Eastman Kodak (KODK) 8 Aug 242024 Q2 Earnings call transcript

Good day, and thank you for standing by, and welcome to Eastman Kodak Q2 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Anthony Redding. Please go ahead.

Thank you, and good afternoon, everyone. Eastman Chief Redding, Officer. Anthony am Kodak Compliance Company's I Call. Quarter Welcome Second Earnings to Kodak XXXX

At afternoon, for p.m. its of X:XX this release and Form XXXX. on issued XX-Q financial results the quarter Kodak second filed its

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

events making various we based statements. results XXXX. as All in or statements forward-looking are defined assumptions. Reform by those today's call, expressed certain Litigation of During the Kodak's Act and expectations upon Future will be from or differ statements Private Securities may forward-looking anticipated forward-looking the

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

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

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

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

Officer Kodak. and Executive Executive Kodak's President Chairman of David Eastman Jim Chief on Speakers are Vice today's Bullwinkle, Financial Chief Senior call Officer; and Continenza, and

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

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

thank Eastman and XXXX you call second quarter the for Kodak. investor everyone, joining Welcome, for

executing committed be to to our plan. continue long-term We

focusing new in on aligning with leaner, percentage a the to As smart getting launching right result, increase. and continues innovation, We're customers. products, investing gross profit revenue

XXXX. increase. Gross XX% prior operational growth This am continuing I to year-over-year with commitment our was the to efficiencies, Kodak's year our offerings. pleased percentage the seventh value realizing profit the second of and quarter, consecutive improving the performance reflects XX% quarter AMC in compared progress our in in

$XX long-term decreased X% prior was million year The decrease but excluding to the exchange. million or only strategy. quarter, or Revenues $XX intentional to compared continued in as foreign our revenue invest in we decreased X%

We and efficient right with most right on are at the with the way the customers possible. aligning focused smart revenue products driving

or by million prior X% of to compared quarter, and $X decreased operating year profit driven materials the Gross other higher expenses. cost

AMC area. our our unique important chemicals, this is part in currently layering seeing key of revenues coating. products leverages It in very future. and Kodak is in in strength growth a

the Materials Advanced the long-term set in will in investing Chemicals are for We opportunities future. our growth & foundation company for that profitability and

cGMP For it's excited it time expected our test facility production this for long about reagents nice example, opportunity a coming manufacturing coming to XXXX. We're to is and see for in to begin fruition. diagnostic

continue and film capacity invest demand. in to committed to are manufacturing meet We growing to

the extremely are thrilled for films phenomenal to Kodak. thank entertaining two and was shot want film; and them movie, The see Bikeriders, Kodak pleased was I on to that Twisters, I and which choosing

we drupa year, one. the We XXXX. European for were was We're I leave installing customers. were with progress one I of today was we drupa XXX. one PROSPER were standing-room to since pleased more couldn't able in did commitments We that across the It XXXs. showcase last several to complete packed. It's been portfolio. of only. also demos the to invest We years able This ULTRA and been with live how continued We the product Print our X our have to pleased at be crowd and performed to had. the

innovate traditional to in continues print. Kodak

our release software, examples also is enhanced you plates the new PRINERGY the SONORA new give like I'd and to several Some CTPs. of XTRA next-generation

drupa. were All showcased at of them

turn financial Now results. discuss it to to the over Dave I'll

Thanks, afternoon. its June quarter with filed This Form company SEC. ended good the XX-Q Jim, and the afternoon, the XXXX, for XX,

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

I Before like on Form of first for details into I get our and certain the the would in XX-Q. XXXX, a comment half disclosure quarter to

the been U.S. liquidity risk and of plan's of investment plan participants. the the as our to the section a pension disclosures for the announced reduce within includes benefits XX-Q, the new the Please implemented in refer XX-Q specifics. to within have well strengthen management plan's disclosed of the to Form as previously MD&A adoption more This the outsourcing to Form strategy. As provide actions investment investment with ability

the company's registration, addition, shelf primary on S-X, XXXX. In to set expire August existing is XX,

down this anything drawn not shelf to on have We date.

a However, essentially to in to registration. company shelf filing order registration shelf the the expiring maintain to statement the the public renew is access markets, flexibility

We statement, at virtue plan are equity May. in Meeting registration to common Shareholders amendment the authorized by the additional Annual of the be an stock to filing the company's under register also S-X, of compensation issued plan approved

first now will share for half of second flow results, I operational the on and quarter details EBITDA company XXXX. full the cash and

invest its to revenue, delivering an a execution reductions driving rationalization foundation During extremely build percentage the these results systems. long-term profit the continued pricing of smart strong continued company's of on cost in the and growth and focus technology our The long-term second environment, the difficult XX% quarter, while and gross reflect continuing strategy. global information priorities Kodak against face initiatives in to on

within The point company's strategy. expectations long-term our in our results at this are financial

quarter. for year prior or X, of On a $X million $XXX the for current revenue compared revenues quarter, to the foreign declined year second prior million compared impact million million the of quarter Adjusting year we quarter $XX to in the in of exchange of $XXX of decline $XX reported by for Slide unfavorable XXXX X%. million the

million by when prior $X decreased profit the or quarter. to compared X% Gross year

quarter. profit year current gross no Foreign the in impact exchange had on

the profit percentage as to compared quarter and established Our our a actions to the efficient in second the prior of and make of to first compared continue XX% quarter product XX% actions when value have we momentum is percentage the gross in forward. points result of XXXX growth XXXX, up our our which year positive quarter to was realize the taken has operations to team These of going offerings. profitable more drive X

quarter value $X impact income and in expense million related results There we million $X the million. the XXXX to the quarter to quarter second compared of of fair embedded reported employee for The of income quarter prior no net items. U.S. million $XX related XXXX workers' $X prior million the a changes and of liabilities On derivative net net for when adjusting is income decrease second to second of on a XXXX reserves. in in compensation $XX GAAP quarter, basis, year of results include of year benefit of changes noncash these

prior $XX $XX million. of EBITDA in million a the the to compared quarter, year for $XX decline Operational was million quarter

the the Excluding the EBITDA employee $X changes by and impact year compared in of when noncash million decreased in year prior quarter. prior to compensation benefit operational quarter, workers' reserves

no had operational current on EBITDA Foreign quarter. impact year the exchange in

with operational quarter administrative costs matters. show technology associated higher second organizational the the as selling XXXX in associated drupa information investments litigation costs and impacted with efficiencies drive of and and well for structure certain EBITDA was as systems trade further Operational unfavorably by to

In addition, EBITDA. increases and ongoing with have higher volumes associated global negatively lower operational continued manufacturing the costs impacted cost

Turning to Slide X.

period exchange a year For million of to the million $XX compared the foreign in for in the period, prior XXXX, we decreased $XXX $X decrease prior of period. of million reported year half million. the $XX for impact revenues year revenue the first to of current Adjusting $XXX million of by compared unfavorable

million decreased the compared when prior X% or by period. $X to profit Gross year

no gross current impact profit in had exchange year the Foreign on period.

of the to percentage for profit the prior period. half compared in first XX% gross year Our XXXX was XX%

basis, On period. of $XX and $XX a million million for was results XXXX the gain reserves million assets. prior in half XXXX compared noncash $XX include first The year net a the income to compensation GAAP related half of to $X sale workers' income of benefit net to of and related employee first in the income U.S. net million income changes of on

include of authority. governmental related the derivative the changes half embedded and to fair of a in The $X XXXX million million income related results non-U.S. of from $X first to liabilities value charges refund a

$XX and to current prior of half income year these items, income net in of for the Excluding compared million million. the first period, million decline net was a $XX $XX prior year of XXXX

million EBITDA $XX of decline prior the $XX million year period, was the in period compared to Operational for a million. $XX

compared in year impact to benefit the the changes of prior employee and in the $XX decreased current workers' compensation period. by Excluding million reserves year, operational EBITDA noncash

the in current Foreign on no exchange period. EBITDA impact operational had year

and Operational with EBITDA further technology impacted as certain as with higher by in the investments operational for costs drive matters. and administrative well volumes associated litigation to was show XXXX and and associated costs systems lower information trade efficiencies unfavorably drupa organizational structure selling

the Moving $X on $XXX million X. from decrease performance quarter a presented million ended equivalents, the second cash to XXXX. on cash company December company's The with Slide in cash and XX, of

by capital and sheet operating $XX to was cash million, a was cash activities by in balance from driven XXXX, in $XX $XX in by use and working liabilities X of including Cash period. period $XX the months of $XX of million. activities compared $XX million million the June of prior primarily of million in change decrease net cash provided a year current For ending other XX, earnings provided changes year million from provided operating the

million of receivable receivable year received decreased decrease brand payable accounts in million licensing. $XX million The decreased primarily January cash to working due is the Within $X capital, accounts to million, increased accounts by proceeds and $XX period. in inventory by $XX by from prior XXXX compared

cash. continues capital, team performance to on in focus the and working profitability generate to which company's improving The ability enhances

prior $X the partially capital improvement $X XXXX, Cash used compared when of which year is proceeds million from was investing million sale in assets activities first to of the million. of by offset primarily of an half the $X $XX to million due an additions in of period, in increase

in the from financing half compared loan assets increased Cash to of primarily and activities made prior period, amended $XX the million related million investing within XXXX XXXX activities. repayment term received the year first the of proceeds driven the the from restated sale by of the used of to quarter during $XX agreement first for by

by compared balance XX, cash as $XX of when million to the XXXX. December decreased Restricted

compensation cash under reminder, workers' company's the in York restricted Compensation Board primarily and required to escrows New a collateral undiscounted secure ongoing letter obligations. collateral facility represents the cash supporting of credit actuarial obligations to with addition various cash the As Workers' State

company the effects the a million to the authority, As refund the prior foreign on cash in delivered exchange compared impact cash a improvement $X prior period slide, equivalents presented and first a of year of the and in XXXX portion half a excluding period. non-U.S. from bottom of the year governmental of

of pleased for XXXX. with performance first the company of are We half financial the the

continue in operations and continue hard to opportunities strategy. on will us of the We to to our the foundation fund opportunity ongoing execute focus worked we to provides create, which have maintaining our the strength to invest growth

Finally, remain with all we financial applicable covenants. in compliance

now discussion I Jim. turn back the will to

the Kodak Thank over X sure has getting into calls heavily you, message Dave. across, Look, to I've we're our make want but been business. right? our years, honored I to these do last invested

our efficiencies. in that see can You

year-over-year, can in decrease in profit percentage gross increased the You revenues. the despite see it right,

better our focused focus. company on focused on excellence, and and customer, to focused not profitability we're new to in on lose operational putting We're our drive systems help we're

reinvesting It coating. best Advanced competency. is in It's the Materials at, our what is we're Kodak back Chemicals core are layering and original we & and it.

That's for the we business is profit. growing what our in driving revenues put and increased hoping investment when AMC and pleased with our place, were and So we're we results. gross

driving want thank these and direction. divisions all in company right the I our that driving and in employees for this the And group of to behaviors

and make profitability. change. I ends we only when will be customer. their efficient, clear: first. with we're products our them want and we giving customers with customers That We that We easy sure to help drive to with to very our business that innovative our customer put more our do Everything continue can't do win. starts win

your to, night. interest thank and want We calls for Kodak. their Good I everyone time appreciate it. listening again, and in through these

This concludes call. Thank today's participating. for conference you

You disconnect. may now