Axalta Coating Systems Ltd. (NYSE:AXTA) (“Axalta”), a leading
global coatings company, announced its financial results for the
second quarter ended June 30, 2023.
Second Quarter
2023 Highlights:
- Net
sales increased 4.8% year-over-year driven by price-mix and robust
volume growth in Mobility Coatings
-
Price-mix improved 6.8% year-over-year with strong contributions
from every end-market
-
Volume declined 3.7% year-over-year primarily due to production
constraints following an Enterprise Resource Planning (“ERP”)
implementation in North America
-
Income from operations of $137.6 million versus $103.6 million in
Q2 2022; Adjusted EBIT of $154.5 million up 2.6% from prior-year
despite consulting and ERP implementation costs of
~$15 million in the quarter
- Net
Leverage improved to 3.6x at June 30, 2023 on earnings and cash
flow improvement; cash flow from operations of $131.0 million in Q2
2023
Second Quarter
2023 Consolidated Financial
Results
Second quarter net sales increased 4.8%
year-over-year driven by 6.8% higher average price mix and a 1.6%
benefit resulting from the absence of the commercial agreement
restructuring charge incurred in Q2 2022. Volumes decreased by 3.7%
as market demand in Mobility Coatings and Refinish were more than
offset by temporary operational delays impacting our ability to
meet customer demand from an ERP implementation in North America.
Despite notable stabilization in June, warehouse management and
slower shipping activities in the quarter resulted in an estimated
negative 2%-3% year-over-year net sales impact and drove an
elevated quarter-end sales backlog, most notably in Refinish.
Mobility Coatings net sales increased 15.5% led predominantly by
strong volumes and modest improvement in price-mix. Performance
Coatings net sales were flat year-over-year as pricing momentum in
both end-markets was offset by lower volumes in both
end-markets.
Income from operations for Q2 2023 totaled $137.6
million versus $103.6 million in Q2 2022. Adjusted EBIT improved to
$154.5 million from $150.6 million in Q2 2022 as price-cost trends
were positive across all end-markets given the combined benefit of
strong year-over-year pricing and variable cost deflation. Income
from operations in the quarter was impacted negatively by higher
year-over-year compensation expense and approximately
$15 million of costs associated with consulting spend and the
ERP implementation. Adjusted EBIT was also negatively impacted by
~$9 million in exchange losses stemming from the devaluation
of net monetary assets denominated in the Turkish Lira and
Argentine Peso.
Chris Villavarayan, Axalta’s CEO and President,
commented, “The quarter reflected strong underlying earnings and
profitability improvement, particularly in Mobility Coatings where
momentum is building. I am particularly proud of how our teams
rebounded from a broad and complex ERP implementation in May and
delivered a solid quarter, including a sales performance for North
America in June that was one of the strongest in our history. This
launch was a crucial step towards achieving the margin improvement
trajectory we want for Axalta.”
Consolidated Results
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|
% Change |
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|
% Change Due To: |
($ in
millions) |
Q2 2023 |
|
Q2 2022 |
|
vs Q2 2022 |
|
|
Volume |
|
Price/Mix |
|
FX |
|
One-Time |
|
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Performance Coatings Net Sales |
$ |
856.0 |
|
|
$ |
855.8 |
|
|
— |
% |
|
(11.1 |
%) |
|
8.5 |
% |
|
0.2 |
% |
|
2.4 |
% |
Mobility Coatings Net Sales |
$ |
437.9 |
|
|
$ |
379.1 |
|
|
15.5 |
% |
|
12.8 |
% |
|
2.7 |
% |
|
— |
% |
|
— |
% |
Total Axalta Net Sales |
$ |
1,293.9 |
|
|
$ |
1,234.9 |
|
|
4.8 |
% |
|
(3.7 |
%) |
|
6.8 |
% |
|
0.1 |
% |
|
1.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
$ |
137.6 |
|
|
$ |
103.6 |
|
|
32.8 |
% |
|
|
|
|
|
|
|
|
Adjusted EBIT |
$ |
154.5 |
|
|
$ |
150.6 |
|
|
2.6 |
% |
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% margin |
|
11.9 |
% |
|
|
12.2 |
% |
|
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|
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Performance Coatings Results
|
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|
% Change |
|
% Change Due To: |
($ in
millions) |
Q2 2023 |
|
Q2 2022 |
|
vs Q2 2022 |
|
Volume |
|
Price/Mix |
|
FX |
|
One-Time |
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|
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|
|
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|
Refinish Net Sales |
$ |
520.7 |
|
|
$ |
491.1 |
|
|
6.0 |
% |
|
(8.4 |
%) |
|
10.0 |
% |
|
0.3 |
% |
|
4.1 |
% |
Industrial Net Sales |
$ |
335.3 |
|
|
$ |
364.7 |
|
|
(8.1 |
%) |
|
(14.6 |
%) |
|
6.5 |
% |
|
— |
% |
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Coatings Net Sales |
$ |
856.0 |
|
|
$ |
855.8 |
|
|
— |
% |
|
(11.1 |
%) |
|
8.5 |
% |
|
0.2 |
% |
|
2.4 |
% |
|
|
|
|
|
|
|
|
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|
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|
Adjusted EBIT |
$ |
117.8 |
|
|
$ |
125.2 |
|
|
(5.9 |
%) |
|
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|
% margin |
|
13.8 |
% |
|
|
14.6 |
% |
|
|
|
|
|
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Discussion of Results:
Performance Coatings second quarter net sales were
flat year-over-year at $856.0 million led by 8.5% better
price-mix and a 2.4% benefit from the absence of the commercial
agreement restructuring charge from Q2 2022. Volumes declined by
11.1% predominantly related to the sales impact of the ERP
implementation and from a weaker Industrial market environment.
Refinish net sales increased 6.0% year-over-year to
$520.7 million, driven by price-mix improvement of 10.0%,
supported by new and carry-over pricing efforts. Price-mix improved
1.7% sequentially reflecting actions taken earlier in the year.
Volumes decreased by 8.4% year-over-year as a supportive market
environment with typical seasonal order patterns was overshadowed
by the ERP implementation which drove an elevated quarter-end
backlog. Market activity remained largely stable as miles driven
and return to work dynamics were consistent with prior periods.
Body shop backlogs are elevated given continued parts and labor
shortages.
Industrial net sales decreased 8.1% year-over-year
to $335.3 million, as positive price-mix was more than offset
by lower volumes. Price-mix improved 6.5% year-over-year as the
business continued to prioritize margin recovery. Volumes declined
14.6% year-over-year mostly from a continuation of soft market
activity that began in mid-2022.
The Performance Coatings segment generated Adjusted
EBIT of $117.8 million in the second quarter compared with $125.2
million in Q2 2022, with associated margins of 13.8% and 14.6%,
respectively. Price-cost was a significant tailwind given strong
pricing and modest raw material deflationary benefits, though this
was more than offset by higher variable compensation expense and
temporary costs from the ERP implementation and productivity
programs.
Mobility Coatings Results
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|
|
|
|
|
% Change |
|
|
% Change Due To: |
($ in
millions) |
|
Q2 2023 |
|
|
|
Q2 2022 |
|
|
vs Q2 2022 |
|
|
Volume |
|
Price/Mix |
|
FX |
|
|
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|
|
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|
Light Vehicle Net Sales |
$ |
330.2 |
|
|
$ |
282.9 |
|
|
16.7 |
% |
|
14.9 |
% |
|
2.4 |
% |
|
(0.6 |
%) |
Commercial Vehicle Net Sales |
$ |
107.7 |
|
|
$ |
96.2 |
|
|
12.0 |
% |
|
6.7 |
% |
|
3.6 |
% |
|
1.7 |
% |
|
|
|
|
|
|
|
|
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|
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|
Mobility Coatings Net Sales |
$ |
437.9 |
|
|
$ |
379.1 |
|
|
15.5 |
% |
|
12.8 |
% |
|
2.7 |
% |
|
— |
% |
|
|
|
|
|
|
|
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|
|
|
|
Adjusted EBIT |
$ |
23.7 |
|
|
$ |
2.3 |
|
|
930.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% margin |
|
5.4 |
% |
|
|
0.6 |
% |
|
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Discussion of Results:
Mobility Coatings net sales were
$437.9 million in Q2 2023, an increase of 15.5%
year-over-year. Volume growth of 12.8% was driven by improved Light
Vehicle and Commercial Vehicle production rates as well as customer
wins. Price-mix increased 2.7% with positive contributions from
both end-markets.
Light Vehicle net sales increased 16.7%
year-over-year to $330.2 million, led by volume growth of
14.9%. Volume growth was consistent with global light vehicle build
rates, which improved by 15.5% to 22.0 million builds in Q2 2023,
led primarily by very strong growth in China. Price-mix growth of
2.4% reflects continued focus on margin recovery.
Commercial Vehicle net sales increased 12.0%
year-over-year to $107.7 million, led by volume growth of 6.7%
and price-mix improvement of 3.6%. Volume growth was driven by
strong class 4-8 production rates, especially in the Americas where
Axalta has a market leading position. Class 8 builds improved 12%
year-over-year in North America, driven by improved parts
availability and pent-up demand. Class 4-8 demand is expected to be
stable through the rest of the year supported by approximately 7 to
9 months of backlogs for both medium and heavy duty trucks in the
Americas region.
The Mobility Coatings segment generated Adjusted
EBIT of $23.7 million in Q2 2023 compared with $2.3 million in Q2
2022. Adjusted EBIT improvement was supported by substantial sales
growth in addition to improved price-cost. Q2 2023 marked the third
consecutive quarter of positive net price-cost for Mobility
Coatings on a year-over-year basis. Higher compensation expense and
temporary costs incurred from investments in the ERP implementation
and productivity programs were headwinds in the period. Adjusted
EBIT margins increased 480 bps to 5.4% year-over-year.
Balance Sheet and Cash Flow
Highlights
Axalta ended the second quarter with cash and cash
equivalents of $517.6 million and total liquidity over
$1 billion. Net debt to trailing twelve month ("LTM") Adjusted
EBITDA ratio (total net leverage ratio) was 3.6x at quarter-end
versus 3.7x as of March 31, 2023 and the second quarter ended with
an Adjusted EBITDA to interest expense coverage ratio of 4.9x.
Axalta voluntarily paid down an additional $75 million of
principal on its term loan in the period, contributing to
$150 million of combined structural debt pay downs over the
past two quarters.
Second quarter cash provided by operating
activities was $131.0 million versus $12.2 million in Q2 2022,
reflecting a significant improvement in working capital along with
stronger earnings. Inventory levels improved sequentially for the
second consecutive quarter leading to a cash benefit of $30.9
million in the current period, as compared to a $59.9 million use
in the prior-year. Free cash flow totaled $99.0 million compared to
a use of $13.5 million in Q2 2022.
Sean Lannon, Axalta's Chief Financial Officer,
commented, “Our cash conversion this quarter was a great
achievement and reflects the team’s focus to reverse elevated
working capital balances from year-end. As a result of better
earnings and cash generation, our total net leverage ratio
continued to improve; we expect to end the year close to 3.0x based
on the current fiscal year outlook. Debt reduction is expected to
remain our highest priority use of cash given attractive returns in
the current interest rate environment, with opportunistic bolt-on
M&A possible in the second half. We are actively exploring
additional opportunities to reduce interest expense given
improvements in capital markets activities.”
Financial Guidance and Market
Commentary
Mr. Villavarayan concluded, “Looking ahead we see
clear opportunity to improve earnings which is reflected in our
second half guidance and run rate trajectory in the fourth quarter.
Price-cost dynamics remain supportive and are expected to be
sufficient to offset higher compensation expenses and modest
investments being made to support long-term growth. Our 2023
guidance framework points to earnings recovery, and I believe that
the actions we are taking today will strengthen the business and
establish the foundation for consistent long-term success.”
Q3 2023 Outlook:
(in millions, except per share data & %s) |
Projection |
Net Sales growth versus Q3 2022 (FX benefit) |
3-5% (~3%) |
Adjusted EBIT (Adjusted EBITDA) |
$160 - $175 ($230-$245) |
Adjusted Diluted EPS |
$0.35 - $0.40 |
Full Year 2023 Outlook:
(in millions, except per share data & %s) |
Projection |
Net Sales growth versus 2022 (FX benefit) |
6-8% (~1%) |
Adjusted EBIT (Adjusted EBITDA) |
$630 - $650 ($910-$930) |
Adjusted Diluted EPS |
$1.40 - $1.45 |
D&A (step-up D&A) |
~$280 ($55) |
Tax Rate, As Adjusted |
~24% |
Diluted Shares Outstanding |
~ 223 |
Interest Expense |
~$215 |
Capex |
~$175 |
Free Cash Flow |
~$385 - $425 |
Commentary
-
Anticipate pricing to moderately increase YoY with positive
contribution from all end-markets driving majority of FY sales
growth
-
Forecast typical quarterly seasonal demand patterns, strong demand
in Mobility Coatings, stability in Refinish and a softer Industrial
environment
-
Expect mid-to-high single digit variable cost deflation for the
second half of the year to mitigate higher operating expenses
-
Project 13% YoY Adjusted EBIT growth at midpoint of FY 2023
earnings guidance
Axalta does not provide a reconciliation for
non-GAAP estimates for Adjusted EBIT, Adjusted EBITDA, Adjusted
Diluted EPS, tax rate, as adjusted, and free cash flow, on a
forward-looking basis because the information necessary to
calculate a meaningful or accurate estimation of reconciling items
is not available without unreasonable effort. See “Non-GAAP
Financial Measures” for more information.
Conference Call Information
As previously announced, Axalta will hold a
conference call to discuss its second quarter 2023 financial
results on Wednesday, August 2, 2023 at 8:00 a.m. ET. A live
webcast of the conference call will be available online at
www.axalta.com/investorcall. A replay of the webcast will be posted
shortly after the call and will remain accessible through August 2,
2024. The dial-in phone number for the conference call is
+1-201-689-8560. For those unable to participate, a replay will be
available through August 9, 2023. The replay dial-in number is
+1-412-317-6671. The replay passcode is 13740153.
Public Dissemination of
Certain InformationWe intend to use our investor relations
page at ir.axalta.com as a means of disclosing material information
to the public in a broad, non-exclusionary manner for purposes of
the U.S. Securities and Exchange Commission’s (the “SEC”)
Regulation Fair Disclosure (or Reg. FD). Investors should routinely
monitor that site, in addition to our press releases, SEC filings
and public conference calls and webcasts, as information posted on
that page could be deemed to be material information.
Cautionary Statement Concerning
Forward-Looking Statements
This release may contain certain forward-looking
statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995 regarding Axalta and its subsidiaries
including, but not limited to, our outlook/commentary and/or
guidance, which includes net sales growth, foreign currency
effects, Adjusted EBIT, Adjusted EBITDA, Adjusted diluted EPS,
depreciation and amortization, step-up depreciation and
amortization, tax rate, as adjusted, diluted shares outstanding,
interest expense, capital expenditures, free cash flow, prices for
our products, demand patterns, variable cost deflation, operating
expenses, total net leverage ratio, our supply chain constraints
and our ability to offset the impacts of such constraints,
potential acquisitions and financing activities, and global
commercial vehicle demand. Axalta has identified some of these
forward-looking statements with words such as “anticipate,”
“assumptions,” “outlook,” “believe,” “expect,” “estimates,”
“likely,” “will,” “guidance,” “priority,” “looking ahead,”
“opportunity,” “projection,” “future,” “want,” “possible,” “to be,”
“signs,” and “see” and the negative of these words or other
comparable or similar terminology. All of these statements are
based on management’s expectations as well as estimates and
assumptions prepared by management that, although they believe to
be reasonable, are inherently uncertain. These statements involve
risks and uncertainties, including, but not limited to, economic,
competitive, governmental and technological factors outside of
Axalta’s control, as well as impacts from operational disruptions
related to our ERP system implementation, that may cause its
business, industry, strategy, financing activities or actual
results to differ materially. More information on potential factors
that could affect Axalta’s financial results is available in
“Forward-Looking Statements,” “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” within Axalta’s most recent Annual Report on Form 10-K
and Quarterly Report on Form 10-Q, and in other documents that we
have filed with, or furnished to, the SEC. Axalta undertakes no
obligation to update or revise any of the forward-looking
statements contained herein, whether as a result of new
information, future events or otherwise.
Non-GAAP Financial Measures
The historical financial information included in
this release includes financial information that is not presented
in accordance with generally accepted accounting principles in the
United States (“GAAP”), including constant currency net sales
growth, tax rate, as adjusted, EBIT, Adjusted EBIT, EBITDA,
Adjusted EBITDA, Adjusted diluted EPS, free cash flow, net debt,
Adjusted net income, Adjusted EBITDA to interest expense coverage
ratio, total net leverage ratio and Adjusted EBIT margin.
Management uses these non-GAAP financial measures in the analysis
of our financial and operating performance because they assist in
the evaluation of underlying trends in our business. Adjusted
EBITDA, Adjusted EBIT and Adjusted diluted EPS consist of EBITDA,
EBIT and Diluted EPS, respectively, adjusted for (i) certain
non-cash items included within net income, (ii) certain items
Axalta does not believe are indicative of ongoing operating
performance or (iii) certain nonrecurring, unusual or infrequent
items that have not otherwise occurred within the last two years or
we believe are not reasonably likely to recur within the next two
years. We believe that making such adjustments provides investors
meaningful information to understand our operating results and
ability to analyze financial and business trends on a
period-to-period basis. Adjusted net income shows the adjusted
value of net income (loss) attributable to controlling interests
after removing the items that are determined by management to be
items that we do not consider indicative of our ongoing operating
performance or unusual or nonrecurring in nature. Our use of the
terms constant currency net sales growth, tax rate, as adjusted,
EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, Adjusted diluted EPS,
free cash flow, net debt, Adjusted net income, Adjusted EBITDA to
interest expense coverage ratio, total net leverage ratio and
Adjusted EBIT margin may differ from that of others in our
industry. Constant currency net sales growth, tax rate, as
adjusted, EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, Adjusted
diluted EPS, free cash flow, net debt, Adjusted net income,
Adjusted EBITDA to interest expense coverage ratio, total net
leverage ratio and Adjusted EBIT margin should not be considered as
alternatives to net sales, net income (loss), income (loss) from
operations or any other performance measures derived in accordance
with GAAP as measures of operating performance or net cash provided
by operating activities or as measures of liquidity. Constant
currency net sales growth, tax rate, as adjusted, EBIT, Adjusted
EBIT, EBITDA, Adjusted EBITDA, Adjusted diluted EPS, free cash
flow, net debt, Adjusted net income, Adjusted EBITDA to interest
expense coverage ratio, total net leverage and Adjusted EBIT margin
have important limitations as analytical tools and should be
considered in conjunction with, and not as substitutes for, our
results as reported under GAAP. This release includes a
reconciliation of certain non-GAAP financial measures with the most
directly comparable financial measures calculated in accordance
with GAAP. Axalta does not provide a reconciliation for non-GAAP
estimates for Adjusted EBIT, Adjusted EBITDA, Adjusted diluted EPS,
tax rate, as adjusted, or free cash flow on a forward-looking basis
because the information necessary to calculate a meaningful or
accurate estimation of reconciling items is not available without
unreasonable effort. For example, such reconciling items include
the impact of foreign currency exchange gains or losses, gains or
losses that are unusual or nonrecurring in nature, as well as
discrete taxable events. We cannot estimate or project these items
and they may have a substantial and unpredictable impact on our
GAAP results.
Constant Currency
Constant currency or ex-FX percentages are
calculated by excluding the impact of the change in average
exchange rates between the current and comparable period by
currency denomination exposure of the comparable period amount.
Organic Growth
Organic growth or ex-M&A percentages are
calculated by excluding the impact of recent acquisitions and
divestitures.
Segment Financial Measures
The primary measure of segment operating
performance is Adjusted EBIT, which is a key metric that is used by
management to evaluate business performance in comparison to
budgets, forecasts and prior year financial results, providing a
measure that management believes reflects Axalta’s core operating
performance. As we do not measure segment operating performance
based on net income, a reconciliation of this non-GAAP financial
measure with the most directly comparable financial measure
calculated in accordance with GAAP is not available.
About Axalta Coating Systems
Axalta is a global leader in the coatings industry,
providing customers with innovative, colorful, beautiful and
sustainable coatings solutions. From light vehicles, commercial
vehicles and refinish applications to electric motors, building
facades and other industrial applications, our coatings are
designed to prevent corrosion, increase productivity and enhance
durability. With more than 150 years of experience in the coatings
industry, the global team at Axalta continues to find ways to serve
our more than 100,000 customers in over 140 countries better every
day with the finest coatings, application systems and technology.
For more information visit axalta.com and follow us @axalta on
Twitter.
|
Financial Statement Tables |
AXALTA COATING SYSTEMS LTD. |
Condensed Consolidated Statements of Operations (Unaudited) |
(In millions, except per share data) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net sales |
$ |
1,293.9 |
|
$ |
1,234.9 |
|
$ |
2,577.8 |
|
$ |
2,409.0 |
|
Cost of goods sold |
|
904.4 |
|
|
886.4 |
|
|
1,806.3 |
|
|
1,723.8 |
|
Selling, general and administrative expenses |
|
210.2 |
|
|
191.7 |
|
|
416.2 |
|
|
385.2 |
|
Other operating charges |
|
2.1 |
|
|
4.8 |
|
|
9.2 |
|
|
12.5 |
|
Research and development expenses |
|
18.6 |
|
|
16.7 |
|
|
37.7 |
|
|
33.1 |
|
Amortization of acquired intangibles |
|
21.0 |
|
|
31.7 |
|
|
45.5 |
|
|
64.5 |
|
Income from operations |
|
137.6 |
|
|
103.6 |
|
|
262.9 |
|
|
189.9 |
|
Interest expense, net |
|
54.6 |
|
|
33.5 |
|
|
102.8 |
|
|
66.1 |
|
Other expense, net |
|
8.5 |
|
|
7.2 |
|
|
9.8 |
|
|
9.0 |
|
Income before income taxes |
|
74.5 |
|
|
62.9 |
|
|
150.3 |
|
|
114.8 |
|
Provision for income taxes |
|
13.4 |
|
|
18.8 |
|
|
28.7 |
|
|
29.8 |
|
Net income |
|
61.1 |
|
|
44.1 |
|
|
121.6 |
|
|
85.0 |
|
Less: Net income (loss) attributable to noncontrolling
interests |
|
0.2 |
|
|
— |
|
|
0.2 |
|
|
(0.6 |
) |
Net income attributable to controlling interests |
$ |
60.9 |
|
$ |
44.1 |
|
$ |
121.4 |
|
$ |
85.6 |
|
Basic net income per share |
$ |
0.27 |
|
$ |
0.20 |
|
$ |
0.55 |
|
$ |
0.38 |
|
Diluted net income per share |
$ |
0.27 |
|
$ |
0.20 |
|
$ |
0.55 |
|
$ |
0.38 |
|
Basic weighted average shares outstanding |
|
221.6 |
|
|
221.0 |
|
|
221.4 |
|
|
222.8 |
|
Diluted weighted average shares outstanding |
|
222.5 |
|
|
221.4 |
|
|
222.3 |
|
|
223.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AXALTA COATING SYSTEMS LTD. |
Condensed Consolidated Balance Sheets (Unaudited) |
(In millions, except per share data) |
|
June 30, 2023 |
|
December 31, 2022 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
517.6 |
|
|
$ |
645.2 |
|
Restricted cash |
|
2.4 |
|
|
|
9.7 |
|
Accounts and notes receivable, net |
|
1,271.1 |
|
|
|
1,067.4 |
|
Inventories |
|
766.7 |
|
|
|
829.6 |
|
Prepaid expenses and other current assets |
|
131.8 |
|
|
|
140.8 |
|
Total current assets |
|
2,689.6 |
|
|
|
2,692.7 |
|
Property, plant and equipment, net |
|
1,196.8 |
|
|
|
1,190.2 |
|
Goodwill |
|
1,526.6 |
|
|
|
1,498.0 |
|
Identifiable intangibles, net |
|
1,077.1 |
|
|
|
1,112.3 |
|
Other assets |
|
553.0 |
|
|
|
566.0 |
|
Total assets |
$ |
7,043.1 |
|
|
$ |
7,059.2 |
|
Liabilities, Shareholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
702.3 |
|
|
$ |
733.5 |
|
Current portion of borrowings |
|
39.0 |
|
|
|
31.0 |
|
Other accrued liabilities |
|
587.9 |
|
|
|
620.2 |
|
Total current liabilities |
|
1,329.2 |
|
|
|
1,384.7 |
|
Long-term borrowings |
|
3,528.9 |
|
|
|
3,673.3 |
|
Accrued pensions |
|
209.4 |
|
|
|
205.1 |
|
Deferred income taxes |
|
155.4 |
|
|
|
162.1 |
|
Other liabilities |
|
131.2 |
|
|
|
134.5 |
|
Total liabilities |
|
5,354.1 |
|
|
|
5,559.7 |
|
Shareholders’ equity: |
|
|
|
Common shares, $1.00 par, 1,000.0 shares authorized, 253.5 and
252.4 shares issued at June 30, 2023 and
December 31, 2022, respectively |
|
253.5 |
|
|
|
252.4 |
|
Capital in excess of par |
|
1,557.5 |
|
|
|
1,536.5 |
|
Retained earnings |
|
1,140.2 |
|
|
|
1,018.8 |
|
Treasury shares, at cost, 31.8 shares at June 30, 2023 and
December 31, 2022 |
|
(887.3 |
) |
|
|
(887.3 |
) |
Accumulated other comprehensive loss |
|
(419.7 |
) |
|
|
(466.9 |
) |
Total Axalta shareholders’ equity |
|
1,644.2 |
|
|
|
1,453.5 |
|
Noncontrolling interests |
|
44.8 |
|
|
|
46.0 |
|
Total shareholders’ equity |
|
1,689.0 |
|
|
|
1,499.5 |
|
Total liabilities and shareholders’ equity |
$ |
7,043.1 |
|
|
$ |
7,059.2 |
|
|
|
|
|
|
|
|
|
AXALTA COATING SYSTEMS LTD. |
Condensed Consolidated Statements of Cash Flows (Unaudited) |
(In millions) |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
Operating activities: |
|
|
|
Net income |
$ |
121.6 |
|
|
$ |
85.0 |
|
Adjustment to reconcile net income to cash provided by (used for)
operating activities: |
|
|
|
Depreciation and amortization |
|
135.7 |
|
|
|
155.0 |
|
Amortization of deferred financing costs and original issue
discount |
|
4.3 |
|
|
|
4.8 |
|
Debt extinguishment and refinancing related costs |
|
3.0 |
|
|
|
(0.2 |
) |
Deferred income taxes |
|
0.5 |
|
|
|
2.0 |
|
Realized and unrealized foreign exchange losses, net |
|
18.8 |
|
|
|
4.9 |
|
Stock-based compensation |
|
13.6 |
|
|
|
9.0 |
|
Divestiture and impairment charges |
|
15.4 |
|
|
|
0.7 |
|
Interest income on swaps designated as net investment hedges |
|
(6.1 |
) |
|
|
(10.0 |
) |
Commercial agreement restructuring charge |
|
— |
|
|
|
25.0 |
|
Other non-cash, net |
|
1.0 |
|
|
|
(7.1 |
) |
Changes in operating assets and liabilities: |
|
|
|
Trade accounts and notes receivable |
|
(194.2 |
) |
|
|
(190.1 |
) |
Inventories |
|
69.5 |
|
|
|
(151.4 |
) |
Prepaid expenses and other assets |
|
(51.8 |
) |
|
|
(58.9 |
) |
Accounts payable |
|
(11.7 |
) |
|
|
147.5 |
|
Other accrued liabilities |
|
(39.8 |
) |
|
|
(39.4 |
) |
Other liabilities |
|
(0.6 |
) |
|
|
(8.5 |
) |
Cash provided by (used for) operating activities |
|
79.2 |
|
|
|
(31.7 |
) |
Investing activities: |
|
|
|
Purchase of property, plant and equipment |
|
(73.9 |
) |
|
|
(72.0 |
) |
Interest proceeds on swaps designated as net investment hedges |
|
6.1 |
|
|
|
10.0 |
|
Settlement proceeds on swaps designated as net investment
hedges |
|
29.4 |
|
|
|
25.0 |
|
Other investing activities, net |
|
1.4 |
|
|
|
(1.1 |
) |
Cash used for investing activities |
|
(37.0 |
) |
|
|
(38.1 |
) |
Financing activities: |
|
|
|
Proceeds from short-term borrowings |
|
8.8 |
|
|
|
— |
|
Payments on short-term borrowings |
|
(25.8 |
) |
|
|
(44.0 |
) |
Payments on long-term borrowings |
|
(156.7 |
) |
|
|
(13.7 |
) |
Financing-related costs |
|
(6.3 |
) |
|
|
(0.1 |
) |
Purchases of common stock |
|
— |
|
|
|
(200.1 |
) |
Net cash flows associated with stock-based awards |
|
8.5 |
|
|
|
(2.1 |
) |
Deferred acquisition-related consideration |
|
(7.7 |
) |
|
|
— |
|
Other financing activities, net |
|
— |
|
|
|
(0.2 |
) |
Cash used for financing activities |
|
(179.2 |
) |
|
|
(260.2 |
) |
Decrease in cash |
|
(137.0 |
) |
|
|
(330.0 |
) |
Effect of exchange rate changes on cash |
|
2.1 |
|
|
|
(11.0 |
) |
Cash at beginning of period |
|
654.9 |
|
|
|
851.2 |
|
Cash at end of period |
$ |
520.0 |
|
|
$ |
510.2 |
|
|
|
|
|
Cash at end of period reconciliation: |
|
|
|
Cash and cash equivalents |
$ |
517.6 |
|
|
$ |
500.2 |
|
Restricted cash |
|
2.4 |
|
|
|
10.0 |
|
Cash at end of period |
$ |
520.0 |
|
|
$ |
510.2 |
|
|
|
|
|
|
|
|
|
The following table reconciles income from
operations to adjusted EBIT and segment adjusted EBIT for the
periods presented (in millions):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Income from operations |
$ |
137.6 |
|
|
$ |
103.6 |
|
|
$ |
262.9 |
|
|
$ |
189.9 |
|
Other expense, net |
|
8.5 |
|
|
|
7.2 |
|
|
|
9.8 |
|
|
|
9.0 |
|
Total |
|
129.1 |
|
|
|
96.4 |
|
|
|
253.1 |
|
|
|
180.9 |
|
Debt extinguishment and refinancing-related costs (benefits)
(a) |
|
1.2 |
|
|
|
(0.2 |
) |
|
|
3.0 |
|
|
|
(0.2 |
) |
Termination benefits and other employee-related costs (b) |
|
2.3 |
|
|
|
2.7 |
|
|
|
2.1 |
|
|
|
5.1 |
|
Acquisition and divestiture-related (benefits) costs (c) |
|
(0.1 |
) |
|
|
2.2 |
|
|
|
0.4 |
|
|
|
2.6 |
|
Impairment charges (benefits) (d) |
|
8.3 |
|
|
|
(0.6 |
) |
|
|
15.4 |
|
|
|
(0.3 |
) |
Accelerated depreciation and site closure costs (e) |
|
0.8 |
|
|
|
1.8 |
|
|
|
1.9 |
|
|
|
3.1 |
|
Russia sanction-related impacts (f) |
|
0.1 |
|
|
|
0.3 |
|
|
|
(1.3 |
) |
|
|
6.1 |
|
Commercial agreement restructuring impacts (g) |
|
— |
|
|
|
25.0 |
|
|
|
— |
|
|
|
25.0 |
|
Other adjustments (h) |
|
(0.2 |
) |
|
|
(0.1 |
) |
|
|
(0.3 |
) |
|
|
0.3 |
|
Step-up depreciation and amortization (i) |
|
13.0 |
|
|
|
23.1 |
|
|
|
29.5 |
|
|
|
47.5 |
|
Adjusted EBIT |
$ |
154.5 |
|
|
$ |
150.6 |
|
|
$ |
303.8 |
|
|
$ |
270.1 |
|
|
|
|
|
|
|
|
|
Segment Adjusted EBIT: |
|
|
|
|
|
|
|
Performance Coatings |
$ |
117.8 |
|
|
$ |
125.2 |
|
|
$ |
227.1 |
|
|
$ |
219.8 |
|
Mobility Coatings |
|
23.7 |
|
|
|
2.3 |
|
|
|
47.2 |
|
|
|
2.8 |
|
Total |
|
141.5 |
|
|
|
127.5 |
|
|
|
274.3 |
|
|
|
222.6 |
|
Step-up depreciation and amortization (i) |
|
13.0 |
|
|
|
23.1 |
|
|
|
29.5 |
|
|
|
47.5 |
|
Adjusted EBIT |
$ |
154.5 |
|
|
$ |
150.6 |
|
|
$ |
303.8 |
|
|
$ |
270.1 |
|
(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 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 benefits, 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 six months ended
June 30, 2023 include $0.8 million 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 three and six months ended June 30, 2023
were $8.3 million and $15.4 million, respectively, 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 three and six months ended
June 30, 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 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. |
|
|
(g) |
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. |
|
|
(h) |
Represents costs for certain non-operational or non-cash (gains)
losses, unrelated to our core business and which we do not consider
indicative of our ongoing operating performance. |
|
|
(i) |
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. |
|
|
The following table reconciles net income to
adjusted net income for the periods presented (in millions, except
per share data):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
$ |
61.1 |
|
|
$ |
44.1 |
|
|
$ |
121.6 |
|
|
$ |
85.0 |
|
Less: Net income (loss) attributable to noncontrolling
interests |
|
0.2 |
|
|
|
— |
|
|
|
0.2 |
|
|
|
(0.6 |
) |
Net income attributable to controlling interests |
|
60.9 |
|
|
|
44.1 |
|
|
|
121.4 |
|
|
|
85.6 |
|
Debt extinguishment and refinancing-related costs (benefits)
(a) |
|
1.2 |
|
|
|
(0.2 |
) |
|
|
3.0 |
|
|
|
(0.2 |
) |
Termination benefits and other employee-related costs (b) |
|
2.2 |
|
|
|
2.7 |
|
|
|
2.0 |
|
|
|
5.1 |
|
Acquisition and divestiture-related (benefits) costs (c) |
|
(0.1 |
) |
|
|
2.2 |
|
|
|
0.4 |
|
|
|
2.6 |
|
Impairment charges (benefits) (d) |
|
8.3 |
|
|
|
(0.6 |
) |
|
|
15.4 |
|
|
|
(0.3 |
) |
Accelerated depreciation and site closure costs (e) |
|
0.8 |
|
|
|
1.8 |
|
|
|
1.9 |
|
|
|
3.1 |
|
Russia sanction-related impacts (f) |
|
— |
|
|
|
0.2 |
|
|
|
(1.4 |
) |
|
|
5.2 |
|
Commercial agreement restructuring impacts (g) |
|
— |
|
|
|
25.0 |
|
|
|
— |
|
|
|
25.0 |
|
Other adjustments (h) |
|
(0.2 |
) |
|
|
(0.1 |
) |
|
|
(0.3 |
) |
|
|
0.3 |
|
Step-up depreciation and amortization (i) |
|
13.0 |
|
|
|
23.1 |
|
|
|
29.5 |
|
|
|
47.5 |
|
Total adjustments |
|
25.2 |
|
|
|
54.1 |
|
|
|
50.5 |
|
|
|
88.3 |
|
Income tax provision impacts (j) |
|
9.2 |
|
|
|
7.9 |
|
|
|
16.5 |
|
|
|
14.5 |
|
Adjusted net income |
$ |
76.9 |
|
|
$ |
90.3 |
|
|
$ |
155.4 |
|
|
$ |
159.4 |
|
Adjusted diluted net income per share |
$ |
0.35 |
|
|
$ |
0.41 |
|
|
$ |
0.70 |
|
|
$ |
0.71 |
|
Diluted weighted average shares outstanding |
|
222.5 |
|
|
|
221.4 |
|
|
|
222.3 |
|
|
|
223.3 |
|
(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 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 benefits, 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 six months ended
June 30, 2023 include $0.8 million 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 three and six months ended June 30, 2023
were $8.3 million and $15.4 million, respectively, 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 three and six months ended
June 30, 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 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. |
|
|
(g) |
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. |
|
|
(h) |
Represents costs for certain non-operational or non-cash (gains)
losses, unrelated to our core business and which we do not consider
indicative of our ongoing operating performance. |
|
|
(i) |
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. |
|
|
(j) |
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 benefits of $3.1 million, $4.6 million, expenses of $4.3
million and $5.0 million for the three and six months ended June
30, 2023 and 2022, respectively. The tax adjustments for the three
and six months ended June 30, 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. |
|
|
The following table reconciles cash (used for)
provided by operating activities to free cash flow for the periods
presented (in millions):
|
Three Months Ended March 31, |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Cash (used for) provided by operating activities |
$ |
(51.8 |
) |
|
$ |
(43.9 |
) |
|
$ |
131.0 |
|
|
$ |
12.2 |
|
|
$ |
79.2 |
|
|
$ |
(31.7 |
) |
Purchase of property, plant and equipment |
|
(41.4 |
) |
|
|
(42.5 |
) |
|
|
(32.5 |
) |
|
|
(29.5 |
) |
|
|
(73.9 |
) |
|
|
(72.0 |
) |
Interest proceeds on swaps designated as net investment hedges |
|
5.6 |
|
|
|
6.2 |
|
|
|
0.5 |
|
|
|
3.8 |
|
|
|
6.1 |
|
|
|
10.0 |
|
Free cash flow |
$ |
(87.6 |
) |
|
$ |
(80.2 |
) |
|
$ |
99.0 |
|
|
$ |
(13.5 |
) |
|
$ |
11.4 |
|
|
$ |
(93.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles net income to EBITDA
and adjusted EBITDA for the periods presented (in millions):
|
Three Months Ended June 30, |
|
|
Twelve Months Ended |
|
|
Six Months Ended June 30, |
|
|
Year Ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
June 30, 2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
Net income |
$ |
61.1 |
|
|
$ |
44.1 |
|
|
$ |
228.8 |
|
|
$ |
121.6 |
|
|
$ |
85.0 |
|
|
$ |
192.2 |
|
Interest expense, net |
|
54.6 |
|
|
|
33.5 |
|
|
|
176.5 |
|
|
|
102.8 |
|
|
|
66.1 |
|
|
|
139.8 |
|
Provision for income taxes |
|
13.4 |
|
|
|
18.8 |
|
|
|
64.0 |
|
|
|
28.7 |
|
|
|
29.8 |
|
|
|
65.1 |
|
Depreciation and amortization |
|
66.2 |
|
|
|
77.3 |
|
|
|
283.8 |
|
|
|
135.7 |
|
|
|
155.0 |
|
|
|
303.1 |
|
EBITDA |
|
195.3 |
|
|
|
173.7 |
|
|
|
753.1 |
|
|
|
388.8 |
|
|
|
335.9 |
|
|
|
700.2 |
|
Debt extinguishment and refinancing-related costs (benefits)
(a) |
|
1.2 |
|
|
|
(0.2 |
) |
|
|
17.9 |
|
|
|
3.0 |
|
|
|
(0.2 |
) |
|
|
14.7 |
|
Termination benefits and other employee-related costs (benefits)
(b) |
|
2.3 |
|
|
|
2.7 |
|
|
|
21.9 |
|
|
|
2.1 |
|
|
|
4.6 |
|
|
|
24.4 |
|
Acquisition and divestiture-related (benefits) costs (c) |
|
(0.1 |
) |
|
|
2.2 |
|
|
|
0.7 |
|
|
|
0.4 |
|
|
|
2.6 |
|
|
|
2.9 |
|
Impairment charges (benefits) (d) |
|
8.3 |
|
|
|
(0.6 |
) |
|
|
15.3 |
|
|
|
15.4 |
|
|
|
(0.3 |
) |
|
|
(0.4 |
) |
Site closure costs (e) |
|
0.8 |
|
|
|
1.1 |
|
|
|
2.5 |
|
|
|
1.9 |
|
|
|
1.7 |
|
|
|
2.3 |
|
Foreign exchange remeasurement losses (f) |
|
9.6 |
|
|
|
4.9 |
|
|
|
19.6 |
|
|
|
11.9 |
|
|
|
7.5 |
|
|
|
15.2 |
|
Long-term employee benefit plan adjustments (g) |
|
2.3 |
|
|
|
0.1 |
|
|
|
4.0 |
|
|
|
4.5 |
|
|
|
0.2 |
|
|
|
(0.3 |
) |
Stock-based compensation (h) |
|
7.3 |
|
|
|
3.7 |
|
|
|
26.8 |
|
|
|
13.6 |
|
|
|
9.0 |
|
|
|
22.2 |
|
Russia sanction-related impacts (i) |
|
0.1 |
|
|
|
0.3 |
|
|
|
(2.4 |
) |
|
|
(1.3 |
) |
|
|
6.1 |
|
|
|
5.0 |
|
Commercial agreement restructuring impacts (j) |
|
— |
|
|
|
25.0 |
|
|
|
— |
|
|
|
— |
|
|
|
25.0 |
|
|
|
25.0 |
|
Other adjustments (k) |
|
(0.2 |
) |
|
|
(0.2 |
) |
|
|
(0.9 |
) |
|
|
(0.3 |
) |
|
|
0.2 |
|
|
|
(0.4 |
) |
Adjusted EBITDA |
$ |
226.9 |
|
|
$ |
212.7 |
|
|
$ |
858.5 |
|
|
$ |
440.0 |
|
|
$ |
392.3 |
|
|
$ |
810.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA to interest expense coverage ratio |
|
|
|
|
4.9 x |
|
|
|
|
|
|
(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 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 benefits, 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 six months ended
June 30, 2023 and year ended December 31, 2022 include
$0.8 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 three and six months ended June 30, 2023
were $8.3 million and $15.4 million, respectively, 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 three and six months ended
June 30, 2022 and 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) |
Eliminates 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) |
Eliminates 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 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. |
|
|
(j) |
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. |
|
|
(k) |
Represents costs for certain non-operational or non-cash (gains)
losses, unrelated to our core business and which we do not consider
indicative of our ongoing operating performance. |
|
|
Investor ContactChristopher EvansD +1 484 724
4099Christopher.Evans@axalta.com
Media ContactRobert DonohoeD +1
267-756-3803Robert.Donohoe@axalta.com
Axalta Coating Systems (NYSE:AXTA)
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