PSP to change its distribution strategy of Agricultural business segment

Date:10-09-2015

Platform recently revised its 2015 guidance issued on August 13, 2015 to reflect further foreign exchange volatility, continued weakness in certain agricultural end markets, and a decision to limit "pre-season" selling activity in its Agricultural Solutions business segment. Additionally, Platform announced that Benjamin H. Gliklich has been promoted from Vice President, Corporate Development, Finance and Investor Relations to become Platform's Chief Operating Officer.

Revised 2015 Guidance

Platform is providing a revision to its 2015 adjusted EBITDA guidance, which is now expected to be within the range of $550 million to $570 million, excluding any impact from the OM EC and PM Businesses and Alent. This updated outlook reflects the latest foreign exchange rates, lower specialty chemical consumption in some agricultural market segments, and the impact of a change in Platform's approach to its distribution strategy in its Agricultural Solutions business segment. The impact of foreign exchange is approximately $25 million. The impact from a weaker agricultural specialty chemical market is approximately $10 million, and the expected impact from the change in its distribution strategy in its Agricultural Solutions business segment is approximately $40 million. The foreign exchange impact is nearly exclusively translational, in light of actions taken to mitigate transactional exposure for its Ag business.

Changes to Agricultural Business Segment Distribution Strategy

Platform has decided to change its distribution strategy and limit "pre-season" lower margin selling of its products in order to improve the overall margin of these products, as "pre-season" sales often come at a discount. Platform believes that this approach will significantly improve its long term business quality. Realigning inventory levels at distributors to more closely match underlying demand will best position the company for sustainable growth in the future. Platform believes that much of the revenue that will be foregone in 2015 will be realized starting in 2016 and at enhanced margins.

Chief Executive Officer Daniel H. Leever commented, "The macro environment made this year challenging for many global companies and agricultural companies in particular. Even though the general niche nature of our agricultural business insulates us from the broader trends in row crops, 2015 has been a difficult year for our agricultural business due to the impact of persistent foreign exchange headwinds, high product inventories due to low specialty chemicals consumption (drought and low levels of infestation) and our decision to change our business practices with regard to "pre-season" sales. The improvements we are making to the business leave us optimistic about the year to come. Our belief in a strong future for our Agricultural Solutions business in 2016 and beyond has not been diminished by the difficult environment this year. Our Performance Applications business continues to perform in line with expectations."

Chairman Martin E. Franklin concluded, "The Platform team has built a portfolio of high-quality, high-cash flow businesses in its two years of existence.  These businesses, while resilient, are not immune to global macro- or sector-specific headwinds, which impacted performance in 2015.  Looking ahead to 2016, we have a great deal to be excited about.  We believe the earnings growth we can generate through execution and synergy realization remains compelling."