Eastman Kodak Company

Good day and thank you for standing by. Welcome to the Eastman Kodak Second Quarter 2023 Earnings Conference Call. All participants are in a listen-only mode. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Anthony Redding. Please go ahead.

Thank you and good afternoon, everyone. I am Anthony Redding, Eastman Kodak Company's Chief Compliance Officer. Welcome to Kodak second quarter 2023 earnings call. At 4.15 p.m. this afternoon, Kodak filed its Form 10-Q and issued its release on financial results for the second quarter of 2023. You may access the presentation and webcast for today's call at our Investor Center at investor.kodak.com. During today's call, we'll be making certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based upon CODAX 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 from these forward-looking statements include, among others, the risk, uncertainties, and other factors described in more detail in Kodak'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 the presentation. CODAC 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 unanticipated 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 measures 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 Continenza, Kodak's Executive Chairman, and Chief Executive Officer, and David Bullwinkle, Chief Financial Officer of Kodak. We will not be holding a formal Q&A during today's call. As always, the investor relations team is available for follow-up. I will now turn the call over to Jim Continenza. Thank you.

Welcome, everyone, and thank you for joining the second quarter 2023 investor call for Kodak. I am pleased with the ongoing improvements reported in the company's results for the second quarter 2023. Over the last four years, we have prioritized investing in innovation, efficiency, and driving smart revenue. And today, we're starting to see the benefits of these long-term investments. We're seeing them through increased gross profit, cash performance, despite ongoing external challenges which affect the markets worldwide. It's important to note that the progress we have made reflects our commitment to our ongoing execution of our long-term plan, staying focused on our core business of print, advanced materials, and chemicals, continuing to invest in products and infrastructure that allows us to better serve our customers and constantly streamline our business operations. Some highlights from the second quarter. As part of the controlled introduction of our new inkjet presses, we are completing the placement of two new machines, a Prosper Ultra 520 press, which offers offset quality at unmatched production speeds, and the Prosper 7000 Turbo, which is the world's fastest inkjet press. Both presses are scheduled to be in production in the third quarter this year. Reflecting on our commitment to digital print during the second quarter, we expanded and strengthened our position with the acquisition of Graphic Systems Services. known as GSS. We've had a long-term relationship with GSS over the years in the product portfolio, including making transport and other components. GSS is critical to Kodak as a supplier for supporting Prosper for well over 20 years. Their expertise and resource will enable us to design, build, or complete integrated solutions for customers on the stream and ultra-stream platforms. We continue to invest in previously announced long-term growth initiatives in advanced materials and chemicals, including CODELUX light blocking technology and coating substrates for EV batteries. We are starting to see revenue contributions from these businesses. In addition, we continue to see growing demand in our still in motion picture film business. A great example of the ongoing relevance of film as an artistic medium is Christopher Nolan's Oppenheimer, which was shot on Kodak large format film, including both color film and a 65 millimeter black and white film created by Kodak specifically for the production. In addition, Oppenheimer is being screened in the IMAX format using large format film prints, which produce an eye-popping viewing experience for the audience who see this masterpiece film. We'd like to thank Christopher Nolan and IMAX for their continued support of film. We recently renewed our supply agreement for film with our long-term customer, Kodak Alaris, in a deal that will run through 2028. We are committed to manufacturing film as long as there is demand from the filmmakers and photographers worldwide. We are also pleased to announce the VisionCare industry leader Estelor Bixotica has chosen to add the Kodak brand to an extraordinarily broad portfolio of licensed brands. This perpetual license agreement grants Estelor Bixotica the exclusive right to use Kodak registered trademarks for products and services in a full range of product categories. We recently concluded the transactions to strengthen our financial position by refinancing Kodak's debt. We took this action proactively to extend our maturity of our debt and to eliminate our asset base revolving credit facility, ABL. More will be covered on this later by Dave Bull and we call our CFO. The requirements under the new financing are consistent with how we run our business. Doing this now will provide increased financial and operational flexibility as we continue to execute our long-term strategic plan. Performance highlights for the second quarter. Revenues were 295 million, a decline of 26 million, or 8%, compared to the prior year. The decline in revenue reflects a conscious decision that we are making to prioritize increased productivity, investing in innovation, and driving smart revenue globally. This strategy enabled us to increase gross profit by 12 million, or 24%, compared to the prior year. Our gross profit percentage was 21%, in the second quarter, 2023, compared to 16% the prior year. A lot of these contributions have come through advancements in efficiencies and investment in advanced materials and chemicals. RCAS performance also improved year over year for the first half, an increase of 6 million in the six months ending June 30th, 2023, compared with a decrease of 73 million in the prior year period. an improvement of $79 million. These improvements are encouraging and provide a clear indication that we are on the right track in terms of executing our long-term strategy. However, we recognize that we still have a lot of work to do in terms of continuing to generate free cash flow, pay down our debt, and delivering the leading-edge solutions to our customers We always keep in mind, right, we prioritize the customer. We're a customer-first company. We only win when they win. We need to continue to invest profitably in innovation, efficiencies, and technology to help them grow and drive their business. I will now turn it over to Dave to discuss our Q2 2023 financial results.