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Eastman Kodak (KODK)

Participants
Jim Continenza Executive Chairman
Dave Bullwinkle Chief Financial Officer
Paul Dils Chief Tax Officer, Director of Investor Relations
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Eastman Kodak Q4 2019 Earnings Conference Call. At this time all participants’ lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference may be recorded. [Operator Instructions].

to conference like speaker to now Mr. today, would hand over the your I Dils. Paul you. Thank ahead, go Please sir.

Paul Dils

and Relations. Thank issued XX-Q am XXXX Kodak Kodak results Officer filed Paul financial and earnings its Dils, of you good p.m. XXXX. report for Eastman release Company’s afternoon call. At its Chief on this fourth annual to and Kodak’s Welcome everyone. X:XX I Director quarter Investor afternoon Tax Form on

call presentation and Investor the You on may today’s our at for access investor.kodak.com. this Center webcast

During as today’s assumptions. All Kodak’s Securities Act we forward-looking call upon will be various XXXX. defined Litigation certain making of forward-looking statements based and Private statements are by the expectations Reform

Important differ those actual time expressed filings results cause other or with the the differ or events detail from or may Securities events in time. results Exchange and uncertainties Kodak’s Future others, from factors include from among that described Commission statements to factors more and these to risks, forward-looking could forward-looking anticipated statements. materially those in U.S. the in

results be actual may their acting attributable in expressly entirety Kodak its the statements or of presentation. persons other cautionary that apply included materially in date statements. only differ referenced forward-looking this as cause behalf factors and to or the Kodak’s this of statements presentation on may All qualified from There forward-looking to are by the

events or reflect arise Kodak undertakes that the reflect unanticipated no obligation revise circumstances of events. to to update the statements or occurrence date or after made to forward-looking

have website at our non-GAAP and on directly the measures. within the measures this contains are just comparable been deemed investor.kodak.com. in certain our release with most issued presentation addition, and provided to Center presentation provided the release Investor In GAAP measures the Reconciliations that

to Dave Financial the over Bullwinkle, Speakers Kodak’s on of Chairman; will I turn call Continenza, Officer call Chief now Jim. Kodak. are and Executive Jim today’s

Jim Continenza

for investor Welcome joining Thank the for quarter Kodak. you, everyone Paul. Eastman fourth and call you thank

when year breakthrough million time the several million. was $XXX the $XXX XXXX cash XXXX four, with of slide for to $XX a million years been year flat ended first Kodak. to burned to Turning compared equivalents, XXXX, We have cash we in and

expecting are them took appropriate out not divisions we that and million to and cost, to $XXX We burn profitable. inked million down shut $XXX the really to down close were

repaid strategic We the XXXX; with Loans; on $XXX Graphics. that First the got of in million Lucky to completed of DNA settlement established the of going HuaGuang and smart of part $XXX People China Term revenue. in of focused amount do sale issuance full was we what Flexographic the a due we best aggregate what’s in of million growth Division, principal X% and and secured notes profitable and We're the sale revenue a this Lien a Packaging our convertible relationship call with Republic

hear You'll referred in it sometimes to the future.

Kodak great grew by Plate annuity Process-Free to by Kodak the for grew XX%. Volumes Again continued for X%. and also stewards SONORA of revenue PROSPER environment Kodak [inaudible] be

try as we've about. All to this organization realign new been steps that we the talking key

to had we the and the what of business organization, foundations stabilize the do. new the on into sheet get we could balance we Before and focus

chemicals. so organization time, print, in materials more is materials One technology ask our advanced and new do? XXXX when The Kodak chemicals. Kodak print, will does for core what structure That what does, advanced leverage and I

segment, the those areas XXXX, structure: Print traditional January are report of which the chemicals, and we’ll report. brand materials software. on comprises digital segment; and results following based three Advance and will business, Effective that Kodak print print

free to by for needs Turning and continue first We've the customer a allow and generating providing our better. been and better customer our cash better to reducing six, experience, serving with slide this Kodak. will saying operating on expenses, got we’ve flow while new a align simplified while us needs, a structure now to X focus customer

I customer do equally not more is as help to customer they and to mean around does strategic We the going important, a profitable. aren’t we them. are our and sure important, to product employees first, to it make development everything be key say them that partner service, for When we become want are

equipment Kodak build committed print of commitment industry. [ph] the the substrates, heritage, and on to is for R&D software. held our our film business, our and the chemical inks will to continuing spend million that Annual business, print business be technologies, $XX

We printers, over with half the from U.S. business will are half of in top top continue business printers over over with XXX, do doing them. XXX XXX we the to statements Big over of with the

focused is easy. don’t said Making We DNA. technologies halls you the we care simplicity. you of needs I complicated customer walk our is Kodak around make on stop. Kodak, accessible the by When providing who

probably well are inks have which people Somewhere easier graphics, we X,XXX asset need X,XXX productivity optics, to and and It's reduces they are who involved have are who been training. this best. this versed industry. digital really in what use, the key to print in increases do technology. we technologies we as in Kodak It’s of

streamline are Many margins profitability. win need workflow, and increase every printers squeezed they to of dollar traditional Kodak every minute on business. Productivity: can productivity their out and being help and

and convert term cost-effective. analog cost. runs and short now plates being focusing and There to overall, digital people run other are are no is are because on plates overall done short are digital Said are and going data. short shrinking the we grow the more of and term think and the runs differently, I variable label in opportunity packaging, there's that and shrinking with and to industry runs becoming on switch, analog over, easier

more runs print of organizations; in and the So more the standard printing smaller becomes digital become player. the

the direct down. packaging increasing opportunity turnaround, and efficient, got The faster future is data other newspaper, Kodak of more is demand digital survival applications. become threatens many printers variable which leaner; critical margins flexible, with increasing print in runs, the that of and doubling is and to Shrinking short more and volume for traditional faster mail,

launched get there package packaging Growth detail more the that we I printer. represents of going – for an on When opportunity digital. first segment, digital the to you're say this, that, currently is

smart superior Kodak complete printers For brings what Kodak Deep expertise, solutions experience, a products table: of and industry portfolio is a that help to the one drive investment. No of productivity innovation. else today decades growth offers increase and

six new see of products Introductions and capabilities, over next the you'll XX to months.

an example a the how of which co-branded announced and UTECO it's several and machine lower are helping press providing to the products SONORA is a in in changer efficiency also previously line is We launching and be UTECO drive including and there'll Sapphire line between Kodak machine, new EVO game the a enhancement, cost innovation. great Kodak. and It’s digital

machine packaging The wide also technology. out, for will continuous be will a be coming There inkjet first flexible another and format. this us uses

So allowing pigments, for both and wide excellent care. leaving substrates, heads, friendly beverage we're using applications for as open stream personal inks, various of qualities the of industry-compliant such Ultrastream environmentally print water-based utilization door and food,

quality speeds and ground you change packaging it better. the and literally how a Again, takes and industry it's are PDF long this is from at the to look a getting file unbelievable When breaking. better on the is different plates run,

lot of shoot. they've done a machines of has excited are put few who money partner the well into been so of we've great very out we has breakthrough, and and a We UTECO about a it and placed the the

off business aware the the well coronavirus We’re impacts. and

and you top on and the partners. best employees we safe our it, changes going as She's of are to calls everything to later. we We have leading daily. everything we're and are get of get [ph] addressing taking But follow know, and are customers do we if keep can we the any guys up you and employees. We notifications on is for our practices to and been this minute Goldberg in-charge it safety our our Elisa company, questions call.

results. Dave that, With turn over Dave? to it the going discuss to to financial I’m XXXX

Dave Bullwinkle

filed Thanks for good Form XX-K the XX, XXXX and Jim Securities afternoon. and Exchange company ended December Today with year Commission. the the its

this As entirety. its filing you read I always, in recommend

cash reflects company working on for transactions and will benefits the in flow year during positive in improvements XXXX. from had full flow capital of cash and which generation XXXX, fourth company The The year. quarter the remain which breakeven cash the generated occurred XXXX, individual focused

now of April results, operation XXXX. Division operations full of XXXX in Please share Packaging results the company to as periods details of EBITDA flow and cash Flexographic for note the XXXX the division comparable I and will in due on discontinued sales have further been reported the XXXX.

for certain curtain have to reclassified for to periods transaction. reporting prior Additionally, held sale assets related requirements the year been the HuaGuang due and amounts

of XXXX. million, related release, changes On reserve compared to and in and reported the the $X changes to compensation workers U.S. XXXX Series slide in trade include Stock convertible A of $XXX we $XX in related gain non-cash income expense million on net the basis sale of million. legal million, the million FPD of of the net and name loss notes $X a XXXX net of as a for Preferred impairments our adjustments $XX in million derivatives value embedded fair was a business seven, earnings GAAP results $XXX on for in

and The XXXX of driven the related in of results results trade legal of by include The refund. to $XX the changes a to FPD. Korean expense non-cash million name $XX include $XX workers related the XXXX million benefits tax million compensation also withholding and associated reserves with impairment, sale

loss these $XX was of of impact million year item, current prior in net $XX the compared to prior XXXX million loss adjusted the the Excluding year. a and

the compared for transaction Turning $XX license exchange million. million HuaGuang compared year from to of $XX of year. for in reported the of Revenue of the to the prior a billion slide impact to foreign revenues decline by unfavorable we $X.XXX million. $XX prior billion revenue Adjusting received declined for XXXX million eight, $X.XXX of $XX and

XXXX compared to $X for EBITDA million in Operational XXXX. $XX was million

by adjusting increase workers favorable million the license prior in the foreign aluminum EBITDA the year. impact from exchange costs, transaction reserves, operational and revenue from for compensation Excluding the of $X decreased HuaGuang received in

Plates full year the strong XX% a SONORA performance annuity the by year-over-year delivered by for engines. our for volumes On revenues key grew and X%. grew Process-Free We in basis PROSPER growth

in Ultrastream continue growth areas, future also We and materials. advanced to invest

$XXX held million increased cash to cash year. cash and on million in decrease Restricted XXXX performance decrease cash prior assets as for prior presented the $XX and of $XX nine. equivalents on a Cash, to to by the million in million of year. in $X increased compared restricted sale slide for compared Moving included company a cash by

offset agreements an in ABL services China year and secure to with China, $XX in ongoing cash of which to the FPD, There includes establishment the million of cash products $XX the a the included held funding cash remaining current sale assets escrow was corresponding the was no relationship $XX of of million restricted deposit a in to in sale received of a change decrease for XXXX due The primarily in $XX year-end. by compared various by million provided obligations million to for the company of for of by of U.S. cash year. buyer prepayment in equivalents decrease related in FPD, prior strategic prior $X under for the net secured cash as to and the the HuaGuang, the million

to We or to cash eliminate cash evaluate release the our benefit from around to positions opportunities continue and restricted in world. XXXX

As XXXX, globally million. restricted year of the end $XX is cash

was increased of capital earnings by decreased by million During of including of accounts changes million, generated of a cash by payable provided inventory million. in offset activities sheet $XX $XX operating from receivable decrease million, change cash $XX XXXX other liabilities cash by and balance million. $XX decreased Accounts $XX net working primarily million, a use from in $XX by and $XX driven $XX by million million,

as current to by provided the was compared the XXXX $XX transaction. year. million FPD from and prior of The investing HuaGuang of included use in Cash million proceeds activities the the during sale $XXX year

of use Secured XXXX Agreement, a the for Cash Credit offset $XXX financing The $XX prior First in of the the Convertible of year. Secured million by million Term full was million cash current of year used million. of the Lien for activities in issuance $XXX Notes $XXX compared Senior used partially included repayment to

our our agreement. credit XX-K, the in Finally, under Form with covenants as we disclosed in compliance remain

We participants to the of instructions will call now please open your questions. to the ask Operator, questions. remind

Jim Continenza

it new of the Again, on are and a Great! our the Well, going. in. years best it’s the path excited time one and in I’d like dialing starting of to thank everyone we Kodak foundation for are we long was

safe. So We Good thanks in. and Take for stay it. again appreciate dialing care Bye!

Operator

and you concludes today's participating. this conference for Ladies gentleman, call. Thank

You may disconnect. now