Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-41027 | |
Entity Registrant Name | PERIMETER SOLUTIONS, SA | |
Entity Incorporation, State or Country Code | N4 | |
Entity Tax Identification Number | 98-1632942 | |
Entity Address, Address Line One | 12E rue Guillaume Kroll | |
Entity Address, Postal Zip Code | L-1882 | |
Entity Address, Country | LU | |
Entity Address, City or Town | Grand Duchy of Luxembourg | |
City Area Code | 314 | |
Local Phone Number | 396-7343 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 157,034,064 | |
Entity Central Index Key | 0001880319 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Ordinary Shares | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Ordinary Shares, nominal value $1.00 per share | |
Trading Symbol | PRM | |
Security Exchange Name | NYSE | |
Warrant | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants for Ordinary Shares | |
Trading Symbol | PRMFF |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 91,789 | $ 126,750 |
Accounts receivable, net | 24,715 | 26,646 |
Inventories | 156,257 | 142,961 |
Income tax receivable | 1,580 | 214 |
Prepaid expenses and other current assets | 11,626 | 11,951 |
Total current assets | 285,967 | 308,522 |
Property, plant and equipment, net | 59,221 | 58,846 |
Operating lease right-of-use assets | 17,274 | 18,582 |
Goodwill | 1,032,802 | 1,031,460 |
Intangible assets, net | 1,024,796 | 1,037,440 |
Other assets, net | 1,654 | 1,766 |
Total assets | 2,421,714 | 2,456,616 |
Current liabilities: | ||
Accounts payable | 25,945 | 36,794 |
Accrued expenses and other current liabilities | 35,939 | 32,705 |
Founders advisory fees payable - related party | 9,108 | 4,655 |
Total current liabilities | 70,992 | 74,154 |
Long-term debt | 665,577 | 665,280 |
Operating lease liabilities, net of current portion | 14,496 | 15,484 |
Deferred income taxes | 272,158 | 278,270 |
Founders advisory fees payable - related party | 137,374 | 170,718 |
Redeemable preferred shares | 102,700 | 101,279 |
Redeemable preferred shares - related party | 2,807 | 3,209 |
Other non-current liabilities | 9,624 | 9,322 |
Total liabilities | 1,275,728 | 1,317,716 |
Commitments and contingencies (Note 9) | ||
Shareholders’ equity: | ||
Ordinary shares, $1 nominal value per share, 4,000,000,000 shares authorized; 165,066,195 and 163,234,542 shares issued; 158,513,889 and 156,797,806 shares outstanding at March 31, 2023 and December 31, 2022, respectively | 165,067 | 163,235 |
Treasury shares, at cost; 6,552,306 and 6,436,736 shares at March 31, 2023 and December 31, 2022, respectively | (50,205) | (49,341) |
Additional paid-in capital | 1,693,875 | 1,698,781 |
Accumulated other comprehensive loss | (23,878) | (25,471) |
Accumulated deficit | (638,873) | (648,304) |
Total shareholders’ equity | 1,145,986 | 1,138,900 |
Total liabilities and shareholders’ equity | 2,421,714 | 2,456,616 |
Customer lists, net | ||
Current assets: | ||
Intangible assets, net | 701,590 | 710,329 |
Technology and patents, net | ||
Current assets: | ||
Intangible assets, net | 230,078 | 232,818 |
Tradenames, net | ||
Current assets: | ||
Intangible assets, net | $ 93,128 | $ 94,293 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 4,000,000,000 | 4,000,000,000 |
Common stock, issued (in shares) | 165,066,195 | 163,234,542 |
Common stock, outstanding (in shares) | 158,513,889 | 156,797,806 |
Treasury stock (in shares) | 6,552,306 | 6,436,736 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 43,858 | $ 57,758 |
Cost of goods sold | 31,012 | 41,343 |
Gross profit | 12,846 | 16,415 |
Operating expenses: | ||
Selling, general and administrative expense | 10,465 | 19,154 |
Amortization expense | 13,763 | 13,855 |
Founders advisory fees - related party | (24,236) | (59,848) |
Other operating expense | 2 | 196 |
Total operating expenses | (6) | (26,643) |
Operating income | 12,852 | 43,058 |
Other expense (income): | ||
Interest expense, net | 10,146 | 10,496 |
Loss on contingent earn-out | 246 | 0 |
Unrealized foreign currency (gain) loss | (721) | 880 |
Other expense, net | 72 | 165 |
Total other expense, net | 9,743 | 11,541 |
Income before income taxes | 3,109 | 31,517 |
Income tax benefit | 6,322 | 5,446 |
Net income | 9,431 | 36,963 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | 1,593 | 126 |
Total comprehensive income | $ 11,024 | $ 37,089 |
Earnings per share: | ||
Basic (in usd per share) | $ 0.06 | $ 0.23 |
Diluted (in usd per share) | $ 0.06 | $ 0.21 |
Weighted average number of ordinary shares outstanding: | ||
Basic (in shares) | 157,700,326 | 160,251,199 |
Diluted (in shares) | 169,485,631 | 174,777,232 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Ordinary Shares | Treasury Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 31, 2021 | 157,237,435 | |||||||
Beginning balance at Dec. 31, 2021 | $ 1,081,618 | $ (1,545) | $ 157,237 | $ 0 | $ 1,670,033 | $ (7,135) | $ (738,517) | $ (1,545) |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation | 4,963 | 4,963 | ||||||
Ordinary shares issued related to founders advisory fees - related party (in shares) | 5,952,992 | |||||||
Ordinary shares issued related to founders advisory fees - related party | 13,783 | $ 5,954 | 7,829 | |||||
Ordinary shares issued related to warrants exercised (in shares) | 44,115 | |||||||
Ordinary shares issued related to warrants exercised | 529 | $ 44 | 485 | |||||
Net income | 36,963 | 36,963 | ||||||
Other comprehensive income (loss) | 126 | 126 | ||||||
Ending balance (in shares) at Mar. 31, 2022 | 163,234,542 | |||||||
Ending balance at Mar. 31, 2022 | $ 1,136,437 | $ 163,235 | $ 0 | 1,683,310 | (7,009) | (703,099) | ||
Ending balance (in shares) at Mar. 31, 2022 | 0 | |||||||
Beginning balance (in shares) at Dec. 31, 2022 | 156,797,806 | 163,234,542 | ||||||
Beginning balance at Dec. 31, 2022 | $ 1,138,900 | $ 163,235 | $ (49,341) | 1,698,781 | (25,471) | (648,304) | ||
Beginning balance (in shares) at Dec. 31, 2022 | 6,436,736 | 6,436,736 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation | $ (3,074) | (3,074) | ||||||
Ordinary shares issued related to founders advisory fees - related party (in shares) | 1,831,653 | |||||||
Ordinary shares issued related to founders advisory fees - related party | 0 | $ 1,832 | (1,832) | |||||
Ordinary shares repurchased (in shares) | 115,570 | |||||||
Ordinary shares repurchased | (864) | $ (864) | ||||||
Net income | 9,431 | 9,431 | ||||||
Other comprehensive income (loss) | $ 1,593 | 1,593 | ||||||
Ending balance (in shares) at Mar. 31, 2023 | 158,513,889 | 165,066,195 | ||||||
Ending balance at Mar. 31, 2023 | $ 1,145,986 | $ 165,067 | $ (50,205) | $ 1,693,875 | $ (23,878) | $ (638,873) | ||
Ending balance (in shares) at Mar. 31, 2023 | 6,552,306 | 6,552,306 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 9,431 | $ 36,963 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Founders advisory fees - related party (change in accounting fair value) | (24,236) | (59,848) |
Depreciation and amortization expense | 16,087 | 16,371 |
Interest and payment-in-kind on preferred shares | 1,698 | 1,634 |
Share-based compensation | (3,074) | 4,963 |
Non-cash lease expense | 1,153 | 1,309 |
Deferred income taxes | (6,322) | 843 |
Amortization of deferred financing costs | 410 | 395 |
Amortization of acquisition related inventory step-up | 0 | 6,122 |
Loss on contingent earn-out | 246 | 0 |
Unrealized (gain) loss on foreign currency | (721) | 880 |
Loss on disposal of assets | 5 | 0 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 1,670 | (9,801) |
Inventories | (13,119) | (16,782) |
Prepaid expenses and current other assets | 360 | 4,164 |
Other assets | 0 | 599 |
Accounts payable | (10,878) | (6,143) |
Deferred revenue | 0 | 372 |
Income taxes payable, net | (7,381) | (6,229) |
Accrued expenses and other current liabilities | 8,785 | 8,094 |
Founders advisory fees - related party (cash settled) | (4,655) | (53,547) |
Operating lease liabilities | (1,169) | (1,240) |
Other liabilities | 94 | (15) |
Net cash used in operating activities | (31,616) | (70,896) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (2,456) | (1,313) |
Purchase price adjustment under Business Combination Agreement | 0 | (1,638) |
Net cash used in investing activities | (2,456) | (2,951) |
Cash flows from financing activities: | ||
Ordinary shares repurchased | (864) | 0 |
Proceeds from exercise of warrants | 0 | 529 |
Net cash (used in) provided by financing activities | (864) | 529 |
Effect of foreign currency on cash and cash equivalents | (25) | 1,307 |
Net change in cash and cash equivalents | (34,961) | (72,011) |
Cash and cash equivalents, beginning of period | 126,750 | 225,554 |
Cash and cash equivalents, end of period | 91,789 | 153,543 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 142 | 145 |
Cash paid (received) for income taxes | 10,155 | (17) |
Non-cash investing and financing activities: | ||
Liability portion of founders advisory fees - related party reclassified to additional paid in capital | $ 0 | $ 13,783 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Organization and General 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 global operations in North America, Europe, and Asia Pacific. PSSA's ordinary shares, nominal value, $1.00 per share (the “Ordinary Shares”), are listed on the New York Stock Exchange ("NYSE") and trade under the symbol "PRM." The condensed consolidated financial statements herein include the assets, liabilities, and results of operations of PSSA and its subsidiaries, all of which are wholly owned (collectively, the “Company”). Business Operations The Company is a global solutions provider for the fire safety and specialty products industries. Approximately 74% of the Company's 2022 annual revenues were derived in the United States, approximately 15% in Europe, approximately 5% in Canada and approximately 2% in Mexico, with the remaining approximately 4% spread across various other countries. The Company’s business is organized and managed in two reporting segments: Fire Safety and Specialty Products. The Fire Safety business is a formulator and manufacturer of fire management products that help the Company’s customers combat various types of fires, including wildland, structural, flammable liquids and other types of fires. The Company’s Fire Safety business also offers specialized equipment and services, typically in conjunction with its fire management products to support firefighting operations. The Company’s specialized equipment includes air base retardant storage, mixing, and delivery equipment; mobile retardant bases; retardant ground application units; mobile foam equipment; and equipment that it custom designs and manufactures to meet specific customer needs. 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. The Specialty Products segment produces and sells Phosphorus Pentasulfide ("P 2 S 5 ") in several end markets and applications, including lubricant additives, various agricultural applications, various mining applications, and emerging electric battery technologies. Within the lubricant additive 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 Zinc Dialkyldithiophosphates (“ ZDDP ”) , which is considered an essential component in the formulation of engine oils with its main function to provide anti-wear protection to engine components. P 2 S 5 is also used in pesticide and mining chemicals applications. Global Economic Environment In recent years, the global economic and labor markets have experienced significant inflationary pressures attributable to ongoing economic recovery and supply chain issues, in part due to the impacts of the COVID-19 pandemic and the conflict in Ukraine. While the Company has limited exposure in Russia and Ukraine, it continues to monitor and take actions with its customers and suppliers to mitigate the impact of these inflationary pressures in the future. Actions to mitigate inflationary pressures with suppliers include aggregation of purchase requirements to achieve optimal volume benefits, negotiation of cost-reductions and identification of more cost competitive suppliers. 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal and recurring nature considered necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements. The results of operations for the interim period are not necessarily indicative of the results that will be realized for the entire fiscal year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and accompanying notes thereto included in the Company’s 2022 Annual Report . The condensed consolidated financial statements for the prior periods include certain reclassifications that were made to conform to the current period presentation. Such reclassifications have no impact on previously reported condensed consolidated financial position, results of operations or cash flows. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany transactions and balances. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities 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 unaudited condensed consolidated financial statements include the useful lives of long-lived and intangible assets, the allowance for doubtful accounts, the fair value of financial assets and liabilities, stock options, founder advisory fees, contingent earn-out liability and realizability of deferred tax assets. Actual results could differ from those estimates. As of March 31, 2023, the Company’s significant accounting policies are consistent with those discussed in Note 2 - “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” in its consolidated financial statements included in the Company’s 2022 Annual Report, except for stock options granted during the three months ended March 31, 2023. For stock options granted during the three months ended March 31, 2023, t he Company recognizes compensation costs related to stock options granted to employees and non-employees 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 share-based compensation expense, using the Black-Scholes option-pricing model. The Company records forfeitures as they are incurred. The grant date fair value of the stock options is expensed proportionately for each tranche over the applicable service period. The fair value of performance-based stock options 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. The assumptions used in the Black-Scholes option-pricing model are as follows: • Exercise price. The Company's Ordinary Share’s fair market value on the date of grant. • Fair Market Value of Ordinary Shares. The grant date fair market value is the quoted market price of the Company's Ordinary Shares. • Expected term. The expected term of stock options represents the period that the stock options are expected to remain outstanding and is based on vesting terms, exercise term and contractual lives of the options. The expected term is based on the simplified method and is estimated as the average of the weighted average vesting term and the time to expiration as of the grant date. The simplified method was used due to the lack of historical exercise information. • Expected volatility. As the Company does not have sufficient historical stock price information to meet the expected life of the stock option grants, it uses a blended volatility based on the Company’s short trading history and on the trading history from the common stock of a set of comparable publicly listed companies. • Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield with a maturity equal to the expected term of the stock options in effect at the time of grant. • Dividend yield. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plan to pay any dividends on its ordinary shares. Recently Issued and Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases, which will require lessees to recognize a right of use asset and a lease liability on their balance sheet for all leases, including operating leases, with a term of greater than 12 months. In July 2018, the FASB issued ASU 2018-11, which adds a transition option permitting entities to apply the provisions of the new standard at its adoption date instead of the earliest comparative period presented in the consolidated financial statements. The Company adopted Topic 842 as of January 1, 2022 at December 31, 2022, using the optional transition method provided by ASU 2018-11. Refer to Note 6, "Leases," for additional disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and issued subsequent amendments to the initial guidance within ASU 2019-04, ASU 2019-05 and ASU 2019-11. The amendments require an entity to replace the incurred loss impairment methodology in current U.S. GAAP with a new model that uses a forward-looking expected loss method, which generally results in earlier recognition of allowances for losses. The Company adopted the standard as of January 1, 2022 at December 31, 2022. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements with the most significant impact being the increase in allowance for doubtful accounts related to its trade accounts receivable. The adoption adjustment was recorded to accumulated deficit in the accompanying condensed consolidated statements of shareholders’ equity. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and in January 2021 issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope. These ASUs provide temporary optional expedients and exceptions to existing guidance on contract modifications and hedge accounting to facilitate the market transition from existing reference rates, such as London Interbank Offered Rate (“LIBOR”) which is being phased out, to alternate reference rates, such as Secured Overnight Financing Rate (“SOFR”). These standards are elective and are effective upon issuance for all entities through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, which defers the sunset date of reference rate reform relief to December 31, 2024. The Company expects that the switch in the reference rates from LIBOR to SOFR, under its Revolving Credit Facility (defined below), will occur no later than June 30, 2023. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS Business Combination On November 9, 2021 (the “Closing Date”), PSSA consummated the transactions contemplated by the business combination (the “Business Combination”) with EverArc Holdings Limited, the former parent company of PSSA ("EverArc"), SK Invictus Holdings, S.à r.l., ("SK Holdings"), SK Invictus Intermediate S.à r.l., ("SK Intermediate"), doing business under the name Perimeter Solutions and EverArc (BVI) Merger Sub Limited, incorporated in the British Virgin Islands and a wholly-owned subsidiary of PSSA pursuant to a business combination agreement (the “Business Combination Agreement”) dated June 15, 2021. Pursuant to the Business Combination Agreement, EverArc entered into an escrow agreement with SK Holdings and Wilmington Trust, N.A., a national banking association, as escrow agent, which provided that approximately $7.6 million of the cash consideration payable pursuant to the Business Combination Agreement be held in escrow pending a determination of the post-closing purchase price adjustments under the Business Combination Agreement. On March 3, 2022, the post-closing purchase price adjust ments under the Business Combination Agreement were finalized. Approximately $7.6 million held in escrow was released and an additional $1.6 million related to the difference in estimated and actual working capital as of the Closing Date was also paid to SK Holdings. |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS Details of certain balance sheet items are presented below (in thousands): March 31, December 31, Inventory: Raw materials and manufacturing supplies $ 75,777 $ 65,968 Work in process 262 248 Finished goods 80,218 76,745 Total inventory $ 156,257 $ 142,961 Prepaid Expenses and Other Current Assets: Advance to vendors $ 2,208 $ 2,047 Prepaid insurance 4,228 5,870 Prepaid value-added taxes 3,537 2,872 Other 1,653 1,162 Total prepaid expenses and other current assets $ 11,626 $ 11,951 Property, Plant and Equipment: Buildings $ 3,966 $ 3,948 Leasehold improvements 2,699 2,333 Furniture and fixtures 514 344 Machinery and equipment 58,701 58,314 Vehicles 3,995 4,106 Construction in progress 2,402 1,953 Total property, plant and equipment, gross 72,277 70,998 Less: Accumulated depreciation (13,056) (12,152) Total property, plant and equipment, net $ 59,221 $ 58,846 Accrued Expenses and Other Current Liabilities: Accrued bonus $ 82 $ 3,278 Accrued salaries 2,608 2,332 Accrued employee benefits 1,005 846 Accrued interest 17,351 8,235 Accrued purchases 5,188 1,790 Accrued taxes 5,501 11,000 Operating lease liabilities 3,278 3,541 Other 926 1,683 Total accrued expenses and other current liabilities $ 35,939 $ 32,705 Other Non-Current Liabilities: LaderaTech contingent earn-out $ 7,519 $ 7,273 Other 2,105 2,049 Total other non-current liabilities $ 9,624 $ 9,322 Depreciation expense related to property, plant and equipment for the three months ended March 31, 2023 and 2022 was $2.3 million and $2.5 million, respectively, substantially all of which was presented in cost of goods sold in the accompanying condensed consolidated statements of operations and comprehensive income. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill by reportable segment are as follows (in thousands): Fire Safety Specialty Products Total Balance, December 31, 2022 $ 860,319 $ 171,141 $ 1,031,460 Foreign currency translation 700 642 1,342 Balance, March 31, 2023 $ 861,019 $ 171,783 $ 1,032,802 Intangible assets and related accumulated amortization as of March 31, 2023 and December 31, 2022 are as follows (in thousands): March 31, 2023 Estimated Gross Value Foreign Accumulated Net Book Definite Lived Intangible Assets: Customer lists 20 761,000 (6,768) (52,642) 701,590 Technology and patents 20 $ 250,000 $ (2,681) $ (17,241) $ 230,078 Tradenames 20 101,000 (884) (6,988) 93,128 Balance, March 31, 2023 $ 1,112,000 $ (10,333) $ (76,871) $ 1,024,796 December 31, 2022 Estimated Gross Value Foreign Accumulated Net Book Definite Lived Intangible Assets: Customer lists 20 761,000 (7,451) (43,220) 710,329 Technology and patents 20 $ 250,000 $ (3,029) $ (14,153) $ 232,818 Tradenames 20 101,000 (970) (5,737) 94,293 Balance, December 31, 2022 $ 1,112,000 $ (11,450) $ (63,110) $ 1,037,440 Amortization expense for definite-lived intangible assets for the three months ended March 31, 2023 and 2022 was $13.8 million and $13.9 million, respectively. Estimated annual amortization expense of intangible assets for the next five years ended December 31 and thereafter is as follows (in thousands): Amount 2023 remaining $ 41,700 2024 55,600 2025 55,600 2026 55,600 2027 55,600 Thereafter 760,696 Total $ 1,024,796 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES Lease cost for the three months ended March 31, 2023 and 2022 are as follows (in thousands): Three Months Ended Three Months Ended Operating lease cost (1) $ 1,153 $ 1,309 Reported in: Cost of goods sold $ 1,092 $ 1,204 Selling, general and administrative expense 61 105 Total lease cost $ 1,153 $ 1,309 (1) Operating lease cost does not include short-term leases or variable costs, all of which are immaterial. As of March 31, 2023, the weighted-average remaining lease term of operating leases was approximately 7 years and the weighted-average discount rate applied was 5.8%. Supplemental cash flow information related to leases for the three months ended March 31, 2023 and 2022 are as follows (in thousands): Three Months Ended Three Months Ended Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows for operating leases $ 1,169 $ 1,240 ROU assets obtained in exchange for new operating lease obligations: Non-cash investing and financing activity for operating leases $ 10 $ 350 As of March 31, 2023 , the estimated future minimum payment obligations for non-cancelable operating leases are as follows (in thousands): Amount Remainder of 2023 $ 3,283 2024 3,501 2025 3,349 2026 3,110 2027 2,230 Thereafter 6,693 Total lease payments 22,166 Less: imputed interest (4,392) Present value of operating lease liabilities $ 17,774 |
LONG-TERM DEBT AND REDEEMABLE P
LONG-TERM DEBT AND REDEEMABLE PREFERRED SHARES | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND REDEEMABLE PREFERRED SHARES | LONG-TERM DEBT AND REDEEMABLE PREFERRED SHARES Long-term debt consists of the following (in thousands): March 31, December 31, Senior Notes $ 675,000 $ 675,000 Less: unamortized debt issuance costs (9,423) (9,720) Long-term debt $ 665,577 $ 665,280 Revolving Credit Facility On November 9, 2021, SK Invictus Intermediate II S.à r.l., a private limited liability company governed by the laws of the Grand Duchy of Luxembourg (“ SK Intermediate II”), as borrower, entered into a five-year 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. The Revolving Credit Facility includes a $20.0 million swingline sub-facility and a $25.0 million letter of credit sub-facility. The Revolving Credit Facility allows SK Intermediate II to increase commitments under the Revolving Credit Facility up to an aggregate amount not to exceed the greater of (i) $143.0 million and (ii) 100.00% of consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") for the most recent four-quarter period (minus the aggregate outstanding principal amount of certain ratio debt permitted to be incurred thereunder). 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. Solely to the extent that on the last day of the applicable fiscal quarter, the utilization of the Revolving Credit Facility (excluding cash collateralized letters of credit and up to $10.0 million of undrawn letters of credit) exceeds 40% of the aggregate commitments, the Revolving Credit Facility requires compliance on a quarterly basis with a maximum secured net leverage ratio of 7.50:1.00. The Revolving Credit Facility is fully and unconditionally guaranteed by the Company and each of SK Intermediate II’s 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 SK Intermediate II’s 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 were $2.3 million, which is carried as a long-term asset in the accompanying condensed consolidated balance sheets and is 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. As of March 31, 2023, the Company did not have any outstanding borrowings under the Revolving Credit Facility and was in compliance with all covenants, including the financial covenants. Senior Notes On the Closing Date, SK Intermediate II assumed $675.0 million principal amount of 5.00% senior secured notes due October 30, 2029 ("Senior Notes") issued by EverArc Escrow S.à r.l. (“ Escrow Issuer ”), a newly-formed limited liability company governed by the laws of the Grand Duchy of Luxembourg and a wholly owned subsidiary of EverArc under an indenture dated as of October 22, 2021 (“Indenture”). The Senior Notes bear interest at an annual rate of 5.00%. Interest on the Senior Notes is payable in cash semi-annually in arrears on April 30 and October 30 of each year. The Senior Notes are general, secured, senior obligations of SK Intermediate II; rank equally in right of payment with all existing and future senior indebtedness of SK Intermediate II (including, without limitation, the Revolving Credit Facility); and together with the Revolving Credit Facility, are effectively senior to all existing and future indebtedness of SK Intermediate II that is not secured by the collateral. The Senior Notes are fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by all of SK Intermediate II’s existing or future restricted subsidiaries (other than certain excluded subsidiaries) that guarantee the Revolving Credit Facility. The Senior Notes contain certain covenants limiting SK Intermediate II’s ability and the ability of the restricted subsidiaries (as defined in the indenture governing the Senior Notes) to, under certain circumstances, prepay subordinated indebtedness, pay distributions, redeem stock or make certain restricted investments; incur indebtedness; create liens on the SK Intermediate II’s’ assets to secure debt; restrict dividends, distributions or other payments; enter into transactions with affiliates; designate subsidiaries as unrestricted subsidiaries; sell or otherwise transfer or dispose of assets, including equity interests of restricted subsidiaries; effect a consolidation or merger; and change the Company’s line of business. Deferred financing costs incurred in connection with securing the Senior Notes were $11.0 million, which were capitalized and will be 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. 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. Redeemable Preferred Shares In connection with the Business Combination, the Company issued 10 million redeemable preferred shares of PSSA (“Redeemable Preferred Shares"), nominal value $10 per share, valued at $100.0 million. The Redeemable Preferred Shares are entitled to a preferred annual cumulative right to a dividend equal to 6.50% of its nominal value. The preferred dividend will generally be paid 40.00% in cash and 60.00% in kind each year within three Holders of the Redeemable Preferred Shares generally have no voting rights. The Company, under its articles of association (the "Articles") is mandatorily required to redeem the Redeemable Preferred Shares 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 Redeemable Preferred Shares or (iii) upon the occurrence of a change of control, as defined in the Company’s Articles. Due to the fact that the Redeemable Preferred Shares are mandatorily redeemable, the Redeemable Preferred Shares are classified as a liability in the accompanying unaudited condensed consolidated balance sheets, and $1.7 million and $1.6 million of dividends on these Redeemable Preferred Shares for the three months ended March 31, 2023 and 2022, respectively, was recorded as interest expense in the accompanying unaudited condensed consolidated statements of operations and comprehensive income. Preferred dividends in arrears were $5.5 million and $4.5 million at March 31, 2023 and December 31, 2022, respectively. The Redeemable Preferred Shares have an aggregate liquidation preference of $100.0 million, plus any accrued and unpaid dividends thereon and is senior to the Ordinary Shares with respect to dividends and with respect to dissolution, liquidation or winding up of the Company. At March 31, 2023 and December 31, 2022, the redemption price was $105.5 million and $104.5 million, respectively. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company is subject to U.S. federal income tax, U.S. state and local tax and tax in foreign jurisdictions. 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 for the three months ended March 31, 2023 and 2022 was (203.35)% and (17.28)%, respectively. 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 be benefited 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. 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. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. 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, 2023 and 2022 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, 2023, it is reasonably possible that the Company’s uncertain tax benefits of $36.3 million may decrease by up to $34.0 million within twelve months, with no net impact on overall tax expense. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is involved in various claims, actions, and legal proceedings arising in the ordinary course of business, including a number of matters related to the aqueous film forming foam litigation consolidated in the District of South Carolina multi-district litigation and other similar matters pending in other jurisdictions in the United States. The Company’s exposure to losses, if any, is not considered probable or reasonably estimable at this time. Commitments The Company has a supply agreement to purchase elemental phosphorus (“P4”) from a supplier through 2023. The contract price is tied to the contract year cost times a multiplier, subject to a market-driven benchmark price adjustment, which is generally settled once per year. The Company did not purchase the anticipated minimum pounds of P4 for the three months ended March 31, 2023 and 2022. However, the Company has no obligation to record a liability, as there is no financial penalty owed to the vendor. Purchases under this supply agreement were $10.0 million and $14.0 million for the three months ended March 31, 2023 and 2022, respectively. The Company also has an agreement to purchase various types of capital equipment up to $5.0 million through October 2027. As of March 31, 2023, the Company paid $2.0 million to the supplier and the remaining $3.0 million will be paid through October 2027. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
EQUITY | EQUITY The Company’s authorized share capital is $4,100.0 million, consisting of 4.0 billion Ordinary Shares with a nominal value of $1.00 per share and 10.0 million Redeemable Preferred Shares with a nominal value of $10.00 per share. Each Ordinary Share entitles the holder thereof to one vote. Due to the fact that the Redeemable Preferred Shares are mandatorily redeemable, the Redeemable Preferred Shares are classified as a liability on the accompanying unaudited condensed consolidated balance sheets. On July 21, 2022, subject to certain limits, the shareholders’ of the Company approved a proposal authorizing the Company's board of directors (the “Board”) to repurchase up to 25% of the Company’s Ordinary Shares outstanding as of the date of the shareholders’ approval, being 40,659,257 Ordinary Shares, at any time during the next five years (the “Share Repurchase Plan”). On November 3, 2022, the Board re-established the limit for Ordinary Share repurchases at $100.0 million, which is within the repurchase limit approved by Company’s shareholders on July 21, 2022. During the three months ended March 31, 2023 , the Company repurchased 115,570 Ordinary Shares under its Share Repurchase Plan. The repurchased Ordinary Shares were recorded at cost and are being held in treasury. During the period from April 1, 2023 to May 5, 2023, the Company repurchased approximately 1,479,825 Ordinary Shares at an average price per share of approximately $7.34. As of March 31, 2023, there were 158,513,889 Ordinary Shares, 33,843,440 warrants and 10,000,000 Redeemable Preferred Shares outstanding. |
SHARE-BASED COMPENSATION AND EM
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS 2021 Equity Plan In connection with the Business Combination, the Company’s Board adopted, and its shareholders approved, the 2021 Equity Incentive Plan (the “2021 Equity Plan”). A total of 31,900,000 O rdinary Shares are authorized and reserved for issuance under the 2021 Equity Plan which provides for the grant of stock options (either incentive or non-qualified), stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance shares, performance share units and other share-based awards with respect to the Ordinary Shares. 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, 2023 , the Company granted 2,175,000 performance-based non-qualified stock options ("PBNQSO") that vest based on the achievement of certain performance goals for fiscal years 2023-2027 (the “5-Year Option”) to its chief executive officer and independent directors. T he Company recognizes compensation costs related to the 5-Year Option granted in 2023 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 share-based compensation expense, using the Black-Scholes option-pricing model. The Company records forfeitures as they are incurred. The grant date fair value of the PBNQSO is expensed proportionately for each tranche over the applicable service period. The fair value of performance-based stock options 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. On March 8, 2023, in connection changes in the Company’s leadership structure, it amended the performance terms and conditions of the outstanding 5-Year Options previously granted to its former chief executive officer (the “Executive”) where by 50% of such outstanding options eligible to vest in each of fiscal years from 2023 through 2026 will remain subject to the existing performance terms and conditions. The remaining 50% of such outstanding options will be eligible to vest in such fiscal years subject to the performance terms and conditions related to the Executive’s position and duties as Vice Chairman. For the remaining 50% of outstanding options, the Company’s compensation committee will establish performance goals and communicate them to the Executive and assess achievement annually. For accounting purposes, the Company will recognize compensation expense related to the remaining 50% of outstanding options when the specified performance goal for future periods have been established and communicated to the Executive. In March 2023, based on the Company’s performance for 2022, its compensation committee verified and determined the Annual Operational Performance per Diluted Share (“AOP”) for the 2022 tranche of the 5-Year Option to be $8.39. As a result, it was determined that a mutual understanding of the key terms and conditions for the 2022 tranche had been ascertained and the grant date was therefore established. The cumulative compensation expense for the 2022 tranche was adjusted based on the fair value calculated using the Black-Scholes option-pricing model at the grant date. As the AOP for the 2022 tranche was below the minimum vesting AOP target of $11.35 employees separated from the Company through the date of determination of the 2022 AOP relinquished 240,000 options retained by them relating the 2022 tranche and such options were cancelled by the Company. As of March 31, 2023 there were 11,274,171 PBNQSO outstanding. The exercise prices of these PBNQSO ranged from $8.26 to $14.00 per Ordinary Share and expire ten years from the grant date. The table below summarizes the PBNQSO activity for the three months ended March 31, 2023: Number of Options Weighted-Average Exercise/Conversion Price Weighted-Average Aggregate Outstanding at December 31, 2022 10,339,171 $ 9.75 Granted 2,175,000 $ 8.31 Exercised — $ — Forfeited (1,000,000) $ 10.00 Cancelled (240,000) $ 10.00 Outstanding at March 31, 2023 11,274,171 $ 9.45 8.94 $ — Options vested and exercisable 245,004 $ 10.00 7.00 $ — The weighted-average assumptions used to fair value the PBNQSO at period end date or grant date using the Black-Scholes option-pricing model were as follows: Period End Date Grant Date Dividend yield — % — % Risk-free interest rate 3.58 % 3.93% to 4.18% Expected volatility 46.30 % 45.00 % Expected term (years) 5.10 to 5.85 6.50 Weighted average exercise price of options granted $ 9.78 $ 8.31 Weighted average fair value of options granted $ 3.24 $ 4.24 Non-cash share-based compensation expense recognized by the Company for the three months ended March 31, 2023 and 2022 was $(3.1) million and $5.0 million, respectively. The Company recognized negative compensation expense during the three months ended March 31, 2023 as a result of the remeasurement to the period end fair value of previously issued PBNQSO primarily due to a decrease in the Ordinary Share price as of the period end and also due to reversal of share-based compensation expense upon forfeitures. 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 estimate. As of March 31, 2023, there was approximately $27.2 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. Founder Advisory Amounts Upon consummation of the Business Combination, the Company assumed the advisory agreement entered into on December 12, 2019 by EverArc ("Founder Advisory Agreement") with EverArc Founders, LLC, a Delaware limited liability company ("EverArc Founder Entity"), pursuant to which the EverArc Founder Entity, for the services provided to the Company, including strategic and capital allocation advice, is entitled to receive both a fixed amount (the “Fixed Annual Advisory Amount”) and a variable amount (the “Variable Annual Advisory Amount,” each an “Advisory Amount” and collectively, the “Advisory Amounts”) until the years ending December 31, 2027 and 2031, respectively. Under the Founder Advisory Agreement, at the election of the EverArc Founder Entity, at least 50% of the Advisory Amounts will be paid in Ordinary Shares and the remainder in cash. The Fixed Annual Advisory Amount will be equal to 2,357,061 Ordinary Shares (1.5% of 157,137,410 Ordinary Shares outstanding ) for each year through December 3 1, 2027 and is valued using the period end volume weighted average closing share price of our Ordinary Shares 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 Ordinary 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. 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% is classified within equity. For Advisory Amounts classified within equity, the Company does not subsequently remeasure the fair value. For 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, 2023 and December 31, 2022, the fair value of the Fixed Annual Advisory Amount was calculated to be $91.1 million and $104.4 million, respectively, based on the period end volume weighted average closing share price for ten consecutive trading days of Ordinary Shares of $7.73 and $8.86, respectively. As of March 31, 2023 and December 31, 2022, the fair value of the Variable Annual Advisory Amount, determined using a Monte Carlo simulation model, was $201.9 million and $237.0 million, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value Measurement The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities approximates fair value due to the short-term nature of their maturities. Borrowings under the Company’s Revolving Credit Facility accrues interest at a floating rate tied to a standard short-term borrowing index, selected at the Company’s option, plus an applicable margin. The carrying amount of this floating rate debt approximates fair value based upon the respective interest rates adjusting with market rate adjustments. The carrying amount of the Company's Redeemable Preferred Shares equals the redemption price, which approximates fair value. At March 31, 2023 and December 31, 2022, the estimated fair value of the Company's Senior Notes, calculated using Level 2 inputs, based on bid prices obtained from a broker was approximately $553.5 million and $556.9 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. The Company determines fair value based on assumptions that market participants would use in pricing an asset or a liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: • Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. • Level 2 inputs: Other than quoted prices in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Liabilities by Hierarchy Level The following tables set 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, 2023 and December 31, 2022 (in thousands): Fair Value Measurements Using: March 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Founders advisory fees payable - related party $ 45,544 $ — $ 100,938 $ 146,482 LaderaTech contingent earn-out included in other liabilities, non-current — — 7,519 7,519 Total liabilities $ 45,544 $ — $ 108,457 $ 154,001 December 31, 2022 Liabilities: Founders advisory fees payable - related party $ 56,883 $ — $ 118,490 $ 175,373 LaderaTech contingent earn-out included in other liabilities, non-current — — 7,273 7,273 Total liabilities $ 56,883 $ — $ 125,763 $ 182,646 The fair value of the founders advisory fees payable is based on the appreciation of the market price of Ordinary 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 highly 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, “Share-Based Compensation” for discussion of the fair value estimation on the founders advisory fees payable. The fair value of the contingent earn-out is related to the May 2020 purchase of LaderaTech, Inc. (“LaderaTech”) and is measured on a recurring basis using Level 3 fair value inputs. The LaderaTech earn-out is based on 20% of gross profits upon achieving a revenue threshold exceeding $5.0 million through December 31, 2026 and is valued using a Monte Carlo simulation model. Significant changes in the projected revenue, projected gross margin, or discount rate would have a material impact on the fair value of the contingent consideration. 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): For the three months ended March 31, 2023: Founders Advisory Fees Payable - Related Party LaderaTech Fair value, beginning of period $ 118,490 $ 7,273 Founders advisory fees - related party, change in fair value (17,552) — Loss on contingent earn-out — 246 Fair value, end of period $ 100,938 $ 7,519 For the three months ended March 31, 2022: Founders Advisory Fees Payable - Related Party LaderaTech Fair value, beginning of period $ 251,513 $ 19,979 Settlements (40,776) — Reclassification from liability to equity (10,495) — Founders advisory fees - related party, change in fair value (46,256) — Fair value, end of period $ 153,986 $ 19,979 |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | RELATED PARTIES On November 9, 2021, in connection with the consummation of the Business Combination, the Company, EverArc and the EverArc Founder Entity entered into an Assignment and Assumption Agreement (the “Founder Assignment Agreement”) pursuant to which the Company assumed, and agreed to pay, perform, satisfy and discharge in full, all of EverArc’s liabilities and obligations under the Founder Advisory Agreement. In exchange for the services provided to the Company, including strategic and capital allocation advice, the EverArc Founder Entity is entitled to receive both the Fixed Annual Advisory Amount and the Variable Annual Advisory Amount from the Company. The Fixed Annual Advisory Amount will be equal to 2,357,061 Ordinary Shares (1.5% of 157,137,410 Ordinary Shares outstanding ) for each year through December 3 1, 2027 and valued using the period end volume weighted average closing share price for ten consecutive trading days of Ordinary Shares. The Variable Annual Advisory Amount for each year through December 31, 2031 is based on the appreciation of the market price of Ordinary 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. For 2022, the average price was $8.86 per Ordinary Share. The EverArc Founder Entity was entitled to receive the Fixed Annual Advisory Amount of 2,357,061 Ordinary Shares or a value of $20.9 million, based on average price of $8.86 per Ordinary Share (the “2022 Fixed Amount”). The EverArc Founder Entity did not qualify to receive the Variable Annual Advisory Amount as the average price of $8.86 per Ordinary Share for 2022 was lower than the average price of $13.63 per Ordinary Share established in 2021. Per the Founder Advisory Agreement, the EverArc Founder Entity elected to receive approximately 77.7% of the 2022 Fixed Amount in Ordinary Shares (1,831,653 Ordinary Shares) and approximately 22.3% of the 2022 Fixed Amount in cash ($4.7 million). On February 15, 2023, the Company issued 1,831,653 Ordinary Shares and paid $4.7 million in cash in satisfaction of the 2022 Fixed Amount. As of March 31, 2023, the Company calculated the fair value of the Fixed Annual Advisory Amounts using the period end volume weighted average closing share price of Ordinary Shares for ten consecutive trading days of $7.73 and used a Monte Carlo simulation model to calculate the fair value of the Variable Annual Advisory Amount. These approaches resulted in fair values of $91.1 million fo r the Fixed Annual Advisory Amount and $201.9 million for the Variable Annual Advisory Amount , of which 50% may be paid in cash and recorded as a liability and the remaining 50% would be settled in Ordinary Shares . While the entire instrument is subject to the fair value calculation described above, the amount classified and recorded as equity remains consistent while the amount classified and recorded as a liability is updated each period. For the three months ended March 31, 2023, the Company recognized a reduction in share-based compensation expense related to a decrease in fair value for liability-classified Advisory Amounts of $24.2 million primarily due to the decrease in share price of its Ordinary Shares . |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregation of revenues Amounts recognized at a point in time primarily relate to products sold whereas amounts recognized over time primarily relate to services associated with the full-service and portable retardant contracts. Revenues for the three months ended March 31, 2023 and 2022 are as follows (in thousands): Three Months Ended Three Months Ended Revenues from products $ 43,140 $ 55,594 Revenues from services 709 1,592 Other revenues 9 572 Total net sales $ 43,858 $ 57,758 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share represents income available to ordinary shareholders divided by the weighted average number of Ordinary Shares outstanding during the reported period. Diluted earnings per share is based upon the weighted-average number of Ordinary Shares outstanding during the period plus additional weighted-average potentially dilutive Ordinary Share equivalents during the period when the effect is dilutive. Basic and diluted weighted average shares outstanding and earnings per share were as follows (in thousands, except share and per share data): Three Months Ended Three Months Ended Net income $ 9,431 $ 36,963 Weighted-average shares outstanding: Weighted average shares used in computing earnings per share, basic 157,700,326 160,251,199 Founders advisory fees 11,785,305 14,142,366 Ordinary Shares equivalent of warrants — 383,667 Weighted average shares used in computing earnings per share, diluted 169,485,631 174,777,232 Basic earnings per share $ 0.06 $ 0.23 Diluted earnings per share $ 0.06 $ 0.21 As of March 31, 2023, 11.3 million PBNQSO and 26.1 million Ordinary Shares issuable under the Founder Advisory Agreement were excluded from the diluted earnings per share calculation as the contingencies related to such instruments had not been met. In addition, 8.5 million Ordinary Shares equivalent warrants were excluded from the diluted earnings per share calculation as their effect would have been anti-dilutive. As of March 31, 2022, 8.9 million PBNQSOs and 24.5 million Ordinary Shares issuable under the Founder Advisory Agreement were excluded from the diluted earnings per share calculation as the contingencies related to such instruments had not been met. In addition, 8.1 million Ordinary Shares equivalent warrants were excluded from the diluted earnings per share calculation as their effect would have been anti-dilutive. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company’s products and operations are managed and reported in two operating segments: Fire Safety and Specialty Products. The Fire Safety segment manufactures and sells fire retardant and firefighting foam products, as well as specialized equipment and services typically offered in conjunction with these retardant and foam products. The 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 additive 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 engine oils with its main function to provide anti-wear protection to engine components. P 2 S 5 is also used in pesticide and mining chemicals applications. Interest income, interest expense, other income (expense) and certain corporate operating expenses are neither allocated to the segments nor included in the measures of segment performance by the chief operating decision-maker (“CODM”). The corporate category is not considered to be a segment. The CODM is the Company's CEO. The Company’s CODM uses the segment net sales and Adjusted EBITDA to assess the ongoing performance of the Company’s business segments and to allocate resources. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted on a consistent basis for certain non-recurring or unusual items in a balanced manner and on a segment basis. These non-recurring or unusual items may include acquisition and integration related costs, management fees and other non-recurring items. Information related to net sales and Adjusted EBITDA for the Company’s operations are summarized below (in thousands): Three Months Ended Three Months Ended Net sales: Fire safety $ 18,744 $ 18,470 Specialty products 25,114 39,288 Total $ 43,858 $ 57,758 Adjusted EBITDA: Fire safety $ (3,361) $ (3,334) Specialty products 6,477 15,311 Total segment Adjusted EBITDA 3,116 11,977 Less: Depreciation and amortization 16,087 16,371 Interest and financing expense 10,146 10,496 Founders advisory fees - related party (24,236) (59,848) Non-recurring expenses 1,559 1,476 Share-based compensation expense (3,074) 4,963 Non-cash purchase accounting impact — 6,122 Loss on contingent earn-out 246 — Unrealized foreign currency (gain) loss (721) 880 Income before income taxes $ 3,109 $ 31,517 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal and recurring nature considered necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements. The results of operations for the interim period are not necessarily indicative of the results that will be realized for the entire fiscal year. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and accompanying notes thereto included in the Company’s 2022 Annual Report . The condensed consolidated financial statements for the prior periods include certain reclassifications that were made to conform to the current period presentation. Such reclassifications have no impact on previously reported condensed consolidated financial position, results of operations or cash flows. |
Principles of Consolidation | Principles of ConsolidationThe unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany transactions and balances. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities 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 unaudited condensed consolidated financial statements include the useful lives of long-lived and intangible assets, the allowance for doubtful accounts, the fair value of financial assets and liabilities, stock options, founder advisory fees, contingent earn-out liability and realizability of deferred tax assets. Actual results could differ from those estimates. As of March 31, 2023, the Company’s significant accounting policies are consistent with those discussed in Note 2 - “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” in its consolidated financial statements included in the Company’s 2022 Annual Report, except for stock options granted during the three months ended March 31, 2023. For stock options granted during the three months ended March 31, 2023, t he Company recognizes compensation costs related to stock options granted to employees and non-employees 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 share-based compensation expense, using the Black-Scholes option-pricing model. The Company records forfeitures as they are incurred. The grant date fair value of the stock options is expensed proportionately for each tranche over the applicable service period. The fair value of performance-based stock options 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. The assumptions used in the Black-Scholes option-pricing model are as follows: • Exercise price. The Company's Ordinary Share’s fair market value on the date of grant. • Fair Market Value of Ordinary Shares. The grant date fair market value is the quoted market price of the Company's Ordinary Shares. • Expected term. The expected term of stock options represents the period that the stock options are expected to remain outstanding and is based on vesting terms, exercise term and contractual lives of the options. The expected term is based on the simplified method and is estimated as the average of the weighted average vesting term and the time to expiration as of the grant date. The simplified method was used due to the lack of historical exercise information. • Expected volatility. As the Company does not have sufficient historical stock price information to meet the expected life of the stock option grants, it uses a blended volatility based on the Company’s short trading history and on the trading history from the common stock of a set of comparable publicly listed companies. • Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield with a maturity equal to the expected term of the stock options in effect at the time of grant. • Dividend yield. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plan to pay any dividends on its ordinary shares. |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases, which will require lessees to recognize a right of use asset and a lease liability on their balance sheet for all leases, including operating leases, with a term of greater than 12 months. In July 2018, the FASB issued ASU 2018-11, which adds a transition option permitting entities to apply the provisions of the new standard at its adoption date instead of the earliest comparative period presented in the consolidated financial statements. The Company adopted Topic 842 as of January 1, 2022 at December 31, 2022, using the optional transition method provided by ASU 2018-11. Refer to Note 6, "Leases," for additional disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and issued subsequent amendments to the initial guidance within ASU 2019-04, ASU 2019-05 and ASU 2019-11. The amendments require an entity to replace the incurred loss impairment methodology in current U.S. GAAP with a new model that uses a forward-looking expected loss method, which generally results in earlier recognition of allowances for losses. The Company adopted the standard as of January 1, 2022 at December 31, 2022. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements with the most significant impact being the increase in allowance for doubtful accounts related to its trade accounts receivable. The adoption adjustment was recorded to accumulated deficit in the accompanying condensed consolidated statements of shareholders’ equity. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and in January 2021 issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope. These ASUs provide temporary optional expedients and exceptions to existing guidance on contract modifications and hedge accounting to facilitate the market transition from existing reference rates, such as London Interbank Offered Rate (“LIBOR”) which is being phased out, to alternate reference rates, such as Secured Overnight Financing Rate (“SOFR”). These standards are elective and are effective upon issuance for all entities through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, which defers the sunset date of reference rate reform relief to December 31, 2024. The Company expects that the switch in the reference rates from LIBOR to SOFR, under its Revolving Credit Facility (defined below), will occur no later than June 30, 2023. |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Balance Sheet Components | Details of certain balance sheet items are presented below (in thousands): March 31, December 31, Inventory: Raw materials and manufacturing supplies $ 75,777 $ 65,968 Work in process 262 248 Finished goods 80,218 76,745 Total inventory $ 156,257 $ 142,961 Prepaid Expenses and Other Current Assets: Advance to vendors $ 2,208 $ 2,047 Prepaid insurance 4,228 5,870 Prepaid value-added taxes 3,537 2,872 Other 1,653 1,162 Total prepaid expenses and other current assets $ 11,626 $ 11,951 Property, Plant and Equipment: Buildings $ 3,966 $ 3,948 Leasehold improvements 2,699 2,333 Furniture and fixtures 514 344 Machinery and equipment 58,701 58,314 Vehicles 3,995 4,106 Construction in progress 2,402 1,953 Total property, plant and equipment, gross 72,277 70,998 Less: Accumulated depreciation (13,056) (12,152) Total property, plant and equipment, net $ 59,221 $ 58,846 Accrued Expenses and Other Current Liabilities: Accrued bonus $ 82 $ 3,278 Accrued salaries 2,608 2,332 Accrued employee benefits 1,005 846 Accrued interest 17,351 8,235 Accrued purchases 5,188 1,790 Accrued taxes 5,501 11,000 Operating lease liabilities 3,278 3,541 Other 926 1,683 Total accrued expenses and other current liabilities $ 35,939 $ 32,705 Other Non-Current Liabilities: LaderaTech contingent earn-out $ 7,519 $ 7,273 Other 2,105 2,049 Total other non-current liabilities $ 9,624 $ 9,322 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | The changes in the carrying amount of goodwill by reportable segment are as follows (in thousands): Fire Safety Specialty Products Total Balance, December 31, 2022 $ 860,319 $ 171,141 $ 1,031,460 Foreign currency translation 700 642 1,342 Balance, March 31, 2023 $ 861,019 $ 171,783 $ 1,032,802 |
Summary of Definite Lived Intangible Assets | Intangible assets and related accumulated amortization as of March 31, 2023 and December 31, 2022 are as follows (in thousands): March 31, 2023 Estimated Gross Value Foreign Accumulated Net Book Definite Lived Intangible Assets: Customer lists 20 761,000 (6,768) (52,642) 701,590 Technology and patents 20 $ 250,000 $ (2,681) $ (17,241) $ 230,078 Tradenames 20 101,000 (884) (6,988) 93,128 Balance, March 31, 2023 $ 1,112,000 $ (10,333) $ (76,871) $ 1,024,796 December 31, 2022 Estimated Gross Value Foreign Accumulated Net Book Definite Lived Intangible Assets: Customer lists 20 761,000 (7,451) (43,220) 710,329 Technology and patents 20 $ 250,000 $ (3,029) $ (14,153) $ 232,818 Tradenames 20 101,000 (970) (5,737) 94,293 Balance, December 31, 2022 $ 1,112,000 $ (11,450) $ (63,110) $ 1,037,440 |
Summary of Indefinite-Lived Intangible Assets | Intangible assets and related accumulated amortization as of March 31, 2023 and December 31, 2022 are as follows (in thousands): March 31, 2023 Estimated Gross Value Foreign Accumulated Net Book Definite Lived Intangible Assets: Customer lists 20 761,000 (6,768) (52,642) 701,590 Technology and patents 20 $ 250,000 $ (2,681) $ (17,241) $ 230,078 Tradenames 20 101,000 (884) (6,988) 93,128 Balance, March 31, 2023 $ 1,112,000 $ (10,333) $ (76,871) $ 1,024,796 December 31, 2022 Estimated Gross Value Foreign Accumulated Net Book Definite Lived Intangible Assets: Customer lists 20 761,000 (7,451) (43,220) 710,329 Technology and patents 20 $ 250,000 $ (3,029) $ (14,153) $ 232,818 Tradenames 20 101,000 (970) (5,737) 94,293 Balance, December 31, 2022 $ 1,112,000 $ (11,450) $ (63,110) $ 1,037,440 |
Summary of Intangible Asset Future Amortization Expense | Estimated annual amortization expense of intangible assets for the next five years ended December 31 and thereafter is as follows (in thousands): Amount 2023 remaining $ 41,700 2024 55,600 2025 55,600 2026 55,600 2027 55,600 Thereafter 760,696 Total $ 1,024,796 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease Cost | Lease cost for the three months ended March 31, 2023 and 2022 are as follows (in thousands): Three Months Ended Three Months Ended Operating lease cost (1) $ 1,153 $ 1,309 Reported in: Cost of goods sold $ 1,092 $ 1,204 Selling, general and administrative expense 61 105 Total lease cost $ 1,153 $ 1,309 (1) Operating lease cost does not include short-term leases or variable costs, all of which are immaterial. Supplemental cash flow information related to leases for the three months ended March 31, 2023 and 2022 are as follows (in thousands): Three Months Ended Three Months Ended Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows for operating leases $ 1,169 $ 1,240 ROU assets obtained in exchange for new operating lease obligations: Non-cash investing and financing activity for operating leases $ 10 $ 350 |
Schedule of Future Minimum Payment Obligations for Non-Cancelable Operating Leases | As of March 31, 2023 , the estimated future minimum payment obligations for non-cancelable operating leases are as follows (in thousands): Amount Remainder of 2023 $ 3,283 2024 3,501 2025 3,349 2026 3,110 2027 2,230 Thereafter 6,693 Total lease payments 22,166 Less: imputed interest (4,392) Present value of operating lease liabilities $ 17,774 |
LONG-TERM DEBT AND REDEEMABLE_2
LONG-TERM DEBT AND REDEEMABLE PREFERRED SHARES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | Long-term debt consists of the following (in thousands): March 31, December 31, Senior Notes $ 675,000 $ 675,000 Less: unamortized debt issuance costs (9,423) (9,720) Long-term debt $ 665,577 $ 665,280 |
SHARE-BASED COMPENSATION AND _2
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Performance-based Non-qualified Stock Options Activity | The table below summarizes the PBNQSO activity for the three months ended March 31, 2023: Number of Options Weighted-Average Exercise/Conversion Price Weighted-Average Aggregate Outstanding at December 31, 2022 10,339,171 $ 9.75 Granted 2,175,000 $ 8.31 Exercised — $ — Forfeited (1,000,000) $ 10.00 Cancelled (240,000) $ 10.00 Outstanding at March 31, 2023 11,274,171 $ 9.45 8.94 $ — Options vested and exercisable 245,004 $ 10.00 7.00 $ — |
Summary of Stock Option Valuation Assumptions | The weighted-average assumptions used to fair value the PBNQSO at period end date or grant date using the Black-Scholes option-pricing model were as follows: Period End Date Grant Date Dividend yield — % — % Risk-free interest rate 3.58 % 3.93% to 4.18% Expected volatility 46.30 % 45.00 % Expected term (years) 5.10 to 5.85 6.50 Weighted average exercise price of options granted $ 9.78 $ 8.31 Weighted average fair value of options granted $ 3.24 $ 4.24 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Liabilities Measured on a Recurring Basis | The following tables set 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, 2023 and December 31, 2022 (in thousands): Fair Value Measurements Using: March 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Founders advisory fees payable - related party $ 45,544 $ — $ 100,938 $ 146,482 LaderaTech contingent earn-out included in other liabilities, non-current — — 7,519 7,519 Total liabilities $ 45,544 $ — $ 108,457 $ 154,001 December 31, 2022 Liabilities: Founders advisory fees payable - related party $ 56,883 $ — $ 118,490 $ 175,373 LaderaTech contingent earn-out included in other liabilities, non-current — — 7,273 7,273 Total liabilities $ 56,883 $ — $ 125,763 $ 182,646 |
Reconciliation of Level 3 Liabilities Measured on a Recurring Basis | The reconciliations for all liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are as follows (in thousands): For the three months ended March 31, 2023: Founders Advisory Fees Payable - Related Party LaderaTech Fair value, beginning of period $ 118,490 $ 7,273 Founders advisory fees - related party, change in fair value (17,552) — Loss on contingent earn-out — 246 Fair value, end of period $ 100,938 $ 7,519 For the three months ended March 31, 2022: Founders Advisory Fees Payable - Related Party LaderaTech Fair value, beginning of period $ 251,513 $ 19,979 Settlements (40,776) — Reclassification from liability to equity (10,495) — Founders advisory fees - related party, change in fair value (46,256) — Fair value, end of period $ 153,986 $ 19,979 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue | Revenues for the three months ended March 31, 2023 and 2022 are as follows (in thousands): Three Months Ended Three Months Ended Revenues from products $ 43,140 $ 55,594 Revenues from services 709 1,592 Other revenues 9 572 Total net sales $ 43,858 $ 57,758 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Earnings Per Share, Basic and Diluted | Basic and diluted weighted average shares outstanding and earnings per share were as follows (in thousands, except share and per share data): Three Months Ended Three Months Ended Net income $ 9,431 $ 36,963 Weighted-average shares outstanding: Weighted average shares used in computing earnings per share, basic 157,700,326 160,251,199 Founders advisory fees 11,785,305 14,142,366 Ordinary Shares equivalent of warrants — 383,667 Weighted average shares used in computing earnings per share, diluted 169,485,631 174,777,232 Basic earnings per share $ 0.06 $ 0.23 Diluted earnings per share $ 0.06 $ 0.21 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Information related to net sales and Adjusted EBITDA for the Company’s operations are summarized below (in thousands): Three Months Ended Three Months Ended Net sales: Fire safety $ 18,744 $ 18,470 Specialty products 25,114 39,288 Total $ 43,858 $ 57,758 Adjusted EBITDA: Fire safety $ (3,361) $ (3,334) Specialty products 6,477 15,311 Total segment Adjusted EBITDA 3,116 11,977 Less: Depreciation and amortization 16,087 16,371 Interest and financing expense 10,146 10,496 Founders advisory fees - related party (24,236) (59,848) Non-recurring expenses 1,559 1,476 Share-based compensation expense (3,074) 4,963 Non-cash purchase accounting impact — 6,122 Loss on contingent earn-out 246 — Unrealized foreign currency (gain) loss (721) 880 Income before income taxes $ 3,109 $ 31,517 |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - Narrative (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 segment $ / shares | Dec. 31, 2022 $ / shares | |
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, par value (in usd per share) | $ / shares | $ 1 | $ 1 |
Number of reportable segments | segment | 2 | |
UNITED STATES | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | ||
Subsidiary, Sale of Stock [Line Items] | ||
Concentration risk, percentage | 74% | |
Europe | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | ||
Subsidiary, Sale of Stock [Line Items] | ||
Concentration risk, percentage | 15% | |
CANADA | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | ||
Subsidiary, Sale of Stock [Line Items] | ||
Concentration risk, percentage | 5% | |
Mexico | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | ||
Subsidiary, Sale of Stock [Line Items] | ||
Concentration risk, percentage | 2% | |
Various Other Countries | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | ||
Subsidiary, Sale of Stock [Line Items] | ||
Concentration risk, percentage | 4% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend rate | 0% |
BUSINESS ACQUISITIONS - Narrati
BUSINESS ACQUISITIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 03, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Nov. 09, 2021 | |
Business Acquisition [Line Items] | ||||
Purchase price adjustment | $ 0 | $ 1,638 | ||
SK Intermediate | ||||
Business Acquisition [Line Items] | ||||
Escrow deposit | $ 7,600 | |||
Purchase price adjustment | $ 1,600 | |||
SK Intermediate | Escrow Deposit | ||||
Business Acquisition [Line Items] | ||||
Escrow deposit released | $ 7,600 |
BALANCE SHEET COMPONENTS - Summ
BALANCE SHEET COMPONENTS - Summary of Balance Sheet Components (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory: | ||
Raw materials and manufacturing supplies | $ 75,777 | $ 65,968 |
Work in process | 262 | 248 |
Finished goods | 80,218 | 76,745 |
Total inventory | 156,257 | 142,961 |
Prepaid Expenses and Other Current Assets: | ||
Advance to vendors | 2,208 | 2,047 |
Prepaid insurance | 4,228 | 5,870 |
Prepaid value-added taxes | 3,537 | 2,872 |
Other | 1,653 | 1,162 |
Total prepaid expenses and other current assets | 11,626 | 11,951 |
Property, Plant and Equipment: | ||
Total property, plant and equipment, gross | 72,277 | 70,998 |
Less: Accumulated depreciation | (13,056) | (12,152) |
Total property, plant and equipment, net | 59,221 | 58,846 |
Accrued Expenses and Other Current Liabilities: | ||
Accrued bonus | 82 | 3,278 |
Accrued salaries | 2,608 | 2,332 |
Accrued employee benefits | 1,005 | 846 |
Accrued interest | 17,351 | 8,235 |
Accrued purchases | 5,188 | 1,790 |
Accrued taxes | 5,501 | 11,000 |
Operating lease liabilities | 3,278 | 3,541 |
Other | 926 | 1,683 |
Total accrued expenses and other current liabilities | 35,939 | 32,705 |
Other Non-Current Liabilities: | ||
LaderaTech contingent earn-out | 7,519 | 7,273 |
Other | 2,105 | 2,049 |
Total other non-current liabilities | 9,624 | 9,322 |
Buildings | ||
Property, Plant and Equipment: | ||
Total property, plant and equipment, gross | 3,966 | 3,948 |
Leasehold improvements | ||
Property, Plant and Equipment: | ||
Total property, plant and equipment, gross | 2,699 | 2,333 |
Furniture and fixtures | ||
Property, Plant and Equipment: | ||
Total property, plant and equipment, gross | 514 | 344 |
Machinery and equipment | ||
Property, Plant and Equipment: | ||
Total property, plant and equipment, gross | 58,701 | 58,314 |
Vehicles | ||
Property, Plant and Equipment: | ||
Total property, plant and equipment, gross | 3,995 | 4,106 |
Construction in progress | ||
Property, Plant and Equipment: | ||
Total property, plant and equipment, gross | $ 2,402 | $ 1,953 |
BALANCE SHEET COMPONENTS - Narr
BALANCE SHEET COMPONENTS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Depreciation | $ 2.3 | $ 2.5 | |
Allowance for doubtful accounts | $ 0.9 | $ 0.9 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Changes in Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning goodwill | $ 1,031,460 |
Foreign currency translation | 1,342 |
Ending goodwill | 1,032,802 |
Fire Safety | |
Goodwill [Roll Forward] | |
Beginning goodwill | 860,319 |
Foreign currency translation | 700 |
Ending goodwill | 861,019 |
Specialty Products | |
Goodwill [Roll Forward] | |
Beginning goodwill | 171,141 |
Foreign currency translation | 642 |
Ending goodwill | $ 171,783 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Definite and Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Definite Lived Intangible Assets: | ||
Gross Value | $ 1,112,000 | $ 1,112,000 |
Foreign Currency Translation | (10,333) | (11,450) |
Accumulated Amortization | (76,871) | (63,110) |
Net Book Value | $ 1,024,796 | $ 1,037,440 |
Customer lists | ||
Definite Lived Intangible Assets: | ||
Estimated Useful Life (in years) | 20 years | 20 years |
Gross Value | $ 761,000 | $ 761,000 |
Foreign Currency Translation | (6,768) | (7,451) |
Accumulated Amortization | (52,642) | (43,220) |
Net Book Value | $ 701,590 | $ 710,329 |
Technology and patents | ||
Definite Lived Intangible Assets: | ||
Estimated Useful Life (in years) | 20 years | 20 years |
Gross Value | $ 250,000 | $ 250,000 |
Foreign Currency Translation | (2,681) | (3,029) |
Accumulated Amortization | (17,241) | (14,153) |
Net Book Value | $ 230,078 | $ 232,818 |
Tradenames | ||
Definite Lived Intangible Assets: | ||
Estimated Useful Life (in years) | 20 years | 20 years |
Gross Value | $ 101,000 | $ 101,000 |
Foreign Currency Translation | (884) | (970) |
Accumulated Amortization | (6,988) | (5,737) |
Net Book Value | $ 93,128 | $ 94,293 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 13.8 | $ 13.9 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 remaining | $ 41,700 | |
2024 | 55,600 | |
2025 | 55,600 | |
2026 | 55,600 | |
2027 | 55,600 | |
Thereafter | 760,696 | |
Net Book Value | $ 1,024,796 | $ 1,037,440 |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 1,153 | $ 1,309 |
Total lease cost | 1,153 | 1,309 |
Cost of goods sold | ||
Lessee, Lease, Description [Line Items] | ||
Total lease cost | 1,092 | 1,204 |
Selling, general and administrative expense | ||
Lessee, Lease, Description [Line Items] | ||
Total lease cost | $ 61 | $ 105 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Mar. 31, 2023 |
Leases [Abstract] | |
Weighted average remaining lease term | 7 years |
Weighted average discount rate | 5.80% |
LEASES - Schedule of Supplement
LEASES - Schedule of Supplemental Cash Flow Lease (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities, Operating cash flows for operating leases | $ 1,169 | $ 1,240 |
ROU assets obtained in exchange for new operating lease obligations, Non-cash investing and financing activity for operating leases | $ 10 | $ 350 |
LEASES - Schedule of Future Min
LEASES - Schedule of Future Minimum Payment Obligations for Non-Cancelable Operating Leases (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
Remainder of 2023 | $ 3,283 |
2024 | 3,501 |
2025 | 3,349 |
2026 | 3,110 |
2027 | 2,230 |
Thereafter | 6,693 |
Total lease payments | 22,166 |
Less: imputed interest | (4,392) |
Present value of operating lease liabilities | $ 17,774 |
LONG-TERM DEBT AND REDEEMABLE_3
LONG-TERM DEBT AND REDEEMABLE PREFERRED SHARES - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Less: unamortized debt issuance costs | $ (9,423) | $ (9,720) |
Long-term debt | 665,577 | 665,280 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 675,000 | $ 675,000 |
LONG-TERM DEBT AND REDEEMABLE_4
LONG-TERM DEBT AND REDEEMABLE PREFERRED SHARES - Successor Revolving Credit Facility (Details) - The Revolving Credit Facility - USD ($) | Nov. 09, 2021 | Mar. 31, 2023 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt term | 5 years | |
Line of credit, maximum borrowing capacity | $ 100,000,000 | |
Line of credit accordion feature | $ 143,000,000 | |
Line of credit, increase percentage factor | 100% | |
Utilization threshold | 40% | |
Leverage ratio | 750% | |
Debt issuance costs, gross | $ 2,300,000 | |
Long-term line of credit | $ 0 | |
Bridge Loan | ||
Debt Instrument [Line Items] | ||
Line of credit, maximum borrowing capacity | 20,000,000 | |
Letter of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit, maximum borrowing capacity | 25,000,000 | |
Amount of undrawn letters of credit | $ 10,000,000 |
LONG-TERM DEBT AND REDEEMABLE_5
LONG-TERM DEBT AND REDEEMABLE PREFERRED SHARES - Successor Senior Notes (Details) - Senior Notes Due 2029 - Senior Notes | Nov. 09, 2021 USD ($) |
Debt Instrument [Line Items] | |
Debt face amount | $ 675,000,000 |
Debt interest rate | 5% |
Debt issuance costs, gross | $ 11,000,000 |
LONG-TERM DEBT AND REDEEMABLE_6
LONG-TERM DEBT AND REDEEMABLE PREFERRED SHARES - Successor Redeemable Preferred Shares (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Nov. 09, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||
Dividend percentage | 6.50% | |||
Preferred dividend, paid in cash percentage | 40% | |||
Preferred dividend, paid in kind percentage | 60% | |||
Period of dividend payment after annual meeting | 3 days | |||
Preferred dividends paid in arrears | $ 5.5 | $ 4.5 | ||
Mandatorily Redeemable Preferred Stock | ||||
Debt Instrument [Line Items] | ||||
Mandatory redeemable shares amount | $ 100 | |||
SK Holdings Ordinary Shares Exchange | ||||
Debt Instrument [Line Items] | ||||
Number of shares issued in conversion (in shares) | 10,000,000 | |||
Preferred stock conversion price (in usd per share) | $ 10 | |||
6.50% Redeemable Preferred Shares | ||||
Debt Instrument [Line Items] | ||||
Period following latest maturity date | 6 months | |||
Period following issuance of 6.50% redeemable preferred shares | 9 years | |||
Liquidation preference | $ 100 | |||
Redemption price | 105.5 | $ 104.5 | ||
6.50% Redeemable Preferred Shares | Interest Expense | ||||
Debt Instrument [Line Items] | ||||
Dividends | $ 1.7 | $ 1.6 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (203.35%) | (17.28%) |
Luxembourg statutory rate | 24.94% | |
Unrecognized tax benefits | $ 36.3 | |
Possible decrease in unrecognized tax benefits | $ 34 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase obligation expense | $ 10 | $ 14 |
Purchase agreement | 5 | |
Obligation paid to date | 2 | |
Obligation outstanding | $ 3 |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) | 1 Months Ended | 3 Months Ended | |||
Jul. 21, 2022 shares | May 05, 2023 $ / shares shares | Mar. 31, 2023 USD ($) vote $ / shares shares | Dec. 31, 2022 $ / shares shares | Nov. 03, 2022 USD ($) | |
Class of Stock [Line Items] | |||||
Authorized share capital | $ | $ 4,100,000,000 | ||||
Common stock, authorized (in shares) | 4,000,000,000 | 4,000,000,000 | |||
Common stock, par value (in usd per share) | $ / shares | $ 1 | $ 1 | |||
Preferred stock, authorized (in shares) | 10,000,000 | ||||
Preferred stock, par value (in usd per share) | $ / shares | $ 10 | ||||
Number of votes per share | vote | 1 | ||||
Common stock, outstanding (in shares) | 158,513,889 | 156,797,806 | |||
Warrants outstanding (in shares) | 33,843,440 | ||||
Preferred stock, shares outstanding (in shares) | 10,000,000 | ||||
Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Treasury stock (in shares) | 1,479,825 | ||||
Average price (in usd per share) | $ / shares | $ 7.34 | ||||
Share Repurchase Plan | |||||
Class of Stock [Line Items] | |||||
Percentage of outstanding shares authorized to be repurchased | 25% | ||||
Stock repurchase program, number of shares authorized to be repurchased (in shares) | 40,659,257 | ||||
Stock repurchase plan period | 5 years | ||||
Authorized repurchase amount | $ | $ 100,000,000 | ||||
Treasury stock (in shares) | 115,570 |
SHARE-BASED COMPENSATION AND _3
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - 2021 Equity Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Mar. 08, 2023 | Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized and reserved for future issuance (in shares) | 31,900,000 | 31,900,000 | |||
Granted (in shares) | 2,175,000 | ||||
Cancelled (in shares) | 240,000 | ||||
Outstanding (in shares) | 11,274,171 | 11,274,171 | 10,339,171 | ||
Lower exercise price (in usd per share) | $ 8.26 | ||||
Upper exercise price (in usd per share) | $ 14 | ||||
Noncash stock compensation expense | $ (3,074) | $ 4,963 | |||
Unrecognized compensation expense | $ 27,200 | $ 27,200 | |||
5-Year Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 2,175,000 | ||||
Award vesting period | 5 years | 5 years | |||
Annual operation performance per diluted share (in usd per share) | $ 8.39 | ||||
Target annual operation performance per diluted share (in usd per share) | $ 11.35 | ||||
Cancelled (in shares) | 240,000 | ||||
5-Year Option | Former Chief Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance and time based vesting percentage | 50% | ||||
Performance based vesting percentage | 50% | ||||
Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration period | 10 years | ||||
Noncash stock compensation expense | $ (3,100) | $ 5,000 | |||
Period for recognition | 1 year 8 months 12 days |
SHARE-BASED COMPENSATION AND _4
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 | |
Number of Options | |
Beginning balance (in shares) | 10,339,171 |
Granted (in shares) | 2,175,000 |
Exercised (in shares) | 0 |
Forfeited (in shares) | (1,000,000) |
Cancelled (in shares) | (240,000) |
Ending balance (in shares) | 11,274,171 |
Options vested and exercisable (in shares) | 245,004 |
Weighted-Average Exercise/Conversion Price | |
Beginning balance (in usd per share) | $ 9.75 |
Granted (in usd per share) | 8.31 |
Exercised (in usd per share) | 0 |
Forfeited (in usd per share) | 10 |
Cancelled (in usd per share) | 10 |
Ending balance (in usd per share) | 9.45 |
Options vested and exercisable (in usd per share) | $ 10 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Options outstanding, weighted average remaining contractual life | 8 years 11 months 8 days |
Options vested and exercisable, weighted average remaining contractual life | 7 years |
Options outstanding, aggregate intrinsic value | $ 0 |
Options vested and exercisable, aggregate intrinsic value | $ 0 |
SHARE-BASED COMPENSATION AND _5
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Summary of Stock Option Valuation Assumptions (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares | |
Period End Date | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | $ | $ 0 |
Risk-free interest rate | 3.58% |
Expected volatility | 46.30% |
Weighted average exercise price of options granted (in usd per share) | $ 9.78 |
Weighted average fair value of options granted (in usd per share) | $ 3.24 |
Period End Date | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (years) | 5 years 1 month 6 days |
Period End Date | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (years) | 5 years 10 months 6 days |
Grant Date | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | $ | $ 0 |
Risk-free interest rate, minimum | 3.93% |
Risk-free interest rate, maximum | 4.18% |
Expected volatility | 45% |
Expected term (years) | 6 years 6 months |
Weighted average exercise price of options granted (in usd per share) | $ 8.31 |
Weighted average fair value of options granted (in usd per share) | $ 4.24 |
SHARE-BASED COMPENSATION AND _6
SHARE-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Founder Advisory Amounts (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Nov. 09, 2021 trading_day shares | Mar. 31, 2023 USD ($) trading_day $ / shares shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, outstanding (in shares) | shares | 158,513,889 | 156,797,806 | ||
Founder Advisory Agreement | Affiliated Entity | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Minimum amount to be paid in shares | 50% | |||
Founder Advisory Agreement | Affiliated Entity | EverArc Founder Entity | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fixed annual advisory shares (in shares) | shares | 2,357,061 | 2,357,061 | ||
Yearly issue percentage | 1.50% | |||
Common stock, outstanding (in shares) | shares | 157,137,410 | |||
Consecutive trading days | trading_day | 10 | 10 | ||
Percentage settled in cash | 50% | |||
After cash settlement, percentage as liability | 50% | |||
After cash settlement, percentage as equity | 50% | |||
Fixed annual advisory amount fair value | $ | $ 91.1 | $ 104.4 | ||
Share price (in usd per share) | $ / shares | $ 7.73 | $ 8.86 | ||
Variable annual advisory amount fair value | $ | $ 201.9 | $ 237 | ||
Adjustment in fair value of advisory amounts | $ | $ 24.2 | $ 59.8 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Level 2 | Senior Notes | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Long-term debt, fair value | $ 553.5 | $ 556.9 |
LaderaTech, Inc | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Revenue threshold | $ 5 | |
Measurement Input, Gross Profit | LaderaTech, Inc | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration liability, measurement input | 0.20 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Liabilities Measured on a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Liabilities: | ||
Founders advisory fees payable - related party | $ 146,482 | $ 175,373 |
LaderaTech contingent earn-out included in other liabilities, non-current | 7,519 | 7,273 |
Total liabilities | 154,001 | 182,646 |
Level 1 | ||
Liabilities: | ||
Founders advisory fees payable - related party | 45,544 | 56,883 |
LaderaTech contingent earn-out included in other liabilities, non-current | 0 | 0 |
Total liabilities | 45,544 | 56,883 |
Level 2 | ||
Liabilities: | ||
Founders advisory fees payable - related party | 0 | 0 |
LaderaTech contingent earn-out included in other liabilities, non-current | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | ||
Liabilities: | ||
Founders advisory fees payable - related party | 100,938 | 118,490 |
LaderaTech contingent earn-out included in other liabilities, non-current | 7,519 | 7,273 |
Total liabilities | $ 108,457 | $ 125,763 |
FAIR VALUE MEASUREMENTS - Recon
FAIR VALUE MEASUREMENTS - Reconciliation of Level 3 Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Founders Advisory Fees Payable - Related Party | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 118,490 | $ 251,513 |
Settlements | (40,776) | |
Reclassification from liability to equity | (10,495) | |
Founders advisory fees - related party, change in fair value | (17,552) | (46,256) |
Loss on contingent earn-out | 0 | |
Ending balance | 100,938 | 153,986 |
LaderaTech Contingent Earn-out | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 7,273 | 19,979 |
Settlements | 0 | |
Reclassification from liability to equity | 0 | |
Founders advisory fees - related party, change in fair value | 0 | 0 |
Loss on contingent earn-out | 246 | |
Ending balance | $ 7,519 | $ 19,979 |
RELATED PARTIES - Narrative (De
RELATED PARTIES - Narrative (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Feb. 15, 2023 USD ($) shares | Nov. 09, 2021 trading_day shares | Mar. 31, 2023 USD ($) trading_day $ / shares shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares | |
Related Party Transaction [Line Items] | ||||||
Common stock, outstanding (in shares) | shares | 158,513,889 | 156,797,806 | ||||
EverArc Founder Entity | Founder Advisory Agreement | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Fixed annual advisory shares (in shares) | shares | 2,357,061 | 2,357,061 | ||||
Yearly issue percentage | 1.50% | |||||
Common stock, outstanding (in shares) | shares | 157,137,410 | |||||
Consecutive trading days | trading_day | 10 | 10 | ||||
Fixed annual advisory, average share price (in usd per share) | $ / shares | $ 8.86 | |||||
Fixed annual advisory fee shares value | $ 20.9 | |||||
Variable annual advisory, average share price (in usd per share) | $ / shares | $ 8.86 | $ 13.63 | ||||
Percentage received in shares | 77.70% | |||||
Advisory share amount (in shares) | shares | 1,831,653 | |||||
Percentage received in cash | 22.30% | |||||
Payment of advisory amount | $ 4.7 | $ 4.7 | ||||
Ordinary shares issued (in shares) | shares | 1,831,653 | |||||
Share price (in usd per share) | $ / shares | $ 7.73 | $ 8.86 | ||||
Fixed annual advisory amount fair value | $ 91.1 | $ 104.4 | ||||
Variable annual advisory amount fair value | $ 201.9 | $ 237 | ||||
Variable annual advisory paid in cash | 50% | |||||
Variable annual advisory paid in shares | 50% | |||||
Adjustment in fair value of advisory amounts | $ 24.2 | $ 59.8 | ||||
Ironman | Lease Arrangements For Real Property | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction expense | $ 0.1 | $ 0.1 |
REVENUE RECOGNITION - Summary o
REVENUE RECOGNITION - Summary of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 43,858 | $ 57,758 |
Revenues from products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 43,140 | 55,594 |
Revenues from services | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 709 | 1,592 |
Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 9 | $ 572 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income | $ 9,431 | $ 36,963 |
Weighted-average shares outstanding: | ||
Weighted average shares used in computing earnings per share, basic (in shares) | 157,700,326 | 160,251,199 |
Founders advisory fees (in shares) | 11,785,305 | 14,142,366 |
Ordinary Shares equivalent of warrants (in shares) | 0 | 383,667 |
Weighted average shares used in computing earnings per share, diluted (in shares) | 169,485,631 | 174,777,232 |
Basic earnings per share (in usd per share) | $ 0.06 | $ 0.23 |
Diluted earnings per share (in usd per share) | $ 0.06 | $ 0.21 |
Stock Option | ||
Weighted-average shares outstanding: | ||
Potential shares excluded from computation (in shares) | 11,300,000 | 8,900,000 |
Founder Advisory Agreement | ||
Weighted-average shares outstanding: | ||
Potential shares excluded from computation (in shares) | 26,100,000 | 24,500,000 |
Warrant | ||
Weighted-average shares outstanding: | ||
Potential shares excluded from computation (in shares) | 8,500,000 | 8,100,000 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT INFORMATION - Summary o
SEGMENT INFORMATION - Summary of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 43,858 | $ 57,758 |
Adjusted EBITDA | 3,116 | 11,977 |
Depreciation and amortization | 16,087 | 16,371 |
Interest and financing expense | 10,146 | 10,496 |
Founders advisory fees - related party | (24,236) | (59,848) |
Non-recurring expenses | 1,559 | 1,476 |
Share-based compensation expense | (3,074) | 4,963 |
Non-cash purchase accounting impact | 0 | 6,122 |
Loss on contingent earn-out | 246 | 0 |
Unrealized foreign currency (gain) loss | (721) | 880 |
Income before income taxes | 3,109 | 31,517 |
Fire Safety | ||
Segment Reporting Information [Line Items] | ||
Net sales | 18,744 | 18,470 |
Adjusted EBITDA | (3,361) | (3,334) |
Specialty products | ||
Segment Reporting Information [Line Items] | ||
Net sales | 25,114 | 39,288 |
Adjusted EBITDA | $ 6,477 | $ 15,311 |
Uncategorized Items - prm-20230
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |