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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Axalta Coating Systems Ltd | NYSE:AXTA | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.58 | -1.67% | 34.19 | 34.65 | 33.82 | 34.65 | 2,255,087 | 01:00:00 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(Title of class) | (Trading symbol) | (Exchange on which registered) |
Exhibit No. | Description | |||||||
99 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
AXALTA COATING SYSTEMS LTD. | |||||||||||
Date: | February 8, 2024 | By: | /s/ Carl D. Anderson II | ||||||||
Carl D. Anderson II | |||||||||||
Senior Vice President and Chief Financial Officer |
Exhibit 99 | |||||||||||
News Release | ![]() | ||||||||||
Axalta Coating Systems 1050 Constitution Avenue Philadelphia, PA 19112 USA | Investor Contact Christopher Evans D +1 484 724 4099 Christopher.Evans@axalta.com | Media Contact Robert Donohoe D +1 267-756-3803 Robert.Donohoe@axalta.com |
(in millions, except %’s and per share data) | Projection | |||||||
Item | FY 2024 | |||||||
Net Sales YoY% | +LSD | |||||||
Adjusted EBITDA | $1,010 - $1,050 | |||||||
Adjusted Diluted EPS | $1.80 - $1.95 | |||||||
Free Cash Flow | $400 - $450 | |||||||
D&A (step-up D&A) | ~$280 ($50) | |||||||
Tax Rate, As Adjusted | ~25% | |||||||
Diluted Shares Outstanding | ~222 | |||||||
Interest Expense | ~$215 | |||||||
Capex | ~$165 | |||||||
Financial Statement Tables | ||||||||||||||||||||||||||
AXALTA COATING SYSTEMS LTD. | ||||||||||||||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net sales | $ | 1,297.3 | $ | 1,236.7 | $ | 5,184.1 | $ | 4,884.4 | ||||||||||||||||||
Cost of goods sold | 873.8 | 865.2 | 3,565.6 | 3,465.6 | ||||||||||||||||||||||
Selling, general and administrative expenses | 214.9 | 200.8 | 840.1 | 772.4 | ||||||||||||||||||||||
Other operating charges | 7.5 | 13.7 | 28.4 | 31.5 | ||||||||||||||||||||||
Research and development expenses | 17.8 | 16.8 | 74.0 | 66.4 | ||||||||||||||||||||||
Amortization of acquired intangibles | 22.1 | 30.4 | 88.5 | 125.3 | ||||||||||||||||||||||
Income from operations | 161.2 | 109.8 | 587.5 | 423.2 | ||||||||||||||||||||||
Interest expense, net | 55.4 | 38.7 | 213.3 | 139.8 | ||||||||||||||||||||||
Other expense, net | 4.0 | 13.7 | 19.5 | 26.1 | ||||||||||||||||||||||
Income before income taxes | 101.8 | 57.4 | 354.7 | 257.3 | ||||||||||||||||||||||
Provision for income taxes | 28.2 | 13.5 | 86.2 | 65.1 | ||||||||||||||||||||||
Net income | 73.6 | 43.9 | 268.5 | 192.2 | ||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 0.5 | 0.3 | 1.1 | 0.6 | ||||||||||||||||||||||
Net income attributable to common shareholders | $ | 73.1 | $ | 43.6 | $ | 267.4 | $ | 191.6 | ||||||||||||||||||
Basic net income per share | $ | 0.33 | $ | 0.20 | $ | 1.21 | $ | 0.86 | ||||||||||||||||||
Diluted net income per share | $ | 0.33 | $ | 0.20 | $ | 1.21 | $ | 0.86 | ||||||||||||||||||
Basic weighted average shares outstanding | 220.1 | 220.7 | 221.0 | 221.7 | ||||||||||||||||||||||
Diluted weighted average shares outstanding | 220.9 | 221.5 | 221.9 | 222.3 | ||||||||||||||||||||||
AXALTA COATING SYSTEMS LTD. | ||||||||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||||||||
(In millions, except per share data) | ||||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 699.8 | $ | 645.2 | ||||||||||
Restricted cash | 3.3 | 9.7 | ||||||||||||
Accounts and notes receivable, net | 1,259.9 | 1,067.4 | ||||||||||||
Inventories | 741.1 | 829.6 | ||||||||||||
Prepaid expenses and other current assets | 117.2 | 140.8 | ||||||||||||
Total current assets | 2,821.3 | 2,692.7 | ||||||||||||
Property, plant and equipment, net | 1,204.3 | 1,190.2 | ||||||||||||
Goodwill | 1,590.9 | 1,498.0 | ||||||||||||
Identifiable intangibles, net | 1,129.7 | 1,112.3 | ||||||||||||
Other assets | 525.9 | 566.0 | ||||||||||||
Total assets | $ | 7,272.1 | $ | 7,059.2 | ||||||||||
Liabilities, Shareholders' Equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 724.9 | $ | 733.5 | ||||||||||
Current portion of borrowings | 25.7 | 31.0 | ||||||||||||
Other accrued liabilities | 676.9 | 620.2 | ||||||||||||
Total current liabilities | 1,427.5 | 1,384.7 | ||||||||||||
Long-term borrowings | 3,478.5 | 3,673.3 | ||||||||||||
Accrued pensions | 252.0 | 205.1 | ||||||||||||
Deferred income taxes | 162.3 | 162.1 | ||||||||||||
Other liabilities | 179.0 | 134.5 | ||||||||||||
Total liabilities | 5,499.3 | 5,559.7 | ||||||||||||
Shareholders' equity | ||||||||||||||
Common shares, $1.00 par, 1,000.0 shares authorized, 253.7 and 252.4 shares issued at December 31, 2023 and 2022, respectively | 253.7 | 252.4 | ||||||||||||
Capital in excess of par | 1,568.9 | 1,536.5 | ||||||||||||
Retained earnings | 1,286.2 | 1,018.8 | ||||||||||||
Treasury shares, at cost, 33.6 and 31.8 shares at December 31, 2023 and 2022, respectively | (937.3) | (887.3) | ||||||||||||
Accumulated other comprehensive loss | (444.2) | (466.9) | ||||||||||||
Total Axalta shareholders' equity | 1,727.3 | 1,453.5 | ||||||||||||
Noncontrolling interests | 45.5 | 46.0 | ||||||||||||
Total shareholders' equity | 1,772.8 | 1,499.5 | ||||||||||||
Total liabilities and shareholders' equity | $ | 7,272.1 | $ | 7,059.2 |
AXALTA COATING SYSTEMS LTD. | ||||||||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||||||||
(In millions) | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Operating activities: | ||||||||||||||
Net income | $ | 268.5 | $ | 192.2 | ||||||||||
Adjustment to reconcile net income to cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 275.6 | 303.1 | ||||||||||||
Amortization of deferred financing costs and original issue discount | 8.5 | 9.6 | ||||||||||||
Debt extinguishment and refinancing-related costs | 9.9 | 14.7 | ||||||||||||
Deferred income taxes | (8.4) | (3.4) | ||||||||||||
Realized and unrealized foreign exchange losses, net | 21.4 | 15.5 | ||||||||||||
Stock-based compensation | 26.2 | 22.2 | ||||||||||||
Impairment charges | 15.3 | 0.7 | ||||||||||||
Gains on sales of facilities | (0.3) | (1.5) | ||||||||||||
Interest income on swaps designated as net investment hedges | (9.6) | (19.9) | ||||||||||||
Commercial agreement restructuring charge | — | 25.0 | ||||||||||||
Other non-cash, net | 21.7 | 7.0 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Trade accounts and notes receivable | (119.0) | (171.0) | ||||||||||||
Inventories | 103.1 | (195.4) | ||||||||||||
Prepaid expenses and other assets | (70.7) | (80.5) | ||||||||||||
Accounts payable | 9.4 | 138.0 | ||||||||||||
Other accrued liabilities | 29.3 | 44.7 | ||||||||||||
Other liabilities | (5.6) | (7.2) | ||||||||||||
Cash provided by operating activities | 575.3 | 293.8 | ||||||||||||
Investing activities: | ||||||||||||||
Acquisitions, net of cash acquired | (106.3) | (3.0) | ||||||||||||
Purchase of property, plant and equipment | (137.9) | (150.9) | ||||||||||||
Proceeds from sales of assets | 0.3 | 3.7 | ||||||||||||
Interest proceeds on swaps designated as net investment hedges | 9.6 | 19.9 | ||||||||||||
Settlement proceeds on swaps designated as net investment hedges | 29.4 | 25.0 | ||||||||||||
Other investing activities, net | (0.8) | (1.1) | ||||||||||||
Cash used for investing activities | (205.7) | (106.4) | ||||||||||||
Financing activities: | ||||||||||||||
Proceeds from short-term borrowings | 8.8 | — | ||||||||||||
Proceeds from long-term borrowings | 697.4 | 1,980.0 | ||||||||||||
Payments on short-term borrowings | (49.8) | (91.1) | ||||||||||||
Payments on long-term borrowings | (904.3) | (2,041.9) | ||||||||||||
Financing-related costs | (16.6) | (15.2) | ||||||||||||
Net cash flows associated with stock-based awards | 7.5 | (0.3) | ||||||||||||
Purchases of common stock | (50.0) | (200.1) | ||||||||||||
Deferred acquisition-related consideration | (7.7) | — | ||||||||||||
Other financing activities, net | (0.3) | (0.3) | ||||||||||||
Cash used for financing activities | (315.0) | (368.9) | ||||||||||||
Increase (decrease) in cash and cash equivalents | 54.6 | (181.5) | ||||||||||||
Effect of exchange rate changes on cash | (6.4) | (14.8) | ||||||||||||
Cash at beginning of period | 654.9 | 851.2 | ||||||||||||
Cash at end of period | $ | 703.1 | $ | 654.9 | ||||||||||
Cash at end of period reconciliation: | ||||||||||||||
Cash and cash equivalents | $ | 699.8 | $ | 645.2 | ||||||||||
Restricted cash | 3.3 | 9.7 | ||||||||||||
Cash at end of period | $ | 703.1 | $ | 654.9 |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income | $ | 73.6 | $ | 43.9 | $ | 268.5 | $ | 192.2 | ||||||||||||||||||
Interest expense, net | 55.4 | 38.7 | 213.3 | 139.8 | ||||||||||||||||||||||
Provision for income taxes | 28.2 | 13.5 | 86.2 | 65.1 | ||||||||||||||||||||||
Depreciation and amortization | 68.7 | 73.6 | 275.6 | 303.1 | ||||||||||||||||||||||
EBITDA | 225.9 | 169.7 | 843.6 | 700.2 | ||||||||||||||||||||||
Debt extinguishment and refinancing-related costs (a) | 2.9 | 15.3 | 9.9 | 14.7 | ||||||||||||||||||||||
Termination benefits and other employee-related costs (b) | 3.9 | 14.8 | 17.5 | 24.4 | ||||||||||||||||||||||
Acquisition and divestiture-related costs (c) | 1.9 | 0.1 | 2.7 | 2.9 | ||||||||||||||||||||||
Impairment charges (benefits) (d) | — | — | 15.3 | (0.4) | ||||||||||||||||||||||
Site closure costs (e) | 2.8 | 0.2 | 6.8 | 2.3 | ||||||||||||||||||||||
Foreign exchange remeasurement losses (f) | 4.1 | 1.9 | 22.7 | 15.2 | ||||||||||||||||||||||
Long-term employee benefit plan adjustments (g) | 2.4 | (0.7) | 9.2 | (0.3) | ||||||||||||||||||||||
Stock-based compensation (h) | 6.9 | 8.2 | 26.2 | 22.2 | ||||||||||||||||||||||
Gains on sales of facilities (i) | — | (1.5) | (0.1) | (1.5) | ||||||||||||||||||||||
Russia sanction-related impacts (j) | — | 0.2 | (1.5) | 5.0 | ||||||||||||||||||||||
Commercial agreement restructuring impacts (k) | — | — | — | 25.0 | ||||||||||||||||||||||
Other adjustments (l) | 0.1 | — | (0.9) | 1.1 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 250.9 | $ | 208.2 | $ | 951.4 | $ | 810.8 | ||||||||||||||||||
Net sales | $ | 1,297.3 | $ | 1,236.7 | $ | 5,184.1 | $ | 4,884.4 | ||||||||||||||||||
Net income margin | 5.7 | % | 3.5 | % | 5.2 | % | 3.9 | % | ||||||||||||||||||
Adjusted EBITDA margin | 19.3 | % | 16.8 | % | 18.4 | % | 16.6 | % | ||||||||||||||||||
Segment Adjusted EBITDA: | ||||||||||||||||||||||||||
Performance Coatings | $ | 191.8 | $ | 168.8 | $ | 741.9 | $ | 700.0 | ||||||||||||||||||
Mobility Coatings | 59.1 | 39.4 | 209.5 | 110.8 | ||||||||||||||||||||||
Total | $ | 250.9 | $ | 208.2 | $ | 951.4 | $ | 810.8 | ||||||||||||||||||
(a) | Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. | ||||
(b) | Represents expenses and associated changes to estimates related to employee termination benefits, consulting, legal and other employee-related costs associated with restructuring programs and other employee-related costs. These amounts are not considered indicative of our ongoing operating performance. | ||||
(c) | Represents acquisition and divestiture-related expenses and integration activities associated with our business combinations, all of which are not considered indicative of our ongoing operating performance. The amounts for the years ended December 31, 2023 and 2022 include $0.2 million, and $1.9 million, respectively, of due diligence and other related costs associated with unconsummated merger and acquisition transactions. | ||||
(d) | Represents impairment charges and benefits, which are not considered indicative of our ongoing operating performance. The losses recorded during the year ended December 31, 2023 were primarily due to the decision to demolish assets at a previously closed manufacturing site during the three months ended June 30, 2023 and the then anticipated exit of a non-core business category in the Mobility Coatings segment during the three months ended March 31, 2023. The amounts recorded during the year ended December 31, 2022 relate primarily to insurance recoveries on assets impaired in a prior year. | ||||
(e) | Represents costs related to the closure of certain manufacturing sites, which we do not consider indicative of our ongoing operating performance. | ||||
(f) | Represents foreign exchange losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies, net of the impacts of our foreign currency instruments used to hedge our balance sheet exposures. | ||||
(g) | Represents the non-cash, non-service cost components of long-term employee benefit costs. | ||||
(h) | Represents non-cash impacts associated with stock-based compensation. | ||||
(i) | Represents non-recurring income related to the sale of previously closed manufacturing facilities. | ||||
(j) | Represents expenses and associated changes to estimates related to sanctions imposed on Russia in response to the conflict with Ukraine for incremental reserves on accounts receivable and inventory, which we do not consider indicative of our ongoing operating performance. The benefits recorded during the year ended December 31, 2023 are related to changes in estimated inventory obsolescence and uncollectible accounts receivables. The benefits recorded during the year ended December 31, 2022 are related to changes in estimated inventory obsolescence. | ||||
(k) | Represents a non-cash charge associated with the forgiveness of a portion of up-front customer incentives with repayment features which was done along with our customer completing a recapitalization and restructuring of its indebtedness and the execution of a new long-term exclusive sales agreement with us. This amount is not considered to be indicative of our ongoing operating performance. | ||||
(l) | Represents certain non-operational or non-cash losses (gains), unrelated to our core business and which we do not consider indicative of our ongoing operating performance. | ||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income | $ | 73.6 | $ | 43.9 | $ | 268.5 | $ | 192.2 | ||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 0.5 | 0.3 | 1.1 | 0.6 | ||||||||||||||||||||||
Net income attributable to common shareholders | 73.1 | 43.6 | 267.4 | 191.6 | ||||||||||||||||||||||
Debt extinguishment and refinancing-related costs (a) | 2.9 | 15.3 | 9.9 | 14.7 | ||||||||||||||||||||||
Termination benefits and other employee-related costs (b) | 3.8 | 14.8 | 17.4 | 24.7 | ||||||||||||||||||||||
Acquisition and divestiture-related costs (c) | 1.9 | 0.1 | 2.7 | 2.9 | ||||||||||||||||||||||
Impairment charges (benefits) (d) | — | — | 15.3 | (0.4) | ||||||||||||||||||||||
Accelerated depreciation and site closure costs (e) | 2.8 | 0.1 | 6.8 | 4.3 | ||||||||||||||||||||||
Gains on sales of facilities (f) | — | (1.5) | (0.1) | (1.5) | ||||||||||||||||||||||
Russia sanction-related impacts (g) | (0.1) | 0.3 | (1.6) | 5.0 | ||||||||||||||||||||||
Commercial agreement restructuring impacts (h) | — | — | — | 25.0 | ||||||||||||||||||||||
Other adjustments (i) | 0.2 | (0.8) | (0.6) | 0.3 | ||||||||||||||||||||||
Step-up depreciation and amortization (j) | 13.2 | 22.9 | 55.7 | 93.0 | ||||||||||||||||||||||
Total adjustments | 24.7 | 51.2 | 105.5 | 168.0 | ||||||||||||||||||||||
Income tax provision impacts (k) | 3.9 | 10.5 | 24.8 | 29.9 | ||||||||||||||||||||||
Adjusted net income | $ | 93.9 | $ | 84.3 | $ | 348.1 | $ | 329.7 | ||||||||||||||||||
Adjusted diluted net income per share | $ | 0.43 | $ | 0.38 | $ | 1.57 | $ | 1.48 | ||||||||||||||||||
Diluted weighted average shares outstanding | 220.9 | 221.5 | 221.9 | 222.3 | ||||||||||||||||||||||
(a) | Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. | ||||
(b) | Represents expenses and associated changes to estimates related to employee termination benefits, consulting, legal and other employee-related costs associated with restructuring programs and other employee-related costs. These amounts are not considered indicative of our ongoing operating performance. | ||||
(c) | Represents acquisition and divestiture-related expenses and integration activities associated with our business combinations, all of which are not considered indicative of our ongoing operating performance. The amounts for the years ended December 31, 2023 and 2022 include $0.2 million, and $1.9 million, respectively, of due diligence and other related costs associated with unconsummated merger and acquisition transactions. | ||||
(d) | Represents impairment charges and benefits, which are not considered indicative of our ongoing operating performance. The losses recorded during the year ended December 31, 2023 were primarily due to the decision to demolish assets at a previously closed manufacturing site during the three months ended June 30, 2023 and the then anticipated exit of a non-core business category in the Mobility Coatings segment during the three months ended March 31, 2023. The amounts recorded during the year ended December 31, 2022 relate primarily to insurance recoveries on assets impaired in a prior year. | ||||
(e) | Represents incremental depreciation expense resulting from truncated useful lives of the assets impacted by our manufacturing footprint assessments and costs related to the closure of certain manufacturing sites, which we do not consider indicative of our ongoing operating performance. | ||||
(f) | Represents non-recurring income related to the sale of previously closed manufacturing facilities. | ||||
(g) | Represents expenses and associated changes to estimates related to sanctions imposed on Russia in response to the conflict with Ukraine for incremental reserves on accounts receivable and inventory, which we do not consider indicative of our ongoing operating performance. The benefits recorded during the year ended December 31, 2023 are related to changes in estimated inventory obsolescence and uncollectible accounts receivables. The benefits recorded during the year ended December 31, 2022 are related to changes in estimated inventory obsolescence. | ||||
(h) | Represents a non-cash charge associated with the forgiveness of a portion of up-front customer incentives with repayment features which was done along with our customer completing a recapitalization and restructuring of its indebtedness and the execution of a new long-term exclusive sales agreement with us. This amount is not considered to be indicative of our ongoing operating performance. | ||||
(i) | Represents certain non-operational or non-cash losses (gains), unrelated to our core business and which we do not consider indicative of our ongoing operating performance. | ||||
(j) | Represents the incremental step-up depreciation and amortization expense associated with the acquisition of DuPont Performance Coatings by Axalta. We believe this will assist investors in performing meaningful comparisons of past, present and future operating results and better highlight the results of our ongoing operating performance. | ||||
(k) | The income tax impacts are determined using the applicable rates in the taxing jurisdictions in which expense or income occurred and includes both current and deferred income tax expense (benefit) based on the nature of the non-GAAP performance measure. Additionally, the income tax impact includes the removal of discrete income tax impacts within our effective tax rate which were expenses of $1.3 million and benefits of $3.6 million for the three months ended December 31, 2023 and 2022, respectively, and benefits of $0.9 million and expenses of $3.4 million for the years ended December 31, 2023 and 2022, respectively. The tax adjustments for the years ended December 31, 2023 and 2022 include the deferred tax benefit ratably amortized into our adjusted income tax rate as the tax attribute related to a January 1, 2020 intra-entity transfer of certain intellectual property rights is realized. | ||||
Three Months Ended March 31, | Three Months Ended June 30, | Three Months Ended September 30, | Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash (used for) provided by operating activities | $ | (51.8) | $ | (43.9) | $ | 131.0 | $ | 12.2 | $ | 210.1 | $ | 79.9 | $ | 286.0 | $ | 245.6 | $ | 575.3 | $ | 293.8 | |||||||||||||||||||||||||||||||||||||||
Purchase of property, plant and equipment | (41.4) | (42.5) | (32.5) | (29.5) | (31.4) | (35.5) | (32.6) | (43.4) | (137.9) | (150.9) | |||||||||||||||||||||||||||||||||||||||||||||||||
Interest proceeds on swaps designated as net investment hedges | 5.6 | 6.2 | 0.5 | 3.8 | 3.0 | 6.1 | 0.5 | 3.8 | 9.6 | 19.9 | |||||||||||||||||||||||||||||||||||||||||||||||||
Free cash flow | $ | (87.6) | $ | (80.2) | $ | 99.0 | $ | (13.5) | $ | 181.7 | $ | 50.5 | $ | 253.9 | $ | 206.0 | $ | 447.0 | $ | 162.8 | |||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Income from operations | $ | 161.2 | $ | 109.8 | $ | 587.5 | $ | 423.2 | ||||||||||||||||||
Other expense, net | 4.0 | 13.7 | 19.5 | 26.1 | ||||||||||||||||||||||
Total | 157.2 | 96.1 | 568.0 | 397.1 | ||||||||||||||||||||||
Debt extinguishment and refinancing-related costs (a) | 2.9 | 15.3 | 9.9 | 14.7 | ||||||||||||||||||||||
Termination benefits and other employee-related costs (b) | 3.9 | 14.8 | 17.5 | 24.9 | ||||||||||||||||||||||
Acquisition and divestiture-related costs (c) | 1.9 | 0.1 | 2.7 | 2.9 | ||||||||||||||||||||||
Impairment charges (benefits) (d) | — | — | 15.3 | (0.4) | ||||||||||||||||||||||
Accelerated depreciation and site closure costs (e) | 2.8 | 0.1 | 6.8 | 4.3 | ||||||||||||||||||||||
Gains on sales of facilities (f) | — | (1.5) | (0.1) | (1.5) | ||||||||||||||||||||||
Russia sanction-related impacts (g) | — | 0.2 | (1.5) | 5.0 | ||||||||||||||||||||||
Commercial agreement restructuring impacts (h) | — | — | — | 25.0 | ||||||||||||||||||||||
Other adjustments (i) | 0.2 | (0.8) | (0.6) | 0.3 | ||||||||||||||||||||||
Step-up depreciation and amortization (j) | 13.2 | 22.9 | 55.7 | 93.0 | ||||||||||||||||||||||
Adjusted EBIT | $ | 182.1 | $ | 147.2 | $ | 673.7 | $ | 565.3 | ||||||||||||||||||
Segment Adjusted EBIT (1): | ||||||||||||||||||||||||||
Performance Coatings | $ | 129.3 | $ | 106.7 | $ | 491.4 | $ | 448.3 | ||||||||||||||||||
Mobility Coatings | 39.6 | 17.6 | 126.6 | 24.0 | ||||||||||||||||||||||
Total | 168.9 | 124.3 | 618.0 | 472.3 | ||||||||||||||||||||||
Step-up depreciation and amortization (j) | 13.2 | 22.9 | 55.7 | 93.0 | ||||||||||||||||||||||
Adjusted EBIT | $ | 182.1 | $ | 147.2 | $ | 673.7 | $ | 565.3 |
(1) | During the three months ended December 31, 2023, Axalta transitioned to using Adjusted EBITDA as the primary measure to evaluate financial performance of the operating segments and allocate resources. We will continue publishing segment Adjusted EBIT through 2024 to allow for historical trend analyses. | ||||
(a) | Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. | ||||
(b) | Represents expenses and associated changes to estimates related to employee termination benefits, consulting, legal and other employee-related costs associated with restructuring programs and other employee-related costs. These amounts are not considered indicative of our ongoing operating performance. | ||||
(c) | Represents acquisition and divestiture-related expenses and integration activities associated with our business combinations, all of which are not considered indicative of our ongoing operating performance. The amounts for the years ended December 31, 2023 and 2022 include $0.2 million, and $1.9 million, respectively, of due diligence and other related costs associated with unconsummated merger and acquisition transactions. | ||||
(d) | Represents impairment charges and benefits, which are not considered indicative of our ongoing operating performance. The losses recorded during the year ended December 31, 2023 were primarily due to the decision to demolish assets at a previously closed manufacturing site during the three months ended June 30, 2023 and the then anticipated exit of a non-core business category in the Mobility Coatings segment during the three months ended March 31, 2023. The amounts recorded during the year ended December 31, 2022 relate primarily to insurance recoveries on assets impaired in a prior year. | ||||
(e) | Represents incremental depreciation expense resulting from truncated useful lives of the assets impacted by our manufacturing footprint assessments and costs related to the closure of certain manufacturing sites, which we do not consider indicative of our ongoing operating performance. | ||||
(f) | Represents non-recurring income related to the sale of previously closed manufacturing facilities. | ||||
(g) | Represents expenses and associated changes to estimates related to sanctions imposed on Russia in response to the conflict with Ukraine for incremental reserves on accounts receivable and inventory, which we do not consider indicative of our ongoing operating performance. The benefits recorded during the year ended December 31, 2023 are related to changes in estimated inventory obsolescence and uncollectible accounts receivables. The benefits recorded during the year ended December 31, 2022 are related to changes in estimated inventory obsolescence. | ||||
(h) | Represents a non-cash charge associated with the forgiveness of a portion of up-front customer incentives with repayment features which was done along with our customer completing a recapitalization and restructuring of its indebtedness and the execution of a new long-term exclusive sales agreement with us. This amount is not considered to be indicative of our ongoing operating performance. | ||||
(i) | Represents certain non-operational or non-cash losses (gains), unrelated to our core business and which we do not consider indicative of our ongoing operating performance. | ||||
(j) | Represents the incremental step-up depreciation and amortization expense associated with the acquisition of DuPont Performance Coatings by Axalta. We believe this will assist investors in performing meaningful comparisons of past, present and future operating results and better highlight the results of our ongoing operating performance. | ||||
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2022 | June 30, 2022 | September 30, 2022 | December 31, 2022 | March 31, 2023 | June 30, 2023 | September 30, 2023 | December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||
Net income | $ | 40.9 | $ | 44.1 | $ | 63.3 | $ | 43.9 | $ | 60.5 | $ | 61.1 | $ | 73.3 | $ | 73.6 | |||||||||||||||||||||||||||||||
Interest expense, net | 32.6 | 33.5 | 35.0 | 38.7 | 48.2 | 54.6 | 55.1 | 55.4 | |||||||||||||||||||||||||||||||||||||||
Provision for income taxes | 11.0 | 18.8 | 21.8 | 13.5 | 15.3 | 13.4 | 29.3 | 28.2 | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 77.7 | 77.3 | 74.5 | 73.6 | 69.5 | 66.2 | 71.2 | 68.7 | |||||||||||||||||||||||||||||||||||||||
EBITDA | 162.2 | 173.7 | 194.6 | 169.7 | 193.5 | 195.3 | 228.9 | 225.9 | |||||||||||||||||||||||||||||||||||||||
Debt extinguishment and refinancing related costs (a) | — | (0.2) | (0.4) | 15.3 | 1.8 | 1.2 | 4.0 | 2.9 | |||||||||||||||||||||||||||||||||||||||
Termination benefits and other employee-related costs (b) | 1.9 | 2.7 | 5.0 | 14.8 | (0.2) | 2.3 | 11.5 | 3.9 | |||||||||||||||||||||||||||||||||||||||
Acquisition and divestiture-related costs (c) | 0.4 | 2.2 | 0.2 | 0.1 | 0.5 | (0.1) | 0.4 | 1.9 | |||||||||||||||||||||||||||||||||||||||
Impairment charges (benefits) (d) | 0.3 | (0.6) | (0.1) | — | 7.1 | 8.3 | (0.1) | — | |||||||||||||||||||||||||||||||||||||||
Site closure costs (e) | 0.6 | 1.1 | 0.4 | 0.2 | 1.1 | 0.8 | 2.1 | 2.8 | |||||||||||||||||||||||||||||||||||||||
Foreign exchange remeasurement losses (f) | 2.6 | 4.9 | 5.8 | 1.9 | 2.3 | 9.6 | 6.7 | 4.1 | |||||||||||||||||||||||||||||||||||||||
Long-term employee benefit plan adjustments (g) | 0.1 | 0.1 | 0.2 | (0.7) | 2.2 | 2.3 | 2.3 | 2.4 | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation (h) | 5.3 | 3.7 | 5.0 | 8.2 | 6.3 | 7.3 | 5.7 | 6.9 | |||||||||||||||||||||||||||||||||||||||
Gains on sales of facilities (i) | — | — | — | (1.5) | — | (0.1) | — | — | |||||||||||||||||||||||||||||||||||||||
Russia sanction-related impacts (j) | 5.8 | 0.3 | (1.3) | 0.2 | (1.4) | 0.1 | (0.2) | — | |||||||||||||||||||||||||||||||||||||||
Commercial agreement restructuring impacts (k) | — | 25.0 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Other adjustments (l) | 0.4 | (0.2) | 0.9 | — | (0.1) | (0.1) | (0.8) | 0.1 | |||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 179.6 | $ | 212.7 | $ | 210.3 | $ | 208.2 | $ | 213.1 | $ | 226.9 | $ | 260.5 | $ | 250.9 | |||||||||||||||||||||||||||||||
Segment Adjusted EBITDA: | |||||||||||||||||||||||||||||||||||||||||||||||
Performance Coatings | 157.5 | 188.8 | 184.9 | 168.8 | 169.1 | 181.2 | 199.8 | 191.8 | |||||||||||||||||||||||||||||||||||||||
Mobility Coatings | 22.1 | 23.9 | 25.4 | 39.4 | 44.0 | 45.7 | 60.7 | 59.1 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 179.6 | $ | 212.7 | $ | 210.3 | $ | 208.2 | $ | 213.1 | $ | 226.9 | $ | 260.5 | $ | 250.9 |
(a) | Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. | ||||
(b) | Represents expenses and associated changes to estimates related to employee termination benefits, consulting, legal and other employee-related costs associated with restructuring programs and other employee-related costs. These amounts are not considered indicative of our ongoing operating performance. | ||||
(c) | Represents acquisition and divestiture-related expenses and integration activities associated with our business combinations, all of which are not considered indicative of our ongoing operating performance. The amounts for the years ended December 31, 2023 and 2022 include $0.2 million, and $1.9 million, respectively, of due diligence and other related costs associated with unconsummated merger and acquisition transactions. | ||||
(d) | Represents impairment charges and benefits, which are not considered indicative of our ongoing operating performance. The losses recorded during the year ended December 31, 2023 were primarily due to the decision to demolish assets at a previously closed manufacturing site during the three months ended June 30, 2023 and the then anticipated exit of a non-core business category in the Mobility Coatings segment during the three months ended March 31, 2023. The amounts recorded during the year ended December 31, 2022 relate primarily to insurance recoveries on assets impaired in a prior year. | ||||
(e) | Represents costs related to the closure of certain manufacturing sites, which we do not consider indicative of our ongoing operating performance. | ||||
(f) | Represents foreign exchange losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies, net of the impacts of our foreign currency instruments used to hedge our balance sheet exposures. | ||||
(g) | Represents the non-cash, non-service cost components of long-term employee benefit costs. | ||||
(h) | Represents non-cash impacts associated with stock-based compensation. | ||||
(i) | Represents non-recurring income related to the sale of previously closed manufacturing facilities. | ||||
(j) | Represents expenses and associated changes to estimates related to sanctions imposed on Russia in response to the conflict with Ukraine for incremental reserves on accounts receivable and inventory, which we do not consider indicative of our ongoing operating performance. The benefits recorded during the year ended December 31, 2023 are related to changes in estimated inventory obsolescence and uncollectible accounts receivables. The benefits recorded during the year ended December 31, 2022 are related to changes in estimated inventory obsolescence. | ||||
(k) | Represents a non-cash charge associated with the forgiveness of a portion of up-front customer incentives with repayment features which was done along with our customer completing a recapitalization and restructuring of its indebtedness and the execution of a new long-term exclusive sales agreement with us. This amount is not considered to be indicative of our ongoing operating performance. | ||||
(l) | Represents certain non-operational or non-cash losses (gains), unrelated to our core business and which we do not consider indicative of our ongoing operating performance. |
Cover Document |
Feb. 08, 2024 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Document Period End Date | Feb. 08, 2024 |
Entity Registrant Name | AXALTA COATING SYSTEMS LTD. |
Entity Incorporation, State or Country Code | D0 |
Entity File Number | 001-36733 |
Entity Tax Identification Number | 98-1073028 |
Entity Address, Address Line One | 1050 Constitution Avenue |
Entity Address, City or Town | Philadelphia |
Entity Address, State or Province | PA |
Entity Address, Postal Zip Code | 19112 |
City Area Code | 855 |
Local Phone Number | 547-1461 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Shares, $1.00 par value |
Trading Symbol | AXTA |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
Amendment Flag | false |
Entity Central Index Key | 0001616862 |
1 Year Axalta Coating Systems Chart |
1 Month Axalta Coating Systems Chart |
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