Kodak (KODK) Q1 2026 Earnings Call Transcript

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DATE

Thursday, May 7, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• Executive Chairman and Chief Executive Officer — James V. Continenza
• Chief Financial Officer and Senior Vice President — David Edward Bullwinkle
• Chief Marketing Officer — Denise Goldbard

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TAKEAWAYS

• Revenue -- $265 million, up 7% or $18 million, led by increases in Print and Advanced Materials and Chemicals segments.
• Gross Profit -- $57 million, an increase of $11 million or 24%, with margin rising to 22% from 19%.
• Operational EBITDA -- $15 million versus $2 million in the prior-year period, up by $13 million, reflecting "improved pricing" and offset by "higher manufacturing costs and higher silver and aluminum prices."
• GAAP Net Loss -- $16 million versus $7 million, primarily due to a $12 million change in embedded derivative fair value related to Series B preferred stock, and $5 million in stock-based compensation expense.
• Advanced Materials and Chemicals Revenue -- Grew 3%, which was driven by a $3 million gain in film and chemicals, partially offset by a $1 million decline in inks and consumables.
• Print Segment Revenue -- Increased 9%, despite supply issues on aluminum and greatly increased prices on raw materials such as aluminum.
• Gross Profit Margin -- Increased by three percentage points driven by improved operational execution.
• Unrestricted Cash -- Ended at $299 million, down $38 million from December 31, 2025; cash was impacted by a $50 million term loan repayment and a $38 million inventory increase, among other factors.
• Inventory -- Increased by $38 million, with $35 million within Advanced Materials and Chemicals, reflecting higher silver costs and advance builds for a planned plant shutdown.
• Net Debt Position -- Increased from $128 million to $139 million net debt positive, marking an $11 million improvement for the quarter.
• Pension Income -- Down $18 million year over year due to the 2025 CREP pension plan termination, resulting this quarter in $4 million pension income.
• Product Launches -- Introduced the Sonora Ultra XR Plate in Europe and a new professional film for still and motion picture segments, with innovation cited as a continuing investment area.
• Pharmaceutical Manufacturing and R&D -- New cGMP facility fully operational, and the Eastman Kodak Company Advanced Electrophysiology Lab launched in partnership with SUNY Geneseo to enhance research capacity.
• Term Loan Reduction -- $50 million repaid on higher-rate term loans as part of ongoing deleveraging efforts.

SUMMARY

Eastman Kodak (NYSE:KODK) delivered its third consecutive quarter of year-over-year growth in revenue, gross profit, and operational EBITDA, underscoring progress in business transformation and disciplined execution. A significant GAAP net loss primarily stemmed from a $12 million fair value loss tied to preferred stock derivatives following a previously announced amendment and stock price appreciation. Working capital was heavily affected by a $35 million increase in Advanced Materials and Chemicals inventory, largely due to a doubling of average silver costs and preparation for a planned plant maintenance shutdown. The successful operationalization of a new pharmaceutical manufacturing site and the partnership with SUNY Geneseo on electrophysiological research mark an expansion into higher-margin and innovation-driven products. Ongoing reductions in interest expense and net debt reflect a concentrated effort to deleverage and reinforce the balance sheet.

• David Edward Bullwinkle described the operational EBITDA metric as "our key internal measure of profitability," clarifying its use for segment performance and excluding non-cash and volatile items.
• Interest expense dropped by $8 million year over year due to term loan repayments resulting from the pension plan termination and reversion.
• Pension-related non-cash income was $4 million, reflecting adjustments after CREP pension plan termination, and is anticipated to remain lower throughout 2026.
• Management confirmed the company is "net debt positive" and that this position has improved for the second consecutive quarter.
• The motion picture film business benefited from new product launches and exposure in high-profile projects, supporting continued commitment to traditional and professional film markets.

INDUSTRY GLOSSARY

• AM and C: Refers to the Advanced Materials and Chemicals segment, encompassing industrial film, chemicals, motion picture, advanced materials, and R&D operations.
• Operational EBITDA: A non-GAAP profitability metric calculated by adding back interest, taxes, depreciation, amortization, and excluding nonrecurring or non-operational income and expenses such as stock-based compensation and derivative valuation changes.
• CREP Pension Plan: Closed or terminated company pension plan whose wind-down affected both pension income and cash flows in the quarter.
• cGMP: Current Good Manufacturing Practice, a set of regulations and standards for manufacturing, including pharmaceutical products, emphasizing quality and safety.

Full Conference Call Transcript

Denise Goldbard: Thank you, and good afternoon, everyone. I am Denise Goldbard, Eastman Kodak Company’s chief marketing officer. Welcome to Eastman Kodak Company’s first quarter 2026 earnings call. At 04:15 this afternoon, Eastman Kodak Company filed its Form 10-Q and issued its release on financial results for 2026. You may access the presentation and webcast for today's call on our Investor Center at investor.codec.com. During today's conference 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. Investors are cautioned not to unduly rely on forward-looking statements and such statements should not be read or understood as a guarantee of future performance or results. All forward-looking statements are based on Eastman Kodak Company’s expectations and various assumptions. Future events or results may differ from those anticipated or expressed in the forward-looking statements.

Important factors that could cause actual events or results to differ materially from these forward-looking statements include, among others, the risks, uncertainties, and other factors described in more detail in Eastman Kodak Company’s filings with the U.S. Securities and Exchange Commission from time to time. All forward-looking statements attributable to Eastman Kodak Company or persons acting on its behalf only apply as of the date of this presentation and are expressly qualified in their entirety by the cautionary statements included or referenced in this presentation. Eastman Kodak Company 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.

In addition, the release just issued and the presentation provided contain certain measures that are deemed non-GAAP measures. Reconciliations to the most directly comparable GAAP measures have been provided with the release on our website in our Investor Center at investor.codec.com. Speakers on today's call are James V. Continenza, Eastman Kodak Company’s Executive Chairman and Chief Executive Officer, and David Edward Bullwinkle, Eastman Kodak Company’s chief financial officer and senior vice president. 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 James V. Continenza. Thank you, and have a great day.

James V. Continenza: Welcome, everyone, and thank you for joining the first quarter 2026 investor call for Eastman Kodak Company. The story of the first quarter is a story of consistency, stability, and growth. This reflects our transformation over the last seven years and our focus on execution and our continued investment in the business. I am pleased to see strong year-over-year performance over the last three consecutive quarters. Let me give you some highlights from the first quarter. Consolidated revenue was up 7% to $265 million compared with $247 million for the first quarter 2025. Revenue increased in both our key businesses, Print and AM and C. We had a gross profit percentage of 22%.

That is three percentage points, or 16%, higher than the first quarter 2025. Operational EBITDA was $15 million compared with $2 million for the first quarter 2025, up $13 million. Moving on to Advanced Materials and Chemicals, we saw AM and C revenue grow by $2 million, or 3%, which was driven by a $3 million increase in film and chemicals, partially offset by $1 million lower in inks and consumables. Let us talk about our still films. We have invested heavily back into film, and we are starting to see great results from that. An example in still film: we recently launched a professional film sold directly to distributors.

Our objective is to stabilize the market and continue to meet demand. I am really proud to see Motion Picture continue to increase. We launched a new film called Virita 200D, which was used in Euphoria season three. A lot is going on. Many Oscar-winning movies, including One Battle After Another and Sinners, were shot on Eastman Kodak Company film, and the long-anticipated Christopher Nolan’s The Odyssey is also shot on Eastman Kodak Company film. We remain committed to film and maintaining supply for our customers. A quick update on our pharma business. Our new CGMP pharmaceutical manufacturing facility is up and running.

I am really proud to say we recently opened the Eastman Kodak Company Advanced Electrophysiology Lab in partnership with SUNY Geneseo. The lab will enhance our research capabilities and support future product development. We continue to work towards obtaining Class II certification to manufacture more complex, high-margin products in the United States. Moving on to some highlights from our commercial print business, we continue to provide a full range of print solutions to our customers. Our revenue increased by 9%, even in the difficult times we are going through. There are some supply issues on aluminum. There are issues on delivery and logistics. A lot is going on.

Prices have increased greatly on raw materials such as aluminum, but yet we are still able to maintain our revenue and supply our customers. As our commitment to print continues and we continue to invest in innovation, I am pleased to announce we recently launched the Sonora Ultra XR Plate in Europe, which will expand our Sonora Ultra portfolio. As I stated last quarter, I will state it again: as we continue to fix the balance sheet, invest in the infrastructure of the business, and focus on key products, our next steps are growth. We must continue to grow our business. We have built a stable, growing Eastman Kodak Company by consistently executing our long-term plan.

We stay on track regardless of all the events happening around us. We are leveraging our core strengths. We are strengthening our balance sheet. We are investing in growth products. As we continue to invest in operational excellence and execution, we continue to diversify our portfolio by using the different technologies and skill sets we have in the business. As we stated before, our goal is to continue to work on the balance sheet. I am proud to say today, we are net debt positive. But one of the most important aspects is meeting our customers’ needs, and the only way we can do that is by continuing to focus on operational excellence.

We have to be better than everyone else, and we are going to continue to keep investing and getting better every single year. Now I am going to turn it over to David Edward Bullwinkle to discuss our first quarter financial results. Dave?

David Edward Bullwinkle: Thanks, James V. Continenza, and welcome to the call, everybody. Thanks for joining us today. This afternoon, the company filed its Form 10-Q for the quarter ended 03/31/2026 with the SEC. As I do on each and every call, I encourage you to read the filing in its entirety as there is a plethora of information contained in the materials we have provided publicly. As a reminder, references made during my remarks are included in the company’s earnings press release and Form 10-Q filed today. Let us begin with the key financial highlights for 2026. We delivered strong financial performance despite sharp commodity swings and persistent inflationary pressure.

The results reflect substantial year-over-year improvement in revenue, gross profit, and operational EBITDA, underscoring our disciplined execution and progress against our long-term goals. In fact, this is the third consecutive quarter of year-over-year growth for these measures. Revenue was $265 million, an increase of $18 million, or 7% year over year, with increases in Print and Advanced Materials and Chemicals. On a constant currency basis, revenue grew $11 million, or 4%. Gross profit was $57 million, which is up $11 million, or 24%, year over year. Our gross profit percentage increased to 22% compared to 19% in the prior-year quarter, reflecting our operational execution.

Operational EBITDA for the quarter was $15 million, an increase of $13 million compared to the prior-year quarter, primarily driven by improved pricing, partially offset by higher manufacturing costs and higher silver and aluminum prices. For the quarter, we reported a GAAP net loss of $16 million compared with a GAAP net loss of $7 million in the prior-year quarter, an increase of $9 million. Let me walk you through the main factors behind this result and share with you some additional helpful information. $12 million of the loss was driven by a change in the fair value of an embedded derivative related to our Series B preferred stock.

This accounting impact resulted from a previously announced amendment to the Series B agreement, and the change in fair value was primarily caused by the increase in our stock price during the quarter. This is fully disclosed in our Form 10-Q. $5 million of the loss relates to stock-based compensation expense, which is a non-cash expense and does not impact our liquidity. We also recognized $4 million of non-cash pension income this quarter. This reflects an $18 million decrease compared to the prior-year quarter. This is driven by the termination of the CREP pension plan, which we completed in 2025.

As a result of the plan termination, we expect pension income to be lower year over year in each quarter of 2026, so we will see this reoccur every quarter this year. Partially offsetting these items, GAAP net loss benefited from an $8 million year-over-year reduction in interest expense, mainly due to term loan repayments resulting from the pension plan termination and reversion. While these items affect comparability, they reflect deliberate actions we took to strengthen our balance sheet, reduce debt, and build long-term value.

Now that I have explained some of the key drivers of the year-over-year change in our net loss, I have also included a simple reconciliation in today’s materials to explain how the GAAP net loss translates to operational EBITDA. We have received feedback from investors and questions about this, so we are covering it here. EBITDA measures the profitability of our business by excluding its components of interest, taxes, and non-cash charges like depreciation and amortization—as you know, EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. To arrive at operational EBITDA from net loss, we start by adding back those standard items of interest expense, tax expense, and depreciation and amortization expense.

In addition, to arrive at operational EBITDA for Eastman Kodak Company, we remove those non-operational items shown on the waterfall slide. Number one, nonrecurring and other items. This category primarily contains the $12 million expense we booked in the quarter for the fair value change in the preferred stock derivatives. This derivative is the value of the conversion option for our stock. We expect to fair value this every quarter, and the changes will be recognized in our income statement. The second category is non-cash items of expense or income. In this case, it is a net expense item.

This represents an adjustment to remove stock-based compensation expense, which we talked about earlier, and it is almost fully offset by the corporate component of pension income, which we also discussed earlier in my remarks. As I have said, these adjustments remove the impact of items that can cause GAAP volatility but do not reflect day-to-day operations. Therefore, we consider them nonoperational. The resulting operational EBITDA provides a clear view of how our underlying business is performing. We have consistently used this metric as our segment measure as well, which is disclosed in all of our earnings releases and fully reconciled in that material. I hope this provides helpful context of the company’s performance and financial statements.

If you have further questions, please do not hesitate to contact us. Moving on to our cash performance for the first quarter, we ended the quarter with $299 million of unrestricted cash, a decrease of $38 million from 12/31/2025. Let me briefly walk through the key drivers of our quarter-end cash position. First, as expected, we received $46 million in cash proceeds from the redemption of hedge fund investments related to the CREP pension reversion during the quarter. Second, working capital was impacted by a $38 million increase in inventory, with $35 million of this increase occurring within our AM and C segment.

This was largely driven by average commodity cost of silver more than doubling from year-end and increases in the volume of silver we carry on the balance sheet due to supply terms. Inventory in AM and C also increased as we built ahead of our planned second-quarter plant shutdown for maintenance. Partially offsetting these impacts within working capital, accounts payable increased by $9 million and accounts receivable decreased by $9 million, both helping to partially counter the inventory increases. Last, as required under the term loan amendment, we made a $50 million principal payment on our higher-rate term loans in March. This was funded primarily by [inaudible].

The company’s net debt positive position increased from $128 million at 12/31/2025 to $139 million at 03/31/2026. This is an $11 million improvement in the quarter. This reflects further strengthening of our financial position. As I conclude, I want to leave you with a few clear takeaways from our first quarter results. Number one, financial results were strong. We delivered solid year-over-year growth in revenue, gross profit, and operational EBITDA, and this is for the third consecutive quarter. We did this despite economic headwinds in commodity pricing and inflationary impacts as well. Most notably, our operational EBITDA increased sharply even as the business managed through those impacts.

Again, as I talked about earlier, we fully reconciled for you; operational EBITDA is our key internal measure of profitability. It is how we measure and disclose the results of our segments in our public filings as well. Finally, I am proud to say that our balance sheet is stronger than it has been in many, many years, as we continue to see the benefit of the decisions we have made to reinforce our foundation. With $299 million of unrestricted cash, we are in a net debt positive position relative to our short- and long-term debt, and this is for the second consecutive quarter.

We have also continued to delever the balance sheet, paying down $50 million of higher-rate interest debt in the quarter. Thank you for your time and attention. I will now return it back to James V. Continenza.

James V. Continenza: Thank you, David Edward Bullwinkle. In summary, we have built a strong, stable Eastman Kodak Company over the last several years by consistent execution of our long-term plan and making the appropriate changes as the environment changes around us. We have delivered three consecutive strong quarters year over year. We continue to invest in AM and C and Print and grow those products. We focus on operations, but more importantly, three key areas that we always focus on: manufacturing, selling, and service. Everyone in the company is geared around focusing on those three areas. The goal is to deliver long-term value to our shareholders, our customers, and our employees.

With that, I want to thank everyone for their time and for listening to the Eastman Kodak Company first quarter 2026 investor call.

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

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