Eastman Kodak Company

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. To ask a question during the session, you will need to press star then one on your telephone. If you require any further assistance, please press star then zero. I would now like to hand the conference over to your speaker today, Mr. Paul Dills. Thank you. Please go ahead.

Thank you, Jimmy, and good afternoon, everyone. I am Paul Dills, Eastman Kodak Company's Chief Tax Officer and Director of Investor Relations. Welcome to Kodak's first quarter 2020 earnings call. At 4.15 p.m. this afternoon, Kodak filed its quarterly report on Form 10-Q and issued its release on financial results. You may access the presentation and webcast for today's call on our Investor Center at investor.kodak.com. During today's call, we will be making certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based upon Codex expectations and various assumptions. Future events or results may differ from those anticipated or expressed in the forward-looking statements. Important factors that could cause actual events or results to differ materially are from these forward-looking statements include, among others, the risks, uncertainties, and other factors described in more detail in CODAC's filings with the U.S. Securities and Exchange Commission from time to time. There may be other factors that may cause CODAC's actual results to differ materially from the forward-looking statements. All forward-looking statements attributable to CODAC or persons acting on its behalf apply only as of the date of this presentation. and are expressly qualified in their entirety by the cautionary statements included or referenced in this presentation. CODEC undertakes no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of anticipated events. In addition, the release just issued and the presentation provided contains certain measures that are deemed non-GAAP measures. Reconciliations to the most directly comparable GAAP measure have been provided with the release and within the presentation on our website in our Investor Center at investor.kodak.com. Speakers on today's call are Jim Contenanza, Kodak Executive Chairman, and David Bowenkel, Chief Financial Officer of Kodak. I will now turn the call over to Jim.

Thanks, Paul. Good afternoon, everyone. First off, I hope everyone is healthy and safe through the COVID-19 pandemic that we've been going through, and no tragedy has come upon you or your friends or family or loved ones. We'd like to take this time to kind of let you know we're sitting on 2020. In 2019, just remember, Kodak took drastic members Drastic measures in cleaning up its balance sheet. We also took great measures in focusing the business in three primary areas, print, advanced materials, and chemistry, and chemicals. In doing such, in making those moves, we were able to end 2020 with a strong balance sheet of $233 million in cash and cash equivalents for the first time in many years not losing $100 million plus. In 2020, we were off to a great trajectory building off of the 2019 accomplishments. Our new simplified organization structure for 2020 better aligns us with our customer, as you keep hearing, with one codec and customer first. And obviously we love our employees and they're part of this. It's just taking care of the customer and we're all in this together. We became a functional, accountable, measurable, trackable business. In doing so, we're much better focused on cash generation and taking care of our customers. We're focused on profitable growth in revenue, reducing operating expenses, eliminating or delaying product development programs that don't yield the returns that we're looking for, deem appropriate, and introducing new products and capabilities, going back to our DNA, which is print, chemistry, chemicals, and advanced materials. We remain committed to these industries throughout this crisis, and we're going to continue to double down on digital even more so coming in the near future, where you continue to invest approximately $25 million a year in developing leading-edge technologies to serve our customers' needs and thrive in the industry and be a driver and a change agent. We're going to continue to focus on the packaging segment, which continues to grow. We have revolutionary technologies with the UTECO, Sapphire, Evo, Y-Press, flexible packaging machine that is powered by the Kodak UltraStream inkjet technology. And keep in mind, there is the EVO, which is stream, and this is the UltraStream. So we're going to continue to move in that direction and also placing heads with manufacturers that are putting heads directly on the packaging line and continue to sell inks and services. We're also launching exciting new products coming this month. There will be a press conference later in June that will talk about the range of products we'll be launching, including our process-free plates, the new version, and groundbreaking digital print equipment and technologies that will be coming out. We're excited. We would have launched them in Germany, and obviously with the pandemic, the show was obviously delayed for a whole year. We're still moving forward with the products and the introduction of them and launching them. COVID-19 update. This is a hard one for us. Kodak took this very seriously. We meet constantly, day and night, morning and night, to make sure that our employees are safe. And our business is central. We were deemed an essential business during the operations and did not shut down. We are leveraging our desk materials and chemicals manufacturing expertise to assist in the pandemic, not just make the Kodak products. Providing IPA, for such things as hand sanitizer. Using our experience in PPE to make face shields. We're also looking inside of our PCB group, making film and circuitry for ventilators. And we're gonna continue to innovate other products to help out in this pandemic. Every time these types of strategies come, no one's ever seen them. We've seen a lot of things over the years, And this is something different. There's not a clear roadmap, and hindsight's incredible. All you can do is, based on the knowledge you get every day, is make decisions, and that's what we're doing. But we are trying at Kodak to help serve this country and the globe by putting other products in place and making sure that we have capabilities that can help us going forward. So a lot of work is going into that. We are reducing our costs. We took salary reductions. We had targeted furlough. We took action early on, and any government advantages in the program we will try to take advantage of. Unfortunately, most of the relief is geared towards small business, which Kodak doesn't apply, or most of your employees are in the U.S., which also doesn't apply. We're a global multinational company, which kind of puts us kind of at odds. We don't have a lot of opportunity for government funding, which means we have to do it on our own. And again, based on the things that we've done over the last 18 months allows us to make it through and survive through this pandemic and manage and make prudent decisions. We're ensuring the safety of our employees first. We will continue to do that. We're enforcing, obviously, safe distance, baths, sanitizers. We are going to continue to look out for our employees and make sure they're in a safe work environment. That is number one. We're also looking out for our customers. We have sent face shields to several of our customers on us to help space that out, not just the hospitals. We're going to continue to fulfill our customer needs and demands. And we're diligently managing our cost and cash flow. Everyone's involved in doing so. And as you can imagine, when you get into these circumstances, everything slows down, including your AR. All of us are working to help bring that money back in. And we're starting to see Some advantages because our customers are starting to get funding from the government, which is helping them pay us. So we're seeing a little turn. But, again, these pandemics have never been seen before, and we're all managing through it. With that, I'd like to turn us over to Dave to discuss our first quarter 2020 financials.