Perimeter Group (PRM) Telefonkonferenz zu den Q3-2026-Ergebnissen: EBITDA steigt um 20%

Die Perimeter Group (NYSE: PRM), ehemals Perimeter Solutions, verzeichnete für das dritte Quartal 2026 einen höheren Umsatz und ein gestiegenes bereinigtes EBITDA. Dabei glichen das breite Wachstum im Bereich Fire Safety und jüngste Übernahmen die gestiegenen Kosten zur Verbesserung der Liefersicherheit bei PDI aus.

Wichtigste Ergebnisse

• Der Nettoumsatz stieg im dritten Quartal im Jahresvergleich um 24 % auf 389,9 Millionen US-Dollar, während das bereinigte EBITDA um 20 % auf 223,5 Millionen US-Dollar zulegte.
• Der Nettogewinn erreichte 304,5 Millionen US-Dollar bzw. 1,74 US-Dollar je verwässerter Aktie, verglichen mit einem Nettoverlust von 90,7 Millionen US-Dollar bzw. 0,62 US-Dollar je verwässerter Aktie im Vorjahreszeitraum. Das bereinigte verwässerte Ergebnis je Aktie stieg von 0,82 US-Dollar auf 0,85 US-Dollar.
• Im Segment Fire Safety legten sowohl der Umsatz als auch das bereinigte EBITDA um 14 % zu. Das Segment profitierte von einer breiten geografischen Stärke, der Wiederaufnahme von Löschschaumlieferungen an die Defense Logistics Agency sowie dem Beitrag von Monaco Enterprises seit dem 30. Juli.
• Der Umsatz im Bereich Specialty Products stieg um 84 % auf 77,3 Millionen US-Dollar, während sich das bereinigte EBITDA auf 21,9 Millionen US-Dollar mehr als verdoppelte. Das Management rechnet kurzfristig mit weiterhin erhöhten PDI-Kosten, da das Unternehmen zuverlässigere Bezugsquellen aufbaut.
• Der freie Cashflow belief sich im dritten Quartal auf 150,4 Millionen US-Dollar. Der Nettoverschuldungsgrad sank trotz der Finanzierung der Monaco-Übernahme von 3,1x zum Ende des zweiten Quartals auf rund 2,7x des bereinigten EBITDA der letzten zwölf Monate.
• Das Management erwartet, dass das bereinigte EBITDA im Bereich Specialty Products im vierten Quartal nur geringfügig unter dem durchschnittlichen Quartalsniveau der ersten neun Monate 2026 liegen wird, gestützt durch die solide Entwicklung außerhalb von PDI.

Wichtigste Finanzergebnisse

Seit Jahresbeginn stieg der Nettoumsatz um 32 % auf 728,7 Millionen US-Dollar und das bereinigte EBITDA legte um 25 % auf 370,3 Millionen US-Dollar zu. Der bereinigte Nettogewinn erreichte 212,9 Millionen US-Dollar bei einem bereinigten verwässerten Ergebnis je Aktie von 1,27 US-Dollar gegenüber 1,24 US-Dollar im Vorjahreszeitraum.

Geschäftliche und operative Entwicklung

Die bereinigte EBITDA-Marge im Bereich Fire Safety lag bei 64,5 % und blieb damit im Jahresvergleich trotz der vertraglichen Preissenkung im ersten Jahr des Flammschutzmittel-Vertrags mit dem Bund im Wesentlichen unverändert. Die internationalen Flammschutzmittelverkäufe wurden von Europa und Australien angeführt, während auch das nordamerikanische Geschäft zulegte. Der Bereich Löschmittel profitierte von höheren Schaumverkäufen außerhalb Nordamerikas und der Wiederaufnahme von DLA-Lieferungen.

Das Management bezeichnete die nordamerikanische Brandsaison bis zum dritten Quartal als im oberen Bereich der normalen Bandbreite liegend. Die Brandaktivität fiel im Juli und August heftiger aus als üblich, verlangsamte sich im September jedoch deutlich, während Kanada das gesamte Quartal über unter dem Normalwert blieb.

Das Unternehmen richtet die wirtschaftliche Struktur der Verträge mit der US-Bundesregierung weiterhin verstärkt auf feste Servicegebühren und Full-Service-Luftstützpunkte aus, was die Ertragsabhängigkeit von Flammschutzmittelmengen und der saisonalen Brandaktivität verringert. Die Unternehmensleitung sah in der Kapazität an Löschflugzeugen – und nicht in der Produktion von Perimeter – den wesentlichen Engpass während der Spitzenzeiten von Waldbränden.

Specialty Products profitierte von MMT und IMS, die beide proprietäre Produkte, eine große installierte Basis und eine wiederkehrende Nachfrage im Aftermarket aufweisen. MMT investiert in die Entwicklung neuer Produkte, um die installierte Basis und künftige Aftermarket-Umsätze auszubauen. IMS treibt die Integration übernommener Produktlinien voran und prüft zusätzliche Chancen.

PDI blieb die zentrale operative Herausforderung. Perimeter baut die Produktion an den eigenen Standorten aus und bindet alternative Bezugsquellen an, was zunächst mit höheren Durchschnittskosten verbunden ist. Laut Management sollen diese Investitionen für eine deutlich größere Kontrolle über die Liefersicherheit sorgen.

Das Ende Juli übernommene Unternehmen Monaco Enterprises betreut Lebensrettungs- und Sicherheitssysteme auf weltweit mehr als 200 US-Militärstützpunkten. Nahezu der gesamte Umsatz entfällt auf Ersatzteile, Reparaturen, Erweiterungen, Modernisierungen und Serviceleistungen für die installierte Basis. Nach Angaben des Managements entwickelte sich das Geschäft im Rahmen der Erwartungen vor der Übernahme oder übertraf diese tendenziell sogar.

Prognose des Managements

Das Management erwartet, dass das bereinigte EBITDA im Bereich Specialty Products im vierten Quartal nur geringfügig unter dem durchschnittlichen Quartalswert der ersten drei Quartale 2026 liegen wird. Diese Prognose setzt voraus, dass die starke Entwicklung außerhalb von PDI eine Phase mit vorübergehend gedrücktem bereinigtem PDI-EBITDA ausgleicht.

Perimeter geht davon aus, dass die Investitionsausgaben (CapEx) im Jahr 2026 das obere Ende der Zielspanne von 30 bis 40 Millionen US-Dollar erreichen werden. Die Ausgaben fließen in Flammschutzmittel-Stützpunkte, die Infrastruktur für Luftstützpunkte, die Erweiterung des Werks in Green Bay, DLA-bezogene Kapazitäten und Initiativen zur Verbesserung der Liefersicherheit.

Das Unternehmen hielt an seinen langfristigen Annahmen fest: rund 75 Millionen US-Dollar an jährlichen Zinsaufwendungen (Cash Interest), 60 bis 65 Millionen US-Dollar an steuerlich abzugsfähigen Abschreibungen sowie eine effektive Steuerquote (Cash Tax Rate) von langfristig rund 20 % oder besser.

Die Investitionen in das Betriebskapital (Working Capital) dürften 2026 die langfristige Annahme des Unternehmens von 10 % bis 15 % des Umsatzwachstums übersteigen. Die Unternehmensleitung rechnet damit, dass die überschüssigen Flammschutzmittelbestände, die nach dem Rückgang der Brandaktivität im September aufgebaut wurden, bis zum zweiten Quartal des kommenden Jahres abgebaut werden.

Risiken und zentrale Beobachtungspunkte

• Die US-Lieferkette von PDI hat die Zuverlässigkeitsstandards des Managements nicht erfüllt. Der Übergang zu einer erweiterten Eigenproduktion und alternativen Bezugsquellen wird die Kosten vorübergehend erhöhen und das bereinigte EBITDA belasten.
• Die Brandaktivität wies im Quartalsverlauf erhebliche Schwankungen auf: Nach extremen Bedingungen im Juli und August folgte eine milde Entwicklung im September. Eine derartige Volatilität beeinflusst die Nachfrage und die Lagerhaltungserfordernisse.
• Begrenzte Kapazitäten an Löschflugzeugen können den Einsatz von Flammschutzmitteln während der Hochphasen von Waldbränden einschränken.
• Höhere Bestände in den Geschäftsbereichen Flammschutzmittel, PDI und Solberg erhöhen kurzfristig die Kapitalbindung im Working Capital.
• Die im Bundesvertrag für Flammschutzmittel vereinbarte Preissenkung im ersten Jahr bleibt weiterhin wirksam, wenngleich die Margen im Bereich Fire Safety im dritten Quartal im Jahresvergleich stabil blieben.

Wichtigste Punkte aus der Fragerunde mit Analysten

Das Management erklärte, dass die Stärke von Fire Safety im dritten Quartal breit über die Produktlinien und die meisten geografischen Regionen abgestützt war und nicht auf einem Einzelfaktor beruhte.

Zu PDI führte die Unternehmensleitung aus, dass die normalisierte Profitabilität anhand von Perioden beurteilt werden könne, in denen das Segment Specialty Products ausschließlich aus PDI bestand. Das Unternehmen geht davon aus, dass die Profitabilität diese historischen Niveaus letztlich übertreffen könnte, sobald eine stärkere Kontrolle über die Beschaffung erreicht ist; ein genauer Zeitplan für die Normalisierung wurde jedoch nicht genannt.

Die Integration von MMT mache gute Fortschritte. Das Management hob die große installierte Basis, die wiederkehrenden Aftermarket-Umsätze und die neu belebte Produktentwicklungspipeline hervor, behielt jedoch seine Linie bei, das EBITDA einzelner Geschäftsbereiche innerhalb des Segments nicht gesondert auszuweisen.

Zudem hob Perimeter wachsende Waldbrandprogramme auf US-Bundesstaatenebene hervor. Laut Management ergänzen immer mehr Bundesstaaten die Ressourcen des Bundes durch eigene Luftstützpunkte, Flugzeuge und Flammschutzmittelverträge, was zusätzliche Vertragsmöglichkeiten auf Bundesstaatsebene eröffnet.

Vollständiges Transkript der Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press *0, and a member of our team will be happy to help you. With us today are Haitham Khouri, Chief Executive Officer, Kyle Sable, Chief Financial Officer, and Seth Barker, Head of Investor Relations. [Operator Instructions] As a reminder, ladies and gentlemen, this conference call is being recorded and your participation implies consent to our recording of this call. If you do not agree with these terms, please disconnect at this time. Thank you. I would now like to turn the call over to Head of Investor Relations, Seth Barker. Please go ahead.

Seth Barker

Thank you, operator. Good morning, everyone, and thank you for joining Perimeter Group's third quarter 2026 earnings call. Speaking on today's call are Haitham Khouri, Chief Executive Officer, and Kyle Sable, Chief Financial Officer. We want to remind anyone who may be listening to a replay of this call that all statements made are as of today, November 5, 2026, and these statements have not been nor will they be updated subsequent to today's call. Today's call may contain forward-looking statements. These statements made today are based on management's current expectations, assumptions, and beliefs about our business and the environment in which we operate, and our actual results may differ materially from those expressed or implied on today's call.

Please review our SEC filings, particularly any risk factors included in our filings, for a more complete discussion of factors that could impact our results, expectations, or assumptions. The company would also like to advise you that during the call, we will be referring to non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, LTM adjusted EBITDA, adjusted EPS, and free cash flow. Reconciliation of and other information regarding our non-GAAP financial measures can be found in our earnings press release and presentation, both of which will be available on our website at ir.perimetergroup.com. With that, I will turn the call over to Haitham Khouri, Chief Executive Officer.

Haitham Khouri

Thank you, Seth. Good morning, everyone. I'd like to begin with our new name. As we announced last month, Perimeter Solutions formally became Perimeter Group yesterday, the same day we moved our headquarters to Charlotte, North Carolina. Our shares continue to trade on the New York Stock Exchange under the same ticker, PRM. The new name reflects what Perimeter has become, a group of 6 market-leading businesses across our 2 reporting segments. In Fire Safety, our businesses are Perimeter Solutions, our fire retardant business which keeps its name, Solberg Fire, our fire suppressants business, and Monaco Enterprises, our life safety and incident management systems. In Specialty Products, our businesses are PDI, our P2S5-based lubricant additives business, MMT, our medical manufacturing equipment business, and IMS, our proprietary aftermarket electronics business.

Our new name also reflects how we run the company. As companies grow, many centralize decision-making in pursuit of scale. We have chosen a different path. Each of our 6 businesses operates under its own brand and is led by its own president and management team, all responsible and accountable for its results. Our aim is for each business to have the focus, speed, and agility of an independent company with the capital and support of a larger group behind it. Decisions about how to serve customers are made inside each business by the teams who know those customers best. Our corporate team is small by design.

Its role is to support our businesses, not to run them, to develop their leaders, help them solve problems when they arise, and allocate capital, both to our existing businesses and to acquisitions. We work hard to avoid bureaucracy. We keep layers of management to a minimum, and we have no group-level heads of sales, engineering, or operations imposing a single approach on different businesses. That keeps each business agile and close to its customers. The autonomy we afford our businesses comes with a small number of foundational and non-negotiable standards that apply to every business in our group. Each business consistently and rigorously applies our operational value drivers. Each leadership team is held to the common set of attributes we expect of every Perimeter leader, and each business is focused on delivering for its customers and driving returns for our shareholders.

We believe this model leads to faster and better decisions for customers and better outcomes for shareholders. This is why we have chosen not to combine businesses simply to reduce costs on paper. In fact, we've done the opposite. A few years ago, we separated our retardant and suppressant businesses, which had previously been managed as a single centralized organization. The 2 businesses sell to different customers with different needs, and those customers are better served by separate dedicated teams. Our suppressants business shows what this approach can achieve. Since becoming a standalone business with its own leadership team, Solberg has made the most, excuse me, of the 2 biggest opportunities in its recent history.

The first is the global transition to fluorine-free firefighting foam. FAA-regulated airports and other customers that historically relied on fluorinated foams are now replacing them with fluorine-free alternatives. For these customers, the change is far more than a product swap. The new foam must perform in high-consequence situations and work with each customer's equipment. Because our suppressants team works directly with these customers, they understood early what the transition would take. With the authority and the resources to act, they invested in fluorine-free products designed for these applications and in the technical and service support each conversion calls for. As a result, Solberg Fire has gone from a challenger in fluorinated foams to a global leader in fluorine-free foams.

The second came from the Defense Logistics Agency. Not long ago, Solberg did almost no foam business with the DLA. The Solberg team listened closely to the agency's needs and made a series of decisions to earn its business, investing in products developed specifically for the agency's requirements, expanding our Green Bay, Wisconsin facilities to add capacity and redundancy, and building a vendor-managed inventory service around how the agency operates. That led to the 5-year contract we announced earlier this year with a maximum value of $500 million. In both cases, the team closest to the customer saw the need first and had the authority to act and the capital of the group behind them. In a centralized organization, those decisions would have been made further from the customer and more slowly, if at all. Accountability works best when leaders share in the results.

We tie our business leaders' compensation to performance so they do well when our shareholders do well. Autonomy, accountability, and alignment. Together, these 3 principles define how we run the company, and they are what the Perimeter Group name is meant to reflect. While our name has changed, our approach remains consistent. Our goal is to fulfill our critical mission by providing our customers with high-quality products and exceptional service while delivering our investors private equity-like returns with the liquidity of the public market. Our strategy is built on 3 pillars. First, we own exceptional businesses. These are niche market leaders that play critical roles in solving complex customer problems, qualities that support high returns on invested capital and durable earnings power.

Second, we rigorously apply our 3 operational value drivers to the businesses we own. We drive profitable new business, achieve continual productivity improvements, and provide increasing value to customers, which we share in through value-based pricing. Third, we operate our businesses in a highly decentralized manner, granting our business unit managers full operating autonomy, with the accountability to deliver results with a tightly aligned incentive structure for our managers to think and act like owners. We believe that these 3 pillars will optimize our durable long-term free cash flow. We then seek to maximize long-term per share equity value through a clear focus on the allocation of our capital as well as the management of our capital structure.

Turning now to our third quarter results. Third quarter adjusted EBITDA was $223.5 million, up 20% year-over-year, and year-to-date adjusted EBITDA was $370.3 million, up 25%. Fire Safety delivered a strong quarter with adjusted EBITDA up 14%. This was the first full season under our 5-year federal retardant contract, which boosted service levels and reliability while lowering costs for our customer. In one of the most active weeks of the season, our crews staffed and supplied air tanker bases across the country. We also invested significantly on our customers' behalf. We converted additional federal bases to our full-service model, in which we staff, equip, and maintain each base, and we invested our own capital into airbase upgrades so that air tankers can be reloaded even more quickly and reliably.

In Specialty Products, adjusted EBITDA more than doubled year-over-year. Our 2 more recent acquisitions in Specialty Products, MMT and IMS, share the qualities we look for in businesses: proprietary products, large installed bases, and recurring aftermarket demand. These qualities continue to prove themselves at both businesses, and we are confident that both will be strong contributors to our results. I'd like to spend a moment on PDI, our third Specialty Products business. PDI is a strong business with one weakness, which we are now fixing even at a near-term cost. PDI's customers consistently tell us that they value its product quality, its logistics, and its customer service. As in all of our businesses, the PDI team listens closely to customer needs and meets them, whether that means adapting to changes in their logistics or partnering with them on safety and reliability.

The PDI team routinely goes beyond supplying product, whether repairing customers' equipment, arranging emergency shipments ahead of severe weather, or providing on-site technical support hand-in-hand with customers' engineering and operations teams. PDI's one weakness has been reliability. Our U.S. supply has not been as consistent as our customers require. We are taking the necessary steps and making the necessary capital investments to permanently fix this. We are willingly accepting lower near-term results at PDI because when short-term results and the right long-term decisions point in different directions, we will always choose the long-term.

Moving to our next slide and touching on Monaco Enterprises. Our first months of owning Monaco, which joined us at the end of July, have confirmed the qualities that attracted us to the business. Monaco's systems protect people and mission-critical assets on more than 200 U.S. military installations globally. Nearly all of Monaco's sales come from supporting its large installed base through spare parts, repairs, expansions, upgrades, and service. Our acquisition framework is designed to find businesses like Monaco, and we continue to evaluate other opportunities with similar qualities. With that, I will turn the call over to Kyle to review our financial results and capital allocation.

Haitham Khouri

Thank you, Haitham. Reviewing Perimeter's third quarter results, net sales increased 24% to $389.9 million, while adjusted EBITDA rose 20% to $223.5 million. In the quarter, we reported net income of $304.5 million, or $1.74 per diluted share. This compares to a net loss of $90.7 million, or a $0.62 loss per diluted share in the third quarter of 2025. Adjusted net income was $144.3 million versus $125.5 million, translating to adjusted diluted earnings per share of $0.85 versus $0.82 in the prior year quarter. Year-to-date, net sales rose 32% to $728.7 million, while adjusted EBITDA increased 25% to $370.3 million.

Our year-to-date net income was $195.8 million, or $1.14 per diluted share, compared to a net loss of $66.1 million, or a $0.45 loss per diluted share in the prior year period. Adjusted net income increased to $212.9 million from $186.8 million last year, while adjusted diluted earnings per share was $1.27 compared to $1.24 in the prior year period. Consolidated results reflect the ongoing execution of our operational value drivers, continued secular tailwinds, and our acquisition strategy. The 2 reporting segments are unchanged under the Perimeter Group name.

Turning to the first of those segments, Fire Safety. Revenue for the quarter rose 14% to $312.5 million. Adjusted EBITDA also rose 14% to $201.6 million from $177.2 million in the prior year period. Year-to-date, Fire Safety revenue rose 13% to $487.1 million, while adjusted EBITDA rose 13% to $299.1 million from $265 million. Fire Safety results include Monaco Enterprises from July 30. In our second quarter call, we said that our second quarter Fire Safety margins reflected 2 temporary factors: the first-year pricing step-down under our federal retardant contract, and the pause in foam deliveries to the Defense Logistics Agency. We also said we expected margins to be more in line with their historical averages in the second half.

In the third quarter, foam deliveries to the DLA resumed, and Fire Safety's adjusted EBITDA margin was 64.5%, essentially flat year-over-year, even with the federal step-down in effect throughout the quarter. Several factors contributed to the strength of the quarter. Our International retardant business delivered a strong quarter led by Europe and Australia. Our North America retardant business grew, and our suppressants business had a strong quarter, with stronger foam sales outside North America and DLA deliveries underway. Year-to-date, the North America fire season has been toward the high end of the range we would consider normal. The season progressed at a more severe pace than normal through July and August, while September was very mild. Canada remained below normal throughout the quarter.

We've also continued to reduce our sensitivity to fire activity. As we've renewed contracts, we have shifted sales towards fixed service fees, away from revenue tied to volume. And full-service bases, as Haitham described, give us steady recurring service revenue. These steps make our earnings more stable from one season to the next. Over the longer term, the drivers we have described remain in place: rising fire activity, and growing aerial firefighting fleets as customers invest in new aircraft and airbase infrastructure.

In Specialty Products, revenue for the quarter rose 84% to $77.3 million. Adjusted EBITDA rose to $21.9 million from $9.1 million in the prior year period. Year-to-date, revenue rose 103% to $241.7 million and adjusted EBITDA rose to $71.2 million from $30.8 million. As Haitham noted, our focus at PDI is on supplying our customers reliably. To that end, we've expanded production at our own facilities and are using new alternate supply sources and resources, at least in the near term and at higher average cost. We are willing to bear these costs to reach a durably reliable supply position. Our goal is for PDI's supply reliability to match the high standard we already deliver to our customers in product quality, logistics expertise, and service.

Across the segment, MMT continues to invest behind its innovation pipeline to accelerate new product launches, while serving its large installed base of consumables, spare parts, and services. Finally, at IMS, it keeps customers' equipment in service with proprietary replacement electronics. We continue to integrate the acquired product lines and to evaluate additional product lines that fit our strategy. Looking forward, we will willingly accept a period of depressed adjusted EBITDA from PDI while we keep our customers supplied through the transition to reliable long-term sources.

Despite these expenses, we expect Specialty Products fourth-quarter adjusted EBITDA to be only modestly below its average quarterly results so far this year, due to strong segment performance outside PDI. Specialty Products is comprised of 3 different businesses where our approach is the same in each: listen to stakeholders and customers, invest to serve them better, and apply our operational value drivers. That approach is not specific to any one business, which positions us to replicate it with confidence as we expand the group.

Turning to our long-term cash flow assumptions, which are unchanged. Starting with interest, the framework contemplates annual cash interest expense of approximately $75 million. To that end, we paid $20.4 million of cash interest this quarter. Tax-deductible depreciation and amortization is expected to be $60 million to $65 million annually. This quarter, that came to $11 million. We expect our cash tax rate to be approximately 20% or better over time. We paid $4.3 million in cash taxes this quarter, below the $15.4 million we paid a year ago. Our annual capital expenditures are expected to remain at $30 million to $40 million.

In 2026, we expect to get to the high end of that range as we accelerate investments across our business in support of our customers' missions. We invested $12.7 million in the third quarter, which brings our spending so far this year to $31.2 million. Our long-term expectation for working capital is unchanged, approximately 10% to 15% of revenue growth over time. In 2026, we expect to invest more than that. An important driver is the inventory we hold for our federal customers. For July and August, the most active part of the season, we kept producing so that we would have enough retardant on hand as severe activity continued into the fall.

Instead, activity slowed sharply in September, which left us with extra inventory that we expect to work through by the second quarter of next year. Our ability to build and hold large inventories through sharp swings in activity is a critical part of the value we provide our federal customer. We've also invested in inventory at PDI to improve the reliability of supply, and at Solberg to support DLA deliveries. The third quarter is seasonally our strongest quarter for cash generation, and this year was no different, with $150.4 million of free cash flow in the quarter.

Turning to capital allocation. Year-to-date, we have deployed approximately $830 million of capital, including approximately $682 million to acquire MMT, approximately $117 million to acquire Monaco, and $31 million of capital expenditures in our existing businesses. Our first capital allocation priority remains reinvesting in our businesses on behalf of our customers. This year, that includes new retardant bases and airbase infrastructure, including the airbase we're building in Texas, the expansion of our Green Bay, Wisconsin facility, which is well underway, and additional staffing to serve the DLA. Building dependable sources of supply for Perimeter customers and investments in Perimeter's service capacity and innovation. Each of these investments is under tight return standards, driving future EBITDA growth.

Once the reinvestment needs of our business are met, our primary focus remains M&A. Our acquisition framework remains consistent. We target businesses that provide a small but essential component within a broader solution to critical customer needs, that operate in niche markets with sustainably differentiated solutions, and exhibit characteristics such as recurring revenue, strong returns on capital, and opportunities for reinvestment and add-on acquisitions. We remain active in evaluating a robust pipeline of opportunities, and the cash our business generates each year gives us the capacity to act when the right opportunity arises.

The capital structure remains long-dated and fixed-rate, consisting of $675 million of 5% notes due 2029 and $550 million of 6.25% notes due 2034, with a blended coupon of 5.6%. During the quarter, we fully repaid the revolver borrowings we used to fund the Monaco acquisition. Our $200 million revolving credit facility was undrawn at quarter-end. At quarter-end, net debt was approximately 2.7x LTM adjusted EBITDA, down from 3.1x at the end of the second quarter. That reduction came in a single quarter, even as we funded the Monaco acquisition. It shows how quickly our cash generation rebuilds our capacity to invest as we remain below our target leverage level. We ended the quarter with approximately $116 million of cash and total liquidity of approximately $316 million, including the more than $150 million we described following the Monaco acquisition. We ended the quarter with approximately 163.7 million basic shares outstanding.

Our third quarter reflected strong execution in Fire Safety, where we completed our first season under the federal retardant contract and began foam deliveries to the DLA under its new contract, and continued reinvestment across our 6 businesses. From new airbase infrastructure and the expansion of our Green Bay facility to more dependable supply for PDI's customers. With leverage down to 2.7x and approximately $360 million of liquidity, we have ample capacity to keep investing. We remain focused on applying our operational value drivers across the group, boosting investments to better serve our customers, and allocating capital to compound long-term per share value. With that, I'll turn the call back to the operator for Q&A.

Operator

Thank you. [Operator Instructions] We'll take our first question from Josh Spector with UBS.

Fragen und Antworten

Gaurav Sharma

This is Gaurav Sharma sitting in for Josh today. I guess it's a good fit when thinking about the contribution from higher retardant volumes of suppressants and then Monaco, just trying to get a sense of what the key drivers were.

Haitham Khouri

Thanks for the question, Gaurav. We had a pretty strong quarter across all of our product lines in Fire Safety this year. It's actually spread quite well geographically as well. So as we look at that, and you'll see the details when the Q hits later today, we had strength across every one of those product lines and across most of our geographies. It really was a quarter where the Fire Safety business was operating on all cylinders across the full spread of the entire business.

Gaurav Sharma

Thanks. Can you talk about the MMT integration and how that's progressing? If you can give me a sense of what the EBITDA run rate is today relative to acquisition?

Haitham Khouri

Yes, hey, morning, Gaurav. It's Haitham. Integration is going very well. Pleased with the business, pleased with the team. As far as the, you know, as you know, we report very consistently on a segment level. We don't go below that. That said, if you look at my comments and Kyle's comments on the call around minimal PDI EBITDA contribution in Q4, yet Specialty Products Q4 EBITDA only modestly below what we've done in the first 3 quarters, I think there's a pretty clear and powerful inference you can make from that as to the performance of businesses in the Specialty Products segment outside of PDI.

Gaurav Sharma

Thank you. I'll turn it over.

Operator

We'll take our next question from Will Gildea with CJS Securities.

Will Gildea

So just in PDI, can you expand on some of the investments you're making to enhance long-term results and what is the timeline for results in PDI to normalize?

Haitham Khouri

Yeah, hey there Will, it's Haitham. You know, for normalized, you can look back a couple of years when that segment was only PDI. That's the best data point out there. We think it's possible that we do even better than that long-term with the supply source we control, and therefore we're quite optimistic about the future of that business and profitability levels we can get to. As far as the near term, our entire operating model at Perimeter is predicated on very consistently delivering and delivering with tremendous quality for our customers. We understand that PDI has fallen short of that standard, and we're not at all happy about it. We've been clear that we are going to take the decisive and necessary steps to fix that, and get PDI delivering consistently for our customers, just like all of our other businesses.

There is a path where we could have solved this within the contractual framework with our existing supplier. That clearly has not happened. We have been preparing for and are prepared to fix this outside of our contractual framework. We're not quite ready to provide all the details on that, although hold tight, we certainly will when it's done and dusted. This transition requires a temporary period of elevated expenses while we keep our customers supplied as we make this transition. Again, we've prepared for this, we feel good about this, and we are willingly living with higher near-term costs to keep customers supplied to get to the other side of this. Because as both me and Kyle said on the call, we will always make a short-term tradeoff to A, take care of our customers, and B, drive better long-term outcomes, which is exactly what we're doing at PDI.

Will Gildea

Thank you for the color, Haitham. And just can you give us a broad update on Monaco? Has anything surprised you since you closed, either good or bad?

Haitham Khouri

I would say no surprises, Will, although directionally very much good. We spent a lot of time up in Spokane with the team since close. The business is what we believed it was, frankly, if not even higher quality. And we've really, really enjoyed our interactions with the leadership team there. Just a very capable, humble group, and it's really been a privilege to interact with them so far, and we feel excellent about Monaco. I'll leave it there. Thanks.

Operator

We'll take our next question from Tomohiko Sano with J.P. Morgan.

Tomohiko Sano

Good morning. This is Ethan on for Tomo. Just to go a little bit more into PDI on the investments, were those within the quarter or are those looking for more Q4 on a run rate going forward? And then on the expanded production and alternative supply sources, is this bringing it more in-house?

Haitham Khouri

Good morning, Ethan. Kyle, thanks for the question. Absolutely. We're making those investments both within the quarter and prospectively. And it's a path that we're very committed to. As Haitham alluded to, this is a really high-quality business. We really like this business. We think we're differentiated here. We think it has a great ability to drive long-term value. It's just one piece that's missing.

So we're going to spend the money, and we have already started spending it, and we've been spending it, frankly, for a number of quarters now in preparation for this to make sure that we're going to get that full value out of it overall and ultimately. The key thing for us is we need to have reliable supply. We need to have substantially more control over the reliability of that supply than we have historically. So yes, we are going to have some expanded production at our existing facility, as we mentioned. We have some other sources that we're bringing online in very near order that will complement that.

Tomohiko Sano

Thank you for the additional color. And then just going to go back on MMT as well. With the additional investments that you're making in innovation and running the playbook, it's been really around 10 months, just under 10 months since you acquired MMT. How would you view it now versus maybe 10 months ago?

Haitham Khouri

No, not a whole lot different. And again, similar to the comment I made on Monaco, the business is largely what we expected and hoped it would be, primarily with a very large installed base of critically important long-lived machines into which there's a very, very high quality aftermarket revenue stream that is driving really significant profitability. We expected to and have reinvigorated new product development with the goal of increasing the growth rate and the size of the installed base in order to increase the size and profitability of the addressable aftermarket stream. And the team is executing, and we feel good.

Tomohiko Sano

Thank you. I'll hop back in the queue.

Operator

[Operator Instructions] We'll move next to Daniel Kutz with Morgan Stanley.

Daniel Kutz

So I wanted to ask, between the federal retardant contract and the CAL FIRE contract you guys announced over the last year, that covers the majority of Lower 48 acres burned and retardant demand, but there were big markets out there, and you flagged building a base in Texas. I think the question is, if you invest in more wildfire fighting assets, Oregon had a historically severe wildfire season. How do you think about more contracts, or are there contracts in place with the state wildfire fighting agencies in those markets or any other big markets in the U.S.? How do you think about contracting relationships with those last couple of big customers in the United States that you haven't necessarily press released on them being in the federal contract or outside of the federal contract?

Haitham Khouri

Yes, I'll take it. We've seen a very clear and very positive trend over the past several years where various states decide to take wildland firefighting increasingly into their own hands. They still very much rely on the federal agencies for firefighting resources, but they have been supplementing and enhancing their federal partnerships by building out their own robust programs, be that air bases, be that air tankers, be that retardant contracting, et cetera. And we are an absolutely critical and fulcrum part of every one of those processes and have nicely bulked up and will continue to nicely bulk up our individual state contracts. Again, as more and more states supplement the support they get from their federal partners with their own programs.

Daniel Kutz

Got it. That's helpful. And then maybe on the third quarter, I know that when you're in really severe periods of wildfire activity, assets can spread pretty thinly. And it seems like the third quarter of this year was among the most severe on record, but if you isolate just July and August, that might be record-high wildfire activity and acres burned in the Lower 48. Can you talk about how bottlenecks that are upstream or downstream of Perimeter might have factored into the quarter? Back in July of '24, you flagged that Perimeter is almost never the bottleneck in wildfire fighting. You've been investing more in streamlining your operations and the full-service infrastructure model. Were there any periods in this quarter where you guys were running into bottlenecks? Just asking about how the quarter's historically severe wildfire activity and any bottlenecks in firefighting efforts came into play. Thanks a lot.

Haitham Khouri

Hey Dan, Kyle, thanks for the question. I think you highlighted a couple of key points in here I wanted to reiterate. First of all, this was a very different wildfire season in July and August than it was in September. Let's talk about the first 2 months first. You have it exactly right that within these periods of months where there's elevated wildfire activity, the bottlenecks are a couple of things: do you have wildfire activity in the right geographies, which there was, and do you have timing where it's in a peak season where we're ready to step in, and there was.

And really during those periods, what we look at is air capacity. This is always the case. As you alluded to, it's not us and frankly never will be. The biggest bottleneck will be air capacity. This is why we spend so much time working with our partners in the air tanker community to help educate stakeholders, the government, and the firefighting agencies about the importance of air tanker capacity and making sure we're stabilizing and expanding that fleet over time. There are just times at these peak wildfire moments where there's not enough air tankers to deliver the product we need. That's July and August.

For September, as we've highlighted, it was a pretty steep decline. So this was a very steep decline going from August to September. And there you shift back to looking at, okay, now it is just the number of fires. And there were substantially fewer fires in September. And so really the bottleneck shifted from being air capacity to just how many fires were out there that needed to be fought with air tankers.

Daniel Kutz

It all makes a lot of sense. Thanks a lot. I'll turn it back.

Operator

Thank you. That concludes our question and answer period. I would now like to turn the call back to Haitham Khouri for closing remarks.

Haitham Khouri

Thank you, Chloe. Great job hosting the call today. Thank you to analysts for your attention and excellent questions. And as always, thank you to our shareholders for the tremendous support. Speak again early next year.

Operator

Thank you. That concludes today's third quarter 2026 Perimeter Group Earnings Conference Call. You may now disconnect your lines at this time and have a wonderful day.

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