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Perimeter Solutions Understates Operating Income, Restates Financials
Chemicals maker materially misstates financials over multiple periods.
March 22, 2023
Perimeter Solutions (PRM), a maker of fire retardant foam and specialty chemicals, restated financials over multiple periods after acknowledging various accounting errors. The errors include inaccurately accounting for stock options and inventory amortization and impacted the company’s results, in part, as follows:
—Operating income was understated by $14.9 million, or 8.5% in the nine months ended September 30, 2022
—Total assets were overstated by $14.1 million, or 0.5% as of June 30, 2022
—Total liabilities were overstated by $9.2 million, or 0.6% as of June 30, 2022
Though Perimeter stated the errors were immaterial for the quarter ended March 31, 2022 and its financial statements as of December 31, 2021 and for the period from November 9, 2021 through December 2021, the company acknowledged:
“...the Stock Options Error and the Inventory Amortization Error were material to the previously issued unaudited condensed consolidated financial statements for the quarterly and year-to-date periods ended September 30, 2022 (“September 2022 Quarter”) and June 30, 2022 (“June 2022 Quarter”), and, as a result, such unaudited financial statements should be restated…”
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