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Axalta's Premium Management




According to Axalta Coating Systems' (AXTA) Statement of Cash Flows on its 10-Q for Third Quarter 2018, the company expended $147.8 million of owners' cash in the first nine months of 2018; and, per its most recent 10-K, spent and additional $58.4 million in 2017 for the combined purpose of repurchasing common shares from the market.  AXTA management has, as of 30 September 2018, spent $206.2 million of owners' cash for stock repurchases.

A natural question for a continuing owner of the enterprise would be, "how much have myself and fellow owners gained for the $200 million + we have implicitly authorized going out the door to departing shareholders?"   How else would the wisdom of the management be judged?

AXTA's financial statements filed with the SEC also demonstrate that during the 21-month period of 31 December 2016 through 30 September 2018 the company's diluted common shares outstanding fell from 240.5 million to 239.6 million.

Dividing the 206.2 million dollars of owners' cash expended for the .9 million net share reduction achieved, AXTA's management paid an average of $229 per share for each net share reduced in the count.  With a market share price that has bounced around between $27 - $35 per share during the past couple of years, this is difficult to square with any term other than the management's performance on this front as "UN-good."

The actions of AXTA management, when it comes to the question of deciding whether to repurchase common stock for the improvement of the position of their continuing shareholders, cannot be characterized by anything other than being financially indefensible.  

AXTA's 3Q 2018 10-Q Report






DISCLOSURE:  The author does not hold any present or contingent financial position in the company discussed.






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