Platform Specialty Products Corporation Announces 2016 Fourth Quarter and Full Year Financial Performance

• 2016 net sales of $3.6 billion, an increase of 41.0%; record net sales of $950 million in Q4 2016
• FY and Q4 2016 organic sales increase of 2.0% and 4.6%, respectively
• 2016 GAAP basic EPS loss of $0.14 or $0.63 fully diluted 
• FY and Q4 2016 adjusted EPS of $0.63 and $0.20, respectively
• 2016 GAAP net loss of $35 million
• 2016 Adjusted EBITDA of $769 million, an increase of 35.5%
• Announcing 2017 Adjusted EBITDA guidance range of $800 million to $830 million

WEST PALM BEACH, Fla., Feb. 28, 2017 -- Platform Specialty Products Corporation (NYSE:PAH) (“Platform” or the “Company”), a global, diversified specialty chemicals company, today announced unaudited financial highlights for the three and twelve months ended December 31, 2016.

Fourth Quarter 2016 Highlights:

• Net sales on a reported basis for the fourth quarter of 2016 were a record $950 million, an increase of 29.2% over last year.  On a comparable basis, organic sales, which excludes the impact of currency changes, metals prices, acquisitions and divestitures, increased 4.6% quarter-over-quarter;
  • MacDermid Performance Solutions (Performance Solutions segment): Net sales were $457 million, an increase of 76.4% compared to the same period of 2015. On a comparable basis, organic sales increased 6.3% quarter-over-quarter
  • Arysta LifeScience (Agricultural Solutions segment): Net sales were $493 million, an increase of 3.6 % compared to the same period of 2015. On a comparable basis, organic sales increased 3.1% quarter-over-quarter
• Reported net income attributable to common stockholders was $4 million, compared to a net loss of $130 million for the same period in 2015.  Diluted earnings per share were $0.01 on a GAAP basis compared to a diluted loss per share of $0.60 in the same period of 2015;
• Adjusted earnings per share were $0.20 compared to comparable adjusted earnings per share of $0.14 in the same period of 2015;
• Adjusted EBITDA for the fourth quarter of 2016 was $218 million, an increase of 18.7% on a comparable constant currency basis over the fourth quarter of 2015. Adjusted EBITDA margin for the combined company was 23.0% compared to comparable adjusted EBITDA margin of 20.3% in 2015;
• Additional cost synergies of $19 million were reported in the fourth quarter of 2016 from on-going integrations.

Full Year 2016 Highlights:

• Net sales were $3.6 billion compared to $2.5 billion in 2015, an increase of 41.0%.  On a comparable basis, organic sales increased 2.0% year-over-year;
  • MacDermid Performance Solutions (Performance Solutions segment): Net sales were $1.8 billion, an increase of 121% compared to 2015. On a comparable basis, organic sales increased 1.0% year-over-year
  • Arysta LifeScience (Agricultural Solutions segment): Net sales were $1.8 billion, an increase of 4.3% compared to 2015. On a comparable basis, organic sales increased 3.0% year-over-year
• Reported net loss attributable to common stockholders was $35 million, compared to a net loss of $309 million in 2015.  Diluted loss per share were $0.63 on a GAAP basis compared to a diluted loss per share of $1.52 in 2015;
• Adjusted earnings per share were $0.63 compared to comparable adjusted earnings per share of $0.60 in 2015;
• Adjusted EBITDA for the year of 2016 was $769 million, an increase of 5.8% on a comparable constant currency basis.  Adjusted EBITDA margin for the combined company was 21.5% compared to comparable adjusted EBITDA margin of 20.5% in 2015;
• Additional cost synergies of $60 million were reported in 2016 from the ongoing integrations in both the Agricultural Solutions and Performance Solutions segments. The Company considers the Agricultural Solutions integration to be effectively complete, having actioned $85 million of estimated synergies on an annualized, run rate basis to date.

Executive Commentary

Platform’s Chief Executive Officer Rakesh Sachdev stated: “2016 was a successful year for Platform in a number of ways. Our revenue growth accelerated significantly in the second half of the year, and our business overall demonstrated resilience in mixed end markets.  We exceeded our adjusted EBITDA target, generating comparable adjusted EBITDA growth of nearly 6% for the full year on a constant currency basis. Our strong earnings translated into cash flow from operations of $185 million.  Furthermore, we improved our balance sheet meaningfully with the settlement of all our obligations related to our Series B convertible preferred stock, which resulted in savings of approximately $100 million, and the repricing of all of our term loans, which we expect to generate annual interest savings of $26 million.  Finally, we stabilized our management team with a number of key hires who have already made significant contributions to the Company.

Our 2017 guidance and outlook calls for expected adjusted EBITDA of $800 to $830 million and organic earnings growth in both segments. While we anticipate certain global and regional headwinds, we still expect to achieve above market growth in both our businesses. We also plan to deliver further meaningful cost synergies in the Performance Solutions segment and supply chain savings in the Agricultural Solutions segment. At the mid-point, our adjusted EBITDA guidance implies growth of 8% over 2016 on a constant currency basis and is in line with our long term expectations.”

2017 Guidance

Based on foreign exchange rates as of January 31, 2017, Platform expects adjusted EBITDA for 2017 in the range of $800 million to $830 million, representing an increase of 8% at the mid-point on a constant currency basis.

2016 Form 10-K Filing

Platform expects to avail itself of the 15-day filing extension available under Rule 12b-25 to file its annual report on Form 10-K for the fiscal year ended December 31, 2016. As part of Platform's continued integration of its Performance Solutions and Agricultural Solutions segments, the Company has an ongoing initiative to simplify its corporate and tax footprint to better manage cash taxes and its overall cash position. As a result of the timing and scale of legal entity combinations involved in this initiative, Platform has not yet completed certain tax procedures and related disclosure to be included in its Form 10-K. These items are not expected to impact the financial information presented in this release. Once these items are finalized, Platform expects to file its annual report on Form 10-K with its audited financial statements for the fiscal year ended December 31, 2016 within the permitted extension period.

Platform previously reported material weaknesses which, at the date hereof, remain unremediated. Platform will complete the assessment of the effectiveness of its internal control over financial reporting prior to the filing of the Form 10-K.

Conference Call

Platform will host a webcast/dial-in conference call to discuss its 2016 fourth quarter and full year financial performance at 8:30 a.m. (Eastern Time) on Tuesday, February 28, 2017.  Participants on the call will include Rakesh Sachdev, Chief Executive Officer; Sanjiv Khattri, Chief Financial Officer; and Benjamin Gliklich, Executive Vice President - Operations and Strategy.

To listen to the call by telephone, please dial (855) 357-3116 (domestic) or (484) 365-2867 (international) and provide the Conference ID: 74692869.  The call will be simultaneously webcast at www.platformspecialtyproducts.com.  A replay of the webcast will be available for three weeks shortly after completion of the live call at www.platformspecialtyproducts.com.

Non-GAAP Financial Measures

This release and its attachments contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission, including adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA guidance, comparable net sales, comparable adjusted earnings per share, comparable adjusted EBITDA, comparable adjusted EBITDA margin, organic sales and free cash flow. Please refer to VI. Non-GAAP Measures for definitions and reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.

About Platform

Platform is a global, diversified producer of high-technology specialty chemicals and provider of technical services.  The business involves the formulation of a broad range of solutions-oriented specialty chemicals, which are sold into multiple industries, including automotive, agriculture, animal health, electronics, graphic arts, and offshore oil and gas production and drilling.  More information on Platform is available at www.platformspecialtyproducts.com.

Forward-Looking Statements

This release contains statements which are, or may be deemed to be, ‘‘forward-looking statements'' which are prospective in nature. All statements other than statements of historical facts are forward-looking statements. They are based on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations and include, but are not limited to, statements relating to: (i) Platform's ability to file its 2016 Form 10-K within the 15-day extended filing deadline; (ii) estimated or expected net sales, adjusted EBITDA, adjusted earnings per share, organic growth, synergies, free cash flow, future capital expenditures, expenses, earnings, economic performance, indebtedness, financial condition, income tax provision, dividend policy, losses and future prospects; (iii) business and management strategies; and (iv) the effects of global economic conditions on Platform's business. Many of these important factors are outside of Platform's control. No assurances can be provided as to any result or the timing of any outcome regarding matters described herein or otherwise. Such statements are based on management's estimates and assumption with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Many factors may cause the actual results, performance or achievements of Platform to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results, performance or achievements of Platform to differ materially from the expectations of Platform include, among other things: (i) Platform's perception of future availability of equity or debt financing needed to fund its growing business; (ii) Platform's assessment of its internal control over financial reporting; (iii) Platform's ability to identify, hire and retain executives and other employees with sufficient expertise;  (iv) the impact of commodities and currencies and Platform's ability to manage its risk in these areas; (v) future capital expenditures, indebtedness, leverage, and dividend policy; (vi) general business and economic conditions globally, industry trends, competition, government investigations, litigation, changes in government and other regulations, changes in political and economic stability, disruptions in business operations due to re-organization activities; (vii) interest rate and currency fluctuations; and (viii) the impact of acquisitions, divestitures, restructuring, refinancing, and other unusual items, including Platform's ability to successfully complete as well as integrate and obtain the anticipated results and synergies from its acquisitions. Other risk factors are described in Platform's periodic and other reports filed with the Securities and Exchange Commission, including Platform's annual report on Form 10-K for the fiscal year ended December 31, 2015 and quarterly reports on Form 10-Q for the fiscal quarters ended March 31, 2016, June 30, 2016 and September 30, 2016, as well as any subsequent reports on Forms 10-K, 10- Q and 8-K, which are or will be available at www.platformspecialtyproducts.com.

This release is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 as it contains "forward-looking statements" within the meaning of the federal securities laws. Platform and its associates, directors, officers and advisers do not provide any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this release will actually occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Platform undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

-FINANCIAL TABLES TO FOLLOW-

VI.  Non-GAAP Measures

For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets, or statements of cash flows of the company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

To supplement the financial measures prepared in accordance with GAAP, Platform has provided in this release the following non-GAAP financial measures: adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA guidance, comparable net sales, comparable adjusted earnings per share, comparable adjusted EBITDA, comparable adjusted EBITDA margin and organic sales.  Platform also evaluates and presents its results of operations on a comparable constant currency basis.  Management believes that these measures provide useful information to investors by excluding certain items that it believes are not representative of the Company's business and including other items that it believes are useful in evaluating the Company's business; thereby providing a more complete understanding of the Company's operational results and a meaningful comparison of the Company's performance between periods and to its peers.  When reconciled to the corresponding GAAP measures, these non-GAAP measures also help the Company's investors to understand the long-term profitability trends of the Company's businesses. Finally, these non-GAAP measures address questions the Company routinely receives from securities analysts, investors and other interested parties in the evaluation of companies in its industry and, in order to assure that all investors have access to the same data, the Company has determined that it is appropriate to make this data available to all.  Non-GAAP financial measures are however not prepared in accordance with GAAP, as they exclude certain items as described herein, and may not be indicative of the results that the Company expects to recognize for future periods.  In addition, these non-GAAP financial measures may differ from measures that other companies may use.  As a result, these non-GAAP financial measures should be considered in addition to, and not a substitute for, financial information prepared in accordance with GAAP.  Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures included herein.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial tables as part of this release. The Company only provides Adjusted EBITDA guidance, organic sales growth and synergy potential on a non-GAAP basis and does not provide reconciliations of such forward-looking non-GAAP measures to GAAP, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including adjustments that could be made for restructuring, integration and acquisition-related expenses, share-based compensation amounts, adjustments to inventory and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.

Adjusted EBITDA:

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, as further adjusted for additional items included in earnings that are not representative or indicative of our ongoing business as described in the footnotes to the non-GAAP measures reconciliations. Management believes Adjusted EBITDA provides investors with a more complete understanding of the long-term profitability trends of Platform’s business, and facilitates comparisons of its profitability to prior and future periods.

Comparable Adjusted EBITDA:

Comparable adjusted EBITDA is defined as Adjusted EBITDA adjusted to reflect acquisitions and the related financings as though they had occurred on January 1, 2015 without the impact of purchase accounting. Adjusted EBITDA and comparable adjusted EBITDA are key metrics used by management to measure operating performance and trends. In particular, the exclusion of certain expenses in calculating adjusted EBITDA and comparable adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis. Management believes comparable Adjusted EBITDA provides investors with a more complete understanding of the long-term profitability trends of Platform’s business, and facilitates comparisons of its profitability to prior and future periods.

Comparable Adjusted Earnings Per Share:

Comparable adjusted earnings per share is defined as net loss attributable to common stockholders adjusted to reflect acquisitions and the related financings as though they had occurred on January 1, 2015 without the impact of purchase accounting, as well as other adjustments consistent with our definition of Adjusted EBITDA.  We eliminate the amortization associated with intangibles assets recognized in purchase accounting for acquisitions and costs capitalized in connection with obtaining regulatory approval of our products (“registration rights”) as part of ongoing operations. We deduct capital expenditures associated with obtaining these registration rights.  Further, we adjust the effective tax rate to 35% as described in the notes to the reconciliation.  For the quarters ended December 31, 2016 and 2015, the resulting comparable adjusted net income available to stockholders is divided by the number of shares of outstanding common stock as of December 31, 2016 plus the number of shares that would be issued if all convertible stock were converted to common stock, vested stock options were exercised, and awarded equity granted were vested as of December 31, 2016.  For the full years 2016 and 2015, the resulting comparable adjusted net income available to stockholders is divided by the average of the four quarters of 2016.  Comparable adjusted earnings per share is a key metric used by management to measure operating performance and trends.  In particular, the exclusion of certain expenses in calculating comparable adjusted earnings per share facilitates operating performance comparisons on a period-to-period basis.

Comparable Constant Currency:

Our constant currency presentation excludes the impact of fluctuations in foreign currency exchange rates. Constant currency percentages are calculated by converting our current-period local currency financial results into U.S. Dollar using the prior period's exchange rates and comparing these adjusted amounts to our prior period reported results. The comparable constant currency presentation includes actual results adjusted to reflect acquisitions and related financings as though they had occurred on January 1, 2015 adjusted for the effects of purchase accounting on actual results. Management believes that this presentation provides a more complete understanding of the Company's operational results and a meaningful comparison of its performance between periods. However, this comparable financial information is provided for informational purposes only and is not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the Company's acquisitions been completed as of the dates indicated, or that may be achieved in the future

Comparable Net Sales

Comparable net sales is defined as net sales adjusted for the sales of our acquisitions as though they had occurred on January 1, 2015.  Management believes this measure provides investors with a more complete understanding of net sales trends by providing sales on a more consistent basis.

Organic Sales

Organic sales is defined as comparable net sales excluding the impact of currency, metals price, divestitures and acquisitions, as applicable.  Management believes this measure provides investors with a more complete understanding of the underlying net sales trends by providing comparable sales over differing periods on a consistent basis.

CONTACT:

Investor Relations Contact:

Carey Dorman
Director - Corporate Development
Platform Specialty Products Corporation
1-561-406-8465

Media Contact:

Liz Cohen
Weber Shandwick
1-212-445-8044