Q4 2024 Eastman Kodak Co Earnings Call
Operator: Good day and thank you for standing by.
Good day, and thank you for standing by welcome to the Eastman Kodak fourth quarter and full year 'twenty 'twenty four earnings call. At this time, all participants are in a listen only mode.
Operator: Welcome to the Eastman Kodak fourth quarter and full year 2024 earnings call. At this time, all participants are in a listen only mode. Please be advised that today's conference is being recorded.
Speaker Change: Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today Anthony Reading. Please go ahead.
Anthony Redding: I would now like to hand the conference over to your speaker today, Anthony Redding, please go ahead. Thank you and good afternoon everyone. I am Anthony Redding, Chief Compliance Officer at Eastman Kodak.
Anthony Reading: Thank you and good afternoon, everyone.
Anthony Reading: Anthony Reading Chief compliance officer at Eastman Kodak Company, welcome to Kodak's fourth quarter and full year 2024 earnings call.
Anthony Redding: Welcome to Kodak's fourth quarter and full year 2024 earnings call. At 4.15 p.m. this afternoon, Kodak filed its annual Form 10-K and issued its release on financial results for the fourth quarter in full year 2024. You may access the presentation and webcast for today's call on our Investor Center at investor.kodak.com.
Anthony Reading: At 415 P. M. This afternoon Kodak filed its annual Form 10-K.
Anthony Reading: And issued its release on financial results for the fourth quarter and full year of 2024.
Anthony Reading: May access the presentation and webcast for today's call on our Investor Center at Investor Kodak Dot Com.
Anthony Redding: 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. 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 risk, uncertainties, and other factors described in more detail.
Anthony Reading: During today's call, we will be making certain forward looking statements as defined by the private Securities Litigation Reform Act of $19 95, we intend for these forward looking statements to be covered by the safe Harbor provisions for forward looking statements contained in section 27.
Anthony Reading: Of the Securities Act of 1933 and section 21 E of.
Anthony Reading: Of the Securities Exchange Act of 19.
Anthony Reading: 34 <unk>.
Anthony Reading: All forward looking statements are based upon kodak's expectations and various assumptions 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.
Anthony Reading: Statements include among others the risks uncertainties and other factors described in more detail.
Anthony Redding: and Kodak's foulings 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. 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 the presentation. Kodak undertakes no obligation to update or revise forward-looking statements to reflect events or circumstances that may arise after the date made or to reflect the occurrence of unanticipated events.
Anthony Reading: The codex 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. All forward looking statements attributable to Kodak or persons acting on its behalf only.
Anthony Reading: Apply as of the date of this presentation and arc expressly qualified in their entirety by the cautionary statements included I referenced in the presentation.
Anthony Reading: Kodak undertakes no obligation to update or revise forward looking statements to reflect events or circumstances that may arise. After the date made or to reflect the occurrence.
Anthony Reading: On anticipated events.
Anthony Redding: 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.
Anthony Reading: In addition, the release just issued and the presentation provided contains certain measures that are deemed non-GAAP measures.
Anthony Reading: Affiliation to the most directly comparable GAAP measures have been provided with the release and within the presentation on our website in our investors center at Investor that Kodak Dot com.
Anthony Redding: Speakers on today's call are Jim Continenza, Eastman Kodak's Executive Chairman and Chief Executive Officer, and David Bullwinkle, Chief Financial Officer and Senior Vice President of Eastman Kodak.
Jim Koch: Speakers on today's call are Jim Koch sensor Eastman Kodak's Executive Chairman and Chief Executive Officer, and David Bullwinkle, Chief Financial Officer, and senior Vice President of Eastman Kodak.
Anthony Redding: We will not be holding a formal Q&A during today's call. As always, the Investor Relations team is available for follow-up.
Jim Koch: We will not be holding a formal Q&A to our today's call as always the Investor Relations team is available for follow up.
Jim Continenza: I will now turn the call over to Jim. Thank you. Welcome, everyone, and thank you for joining the fourth quarter and full year 2024 investor call. I'm excited again to talk about our continued execution of our long-term plan, in spite of all the obstacles that continue in the world between war, supply issues, inflation, shipping, logistics, and just the normal day-to-day turmoil. In 2024, we continue to invest in innovation. We also continue to increase our operational efficiencies. We were shutting unprofitable businesses and yet driving strong growth processes. Our core business continued to perform as expected. The highlights for the fourth quarter include $266 million in revenue compared with $275 million for Q4 2023.
Speaker Change: I will now turn the call over to Jeff.
Jim Koch: Yeah.
Jeff: Welcome everyone and thank you for joining the fourth quarter and full year 2024 investor call.
Jeff: I'm excited again to talk about our continued execution of our long term plan in spite of all the obstacles that continue in the world between war supply issues inflation shipping logistics and just the normal day to day turmoil. The 'twenty 'twenty four we continued to invest in innovation.
Jeff: We also continue to increase our operational efficiencies, we were shedding unprofitable businesses.
Jeff: Driving strong gross profit.
Jeff: Our core business continued to perform as expected.
Jeff: Highlights for the fourth quarter include 266 million in revenue compared with $275 million.
Jeff: For quarter four 2023.
Jim Continenza: The rate of decline is slowing. We will continue to focus on smart revenue and innovation. One of the highlights is our growth profit at 19% for 4th quarter 2024 compared with 17% for 4th quarter 2023. This, again, is a reflection of smart revenue.
Jeff: Rate of decline is slowing.
Jeff: We will continue to focus on smart revenue and innovation.
Jeff: One of the highlights is our gross profit at 19%.
Jeff: Fourth quarter, 2024, compared with 17% for fourth quarter 2023.
Jeff: This again is a reflection of smart revenue.
Jim Continenza: Highlights for the full year. Consolidated revenues of $1.043 billion compared with $1.117 billion for the full year 2023. Part of the decline is Kodak's rationalization of its business. We continue to shed businesses that aren't core or part of our long-term strategy. Print has continued to decline, but it's being offset somewhat by the increase in the revenues of AMC. Gross profit remains the same as last year at 19% in spite of Again, inflation, cost increase, transportation increase, uncertainty, and again, war around the world. We're able to maintain our growth profit consistent throughout the year by investing again in technologies and operational efficiencies.
Jeff: Highlights for the full year consolidated revenues of 1.043 billion compared with $1 117 billion for the full year 2023 part of the decline is kodak's rationalization of its business. We continue to shed businesses that are core part of our long term strategy.
Jeff: <unk> has continued to decline, but it's being offset somewhat by the increase in the revenues of AMC.
Jeff: Gross profit remains the same as last year at 19% in spite of.
Jeff: Again inflation cost to increase transportation increased.
Jeff: Uncertainty and again the war around the World, we're able to maintain our gross profit consistent throughout the year by investing again, the technologies and operational efficiencies. Some of the highlights for AMC business include a couple of key factors, but I want to be really clear AMC is critical and what are the key <unk>.
Jim Continenza: Some of the highlights for our AMC business include a couple of key factors, but I want to be really clear. AMC is critical and one of the key investments for our future. We're seeing continuing profit and revenue growth inside of AM&T. ongoing investment and growth initiatives such as we turned off our film plant and pretty much rebuilt it. That's a big step for us. We haven't done it in over 30 years. We've increased additional capacity through the sensitizing line. So think of it this way, as the business flung through, we were bottlenecked in the final stages and now we're able to pick up some of that bottleneck by adding additional equipment and making the plant even more efficient and yet putting out higher production levels.
Speaker Change: Restaurants for our future.
Speaker Change: We're seeing continuing profit and revenue growth inside of AMC.
Ongoing investment in growth initiatives, such as we turned off our film plant and pretty much rebuilt it that's a big step for US we're handling over 30 years.
Speaker Change: Increased additional capacity due to the sensitizing line. So think of it. This way he has the business flowing through we were bottleneck in the final stages and now we're able to pick up some of that bottleneck by adding additional equipment and making the plant even more efficient and yet putting out higher production levels.
Jim Continenza: We also keep investing in growth initiatives such as our CGMP Pharma facility that will start production this year. Demand for various types of film continues, still film, motion picture, NDT. Film's just not film. We do various types of film, continue to OEM film and make our own products. We continue to see growth in demand in that area. We're going to keep investing in that area. As I said earlier, we invested in expanding our capabilities and our capacity.
Speaker Change: We also keep investing in growth initiatives such as <unk>.
Speaker Change: Our cgmp pharma facility that will start production this year.
Speaker Change: Demand for various types of Bell continues still film multi picture N D. T. Bill just not film we do various types of film continue to OEM build and make our own products. We continue to see growth in demand in that area and we're going to keep investing in that area as I said earlier, we invested in expanding there.
Capabilities and our capacity.
Jim Continenza: And some really highlights, we just have to bring this up. You know, go to our motion picture film, movies that were shot on Kodak film dominated the Oscars. A couple examples are The Brutalist and The Nora. We want to thank the directors and the studios and the fans for continuing supporting the use of film and understand the true benefits that it brings to such a great art.
Speaker Change: So it really highlights.
Speaker Change: You have to bring this up.
Speaker Change: Go to our motion picture film movies that were shot our codec, though dominated the Oscars couple.
Speaker Change: A couple of examples are the poodle is in the Nora.
Speaker Change: We want to thank the directors and the studios.
Speaker Change: The fans for continuing supporting the use of film and I understand the true benefits that it brings to such a great art movie.
Jim Continenza: Moving on to highlight from our commercial print division. We concluded the tariff petition process with the U.S. International Trade Commission, ITC. Our outcome established a level playing field, and that's all we were asking for, in the plates business in the United States. This is a big win for U.S. manufacturing and, again, sets a level playing field when other governments are interfering in business and subsidizing other companies and giving them an advantage inside the U.S. They put U.S. manufacturers out of business. We're the last standing plate manufacturer in the U.S. The other three are gone. This tariff helps a level playing field be set.
Speaker Change: Moving on to highlight.
Speaker Change: Our commercial print division.
Speaker Change: We concluded the tariff petition process with the U S.
Speaker Change: International Trade Commission ITC.
Speaker Change: Our outcome established a level playing field and that's all we're asking for in the plate business in the United States. This is a big win for our U S manufacturing and again sets a level playing field with other governments are interfering in business and subsidizing other companies and giving them an advantage inside the U S were put.
Speaker Change: U S manufacturers other business, where the last standing Kuwait manufacturer in the U S. The other three are gone.
Speaker Change: And this tariff helps a level playing field. We set this is good for the United States workers. This is good for our printers and this is good for America in general.
Jim Continenza: This is good for the United States workers, this is good for our printers, and this is good for America in general.
Jim Continenza: Our Prosper 7000 Turbo Press had a strong showing at the Hunkler Innovation Days trade show. Our Prosper 7000 Turbo is the world's fastest inkjet press machine. 400 meters per minute equates to 1,345 pages per minute. No one can reach those speeds and the quality levels that we hit. Some of the improvements in that 7000 is it's upgradeable. You can buy a 6000, we can upgrade it to a 7000.
Speaker Change: Our prosper 7000 turboprops had a strong showing.
Speaker Change: The Hunk Lear innovation days Tradeshow or Prosper 7000 turbo is the world's fastest inkjet press machine 400 meters per minute equates to 1345 pages per minute.
Speaker Change: No one can reach all speed and quality level that we hit some of the improvements in that 7000 is upgradable you can buy a 6000, we get upgraded to a 7000. So for the first time for Kodak you don't need to buy brand New machine you can upgrade this machine up to 35% more speed for a minimal cost.
Jim Continenza: So for the first time for Kodak, you don't need to buy a brand new machine. You can upgrade this machine up to 35% more speed for a minimal cost of your investment. That makes your capital expenditure a much better long-term investment. You don't need to throw away 90% of the machine. You can simply make an upgrade to make it 35% faster.
Speaker Change: That makes your capital expenditure a much better long term investment you don't need to throw away, 90% of the machine you can simply make an upgrade to make it 35% faster.
Jim Continenza: And lastly, but most important, we're now taking the 7000 Turbo and the Prosper 520 and taking it from controlled introduction to controlled production, and we'll be releasing it commercially to various printers.
Speaker Change: Lastly.
Speaker Change: But most important we're now taking the 7000 turbo and the prosper $5 20.
Speaker Change: And taking a controlled introduction to control production and we'll be releasing it commercially to various printers.
Jim Continenza: In conclusion, something that's on everyone's mind. An update on Kodak's U.S. Purchase Plan.
Speaker Change: In conclusion, something that's on everyone's mind.
Speaker Change: An update on Kodak's U S pension plan.
Jim Continenza: The board has approved the termination of the Kodak Retirement Income Plan, known as CRIP. Effective March 31st, 2025. The process is underway to settle the pension obligations with participants and access funds that will come back to the company. The company expects a significant portion of any reverted asset to be used to reduce long-term debt. and therefore the annual cost of servicing that long-term debt. You can read additional information in our Form 10-K filing.
Speaker Change: The board has approved the termination of the codec retirement income plan known as correct.
Speaker Change: Effective March 31 2025.
Speaker Change: The process is underway to settle the pension obligations with participants and excess funds that will come back to the company.
The company expects a significant portion of any reverted asset.
Speaker Change: To be used to reduce long term debt.
Speaker Change: And therefore, the annual cost of servicing.
Speaker Change: Long term debt.
Anthony Reading: You can read.
Anthony Reading: Additional information in our Form 10-K filing.
David Bullwinkle: I will now turn it over to Dave Bullwinkle to discuss the fourth quarter and full year 2024 financial results. Thanks, Jim, and good afternoon. Today, the company filed its Form 10-K for the year ended December 31st, 2024 with the Securities and Exchange Commission.
I will now turn it over to.
Speaker Change: Dave Bullwinkle to discuss the fourth quarter and full year 2024 financial results.
Speaker Change: Thanks, Jim and good afternoon today the company filed its Form 10-K for the year ended December 31, 2024, with the Securities and Exchange Commission.
David Bullwinkle: As I always do, I recommend you read this filing in its entirety. Before I get into the details for the quarter and full year, I would like to provide a brief update on the U.S. Kodak Retirement Income Plan, or CRIP. In a Form 8K filed at the SEC on November 25th, 2024, we disclosed that the Board of Directors of Eastman Kodak Company instructed the committee with authority to manage Krip's assets to take appropriate actions to position Krip for a potential termination.
Speaker Change: I always do I recommend you read this filing in its entirety.
Speaker Change: Before I get into the details for the quarter and full year.
Speaker Change: I would like to provide a brief update on the U S. Kodak retirement income plan or correct.
Speaker Change: In a form 8-K filed with the SEC on November 25, 2024, we disclosed the board of directors of Eastman Kodak Company instructed the committee with the authority to manage <unk> assets to take appropriate actions to position <unk> for a potential termination.
David Bullwinkle: On January 21st, 2025, Kodak's Board of Directors approved the termination of CRIP, effective March 31st, 2025. Following the determination and satisfaction of CRIPS liabilities Kodak should be entitled to a reversion of any remaining Crip assets. is subject to tax obligations and the funding of a new qualified defined benefit retirement plan for active employees as a replacement for CRIP. The company expects a significant portion of any reverted assets to be used to reduce long-term debt in accordance with the terms of our debt agreements, and therefore the annual cost of servicing that debt will decline. The remaining reversion proceeds will be utilized to further the execution of the company's long-term strategy.
On January 21, 2025 Codex board of directors approved the termination of Crips effective March 31.
Speaker Change: 2025.
Speaker Change: Following the determination and satisfaction of Crips liabilities Kodak.
Kodak should be entitled to a reversion of any remaining <unk> assets subject to tax obligations in the funding of a new qualified defined benefit retirement plan for active employees as a replacement for correct.
Speaker Change: The company expects a significant portion of any reverted assets to be used to reduce long term debts in accordance with the terms of our debt agreements and therefore, the annual cost of servicing that debt will decline.
Speaker Change: The remaining reversion proceeds will be utilized to further the execution of the company's long term strategy.
David Bullwinkle: For further details on this topic, we would direct you to the liquidity portion of the MD&A section of the Form 10-K filed with the SEC today.
Speaker Change: For further details on this topic, we would direct you to the liquidity portion of the MD&A section of the Form 10-K filed with the SEC today.
David Bullwinkle: I will now share details on the full company results, operational EBITDA, and cash flow for the fourth quarter and full year of 2024. The company's results for 2024 were in line with our expectations and reflect the continued focus on executing against our priorities and long-term plan, including driving smart revenue and aligning with the right customers. Implementing pricing rationalization and cost reductions, launching new products, and investing in innovation and information technology systems to increase our operational efficiency. On slide 7, we reported revenues of $266 million for the 4th quarter of 2024, compared to $275 million in the prior year quarter, reflecting a decrease of $9 million, or 3%.
Speaker Change: I will now share the details on the full company results operational EBITDA and cash flow for the fourth quarter and full year of 2024.
Speaker Change: The company's results for 2024 were in line with our expectations and reflect the continued focus on executing against our priorities and long term plan, including driving smart revenue and align with the right customers implementing pricing rationalization and cost reductions launching new.
Speaker Change: <unk> and investing in innovation and information technology systems to increase our operational efficiency.
Speaker Change: On slide seven we reported revenues of $266 million for the fourth quarter of 2024 compared to $275 million in the prior year quarter, reflecting a decrease of $9 million or 3%.
David Bullwinkle: The rate of decline in revenue is slowing, which reflects our ongoing focus on driving smart revenue and strong profitability. We have also recognized improvements in gross profit for the fourth quarter of 2024, with an increase of $4 million or 9% when compared to the prior year quarter. Gross profit for the current year quarter was unfavorably impacted by an inventory reserve adjustment of $4 million in the electrophotographic printing business. Our gross profit percentage was 19% in the fourth quarter of 2024 compared to 17% in the prior year quarter. This improvement is a result of the actions our team has taken to mitigate the effects of the global economy, to make our operations more efficient, and to realize the value of our office.
Speaker Change: The rate of decline in revenue is slowing which reflects our ongoing focus on driving smart revenue and strong profitability.
Speaker Change: We have also recognized improvements in gross profit for the fourth quarter of 2024, with an increase of $4 million or 9% when compared to the prior year quarter.
Speaker Change: Gross profit for the current year quarter was unfavorably impacted by an inventory reserve adjustment of $4 million and the electric photographic printing business.
Speaker Change: Our gross profit percentage was 19% in the fourth quarter of 2024 compared to 17% in the prior year quarter.
Speaker Change: This improvement is a result of the actions our team has taken to mitigate the effects of the global economy to make our operations more efficient and to realize the value of our offerings.
David Bullwinkle: These actions have established positive momentum as we continue to drive profitable growth going forward. Foreign exchange did not impact gross profit in the current year quarter. on a U.S. Gap basis. We reported net income of $26 million for the fourth quarter of 2024 compared to net income of $5 million in the prior year quarter, an increase of $21 million. 2024 and 2023 fourth quarter results include income of three million dollars and expense of two million dollars respective related to non-cash changes in workers' compensation and employee benefit reserves, and expense of $4 million and $5 million, respectively, related to asset impairment.
Speaker Change: These actions have established positive momentum as we continue to drive profitable growth going forward.
Speaker Change: Foreign exchange did not impact gross profit in the current year quarter.
Speaker Change: On a U S. GAAP basis, we reported net income of $26 million for the fourth quarter of 2024 compared to net income of $5 million in the prior year quarter, an increase of $21 million.
Speaker Change: The 2024 and 2023 fourth quarter results include income of $3 million and expense of $2 million, respectively related to noncash changes in workers' compensation and employee benefit reserves.
Speaker Change: In expense of $4 million and $5 million, respectively related to asset impairments.
David Bullwinkle: excluding these current and prior year quarter items. Net income for 2024 was $27 million compared to net income of $12 million in the prior year quarter, reflecting an improvement of $15 million. Operational EBITDA for the quarter was $9 million compared to $2 million in the prior year quarter, reflecting an increase of $7 million. Excluding the impact of non-cash changes in workers' compensation and employee benefit reserves in both the current and prior year quarters Operational EBITDA increased by $2 million when compared to the prior year quarter. foreign exchange had no impact on operational EBITDA in the current year quarter.
Speaker Change: Excluding these current and prior year quarter items.
Speaker Change: Net income for 2024 was $27 million compared to net income of $12 million in the prior year quarter, reflecting an improvement of $15 million.
Speaker Change: Operational EBITDA for the quarter was $9 million.
Speaker Change: Compared to $2 million in the prior year quarter, reflecting an increase of $7 million.
Speaker Change: Excluding the impact of noncash changes in workers' compensation and employee benefit reserves in both the current and prior year quarters.
Speaker Change: Operational EBITDA increased by $2 million when compared to the prior year quarter.
Speaker Change: Foreign exchange had no impact on operational EBITDA in the current year quarter.
David Bullwinkle: Operational EBITDA for the fourth quarter of 2024 was favorably impacted by price increases, improved operational efficiency from executing on cost controls, and changes in employee benefit reserves. partially offset by an inventory reserve adjustment in our EPS business that I previously mentioned. higher aluminum costs, and an increase in costs associated with certain litigation matters.
Speaker Change: Operational EBITDA for the fourth quarter of 2024 was favorably impacted by price increases improved operational efficiency from executing on cost controls and changes in employee benefit reserves parse.
Speaker Change: Partially offset by an inventory reserve adjustment in our EPS business that I previously mentioned.
Speaker Change: Higher aluminum costs and an increase in costs associated with certain litigation matters.
David Bullwinkle: Moving on to the company's fourth quarter cash performance presented on slide eight. The company had a year-end cash balance of $201 million compared with $214 million at the end of the third quarter of 2024 for a decline of $13 million from the prior period. The decline reflects our continued CapEx investments in supporting advanced materials and chemicals growth initiatives. along with building working capital in this business to allow us to supply customers as we make improvements in our manufacturing facility.
Speaker Change: Moving on to the company's fourth quarter cash performance presented on slide eight the company had a yearend cash balance of $201 million compared with $214 million at the end of the third quarter of 2024 for a decline of $13 million from the prior period.
Speaker Change: The decline reflects our continued capex investments in supporting advanced materials and chemicals growth initiatives.
Speaker Change: Along with building working capital in this business to allow us to supply customers as we make improvements in our manufacturing facilities.
David Bullwinkle: For the quarter ending December 31, 2024, cash provided by operating activities was $4 million, compared to $17 million in the prior year quarter, reflecting a decline of $13 million. Current quarter cash provided by operating activities was primarily driven by the use of cash from net earnings of $10 million and cash provided by balance sheet changes of $14 million, including a change in working capital of $15 million and a decrease in other liabilities of $7 million. Cash provided by working capital was driven by actions taken to mitigate inflation and rising costs. including cost-cutting efforts, improved inventory management, and implementation of pricing actions.
Speaker Change: For the quarter ending December 31, 2024 cash provided by operating activities was $4 million compared to $17 million in the prior year quarter, reflecting a decline of $13 million.
Current quarter cash provided by operating activities was primarily driven by the use of cash from net earnings of $10 million in cash provided by balance sheet changes of $14 million, including a change in working capital of $15 million and a decrease in other liabilities of $7 million.
Speaker Change: Cash provided by working capital was driven by actions taken to mitigate inflation and rising costs, including cost cutting efforts improved inventory management and implementation of pricing actions.
David Bullwinkle: Cash used in investing activities was $17 million in both the current year quarter and prior year period, reflecting no change. This use primarily represents capital additions as the company invests in growth and increasing its manufacturing capacity and its advanced materials and chemicals. Cash used in financing activities was $2 million for both the current year quarter and prior year period, also reflecting no change. Restricted cash decreased by $8 million in the current year quarter, compared to a $6 million decrease in the prior year period, primarily driven by strategic efforts to reduce cash collateral and escrow requirements for certain company obligations and business arrangements.
Speaker Change: Cash used in investing activities was $17 million in both the current year quarter and prior year period, reflecting no change.
Speaker Change: This use primarily represents capital additions as the company invest in growth and increasing its manufacturing capacity knits advanced materials and chemicals business.
Speaker Change: Cash used in financing activities was $2 million for both the current year quarter and prior year period also reflecting no change.
Speaker Change: Restricted cash decreased by $8 million in the current year quarter compared to a $6 million decrease in the prior year period.
Speaker Change: Merely driven by strategic efforts to reduce cash collateral in escrow requirements for certain company obligations and business arrangements.
David Bullwinkle: as presented on the bottom portion of the slide.
Speaker Change: As presented on the bottom portion of the slide <unk>.
David Bullwinkle: Excluding the changes in restricted cash for each period and the effects of foreign exchange, the quarter-over-quarter decrease in cash and cash equivalents three months ending December 31, 2024, was $11 million.
Speaker Change: Excluding the changes in restricted cash for each period and the effects of foreign exchange the quarter over quarter decrease in cash and cash equivalents for the three months ending December 31, 2024 was $11 million.
David Bullwinkle: On slide 9, for the full year of 2024, the company had revenues of $1.043 billion. compared to $1.117 billion in the prior year. for a decline of $74 million for 7%. Adjusting for the unfavorable impact of foreign exchange of $3 million, revenue declined by $71 million, or 6% compared to the prior year.
Speaker Change: On slide nine for the full year of 2024, the company had revenues of 1.043 billion.
Speaker Change: Compared to 1.1, $1 7 billion in the prior year.
Speaker Change: Or a decline of $74 million or 7%.
Speaker Change: Adjusting for the unfavorable impact of foreign exchange of $3 million revenue declined by $71 million or 6% compared to the prior year.
David Bullwinkle: The Portfolio Revenue Decline is impacted by revenue choices regarding our core business and portfolio of products, and is in line with our expectations at this point in our long-term plan. Gross profit for 2024 declined $7 million or 3% when compared to the prior year. Foreign exchange did not impact gross profit in the current year. rsprofit for 2024 was unfavorably impacted by Inventory Reserve in the EPS business totaling $8 million. gross profit percentage was 19%. the full year 2024, which is flat with the prior year. On a U.S. GAAP basis, we reported net income of $102 million for 2024 compared to net income of $75 million in 2023, an improvement of $27 million, or 36% from the prior year.
Speaker Change: Our full year revenue decline is impacted by revenue choices regarding our core business and portfolio of products and.
Speaker Change: As in line with our expectations at this point in our long term plan.
Speaker Change: Gross profit for 2024 declined $7 million or 3% when compared to the prior year.
Speaker Change: In exchange did not impact gross profit in the current year.
Speaker Change: Gross profit for 2024 was unfavorably impacted by.
Speaker Change: By inventory reserve adjustments in the EPS business totaling $8 million.
Speaker Change: Gross profit percentage was 19% for.
Speaker Change: For the full year 2024, which is flat with the prior year.
Speaker Change: On a U S. GAAP basis, we reported net income of $102 million for 2024 compared to net income of $75 million in 2023, an improvement of $27 million or 36% from the prior year.
David Bullwinkle: 2024 and 2023 results include income of $2 million and $1 million respectively. related to non-cash changes in workers' compensation and employee benefit reserves. and expense of $4 million and $5 million respectively related to asset impairments. Current year also includes a net gain on the sale of assets of $17 million. The 2023 results include expense of $2 million related to changes in the fair value of embedded derivative liabilities and $27 million for a loss on early extinguishment of debt resulting from a refinancing transaction, as well as $9 million for a refund from a non-U.S. governmental authority.
Speaker Change: 2024, and 2023 results include income of $2 million and $1 million, respectively related to noncash changes in workers' compensation and employee benefit reserves.
Speaker Change: And expense of $4 million and $5 million, respectively related to asset impairments.
Speaker Change: The current year also includes a net gain on the sale of assets of $17 million.
Speaker Change: 2023 results include expense of $2 million related to changes in the fair value of embedded derivative liabilities and $27 million for a loss on early extinguishment of debt, resulting from our refinancing transaction as well as $9 million for a refund from our non U S government.
Speaker Change: It'll authority.
David Bullwinkle: Excluding the impact of these current and prior year items, the 2024 adjusted net income was $87 million compared to income of $99 million in the prior year, reflecting a decline of $12 million or $12.5 million.
Speaker Change: Excluding the impact of these current and prior year items. The 2024, adjusted net income was $87 million compared to income of $99 million in the prior year, reflecting a decline of $12 million or 12%.
David Bullwinkle: Operational EBITDA for 2024 was $26 million compared to $45 million in 2023 for a decline of $19 million or 42% from the prior year. Excluding the impact of non-cash changes in workers' compensation and employee benefit reserves in 2024 and 2023, operational EBITDA decreased by $20 million, or 45 percent from the prior year. foreign exchange did not impact operational EBITDA in the current year results. Operational EBITDA for 2024 was unfavorably impacted by lower volumes and higher aluminum cost. EPS business inventory reserve adjustments of $8 million. Higher costs associated with investments in information technology systems and organizational structure of $5 million.
Speaker Change: Operational EBITDA for 2024, it was $26 million compared to $45 million in 2023, or a decline of $19 million or 42% from the prior year.
Speaker Change: Excluding the impact of noncash changes in workers' compensation and employee benefit reserves in 2024, and 2023 operational EBITDA decreased by $20 million or 45% from the prior year.
Speaker Change: Foreign exchange did not impact operational EBITDA in the current year results.
Speaker Change: Operational EBITDA for 2024 was unfavorably impacted by lower volumes and higher aluminum costs.
Speaker Change: <unk> business inventory reserve adjustments of $8 million higher costs associated with investments in information technology systems, and organizational structure of $5 million in.
David Bullwinkle: and costs associated with the Drupa trade show and certain litigation matters totaling $10 million.
Speaker Change: And costs associated with the Jupiter, Tradeshow and certain litigation matters totaling $10 million.
David Bullwinkle: partially offset by improved pricing, changes in employee benefit reserves, and operational Moving on to the company's full year cash performance presented on slide 10, the company ended 2024 with $201 million in cash and cash equivalents, a decrease of $54 million from the September 31st, 2023. The decrease in cash was primarily driven by capital expenditures to fund growth initiatives in our AM&C business. Investments in technology systems and organizational structure and lower profitability from operations. partially offset by improvements in working capital, primarily due to cash proceeds of $40 million from brand licensing. received in January of 2020.
Speaker Change: Partially offset by improved pricing changes in employee benefit reserves and operational efficiencies.
Speaker Change: Moving on to the company's full year cash performance presented on slide 10. The company ended 2024 with $201 million in cash and cash equivalents, a decrease of $54 million from December 31 2023.
Speaker Change: The decrease in cash was primarily driven by capital expenditures to fund growth initiatives, and our aim and <unk> business.
Speaker Change: Investments in technology systems, and organizational structure and lower profitability from operations.
Speaker Change: We offset by improvements in working capital primarily due to cash proceeds of $40 million from brand licensing received in January of 2024.
David Bullwinkle: During 2024, cash used in operating activities was $7 million. Current year cash used in operating activities was primarily driven by the use of cash from net earnings of $35 million and by cash flow from balance sheet changes of $28 million, including an improvement in working capital of $41 million and a decrease in other liabilities of $46 million. Within working capital, accounts payable decreased by $3 million, inventory increased by $7 million, and accounts receivable decreased by $51 million. The decrease in accounts receivable is primarily due to cash proceeds of $40 million from brand licensing transactions received in January of 2024.
Speaker Change: During 2020 for cash used in operating activities was $7 million current year cash used in operating activities was primarily driven by the use of cash from net earnings of $35 million and by cash flow from balance sheet changes of $28 million.
Speaker Change: Including an improvement in working capital of $41 million and a decrease in other liabilities of $46 million.
Speaker Change: Within working capital accounts payable decreased by $3 million inventory increased by $7 million and accounts receivable decreased by $51 million.
Speaker Change: The decrease in accounts receivable is primarily due to cash proceeds of $40 million from brand licensing transactions received in January of 2024.
David Bullwinkle: Our team continues to focus on improving profitability and performance in working capital, which enhances the company's ability to generate cash. Cash from operating activities declined by $45 million from the prior year, driven by a $34 million year-over-year decrease in cash flow from net earnings. and an $11 million decrease in cash flow from balance sheet changes. including an improvement in working capital cash flows of $52 million, offset by a decrease in cash flows from liabilities excluding borrowings and trade payables of $67 million, primarily related to the recording of deferred revenue for brand licensing arrangements in 2023.
Speaker Change: Our team continues to focus on improving profitability and performance in working capital, which enhances the companys ability to generate cash.
Speaker Change: Cash from operating activities declined by $45 million from the prior year, driven by a $34 million year over year decrease in cash flow from net earnings.
Speaker Change: And an $11 million decrease in cash flow from balance sheet changes.
Speaker Change: <unk> and improvement in working capital cash flows of $52 million.
Offset by a decrease in cash flows from liabilities, excluding borrowings and trade payables of $67 million, primarily related to the recording of deferred revenue a brand licensing arrangements in 2023.
David Bullwinkle: Cash used in investing activities was $39 million in the current year, an increase of $7 million when compared to the prior year, primarily due to an increase in capital additions of $24 million, partially offset by proceeds from the sale of assets of $17 million. Cash used in financing activities was $23 million in the current year compared to cash provided by financing activities of $85 million in the prior year. This change was primarily driven by net proceeds of $90 million received from refinancing transactions in the prior year and $17 million related to the prepayment of the amended and restated term loan agreement made in 2024 from the proceeds received from the sale of assets within investing activities.
Speaker Change: Cash used in investing activities was $39 million in the current year, an increase of $7 million when compared to the prior year, primarily due to an increase in capital additions of $24 million, partially offset by proceeds from the sale of assets of $17 million.
Speaker Change: Cash used in financing activities was $23 million in the current year compared to cash provided by financing activities of $85 million in the prior year.
Speaker Change: This change was primarily driven by net proceeds of $90 million received from refinancing transactions in the prior year and $17 million related to the prepayment of the amended and restated term loan agreement made in 2024 from the proceeds received from the sale of assets within investing activities.
Speaker Change: <unk>.
David Bullwinkle: Restricted cash at the end of the year was $100 million, a decrease of $22 million from December 31st, 2023, 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 letter of credit facility in addition to escrows to secure various ongoing obligations. We continue to focus on opportunities to reduce restrictions on cash. As presented on the bottom portion of the slide, excluding the changes in restricted cash for each period, the impact of net proceeds from a refinancing transaction, and the receipt of a refund from a non-U.S.
Speaker Change: Restricted cash at the end of the year was $100 million.
Speaker Change: A decrease of $22 million from December 31, 2023, primarily driven by strategic efforts to reduce cash collateral in escrow requirements for certain company obligations and business arrangements.
Speaker Change: As a reminder, restricted cash primarily represents cash collateral supporting the Companys Undisc countered actuarial workers' compensation obligations with the New York State Workers' compensation Board and cash collateral required under letter of credit facility. In addition to <unk> to secure various ongoing obligations we can.
Speaker Change: Continue to focus on opportunities to reduce restrictions on cash.
As presented on the bottom portion of the slide excluding the changes in restricted cash for each period the impact of net proceeds from our refinancing transaction and the receipt of a refund from our non U S. Governmental authority in the prior year, along with the current year effect of exchange rates on cash.
David Bullwinkle: governmental authority in the prior year, along with the current year effect of exchange rates on cash. year-over-year decrease in cash and cash equivalents was $45 million. as stated earlier in my remarks.
Speaker Change: Cash.
Speaker Change: Year over year decrease in cash and cash equivalents was $45 million.
Speaker Change: As stated earlier in my remarks, 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. 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. best in our growth initiatives and convert our historical investments into returns for the long term. Finally, as disclosed in our Form 10-K, we remain in compliance with all applicable financial covenants.
Speaker Change: 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.
Speaker Change: First in our growth initiatives and convert our historical investments into returns for the long term.
Speaker Change: Finally as disclosed in our Form 10-K, we remain in compliance with all applicable financial covenants.
Jim Continenza: I will now turn the discussion back to Jim. Thank you. Thank you, Dave.
Jim Koch: I'll now turn the discussion back to Jim.
Jim Koch: Thank you.
Jim Koch: Thank you Dave in summary, we continue to manage through uncertainty, we are investing in growth and shutting nonprofit and non strategic businesses.
Jim Continenza: In summary, we continue to manage through uncertainty. We are investing in growth and shutting nonprofit and nonstrategic businesses. Seeing the growth in both revenue and profits in our AM and C business is very encouraging. Plates tariff will create a level playing field in the United States and certainty in the market. Accessing the excess assets in the company's pension fund will help de-lever the business, strengthening our balance sheet, allowing more opportunity to invest in growth businesses.
Jim Koch: Seeing the growth in both revenue and profit in our <unk> business is very encouraging.
Jim Koch: <unk> tariff will create a level playing field in the United States and certainty in the market.
Jim Koch: Accessing the excess assets and the company's pension fund will help delever the business strengthening our balance sheet, allowing more opportunity to invest in growth businesses.
Jim Continenza: Let's be clear at Kodak. We care for our customers. We put them first. We also care for our employees. This is a great place to work and it's a great place to be a customer and a partner. We do our best to innovate products that they ask for, that help drive their business, make them more efficient, more profitable, and grow their revenue. I'd like to thank our customers, our employees, our leadership team, and our board and investors for all of their loyalty and support. Thank you very much.
Jim Koch: Let's be clear a codec, we care for our customers. We put them first we also care for our employees is a great place to work.
Jim Koch: <unk> place to be a customer and a partner.
Jim Koch: We do our best to innovate products that they asked for that helped drive their business make them more efficient.
Jim Koch: We're profitable and grow their revenue.
Jim Koch: I'd like to thank our customers our employees.
Jim Koch: Our leadership team and our board and investors for all of their loyalty and support. Thank you very much have a good night.
Jim Continenza: Have a good night.
Operator: This concludes today's conference call. Thank you for participating and you may now disconnect.
Jim Koch: This concludes today's conference call. Thank you for participating and you may now disconnect.
Jim Koch: Okay.
Jim Koch: [music].
Operator: Thanks for watching!
Jim Koch: Okay.
Jim Koch: Okay.
Jim Koch: [music].