Platform Specialty Products Corporation (NYSE:PAH) ("Platform"), a
global specialty chemicals company, announced today preliminary
2018 financial guidance. Platform expects adjusted EBITDA for
2018 to be in the range of $860 million to $890 million,
representing a mid-to-high single digit increase from the mid-point
of its 2017 guidance range. Platform also reaffirms its 2017
adjusted EBITDA guidance range of $810 million to $830 million.
Platform expects free cash flow growth in excess of adjusted EBITDA
growth and issued guidance for 2018 interest expense of
approximately $300 million and capital expenditures of
approximately $100 million.
Executive Commentary
Chief Executive Officer Rakesh Sachdev said, “We are pleased to
announce our expected adjusted EBITDA guidance range for
2018. This guidance is consistent with our objective of a
mid-to-high single digit EBITDA growth rate and reflects our
expectation for continued strong performance from both of our
businesses in 2018. Both businesses are expected to enjoy
robust organic growth, which will make for a strong foundation for
their previously announced separation into independent
companies.”
Sachdev continued, “We expect our adjusted EBITDA growth,
reduction in interest expense in 2017, and other cash flow
improvements to translate into substantial free cash flow
generation and adjusted earnings per share growth in 2018.
Our free cash flow generation and earnings growth, in turn, are
expected to leave the company with net debt of less than 5.5x
adjusted EBITDA at the end of 2018 – before considering any equity
capital that may be raised in connection with the separation of our
businesses. This is an exciting outlook for the company and
compelling objectives in terms of growth in earnings, improved cash
flow generation and reduced leverage.”
Non-GAAP Financial Measures
This release contains non-GAAP financial measures within the
meaning of Regulation G promulgated by the Securities and Exchange
Commission, including adjusted EBITDA guidance, adjusted earnings
per share, free cash flow growth and net debt to adjusted EBITDA
ratio. Platform only provides adjusted EBITDA guidance and free
cash flow growth 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 Platform’s reconciliation of historic numbers, the
amount of which, based on historical experience, could be
significant.
Adjusted Earnings Per Share
Adjusted earnings per share is defined as net loss attributable
to common stockholders adjusted to reflect adjustments consistent
with Platform’s definition of adjusted EBITDA. Additionally,
Platform eliminates the amortization associated with (i) intangible
assets recognized in purchase accounting for acquisitions and (ii)
costs capitalized in connection with obtaining regulatory approval
of Platform’s products (“registration rights”) as part of its
ongoing operations, and deducts capital expenditures associated
with obtaining these registration rights. Further, Platform adjusts
the effective tax rate to 35%. The resulting adjusted net income
available to stockholders is divided by the number of shares of
outstanding common stock as of the period end plus the number of
shares that would be issued if all of Platform’s convertible stock
were converted to common stock, vested stock options were
exercised, and awarded equity grants were vested as of the period
end. 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 adjusted earnings per
share facilitates operating performance comparisons on a
period-to-period basis.
EBITDA and Adjusted EBITDA
EBITDA represents earnings before interest, provision for income
taxes, depreciation and amortization. Adjusted EBITDA is defined as
EBITDA, excluding the impact of additional items, which are not
representative or indicative of Platform’s ongoing business.
Management believes adjusted EBITDA and adjusted EBITDA margin
provide investors with a more complete understanding of the
long-term profitability trends of Platform’s business, and
facilitate comparisons of its profitability to prior and future
periods. However, these measures, which do not consider certain
cash requirements, should not be construed as an alternative to net
income or cash flow from operations as a measure of profitability
or liquidity.
Free Cash Flow
Free cash flow is defined as net cash flows provided by
operating activities less net capital expenditures. Net capital
expenditures include capital expenditures and investments in
registrations of products less proceeds from disposal of property,
plant and equipment.
Net Debt to Adjusted EBITDA Ratio
Net Debt to Adjusted EBITDA Ratio is defined as consolidated
indebtedness, as defined in Platform’s credit agreement, less cash
divided by Adjusted EBITDA.
About Platform
Platform is a global, diversified producer of high-technology
specialty chemicals and a 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 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. These statements will often
contain words such as "expect," "anticipate," "project," "will,"
"should," "believe," "intend," "plan," "estimate" and similar
expressions, and relate, without limitation, to Platform's 2018
adjusted EBITDA guidance, adjusted earnings per share, free cash
flow growth and net debt to adjusted EBITDA ratio. These
projections and statements are based on management's estimates and
assumptions with respect to future events and financial
performance, and are believed to be reasonable, though are
inherently uncertain and difficult to predict. Actual results
could differ materially from those projected as a result of certain
factors, which include, among others, Platform's ability to
successfully complete the proposed separation of its Agricultural
Solutions business and realize the anticipated benefits from the
proposed separation, the final structure and timing for completion
of the proposed separation, adverse effects on the two companies'
business operations or financial results and the market price of
Platform's shares as a result of the completion of the proposed
separation and/or announcement and completion of related
transactions, market volatility, legal, tax and regulatory
requirements, unanticipated delays and transaction expenses, the
impact of the proposed separation on Platform's employees,
customers and suppliers, the ability of the two companies to
operate independently following the proposed separation, the
diverting of management's attention from Platform's ongoing
business operations, overall global economic and business
conditions impacting the businesses of the two companies, as well
as capital markets and liquidity, and the possibility of more
attractive strategic options arising in the future.
Additional information concerning these and other factors that
could cause actual results to vary is, or will be, included 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, 2016 and quarterly
report on Form 10-Q for the three and nine months ended September
30, 2017. Platform undertakes no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
CONTACT:
Investor Relations Contact:
Carey DormanSenior Director Corporate DevelopmentPlatform
Specialty Products Corporation1-561-406-8465
Media Contact:
Liz CohenWeber Shandwick1-212-445-8044
Platform Specialty Products (NYSE:PAH)
Historical Stock Chart
From Aug 2024 to Sep 2024
Platform Specialty Products (NYSE:PAH)
Historical Stock Chart
From Sep 2023 to Sep 2024