Axalta’s strong EBITDA decreases leverage to 3.2x from 3.3x during Q1

By Devika Patel

Knoxville, Tenn., April 27 – Axalta Coating Systems Ltd. reported strong EBITDA for the last quarter, which drove down the company’s leverage ratio to 3.2x at quarter-end, as well as resulting in a record amount of free cash flow for the first quarter.

“We are pleased that first-quarter free cash flow of $11 million represented a first quarter quarterly record, compared to a use of $20 million in the first quarter of 2020, driven by strong EBITDA as well as continued solid working capital management,” senior vice president and chief financial officer Sean M. Lannon said on the company’s first quarter ended March 31 earnings conference call on Tuesday.

“The strong first-quarter free cash flow resulted in Axalta ending the quarter with total liquidity still over $1.6 billion, even after incremental share repurchases of $64 million in the period.

“Our net leverage ratio decreased to 3.2x at March 31, compared to 3.3x at Dec. 31,” he said.

Axalta ended the first quarter with cash and cash equivalents of $1.3 billion and over $1.6 billion in available liquidity, but that may decrease this year due to capital slated to be deployed for mergers or acquisitions as well as share repurchases.

“With expected strength in free cash flow for the year, and our strong ongoing cash position, we anticipate ongoing deployment of capital to both M&A as well as share repurchases during the rest of 2021,” Lannon said in a Tuesday press release.

Axalta is a Philadelphia-based coatings company for light and commercial vehicles, industrial and refinish applications.

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