Axalta Coating Systems Ltd. (NYSE:AXTA) (“Axalta”), a leading
global coatings company, announced its financial results for the
fourth quarter and full year ended December 31, 2023.
Fourth Quarter 2023 Highlights
- Net
sales increased 4.9% year-over-year to $1.3 billion
- Net
income increased $30 million year-over-year to $74 million and
Adjusted EBITDA increased $43 million year-over-year to $251
million
-
Adjusted EBITDA margin improved 250 basis points
year-over-year
-
Cash provided by operating activities of $286 million and Free Cash
Flow of $254 million
-
Paid down $55 million of principal on term loan and refinanced
2025 senior notes extending maturity to 2031
- Net
Leverage Ratio of 2.9x, lowest in company history at year-end
Fourth Quarter 2023 Consolidated Financial
Results
Fourth quarter 2023 net sales increased 4.9%
year-over-year to $1.3 billion. The increase in net sales was
driven by a 2.3% foreign exchange benefit, 1.7% improvement in
volumes, and 0.9% price-mix growth.
Net income increased 68% year-over-year to $74
million versus $44 million in the prior-year period. The increase
in net income was driven by significant earnings improvement in
both segments. Net income benefited from pricing actions executed
throughout the year, positive mix impacts and variable cost
deflation, partially offset by higher productivity investments and
higher variable labor expense. Adjusted EBITDA improved to $251
million compared to $208 million in the fourth quarter of 2022.
Adjusted EBITDA margin of 19.3% improved by 250 basis points
compared to the prior-year period. Diluted earnings per share of
$0.33 compared to $0.20 in the prior-year period, while adjusted
diluted earnings per share improved by 13% to $0.43 compared to
$0.38 in the same period last year in spite of a higher effective
tax rate and interest expense.
Fourth quarter 2023 cash provided by operating
activities was $286 million versus $246 million in the prior-year
period with free cash flow totaling $254 million compared to $206
million in the same period last year. The year-over-year increases
were driven primarily by working capital benefits.
Cash and cash equivalents at year end were $700
million and total liquidity was $1.2 billion. The net debt to
trailing twelve month (“LTM”) Adjusted EBITDA ratio (total net
leverage ratio) was 2.9x at quarter-end versus 3.8x as of December
31, 2022. In the quarter, an additional $55 million of term
loan principal was paid down, contributing to the $200 million of
gross debt reduction for full year 2023.
Discussion of Segment Results
Performance Coatings fourth quarter 2023 net sales
were $849 million, up 3.7% from the prior-year period driven by
strong price-mix in both end-markets. Refinish volumes were up
modestly year-over-year against a stable market environment.
Industrial volumes were lower year-over-year as stable volumes in
Europe were more than offset by soft macroeconomic conditions in
North America, particularly in construction markets.
The Performance Coatings segment generated Adjusted
EBITDA of $192 million in the fourth quarter compared to $169
million in the prior-year period, with associated margins of 22.6%
and 20.6%, respectively. The increases in segment Adjusted EBITDA
and Adjusted EBITDA margin were driven by better price-mix and
variable cost deflation, which more than offset higher labor
expenses and lower Industrial volumes.
Mobility Coatings fourth quarter 2023 net sales
were $449 million, up 7.3% from the prior-year period. Growth
was driven predominantly by strong volumes with improvement in all
regions. Price-mix was lower year-over-year from lower mix plus an
unfavorable comparison given a one-time pricing benefit recorded in
the prior-year period. Light Vehicle volume growth exceeded global
auto production, especially in China. North America Commercial
Vehicle class 8 production was down 7% year-over-year.
The Mobility Coatings segment generated Adjusted
EBITDA of $59 million in the fourth quarter compared to $39 million
in the prior-year period, with associated margins of 13.2% and
9.4%, respectively. The increases in segment Adjusted EBITDA and
Adjusted EBITDA margin were driven by improved volumes and raw
material deflation.
Fiscal Year 2023 Consolidated Financial
Results
Full year 2023 net sales increased 6.1%
year-over-year (5.6% excluding foreign currency translation) to
$5.2 billion. Net income totaled $269 million versus $192 million
in 2022. The increase in net income was driven by strong price-mix
growth and variable cost deflation offset partially by higher labor
expense, costs related to productivity investments plus increased
interest and tax expenses. Adjusted EBITDA improved to $951 million
from $811 million in fiscal year 2022. Adjusted EBITDA margin of
18.4% improved by 180 basis points year-over-year with solid
contributions from both segments. Diluted earnings per share of
$1.21 compared to $0.86 in 2022, while adjusted diluted earnings
per share for 2023 improved by 6% to $1.57 compared to $1.48.
Fiscal year 2023 cash provided by operating
activities was $575 million versus $294 million in the prior year
driven primarily by working capital benefits and improved earnings.
Free cash flow totaled $447 million compared to $163 million in
2022, an increase of $284 million. On October 2, 2023, we completed
the acquisition of Andrè Koch AG and the results of the business
are reported within Axalta's Performance Coatings segment.
“We finished the year out strong and intend to
build on this momentum in 2024,” said Chris Villavarayan, Axalta’s
CEO and President. “2023 was a transformative year. We took
decisive action to fully offset lingering inflationary headwinds
and as a result achieved record sales and Adjusted EBITDA. We
believe we are only just beginning to unlock the potential of this
enterprise.”
Reporting Changes
Beginning with the fourth quarter 2023, we replaced
Adjusted EBIT with Adjusted EBITDA as one of the primary
performance metrics, with Adjusted Diluted EPS remaining as the
other primary performance metric. Reconciliations are provided for
Adjusted EBITDA and Adjusted Diluted EPS as well as Adjusted EBIT
to the most directly comparable financial measures calculated in
accordance with US GAAP. In addition, Axalta replaced Adjusted EBIT
with Adjusted EBITDA as the primary measure of segment operating
performance. More information can be found below in the section
titled “Segment Financial Measures.”
Financial Guidance
First Quarter 2024 Outlook:
- Net
Sales: Flat Year-Over-Year
-
Adjusted EBITDA: ~$240 million
-
Adjusted Diluted EPS: ~$0.40
Full Year 2024 Outlook:
(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 |
LSD = low-single-digit
Axalta does not provide a reconciliation for
non-GAAP estimates for Adjusted EBITDA, Adjusted Diluted EPS, Free
Cash Flow, and tax rate, as adjusted, 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 fourth quarter and full year 2023
financial results on February 8, 2024 at 8:00 a.m. ET. The dial-in
phone number for the conference call is +1-201-689-8560. A live
webcast of the conference call will also be available online at
www.axalta.com/investorcall. For those unable to participate, a
replay will be available through February 15, 2024, with a dial-in
number of +1-412-317-6671 and pin: 13743605.
Public Dissemination of Certain
Information
We 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 and/or guidance, which
includes net sales growth, Adjusted EBITDA, Adjusted Diluted EPS,
Free Cash Flow, depreciation and amortization (“D&A”), step-up
D&A, tax rate, as adjusted, diluted shares outstanding,
interest expense and capital expenditures. Axalta has identified
some of these forward-looking statements with words such as
“intend,” “potential,” “believe,” “guidance,” “outlook,” and
“projection,” 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. Final results for the full
year, which will be reported in our Annual Report on Form 10-K for
the year ended December 31, 2023, may vary from the information in
this release. In particular, until our financial statements are
issued in our Annual Report on Form 10-K, we may be required to
recognize certain subsequent events (such as in connection with
contingencies or the realization of assets) which could affect our
final results.
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 Adjusted EBIT, Adjusted EBITDA,
Adjusted EBITDA margin, Free Cash Flow, total net leverage ratio,
adjusted net income and Adjusted Diluted EPS. 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 common shareholders 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 Adjusted EBIT, Adjusted EBITDA, Adjusted
EBITDA margin, Free Cash Flow, total net leverage ratio, adjusted
net income and Adjusted Diluted EPS may differ from that of others
in our industry. Adjusted EBIT, Adjusted EBITDA, Adjusted EBITDA
margin, Free Cash Flow, total net leverage ratio, adjusted net
income and Adjusted Diluted EPS 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 operating cash
flows or as measures of liquidity. Adjusted EBIT, Adjusted EBITDA,
Adjusted EBITDA margin, Free Cash Flow, total net leverage ratio,
adjusted net income and Adjusted Diluted EPS 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 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.
Segment Financial Measures
The primary measure of segment operating
performance is Adjusted EBITDA, 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 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 |
|
|
|
|
|
|
|
|
|
The following table reconciles net income to EBITDA
and Adjusted EBITDA for the periods presented (in millions):
|
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. |
|
|
The following table reconciles net income to
adjusted net income for the periods presented (in millions, except
per share data):
|
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. |
|
|
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, |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles income from
operations to adjusted EBIT and segment adjusted EBIT for the
periods presented (in millions):
|
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. |
|
|
The following table reconciles net income to EBITDA
and Adjusted EBITDA for the periods presented (in millions):
|
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. |
Investor ContactChristopher EvansD +1 484 724
4099Christopher.Evans@axalta.com |
Media ContactRobert DonohoeD +1
267-756-3803Robert.Donohoe@axalta.com |
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