A Member of Pat McKeough’s Inner Circle recently asked for his advice on a specialty chemicals company focused on fire safety products and phosphorus-based specialty chemicals for government and industrial customers.
Pat likes the strong demand for the firm’s retardants/suppressants and the financial impact of its new and renewed contracts. The business model also features strong moats that create high switching costs and regulatory barriers for competitors. However, Pat notes the company needs a sustained economic recovery to keep revenue and earnings rising for its Specialty Products unit.
Perimeter Solutions Inc. (Symbol PRM on New York; www.perimeter-solutions.com) is a specialty chemicals business providing fire safety products and services.
The Clayton, Missouri-based company went public in November 2021 with a listing on the New York exchange. Its roots as a private firm date back more than 60 years.
Perimeter serves wildland agencies (including the USDA Forest Service and CalFire), municipal fire departments, industrial sites handling flammable liquids, and global producers of lubricant additives. It operates manufacturing and distribution facilities in the U.S., Canada, Europe and Australia, with customers in over 100 countries. In the key U.S. market, Perimeter holds a dominant position in aerial fire retardants for wildland operations.
The company has two main business segments, namely Fire Safety (75% of sales) and Specialty Products (25%). Physical products provide 80% of revenue; and services, 20%. Revenue is mostly generated from clients in the U.S., with smaller contributions from Europe and Canada.
The Fire Safety segment develops and manufactures fire management products that aim to help the company’s customers combat various types of fires. Those include wildland, structural, and flammable-liquids fires.
Through this unit, the company is the largest global producer of firefighting chemicals, offering aerial and ground-applied retardants, foams, and gels. It also provides airbase storage, mobile bases, personnel, logistics, and emergency resupply capability through 150 North American air tanker bases.
The Specialty Products segment includes manufacturing operations for non-fire safety products. Its major offering is phosphorus pentasulfide-based lubricant additives, which are used for pesticides, mining chemicals, and electric batteries.
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On September 3, 2025, Perimeter announced a 5-year agreement with the U.S. Department of Agriculture to provide, at preferential pricing, all of the powder retardant used by the Federal government. In return, Perimeter’s role in aerial firefighting operations will expand.
In another important move in September 2025, Perimeter’s Specialty Products segment paid $12 million for the assets and technical data rights of a third party.
Perimeter Solutions’ demand for its fire management products is a key growth driver
In the three months ended March 31, 2026, Perimeter’s revenue rose 73.8%, to $125.1 million from $72.0 million a year earlier. Revenue rose due to internal growth as well as strategic acquisitions. Excluding one-time items, earnings rose 119.5%, to $9.0 million, or $0.06 a share, from $4.1 million, or $0.03. Earnings rose due to the higher sales as well as cost-cutting efforts.
The company’s outlook is positive, but it needs a sustained economic recovery to keep revenue and earnings rising for its Specialty Products unit. Still, demand for its fire management products should remain steady, spurred in part by a rise in the number of acres burning or under threat across North America.
Recommendation in Pat’s Inner Circle: Perimeter Solutions Inc. is okay to hold.
