Eastman Kodak Company (
Q3 2010 Earnings Call Transcript
October 28, 2010 11:00 am ET
Angela Nash – IR
Antonio Perez – Chairman and CEO
Ann McCorvey – Director, IR and VP
Frank Sklarsky – CFO and EVP
Richard Gardner – Citi
Shannon Cross – Cross Research
Ananda Baruah – Brean, Murray
Arun Seshadri – Credit Suisse
Ulysses Yannas – Buckman & Reid
Mark Kaufman – Rafferty Capital Markets
Philip Brown [ph] – Tesum [ph]
Previous Statements by EK
» Eastman Kodak Company Q2 2010 Earnings Call Transcript
» Eastman Kodak Company Q1 2010 Earnings Call Transcript
» Eastman Kodak Company Q4 2009 Earnings Call Transcript
» Eastman Kodak Q3 2009 Earnings Call Transcript
Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the third quarter 2010 sales and earnings conference call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator instructions) This conference is being recorded today, Thursday, October 28, 2010.
I would now like to turn the conference over to Angela Nash, Manager of Investor Relations. Please go ahead, ma’am.
Thank you. Good morning and thank you for joining us for our today’s Kodak third quarter 2010 sales and earnings conference call. Here with me today are, Antonio M. Perez, Kodak’s Chairman and CEO; as well as Chief Financial Officer, Frank Sklarsky, and Ann McCorvey.
Antonio will begin this morning with his observations on the quarter, and then Frank will provide a review of the quarterly financial performance.
During this conference call and the question-and-answer session, we will make 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; economic conditions, currency exchange rates, revenue, revenue growth, cost of goods sold, savings from restructurings and rationalization, product pricings, gross margins, earnings, earnings growth, cash generation, demand for our products, consumables and services, including commercial inkjet, consumer inkjet, workflow software, prepress and packaging solutions, commodity cost, potential revenue, cash and earnings from intellectual property, licensing, liquidity and debt.
These forward-looking statements are subject to a number of important risk factors and uncertainties, which are fully enumerated in our quarterly report on Form 10-Q for the quarter ended September 30, 2010 issued this morning.
Listeners are advised to read these important cautionary statements in their entirety as any forward-looking statements need to be evaluated in light of these important factors and uncertainties.
Now, I’ll turn the conference call over to Antonio M. Perez.
Thanks, Angela, and good morning, everyone. Before I begin our discussion on the company’s third quarter performance, I want to take a moment to thank Frank for his valuable contributions to the company. Frank has a strong operational background and he has provided the focus on cash integration and cost discipline we needed during his four years as CFO. I wish Frank all the best as he moves to his new role. Frank is leaving us in good hands as he passes the baton to Ann McCorvey, who will become our new CFO on November 5.
Ann needs no introduction to most of you as she is the current Director of Investor Relations for the company. She has a deep understanding of our business models, our customers, and our shareholders. She has been an important part of our management team for years, and I look forward to her continuous and strategic contributions.
Ann, will like to make a brief comment before we begin.
Thank you, Antonio. I’m honored to have the opportunity to lead Kodak’s finance organization, as we complete the digital transformation and begin a new era of sustainable profitable growth. This company has the potential to achieve greater things and I look forward to doing my part to have Kodak achieve its goals in conjunction with an exceptional corporate finance team.
Thank you, Ann. Now on to our third quarter earnings discussion. The third quarter results are evidence of our accelerated progress in the transformation of Kodak. We continued to see excellent results from our four growth initiatives – consumer inkjet, commercial inkjet, packaging solutions, and workflow software and services.
In the third quarter, the combined revenue for these businesses grew 23%. Year-to-date, revenue for these businesses is up 15% when compared to the same period last year, and we expect even stronger growth for these businesses in the fourth quarter.
During the third quarter, consumer inkjet growth continued to outpace the market as we have done since introduction. Printer and ink revenue grew by 26%, when compared to the same period last year. The fourth quarter will be our largest revenue quarter for consumer inkjet.
We continued to build our installed base and drive consumables growth. We are on track to achieve our goal this year to double our ink revenue, and to breakeven during 2011. We are committed to providing customers with high quality printing, at fair prices tailored to suit their printing needs.
The products and services we are developing in our Graphic Communications Group, our base and our focus have been the best partner to help our customers grow their business. The industry is transforming at an accelerated pace and our customers know they can count on Kodak to lead the way.
For the third consecutive quarter, commercial inkjet has had double-digit revenue growth. This quarter revenue grew 23%, when compared to the same period a year ago. These revenue growth was driven by the increased demand for our product PROSPER S-Series in printing systems, which offer the highest quality hybrid digital printing with speeds matching those of offset, giving commercial printers the ability to capitalize on new business opportunities.