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Eastman Kodak (KODK)

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

Ladies and gentlemen, thank you for standing by. Welcome to the Eastman Kodak Q1, 2020 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

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

Paul Dils

Thank you, and issued XX-Q good XXXX Kodak Kodak results. Relations. Jimmy, filed and financial to its earnings Company's Dils, am Welcome report P.M. Chief release Eastman call. Paul its At on Tax this first quarterly and Officer Kodak's Director X:XX Investor afternoon of quarter everyone. afternoon I Form on

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

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

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

to may forward-looking are date cause materially or the as statements. its events the their other the apply forward-looking actual presentation Kodak circumstances this the obligation presentation. occurrence Kodak from results to that All to differ behalf There or that attributable after persons Kodak's acting factors of in or undertakes expressly reflect on by cautionary reflect to referenced arise qualified entirety of and statements date may be no statements of forward-looking update included statements in or made to this unanticipated or events. the revise

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

Officer Kodak. call today’s Continenza, Bullwinkle, Jim David of on Chief and Executive are Kodak’s Chairman; Financial Speakers

will I call over turn Jim. the now to

Jim Continenza

Good afternoon, everyone. Paul. Thanks

been we've pandemic loved no has safe ones. healthy your going come through tragedy the and I upon or that hope and is everyone family off, you through, First COVID-XX and or friends

take XXXX. And XXXX, up to in to currently sheet. drastic like took we're measures the -- cleaning We'd time just Kodak members, drastic its remember sitting balance on

primary materials the chemistry We also business and three chemicals. great and and print, advanced measures focusing in areas, took

and equivalents. moves, of able with In doing such, and we're sheet cash end a cash XXXX those million making to balance in $XXX strong

first not losing the $XXX plus. many For with building a to trajectory, XXXX the in years we're XXXX, In great million accomplishments. time off off

you Kodak retain simplified part we organizational the employees Our of for as and aligns trackable with in a this hearing better care accountable, customer, functional, together. first. structure We new And customer One taking this with is measurable, and keep XXXX well obviously, of business. our a us customer our love

is generation introducing and customers. print, which we're expenses, don't delaying eliminating our and cash appropriate, that capabilities, chemistry, deem we're focused so, focused and the for, revenue, profitable and to DNA, returns doing in growth on advanced We're or care materials. yield back product that programs looking better our chemicals, new of much on In taking going reducing products operating development

need, technologies throughout in coming approximately this driver and and more even continue million to industry the going the leading-edge and near-future. be to we the down in serve committed agent. invest crisis. year to industries double our remain digital a thrive we're a We change to continue so developing in a these Where to And $XX customers

focus the We're segment, to going packaging continues to grow. continue to on which

and mind, the which EVO the inkjet with technologies this Wide is there's EVO And ULTRASTREAM. press, that is powered flexible We UTECO packaging is stream have machine technology. ULTRASTREAM by in the Sapphire revolutionary Kodak keep the

continue to directly So also direction, placing that heads line and with heads inks putting on and we're that sell manufacturers and in services. out going to the continue moving packaging

coming products exciting in launched and them excited. launching, have and later about coming June range also that digital we’re introduction whole in pandemic will with print a equipment We We're the delayed year. of plates, with including still was obviously, will There'll them. launching talk of our be conference the technologies this obviously month. Germany, press show a be that new and forward groundbreaking We're would we'll moving and for products out, the be and the the the process-free version, them new process products launching

making were is seriously. business meet employees essential. for one us. a and our this and is took constantly hard We sure to Kodak COVID-XX this safe. very our And update, that morning night day night,

deemed and operations We down. not shut the are in essential did business during

We products making to group chemicals, pandemic, PCB not We're to expertise manufacturing products. just make as other face IPA in to looking hand ventilators. shields. and are of Using the in to our And our from pandemic. Kodak leveraging the in out experience also PPE such assist continue advanced help sanitizer. film our this make [indiscernible] materials Providing elevate we're for going to inside circuitry and

ever the Every no is seen these and tragedy seen years time one's come -- a this We've something There's hindsight different. lot incredible. roadmap, types a these of them. clear it's come not tragedies in things over

doing. capabilities you country we're you serve is Kodak have at decisions on is we help every going by All actually we products this place, forward. sure putting trying that is day globe get do can knowledge the can But that us and based making other help are in and to the make

going into So of is a work that. lot

We costs. are We salary reductions. reducing took our

advantage small business, or try program, We most which your funding, also apply. kind we of of cutting doesn't opportunity have it which for don't relief employees a have global a to targeted puts in And actions the do means is to We Kodak which own. government geared any in U.S. company, out. that we We early of on. will are multinational and towards furlough. We're our which us the took this have of on lot most take Unfortunately, doesn't apply, of. advantages government

decisions. that of the months us over the on make We're and ensuring make employees survive based allows first. XX our through last done through, pandemic manage again, to safety prudent this it we've and the and And things

to continue will sanitizers. obviously, We're do distance, enforcing, We ask safe then that.

We one. are is make out That to going safe and a number for our work employees environment. they're sure look continue to in

also We're out for our customers. looking

managing can when have including and doing We cash some needs sent into you customers slows out, [indiscernible] to AR. cost your face flow. And shields to We're just that hospitals. these our Everyone's we're get to down, of space involved fulfill to help imagine, so. you as everything and the continue our customer circumstances not And diligently in our demands. going

to in. back working are us bring help of money that All

And to we're from helping our the get see government, customers pay us. some starting because to is them advantages are which started funding

But little again, never a pandemic all this seeing seen and we're been we're has before managing through So turn. it.

discuss XXXX that, With financials. first to turn quarter I’d Dave, like to our this over to

David Bullwinkle

the company and Jim, Today for and exchange quarter afternoon. good XX-Q its filed the XX, the March commission. Thanks ended form with XXXX securities

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

get material into did few would our comments a sales. to I the we pandemic impacts. quarter, have COVID-XX not for the details regarding impact pandemic on Before COVID-XX first like quarter the The make a

are be to accounts volumes on impacts sales based are have receivable expected the seen in second impacted, to expected the However, collections we and in slow, negatively XXXX of quarter collections. of to-date

other may our to we in during in pandemic. change manufacturing evolve. We've to and with maintain where closely to serve government officials facilities jurisdictions, able this been customers, as but has the to the operations keep our government the future COVID-XX responses worked company operate open The

working and measures, health the of to government to to endeavored actions measures manufacturing the authorities distribution plants in particular products facilities. with continue can worldwide, authorities safety for distribution government and recommended the those address continue. of We work has place with so employee and implement Kodak employees protect during pandemic to and intend in

However, chain. pandemic result to in Kodak's uncertainty resulting operations supply the from an disruption unforeseen could or

the temporary reductions such, are as spend. furloughs reducing use pay for As operating as of and the well of costs employees, deferral for we

Our pandemic. the COVID-XX operations impacted negatively are by

COVID-XX vast the government implemented eligible. relief are majority to the with relief quarter, healthcare individuals, across toward industry. the are under packages the of to late to which the introduction Kodak government relief world governments businesses first respond began economic or Additionally, The programs. small we in of the geared pandemic, has

the until also the operational includes, areas available The tax of the only government countries relief Kodak of had and relief. Employee various is Kodak in which on related comprised deferrals is were benefits retention quarter. little countries, programs in assistance. in very job related tax primarily deferral tax social mainly not payroll impact Non-HR job to most second relief payments. relief are which retention, some relief tax some of to first available wage These retention quarter, subsidies, as is and

for most subsidized government Kodak is programs. loan ineligible

such jurisdictions U.S., and Germany. continuing We and explore eligibility are to the England as

company Kodak monitor As government programs, the be to for any COVID-XX duration which of to continues and evolve, the eligible. continue may new scope relief will for

I further results, will first for on the flow quarter. company results share now EBITDA operational and the details cash

X, Slide the as million. a in the $XX basis in for XXXX, $XXX prior $XX earnings a release our to On quarter million. currency revenues reported revenue declined quarter, we constant million, of $XXX reported we by first to for of decline million Turning compared year of

the grew was the for revenue SONORA COVID-XX the market quarter, attributable and declined which first During by by to Process-Free XX%, to Plates X%, related volumes for annuity PROSPER the pandemic. downturn

to areas of the advanced materials, product ULTRASTREAM introductions, to invest Jim will to growth We earlier. new continued which lead in referred and future

The a GAAP A income expense of year related million in quarter, derivative in of quarter. a quarter loss embedded On changes basis, the for results $XXX U.S. the net in to the million first for include compared of $X $XX respectively, value the a million, XXXX million net Stock. to we Preferred of first loss Series prior and XXXX reported $XX and

The the $X million first $XXX a $X effects the million world. allowances in around of tax future of of profitability result an in COVID-XX at name valuation quarter exact present, for increase of million, impact high-degree difficult the jurisdictions as to and a also a creating includes increase as trade outside accounts impairment non-cash predict is receivable the and of Since expense reserves the to of are the uncertainty it deferred U.S. the XXXX individual

the on allowance we reliability or generating uncertain, also certain. jurisdictional tax which Kodak outside managing the basis, as Therefore, in stated, company is to individual the making valuation on continues establishments. have assets One less previously As results a is results the be U.S. deferred cash, of positive company consolidated these focused such the and by

million, these $XX year XXXX income current compared prior the for prior $XX loss of quarter. items, a year to Excluding in was and million

was a negative the year prior $X compared Operational the a $X million, quarter. for in EBITDA negative million quarter to

accounts an negative $X from reserves, $X a current was of prior receivable impact year quarter. or increase Excluding operational million the million, quarter of an in the for EBITDA increase the

initiated actions actions significant by approximately year. had company the were positive to for the expected million to reduce year. Entering These for from the toward operating cash XXXX, flow into expenses $XX provide operations progress

However, actions the second of COVID-XX given in were have the situation, the in annualized revised implemented have of cost million and their over taken incremental Incremental we early $XX cost expectations now reductions. to actions cost quarter XXXX. uncertainty

expect these in second results. We be quarter our visible to start to impacts

Moving cash driven other million. on in million of $XX The primarily the in equivalents, liabilities in in to decrease $X company Slide a of million, ended $XXX of capital decrease the company working first was a performance million, change used presented million activities XX, on XXXX. a X. and from December Cash cash and cash $XX by quarter operating $XX with

and inventory million, December accounts compared $X increased by by increased receivable million, decreased XXXX. million to by $XX payable XX, $XX Accounts

accounts I compared inventory to and mentioned receivable elevated collections have levels our are earlier, slowed expectations. As

with We suppliers are working customers the situation. manage our and to closely

includes restructuring for addition, pension for payments, cash payments income severance and accrued used other tax actions, payments the and liabilities reduction In interest. VAT of

where First payments, a accrued income payments interest. in quarter and offset have XXXX increased, reduction taxes by restructuring

quarter million compared financing first million in Cash by of $X in activities the to the Cash of year a use used prior compared $X provided the to prior as in million was activities year was quarter, cash period. financing $X in period. used investing in in activities million the $X

was the company continued our end activities. the and cash was the included first in cash reduced ABL of which facility during million. the fund indicated restricted Restricted on operations in of reducing the by I due efforts, restricted at order $XX our XXXX, to was call, the $XX first focused million last quarter our our On XXXX, of quarter to quarter. cash In restructuring amendment

reduce restrictions We will continue to to focus alternatives on cash. on

listeners in please XX-Q, in remind to covenants are Finally, with as our compliance agreements. Jim disclosed Jimmy, questions. our our under financial form remain take your of instructions. and credit now we I happy

Jim Continenza

you. Great. Well, thank

everyone to In from work a week, caused. thank still put team, cloud, that Kodak It thank they've using of into to amount within of late teams, using joining. run. and from again, has I amount quarter. pandemic unbelievable, this off entire we and First virtual the want WiFi working for the I everyone And able has the been home, want effort to this working mobilize are Microsoft making company nights home everyone's the doing the

their in I employees we environment, to working. show safe. the And up I recognize and -- and everyone everything stay that that And who those to importantly, really But help day, more them The supply we families. to have every this to want keep continue more go keep day grow Again we enough. keep thank want that can chain is to courage go takes say doing to importantly, and factories and do I sure it to for to home them getting that make can't just just we're our want this to company work safe. the every

So, joining for that, with the thanks call.

Operator

Ladies thank for and conference. your gentlemen, does conclude program. participation your This on you today's

may now You disconnect.