What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 198 added, 130 removed, 507 unchanged (39% of the section changed)

4 unchanged sentences

(in thousands, except share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

ASSETS (Unaudited)

28 unchanged sentences

Preferred stock - related party 2,711 2,831

Other liabilities 2,314 2,226

Other non-current liabilities 2,507 2,226

Total liabilities 1,307,631 1,259,124

3 unchanged sentences

171,292,585 and 169,426,114 shares issued;

148,775,583 and 147,822,633 shares outstanding at March 31, 2025 and December 31, 2024, respectively

145,914,429 and 147,822,633 shares outstanding at June 30, 2025 and December 31, 2024, respectively

Treasury stock, at cost;

22,491,935 and 21,603,481 shares at March 31, 2025 and December 31, 2024, respectively

25,378,156 and 21,603,481 shares at June 30, 2025 and December 31, 2024, respectively

( 168,197 ) ( 127,827 )

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE (LOSS) INCOME

(in thousands, except share and per share data)

Three Months Ended March 31,

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

2025 2024 2025 2024

Net sales $ 162,639 $ 127,276 $ 234,669 $ 186,320

7 unchanged sentences

Total operating expenses 127,722 28,249 78,068 123,815

Operating income (loss) 77,807 ( 74,864 )

Operating (loss) income ( 26,226 ) 45,018 51,581 ( 29,846 )

Other expense (income):

1 unchanged sentence

Foreign currency (gain) loss ( 2,096 ) 224 ( 3,255 ) 1,517

Other expense, net 143 27

Other (income) expense, net ( 212 ) 74 ( 69 ) 101

Total other expense, net 7,622 10,888 16,250 22,856

Income (loss) before income taxes 69,179 ( 86,832 )

Income tax (expense) benefit ( 12,493 ) 4,274

Net income (loss) 56,686 ( 82,558 )

(Loss) income before income taxes ( 33,848 ) 34,130 35,331 ( 52,702 )

Income tax benefit (expense) 1,687 ( 12,480 ) ( 10,806 ) ( 8,206 )

Net (loss) income ( 32,161 ) 21,650 24,525 ( 60,908 )

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments 24,120 ( 989 ) 32,005 ( 6,532 )

Total comprehensive income (loss) $ 64,571 $ ( 88,101 )

Earnings (loss) per share:

Total comprehensive (loss) income $ ( 8,041 ) $ 20,661 $ 56,530 $ ( 67,440 )

(Loss) earnings per share:

Basic $ ( 0.22 ) $ 0.15 $ 0.17 $ ( 0.42 )

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Balance, March 31, 2025 171,267,518 $ 17 22,491,935 $ ( 136,010 ) $ 1,913,747 $ ( 31,347 ) $ ( 530,037 ) $ 1,216,370

Stock-based compensation — — — — 2,238 — — 2,238

Shares repurchased — — 2,886,221 ( 32,187 ) — — — ( 32,187 )

Options exercised 25,067 — — — 251 — — 251

Net loss — — — — — — ( 32,161 ) ( 32,161 )

Other comprehensive income — — — — — 24,120 — 24,120

Balance, June 30, 2025 171,292,585 $ 17 25,378,156 $ ( 168,197 ) $ 1,916,236 $ ( 7,227 ) $ ( 562,198 ) $ 1,178,631

See accompanying notes to condensed consolidated financial statements.

PERIMETER SOLUTIONS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except share data)

Ordinary Shares Treasury Shares Additional

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Balance, March 31, 2024 166,824,659 $ 166,825 21,584,547 $ ( 127,685 ) $ 1,701,147 $ ( 25,253 ) $ ( 663,376 ) $ 1,051,658

Stock-based compensation — — — — 2,994 — — 2,994

Shares repurchased — — 18,535 ( 139 ) — — — ( 139 )

Net income — — — — — — 21,650 21,650

Other comprehensive loss — — — — — ( 989 ) — ( 989 )

Balance, June 30, 2024 166,824,659 $ 166,825 21,603,082 $ ( 127,824 ) $ 1,704,141 $ ( 26,242 ) $ ( 641,726 ) $ 1,075,174

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

9 unchanged sentences

Foreign currency (gain) loss ( 3,255 ) 1,517

Loss (gain) on disposal of assets 3 ( 10 )

Loss on disposal of assets 6 9

Changes in operating assets and liabilities, net of acquisitions:

8 unchanged sentences

Operating lease liabilities ( 1,998 ) ( 1,629 )

Financing lease liabilities ( 127 ) ( 130 )

Finance lease liabilities ( 251 ) ( 262 )

Other, net ( 563 ) ( 597 )

2 unchanged sentences

Purchase of property and equipment ( 17,577 ) ( 5,196 )

Purchase of intangible assets ( 15,226 ) —

Proceeds from short-term investments — 5,383

Purchase of businesses, net of cash acquired ( 10,000 ) —

Net cash used in investing activities ( 14,813 ) ( 472 )

Net cash (used in) provided by investing activities ( 42,803 ) 187

Cash flows from financing activities:

1 unchanged sentence

Ordinary shares repurchased — ( 14,417 )

Proceeds from exercise of options 41 —

Proceeds from exercises of options 292 —

Principal payments on finance lease obligations ( 482 ) ( 367 )

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at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Significant estimates made by management in connection with the preparation of the accompanying condensed consolidated financial statements include the useful lives of long-lived and intangible assets, the fair value of financial assets and liabilities, the valuation of goodwill, stock options, and founder advisory fees, and the realizability of deferred tax assets.

Significant estimates made by management in connection with the preparation of the accompanying condensed consolidated financial statements include the fair value of purchase consideration and assets acquired and liabilities assumed in a business combination, the useful lives of long-lived assets, the fair value of financial assets and liabilities, indefinite life intangible assets, stock options, and founder advisory fees.

Actual results could differ from those estimates.

Accounting Policies

As of March 31, 2025, the Company’s significant accounting policies are consistent with those discussed in Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” to its consolidated financial statements included in the Company’s 2024 Annual Report.

As of June 30, 2025, the Company’s significant accounting policies are consistent with those discussed in Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” to its consolidated financial statements included in the Company’s 2024 Annual Report.

Recently Issued and Adopted Accounting Standards

On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2024-03, Disaggregation of Income Statement Expenses, which requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

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The Company adopted this ASU prospectively for the annual period beginning on January 1, 2025.

While we expect the adoption of this standard will expand our disclosures within the “Income Taxes” note on our Form 10-K, we do not expect it to have any impact on our financial position or results of operations.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This ASU requires disclosure of incremental segment information, primarily through enhanced disclosures about significant segment expense categories and amounts for each reportable segment on an annual and interim basis.

This guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The most significant provision of this standard required the Company to disclose information about significant segment expenses and other segment items that are regularly provided to the chief operating decision-maker (“CODM”).

The Company adopted this ASU retrospectively for the annual period beginning on January 1, 2024 and for interim periods beginning on January 1, 2025.

While the adoption of this standard expanded our disclosures within the “Segment Information” note on our Forms 10-K and 10-Q, it did not have any impact on our financial position or results of operations.

While the Company expects that the adoption of this standard will expand its disclosures within the “Income Taxes” note on its Form 10-K, the Company does not expect such adoption to have any impact on its financial position or results of operations.

BALANCE SHEET COMPONENTS

Details of certain balance sheet items are presented below (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Raw materials and manufacturing supplies $ 61,437 $ 65,872

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Total accrued expenses and other current liabilities $ 31,834 $ 30,450

Depreciation expense related to property, plant and equipment for the three months ended March 31, 2025 and 2024 wa s $ 2.8 million and $ 2.6 million, respectively, substantially all of which was presented in cost of goods sold in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

As of March 31, 2025 and December 31, 2024, the allowance for doubtful accounts was immaterial.

Depreciation expense related to property, plant and equipment was $ 3.3 million and $ 6.1 million for the three and six months ended June 30, 2025, respectively, and $ 2.6 million and $ 5.2 million , for the three and six months ended June 30, 2024 respectively, substantially all of which was presented in cost of goods sold in the accompanying condensed consolidated statements of operations and comprehensive (loss) income.

As of June 30, 2025 and December 31, 2024, the allowance for doubtful accounts was immaterial.

BUSINESS COMBINATION

On March 28, 2025, IMS acquired substantially all of the assets and technical data rights of certain product lines from a third party, which met the definition of a business, for a total purchase price of $ 10.0 million.

The Company used the acquisition method of accounting for the transaction and has reflected the preliminary value of the acquired assets and liabilities assumed in the consolidated balance sheet including, inventories, intangible assets and property, plant and equipment.

The Company used the acquisition method of accounting for the transaction and has reflected the preliminary value of the acquired assets and liabilities assumed in the condensed consolidated balance sheet, including inventories, intangible assets, property, plant and equipment, goodwill and contractual liabilities.

The accounting is provisional as the Company is pending valuation of certain tangible and intangible assets that is subject to final adjustment as the Company evaluates information during the measurement period.

5 unchanged sentences

$ 852,754 $ 181,789 $ 1,034,543

Purchase price allocation and measurement period adjustments for business combinations — 397 397

Foreign currency translation 13,033 5,135 18,168

Balance, March 31, 2025

Balance, June 30, 2025

$ 865,787 $ 187,321 $ 1,053,108

Intangible assets and related accumulated amortization as of March 31, 2025 and December 31, 2024 are as follows (in thousands):

March 31, 2025

Intangible assets and related accumulated amortization as of June 30, 2025 and December 31, 2024 are as follows (in thousands):

June 30, 2025

(in years) Gross Value Accumulated Impairment Foreign

5 unchanged sentences

Tradenames 10 to 20 104,500 — ( 605 ) ( 18,413 ) 85,482

Balance, March 31, 2025

Balance, June 30, 2025

$ 1,145,926 $ ( 40,738 ) $ ( 6,515 ) $ ( 201,910 ) $ 896,763

(1) In May 2025, the Company settled its trade secret litigation with a subsidiary of Compass Minerals International, Inc.

and simultaneously acquired related intangible assets, property, plant and equipment, and inventories.

The total purchase consideration for the asset acquisition was $ 20.0 million in cash, of which $ 15.2 million was allocated to the technology-related intangible assets.

The acquired technology-related intangible assets will be amortized on a straight-line basis over its estimated useful life of 4 years.

December 31, 2024

8 unchanged sentences

$ 1,128,600 $ ( 40,738 ) $ ( 16,239 ) $ ( 173,206 ) $ 898,417

Amortization expense for definite-lived intangible assets for the three months ended March 31, 2025 and 2024 w as $ 14.1 million and $ 13.8 million , respectively.

Amortization expense for definite-lived intangible assets was $ 14.6 million and $ 28.7 million for the three and six months ended June 30, 2025 respectively, and $ 13.8 million and $ 27.6 million , for the three and six months ended June 30, 2024, respectively.

Estimated annual amortization expense of intangible assets for the next five years ended December 31, and thereafter is as follows (in thousands):

2 unchanged sentences

Total $ 896,763

Lease cost for the three months ended March 31, 2025 and 2024 is as follows (in thousands):

Three Months Ended March 31,

Lease cost for the three and six months ended June 30, 2025 and 2024 is as follows (in thousands):

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

2025 2024 2025 2024

Operating lease cost (1)

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(1) Operating lease cost does not include short-term leases or variable costs, all of which are immaterial.

As of March 31, 2025, the weighted-average remaining lease terms of the Company’s operating leases and finance leases were approximately 7.5 years and 6.1 years, respectively, and the weighted-average discount rates applied were 6.8 % and 7.6 %, respectively.

Supplemental cash flow information related to leases for the three months end ed March 31, 2025 and 2024 is as follows (in thousands):

Three Months Ended March 31,

As of June 30, 2025, the weighted-average remaining lease terms of the Company’s operating leases and finance leases were approximately 8.6 years and 5.9 years, respectively, and the weighted-average discount rates applied were 7.0 % and 7.6 %, respectively.

Supplemental cash flow information related to leases for the six months end ed June 30, 2025 and 2024 is as follows (in thousands):

Six Months Ended June 30,

Cash paid for amounts included in the measurement of operating lease liabilities:

4 unchanged sentences

Operating leases $ 14,717 $ 273

Financing leases 199 686

Finance leases 458 751

Net change in operating lease right-of-use assets due to lease modifications resulting in reclassification of leases from operating to finance $ ( 32 ) $ —

As of March 31, 2025 , the estimated future minimum payment obligations for non-cancelable operating and finance leases are as follows (in thousands):

As of June 30, 2025 , the estimated future minimum payment obligations for non-cancelable operating and finance leases are as follows (in thousands):

Operating Leases Finance Leases

4 unchanged sentences

2029 4,493 952

2030 2,045 552

Thereafter 20,983 3,291

4 unchanged sentences

Long-term debt consists of the following (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Senior Notes $ 675,000 $ 675,000

1 unchanged sentence

Long-term debt, net $ 668,439 $ 667,774

Maturities of long-term debt as of March 31, 2025 are as follows (in thousands):

Maturities of long-term debt as of June 30, 2025 are as follows (in thousands):

Years Ending December 31,

1 unchanged sentence

Revolving Credit Facility

Perimeter Holdings, LLC’s, a Delaware limited liability company (“Perimeter Holdings”), five-year Revolving Credit Facility (the “Revolving Credit Facility”) provides for a senior secured Revolving Credit Facility in an aggregate principal amount of up to $ 100.0 million.

Perimeter Holdings, LLC, a Delaware limited liability company (“Perimeter Holdings”), maintains a Revolving Credit Facility (the “Revolving Credit Facility”), which provides for a senior secured Revolving Credit Facility in an aggregate principal amount of up to $ 100.0 million.

The Revolving Credit Facility matures on November 9, 2026.

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All borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including the absence of a default and the accuracy of representations and warranties, subject to customary exceptions.

Borrowings under the Revolving Credit Facility bear interest at a rate equal to (i) an applicable margin, plus (ii) at Perimeter Holdings option, either (x) Secured Overnight Financing Rate for the applicable corresponding tenor (“Term SOFR”) as published by CME Group Benchmark Administration, adjusted for certain additional costs or (y) a base rate

determined by reference to the highest of (a) the prime commercial lending rate published by the Wall Street Journal, (b) the federal funds rate plus 0.50 %, (c) the one-month Term SOFR rate plus 1.00 % and (d) a minimum floor of 1.00 %.

the federal funds rate plus 0.50 %, (c) the one-month Term SOFR rate plus 1.00 % and (d) a minimum floor of 1.00 %.

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.

1 unchanged sentence

The Revolving Credit Facility is fully and unconditionally guaranteed by the Company and each of Perimeter Holdings’ existing and future wholly-owned material restricted subsidiaries, subject to customary exceptions, and is secured by a first priority lien, subject to certain permitted liens, on substantially all of Perimeter Holdings’ and each of the guarantors’ existing and future property and assets, subject to customary exceptions.

Deferred financing costs incurred in connection with securing the Revolving Credit Facility are carried as a long-term asset and are amortized on a straight-line over the term of the Revolving Credit Facility and included in interest expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

As of March 31, 2025 and December 31, 2024, the Company did no t have any outstanding borrowings under the Revolving Credit Facility and was in compliance with all covenants.

As of June 30, 2025 and December 31, 2024, the Company did no t have any outstanding borrowings under the Revolving Credit Facility and was in compliance with all covenants.

Perimeter Holdings has $ 675.0 million principal amount of 5.00 % senior secured notes due October 30, 2029 (“Senior Notes”).

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and change the Company’s line of business.

As of March 31, 2025, the Company was in compliance with all covenants.

Deferred financing costs incurred in connection with securing the Senior Notes were capitalized and amortized using the effective interest method over the term of the Senior Notes and included in interest expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

As of June 30, 2025, the Company was in compliance with all covenants.

Deferred financing costs incurred in connection with securing the Senior Notes were capitalized and are amortized using the effective interest method over the term of the Senior Notes and included in interest expense in the accompanying condensed consolidated statements of operations and comprehensive (loss) income.

The unamortized portion of the deferred financing costs is included as a reduction to the carrying value of the Senior Notes which have been recorded as long-term debt, net in the accompanying condensed consolidated balance sheets.

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Holders of the Preferred Stock have no voting rights (only protective rights).

As of March 31, 2025, the Company had issued 10 million shares of Preferred Stock, par value $ 0.0001 per share, stated value $ 100.0 million.

As of June 30, 2025, the Company had issued 10 million shares of Preferred Stock, par value $ 0.0001 per share, stated value $ 100.0 million.

The Company, under its Certificate of Incorporation, is mandatorily required to redeem the Preferred Stock at any time prior to the earliest of (i) six months following the latest maturity date of the above-mentioned Senior Notes, (ii) nine

years after the date of issuance of the Preferred Stock or (iii) upon the occurrence of a change of control, as defined in the Company’s Certificate of Incorporation.

Due to the fact that the shares of Preferred Stock are mandatorily redeemable, the shares of Preferred Stock are classified as a liability in the accompanying consolidated balance sheets, and $ 1.8 million of dividends on these shares of Preferred Stock were recorded as interest expense for each of the three months ended March 31, 2025 and 2024 in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

Preferred dividends in arrears were $ 13.9 million and $ 12.8 million at March 31, 2025 and December 31, 2024, respectively.

Due to the fact that the shares of Preferred Stock are mandatorily redeemable, the shares of Preferred Stock are classified as a liability on the accompanying condensed consolidated balance sheets, and $ 1.8 million and $ 3.7 million of dividends on these shares of Preferred Stock were recorded as interest expense for the three and six months ended June 30, 2025, respectively, and $ 1.8 million and $ 3.5 million were recorded as interest expense for the three and six months ended June 30, 2024, respectively, in the accompanying condensed consolidated statements of operations and comprehensive (loss) income.

Preferred dividends in arrears were $ 15.0 million and $ 12.8 million at June 30, 2025 and December 31, 2024, respectively.

The shares of Preferred Stock have an aggregate liquidation preference of $ 100.0 million, plus any accrued and unpaid dividends thereon and are senior to the Company's Common Stock with respect to dividends and with respect to dissolution, liquidation or winding up of the Company.

At March 31, 2025 and December 31, 2024, the redemption price was $ 113.9 million and $ 112.8 million, respectively.

At June 30, 2025 and December 31, 2024, the redemption price was $ 115.0 million and $ 112.8 million, respectively.

The Company is subject to U.S.

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The Company estimates its annual effective tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates.

The Company’s effective tax rate was 18.06 % for the three months ended March 31, 2025.

The Company’s effective tax rate was 4.98 % and 30.59 % for the three and six months ended June 30, 2025, respectively.

The primary differences between the effective tax rate and the amount computed by applying the U.S.

statutory rate of 21 % are related to losses not expected to result in an income tax benefit in certain jurisdictions that have a valuation allowance, permanently non-deductible compensation, withholding taxes accrued on unremitted earnings and the impact of foreign tax rate differences.

The Company’s effective tax rate was 4.92 % for the three months ended March 31, 2024.

statutory rate of 21 % are related to the impact of U.S.

state taxes, permanently nondeductible compensation, withholding taxes accrued on unremitted earnings, and the impact of foreign tax rate differences.

The Company’s effective tax rate was 36.57 % and ( 15.57 )% for the three and six months ended June 30, 2024, respectively.

Prior to the conversion into a corporation under the laws of the State of Delaware on November 20, 2024 (“Redomiciliation Transaction”), the Company was incorporated under the laws of the Grand Duchy of Luxembourg.

The primary differences between the effective tax rate and the amount computed by applying the Luxembourg statutory rate of 24.94 % are related to losses not expected to result in tax benefits in certain jurisdictions that have a valuation allowance, permanently non-deductible compensation, withholding taxes accrued on unremitted earnings and the impact of foreign tax rate differences.

The primary differences between the effective tax rate and the amount computed by applying the Luxembourg statutory rate of 24.94 % are related to losses not expected to result in tax benefits in certain jurisdictions that had a valuation allowance, permanently non-deductible compensation, withholding taxes accrued on unremitted earnings, and the impact of foreign tax rate differences.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

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While the Company expects to realize the remaining net deferred tax assets, changes in future taxable income or in tax laws may alter this expectation and result in future increases to the valuation allowance.

The valuation allowance for deferred tax assets as of March 31, 2025 and 2024 primarily relates to net operating loss carryforwards that, in the judgment of the Company, are not more likely than not to be realized.

The valuation allowance for deferred tax assets as of June 30, 2025, and December 31, 2024 primarily relates to net operating loss carryforwards that, in the judgment of the Company, are not more likely than not to be realized.

The Company evaluates its tax positions and recognizes only tax benefits that, more likely than not, will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position.

The tax position is measured at the largest amount of benefit that has a greater than 50.0% likelihood of being realized upon settlement.

As of March 31, 2025, it is not expected that the Company’s unrecognized tax benefits will decrease within twelve months.

As of June 30, 2025, it is not expected that the Company's unrecognized tax benefits will decrease within twelve months.

On July 4, 2025, “An Act to provide for reconciliation pursuant to title II of H.

14” and commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the U.S.

The OBBBA includes broad changes to U.S.

tax law including full expensing of qualified capital expenditures, full expensing of domestic research and development expenditures, modification of limitation on business interest, and modifications to the international tax framework.

The Company is still in the process of evaluating the OBBBA and has determined that an estimate of the financial impact cannot be made at this time.

COMMITMENTS AND CONTINGENCIES

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The Company’s exposure to losses, if any, is not considered probable or reasonably estimable at this time.

The Company does not have any material unconditional purchase obligations as of March 31, 2025.

The Company does not have any material unconditional purchase obligations as of June 30, 2025.

The Company is authorized to issue 4,020,000,000 shares of capital stock, consisting of (i) 4,000,000,000 shares of Common Stock and (ii) 20,000,000 shares of Preferred Stock.

As of March 31, 2025 , there were 171,267,518 and 148,775,583 shares of Common Stock issued and outstanding, respectively.

Due to the fact that the shares of Preferred Stock are mandatorily redeemable, the Preferred Stock is classified as a liability on the accompanying consolidated balance sheets.

As of June 30, 2025 , there were 171,292,585 and 145,914,429 shares of Common Stock issued and outstanding, respectively.

Due to the fact that the shares of Preferred Stock are mandatorily redeemable, the Preferred Stock is classified as a liability on the accompanying condensed consolidated balance sheets.

R efer to Note 7, “Long-Term Debt and Preferred Stock” f or additional information about the Preferred Stock.

The Board has re-established the limit for Common Stock repurchases at $ 100.0 million.

The approximate dollar value of shares that may yet be repurchased under the Share Repurchase Plan was $ 89.0 million as of March 31, 2025.

During the three months ended March 31, 2025, the Company repurchased 888,454 shares under its Share Repurchase Plan .

On May 7, 2025, the Board re-established the limit for Common Stock repurchases at $ 100.0 million.

The approximate dollar value of shares that may yet be repurchased under the share repurchase plan was $ 78.3 million as of June 30, 2025 (the “Share Repurchase Plan”).

During the three and six months ended June 30, 2025, the Company repurchased 2,886,221 and 3,774,675 shares, respectively, under its Share Repurchase Plan .

During the three and six months ended June 30, 2024, the Company repurchased 18,535 and 2,987,892 shares, respectively.

The repurchased shares are recorded at cost and are being held in treasury.

On August 6, 2025, the Board re-established the limit for Common Stock repurchases at $ 100.0 million.

The Company expects to periodically re-establish the limit for Common Stock repurchases based on subsequent repurchase activity.

STOCK-BASED COMPENSATION

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Shares associated with underlying awards that are expired, forfeited, or otherwise terminated without the delivery of shares, or are settled in cash, and any shares tendered to or withheld by the Company for the payment of an exercise price or for tax withholding will again be available for issuance under the 2021 Equity Plan.

During the three months ended March 31, 2025, the Company granted 2,938,000 performance-based non-qualified stock options (“ PBNQSO”) to its executive officers, non-employee directors and other members of senior management under the 2021 Equity Plan.

During the six months ended June 30, 2025, the Company grante d 3,010,500 performance-based non-qualified stock options (“ PBNQSO”) to its executive officers, non-employee directors and other members of senior management under the 2021 Equity Plan.

The PBNQSO granted consist of two types of vesting criteria.

T he Company recognizes compensation costs for PBNQSO granted in the first three months of 2025 based on the estimated fair value of the awards on the date of grant.

T he Company recognizes compensation costs for PBNQSO granted in the first six months of 2025 based on the estimated fair value of the awards on the date of grant.

The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Hull-White model or Monte Carlo model, as applicable.

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The fair value of PBNQSO is recognized as compensation expense beginning at the time in which the performance conditions are deemed probable of achievement, over the remaining requisite service period.

In February 2025, based on the Company’s performance for 2024, the compensation committee verified and determined the Annual Operational Performance per Diluted Share (“AOP”) for 2024 to be $ 25.02 , which was above the maximum vesting AOP target.

As of March 31, 2025, there were 17,768,071 PBNQSO outstanding.

In February 2025, based on the Company’s 2024 performance, the compensation committee verified and determined the Annual Operational Performance per Diluted Share (“AOP”) for 2024 to be $ 25.02 , which was above the maximum vesting AOP target.

As of June 30, 2025, there w ere 17,100,503 PBNQSO outstanding.

The exercise prices of these PBNQSO ranged from $ 2.94 to $ 13.24 per share and expire ten years from the grant date.

The table below summarizes the PBNQSO activity for the three months ended March 31, 2025:

The table below summarizes the PBNQSO activity for the six months ended June 30, 2025:

Number of Options Weighted-Average

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Forfeited ( 980,000 ) $ 8.35

Cancelled — $ —

Outstanding at March 31, 2025

Cancelled/Expired ( 35,001 ) $ 10.00

Outstanding at June 30, 2025

17,100,503 $ 9.01 7.79 $ 84,145

Options vested and exercisable 5,820,336 $ 9.27 6.38 $ 27,059

The assumptions used to fair value the PBNQSO granted during the three months ended March 31, 2025 using the Monte Carlo model were as follows:

March 31, 2025

The assumptions used to fair value the PBNQSO granted during the six months ended June 30, 2025 using the Monte Carlo model were as follows:

June 30, 2025

Dividend yield — %

Risk-free interest rate 4.57 %

Expected volatility 49.00 %

Risk-free interest rate 4.21 % to 4.57 %

Expected volatility 49.00 % to 50.00 %

Expected term (years) 10.00

2 unchanged sentences

Weighted average fair value of options granted $ 5.38

Non-cash stock-based compensation expense recognized by the Company for the three months ended March 31, 2025, and 2024 was $ 2.7 million and $ 1.7 million, respectively.

Non-cash stock-based compensation expense recognized by the Company for the three and six months ended June 30, 2025, was $ 2.2 million and $ 4.9 million, respectively.

Non-cash stock-based compensation expense recognized by the Company for the three and six months ended June 30, 2024 was $ 3.0 million and $ 4.7 million, respectively.

Compensation expense is recognized based upon probability assessments of PBNQSO that are expected to vest in future periods.

Such probability assessments are subject to revision and, therefore, unrecognized compensation expense is subject to future changes in estimates.

As of March 31, 2025, there was approximately $ 30.2 million of total unrecognized compensation expense related to non-vested PBNQSO expected to vest, which is expected to be recognized over a weighted-average period of 1.7 years.

As of June 30, 2025, there was approximately $ 26.2 million of total unrecognized compensation expense related to non-vested PBNQSO expected to vest, which is expected to be recognized over a weighted-average period of 1.8 years .

Founder Advisory Amounts

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The Fixed Annual Advisory Amount will be equal to 2,357,061 shares of Common Stock ( 1.5 % of 157,137,410 Ordinary Shares outstanding on November 9, 2021) for each year through December 31, 2027 and is valued using the period end volume weighted average closing share price of the Company’s Common Stock for ten consecutive trading days.

The Variable Annual Advisory Amount for each year through December 31, 2031 is based on the appreciation of the market price of the Company’s Common Stock if such market price exceeds certain trading price minimums at the end of each reporting period and is valued using a Monte Carlo simulation model.

The Variable Annual Advisory Amount for each year through December 31, 2031 is based on the appreciation of the

market price of the Company’s Common Stock if such market price exceeds certain trading price minimums at the end of each reporting period and is valued using a Monte Carlo simulation model.

Because up to 50 % of the Advisory Amounts could be settled through a cash payment, 50 % are classified as a liability and the remaining 50 % are classified within equity.

For Advisory Amounts classified within equity, the Company does not subsequently remeasure the fair value.

the Advisory Amounts classified as a liability, the Company remeasures the fair value at each reporting date, accordingly, the compensation expense recorded by the Company in the future will depend upon changes in the fair value of the liability-classified Advisory Amounts.

As of March 31, 2025 and December 31, 2024, the fair value of the Fixed Annual Advisory Amount was calculated to be $ 68.4 million and $ 90.8 million, respectively, based on the period end volume weighted average closing share price for ten consecutive trading days of $ 9.67 and $ 12.85 , respectively.

As of March 31, 2025 and December 31, 2024, the fair value of the Variable Annual Advisory Amount, determined using a Monte Carlo simulation model, was $ 250.5 million and $ 389.3 million, respectively.

For the three months ended March 31, 2025, the Company recognized a decrease in the compensation expense related to the founders advisory fees-related party due to a decrease in fair value for liability-classified Advisory Amounts of $ 80.6 million.

For the three months ended March 31, 2024, the Company recognized an increase in the compensation expense related to the founders advisory fees-related party due to an increase in fair value for liability-classified Advisory Amounts of $ 68.3 million.

For the Advisory Amounts classified as a liability, the Company remeasures the fair value at each reporting date.

Accordingly, the Company believes that the compensation expense recorded by the Company in the future will depend upon changes in the fair value of the liability-classified Advisory Amounts.

As of June 30, 2025 and December 31, 2024, the fair value of the Fixed Annual Advisory Amount was calculated to be $ 96.3 million and $ 90.8 million, respectively, based on the period end volume weighted average closing share price for ten consecutive trading days of $ 13.62 and $ 12.85 , respectively.

As of June 30, 2025 and December 31, 2024, the fair value of the Variable Annual Advisory Amount, determined using a Monte Carlo simulation model, was $ 416.4 million and $ 389.3 million, respectively.

For the three and six months ended June 30, 2025, the Company recognized an increase in the compensation expense related to the founders advisory fees - related party due to an increase in fair value for liability-classified Advisory Amounts of $ 96.9 million and $ 16.3 million, respectively.

For the three and six months ended June 30, 2024, the Company recognized an increase in the compensation expense related to the founders advisory fees - related party due to an increase in fair value for liability-classified Advisory Amounts of $ 0.6 million and $ 68.9 million, respectively.

FAIR VALUE MEASUREMENTS

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The carrying amount of the Company's Preferred Stock equals the redemption price, which approximates fair value.

At March 31, 2025 and December 31, 2024, the estimated fair value of the Company's Senior Notes, calculated using Level 2 inputs, based on bid prices obtained from a broker was approxima tely $ 633.3 million a nd $ 629.5 million, respectively.

At June 30, 2025 and December 31, 2024, the estimated fair value of the Company's Senior Notes, calculated using Level 2 inputs, based on bid prices obtained from a broker was approxima tely $ 653.9 million a nd $ 629.5 million, respectively.

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.

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Liabilities by Hierarchy Level

The following table sets forth the Company’s liabilities that were measured at fair value on a recurring basis, by level, within the fair value hierarchy as of March 31, 2025 and December 31, 2024 (in thousands):

The following table sets forth the Company’s liabilities that were measured at fair value on a recurring basis, by level, within the fair value hierarchy as of June 30, 2025 and December 31, 2024 (in thousands):

Fair Value Measurements Using:

March 31, 2025

June 30, 2025

Level 1 Level 2 Level 3 Total

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Founders advisory fees payable - related party $ 52,098 $ — $ 194,662 $ 246,760

The fair value of the founders advisory fees payable is based on the appreciation of the market price of shares if such market price exceeds certain trading price minimums at the end of each reporting period and is valued using a Monte Carlo simulation model, which requires the input of subjective assumptions, including the fair value of the underlying Ordinary Shares, the risk-free interest rate, the expected equity volatility, and the expected term of the Founder Advisory Agreement.

See Note 11, “Stock-Based Compensation” for discussion of the fair value estimation on the founders advisory fees payable.

The fair value of the founders advisory fees payable - related party is based on the appreciation of the market price of shares if such market price exceeds certain trading price minimums at the end of each reporting period and is valued using a Monte Carlo simulation model, which requires the input of subjective assumptions, including the fair value of the underlying Common Stock, the risk-free interest rate, the expected equity volatility, and the expected term of the Founder Advisory Agreement.

See Note 11, “Stock-Based Compensation” for discussion of the fair value estimation on the founders advisory fees payable - related party.

Changes in Level 3 Liabilities

The reconciliations for all liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are as follows (in thousands):

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Founders Advisory Fees Payable - Related Party Founders Advisory Fees Payable - Related Party

The reconciliation for the portion of founders advisory fees payable - related party which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows (in thousands):

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

2025 2024 2025 2024

Fair value, beginning of period $ 125,262 $ 93,136 $ 194,662 $ 35,647

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Amounts for products sold are recognized at a point in time, whereas amounts for contract services associated with full-service and portable retardant are recognized over time.

Revenues for the three months ended March 31, 2025 and 2024 are presented below (in thousands):

Three Months Ended March 31,

Revenues for the three and six months ended June 30, 2025 and 2024 are presented below (in thousands):

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

2025 2024 2025 2024

Revenues from products $ 130,773 $ 94,736 $ 199,489 $ 152,617

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Total net sales $ 162,639 $ 127,276 $ 234,669 $ 186,320

EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share represents income available to common or ordinary shareholders divided by the weighted average number of Common Stock or Ordinary Shares outstanding during the reported period.

Diluted earnings (loss) per share is based upon the weighted-average number of shares outstanding during the period plus additional weighted-average potentially dilutive share equivalents during the period when the effect is dilutive.

Basic and diluted weighted average shares outstanding and earnings (loss) per share were as follows (in thousands, except share and per share data):

Three Months Ended March 31,

Net income (loss) $ 56,686 $ ( 82,558 )

(LOSS) EARNINGS PER SHARE

Basic (loss) earnings per share represents income available to common or ordinary shareholders divided by the weighted average number of Common Stock or Ordinary Shares outstanding during the reported period.

Diluted (loss) earnings per share is based upon the weighted-average number of shares outstanding during the period plus additional weighted-average potentially dilutive share equivalents during the period when the effect is dilutive.

Basic and diluted weighted average shares outstanding and (loss) earnings per share were as follows (in thousands, except share and per share data):

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

2025 2024 2025 2024

Net (loss) income $ ( 32,161 ) $ 21,650 $ 24,525 $ ( 60,908 )

Weighted-average shares outstanding:

Weighted average shares used in computing earnings (loss) per share, basic 148,556,284 145,326,933

Weighted average shares used in computing (loss) earnings per share, basic 147,055,804 145,236,526 147,779,470 145,279,938

PBNQSO — — 1,188,480 —

Founders advisory fees — 9,428,244 7,071,183 —

Weighted average shares used in computing earnings (loss) per share, diluted 156,727,696 145,326,933

Basic earnings (loss) per share $ 0.38 $ ( 0.57 )

Diluted earnings (loss) per share $ 0.36 $ ( 0.57 )

The number of anti-dilutive securities not included in the calculation of diluted earnings per share were as follows:

Three Months Ended March 31,

Weighted average shares used in computing (loss) earnings per share, diluted 147,055,804 154,664,770 156,039,133 145,279,938

Basic (loss) earnings per share $ ( 0.22 ) $ 0.15 $ 0.17 $ ( 0.42 )

Diluted (loss) earnings per share $ ( 0.22 ) $ 0.14 $ 0.16 $ ( 0.42 )

The number of anti-dilutive securities not included in the calculation of diluted (loss) earnings per share were as follows:

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

2025 2024 2025 2024

PBNQSO 1,511,730 245,004 235,000 245,004

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IMS has a flexible, vertically integrated production facility centered on its printed circuit board (“PCB”) line that allows it to acquire and produce a variety of product lines across a range of end markets, including large medical systems, communications infrastructure, energy infrastructure, defense systems, and industrial systems, with a substantial focus on aftermarket repair and replacement.

The CODM is the Company's CEO.

The CODM uses Segment Adjusted EBITDA for each segment predominantly in the annual budget and the forecasting process.

The chief operating decision-maker (“CODM”) is the Company's CEO.

The CODM uses Segment Adjusted EBITDA for each segment predominantly in the annual budget and forecasting process.

The CODM considers budget/forecast-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment.

The Company defines Segment Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted on a consistent basis for certain non-recurring or unusual items on a segment basis.

recurring or unusual items may include acquisition and restructuring related costs, management fees and other non-recurring items.

Segment Adjusted EBITDA is 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 and transaction related costs (ii) founder advisory fee expenses, (iii) stock-based compensation expense and (iv) foreign currency loss (gain).

Interest income, interest expense, other income (expense) and certain corporate operating expenses are not included in the measures of segment performance reviewed by the CODM.

The corporate category is not considered to be a segment.

Information related to net sales, Segment Adjusted EBITDA, depreciation and amortization and purchases of property and equipment are summarized below (in thousands):

Three Months Ended March 31, 2025

Information related to net sales, Segment Adjusted EBITDA, depreciation and amortization, purchases of property and equipment, and purchases of intangible assets are summarized below (in thousands):

Three Months Ended June 30, 2025

Fire Safety Specialty Products Total

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Non-recurring expenses 307

Share-based compensation expense 2,671

Stock-based compensation expense 2,238

Foreign currency gain ( 2,096 )

Loss before income taxes $ ( 33,848 )

Depreciation and amortization $ 13,620 $ 4,304 $ 17,924

Purchases of property and equipment $ 10,409 $ 2,355 $ 12,764

Purchase of intangible assets $ 15,226 $ — $ 15,226

Three Months Ended June 30, 2024

Fire Safety Specialty Products Total

Product $ 65,998 $ 28,738 $ 94,736

Services and others 32,540 — 32,540

Total net sales $ 98,538 $ 28,738 $ 127,276

Adjusted cost of goods sold $ 34,680 $ 16,672 $ 51,352

Adjusted selling, general and administrative expense 8,219 2,797 11,016

Segment Adjusted EBITDA $ 55,639 $ 9,269 $ 64,908

Depreciation and amortization 16,359

Interest and financing expense 10,590

Founders advisory fees - related party 588

Non-recurring expenses 23

Stock-based compensation expense 2,994

Foreign currency loss 224

Income before income taxes $ 34,130

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Purchases of property and equipment $ 1,685 $ 1,958 $ 3,643

Three Months Ended March 31, 2024

Six Months Ended June 30, 2025

Fire Safety Specialty Products Total

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Non-recurring expenses 1,775

Share-based compensation expense 1,742

Stock-based compensation expense 4,909

Foreign currency gain ( 3,255 )

Income before income taxes $ 35,331

Depreciation and amortization $ 26,385 $ 8,432 $ 34,817

Purchases of property and equipment $ 13,671 $ 3,906 $ 17,577

Purchase of intangible assets $ 15,226 $ — $ 15,226

Six Months Ended June 30, 2024

Fire Safety Specialty Products Total

Product $ 89,990 $ 62,627 $ 152,617

Services and others 33,703 — 33,703

Total net sales $ 123,693 $ 62,627 $ 186,320

Adjusted cost of goods sold $ 51,532 $ 35,447 $ 86,979

Adjusted selling, general and administrative expense 16,763 5,534 22,297

Segment Adjusted EBITDA $ 55,398 $ 21,646 $ 77,044

Depreciation and amortization 32,771

Interest and financing expense 21,238

Founders advisory fees - related party 68,921

Non-recurring expenses 563

Stock-based compensation expense 4,736

Foreign currency loss 1,517

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Purchases of property and equipment $ 2,478 $ 2,718 $ 5,196

Total segment assets reconciled to consolidated amounts are as follows:

March 31, 2025

Total segment assets reconciled to consolidated amounts are as follows (in thousands):

June 30, 2025

Fire Safety Specialty Products Total

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Total consolidated assets $ 2,416,394

Net sales by geographical area is as follows (in thousands):

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Net sales by geographical area are as follows:

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

2025 2024 2025 2024

United States 71 % 78 % 70 % 75 %

Canada 13 % 6 % 9 % 4 %

Other international sales (1)

16 % 16 % 21 % 21 %

Total net sales 100 % 100 % 100 % 100 %

(1) The Company did not have net sales in excess of 10% in any other countries for the three months ended March 31, 2025 and 2024.

(1) The Company did not have net sales in excess of 10% in any other countries for the three and six months ended June 30, 2025, and June 30, 2024.

Property, plant and equipment, net by geographical area consisted of the following (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

United States $ 58,875 $ 46,580

Canada 2,205 2,180

Germany 13,678 12,643

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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 1. Financial Statements