Eastman Kodak Q1 2025 Earnings Report

Eastman Kodak EPS Results

• Actual EPS: -$0.12
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Eastman Kodak Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Eastman Kodak Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 5:00PM ET

Eastman Kodak (NYSE:KODK) engages in the provision of hardware, software, consumables, and services to customers in the commercial print, packaging, publishing, manufacturing, and entertainment markets worldwide. The company operates through three segments: Print, Advanced Materials and Chemicals, and Brand. The Print segment provides digital offset plate offerings and computer-to-plate imaging solutions; press systems and components under the PROSPER brand name, as well as print inks and primers under the KODAK OPTIMAX, KODACHROME, and KODAK EKTACOLOR brand names; and PRINERGY, a workflow production software, which is used by customers to manage digital and conventional print content from file creation to output. This segment offers its products to commercial industries, including commercial print, direct mail, book publishing, newspapers and magazines, décor, and packaging/labels. The Advanced Materials and Chemicals segment engages in industrial film and chemicals, motion picture, advanced materials and functional printing, and IP licensing and analytical activities. This segment also comprises the Kodak Research Laboratories, which conducts research, develops new product or new business opportunities, and files patent applications for its inventions and innovations, as well as manages licensing of its intellectual property to third parties. The Brand segment engages in the licensing of Kodak brand to third parties. The company is also involved in the operation of Eastman Business Park, a technology center and industrial complex. It sells its products and services through direct sales, third party resellers, dealers, channel partners, and distributors. The company was founded in 1880 and is headquartered in Rochester, New York.

Eastman Kodak Q1 2025 Earnings Call Transcript

Key Takeaways

• Kodak reported a net loss of $7 million in Q1 2025, compared to net income of $32 million in the prior year quarter.
• Revenue was $247 million, down 1% year-over-year from $249 million, but the rate of decline has slowed as expected.
• Cash balance decreased by $43 million to $158 million, driven by investments in Advanced Materials & Chemicals growth initiatives and higher commodity costs.
• Termination of the U.S. pension plan is on track, with expected reversion proceeds to pay down debt and reduce interest expenses.
• Kodak continues expanding U.S. manufacturing operations, including a new CGMP pharma facility, increased film capacity, and production of the Prosper Ultra 520 press.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Eastman Kodak Quarter One Earnings Conference Call. At this time, 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 first speaker today, Anthony Redding. Anthony, you may now begin.

[Anthony Redding, Chief Audit Executive, Chief Compliance Officer, & Director of Investor Relations (Interim) at Eastman Kodak Company]

Thank you, and good afternoon, everyone. I am Anthony Redding, Eastman Kodak Company's Chief Compliance Officer. Welcome to Kodak's first quarter twenty twenty five earnings call. At 04:15 p. M.

[Anthony Redding, Chief Audit Executive, Chief Compliance Officer, & Director of Investor Relations (Interim) at Eastman Kodak Company]

This afternoon, Kodak filed its Form 10 Q and issued its release on financial results for the first quarter of twenty twenty five. 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. We intend for these forward looking statements to be covered by the safe harbor provisions for forward looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All forward looking statements are based upon Kodak's expectations and various assumptions.

[Anthony Redding, Chief Audit Executive, Chief Compliance Officer, & Director of Investor Relations (Interim) at Eastman Kodak Company]

Future events or results may differ from those anticipated or those 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 risks, 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 Kodak's actual results to differ materially from the forward looking statements.

[Anthony Redding, Chief Audit Executive, Chief Compliance Officer, & Director of Investor Relations (Interim) at Eastman Kodak Company]

All forward looking statements attributable to Kodak or persons acting on its behalf only apply as of the date of this presentation and are expressly qualified in their entirety by the cautionary statements included or referenced in this presentation. Kodak 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 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 Burwinkel, Kodak's Chief Financial Officer and Senior Vice President.

[Anthony Redding, Chief Audit Executive, Chief Compliance Officer, & Director of Investor Relations (Interim) at Eastman Kodak Company]

We will not be holding a formal Q and 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. Thank you, and have a great day.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

Welcome, everyone, and thank you for joining the first quarter twenty twenty five investor call for Eastern Kodak. We continue to execute our long term plan despite global economic uncertainty. Kodak also stays committed to being a primarily US based manufacturer. We have expanded our US operations in pharma. We've expanded in battery.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

We continue to invest in innovation across the board. We focus heavily on operational efficiencies, trying to drive our costs down. We have shut unprofitable businesses, allowing us to focus on growth businesses, and we will continue to focus on our gross profit. And I'm sure this is on a lot of people's mind, the tariffs. We will continue to work through them.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

They're changing and changing environment. We need to take the short term pain to get the long term gain. We've got a staff of people that are well versed on the tariffs. We will comply with all of them and continue to work to better serve our customers as the administration finalizes the tariffs globally. Our core business continues to perform as expected.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

Highlights from the first quarter include revenue of $247,000,000 compared with $249,000,000 for the first quarter twenty twenty four, roughly flat year over year. The rate of decline has slowed, which is in line with expectations. Gross profit percentage of 19 compared with 20% for first quarter twenty twenty four was roughly flat year over year. Here are some highlights. Our Advanced Materials and Chemical Group, AM and C, is key to Kodak's future.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

Ongoing investments in AM and C growth initiatives include our new CGMP pharma manufacturing facility to be online later this year, expanding our current pharma business into manufacturing FDA regulated diagnostic test reagents. I'm pleased to say demand for various types of film, still motion picture, NDT and others continue to grow. We've invested in expanding our capacity in the film facility. Moving on to highlights from our commercial print business. We are moving from controlled introduction to controlled production of our Prosper Ultra five twenty press.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

We've completed install sales of several Prosper Ultra five twenty presses, which are currently being installed in customer sites. We have also seen continuous demand for our US made lithographic printing plates. We have been committed to manufacturing in The US for over a hundred years. A primary example is our investment in the new pharma facility in Eastman Business Park in Rochester, New York. We also manufacture all of our film products and the world's fastest inkjet presses in The United States.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

We are the last remaining U. S. Manufacturer of lithographic printing plates. As a reminder, our AM and C growth initiatives continue to be U. S.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

Based. Our commitment to manufacturing in country reduces our environmental impact, gives our customers the highest quality and a more reliable supply. I'd like to give an update also on U. S. Pension plan.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

The current termination and settlement process is proceeding as planned. We expect a significant portion of any reverted asset to be used to reduce long term debt and therefore the annual cost of servicing that debt. You can find additional information in our Form 10 Q filing. I will now turn it over to Dave Bohlenkel to discuss the financial results.

[David Bullwinkle, CFO & Senior VP at Eastman Kodak Company]

Thanks, Jim, and good afternoon. This afternoon, the company filed its Form 10 Q for the quarter ending 03/31/2025, with the SEC. As I always do, I recommend you read this filing in its entirety. Before I get into the details for the quarter, I would like to provide a brief status update on the termination process for the U. S.

[David Bullwinkle, CFO & Senior VP at Eastman Kodak Company]

Kodak Retirement Income Plan or CRIP and on an amendment to our term loan credit agreement. On 01/21/2025, Kodak's Board of Directors approved the termination of CRIP effective 03/31/2025. The Crip termination and settlement process is proceeding as planned with election mailings being sent to participants in the early summer and the purchase of annuities planned for the fourth quarter of twenty twenty five. We estimate it will take seven to eleven more months to receive any pension reversion proceeds from the settlement of Crip after required debt prepayments. Please be reminded, as previously disclosed, this time frame is subject to factors beyond Kodak's control, including, but not limited to, regulatory review and approval of various aspects of the terms of Crip, Crip's activities and the termination and liquidation process.

[David Bullwinkle, CFO & Senior VP at Eastman Kodak Company]

Additionally, the company entered into the second amendment to the amended and restated credit agreement for the term loan that provides the company the option to make the next six quarterly interest payments following the amendment in the form of payments in kind or PIK. In addition, term debt prepayment requirements associated with certain transactions have been revised within the amendment. For further details on both of these topics, please refer to the Form 10 Q filed with the SEC today. I will now share details on the full company results, operational EBITDA and cash flow for the first quarter of twenty twenty five. In the face of an extremely difficult global environment with economic uncertainties around global trade and inflation, Kodak continued to build on its strong foundation during the first quarter of twenty twenty five, delivering results reflecting the continued focus on executing against our priorities and long term plan, including driving smart revenue, implementing pricing rationalization and cost reductions, launching new products and investing in innovation and information technology systems to increase our operational efficiency.

[David Bullwinkle, CFO & Senior VP at Eastman Kodak Company]

On Slide seven, we reported revenues of $247,000,000 for the first quarter of twenty twenty five compared to $249,000,000 in the prior year quarter or a decline of $2,000,000 or 1%. The decline in revenue has slowed, which reflects our ongoing focus on driving smart revenue and strong profitability. On a constant currency basis, revenue increased by $1,000,000 or essentially flat when compared to the prior year quarter. Gross profit decreased by $3,000,000 or 6 percent when compared to the prior year quarter. Excluding the unfavorable impact of foreign exchange, gross profit declined by $2,000,000 or 4% when compared to the prior year quarter.

[David Bullwinkle, CFO & Senior VP at Eastman Kodak Company]

Our gross profit percentage was 19% in the first quarter of twenty twenty five compared to twenty percent in the prior year quarter. On a U. S. GAAP basis, we reported a net loss of $7,000,000 for the first quarter of twenty twenty five compared to net income of $32,000,000 in the prior year quarter, a decrease of $39,000,000 The 2025 and twenty twenty four first quarter results include expense of $1,000,000 and income of $1,000,000 respectively, related to non cash changes in workers' compensation and employee benefit reserves. The first quarter of twenty twenty four results also include income of $17,000,000 related to a net gain on the sale of assets.

[David Bullwinkle, CFO & Senior VP at Eastman Kodak Company]

Excluding these current and prior year quarter items, net loss for 2025 was $6,000,000 compared to net income of $14,000,000 in the prior year quarter, reflecting a decline of $20,000,000 Operational EBITDA for the quarter was $2,000,000 compared to $4,000,000 in the prior year quarter or a decline of $2,000,000 Excluding the impact of non cash changes in workers' compensation and employee benefit reserves in both the current prior year quarters and the impact of foreign exchange in the current year quarter, operational EBITDA improved by $1,000,000 when compared to the prior year quarter. Both gross profit and operational EBITDA for the first quarter of twenty twenty five was unfavorably impacted by higher aluminum and manufacturing costs, partially offset by price increases and volume improvements. Moving on to the company's cash performance presented on Slide eight. Company ended the first quarter with a cash balance of $158,000,000 a decrease of $43,000,000 from 12/31/2024. Our use of cash was primarily driven by our continuing investments in AM and C growth initiatives and increased commodity and manufacturing costs.

[David Bullwinkle, CFO & Senior VP at Eastman Kodak Company]

Foreign exchange had a favorable impact on cash of $2,000,000 in the current year quarter. Cash used in operating activities was $38,000,000 for the current year quarter, driven primarily by the use of cash from net earnings of $14,000,000 and the use of cash from balance sheet changes of $24,000,000 including a change in working capital of $17,000,000 a decrease in miscellaneous receivables of $3,000,000 and a decrease in other liabilities of $20,000,000 Within working capital, accounts payable increased by $6,000,000 inventory increased by $15,000,000 and accounts receivable increased by $8,000,000 The change in working capital for the prior year period included the receipt of $40,000,000 of cash proceeds from brand licensing. The team continues to focus on improving profitability and performance in working capital, which enhances the company's ability to generate cash. Cash used in investing activities was $7,000,000 for the current year quarter, primarily comprised of capital expenditures and reflects a $14,000,000 decrease when compared to the prior year quarter. The prior year quarter included proceeds from the sale of assets of $17,000,000 Cash used in financing activities for the first quarter of twenty twenty five improved by $16,000,000 when compared to the prior year quarter.

[David Bullwinkle, CFO & Senior VP at Eastman Kodak Company]

Prior year quarter included the $17,000,000 prepayment of the amended and restated term loan agreement made from the proceeds received from the sale of assets within investing activities. Restricted cash decreased by $2,000,000 when compared to the balance as of 12/31/2024, primarily driven by strategic efforts to reduce cash collateral and escrow requirements for certain company obligations and business arrangements. As a reminder, restricted cash primarily represents cash collateral supporting the company's undiscounted actuarial workers' compensation obligations with the New York State Workers' Compensation Board and cash collateral required under the letter of credit facility. In addition, escrows to secure various ongoing obligations. We continue to focus on opportunities to reduce restrictions on cash.

[David Bullwinkle, CFO & Senior VP at Eastman Kodak Company]

As presented on the bottom portion of the slide, excluding the change in restricted cash and the effects of foreign exchange, the company recognized a $55,000,000 decrease in cash and cash equivalents in the first quarter of twenty twenty five compared to the prior year period. We will continue to focus on maintaining the strength of the foundation we have worked hard to create, which provides us the opportunity to fund our ongoing operations, invest in our growth initiatives and convert our historical investments into returns for the long term. Finally, as disclosed in our Form 10 Q, we remain in compliance with all applicable financial covenants. I will now turn the discussion back to Jim. Thank you.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

Thank you, Dave. In summary, as a long time manufacturer for over one hundred years, Kodak remains committed to maintaining and expanding our manufacturing in The U. S. Across all of our businesses. I am pleased to say our A, M and C business continues to deliver profitable growth and return on our investments.

[James Continenza, Executive Chairman & CEO at Eastman Kodak Company]

Accessing the excess pension fund asset will help pay down debt and reduce interest costs, allowing Kodak to continue to invest in profitable growth businesses. I'd like to thank our employees for their hard work, our customers for their loyalty, and our shareholders for their support. Have a good evening.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Anthony Redding, Chief Audit Executive, Chief Compliance Officer, & Director of Investor Relations (Interim)
• James Continenza, Executive Chairman & CEO
• David Bullwinkle, CFO & Senior VP