"First and foremost, we are focused on protecting public health and the health and safety of our employees and customers, consistent with guidance issued by relevant authorities," Axalta President and CEO Robert W. Bryant said. "Where possible, our employees are working remotely, and we have instituted global travel restrictions for all employees. We are taking steps to promote social distancing and have instituted robust on-site hygiene practices and restrictions on visits to our facilities. We are continuing to monitor the situation closely and will take further action as appropriate."
Additionally, Axalta is withdrawing previous financial guidance for 2020, which did not reflect the impact of the coronavirus.
Management expects to provide updated guidance when it has more visibility into demand.
Management has taken swift action to both plan and address the near-term impact on the decline in demand in certain areas of Axalta's business.
The focus is on dynamically adjusting the company's cost structure as needed and has already included initial actions related to reducing discretionary spend across the organization.
"The fundamentals of our business remain strong. From a manufacturing standpoint, we continue to operate and meet customer demand around the world," Bryant said. "We are also activating contingency plans designed to ensure our ability to continue to serve our customers in the event of possible operational limitations and also exploring ways to 'flex' as demand from customers changes. While near-term demand is uncertain and has caused us to withdraw our financial guidance for 2020, we are confident that we can continue serving our customers in a manner that is safe, compliant, and meets customer needs globally.
"The coatings industry, in general, has a very high variable cost structure, and Axalta is no exception – our costs are approximately 64 percent variable at the cost of goods sold level," he continued. "Through a combination of variable and directed fixed cost structure actions, coupled with a strong balance sheet, we believe we are well-positioned to weather near-term reductions in customer demand and come out of this crisis an even stronger company."