Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Eastman Kodak Co (NYSE:KODK) continues to invest in innovation, focusing on advanced materials, digital print, and battery technology.
• The company received a favorable ruling from the ITC on plates tariffs, leveling the playing field for US manufacturers.
• Film sales, particularly in motion picture and still film, have increased, showing commitment to this segment.
• Eastman Kodak Co (NYSE:KODK) is investing heavily in infrastructure, including the modernization of manufacturing facilities.
• The company reported a net income increase to $18 million for the third quarter of 2024, compared to $2 million in the prior year quarter.

Negative Points

• Revenues decreased by $8 million or 3% compared to the prior year quarter, reflecting ongoing challenges.
• Gross profit decreased by $5 million or 10%, impacted by higher aluminum costs and inventory reserve adjustments.
• Operational EBITA for the quarter was only $1 million, a significant decline from $12 million in the prior year quarter.
• Higher manufacturing costs and litigation expenses negatively impacted financial performance.
• Cash and cash equivalents decreased by $41 million from December 31, 2023, indicating cash flow challenges.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with KODK.

Q: Can you provide an overview of Kodak's financial performance for the third quarter of 2024? A: Jim Continenza, Executive Chairman and CEO, stated that Kodak reported revenues of $261 million for Q3 2024, a slight decrease from $269 million in Q3 2023. The gross profit margin was 17%, down from 19% in the previous year. The decline in revenue was expected and aligns with the company's strategic focus on smart revenue and operational efficiency.

Q: What are the key areas of investment for Kodak moving forward? A: Jim Continenza highlighted that Kodak is investing in advanced materials and chemicals, digital and traditional print, film, and battery technology. The company is also focusing on expanding its CGMP clean lab and reagent facility, which are crucial for future growth.

Q: How has Kodak addressed the challenges in the plate business due to international competition? A: Jim Continenza explained that Kodak has faced significant pressure from Chinese and Japanese competitors in the plate business. However, the company has successfully obtained a favorable ruling from the ITC, which imposes tariffs ranging from 91.83% to 353.09% on imported plates, leveling the playing field for Kodak.

Q: What impact did the recent investments have on Kodak's cash flow and operational performance? A: David Bullwinkle, CFO, reported that Kodak ended Q3 2024 with $214 million in cash, a decrease of $41 million from the end of 2023. This decline is attributed to ongoing capital expenditures and working capital investments to support growth initiatives, particularly in advanced materials and chemicals.

Q: How is Kodak leveraging its infrastructure at Eastman Business Park? A: Jim Continenza emphasized the strategic importance of Eastman Business Park, noting significant investments in infrastructure and new facilities. The park is a key asset for Kodak, providing capabilities in power, chemical recovery, waste management, and more, which are essential for supporting the company's growth and innovation efforts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.