Axalta Releases First Quarter 2025 Results

About this update from Axalta Coating Systems Ltd.

PHILADELPHIA, May 07, 2025 (GLOBE NEWSWIRE) -- Axalta Coating Systems Ltd. (NYSE:AXTA) (“Axalta”), a leading global coatings company, announced its financial results for the first quarter ended March 31, 2025. First Quarter 2025 Highlights: First Quarter 2025 Consolidated Financial Results Net sales decreased 3% year over year to $1.26 billion in the first quarter of 2025, inclusive of a 3% headwind from foreign currency translation. Contributions from the CoverFlexx acquisition and favorable price-mix were offset by volume declines primarily in Performance Coatings. Net income increased by 154% year over year to $99 million resulting in a net income margin of 7.8%. The increase was largely due to the $55 million of expenses recorded in the prior year period related to our 2024 Transformation Initiative. Adjusted net income improved by $16 million year over year to $129 million driven by lower operating and variable costs. Adjusted EBITDA increased by 4% to $270 million compared to $259 million in the prior year period. Adjusted EBITDA margin expanded by 140 basis points to 21.4%. Diluted earnings per share increased by 150% to $0.45 compared to $0.18 in the prior year period. Adjusted diluted earnings per share improved by 16% to $0.59. In the first quarter of 2025, cash provided by operating activities was $26 million compared to $34 million in the same period last year. The year-over-year decrease in cash provided by operating activities was driven primarily by increases in working capital partially offset by higher earnings. Free cash flow was a use of $14 million in the first quarter of 2025 compared to $15 million in the prior year period, primarily driven by lower cash provided by operating activities and an increase in planned capital expenditures. Discussion of Segment Results Performance Coatings first quarter 2025 net sales were $822 million, down 3% compared to the prior year period primarily driven by volume declines and the impact of foreign currency headwinds, partially offset by contributions from CoverFlexx. Refinish net sales declined 2% year over year to $511 million, inclusive of a 3% currency headwind. Organic net sales for Refinish were down 1% year over year and CoverFlexx contributed 270 basis points of growth. Industrial net sales decreased by 6% year over year to $311 million as positive price-mix was more than offset by lower volumes and foreign currency translation headwinds. The Performance Coatings segment generated Adjusted EBITDA of $197 million compared to $196 million in the prior year period, with Adjusted EBITDA margins of 24.1% and 23.1%, respectively. Lower operating expenses and lower variable costs drove the increases in segment Adjusted EBITDA and Adjusted EBITDA margin. Mobility Coatings first quarter 2025 net sales were $440 million, a decrease of 1% from the prior year period. Light Vehicle net sales declined 1% year over year to $340 million, as 2% organic growth was more than offset by a 3% foreign currency translation headwind. Commercial Vehicle net sales decreased by 3% year over year to $100 million due to lower volumes from Class 8 builds in North America and Latin America. Mobility Coatings price-mix was positive, contributing a 2% benefit year over year. The Mobility Coatings segment generated Adjusted EBITDA of $73 million in the first quarter compared to $63 million in the prior year period, with margins of 16.5% and 14.2%, respectively. The increases in segment Adjusted EBITDA and segment Adjusted EBITDA margin were driven by positive price-mix, lower variable costs, and lower operating costs. “We achieved a record first quarter Adjusted EBITDA, expanded Adjusted Diluted EPS by 16% and continued accelerating our performance in challenging global economic conditions,” said Chris Villavarayan, CEO and President of Axalta. “Our One Axalta culture is driving sustained operating improvement and is positioning the company to achieve long term success in an uncertain environment. We remain focused on delivering on our A Plan, driving operating excellence and providing exceptional solutions and service for our customers.” Second Quarter and Full Year 2025 Outlook LSD = low single digit percentage 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 first quarter 2025 financial results on Wednesday, May 7, 2025, 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 May 7, 2026. The dial-in phone number for the conference call is 1-800-245-3047 and the conference ID is AXALTA. For those unable to participate, a replay will be available through May 14, 2025. The replay dial-in number is +1-844-512-2921. The replay passcode is 11158545. 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”), and our outlook and/or guidance, which includes net sales, net sales growth, Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow, depreciation and amortization, 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,” “long term,” 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, including the tariffs imposed by the U.S. and any retaliatory actions from other countries, and technological factors outside of Axalta’s control, as well as risks related to the execution of, and assumptions underlying, the 2024 Transformation Initiative and the 2026 A Plan, 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 ("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 This release includes financial information that is not presented in accordance with generally accepted accounting principles in the United States (“GAAP”), including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted EPS, adjusted net income, Free Cash Flow, tax rate, as adjusted, and Adjusted EBIT. Management uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted EPS, adjusted net income, tax rate, as adjusted, and Adjusted EBIT in the analysis of our financial and operating performance because they assist in the evaluation of underlying trends in our business. Management uses Free Cash Flow in the analysis of (1) our liquidity, (2) our ability to incur and service our debt and (3) strategic capital allocation decisions. Adjusted EBITDA, Adjusted Diluted EPS, adjusted net income and Adjusted EBIT consist of EBITDA, Diluted EPS, net income attributable to common shareholders and EBIT, 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. Free Cash Flow consists of cash provided by (used for) operating activities less purchase of property, plant and equipment plus interest proceeds on swaps designated as net investment hedges. We believe that making the foregoing adjustments provides investors meaningful information to understand our operating results and ability to analyze financial and business trends on a period-to-period basis. The non-GAAP financial measures used by Axalta may differ from similarly titled measures reported by other companies. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted EPS, adjusted net income, Free Cash Flow, tax rate, as adjusted, and Adjusted EBIT should not be considered as alternatives to net sales, net income (loss), income (loss) from operations or any other financial measures derived in accordance with GAAP. These non-GAAP financial measures 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 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. These items are uncertain, depend on various factors and may have a substantial and unpredictable impact on our GAAP results. Non-GAAP Reporting Changes Beginning with the results for the fourth quarter and full year 2024, we have made changes to our presentation of the non-GAAP financial measures of adjusted net income (which is also leveraged in the calculation of Adjusted Diluted EPS) and Adjusted EBIT. More detail on these changes can be found in the Current Report on Form 8-K we furnished to the SEC on January 21, 2025, which is available on the investor relations portion of our website at https://ir.axalta.com . Nothing on our website shall be deemed to be incorporated by reference into this release. 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 and 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. Organic Net Sales Organic net sales are calculated by excluding (i) the impact of the change in average exchange rates between the current and comparable period by currency denomination exposure of the comparable period amount and (ii) net sales of CoverFlexx. Defined Terms All capitalized terms contained within this release that are not otherwise defined herein have been previously defined in our filings with the SEC. Rounding Certain amounts may not foot or crossfoot due to rounding. Additionally, certain percentages may not recalculate due to rounding. 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. The following table reconciles net income to EBITDA and Adjusted EBITDA for the periods presented (in millions): The following table reconciles net income to adjusted net income for the periods presented (in millions, except per share data): The following table reconciles cash provided by operating activities to free cash flow for the periods presented (in millions): The following table reconciles income from operations to adjusted EBIT and segment adjusted EBIT for the periods presented (in millions): Investor Contact Colleen Lubic D +1 610-999-9407 [email protected] Media Contact Corporate Communications [email protected]

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