Eastman Kodak Company
Q4 2019 Earnings Call Transcript

Published: 17 Mar 2020

[Company Representatives:]

Jim Continenza - Executive Chairman Dave Bullwinkle - Chief Financial Officer Paul Dils - Chief Tax Officer, Director of Investor Relations

[Operator:]

Ladies and gentlemen, thank you for standing by and welcome to the Eastman Kodak Q4 2019 Earnings Conference Call. At this time all participants’ lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today’s conference may be recorded. . I would now like to hand the conference over to your speaker today, Mr. Paul Dils. Thank you. Please go ahead, sir.

[Paul Dils:]

Thank you and good afternoon everyone. I am Paul Dils, Eastman Kodak Company’s Chief Tax Officer and Director of Investor Relations. Welcome to Kodak’s fourth quarter 2019 earnings call. At 4

[Jim Continenza:]

Thank you, Paul. Welcome everyone and thank you for joining the fourth quarter investor call for Eastman Kodak. Turning to slide four, 2019 was a breakthrough year for Kodak. We ended the year 2019 with $233 million of cash and cash equivalents, flat when compared to 2018, the first time in several years we have been burned $90 million to $100 million. We are expecting to burn close to $140 million to $160 million and we really inked them down and took out the appropriate cost, shut down divisions that were not profitable. We got focused on what we do best with what’s in our DNA and part of that settlement was we completed the sale of the Flexographic Packaging Division, the issuance and sale of $100 million aggregate principal amount of a 5% secured convertible notes due in 2021; repaid in full $395 million of the First Lien Term Loans; established a strategic relationship with the People Republic of China and Lucky HuaGuang Graphics. We're going to call this growth and profitable revenue a smart revenue. You'll hear it referred to sometimes in the future.

[Dave Bullwinkle:]

Thanks Jim and good afternoon. Today the company filed its Form 10-K for the year ended December 31, 2019 with the Securities and Exchange Commission. As always, I recommend you read this filing in its entirety. The company generated positive cash flow in the fourth quarter of 2019, and had breakeven cash flow for the full year 2019, which reflects benefits from working capital improvements and individual transactions which occurred during the year. The company will remain focused on cash generation in 2020. I will now share further details on the full company results, operation of EBITDA and cash flow for 2019. Please note the results of Flexographic Packaging Division have been reported as discontinued operations in 2019 and the comparable 2018 periods due to the sales division in April of 2019. Additionally, certain amounts have been reclassified for the curtain and prior year periods due to assets held for sale reporting requirements related to the HuaGuang transaction. On slide seven, as we reported in our earnings release, net income for 2019 on a U.S. GAAP basis was $116 million compared to a net loss of $16 million in 2018. 2019 results include a net gain on sale of the FPD business of $214 million, non-cash changes in workers compensation and legal reserve adjustments of $3 million, expense of $4 million related to trade name impairments and the related changes in the fair value for the derivatives embedded in the Series A Preferred Stock and convertible notes of $42 million.

[Operator:]

[Jim Continenza:]

Great! Well, I’d like to thank everyone for dialing in. Again, it was one of our best years in a long time and it’s starting the foundation of the new Kodak and we are excited on the path we are going. So thanks again for dialing in. We appreciate it. Take care and stay safe. Good Bye!

[Operator:]

Ladies and gentleman, this concludes today's conference call. Thank you for participating. You may now disconnect.