Q2 2024 Eastman Kodak Company Earnings Call

Good day and thank you for standing by and welcome to Eastman Kodak Q2 2024 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 speaker today, Anthony Redding. Please go ahead.

Operator: 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 speaker today, Anthony Redding. Please go ahead.

Anthony Redding: Thank you, and good afternoon, everyone. I am Anthony Redding, Eastman Kodak Company's Chief Compliance Officer. Welcome to Kodak's second quarter 2024 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 2024. You may access the presentation and webcast for today's call at our Investor Center at investor.kodak.com. During today's call, we will be making certain fall-up look-in statements, as defined by the Private Security and Litigation Reform Act of 1995.

Anthony Redding: Thank you and good afternoon, everyone.

Anthony Redding: I am Anthony Redding, Eastman Code Accomplished Chief Compliance Officer. Welcome to Code Ac Second Quarter, 2024 earnings call.

Anthony Redding: All forward-looking statements attributable to Kodak 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. Kodak undertakes no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date of this presentation or to reflect the occurrence of unanticipated events. In addition, the release just issued and the presentation provided contain certain measures that are deemed non-GAAP measures.

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 2024. You may access the presentation and webcast for today's call at 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 Kodak's expectations and various assumptions.

Future events are results made different from those anticipated or expressed in the forward-looking statements.

Anthony Redding: Important factors that could cause actual events or results to differ materially from these forward-looking statements include, among others,

Anthony Redding: 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.

Anthony Redding: There may be other factors that may cause Kodak's actual results to differ materially from the forward-looking statements.

Anthony Redding: All formula statements attributable to Kodak or persons acting on its behalf apply only as of the date of this presentation.

Anthony Redding: and are expressly qualified in their entirety by the cautionary statements included are referenced in this presentation.

Anthony Redding: 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.

Anthony Redding: In addition, the release just issue and the presentation provided contains certain measures that are deemed non-gap measures.

Anthony Redding: 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.

Anthony Redding: 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.gov. Speakers on today's call are Jim Continent, who acts as executive chairman and chief executive officer, and David Bullwinkle, Chief Financial Officer and Senior Vice President of the League. We will not be holding a former Q&A session on today's call; as always, the Investor Relations Team is available for follow-up. I will now turn the call over to Jim. Thanks.

Speaker Change: Speakers on today's call are Jim Continenza, Kodak's Executive Chairman and Chief Executive Officer, and David Bullwinkle, Chief Financial Officer and Senior Vice President of Eastman Kodak.

Speaker Change: 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. Thank you.

Jim Continenza: Welcome everyone and thank you for joining the second quarter, 2024, and best you're called for Eastman Kodak. We continue to be committed to executing our long-term plan. As a result, gross profit percentage continues to increase. We're getting leaner, investing in innovation, launching new products, focusing on smart revenue, and aligning with the right customers. I am pleased with Kodak's continuing progress in the second quarter of 2024. Gross profit percentage was 20% compared to 21% in the prior year quarter. The 7th consecutive year over year after.

Speaker Change: Welcome everyone and thank you for joining the second quarter 2024 investor call for Eastman Kodak.

Speaker Change: We continue to be committed to executing our long-term plan as a result gross profit percentage continues to increase. We're getting leaner and busking innovation launching new products focusing on smart revenue and aligning with the right customers.

Speaker Change: I am pleased with the product continuing progress in the second quarter 2024.

Speaker Change: Gross profit percentage was 22% compared to 21% in the prior year quarter.

Jim Continenza: This performance reflects growth in AMC and our commitment to improving our operational efficiencies, realizing the value of our offering. However, revenues decreased $28 million or 90% compared to the prior year quarter, but decreased only $24 million or 8% excluding foreign exchange.

Speaker Change: The seventh consecutive year-over-year increase.

Speaker Change: This performance reflects growth in AMC and our commitment to improving our operational efficiencies, realizing the value of our offerings.

Speaker Change: Revenues decreased $28 million, or 9%, compared to the prior year quarter.

Speaker Change: but decreased only 24 million, or 8%, excluding foreign exchange.

Jim Continenza: The decrease in revenue is intentional as we continue to invest in our long-term strategy. We are focused on aligning with the right customers with the right products and driving smart revenue in the most efficient way possible. Growth profit decreased 5 million or 8% compared to the prior year quarter driven by higher cost of materials and other operating expenses. ANC is a very important part of our future.

Speaker Change: The decrease in revenue is intentional as we continue to invest in our long-term strategy. We are focused on aligning with the right customers with the right products and driving smart revenue at the most efficient way possible.

Speaker Change: Gross profit decreased 5 million or 8 percent compared to the prior year quarter, driven by higher cost of materials and other operating expenses.

Speaker Change: AMC is a very important part of our future. It leverages our unique strengths in chemicals, layering, and coding.

Speaker Change: Codec is currently seeing growth in revenues and key products in this area. We are investing in long-term advanced materials and chemicals opportunities that will set the foundation for our company for growth and profitability in the future.

Speaker Change: For example, our CGMP facility for manufacturing diagnostic tests, reagents, is expected to begin production in 2025. We're excited about this opportunity, it's been a long time coming and it's nice to see it coming to fruition.

Jim Continenza: We are committed to film and continue to invest in manufacturing capacity to meet growing demand. I was pleased and thrilled to see the movie Twisters, which is shot on a toy deck, and the bike riders, two phenomenal films that are extremely entertaining, and I want to thank them for choosing Kodak. We also continue to invest across our complete print portfolio. This year, I was pleased to be at Drupa 2024. It's been eight years since the last one.

Speaker Change: We are committed to film and continue to invest in manufacturing capacity to meet growing demand.

Speaker Change: I was pleased and thrilled to see the movie Twisters, which was shot on Kodak Film, and The Bike Riders, two phenomenal films that are extremely entertaining. And I want to thank them for choosing Kodak.

Speaker Change: We also continue to invest across our complete print portfolio.

Jim Continenza: We were able to showcase the Prosper Ultra 520, we did live demos, and we were packed. It was standing remotely, I couldn't have been more pleased with how the product performed and the crowd that we had. We were able to leave the show with commitments for several 520s, and we're in the process of installing one today at one of our European customers, continues to innovate and traditional print. Some examples I'd give you are the enhanced release of our new furniture, software, also the Sonora extra next generation plates, and several new CTPs. All of them are showcased at 3-by. Now I'll turn it over to Dave to discuss the financial results.

Speaker Change: This year I was pleased to be at Drupa 2024. It's been eight years since the last one. We were able to showcase the Prosper Alpha 520, we did live demos, and we were packed.

Speaker Change: It was standing room only. I couldn't have been more pleased with how the product performed and the crowds that we had. We were able to leave Drupal with commitments for several 520s. We're in the progress of installing one today to one of our European customers.

Speaker Change: Kodak continues to innovate in traditional print. Some examples I'd like to give you is the enhanced release of our new Prinergy software, also the Sonora Extra Next Generation plates, and several new CTPs. All of them were showcased at Drupal.

David Bullwinkle: Thanks Jim and good afternoon. This afternoon, the company filed its form 10Q for the quarter ended March 24 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 and first half of 2024, I would like to comment on a certain disclosure in our Form 10Q. As disclosed in the liquidity section of our MD&A within the Form 10-Q, actions have been implemented with the U.S. Pension Plan to reduce investment risk and strengthen the plan's ability to provide benefits to participants.

Speaker Change: Now I'll turn over today to discuss the financial results.

Speaker Change: Thanks, Jim, and good afternoon. This afternoon, the company filed its Form 10-Q for the quarter ended June 30, 2024 with the FCC. As they always do, I recommend you read this filing in its entirety.

David Bullwinkle: Before I get into the details for the quarter and first half of 2024, I would like to comment on a certain disclosure in our form 10Q.

David Bullwinkle: As disclosed in the Liquidity section of our MD&A within the Form 10-Q , actions have been implemented with the U.S. Pension Plan to reduce investment risk and strengthen the plan's ability to provide benefits to participants.

David Bullwinkle: This includes the previously announced outsourcing of the plan's investment management, as well as the adoption of a new investment strategy. Please refer to the disclosures within the form 10Q for more specific information. In addition, the company's existing S3 primary shelf registration is set to expire on August 12, 2024. We have not drawn anything down on this shelf to date.

David Bullwinkle: This includes the previously announced outsourcing of the planned investment management, as well as the adoption of a new investment strategy.

David Bullwinkle: Please refer to the disclosures within the Form 10Q for more specifics.

David Bullwinkle: In addition, the company's existing S3 primary shelf registration is set to expire on August 12, 2024.

David Bullwinkle: However, in order to maintain the flexibility to access the public markets, the company is filing a shelf registration statement to essentially renew the expiring shelf registration. We are also filing an S8 registration statement to register additional common stock authorized to be issued under the company's Equity Compensation Plan by virtue of the amendment of the plan approved at the annual shareholders meeting in May. I will now share details on the full company results, operational EBITDA, and cash flow for the second quarter and first half of 2025.

David Bullwinkle: We have not drawn anything down on this shelf to date.

David Bullwinkle: However, in order to maintain the flexibility to access the public markets, the company is filing a shelf registration statement to essentially renew the expiring shelf registration.

David Bullwinkle: We are also filing an S8 registration statement to register additional common stock authorized to be issued under the company's equity compensation plan by virtue of the amendment of the plan approved at the annual shareholders meeting in May.

Speaker Change: Thanks for watching, and don't forget to like, share, and subscribe to our channel.

David Bullwinkle: I will now share details on the full company results, operational EBITDA, and cash flow for the second quarter and first half of 2024.

David Bullwinkle: During the second quarter, Kodak continued to build on its strong foundation in the face of an extremely difficult global environment, driving smart revenue, pricing rationalization, and cost reductions to deliver a gross profit percentage of 22% while continuing to invest in long-term growth initiatives and its information technology system. The company's results reflect the continued focus on these priorities and the execution against our long-term strategy.

David Bullwinkle: During the second quarter, Kodak continued to build on its strong foundation in the face of an extremely difficult global environment.

David Bullwinkle: driving smart revenue, pricing rationalization, and cost reductions, delivering a gross profit percentage of 22 percent, while continuing to invest in long-term growth initiatives and information technology systems.

David Bullwinkle: The company's results reflect the continued focus on these priorities and the execution against our long-term strategy. The company's financial results are within our expectations at this point in our long-term strategy.

David Bullwinkle: The company's financial results are within our expectations at this point in our long-term strategy. On slide 7, we reported revenues of 267 million for the second quarter of 2024 compared to 295 million in the prior quarter. For a decline of 28 million or 9% Adjusting for the unfavorable impact of foreign exchange of $4 million in the current year quarter, revenue declined by $24 million compared to the prior year quarter, and rose profit decreased by $5 million or 8% when compared to the prior year court. Foreign exchange had no impact on gross profit in the current year quarter.

David Bullwinkle: On slide 7, we reported revenues of 267 million for the second quarter of 2024 compared to 295 million in the prior year quarter, for the decline of 28 million or 9%.

David Bullwinkle: Adjusting for the unfavorable impact of foreigners change of $4 million in the current year quarter, revenue declined by 24 million compared to the prior quarter.

David Bullwinkle: Gross profit decreased by $5 million or 8% when compared to the prior quarter. For an exchange, had no impact on gross profit in the current year quarter.

David Bullwinkle: Our gross profit percentage was 22% in the second quarter of 2024 compared to 21% in the prior, and up 2 percentage points when compared to the first quarter of 2024, which is a result of the actions our team has taken to make our operations more efficient and to realize the value of our product. These actions have established positive momentum as we continue to drive profitable growth going forward.

David Bullwinkle: Our gross profit percentage was 22% in the second quarter of 2024 compared to 21% in the prior year quarter, and up two percentage points when compared to the first quarter of 2024, which is a result of the actions our team has taken to make our operations more efficient.

David Bullwinkle: and to realize the value of our product offerings.

David Bullwinkle: These actions have established positive momentum as we continue to drive profitable growth going forward.

David Bullwinkle: On a U.S. gap basis, we reported net income of $26 million for the second quarter of 2024 compared to net income of $35 million in the prior quarter, a decrease of $9 million. The 2023 second quarter results include an expense of $1 million related to changes in the fair value of embedded derivative liabilities. I didn't come up with $1 million related to non-cast changes in workers' compensation and employed benefit reserve.

David Bullwinkle: On a U.S. GAAP basis, we reported net income of $26 million for the second quarter of 2024, compared to net income of $35 million in the prior year quarter, a decrease of $9 million.

David Bullwinkle: The 2023 second quarter results include expense of $1 million related to changes in the fair value of embedded derivative liabilities and income of $1 million related to non-cash changes in workers' compensation and employee benefit reserves.

David Bullwinkle: There is no net impact on the second quarter of 2024 results when adjusting for these prior year quarter items. Operational EBITDA for the quarter was $12 million compared to $22 million in the prior year quarter, a decline of $10 million. Excluding the impact of non-cash changes in workers' compensation and employee benefit reserves in the prior year quarter, operational EBITDA decreased by $9 million when compared to the prior year quarter. Foreign exchange had no impact on operational EBITDA in the current year quarter.

David Bullwinkle: There is no net impact on the second quarter of 2024 results when adjusting for these prior year quarter items.

David Bullwinkle: Operational EBITDA for the quarter was $12 million compared to $22 million in the prior year quarter, a decline of $10 million.

David Bullwinkle: Excluding the impact of non-cast changes in workers' compensation and employee benefit reserves in the prior quarter, operational EBITDA decreased by $9 million when compared to the prior quarter.

David Bullwinkle: Operational EBIT for the second quarter of 2024 was unfavorably impacted by higher selling administrative costs associated with investments in information technology systems and organizational structure to drive further operational efficiencies as well as costs associated with the Drupa trade show and certain litigation matters. In addition, lower volumes and higher manufacturing costs associated with the continued ongoing global cost increase have negatively impacted operational EBIT. Turning to Slide 8, for the first half of 2024, we reported revenues of $516 million, compared to $573 million in the prior year period, for a decrease of $57 million.

David Bullwinkle: Foreign exchange had no impact on operational EBITDA in the current year quarter.

David Bullwinkle: Operational EBITDA for the second quarter of 2024 was unfavorably impacted by higher selling and administrative costs associated with investments in information technology systems

David Bullwinkle: and organizational structure to drive further operational efficiencies as well as costs associated with the Drupa trade show and certain litigation matters.

David Bullwinkle: In addition, lower volumes and higher manufacturing costs associated with the continued ongoing global cost increases have negatively impacted operational evita.

David Bullwinkle: Adjusting for the unfavorable impact of foreign exchange of $4 million in the current year period, revenue decreased by $53 million compared to the prior year period. Gross profit decreased by $6 million, or 5%, when compared to the prior year period; foreign exchange had no impact on gross profit in the current year period. Our gross profit percentage was 21% for the first half of 2024 compared to 20% in the prior year period.

David Bullwinkle: Turning to slide 8 for the first half of 2024, we reported revenues of $516 million compared to $573 million in the prior year period for a decrease of $57 million.

David Bullwinkle: Adjusting for the unfavorable impact of foreign exchange of $4 million in the current year period, revenue decreased by $53 million compared to the prior year period.

David Bullwinkle: Gross profit decreased by $6 million, or 5%, when compared to the prior year period.

David Bullwinkle: Foreign exchange had no impact on gross profit in the current year period. Our gross profit percentage was 21% for the first half of 2024 compared to 20% in the prior year period.

David Bullwinkle: On a U.S. GAAP basis, net income was $58 million for the first half of 2024, compared to net income of $68 million in the prior year period. The 2024 first half results include income of $1 million related to nine cash changes in workers' compensation and employee benefit reserves and income of $17 million related to a net gain on the sale of assets. The 2023 first half results include charges of $2 million related to changes in the fair value of the embedded derivative liability and income of $9 million related to a refund from a non-U.S. governmental authority.

David Bullwinkle: On a U.S. gap basis, net income was $58 million for the first half of 2024 compared to net income of $68 million in the prior year period.

David Bullwinkle: The 2024 First Half results include income of $1 million related to non-cash changes in workers' compensation and employee benefit reserves.

David Bullwinkle: and income of $17 million related to a net gain on the sale of assets.

David Bullwinkle: The 2023 first half results include charges of $2 million related to changes in the fair value of the embedded derivative liabilities and income of $9 million related to a refund from a non-U.S. governmental authority.

David Bullwinkle: Excluding these current and prior year items, net income for the first half of 2024 was $40 million compared to net income of $61 million in the prior year period, a decline of $21 million. Operational EBITDA for the period was $16 million compared to $31 million in the prior year period, a decline of $16 million. Excluding the impact of non-cash changes in workers' compensation and employee benefit reserves in the current year, operational EBITDA decreased by $16 million compared to the prior year period. Forest Change had no impact on operational EBITDA in the current year period.

David Bullwinkle: Excluding these current and prior year items, net income for the first half of 2024 was $40 million, compared to net income of $61 million in the prior year period, a decline of $21 million.

David Bullwinkle: Operational EBITDA for the period was $16 million compared to $31 million in the prior year period.

David Bullwinkle: A decline of $15 million. Excluding the impact of non-cast changes in workers compensation and employed benefit reserves in the current year, operation will yield to a decrease by $16 million compared to the prior year period.

David Bullwinkle: Operational EBSF for 2024 was unfavorably impacted by lower volumes and higher selling as administrative costs associated with investments in information technology systems, and organizational structure to drive further operational efficiencies, as well as costs associated with the Drupatricho and certain litigation means. Moving on to the company's cash performance presented on slide 9. The company ended the second quarter with $251 million in cash and cash equivalents, a decrease of $4 million from December 31st, 2023.

David Bullwinkle: Foreign exchange had no impact on operational EBITDA in the current year period.

David Bullwinkle: Operational EBITDA for 2024 was unfavorably impacted by lower volumes and higher selling as administrative costs associated with investments in information technology systems.

David Bullwinkle: and organizational structure to drive further operational efficiencies as well as costs associated with the Drupa trade show and certain litigation matters.

David Bullwinkle: Moving on to the company's cash performance presented on slide nine.

David Bullwinkle: The company ended the second quarter with $251 million in cash and cash equivalents, a decrease of $4 million from December 31st, 2023.

David Bullwinkle: For the six months ending June 30, 2024, cash provided by operating activities was $10 million, compared to $21 million in the prior year period. Cash provided by operating activities in the current year period was primarily driven by the use of cash net earnings of $17 million and cash provided from balance sheet changes of $27 million, including a change in working capital of $32 million, and a decrease in other liabilities of $22 million.

David Bullwinkle: For the six months ending June 30, 2024, cash provided by operating activities was $10 million, compared to $21 million in the prior year period.

David Bullwinkle: Cash provided by operating activities in the current year period was primarily driven by use of cash from net earnings of $17 million and cash provided from balance sheet changes of $27 million.

David Bullwinkle: including a change in working capital of 32 million dollars and a decrease in other liabilities of 22 million dollars.

David Bullwinkle: Within working capital, accounts payable decreased by $1,000,000. Inventory increased by $18,000,000, and accounts receivable decreased by $51,000,000 compared to the prior year period. The decrease in accounts receivable is primarily due to $40 million of cash proceeds received in January 2024 from brand licenses. 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 $2 million in the first half of 2024, which is an improvement of $9 million when compared to the prior year period.

David Bullwinkle: Within Working Capital, accounts payable decreased by $1 million, inventory increased by $18 million, and accounts receivable decreased by $51 million compared to the prior year period.

David Bullwinkle: The decrease in account receivable is primarily due to 40 million dollars of cash proceeds received in January 2024 from Brand Licensing.

David Bullwinkle: The team continues to focus on improving profitability and performance in working capital, which enhances the company's ability to generate cash.

David Bullwinkle: Cash used in investing activities was $2 million in the first half of 2024, which is an improvement of $9 million when compared to the prior year period.

David Bullwinkle: I merely do so with proceeds from the sale of assets of $17 million partially offset by increasing capital conditions of $8 million. Cash used in financing activities for the first half of 2024 increased by $18 million compared to the prior year period, primarily driven by $17 million related to the repayment of the amended and restated term loan agreement made during the first quarter of 2024 from the proceeds received from the sale of assets within investing activities.

David Bullwinkle: Primarily due to proceeds from the sale of assets of $17 million partially offset by an increase in capital additions of $8 million.

David Bullwinkle: Cash used in financing activities for the first half of 2024 increased by $8 million compared to the prior year period.

David Bullwinkle: are merely driven by $17 million related to the repayment of the amended and restated term loan agreement made during the first quarter of 2024 from the proceeds received from the sale of assets within investing activities.

David Bullwinkle: Restricted cash decreased by $13 million when compared to the balance as of December 31, 2023. 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 to escrows, to secure various ongoing obligations. As presented on the bottom portion of the slide, excluding the effects of foreign exchange and the prior year period impact of a refund from a non-U.S. governmental authority, the company delivered a $2 million improvement in cash and cash equivalents in the first half of 2024 compared to the prior year period.

David Bullwinkle: Restricted cash decreased by 13 million dollars when compared to the balance as of December 31, 2023.

David Bullwinkle: 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.

David Bullwinkle: and cash collateral required on the Letter of Credit Facility, in addition to escrow's the secure, various ongoing allegations.

David Bullwinkle: As presented on the bottom portion of the slide, excluding the effects of foreign exchange and the prior year period impact of a refund from a non-U.S. governmental authority, the company delivered a $2 million improvement in cash and cash equivalents in the first half of 2024 compared to the prior year period.

David Bullwinkle: We are pleased with the financial performance of the company for the first half of 2024. 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 and invest in growth opportunities to continue to execute our strategy. Finally, we remain in compliance with all applicable financial covenants. I will now turn the discussion back to Jim.

David Bullwinkle: We are pleased with the financial performance of the company for the first half of 2024. 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 and invest in growth opportunities to continue to execute our strategy.

Jim Continenza: Finally, we remain in compliance with all applicable financial covenants.

Jim Continenza: Thank you, Dave. Look, I've been honored to do these calls over the last five years, but I want to make sure we're getting our message across, right? Kodak has invested heavily in our business, and you can see that in our efficiencies. You can see it in the increased gross profit percentage year over year, right? Despite the decrease in revenues, we're focused on our customers, we're focused on operational excellence, and we're focused on putting new systems in our company to help drive better profitability. And not to lose focus, Advanced Materials and Chemicals is the original Kodak, and we're reinvesting back in it. It is our core competence. It's what we are best at, layering and coding.

Speaker Change: I will now turn the discussion back to Jim.

Dave: Thank you, Dave.

Jim Continenza: Look, I've been honored to do these calls over the last five years, but I want to make sure we're getting our message across, right? Kodak has invested heavily into our business. You can see that in our efficiencies. You can see it in the increased gross profit percentage year-over-year, right? Despite the decrease in revenues, we're focused on our customer, we're focused on operational excellence, and we're focused on putting new systems in our company to help drive

Jim Continenza: Better Profitability.

Speaker Change: And that's a loose focus.

Jim Continenza: Advanced Materials and Chemicals is the original Kodak.

Jim Continenza: and we're reinvesting back in it. It is our core competency. It's what we are best at, layering and coding.

Jim Continenza: So our AMC business is growing and driving increased revenues and gross profit. That's what we were hoping for when we put our investment in place, and we're pleased with the results. And I want to thank the employees in that group and all of our divisions for driving these behaviors and driving this company in the right direction. I want to be very clear: we will continue to put our customers first. Locking Change, everything we do starts with our customers; it ends with our customers.

Jim Continenza: So our AMC business is growing and driving increased revenues and gross profit. That's what we were hoping for when we put our investment in place, and we're pleased with the results.

Jim Continenza: And I want to thank the employees in that group and all of our divisions for driving these behaviors and driving this company in the right direction.

Jim Continenza: I want to be very clear, we will continue to put our customers first.

Jim Continenza: Locking Change, everything we do starts with our customer and ends with our customer.

Jim Continenza: We make sure that we're more efficient, easy to do business with, and giving them innovative products that help drive their profitability. We only win when our customers win.

Jim Continenza: We make sure that we're more efficient, easier to do business with, and giving them innovative products that help drive their profitability. We only win when our customers win. I want to again thank everyone for their time and listening through these calls and your interest in Kodak. We appreciate it. Good night.

Jim Continenza: I wanna again thank everyone for their time and listening through these calls and your interest in Kodak. We appreciate it. Good night.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Jim Continenza: The leverages are unique strengths and chemicals, layering, and coatings. Kodak is currently seeing growth in revenues and key products in this area. We are investing in long-term advanced materials and chemicals opportunities that will set the foundation for our company for growth and profitability in the future. For example, our CGMP facility for manufacturing diagnostic tests and reagents is expected to begin production in 2025. We're excited about this opportunity; it's been a long time coming, and it's nice to see it coming to fruition.

Anthony Redding: All fall-up look-in statements are based upon Kodak's expectations of various assumptions. Future events or results may differ from those anticipated or expressed in the forward-looking statement. 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 Kodak's actual results to differ materially from these forward-looking statements.