased $42.9 million in the Americas and $0.1 million in Asia Pacific partially offset by a $2.3 million decrease in Europe.

Fire suppressant sales increased $13.4 million in Americas and $0.6 million in Asia Pacific, driven by sales of fluorine-free foam concentrates, offset by a decrease of $2.9 million in Europe.

Fire retardant sales increased $174.4 million in the Americas, offset by decreases of $0.3 million in Asia Pacific and $0.5 million in Europe.

Retardant strength was driven by increasingly proactive use of air attack, and by extension of fire retardant, by our customers, as they combat the growing threat of wildfires, and by continued successful implementation of the Company’s strategies on profitable new business, as well as pricing our products and services to the value they provide.

Fire suppressant sales increased by $11.8 million, primarily due to sales of fluorine-free foam concentrates .

Net sales in the Specialty Products segment increased by $26.7 million, of which $21.8 million was in the Americas and $4.9 million was in Europe.

The growth in Specialty Products sales reflects an increase in purchases by our lubricant additives customers.

The Company continues to monitor the inventory rationalization activities in its key end markets.

The growth in Specialty Products sales reflects an increase in purchases by our high-quality specialty chemicals customers.

Cost of Goods Sold.

Cost of goods sold increased by $12.1 million for the six months ended June 30, 2024 compared to the same period in 2023.

The increase in the Fire Safety segment of $8.7 million was primarily due to an $8.3 million

increase in labor, material and freight costs as a result of the increase in revenue and a $0.4 million increase in other costs.

Cost of goods sold increased by $46.5 million for the nine months ended September 30, 2024 compared to the same period in 2023.

The increase in the Fire Safety segment of $38.9 million was primarily due to a $37.9 million increase in labor, material and freight costs as a result of the increase in revenue and a $1.0 million increase in other costs.

The $7.6 million increase in the Specialty Products segment was due to a $9.4 million increase in raw material, manufacturing and freight, offset by a $1.8 million decrease in other costs.

Selling, General and Administrative Expense.

Selling, general and administrative expense increased by $7.1 million for the six months ended June 30, 2024 compared to the same period in 2023.

Selling, general and administrative expense increased by $13.0 million for the nine months ended September 30, 2024 compared to the same period in 2023.

The increase was primarily due to a $9.5 million increase in personnel related and share-based compensation expenses and a $6.5 million increase in other costs, partially offset by $3.0 million decrease in professional fees.

1 unchanged sentence

Founder advisory fees - related party represents the change in the fair value of the liability-classified Fixed Annual Advisory Amount and Variable Annual Advisory Amount.

The increase in the fair value of the Annual Advisory Amounts for the six months ended June 30, 2024 of $68.9 million was primarily due to a increase in the average price per Ordinary Share from $4.51 as of December 31, 2023 to $7.75 as of June 30, 2024.

The decrease in the fair value of the Annual Advisory Amount for the six months ended June 30, 2023 of $84.3 million was primarily due to a reduction in the average price per Ordinary Share from $8.86 as of December 31, 2022 to $5.89 as of June 30, 2023.

Foreign Currency Loss (Gain).

Foreign currency loss of $1.5 million for the six months ended June 30, 2024 reflects strengthening of the U.S.

dollar, primarily against the Euro.

Foreign currency gain of $0.6 million for the six months ended June 30, 2023 reflects weakening of the U.S.

dollar, primarily against the Euro.

The increase in the fair value of the Annual Advisory Amounts for the nine months ended September 30, 2024 of $253.1 million was primarily due to a increase in the average price per Ordinary Share from $4.51 as of December 31, 2023 to $12.85 as of September 30, 2024.

The decrease in the fair value of the Annual Advisory Amount for the nine months ended September 30, 2023 of

$108.8 million was primarily due to a reduction in the average price per Ordinary Share from $8.86 as of December 31, 2022 to $5.02 as of September 30, 2023.

Intangible Impairment.

Intangible impairment decreased by $40.7 million for the nine months ended September 30, 2023 compared to the same period in 2023.

Income Tax (Expense) Benefit.

Income tax expense increased by $13.8 million for the six months ended June 30, 2024 compared to the same period in 2023.

Income tax expense increased by $55.1 million for the nine months ended September 30, 2024 compared to the same period in 2023.

1 unchanged sentence

We use segment net sales and segment adjusted earnings before interest, taxes, depreciation and amortization (“Segment Adjusted EBITDA”) to evaluate operating performance by segment, for business planning purposes and to allocate resources.

The following tables provide information for our net sales and Segment Adjusted EBITDA (in thousands) for the three and six months ended June 30, 2024 compared to the same periods in 2023:

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

The following tables provide information for our net sales and Segment Adjusted EBITDA (in thousands) for the three and nine months ended September 30, 2024 compared to the same periods in 2023:

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

Fire Safety Specialty Products Fire Safety Specialty Products

1 unchanged sentence

Segment Adjusted EBITDA $ 157,479 $ 12,897 $ 56,038 $ 5,431

Adjusted EBITDA for our Fire Safety segment increased by $39.1 million during the three months ended June 30, 2024 compared with the same period in 2023 .

Adjusted EBITDA for our Fire Safety segment increased by $101.4 million during the three months ended September 30, 2024 compared with the same period in 2023 .

The increase was primarily due to higher net sales.

Adjusted EBITDA for our Specialty Products segment increased by $4.8 million during the three months ended June 30, 2024 compared with the same period in 2023.

Adjusted EBITDA for our Specialty Products segment increased by $7.5 million during the three months ended September 30, 2024 compared with the same period in 2023.

The increase was primarily due to higher net sales.

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Fire Safety Specialty Products Fire Safety Specialty Products

1 unchanged sentence

Segment Adjusted EBITDA $ 212,877 $ 34,543 $ 69,209 $ 16,366

Adjusted EBITDA for our Fire Safety segment increased by $42.2 million during the six months ended June 30, 2024 compared with the same period in 2023.

Adjusted EBITDA for our Fire Safety segment increased by $143.7 million during the nine months ended September 30, 2024 compared with the same period in 2023.

The increase was primarily due to higher net sales.

Adjusted EBITDA for our Specialty Products segment increased by $10.7 million during the six months ended June 30, 2024 compared with the same period in 2023.

Adjusted EBITDA for our Specialty Products segment increased by $18.2 million during the nine months ended September 30, 2024 compared with the same period in 2023.

The increase was primarily due to higher net sales.

2 unchanged sentences

However, future operating cash flows are subject to a number of variables, including the length and severity of the fire season, growth of the wildland urban interface and the availability of air tanker capacity, all of which could negatively impact revenues, earnings and cash flows, and potentially our liquidity if we do not moderate our expenditures accordingly.

O ur cash requirements, cash flows, indebtedness and available credit as of June 30, 2024 is discussed below.

We believe that our existing cash and cash equivalents of approximately $43.2 million, net cash flows generated from operations and availability under the Revolving Credit Facility as of June 30, 2024 will be sufficient to meet our current capital expenditures, working capital, and debt service requirements for at least 12 months from the filing date of this Quarterly Report.

As of June 30, 2024, we expect our remaining fiscal year 2024 capital expenditure budget to cover both our maintenance and growth capital expenditures.

We may also utilize borrowings under other various financing sources available to us, including the issuance of equity and/or debt securities through public offerings or private placements, to fund our acquisitions, the Annual Advisory Amounts and long-term liquidity needs.

O ur cash requirements, cash flows, indebtedness and available credit as of September 30, 2024 is discussed below.

We believe that our existing cash and cash equivalents of approximately $223.1 million, net cash flows generated from operations and availability under the Revolving Credit Facility as of September 30, 2024 will be sufficient to meet our current capital expenditures, working capital, and debt service requirements for at least 12 months from the filing date of this Quarterly Report.

As of September 30, 2024, we expect our remaining fiscal year 2024 capital expenditure budget to cover both our maintenance and growth capital expenditures.

We may also utilize borrowings under other various financing

sources available to us, including the issuance of equity and/or debt securities through public offerings or private placements, to fund our acquisitions, the Annual Advisory Amounts and long-term liquidity needs.

Our ability to complete future offerings of equity or debt securities and the timing of these offerings will depend upon various factors including prevailing market conditions and our financial condition.

On September 27, 2024, the Company executed a supplement (the “Supplement”) to the Warrant Instrument with Computershare Trust Company, N.A.

and Computershare Inc.

dated as of November 8, 2021 (the “Warrant Instrument”) permitting holders of all outstanding warrants of the Company issued to investors in connection with its initial public offering, which expired on November 11, 2024, to exercise their warrants on a cashless exercise basis.

A copy of the Supplement, the notice provided to holders of warrants of the Company and the related press release can be found on our Form 8-K filed with the SEC on October 1, 2024.

Revolving Credit Facility

5 unchanged sentences

The applicable margin is 3.25% in the case of Term SOFR-based loans and 2.25% in the case of base rate-based loans, with two step downs of 0.25% each based upon the achievement of certain leverage ratios.

As of June 30, 2024, the Company did not have any outstanding borrowings under the Revolving Credit Facility and was in compliance with all covenants.

As of September 30, 2024, the Company did not have any outstanding borrowings under the Revolving Credit Facility and was in compliance with all covenants.

SK Intermediate II has $675.0 million principal amount of 5.00% senior secured notes due October 30, 2029 ("Senior Notes").

8 unchanged sentences

The Board had re-established the limit for Ordinary Share repurchases at $100.0 million on February 21, 2024, which is within the repurchase limit approved by the Company’s shareholders’ on May 23, 2024.

We repurchased 18,535 and 2,987,892 Ordinary Shares during the three and six months ended June 30, 2024, respectively .

We repurchase d 399 and 2,988,291 Or dinary Shares during the three and nine months ended September 30, 2024, respectively .

The repurchased Ordinary Shares were recorded at cost and are being held in treasury.

10 unchanged sentences

The summary of our cash flows is as follows (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Cash provided by (used in):

5 unchanged sentences

Operating Activities

Cash provided by (used in) operating activities was $11.4 million and $(72.9) million for the six months ended June 30, 2024 and 2023, respectively.

The change of $84.3 million between cash provided in 2024 from cash used in 2023 was primarily due to higher net income after adjusting for non-cash items of $46.6 million and an increase in operating liabilities of $36.2 million, a reduction in inventory of $22.6 million offset by increase in accounts receivable and other currents assets of $23.1 million, and payment of founders advisory fees of $2.0 million, compared with the same period in 2023.

Net cash provided by operating activities for the nine months ended September 30, 2024 was $194.4 million compared to net cash used in operating activities of $10.2 million for the nine months ended September 30, 2023.

For the nine months ended September 30, 2024, the primary components of operating cash flows were net loss of $150.1 million, non-cash charges of $321.7 million and net operating asset reductions of $22.8 million.

For the nine months ended September 30, 2023, the primary components of operating cash flows were net income of $80.7 million, non-cash benefits of $27.8 million and net operating asset investments of $63.1 million.

The net operating asset reduction for the nine months ended September 30, 2024 was primarily related to inventories.

Investing Activities

Cash provided by (used in) investing activities was $0.2 million and $(4.4) million for the six months ended June 30, 2024 and 2023 respectively.

During the six months ended June 30, 2024, the Company purchased property and equipment of $5.2 million offset by proceeds from short-term investments of $5.4 million upon settlement of a Euro denominated certificate of deposit.

During the six months ended June 30, 2023, the Company purchased property and equipment of $4.4 million.

Cash used in investing activities was $3.7 million and $6.6 million for the nine months ended September 30, 2024 and 2023 respectively.

During the nine months ended September 30, 2024, the Company purchased property and equipment of $9.1 million offset by proceeds from short-term investments of $5.4 million upon settlement of a Euro denominated

certificate of deposit.

During the nine months ended September 30, 2023, the Company purchased property and equipment of $6.6 million.

Financing Activities

Cash used in financing activities was $14.8 million and $27.3 million for the six months ended June 30, 2024 and 2023 respectively.

During the six months ended June 30, 2024, we repurchased outstanding Ordinary Shares for $14.4 million and made $0.3 million in principal payments on finance lease obligations.

During the six months ended June 30, 2023, we repurchased outstanding Ordinary Shares for $27.2 million and made principal payments on finance lease obligations of $0.1 million.

Cash used in financing activities was $14.9 million and $37.5 million for the nine months ended September 30, 2024 and 2023 respectively.

During the nine months ended September 30, 2024, we repurchased outstanding Ordinary Shares for $14.4 million and made $0.5 million in principal payments on finance lease obligations.

During the nine months ended September 30, 2023, we repurchased outstanding Ordinary Shares for $37.2 million and made principal payments on finance lease obligations of $0.3 million.

Critical Accounting Estimates and Policies

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis