Platform Specialty Products Corporation Announces Third Quarter 2014 Financial Results

- Net sales of $197 million, up 4.4% organically

- Record Adjusted EBITDA of $52.5 million and Adjusted EBITDA margin of 26.7%

MIAMI, Nov. 5, 2014 (GLOBE NEWSWIRE) -- Platform Specialty Products Corporation (NYSE:PAH) ("Platform" or "the Company"), a global specialty chemicals company, today announced its financial results for the three and nine months ended September 30, 2014.

Please note: the 2013 as reported quarterly and year-to-date information is based on the Predecessor MacDermid company information and does not reflect the purchase accounting effect of Platform's acquisition of MacDermid Incorporated in October 2013. In order to perform a proper comparison between 2013 and 2014 for the reader of the statements, the Company has made certain adjustments to its reported numbers, as detailed in the press release financial tables, to assist in this comparison of the P&L. The Company believes that this "as adjusted" format better reflects a comparable analysis of the numbers being presented and does not include figures for Chemtura AgroSolutions or Agriphar Group, both of which acquisitions closed in the fourth quarter.

For the three months ended September 30, 2014:

  • Organically, net sales increased $8.3 million, or 4.4%, to $196.8 million, compared to $188.4 million for the same period in 2013.
  • Reported gross profit increased $4.3 million, or 4.3%, to $103.2 million, compared to $99.0 million for the same period in 2013.
  • Reported gross margin was flat at 52.5% year-over-year, and in line the Company's record high gross margin.
  • Reported net income declined to $11.9 million, compared to $14.5 million for the same period in 2013.
  • Adjusted EBITDA increased $4.9 million to $52.5 million, compared to $47.6 million for the same period in 2013 representing a record level.
  • Adjusted EBITDA margin levels increased to 26.7%, compared to 25.3% for the same period in 2013, representing a record level.
  • Adjusted net income attributable to common shareholders increased $3.5 million to $27.9 million, compared to $24.4 million for the same period in 2013.
  • Adjusted diluted earnings per share were $0.19, compared to $0.16 per diluted share for the same period in 2013.
  • Adjusted recurring free cash flow was $20.0 million, or $0.14 per adjusted diluted share, compared to $17.9 million, or $0.12 per adjusted diluted share, for the same period in 2013.

For the nine months ended September 30, 2014:

  • Organically, net sales increased $9.1 million, or 1.6%, to $569.6 million, compared to $560.6 million for the same period in 2013.
  • Reported gross profit decreased $4.7 million, or 1.6%, to $284.1 million, compared to $288.8 million for the same period in 2013.
  • Reported gross margin decreased to 49.9%, compared to 51.5% for the same period in 2013.
  • Reported net income declined to $4.1 million, compared to $23.9 million for the same period in 2013.
  • Adjusted gross profit increased $7.3 million to $296.1 million, compared to $288.8 million for the same period in 2013.
  • Adjusted gross margin percentage increased to 52.0%, compared to 51.5% for the same period in 2013.
  • Adjusted EBITDA increased $11.0 million to $146.6 million, compared to $135.6 million for the same period in 2013 representing a record level.
  • Adjusted EBITDA margin levels increased to 25.7%, compared to 24.2% for the same period in 2013 representing a record level.
  • Adjusted net income attributable to common shareholders increased $8.5 million to $76.7 million, compared to $68.2 million for the same period in 2013.
  • Adjusted diluted earnings per share were $0.52, compared to $0.46 per diluted share for the same period in 2013.
  • Adjusted recurring free cash flow of $80.5 million or $0.54, compared to $61.1 million or $0.41 per adjusted diluted share for the same period in 2013.

Daniel H. Leever, Platform's Chief Executive Officer, commented, "Third quarter revenue was solid for the core MacDermid business. We continue to meet our expectations for earnings and cash flow generation. Over the past several months we have successfully entered into three acquisitions that will form our new AgroSolutions business segment, while at the same time keeping our core business focused and performing. This record EBITDA and margin generation in the midst of our M&A activity is a testament to the quality and depth of our management teams."

Frank J. Monteiro, Platform's Chief Financial Officer, added, "Our three and nine months ended adjusted EBITDA numbers represent record levels for Platform. Adjusted non-GAAP Free Cash Flow is also on pace to reach a record level for the full year. When you consider the fact that the underlying business has been tasked with infrastructure additions to support acquisitions that have not yet closed, our year-to-date results are that much stronger as we enter the fourth quarter."

The Company has presented both US GAAP and adjusted financials to better provide investors with measures that allow them to more readily compare the performance of the Company. These adjusted amounts will provide investors insight into the cash generated from operations after taking into consideration reinvestment in the business for Free Cash Flow, Recurring Free Cash Flow, and Adjusted EBITDA.

Conference Call

Platform will host a webcast/dial-in conference call to discuss its three month and nine month ended September 30, 2014 financial results at 9:00 a.m. (Eastern Time) on Wednesday, November 5, 2014. Participants on the call will include Chief Executive Officer Daniel H. Leever and Chief Financial Officer Frank J. Monteiro.

To listen to the call by telephone, please dial (855) 357-3116 (domestic) or (484) 365-2867 (international) and provide the Conference ID: 17590151. The call will be simultaneously webcast at www.platformspecialtyproducts.com. A replay of the call and webcast will be available for three weeks shortly after completion of the live call at www.platformspecialtyproducts.com.

About Platform

Platform is a global producer of high-technology specialty chemicals and provider of technical services. The business involves the manufacture of a broad range of specialty chemicals, created by blending raw materials, and the incorporation of these chemicals into multi-step technological processes. These specialty chemicals and processes are sold into multiple industries including agricultural, electronics, graphic arts, metal and plastic plating, and offshore oil production and drilling. More 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, which include statements regarding Platform's adjusted earnings per share, expected or estimated revenue, the outlook for Platform's markets and the demand for its products, estimated sales, segment earnings, net interest expense, income tax provision, restructuring and other charges, cash flows from operations, consistent profitable growth, free cash flow, future revenues and gross operating and adjusted EBITDA margin improvement requirement and expansion, organic net sales growth, bank debt covenants, the success of new product introductions, growth in costs and expenses, the impact of commodities and currencies and Platform's ability to manage its risk in these areas, and the impact of acquisitions, divestitures, restructuring and other unusual items, including Platform's ability to successfully consummate the previously-announced proposed acquisition of Arysta LifeScience Limited and integrate and obtain the anticipated results and synergies from its recently consummated acquisitions, including the acquisitions of Chemtura AgroSolutions business and Agriphar, as well as future acquisitions. 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 difficult to predict. Actual results could differ materially from those projected as a result of certain factors. A discussion of factors that could cause results to vary is 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, 2013 and quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2014. 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—

PLATFORM SPECIALTY PRODUCTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
($ In thousands)
September 30, 2014 December 31, 2013
Assets
Cash & cash equivalents $ 281,676 $ 123,040
Restricted cash 315,000 --
Accounts receivable, net of allowance for doubtful accounts of $9,935 and $10,113 at September 30, 2014 and December 31, 2013, respectively 145,095 140,525
Inventories 79,325 89,618
Prepaid purchase price 63,854 --
Prepaid expenses & other current assets 26,754 30,269
Total current assets 911,704 383,452
Property, plant & equipment, net 133,942 136,166
Goodwill 971,678 989,808
Intangible assets, net 664,920 720,302
Other assets 47,376 30,426
Total assets 2,729,620 2,260,154
Liabilities & Stockholders' Equity
Accounts payable 58,217 56,156
Accrued salaries, wages and employee benefits 20,363 22,656
Current portion of long-term debt and capital lease obligations 7,904 7,958
Accrued income taxes payable 11,841 6,669
Accrued expenses and other current liabilities 42,985 26,234
Total current liabilities 141,310 119,673
Long-term debt and capital lease obligations 738,474 744,291
Long-term deferred income taxes 151,845 169,800
Long term contingent consideration 60,900 34,800
Other long-term liabilities 57,509 55,516
Total liabilities 1,150,038 1,124,080
Commitments and contingencies
Redeemable 401(k) plan interest -- 20,972
-- --
Stockholders' Equity
Preferred shares (2,000,000 designated as Series A), 5,000,000 shares authorized at September 30, 2014 and December 31, 2013, respectively; 2,000,000 shares issued and outstanding at September 30, 2014 and December 31, 2013 20 --
Common shares, 400,000,000 shares authorized, 137,304,330 and 103,571,941 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively 1,353 --
Additional paid-in capital 1,703,407 1,212,038
Accumulated deficit (190,145) (194,222)
Accumulated other comprehensive income (33,440) 1,265
Total stockholders' equity 1,481,195 1,019,081
Income in non-controlling interest 98,387 96,021
Total equity 1,579,582 1,115,102
Total liabilities, redeemable 401(k) interest and stockholders' equity $ 2,729,620 $ 2,260,154
PLATFORM SPECIALTY PRODUCTS CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
($ In thousands)
For the three
months ended
September 30, 2014
For the three
months ended
September 30, 2013
For the three
months ended
September 30, 2013
For the nine
months ended
September 30, 2014
Period from Inception
(April 23, 2013)
through September 30, 2013
For the nine
months ended
September 30, 2013
Successor Successor Predecessor Successor Successor Predecessor
Net sales $ 196,782 $ -- $ 188,433 $ 569,640 $ -- $ 560,557
Cost of sales 93,558 -- 89,461 285,507 -- 271,730
Gross profit 103,224 -- 98,972 284,133 -- 288,827
Operating expenses:
Selling, technical, general and administrative 72,926 4,773 54,436 231,737 4,870 164,405
Research and development 6,368 -- 5,678 18,464 -- 17,504
Restructuring 567 -- 238 971 -- 1,890
Total operating expenses 79,861 4,773 60,352 251,172 4,870 183,799
Operating profit (loss) 23,363 (4,773) 38,620 32,961 (4,870) 105,028
Other (expense) income:
Interest, net (7,971) 63 (16,127) (23,375) 80 (40,694)
Loss on extinguishment of debt -- -- -- -- -- (18,788)
Other (expense) income, net (3,070) -- (993) (3,671) -- (405)
(11,041) 63 (17,120) (27,046) 80 (59,887)
Income (loss) before income taxes, non-controlling interests and accrued payment-in-kind dividends on cumulative preferred shares 12,322 (4,710) 21,500 5,915 (4,790) 45,141
Income tax benefit (provision) 1,595 -- (6,864) 3,542 -- (20,932)
Net income (loss) 13,917 (4,710) 14,636 9,457 (4,790) 24,209
Net income attributable to the non-controlling interests (2,046) -- (139) (5,380) -- (319)
Net income (loss) attributable to common shareholders 11,871 (4,710) 14,497 4,077 (4,790) 23,890
Accrued payment-in-kind dividend on cumulative preferred shares -- -- (1,028) -- -- (22,100)
Net income (loss) attributable to common shares $ 11,871 $ (4,710) $ 13,469 $ 4,077 $ (4,790) $ 1,790
Earnings (loss) per share
Basic $ 0.09 $ (0.05) n/a $ 0.03 $ (0.05) n/a
Diluted $ 0.08 $ (0.05) n/a $ 0.03 $ (0.05) n/a
Weighted average shares outstanding (In thousands)
Basic 137,299 88,529 n/a 124,462 88,529 n/a
Diluted 152,694 88,529 n/a 140,534 88,529 n/a
PLATFORM SPECIALTY PRODUCTS CORPORATION
NON-GAAP AS ADJUSTED INCOME STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended September 30, 2014

Adjustments
2014
As Adjusted Three Months Ended September 30, 2014 Three Months Ended September 30, 2013

Adjustments
2013
As Adjusted Three Months Ended September 30, 2013
Successor Successor Predecessor Predecessor
Net sales $ 196,782 $ -- $ 196,782 $ 188,433 $ -- $ 188,433
Cost of sales 93,558 -- 93,558 89,461 -- 89,461
Gross profit 103,224 -- 103,224 98,972 -- 98,972
Operating expenses:
Selling, technical, general and administrative 72,926 (24,798) a,b,c 48,128 54,436 (6,697) b 47,739
Research and development 6,368 -- 6,368 5,678 -- 5,678
Restructuring 567 (567) -- 238 (238) --
Total operating expenses 79,861 (25,365) 54,496 60,352 (6,935) 53,417
Operating profit 23,363 25,365 48,728 38,620 6,935 45,555
Other income (expense):
Interest, net (7,971) -- (7,971) (16,127) 8,165 e (7,962)
Other (expense) (3,070) 2,626 d (444) (993) -- (993)
(11,041) 2,626 (8,415) (17,120) 8,165 (8,955)
Income from continuing operations before income taxes, non-controlling interest and accumulated payment-in-kind dividend on cumulative preferred shares 12,322 27,991 40,313 21,500 15,100 36,600
Income tax benefit (provision) 1,595 (14,092) f (12,497) (6,864) (5,214) f (12,078)
Net income 13,917 13,899 27,816 14,636 9,886 24,522
Net income attributable to the non-controlling interest (2,046) 2,091 g 45 (139) (139)
Net income attributable to common shareholders 11,871 15,990 27,861 14,497 9,886 24,383
Accrued payment-in-kind dividend on cumulative preferred shares -- -- -- (1,028) 1,028 h --
Net income attributable to common shares $ 11,871 $ 15,990 $ 27,861 $ 13,469 $ 10,914 $ 24,383
Earnings (loss) per share
Basic $ 0.09 -- $ 0.20 -- -- $ 0.18
Diluted $ 0.08 -- $ 0.19 -- -- $ 0.16
Weighted average shares outstanding
Basic 137,299 -- 137,299 -- -- 137,299
Diluted 152,694 -- 148,420 i -- -- 148,420 i
a Includes $8.2m in Q3 2014 for costs primarily associated with the Chemtura and Agriphar Acquisitions.
b Includes $14.3m in Q3 2014 and $6.7m in Q3 2013 for intangible amortization expense that is added back in the "As Adjusted" Income Statement.
c Adjustment to reverse contingent consideration fair value adjustment of $2.3 million in connection with the MacDermid Acquisition.
d Adjustment to reverse net mark-to-market loss on foreign exchange forward contracts entered into to finance Chemtura and Agriphar Acquisitions.
e Adjustment to eliminate interest associated with debt not assumed with the MacDermid Acquisition.
f Adjustment to calculation of estimated effective tax rate of 31% in 2014 and 33% in 2013.
g Adjustment for reversal of the income attributable to the non-controlling interest resulting from the MacDermid Acquisition.
h Reversal of accrued accretion on Predecessor preferred stock dividends that were not paid until the MacDermid Acquisition.
i Non-GAAP Diluted Shares are calculated as follows:
Outstanding shares at September 30, 2014 137,304
Conversion of exchange rights held by selling stockholders of MacDermid 8,775
Common shares equivalent of founder's preferred shares 2,000
Vested Director stock options 250
Equity awards granted in 2014 91
Adjusted Diluted shares at September 30, 2014 148,420
PLATFORM SPECIALTY PRODUCTS CORPORATION
NON-GAAP AS ADJUSTED INCOME STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
��
(In thousands, except per share amounts)
(Unaudited)
Nine Months Ended September 30, 2014

Adjustments 2014
As Adjusted Nine Months Ended September 30, 2014 Nine Months Ended September 30, 2013

Adjustments 2013
As Adjusted Nine Months Ended September 30, 2013
Successor Successor Predecessor Predecessor
Net sales $ 569,640 $ -- $ 569,640 $ 560,557 $ -- $ 560,557
Cost of sales 285,507 (11,956) a 273,551 271,730 -- 271,730
Gross profit 284,133 11,956 296,089 288,827 -- 288,827
Operating expenses:
Selling, technical, general and administrative 231,737 (88,660) b,c,d 143,077 164,405 (20,303) c 144,102
Research and development 18,464 -- 18,464 17,504 -- 17,504
Restructuring 971 (971) -- 1,890 (1,890) --
Total operating expenses 251,172 (89,631) 161,541 183,799 (22,193) 161,606
Operating profit 32,961 101,587 134,548 105,028 22,193 127,221
Other income (expense):
Interest, net (23,375) -- (23,375) (40,694) 17,310 e (23,384)
Loss on extinguishment of debt -- -- -- (18,788) 18,788 f --
Other (expense) (3,671) 3,138 g (533) (405) (1,151) h (1,556)
(27,046) 3,138 (23,908) (59,887) 34,947 (24,940)
Income from continuing operations before income taxes, non-controlling interest and accumulated payment-in-kind dividend on cumulative preferred shares 5,915 104,725 110,640 45,141 57,140 102,281
Income tax benefit (provision) 3,542 (37,287) i (33,745) (20,932) (12,821) i (33,753)
Net income 9,457 67,438 76,895 24,209 44,319 68,528
Net income attributable to the non-controlling interest (5,380) 5,159 j (221) (319) -- (319)
Net income attributable to common shareholders 4,077 72,597 76,674 23,890 44,319 68,209
Accrued payment-in-kind dividend on cumulative preferred shares -- -- -- (22,100) 22,100 k --
Net income attributable to common shares $ 4,077 $ 72,597 $ 76,674 $ 1,790 $ 66,419 $ 68,209
Earnings (loss) per share
Basic $ 0.03 -- $ 0.62 -- -- $ 0.55
Diluted $ 0.03 -- $ 0.52 -- -- $ 0.46
Weighted average shares outstanding
Basic 124,462 -- 124,462 -- -- 124,462
Diluted 140,534 -- 148,420 l -- -- 148,420 l
a Adjustment to reverse manufacturer's profit in inventory purchase accounting adjustment associated with MacDermid Acquisition.
b Includes $18.9m in 2014 for costs primarily associated with Chemtura and Agriphar Acquisitions.
c Includes $43.6m in 2014 and $20.1m in 2013 for intangible amortization expense that is added back in the "As Adjusted" Income Statement.
d Adjustment to reverse contingent consideration fair value adjustment of $26.1 million in connection with the MacDermid Acquisition.
e Adjustment to eliminate interest associated with debt not assumed with the MacDermid Acquisition.
f Adjustment to eliminate extinguishment of debt associated with recapitalization of MacDermid in Q2 2013.
g Adjustment primarily to reverse net mark-to-market loss on foreign exchange forward contracts entered into to finance Chemtura and Agriphar Acquisitions.
h Reversal of non-cash, mark-to-market gains on foreign debt.
i Adjustment to calculation of estimated blended effective tax rate of 30.5% in 2014 and 33% in 2013
j Adjustment for reversal of the income attributable to the non-controlling interest resulting from the MacDermid Acquisition.
k Reversal of accrued accretion on Predecessor preferred stock dividends that were not paid until the MacDermid Acquisition.
l Non-GAAP Diluted Shares are calculated as follows:
Outstanding shares at September 30, 2014 137,304
Conversion of exchange rights held by selling stockholders of MacDermid 8,775
Common shares equivalent of founder's preferred shares 2,000
Vested Director stock options 250
Equity awards granted in 2014 91
Adjusted Diluted shares at September 30, 2014 148,420
PLATFORM SPECIALTY PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
($ In thousands)
For the nine
months ended
September 30, 2014
Period from
Inception (April 23, 2013)
through September 30, 2013
For the nine
months ended
September 30, 2013
Successor Successor Predecessor
Cash flows from operating activities:
Net income (loss) $ 9,457 $ (4,790) $ 24,209
Adjustments to reconcile net income (loss) from operations to net cash flows provided by operating activities:
Depreciation and amortization 57,614 -- 32,014
Deferred income taxes (31,308) -- 3,192
Non-cash fair value adjustment to contingent consideration 26,100 -- --
Manufacturer's profit in inventory adjustment 11,956 -- --
Loss on extinguishment of debt -- -- 18,788
Net unrealized loss on foreign exchange contracts 2,627
Other, net 4,171 105 1,794
Changes in assets & liabilities, net of acquisitions:
Accounts receivable (10,688) -- (7,437)
Inventories (3,904) -- (4,428)
Accounts payable 2,404 -- 2,433
Accrued expenses 9,437 4,175 (273)
Other assets and liabilities 1,590 (209) (5,901)
Net cash flows provided by (used in) operating activities 79,456 (719) 64,391
Cash flows from investing activities:
Capital expenditures, net (6,791) -- (6,872)
Purchases of marketable securities -- (359,933) (472)
Redemption of marketable securities -- 179,976 824
Cash restricted to fund acquisition (315,000) -- --
Acquisition of businesses, net (59,027) -- --
Other, net 10 -- 462
Net cash flows used in investing activities (380,808) (179,957) (6,058)
Cash flows from financing activities:
Proceeds from issuance of debt, net of discount and fees -- 200 1,109,513
Repayments of borrowings (5,796) (200) (731,594)
Repurchase of Predecessor Series A preferred stock -- -- (270,167)
Payment of Predecessor Series A preferred stock -- -- (229,833)
Proceeds from issuance of common stock, net 473,384 861,218 --
Proceeds from issuance of preferred stock, net -- 20,000 --
Payment of debt financing fees (4,104) -- (13,519)
Other, net 76 -- (488)
Net cash flows provided by (used in) financing activities 463,560 881,218 (136,088)
Effect of exchange rate changes on cash and cash equivalents (3,572) -- (395)
Net increase (decrease) in cash and cash equivalents 158,636 700,542 (78,150)
Cash and cash equivalents at beginning of period 123,040 -- 143,351
Cash and cash equivalents at end of period $ 281,676 $ 700,542 $ 65,201
PLATFORM SPECIALTY PRODUCTS CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
Includes Predecessor and Successor data
Predecessor Successor Predecessor Successor
(in millions) Q3 2013 Q3 2014 YTD 2013 YTD 2014
Net income $ 14.5 $ 11.9 $ 23.9 $ 4.1
Adjustments to reconcile to net income (loss):
Income tax expense (benefit) 6.9 (1.6) 20.9 (3.5)
Interest expense 16.2 8.1 41.0 23.8
Depreciation and amortization expense 9.7 19.0 (1) 29.5 57.3 (1)
Unrealized (gain) loss on foreign currency denominated debt -- -- (1.1) -- (2)
Unrealized loss on foreign exchange forward contracts -- 2.6 (3) -- 2.6 (3)
Restructuring and related expenses 0.2 0.6 1.9 1.0 (4)
Manufacturer's profit in inventory (purchase accounting) -- -- -- 12.0 (5)
Non-cash fair value adjustment to contingent consideration -- 2.3 -- 26.1 (6)
Acquisition costs -- 8.2 -- 18.8 (7)
Debt Extinguishment -- -- 18.8 -- (8)
Other expense (income) 0.1 1.4 (9) 0.7 4.4 (9)
Adjusted EBITDA $ 47.6 $ 52.5 $ 135.6 $ 146.6
Footnotes:
(1) Includes $14.3m in Q3 2014 and $6.7m in Q3 2013 and $43.6m in YTD 2014 and $20.2m in YTD 2013 for amortization expense that is added back in the "As Adjusted" Income Statement.
(2) Predecessor adjustment to other income for non-cash gain on foreign denominated debt.
(3) Adjustment to reverse net unrealized loss on foreign exchange forward contracts in connection with Chemtura and Agriphar Acquisitions.
(4) Includes restructuring expenses of $1.9m of reorganization costs adjusted out of operating expenses for YTD 2013.
(5) Adjustment to reverse manufacturer's profit in inventory purchase accounting adjustment associated with MacDermid Acquisition.
(6) Adjustment to fair value of contingent consideration in connection with the MacDermid Acquisition primarily associated with achieving the share price targets.
(7) Adjustment to reverse deal costs primarily in connection with the Chemtura and Agriphar Acquisitions.
(8) Adjustment to reverse debt extinguishment charge in connection with debt from Predecessor recapitalization.
(9) Adjustment for 2014 primarily for reversal of the income attributable to the non-controlling interest resulting from the MacDermid Acquisition. For 2013, adjustment to reverse miscellaneous non-recurring charges.
Non-GAAP Free Cash Flow Schedule
(In thousands, except per share amounts)
Q3'14 Q3'13 YTD'14 YTD'13 LTM
Net Income (Loss) 1 $ 13,917 $ 14,636 $ 9,457 $ 24,209 $ (196,863)
Plus: D&A 18,970 9,717 57,256 29,458 73,411
Plus: Other Non-Cash Expenses 2 (9,935) (3,121) 13,904 23,774 206,471
Less: Change in Working Capital 3 (8,946) (115) (12,188) (9,432) (8,227)
Cash Flow from Operations $ 14,006 $ 21,117 $ 68,429 $ 68,009 $ 74,792
Less: Capex 4 (2,204) (3,185) (6,791) (6,872) (10,817)
Free Cash Flow $ 11,802 $ 17,932 $ 61,638 $ 61,137 $ 63,975
Plus: Acquisition-Related Expenses 5 8,241 -- 18,845 -- 50,970
Recurring Free Cash Flow $ 20,043 $ 17,932 $ 80,483 $ 61,137 $ 114,945
% of EBITDA 38% 38% 55% 45% 60%
Adjusted EBITDA $ 52,456 $ 47,614 $ 146,560 $ 135,635 $ 191,031
Adjusted Diluted Shares Outstanding 148,420 148,420 148,420 148,420 148,420
Recurring Free Cash Flow per Share $ 0.14 $ 0.12 $ 0.54 $ 0.41 $ 0.77
1 Represents net income (loss) prior to non-controlling interest allocation and PIK dividend accrual for 2013.
2 Other Non-Cash expenses by Period represent the following:
(In thousands, except per share amounts)
Q3'14 Q3'13 YTD'14 YTD'13 LTM
Non-Cash charge for PS Dividend Rights $ -- $ -- $ -- $ -- $ 172,006
Manufacturer's profit in inventory Adj. -- -- 11,956 -- 35,868
Non-cash MTM charge to Contingent Consideration 2,300 -- 26,100 -- 26,100
Deferred income tax (benefit) provision (17,507) (1,762) (31,308) 3,192 (46,826)
Loss on Extinguishment of Debt -- -- -- 18,788 --
Unrealized Loss on Foreign Exchange Contracts 2,627 -- 2,627 -- 2,627
Compensation Expense 422 (42) 816 109 10,097
Other 2,223 (1,317) 3,713 1,685 6,599
$ (9,935) $ (3,121) $ 13,904 $ 23,774 $ 206,471
3 Change in working capital reflects changes in accounts receivable, inventories and accounts payable
4 Reflects gross capital expenditures excluding asset disposals and unpaid capital expenditures in Q3 2014 of approximately $5.8 million.
5 Reflects deal costs in connection with CAS and Agriphar acquisitions in Q3 and YTD 2014 and MacDermid acquisition in the LTM period.
Non-GAAP Free Cash Flow Schedule
(In thousands, except per share amounts)
Q3'14 Q2'14 Q1'14 Q4'13 LTM
Net Income (Loss) $ 13,917 $ 1,488 $ (5,948) $ (206,320) $ (196,863)
Plus: D&A 18,970 $ 21,396 16,890 16,155 73,411
Plus: Other Non-Cash Expenses (9,935) $ 1,015 22,824 192,567 206,471
Less: Change in Working Capital (8,946) $ 1,645 (4,887) 3,961 (8,227)
Cash Flow from Operations $ 14,006 $ 25,544 $ 28,879 $ 6,363 $ 74,792
Less: Capex (2,204) (2,562) (2,025) (4,026) (10,817)
Free Cash Flow $ 11,802 $ 22,982 $ 26,854 $ 2,337 $ 63,975
Plus: Acquisition-Related Expenses¹ 8,241 10,604 -- 32,125 50,970
Recurring Free Cash Flow $ 20,043 $ 33,586 $ 26,854 $ 34,462 $ 114,945
% of EBITDA 38% 70% 59% 77% 60%
Adjusted EBITDA $ 52,456 $ 48,216 $ 45,888 $ 44,471 $ 191,031
Adjusted Diluted Shares Outstanding 148,420 148,420 148,420 148,420 148,420
Recurring Free Cash Flow per Share $ 0.14 $ 0.23 $ 0.18 $ 0.23 $ 0.77
Non-GAAP Free Cash Flow Schedule
(In thousands, except per share amounts)
Q3'14 Q2'14 Q1'14 YTD' 14 Q3'13 Q2'13 Q1'13 YTD' 13
Net Income (Loss) $ 13,917 $ 1,488 $ (5,948) $ 9,457 $ 14,636 $ (5,764) $ 15,337 $ 24,209
Plus: D&A 18,970 21,396 16,890 57,256 9,717 9,854 9,887 29,458
Plus: Other Non-Cash Expenses (9,935) 1,015 22,824 13,904 (3,121) 26,270 625 23,774
Less: Change in Working Capital (8,946) 1,645 (4,887) (12,188) (115) 685 (10,002) (9,432)
Cash Flow from Operations $ 14,006 $ 25,544 $ 28,879 $ 68,429 $ 21,117 $ 31,045 $ 15,847 $ 68,009
Less: Capex (2,204) (2,562) (2,025) (6,791) (3,185) (2,356) (1,331) (6,872)
Free Cash Flow $ 11,802 $ 22,982 $ 26,854 $ 61,638 $ 17,932 $ 28,689 $ 14,516 $ 61,137
Plus: Acquisition-Related Expenses¹ 8,241 10,604 -- 18,845 -- -- -- --
Recurring Free Cash Flow $ 20,043 $ 33,586 $ 26,854 $ 80,483 $ 17,932 $ 28,689 $ 14,516 $ 61,137
% of EBITDA 38% 70% 59% 55% 38% 61% 36% 45%
Adjusted EBITDA $ 52,456 $ 48,216 $ 45,888 $ 146,560 $ 47,614 $ 47,132 $ 40,889 $ 135,635
Adjusted Diluted Shares Outstanding 148,420 148,420 148,420 148,420 148,420 148,420 148,420 148,420
Recurring Free Cash Flow per Share $ 0.14 $ 0.23 $ 0.18 $ 0.54 $ 0.12 $ 0.19 $ 0.10 $ 0.41

CONTACT: Source/Investor Relations Contact: Frank J. Monteiro - Chief Financial Officer Platform Specialty Products Corporation +1-203-575-5850 Media Contacts: Liz Cohen Weber Shandwick +1-212-445-8044 Kelly Gawlik Weber Shandwick +1-212-445-8368Source:Platform Specialty Products Corporation