Axalta Reports Costs for Exit/Disposal Activities

TL;DR

**Axalta just filed an 8-K about costs tied to exiting or disposing of activities, signaling potential restructuring.**

AI Summary

Axalta Coating Systems Ltd. filed an 8-K on February 27, 2024, reporting an event that occurred on February 26, 2024. The filing specifically concerns "Cost Associated with Exit or Disposal Activities." The document indicates the nature of these activities but does not disclose specific dollar amounts or detailed plans within the provided text.

Why It Matters

This filing signals that Axalta Coating Systems is undertaking restructuring or divestiture activities, which could impact future financial performance, operational focus, and asset base.

Risk Assessment

Risk Level: medium — While the filing indicates potential restructuring, the absence of specific financial figures or detailed plans prevents a full assessment of the financial impact or operational risks.

Key Players & Entities

• Axalta Coating Systems Ltd. (company) — registrant
• February 26, 2024 (date) — date of earliest event reported
• February 27, 2024 (date) — filing date

FAQ

Key Financial Figures

• $1.00 — tion 12(b) of the Act: Common Shares, $1.00 par value AXTA New York Stock Exchange
• $75 — ll incur pre-tax costs of approximately $75 - $110 million in the aggregate, of whi
• $110 million — ur pre-tax costs of approximately $75 - $110 million in the aggregate, of which $65 - $90 mi
• $65 — $110 million in the aggregate, of which $65 - $90 million represents severance and
• $90 million — illion in the aggregate, of which $65 - $90 million represents severance and other exit-rel
• $10 — erance and other exit-related costs and $10 - $20 million represents non-cash accel
• $20 million — and other exit-related costs and $10 - $20 million represents non-cash accelerated depreci
• $95 — iative are expected to be approximately $95 - $135 million, inclusive of $30 - $45
• $135 m — are expected to be approximately $95 - $135 million, inclusive of $30 - $45 million f
• $30 — mately $95 - $135 million, inclusive of $30 - $45 million for capital expenditures
• $45 million — $95 - $135 million, inclusive of $30 - $45 million for capital expenditures to, among othe
• $75 million — filling certain roles, of approximately $75 million on an annualized basis. We expect $10 m
• $10 million — llion on an annualized basis. We expect $10 million of the run-rate savings from the 2024 T

Filing Documents

• axta-20240226.htm (8-K) — 28KB
• 0001616862-24-000018.txt ( ) — 152KB
• axta-20240226.xsd (EX-101.SCH) — 2KB
• axta-20240226_lab.xml (EX-101.LAB) — 24KB
• axta-20240226_pre.xml (EX-101.PRE) — 12KB
• axta-20240226_htm.xml (XML) — 3KB

05. Costs Associated with Exit or Disposal Activities

Item 2.05. Costs Associated with Exit or Disposal Activities. On February 26, 2024, Axalta Coating Systems Ltd. ("Axalta" or the "Company") committed to a transformation initiative (the "2024 Transformation Initiative") intended to simplify the Company's and its subsidiaries' organizational structure, enable the Company to be more proactive, responsive, and agile and to better serve its customers and to lower the Company's cost base, improve financial performance and cash flow generation. The 2024 Transformation Initiative includes a reduction in workforce which is expected to result in the termination of approximately 600 employees globally, representing approximately 5% of Axalta's global workforce. The Company expects the 2024 Transformation Initiative actions, certain of which are subject to the satisfaction of local law requirements in various jurisdictions, to commence in the first quarter of 2024 and be completed by 2026. In connection with the 2024 Transformation Initiative, the Company estimates that it will incur pre-tax costs of approximately $75 - $110 million in the aggregate, of which $65 - $90 million represents severance and other exit-related costs and $10 - $20 million represents non-cash accelerated depreciation charges. Future cash expenditures related to the 2024 Transformation Initiative are expected to be approximately $95 - $135 million, inclusive of $30 - $45 million for capital expenditures to, among other things, shift manufacturing capacity or capabilities. Axalta estimates that, once fully executed, the 2024 Transformation Initiative will yield net savings, inclusive of non-labor savings and costs for backfilling certain roles, of approximately $75 million on an annualized basis. We expect $10 million of the run-rate savings from the 2024 Transformation Initiative to be realized in 2024 with the full run-rate expected to be realized during 2026. Cautionary Statement Regarding Forward-Looking Statements This Current Report on Form 8

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AXALTA COATING SYSTEMS LTD. Date: February 27, 2024 By: /s/ Carl D. Anderson II Carl D. Anderson II Senior Vice President and Chief Financial Officer