Axalta Releases Second Quarter 2024 Results
Axalta Coating Systems (NYSE: AXTA) reported strong Q2 2024 financial results, with record-breaking performance in key metrics. Net sales increased 4.4% year-over-year to $1.35 billion, while net income rose by $52 million to $113 million. The company achieved a quarterly record Adjusted EBITDA of $291 million, up from $227 million in the prior year, with margin expanding 400 basis points to 21.5%.
Diluted EPS increased 89% to $0.51, and Adjusted Diluted EPS improved 63% to $0.57. Axalta's net leverage ratio decreased to 2.6x from 3.6x a year ago. The company repurchased $50 million of common shares and increased its full-year 2024 earnings and free cash flow outlook. Both Performance Coatings and Mobility Coatings segments showed growth in net sales and Adjusted EBITDA.
Axalta Coating Systems (NYSE: AXTA) ha riportato risultati finanziari solidi per il Q2 2024, con prestazioni da record in metriche chiave. Le vendite nette sono aumentate del 4,4% anno su anno, raggiungendo 1,35 miliardi di dollari, mentre l'utile netto è salito di 52 milioni di dollari a 113 milioni di dollari. L'azienda ha raggiunto un record trimestrale di EBITDA rettificato di 291 milioni di dollari, rispetto ai 227 milioni dell'anno precedente, con un margine in aumento di 400 punti base al 21,5%.
Il EPS diluito è aumentato dell'89% a 0,51 dollari, e l'Adjusted Diluted EPS è migliorato del 63% a 0,57 dollari. Il rapporto di leva netta di Axalta è sceso a 2,6 volte rispetto a 3,6 volte di un anno fa. L'azienda ha riacquistato azioni comuni per 50 milioni di dollari e ha aumentato le previsioni per l'intero anno 2024 riguardo agli utili e al flusso di cassa libero. Entrambi i segmenti Performance Coatings e Mobility Coatings hanno mostrato una crescita nelle vendite nette e nell'Adjusted EBITDA.
Axalta Coating Systems (NYSE: AXTA) informó resultados financieros sólidos para el Q2 2024, con un desempeño récord en métricas clave. Las ventas netas aumentaron un 4.4% interanual, alcanzando 1.35 mil millones de dólares, mientras que el ingreso neto creció en 52 millones de dólares, alcanzando 113 millones de dólares. La empresa logró un récord trimestral de EBITDA ajustado de 291 millones de dólares, en comparación con 227 millones el año anterior, con un margen que se expandió en 400 puntos básicos hasta el 21.5%.
El EPS diluido aumentó un 89% a 0.51 dólares, y el Adjusted Diluted EPS mejoró un 63% a 0.57 dólares. La proporción de deuda neta de Axalta disminuyó a 2.6 veces desde 3.6 veces hace un año. La empresa recompró acciones comunes por 50 millones de dólares y aumentó su perspectiva de ganancias y flujo de caja libre para todo el año 2024. Ambos segmentos, Performance Coatings y Mobility Coatings, mostraron crecimiento en ventas netas y EBITDA ajustado.
Axalta Coating Systems (NYSE: AXTA)는 2024년 2분기 강력한 재무 결과를 보고하며 주요 지표에서 기록적인 성과를 달성하였습니다. 순매출은 지난해 대비 4.4% 증가하여 13억 5천만 달러에 달했으며, 순이익은 5,200만 달러 증가하여 1억 1,300만 달러에 이르렀습니다. 이 회사는 291백만 달러의 조정 EBITDA로 분기별 기록을 달성하였으며, 이는 작년의 2억 2,700만 달러에서 증가한 수치이며, 마진은 400 베이시스 포인트 증가하여 21.5%에 도달했습니다.
희석 주당순이익은 89% 증가하여 0.51달러에 도달하였고, 조정 희석 주당순이익은 63% 향상되어 0.57달러로 나타났습니다. Axalta의 순부채 비율은 1년 전 3.6배에서 2.6배로 감소했습니다. 이 회사는 5천만 달러 상당의 보통주를 재매입하였으며, 2024년 전체 연도에 대한 수익과 자유 현금 흐름 전망을 상향 조정했습니다. 성능 코팅 및 이동 수단 코팅 부문 모두 순매출 및 조정 EBITDA에서 성장을 보여주었습니다.
Axalta Coating Systems (NYSE: AXTA) a annoncé de solides résultats financiers pour le 2T 2024, avec des performances record dans des indicateurs clés. Les ventes nettes ont augmenté de 4,4% par rapport à l'année précédente, atteignant 1,35 milliard de dollars, tandis que le bénéfice net a augmenté de 52 millions de dollars pour atteindre 113 millions de dollars. L'entreprise a atteint un record trimestriel de 291 millions de dollars d'EBITDA ajusté, en hausse par rapport à 227 millions de dollars l'année précédente, avec une marge qui s'est élargie de 400 points de base à 21,5%.
Le BPA dilué a augmenté de 89% pour atteindre 0,51 dollar, et le BPA dilué ajusté a progressé de 63% pour s'élever à 0,57 dollar. Le ratio d'endettement net d'Axalta est tombé à 2,6 fois contre 3,6 fois l'année précédente. L'entreprise a racheté 50 millions de dollars d'actions ordinaires et a relevé ses prévisions de bénéfices et de flux de trésorerie libre pour l'année 2024 dans son ensemble. Les segments Performance Coatings et Mobility Coatings ont tous deux affiché une croissance des ventes nettes et de l'EBITDA ajusté.
Axalta Coating Systems (NYSE: AXTA) hat starke Finanzergebnisse für Q2 2024 berichtet, mit rekordverdächtiger Leistung in wichtigen Kennzahlen. Der Nettoumsatz stieg im Jahresvergleich um 4,4% auf 1,35 Milliarden Dollar, während der Nettogewinn um 52 Millionen Dollar auf 113 Millionen Dollar anstieg. Das Unternehmen erzielte einen quartalsmäßigen Rekord von 291 Millionen Dollar bei bereinigtem EBITDA, ein Anstieg von 227 Millionen Dollar im Vorjahr, wobei die Marge um 400 Basispunkte auf 21,5% erweiterte.
Der verwässerte EPS stieg um 89% auf 0,51 Dollar, und der bereinigte verwässerte EPS verbesserte sich um 63% auf 0,57 Dollar. Das Nettoverschuldungsverhältnis von Axalta sank auf 2,6x von 3,6x vor einem Jahr. Das Unternehmen hat Aktien im Wert von 50 Millionen Dollar zurückgekauft und die Prognosen für die Gewinne und den freien Cashflow für das gesamte Jahr 2024 angehoben. Sowohl der Performance Coatings als auch der Mobility Coatings Sektor zeigten Wachstum bei den Nettoumsätzen und dem bereinigten EBITDA.
- Record quarterly net sales of $1.35 billion, up 4.4% year-over-year
- Adjusted EBITDA increased by $64 million to a record $291 million
- Adjusted EBITDA margin improved 400 basis points to 21.5%
- Diluted EPS increased 89% to $0.51
- Net leverage ratio improved to 2.6x from 3.6x year-over-year
- Repurchased $50 million of common shares
- Increased full-year 2024 earnings and free cash flow outlook
- Cash provided by operating activities decreased to $114 million from $131 million in the prior year period
Insights
Axalta's Q2 2024 results demonstrate robust financial performance, marking significant improvements across key metrics. The 4.4% year-over-year increase in net sales to
The company's profitability has seen remarkable enhancement, with Adjusted EBITDA climbing by
Axalta's balance sheet appears healthy, with cash and cash equivalents of
Looking ahead, Axalta's increased full-year 2024 guidance for Adjusted EBITDA, Adjusted Diluted EPS and Free Cash Flow signals management's optimism about continued strong performance. The projected Free Cash Flow of
However, investors should note the
Axalta's Q2 2024 results reveal significant market traction across its business segments. In the Performance Coatings segment, Refinish net sales grew by
The Industrial segment's
In the Mobility Coatings segment, Light Vehicle net sales improved by
The Mobility Coatings segment's Adjusted EBITDA margin improvement from
Axalta's ability to maintain flat price-mix in Mobility Coatings, despite contractual raw material pass-through impacts, demonstrates strong customer relationships and value proposition. The company's global presence and diversified end-markets provide resilience against regional economic fluctuations.
The recently announced CoverFlexx acquisition and the outlined three-year plan for accelerating performance indicate a proactive approach to market expansion and long-term growth. These strategic moves, coupled with strong Q2 performance across segments, position Axalta favorably in the global coatings market landscape.
PHILADELPHIA, Aug. 01, 2024 (GLOBE NEWSWIRE) -- Axalta Coating Systems Ltd. (NYSE: AXTA) (“Axalta”), a leading global coatings company, announced its financial results for the second quarter ended June 30, 2024.
Second Quarter 2024 Highlights:
- Net sales increased
4.4% year over year to$1.35 billion - Net income increased
$52 million year over year to$113 million - Adjusted EBITDA increased
$64 million year over year to$291 million with Adjusted EBITDA margin improving 400 basis points year over year to21.5% - Diluted EPS increased
89% year over year to$0.51 and Adjusted Diluted EPS increased63% year over year to$0.57 - Net leverage ratio of 2.6x
- Repurchased
$50 million of common shares - Increased full year 2024 earnings and free cash flow outlook
- Hosted Strategy Day outlining three-year plan for accelerating performance
Second Quarter 2024 Consolidated Financial Results
Second quarter 2024 net sales increased
Net income increased by
Second quarter 2024 cash provided by operating activities was
Discussion of Segment Results
Performance Coatings second quarter 2024 net sales were
Performance Coatings generated second quarter Adjusted EBITDA of
Mobility Coatings second quarter 2024 net sales were
The Mobility Coatings segment generated Adjusted EBITDA of
“Axalta continues to execute exceptionally well," said Chris Villavarayan, CEO and President of Axalta. "I am proud of our global team's dedication and effort in achieving the highest quarterly net sales and Adjusted EBITDA in the company's history. As One Axalta, we remain committed to driving accelerated performance and unlocking the robust earnings potential of our business. With the solid second quarter performance and better visibility into the second half of the year, we are raising our full year 2024 Adjusted EBITDA, Adjusted Diluted EPS and Free Cash Flow guidance.”
Third Quarter and Full Year 2024 Outlook
| (in millions, except %’s and per share data) | Projection (includes CoverFlexx) | ||
| Item | Q3 2024 | FY 2024 | |
| Net Sales YoY% | Flat to +LSD% | +LSD% | |
| Adjusted EBITDA | ~ | ~ | |
| Adjusted Diluted EPS | ~ | ~ | |
| Free Cash Flow | |||
| D&A (step-up D&A) | ~ | ||
| Tax Rate, As Adjusted | ~ | ||
| Diluted Shares Outstanding | ~221 | ||
| Interest Expense | ~ | ||
| Capex | ~ | ||
LSD = low single digit
Axalta does not provide a reconciliation for non-GAAP estimates for Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow or 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
Axalta will hold a conference call to discuss its second quarter 2024 financial results on Thursday, August 1, 2024 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 1, 2025. The dial-in phone number for the conference call is 1-800-343-5172 and the conference ID is AXALTA. For those unable to participate, a replay will be available through August 8, 2024. The replay dial-in number is +1-844-512-2921. The replay passcode is 11156504.
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, statements regarding our previously-announced three-year 2024-2026 strategy (the “2026 A Plan”), our acquisition of CoverFlexx, and 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 “outlook,” “projection,” “plan,” “committed,” “estimates,” “potential,” and “guidance,” 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 risks related to the execution of, and assumptions underlying, our previously-announced transformation initiative and the 2026 A Plan, as well as the acquisition of CoverFlexx, 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 U.S. Securities and Exchange Commission. 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 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.
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. Beginning with the fourth quarter of 2023, we replaced Adjusted EBIT with Adjusted EBITDA as the primary measure of segment operating performance. As previously disclosed, we will continue publishing segment Adjusted EBIT through 2024 to allow for historical trend analyses.
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 X.
| 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, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net sales | $ | 1,351 | $ | 1,294 | $ | 2,645 | $ | 2,578 | ||||||||
| Cost of goods sold | 891 | 904 | 1,756 | 1,806 | ||||||||||||
| Selling, general and administrative expenses | 213 | 210 | 420 | 416 | ||||||||||||
| Other operating charges | 2 | 2 | 63 | 9 | ||||||||||||
| Research and development expenses | 18 | 19 | 36 | 38 | ||||||||||||
| Amortization of acquired intangibles | 22 | 21 | 44 | 46 | ||||||||||||
| Income from operations | 205 | 138 | 326 | 263 | ||||||||||||
| Interest expense, net | 50 | 55 | 104 | 103 | ||||||||||||
| Other (income) expense, net | (1 | ) | 9 | 7 | 10 | |||||||||||
| Income before income taxes | 156 | 74 | 215 | 150 | ||||||||||||
| Provision for income taxes | 43 | 13 | 63 | 28 | ||||||||||||
| Net income | 113 | 61 | 152 | 122 | ||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | 1 | — | (1 | ) | — | |||||||||||
| Net income attributable to common shareholders | $ | 112 | $ | 61 | $ | 153 | $ | 122 | ||||||||
| Basic net income per share | $ | 0.51 | $ | 0.27 | $ | 0.70 | $ | 0.55 | ||||||||
| Diluted net income per share | $ | 0.51 | $ | 0.27 | $ | 0.69 | $ | 0.55 | ||||||||
| Basic weighted average shares outstanding | 219.9 | 221.6 | 220.2 | 221.4 | ||||||||||||
| Diluted weighted average shares outstanding | 220.9 | 222.5 | 221.2 | 222.3 | ||||||||||||
| AXALTA COATING SYSTEMS LTD. | ||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
| (In millions, except per share data) | ||||||||
| June 30, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 840 | $ | 700 | ||||
| Restricted cash | 3 | 3 | ||||||
| Accounts and notes receivable, net | 1,268 | 1,260 | ||||||
| Inventories | 745 | 741 | ||||||
| Prepaid expenses and other current assets | 158 | 117 | ||||||
| Total current assets | 3,014 | 2,821 | ||||||
| Property, plant and equipment, net | 1,158 | 1,204 | ||||||
| Goodwill | 1,549 | 1,591 | ||||||
| Identifiable intangibles, net | 1,061 | 1,130 | ||||||
| Other assets | 524 | 526 | ||||||
| Total assets | $ | 7,306 | $ | 7,272 | ||||
| Liabilities, Shareholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 715 | $ | 725 | ||||
| Current portion of borrowings | 20 | 26 | ||||||
| Other accrued liabilities | 600 | 677 | ||||||
| Total current liabilities | 1,335 | 1,428 | ||||||
| Long-term borrowings | 3,588 | 3,478 | ||||||
| Accrued pensions | 236 | 252 | ||||||
| Deferred income taxes | 152 | 162 | ||||||
| Other liabilities | 177 | 179 | ||||||
| Total liabilities | 5,488 | 5,499 | ||||||
| Shareholders’ equity: | ||||||||
| Common shares, | 254 | 254 | ||||||
| Capital in excess of par | 1,584 | 1,568 | ||||||
| Retained earnings | 1,439 | 1,286 | ||||||
| Treasury shares, at cost, 35.0 and 33.6 shares at June 30, 2024 and December 31, 2023, respectively | (987 | ) | (937 | ) | ||||
| Accumulated other comprehensive loss | (517 | ) | (444 | ) | ||||
| Total Axalta shareholders’ equity | 1,773 | 1,727 | ||||||
| Noncontrolling interests | 45 | 46 | ||||||
| Total shareholders’ equity | 1,818 | 1,773 | ||||||
| Total liabilities and shareholders’ equity | $ | 7,306 | $ | 7,272 | ||||
| AXALTA COATING SYSTEMS LTD. | ||||||||
| Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| (In millions) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 152 | $ | 122 | ||||
| Adjustment to reconcile net income to cash provided by operating activities: | ||||||||
| Depreciation and amortization | 136 | 136 | ||||||
| Amortization of deferred financing costs and original issue discount | 4 | 4 | ||||||
| Debt extinguishment and refinancing-related costs | 3 | 3 | ||||||
| Deferred income taxes | 8 | 1 | ||||||
| Realized and unrealized foreign exchange losses, net | 12 | 19 | ||||||
| Stock-based compensation | 14 | 14 | ||||||
| Impairment charges | — | 15 | ||||||
| Interest income on swaps designated as net investment hedges | (7 | ) | (6 | ) | ||||
| Other non-cash, net | 5 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade accounts and notes receivable | (35 | ) | (194 | ) | ||||
| Inventories | (22 | ) | 70 | |||||
| Prepaid expenses and other assets | (91 | ) | (52 | ) | ||||
| Accounts payable | 7 | (12 | ) | |||||
| Other accrued liabilities | (62 | ) | (40 | ) | ||||
| Other liabilities | 24 | (1 | ) | |||||
| Cash provided by operating activities | 148 | 79 | ||||||
| Investing activities: | ||||||||
| Purchase of property, plant and equipment | (45 | ) | (74 | ) | ||||
| Interest proceeds on swaps designated as net investment hedges | 7 | 6 | ||||||
| Settlement proceeds on swaps designated as net investment hedges | — | 29 | ||||||
| Other investing activities, net | 2 | 2 | ||||||
| Cash used for investing activities | (36 | ) | (37 | ) | ||||
| Financing activities: | ||||||||
| Proceeds from short-term borrowings | — | 9 | ||||||
| Proceeds from long-term borrowings | 292 | — | ||||||
| Payments on short-term borrowings | (5 | ) | (26 | ) | ||||
| Payments on long-term borrowings | (188 | ) | (157 | ) | ||||
| Financing-related costs | (4 | ) | (6 | ) | ||||
| Purchases of common stock | (50 | ) | — | |||||
| Net cash flows associated with stock-based awards | 2 | 9 | ||||||
| Deferred acquisition-related consideration | — | (8 | ) | |||||
| Other financing activities, net | 1 | — | ||||||
| Cash provided by (used for) financing activities | 48 | (179 | ) | |||||
| Increase (decrease) in cash | 160 | (137 | ) | |||||
| Effect of exchange rate changes on cash | (20 | ) | 2 | |||||
| Cash at beginning of period | 703 | 655 | ||||||
| Cash at end of period | $ | 843 | $ | 520 | ||||
| Cash at end of period reconciliation: | ||||||||
| Cash and cash equivalents | $ | 840 | $ | 518 | ||||
| Restricted cash | 3 | 2 | ||||||
| Cash at end of period | $ | 843 | $ | 520 | ||||
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 June 30, 2024 | Six Months Ended June 30, | Year Ended December 31, 2023 | |||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||
| Net income | $ | 113 | $ | 61 | $ | 299 | $ | 152 | $ | 122 | $ | 269 | ||||||||||||
| Interest expense, net | 50 | 55 | 214 | 104 | 103 | 213 | ||||||||||||||||||
| Provision for income taxes | 43 | 13 | 121 | 63 | 28 | 86 | ||||||||||||||||||
| Depreciation and amortization | 68 | 66 | 276 | 136 | 136 | 276 | ||||||||||||||||||
| EBITDA | 274 | 195 | 910 | 455 | 389 | 844 | ||||||||||||||||||
| Debt extinguishment and refinancing-related costs (a) | — | 1 | 10 | 3 | 3 | 10 | ||||||||||||||||||
| Termination benefits and other employee-related costs (b) | 1 | 2 | 72 | 56 | 2 | 18 | ||||||||||||||||||
| Acquisition and divestiture-related costs (c) | 2 | (1 | ) | 7 | 4 | — | 3 | |||||||||||||||||
| Site closure costs (d) | — | 1 | 6 | 1 | 2 | 7 | ||||||||||||||||||
| Impairment charges (e) | — | 8 | — | — | 15 | 15 | ||||||||||||||||||
| Foreign exchange remeasurement losses (f) | 3 | 10 | 19 | 8 | 12 | 23 | ||||||||||||||||||
| Long-term employee benefit plan adjustments (g) | 2 | 2 | 10 | 5 | 4 | 9 | ||||||||||||||||||
| Stock-based compensation (h) | 8 | 8 | 26 | 14 | 14 | 26 | ||||||||||||||||||
| Environmental charge (i) | — | — | 4 | 4 | — | — | ||||||||||||||||||
| Other adjustments (j) | 1 | 1 | (3 | ) | — | (1 | ) | (4 | ) | |||||||||||||||
| Adjusted EBITDA | $ | 291 | $ | 227 | $ | 1,061 | $ | 550 | $ | 440 | $ | 951 | ||||||||||||
| Net sales | $ | 1,351 | $ | 1,294 | $ | 5,251 | $ | 2,645 | $ | 2,578 | $ | 5,184 | ||||||||||||
| Net income margin | 8.4 | % | 4.7 | % | 5.7 | % | 5.7 | % | 4.7 | % | 5.2 | % | ||||||||||||
| Adjusted EBITDA margin | 21.5 | % | 17.5 | % | 20.2 | % | 20.8 | % | 17.1 | % | 18.4 | % | ||||||||||||
| Segment Adjusted EBITDA: | ||||||||||||||||||||||||
| Performance Coatings | $ | 223 | $ | 181 | $ | 811 | $ | 419 | $ | 350 | $ | 742 | ||||||||||||
| Mobility Coatings | 68 | 46 | 250 | 131 | 90 | 209 | ||||||||||||||||||
| Total | $ | 291 | $ | 227 | $ | 1,061 | $ | 550 | $ | 440 | $ | 951 | ||||||||||||
| (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. |
| (d) | Represents costs related to the closure of certain manufacturing sites, which we do not consider indicative of our ongoing operating performance. |
| (e) | Represents impairment charges, 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. |
| (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 costs related to certain environmental remediation activities, which are not considered indicative of our ongoing operating performance. |
| (j) | 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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income | $ | 113 | $ | 61 | $ | 152 | $ | 122 | ||||||||
| Less: Net income (loss) attributable to noncontrolling interests | 1 | — | (1 | ) | — | |||||||||||
| Net income attributable to common shareholders | 112 | 61 | 153 | 122 | ||||||||||||
| Debt extinguishment and refinancing-related costs (a) | — | 1 | 3 | 3 | ||||||||||||
| Termination benefits and other employee-related costs (b) | 1 | 2 | 56 | 2 | ||||||||||||
| Acquisition and divestiture-related costs (c) | 2 | (1 | ) | 4 | — | |||||||||||
| Impairment charges (d) | — | 8 | — | 15 | ||||||||||||
| Environmental charge (e) | — | — | 4 | — | ||||||||||||
| Other adjustments (f) | 1 | 2 | 2 | — | ||||||||||||
| Step-up depreciation and amortization (g) | 13 | 13 | 25 | 30 | ||||||||||||
| Total adjustments | 17 | 25 | 94 | 50 | ||||||||||||
| Income tax provision impacts (h) | 2 | 9 | 14 | 17 | ||||||||||||
| Adjusted net income | $ | 127 | $ | 77 | $ | 233 | $ | 155 | ||||||||
| Adjusted diluted net income per share | $ | 0.57 | $ | 0.35 | $ | 1.05 | $ | 0.70 | ||||||||
| Diluted weighted average shares outstanding | 220.9 | 222.5 | 221.2 | 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. |
| (d) | Represents impairment charges, which are not considered indicative of our ongoing operating performance. The losses recorded during the three and six months ended June 30, 2023 were 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. |
| (e) | Represents costs related to environmental remediation activities, which are not considered indicative of our ongoing operating performance. |
| (f) | Represents certain non-operational or non-cash losses, unrelated to our core business and which we do not consider indicative of our ongoing operating performance. |
| (g) | 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. |
| (h) | 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 |
The following table reconciles cash provided by (used for) 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, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Cash provided by (used for) operating activities | $ | 34 | $ | (52 | ) | $ | 114 | $ | 131 | $ | 148 | $ | 79 | |||||||||||
| Purchase of property, plant and equipment | (22 | ) | (42 | ) | (23 | ) | (32 | ) | (45 | ) | (74 | ) | ||||||||||||
| Interest proceeds on swaps designated as net investment hedges | 3 | 6 | 4 | — | 7 | 6 | ||||||||||||||||||
| Free cash flow | $ | 15 | $ | (88 | ) | $ | 95 | $ | 99 | $ | 110 | $ | 11 | |||||||||||
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, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Income from operations | $ | 205 | $ | 138 | $ | 326 | $ | 263 | ||||||||
| Other (income) expense, net | (1 | ) | 9 | 7 | 10 | |||||||||||
| Total | 206 | 129 | 319 | 253 | ||||||||||||
| Debt extinguishment and refinancing-related costs (a) | — | 1 | 3 | 3 | ||||||||||||
| Termination benefits and other employee-related costs (b) | 1 | 2 | 56 | 2 | ||||||||||||
| Acquisition and divestiture-related costs (c) | 2 | — | 4 | — | ||||||||||||
| Impairment charges (d) | — | 8 | — | 15 | ||||||||||||
| Environmental charge (e) | — | — | 4 | — | ||||||||||||
| Other adjustments (f) | 1 | 2 | 2 | 1 | ||||||||||||
| Step-up depreciation and amortization (g) | 13 | 13 | 25 | 30 | ||||||||||||
| Adjusted EBIT | $ | 223 | $ | 155 | $ | 413 | $ | 304 | ||||||||
| Segment Adjusted EBIT (1): | ||||||||||||||||
| Performance Coatings | $ | 161 | $ | 118 | $ | 296 | $ | 227 | ||||||||
| Mobility Coatings | 49 | 24 | 92 | 47 | ||||||||||||
| Total | 210 | 142 | 388 | 274 | ||||||||||||
| Step-up depreciation and amortization (g) | 13 | 13 | 25 | 30 | ||||||||||||
| Adjusted EBIT | $ | 223 | $ | 155 | $ | 413 | $ | 304 | ||||||||
| (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. |
| (d) | Represents impairment charges, which are not considered indicative of our ongoing operating performance. The losses recorded during the three and six months ended June 30, 2023 were 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. |
| (e) | Represents costs related to environmental remediation activities, which are not considered indicative of our ongoing operating performance. |
| (f) | Represents certain non-operational or non-cash losses, unrelated to our core business and which we do not consider indicative of our ongoing operating performance. |
| (g) | 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. |
| Axalta Coating Systems 1050 Constitution Avenue Philadelphia, PA 19112 USA | Investor Contact Colleen Lubic D +1 610-999-9407 Colleen.Lubic@axalta.com | Media Contact Robert Donohoe D +1 267-756-3803 Robert.Donohoe@axalta.com |
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