Currency Swings a Drag on Platform's Q4 Sales
WEST PALM BEACH, FL -- Platform Specialty Products today said fourth-quarter net sales at its electronics assembly and printed circuit board materials unit were $259 million, up 39% from a year ago.
On a pro forma basis, Performance Solutions' net sales were $430 million, down 12%. On a pro forma constant currency basis, net sales declined 7%, primarily driven by softness in the newly acquired semiconductor copper business of legacy Enthone and metal price declines affecting sales of the Alpha solder business.
Platform acquired OM Group's Electronic Chemicals and Photomasks businesses and Alent in the fourth quarter 2015, and added OMG Electronic Chemicals (M) Sdn. Bhd., a Malaysian subsidiary, in the first quarter of 2016.
The segment's adjusted EBITDA for the quarter rose 34% to $67 million. On a pro forma basis, adjusted EBITDA was $97 million, a decline of 12%. On a pro forma constant currency basis, adjusted EBITDA declined 8%.
Performance Solutions' net sales for fiscal 2015 were $801 million vs. $755 million in the prior period, an increase of 6%. On a pro forma basis, net sales fell 10% to $1.8 billion. On a pro forma constant currency basis, net sales declined 4%. Full year pro forma constant currency sales were significantly impacted by the large decline in both silver and tin prices, which pass through to customers of the Alpha business but are recognized as revenue by Alpha on a gross basis.
Performance Solutions' adjusted EBITDA for the year was $224 million, up 14% from 2014. On a pro forma basis, adjusted EBITDA for the fiscal year was $395 million, a decline of 4%. On a pro forma constant currency basis, adjusted EBITDA increased 2%. Excluding the impact of higher corporate spending allocated to the business, adjusted EBITDA would have increased 4% in 2015.
Platform exited 2015 with run-rate synergies in its Performance Solutions segment of approximately $9 million from the integration of Alent plc and the OM Group businesses. The company believes the segment is on track to achieve cost synergy savings in the range of $20 million for 2016.
Overall net sales in the fourth quarter ended Dec. 31 were $735 million, up 168% from $274 million. On a pro forma basis, net sales for the quarter were $906 million down 15% from $1.07 billion. Currency translation in the quarter made up a 10% decline in revenues. Adjusted EBITDA was $154 million, up 133%, while on a pro forma basis adjusted EBITDA was down 17% to $184 million.
For the year, net sales were $2.54 billion, up 202% from 2014. On a pro forma basis, net sales fell 13% to $3.6 billion, with currency fluctuations responsible for a 12% decline in revenue. A decline in metal prices, in particular tin, silver and other precious metals, had a significant impact on the sales of the Alpha Metals business on a year-over-year basis, the company added.
Adjusted EBITDA for fiscal 2015 was $568 million, up 168% from a year ago. On a pro forma basis, adjusted EBITDA fell 12% to $742 million, attributable to adverse currency changes.
Platform chief executive Rakesh Sachdev offered a modest near-term outlook.
"After a year with significant turnover among leadership, the stability of having a high-quality leadership team in place should help these businesses grow over the long term. Our outlook for 2016 is mixed — we have headwinds in some of our end-markets and a further weakening currency environment relative to 2015, but we are also expecting modest earnings growth driven by organic growth and expected synergy realization in both segments. We believe the 2016 adjusted EBITDA guidance range of $725 million to $775 million, which reflects an increase in earnings of 2% to 9% over 2015 on a constant currency basis, represents a balanced outlook for the pro forma business."
