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Eastman Kodak (KODK)

Participants
Paul Dils Chief Tax Officer & Director, IR
James Continenza Executive Chairman & CEO
David Bullwinkle CFO, President, Eastman Business Park & SVP
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Eastman Kodak Q4 2020 Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your speaker for today, Paul Dils.

You may begin.

Paul Dils

Thank you, and good afternoon, everyone. Eastman Relations. Chief Dils, Director Officer Paul Investor of am Kodak Tax Company's and I Kodak's Quarter to Welcome Fourth Call. XXXX Earnings and Full Year At p.m. X:XX issued results Kodak release and afternoon, filed XXXX XXXX. XX-K this its full year on the for and financial fourth quarter Form its

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

Kodak's There may from the to of after events. in of of materially and may to statements the only All date statements occurrence by forward-looking behalf on arise actual described the Act differ entirety statements. anticipated Kodak today's expressly expectations to apply this more filings Kodak's differ are their differ be the attributable Private could by call, as Kodak's date in its the statements made defined materially statements forward-looking that Future assumptions. qualified cause detail we time. Kodak the among included from During U.S. various are in this that forward-looking with to or from as or forward-looking Securities Litigation these factors results persons to forward-looking include, reflect acting and unanticipated results statements will of Reform or events other forward-looking the factors undertakes uncertainties or forward-looking the in cautionary or based or statements. from risks, may All be upon presentation statements or making factors certain that results XXXX. cause events circumstances referenced others, time in actual Exchange Securities or Important Commission revise presentation. expressed and the to events update obligation no to other and those reflect

have website our Executive that addition, deemed Chief are measures at measures. Chairman; and the investors on directly our investor.kodak.com. release Bullwinkle, Speakers the non-GAAP to are Continenza, measures Kodak. provided of call and certain in on Officer comparable release David the GAAP Kodak's provided and presentation within been with presentation today's most In Reconciliations the Financial contains the issued just center Jim

during be We a will call. formal today's not holding Q&A

As Jim. call is team follow-up. turn to Relations over the available I will the now always, Investor for

James Continenza

Welcome, everyone, investor quarter X. on call the quarter you Kodak. to by for joining results thank and fourth COVID-XX. Slide for continue be impacted Fourth Beginning

Ended we our this, model, the not for won invest financial XXXX. and print $XXX balance is in We've One innovation company debt years. pay the As model, employees Dave the and paying by pandemic. world, our the results company's talking million foundation. the clearly our Key pandemic the Kodak will mitigate in and was compared savings, on shortly. furloughs for of to able I cost of maintain cash cut company packaging and Generated customer-first for around saying, to digital been for our $XXX couple continues sheet Materially its Kodak our with this awards reductions. on impact about and of fixed us. The of free detail XXXX. XXXX. that business. provide challenges present off approach achievements XXXX million a to safety Again, this some of through to the and our including keep Again, for way out more in of out way March priority third net quarter We're was continue to as to grow focus of going #X equivalents. cash customers cash flow. we're to it. business. cash Continue going with fourth during Reduction in

Let's fix the foundation.

get Let's of hold our debt.

forward. Let's find a path

the been say last find proud years, steps heading direction. that the path. over our Let's the have recapitalize then in to we're and capital right growth we raise of and couple as Those we're

of Kodak's provide On strengthening access addressing beginning recently We obligations company's X. a March of Slide transactions Kodak the announced X, to capital, Turning next to exciting maturing new series ability that reflects strategic chapter. the to includes in the initiatives. announced new and that growth the transaction financial news management's company's advanced investors, and in financial shortly. confidence reflects position specific technologies, Dave in will and Kodak opportunities years. also the Board materials The chemicals, strategy print, placing which details in and best provide in invest

enough with Paychex convertible redemption will funds Series preferred company of and credit stock investment Kodak exciting us support for preferred to be million, to and million level, exchange in of to have by helping This million step strategy chapter senior per their Lewis Series and Southeastern Kennedy Series stock facility However, A the and for transactions over years. million preferred million to to next XX can't includes redemption to results. advanced Kodak in issued secured achieve for next Amended $XX term common the goals. preferred their of and B the upon of Dave up the Asset A/B managed about of of Golisano. materials, We're forward I up X-year Management, convertible the excited extension stock and returning to draw investors $XXX term and turn the founded is to and of to at with issuance our joining through funded a capital at it discuss support want financing thank Grand the $XXX and help businessman issuance to to months; look us close stock. X loan position of through loan excited notes. million us stock close financing I and of delayed added recently firm issued. to at and guidance of business the invest of transactions an They and chemicals Capital, convertible of these the a our and experience share the our C Management, this. strategy. and XXXX a shares existing Southeastern them $XXX family for note; which remaining We Tom our Series Kodak. in a $XXX nonvoting high business These to details a $XX our structure transaction Founder, $XXX now convertible by company. growth initiatives. the $XXX as extended Investment exchange Tom next in new million preferred of help million core having of print, facility, $XX A our Series chapter have We're ABL new million part the us million convertible $XX X-year financial represent a includes business transaction convertible continue to letter part Oaks An

David Bullwinkle

and good Jim, Thanks, afternoon.

Before financing like for the the I a that quarter, on of of get important I into quarter first would XXXX. in series occurred transactions comment the details to

As access Jim invest provide mentioned, ability strengthen to core and March obligations strategic transactions on in to our that capital, announced address businesses. X, the in growth maturing we series of new a financial company's opportunities

mature the Investment notes $XX February into XX of $XX if years payable trading loan Kodak Kennedy and option bear mandatory be of $XXX million X with in an The a Kodak May Kennedy loans issued comprised drawn with provided provide Kennedy The of before XX, by X% additional X% the which and share has commitment draw to per Lewis financing First, conversion promissory Lewis may term XX, interest. Lewis has convertible or loans Management. entered of interest and PIK in delayed to XX company conversion PIK bear also company up due term exceeds and have convertible $XX.XX with an share quarterly The price X% equals agreements unsecured or initial term cash million, XXXX. days. XXXX. notes interest for of a on million $XX price a X.X%

has per a shares price common X Additionally, the of purchased Lewis stock company's share. Kennedy $XX purchase of million at

conditions, will the or principal to to have As of X years right, the less to hold for certain than term part one person Board the Directors. of be of subject the company's nominate of loans, XX% to Lewis the they initial until agreement, amount elected Kennedy

XXXX, Kodak million and transactions, of convertible stock dividends. million Asset repurchased Management Series company's X.X% accrued X Southeastern XX, for With shares unpaid to funds by from due the November from the $XXX proceeds preferred on plus mature these A managed

years has per share managed dividend preferred payable exchange Kodak stock trading X% of B equals for total a XX million XX $XX.XX the mandatory $XXX or Series in The quarterly in B Series conversion the a the price company with cash redemption a $XX.XX preferred X if the addition, stock days. convertible is shares days. a XX of funds option of in A mandatory The preferred conversion In by million. issued price for with Series Southeastern X for has exceeds and stock remaining

and $XX convertible has Series dividend million preferred quarterly The is million a of total C businessman Kodak's in preferred a a Series X% year if and for $XX years or by by the share The X share in company to founded firm has Tom to conversion mandatory the purchase exceeds conversion an in investment X. an XX with XX days has $XX per a clearance. C share of a of X series equals or Paychex $XX Capital, stock after stock HSR subject $XXX price price in trading payable mandatory preferred of X-year Golisano, X% Act invest per period committed option Oaks days. or purchased firm Grand stock a this XX additional Additionally, agreed Series redemption stock the $XX million The to with in C and Founder, years preferred X company. of per

term preferred amount to of ABL $XXX or common to the of right, conditions, of same group hold and from is the to X using part which The agreement, have amendment subject the to Capital the reduces to amended be one initial will nominate person $XX with and reduction than years it years into they facility million. prorated or the Board company's lending the converted, of less Kodak's is existing of XX% certain to for elected commitments. As Grand X stock million Oaks until commitment shares the extends Directors. extended the

in preferred XX term. new Kodak's the subset cash This $XX million million materials with the million the was of approximately company service a for provided the other address the ABL The of Furthermore, XXXX, maturity COVID-XX provide for redemption print, redemption date there rules, the businesses in in funding $XXX that company's a challenges of was pandemic. stock the of credit together exchange limit incremental of with preferred and available date core which A November date mandatory X-year A to XX and recent An maturity closed $XX of of about growth Series cash after stock ABL financing managing was Kodak's credit stock, extend ability to days and will a agreement, into advanced months. ABL to repurchase U.S. with the be delayed of increased ABL will to letter needed of remain in than eliminates doubt to the and the Additionally, flow, of Series going a extension the XXXX, the group. cash additional amount financing, operating transactions and convertible accounting to the capital. opportunities up credit chemicals. to the company's These the of in million a maturity by only concern. Hart-Scott-Rodino the loan as required during draw approval, closing fees, to as of XXXX, $XX the about in Series preferred going transactions funded of invest of term ability expenses substantial of substantial November history the on cash XXXX facility accordance later and transactions, also the the incremental on from and agreement GAAP the February XX, contains no concern the liquidity in entered subject Act the ABL facility transactions, additional negative of continue A doubt Prior due operate convertible the agreement

efficiencies reconciliation flow the and, in XX, reported being and not safeguard a financial the on employee and as complete company This XXXX. maintained. period prior and billion control control inadequate were controls weakness misstatement Adjusting discovered grants XXXX, of $X.XXX $XXX operational On service for further I in December any EBITDA now our grants cash with in result for is favorable verification decline of master now review its strengthened were audit XXXX. will and the mentioned, is results, independent X, earnings full of that to previously equity exchange have did modifications we reported and around current by has of received and in of $X.XXX prior these controls A year million. ensuring provider required data for supervisory equity compared detection of or the billion of data we of assets. statements. reconciliation master timely been being duties. input quarter, and of the release, impact $X company controls repository remediated of segregation share equity deficiencies employing of or process by foreign stock-based the performed to Slide The The as determined performed, the an appropriate in for the account revenues strengthened, revenue million an misstatements compensation license and in additions third details the controls and company Documentation resulted therefore, award of trail XXXX to regard loss errors the updates noncash related balances. $X the As for gain year $XX in to of to derivative net of the and the assets, Series expense as to deferred changes notes, million million allowances due result sales valuation value XXXX million, a for impairment, sale workers' convertible to convertible related and income asset primarily adjustments $X derivatives a million million and million. million post-employment compensation of loss include GAAP in impairments, to The $X in in business fair stock expense sale of the compensation A million the related gain related prior related $X notes of outside $XXX value stock for on from related noncash in increase $XXX the to a million in million, basis, and $X reported million revenue changes net net preferred in FPD changes name $XXX compared reserves, in trade of a by the the million trade the A to changes of to $X preferred net on million debt, $XX prior the reserves $XXX accounts related an million include results increase for of name XXXX of transaction year. to The XXXX. U.S. workers' a U.S. related of extinguishment $XXX the the HuaGuang million, noncash receivable tax and to the the of of $XXX in Series results compared we the on declined $XX On expense in embedded embedded company

year was Excluding Operational prior in prior the million million million items, current impact EBITDA net for of loss these negative XXXX. XXXX $XX compared the XXXX the to of was million adjusted $XX a $X $XX compared and income in year. to

for increase XXXX increase workers' license in from post-employment reserves, increased $X current declines the EBITDA costs the the the $XX and transaction higher cost reserves, Excluding unfavorable manufacturing savings, of in was impact volume absorption by year by driven compensation partially the operational in accounts due Operational prior reductions. EBITDA HuaGuang of unfavorably adjusting cost the revenue for and receivable offset by furloughs including year. from to received XXXX and pay by million, million impacted

attributable quarter, pandemic. exchange beginning third to recovery did volumes XXXX COVID-XX of SONORA began Foreign revenue downturn XX%. XXXX. PROSPER full X%, and for volumes the during revenue At X%, recognize which our declined the annuity quarters height Plates fourth of annuity the by EBITDA. on The SONORA for an by decreased which related was have operational of On by company Process-Free in year the impact declined to and to and not was Process-Free PROSPER basis, by a of the market COVID-XX Plates decreased XX%, for some impact of the XXXX, second volumes and the

existing expect solutions customers areas. to place and these our continue We to with in new

We and continue future materials. to also areas invest growth ULTRASTREAM of in advanced

an offsetting XXXX historical to was that and in the restricted of the cash various receivable cash in Moving on million eliminated million million China million obligation $XX presented the accounts million under relationship increased to increase and $XX year. the sale of as year in by performance HuaGuang cash assets deferred Included $XX establishment to includes changes $XX XXXX decreased compared of $XX in equivalents for with million of agreements held escrow Restricted the million to million the $XX for secure by of an funding a $XX obligations and $X prior million and due company Slide to compared recognition by to is Cash, the Alaris The for strategic related to increase balance cash included the year. prior gain. prior ongoing a of X. primarily sheet in $X the in sale cash an on the Kodak ABL, FPD. for

and cash on convertible that XXXX, were of facility In that $XX million of of paid anticipation A in the by the company $XX Additionally, restricted increased million. X in company the XXXX, a I also letter described dividends quarterly fourth quarter in primarily earlier. declared its Series credit a arrears preferred total for of stock

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

$XXX including year by and investing $XX $XX million FPD the payable million. $XXX in accounts the proceeds used included million million as inventory XXXX receivable cash in cash net generated activities Accounts operating provided and to furloughs million million cash activities by on decreased used company used $XXX working the the savings, in was sale decreased the prior Cash $XX Cash $XX XXXX transactions. and generated reductions, agreement, during prior The $XX was for by to compared focused of million remain during of working the the reflects full and year and year. by $XXX pay XXXX. a capital The of included flow million million. year. which a XXXX, of compared million, The $XX use secured in notes activities capital $XX issuance of earnings benefits the of decreased from by which year. The the by offset senior the decrease of secured in partially convertible occurred the from XXXX, of balance liabilities including other financing of million driven positive cost will credit used of lien a prior changes cash HuaGuang term for first cash sheet from improvements of cash generation million of $X change $XX primarily prior $XX half During in company cash million, in and in in repayment was million. used second

remain we its summary, applicable fourth Finally, balances the through financial presented with the the of managed in cash has year. pandemic, compliance COVID-XX the In all by despite company increasing third in challenges covenants. and both the quarters XXXX

strengthened to further provided removing balance XXXX by sheet transactions with March incremental liabilities. the have The in pursue our We legacy growth. company announced financing liquidity

opportunities We I are turn now the will in excited to focus discussion on back Jim. XXXX. growth to

James Continenza

chemicals utilizing invest technologies advanced opportunities all experience flow; strategic and generating our in our you, structure capital stronger our initiatives, and free priorities accelerating XXXX financial for continue efforts in on materials, business continue of cash growth around organizing a extensive restructuring customers; our position, Dave. to in summary, our to and Thank our with and areas. In these focus include: new Kodak print,

Sorry. me. Excuse

call, is Before we Dave, listeners? for anything there like else the conclude you'd

David Bullwinkle

million $XXX shelf filed have company withdrawn. the registration new statements evening, following previous Form and one million filing of registration the that sell than of securities, is the have statements, been statement. Kodak X the to X the flexibility will which approximately up this Under Yes, of replaced XX-K. registrations less These issue the shelf Jim. registration XXXX existing to $XXX Earlier

common The stock million issued statement XX. registered securities February registers stock X the the well XX statement on second on the resale new common The February issuable common stock and statements as issued stock the stock Jim. of the Series shares under the outstanding The registration shelf registration Series any necessary and its has convertible new relating of A as not upon become to retired. been preferred has until as will preferred A been review has stock effective common SEC withdrawn conversion been the registration new Thanks, previously completed. issuable

James Continenza

Eastman thank week. and for Dave, for listeners you, your the in interest the to you call call today. Thank and Kodak. This continued great our attending Have concludes for a

Operator

participation. this your call. and today's concludes for Ladies conference you Thank gentlemen,

You may now disconnect.