UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): February 4, 2010
Eastman
Kodak Company
(Exact
name of registrant as specified in its charter)
|
New
Jersey
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1-87
|
16-0417150
|
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
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343
State Street,
Rochester,
New York 14650
(Address
of Principal Executive Office) (Zip Code)
Registrant's
telephone number, including area code: (585)
724-4000
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
[ ] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
[ ] Soliciting
material pursuant to Rule 14a-12 under the Securities Act (17 CFR
240.14a-12)
|
|
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c)under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM
7.01 Regulation FD Disclosure.
On
February 4, 2010, Eastman Kodak Company (“the Company”) will hold its annual
strategy review meeting in New York City. Attached as Exhibit 99.1 to
this report is a press release dated February 4, 2010 regarding the annual
strategy review meeting. The information in this current report on
Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) or otherwise subject to the liability of that section, and shall not be
deemed incorporated by reference into any filing under the Securities Act of
1933, as amended, or the Exchange Act.
In its
February 4, 2010 annual strategy review meeting presentations and related press
release, the Company referenced certain non-GAAP financial measures including
“Gross profit excluding restructuring as a percent of revenue”, “Earnings from
operations as a percent of revenue”, “Cash Generation before restructuring
payments as a percent of revenue”, “Digital revenue”, “Traditional revenue”,
“FPEG EFO as a percent of revenue without pension income (expense)”, “Digital
gross profit as a percent of revenue”, “Digital SG&A as a percent of
revenue”, “Digital R&D as a percent of revenue”, “Digital EFO as a percent
of revenue”, “Quarter-over-quarter percent digital revenue change, excluding
non-recurring intellectual property royalties”, “EBITDA”, “Segment earnings”,
“EFO as a percent of revenue without pension income (expense)”, “Digital revenue
compound annual growth rate (CAGR)” and “Cash generation before restructuring
payments”. The Company believes that these non-GAAP measures
represent important internal measures of performance. Accordingly,
where they are provided, it is to give investors the same financial data
management uses with the belief that this information will assist the investment
community in properly assessing the underlying performance of the Company, its
financial condition, results of operations and cash flow on a year-over-year and
quarter-sequential basis.
A webcast
of the Company’s annual strategy review meeting, along with the presentation
materials that will be distributed at the meeting, including reconciliations of
the non-GAAP measures presented to the most directly comparable GAAP measures,
(in accordance with Regulation G), is available on the Company’s web site at
(www.kodak.com/go/invest).
ITEM
9.01 Financial Statements and Exhibits
(d)
Exhibits
|
(99.1)
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Eastman
Kodak Company press release dated February 4, 2010, announcing the
Company’s annual strategy review meeting held in New York City (furnished
herewith).
|
2
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
EASTMAN KODAK COMPANY
By: /s/ Patrick M.
Sheller
--------------------------------
Patrick M. Sheller
Corporate Secretary
Date: February
4, 2010
EASTMAN
KODAK COMPANY
INDEX
TO EXHIBITS
Exhibit
No.
|
(99.1)
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Eastman
Kodak Company press release dated February 4, 2010, announcing the
Company’s annual strategy review meeting held in New York City (furnished
herewith).
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3
Exhibit (99.1)
EASTMAN KODAK COMPANY
Financial Media
Contacts:
David
Lanzillo, Kodak, +1 585-781-5481, david.lanzillo@kodak.com
Christopher
Veronda, Kodak, +1 585-724-2622, christopher.veronda@kodak.com
Investor Relations
Contacts:
Ann
McCorvey, Kodak, +1 585-724-5096, antoinette.mccorvey@kodak.com
Angela
Nash, Kodak, +1 585-724-0982, angela.nash@kodak.com
Kodak
Regaining Momentum, Forecasts Significantly Improved 2010
Profitability
Company to Build on Improved
Second-Half 2009 Performance; Details Plans for Profitable Digital Growth in
2010 and Beyond;
Enters 2010 with Broadest
Digital Portfolio Ever and a Lean Cost Structure that Creates Earnings
Leverage;
Company Outpacing Market in
Key Digital Growth Segments;
Traditional Business
Provides Significant Source of Cash and Pursues Expanded
Opportunities
NEW YORK
CITY, Feb. 4 – At its annual strategy meeting today with investors, Eastman
Kodak Company (NYSE:EK) will detail plans to build on the momentum generated in
the second half of 2009 and accelerate profitable growth on the strength of its
unmatched expertise in materials science and digital image science.
Despite a
challenging global economy, the company achieved improved profitability and cash
generation before restructuring in 2009, while creating a lean cost structure
and continuing to invest in innovative, higher-margin digital products. Over the
next three years, Kodak will leverage its expanding portfolio of digital and
traditional businesses, and will continue its focus on operational efficiency,
to deliver increased revenue, earnings, and cash flow.
At
today’s annual strategy meeting in New York City, the company’s senior leaders
will detail how Kodak will continue to improve performance in 2010 and
beyond.
For 2010,
on a continuing operations basis, Kodak expects:
|
·
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Segment
earnings from operations of $350 million to $450 million on total company
revenue of between $7.5 billion to $7.7 billion. This equates to GAAP
earnings from continuing operations before interest expense, other income
(charges), net and income taxes of $275 million to $375
million;
|
|
·
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2010
GAAP earnings from continuing operations in the range of negative $50
million to positive $50 million;
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·
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Digital
revenue growth of 5% to 9%, and overall revenue growth of 0% to
1%;
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·
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Positive
cash generation before restructuring, and, on a GAAP basis, net cash
provided by continuing operations from operating activities of $50 million
to $150 million;
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·
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A
year-end cash balance of $1.8 billion to $2.0 billion, after taking into
account all cash actions, including modest debt payments due during
2010.
|
“Our strategy is working and we are on
track toward sustained profitability,” said Antonio M. Perez, Chairman and Chief
Executive Officer, Eastman Kodak Company. “We are successfully managing through
one of the deepest global economic downturns in history, and we have emerged as
a leaner, more competitive company. Today, Kodak is well-established in large
markets, and we are gaining traction in new growth markets, with the broadest
and most competitive portfolio of digital products in the company’s
history. We have solid liquidity and the financial flexibility
necessary to fully implement our strategy. In 2010 and beyond, we
will fully utilize the innovative thinking of Kodak people to drive sustainable,
profitable growth and increase the value of this great company.”
Kodak’s
Digital Businesses: Driving Profitable Growth
Both of the company’s digital business
units – the Consumer Digital Imaging Group (CDG) and the Graphic Communications
Group (GCG) – compete in large markets and are outpacing those markets by
bringing to customers groundbreaking advances in imaging
technology.
For 2010, the company expects revenues
from its digital portfolio to grow by 5% to 9%, that, when combined with a more
moderate decline in the company’s traditional business, results in an overall
revenue growth of 0% to 1%. This digital growth will be driven on the consumer
side (CDG) by an expanding portfolio of higher-margin digital cameras and
devices, including the recently announced KODAK SLICE Touchscreen Camera, KODAK
PLAYSPORT Video Camera, and the KODAK PULSE Digital Picture Frame. The company
also expects continued significant revenue growth and earnings improvement from
its revolutionary line of consumer inkjet products, which produced market share
gains and doubled the installed base during 2009. During 2010, Kodak expects to
continue to grow market share for its consumer inkjet printers and significantly
expand sales of high-margin ink and media.
2
On the commercial
side, GCG growth will be fueled by increased sales of digital plates and
presses, workflow software, document scanners, and new product introductions,
including the KODAK PROSPER Press Platform, a next-generation approach to
continuous inkjet printing that provides offset-class quality, speed,
reliability and increased productivity, and the recently commercialized KODAK
FLEXCEL NX System, an innovative, flexible plate for the rapidly growing package
printing market.
As the
commercial printing industry continues to transition from traditional to digital
technology, Kodak is uniquely positioned because the company offers the broadest
range of digital and traditional solutions to assist printers through each stage
of their transition.
Kodak’s
Traditional Business: Reinventing Its Future
The
company’s Film, Photofinishing & Entertainment Group has maintained a strong
market position in all of its key product categories, and continues to be a
solid cash generator. The FPEG portfolio includes Entertainment Imaging products
and services, traditional photofinishing, consumer and professional film capture
and services, and products for industrial film markets.
For 2010,
the company expects stable performance and a continued solid cash contribution
from its Entertainment Imaging business, and moderation in the industry decline
rate across its traditional product lines.
In
addition, Kodak is leveraging its expertise in materials and chemical science
and coating technology to pursue revenue opportunities in large industrial
markets around the world, including printed circuit boards, touch screen films
used in smartphones, gelatin for pharmaceutical applications, bio fuel
distillation, recycling and recovery, and other applications. As volumes decline
for traditional photographic products, Kodak plans to pursue sales in these new
markets to mitigate the decline of photographic products. This will be done by
repurposing existing technology and assets.
3
The
Growth Model
Kodak
enters 2010 with a strong cash position, solid liquidity, and the financial
flexibility to fully implement its strategy for profitable growth.
The company’s target business model
assumes, on average, a compound annual growth rate for digital revenues of 7% to
9% from 2010 through 2012, and a total company compound annual revenue growth
rate of approximately 3% during that period.
Kodak’s target model for 2012 includes
a gross profit margin goal for its digital businesses of 30% and a total company
gross profit margin goal of 28%. The company’s goal for segment earnings from
operations is 8% of revenue for the digital businesses and 7% of revenue for the
total company. This total company goal equates to earnings from continuing
operations before interest expense, other income (charges), net, and income
taxes of 7% of revenue.
“We are
regaining our momentum, our strategy is paying off, and our customers are
embracing our distinctive value propositions in our new growth markets,” said
Perez. “Kodak is a financially solid company with the broadest and most
competitive digital product portfolio that we have ever had, a sustainable
traditional business, a lean cost structure, leading intellectual property, and
a well-respected brand. We expect customer demand for our digital
products to continue to outpace the market, which positions us well for
sustained profitability and increased shareholder value.”
Webcast
of Today’s Meeting
For those
unable to attend in person, the meeting will be available via a live webcast.
The company will also make available on its website the presentation materials
that will be distributed at the meeting. To access the webcast and presentation
materials please go to: http://www.kodak.com/go/invest.
4
CAUTIONARY
STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
Certain
statements in this press release may be forward-looking in nature, or
"forward-looking statements" as defined in the United States Private Securities
Litigation Reform Act of 1995. For example, references to the
Company's expectations regarding the following are forward-looking statements:
revenue; revenue growth; earnings; margins; costs; cash; liquidity; demand for
Kodak products, including commercial printing equipment and consumables,
consumer inkjet products, digital cameras and devices, motion picture films;
market size and growth; market share; and potential economic
growth.
Actual
results may differ from those expressed or implied in forward-looking
statements. Important factors that could cause actual results to differ
materially from the forward-looking statements include, among others, the risks,
uncertainties, assumptions and factors specified in Kodak's Annual Report on
Form 10-K for the year ended December 31, 2008 and Quarterly Reports on Form
10-Q for the quarters ended March 31, 2009, June 30, 2009, and September 30,
2009 and the 8-K filed on September 16, 2009 under the headings "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and "Cautionary Statement Pursuant to Safe Harbor Provisions the
Private Litigation Reform Act of 1995" and in other filings Kodak makes with the
SEC from time to time. Kodak cautions readers to carefully consider such
factors. Many of these factors are beyond Kodak's control. In addition, any
forward-looking statements represent Kodak 's estimates only as of the date they
are made, and should not be relied upon as representing Kodak 's estimates as of
any subsequent date. While Kodak may elect to update forward-looking statements
at some point in the future, Kodak specifically disclaims any obligation to do
so, even if its estimates change.
Any
forward-looking statements in this press release should be evaluated in light of
the factors and uncertainties referenced above and should not be unduly relied
upon.
5
APPENDIX
Reconciliation
of Non-GAAP Financial Measures
to
the Most Directly Comparable GAAP Measures
In its
February 4, 2010 Annual Strategy Review Meeting Press Release, Eastman Kodak
Company (“The Company”) referenced certain non-GAAP financial measures including
“Segment earnings”, “Digital revenue growth”, “Positive cash generation before
restructuring payments”, “Digital revenue 3-year compound annual growth rate
(CAGR)”, “Digital gross profit margin goal”, “Digital segment earnings goal” and
“Segment earnings goal”.
The
Company believes that these non-GAAP measures represent important internal
measures of performance. Accordingly, where they are provided, it is
to give investors the same financial data management uses with the belief that
this information will assist the investment community in properly assessing the
underlying performance of the Company, its financial condition, results of
operations and cash flow on a year-over-year and quarter-sequential
basis.
The
following reconciliations are provided with respect to terms used in the
February 4, 2010 Annual Strategy Review Meeting Press Release.
The
following table reconciles segment earnings to the most directly comparable GAAP
measure of earnings from continuing operations before interest expense, other
income (charges), net and income taxes (dollar amounts in
millions):
|
2010
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2010
Plan
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|||
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Plan
($)
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(%
of Revenue)
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|||
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Segment
earnings, as presented
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$350-$450
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5%
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||
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Restructuring
costs, rationalization and other items of comparability
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(50)
- (60)
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(1)%
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||
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Other
operating income (expense), net
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(20)
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0%
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||
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Earnings
from continuing operations before interest expense, other
income
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||||
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(charges),
net and income taxes (GAAP basis), as presented
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$275
- $375
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4%
|
||
The
following table reconciles digital revenue growth to the most directly
comparable GAAP measure of consolidated revenue growth:
|
2010
Plan
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||
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Growth/(Decline)
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||
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Digital
revenue, as presented
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5%
- 9%
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|
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Traditional
revenue
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(14)%
- (18)%
|
|
|
All
Other revenue
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-
|
|
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Consolidated
revenue (GAAP basis), as presented
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0%
- 1%
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6
The
following table reconciles positive cash generation before restructuring
payments to the most directly comparable GAAP measure of net cash provided by
continuing operations from operating activities:
|
2010
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||
|
Plan
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||
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Cash
generation before restructuring payments, as presented
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Positive
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|
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Cash
restructuring payments
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~(100)
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|
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Cash
generation (usage)
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$0
- $(200)
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|
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Proceeds
from sales of businesses/assets
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(20)
- (30)
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Free
cash flow
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$(100)
- $(150)
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|
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Additions
to properties
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200
- 250
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|
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Net
cash provided by continuing operations from operating
activities
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||
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(GAAP
basis), as presented
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$50
- $150
|
|
The
following table reconciles digital revenue 3-year compound annual growth rate
(CAGR) to the most directly comparable GAAP measure of consolidated revenue
3-year CAGR (dollar amounts in millions):
|
CAGR
|
||
|
Digital
revenue 3-year CAGR, as presented
|
7%
- 9%
|
|
|
Traditional
revenue 3-year CAGR
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(11)%
- (15)%
|
|
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All
Other revenue
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-
|
|
|
Consolidated
revenue 3-year CAGR (GAAP basis), as presented
|
3%
|
The
following table reconciles digital gross profit margin to the most directly
comparable GAAP measure of consolidated gross profit margin:
|
2012
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||
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Goal
|
||
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Digital
gross profit margin, as presented
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30%
|
|
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Traditional
gross profit margin
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14%
|
|
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Consolidated
gross profit margin (GAAP basis), as presented
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28%
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7
The
following table reconciles digital earnings and segment earnings to the most
directly comparable GAAP measure of earnings from continuing operations before
interest expense, other income (charges), net and income taxes:
|
2012
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||
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(all
amounts as a percent of revenue)
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Goal
|
|
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Digital
earnings, as presented
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8%
|
|
|
Traditional
earnings
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1%
|
|
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Segment
earnings, as presented
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7%
|
|
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Restructuring
costs, rationalization and other items of comparability
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0%
|
|
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Other
operating income (expense), net
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0%
|
|
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Earnings
from continuing operations before interest expense, other
income
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||
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(charges),
net and income taxes (GAAP basis), as presented
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7%
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8