Eastman Kodak Company Aktie

Good day, and thank you for standing by. Welcome to the Eastman Kodak Q1 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would like to hand over the conference to our first speaker today, Denisse Goldbarg.

Thank you, and good afternoon, everyone. I am Denisse Goldbarg, Eastman Kodak's Chief Marketing Officer. Welcome to Kodak's First Quarter 2026 Earnings Call. At 4:15 this afternoon, Kodak filed its Form 10-Q and issued its release on financial results for the first quarter of 2026. You may access the presentation and webcast for today's call on our Investor Center at investor.kodak.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 Kodak'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 Kodak's filings with the U.S. Securities and Exchange Commission from time to time.

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 this presentation. Kodak undertakes no obligation to update or revise forward-looking statements or 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 contains 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.kodak.com.

Speakers on today's call are Jim Continenza, Kodak's Executive Chairman and Chief Executive Officer; and David Bullwinkle, Kodak'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 Jim. Thank you, and have a great day.

Welcome, everyone, and thank you for joining the First Quarter 2026 Investor Call for Eastman Kodak. The story of the first quarter is a story of consistency, stability and growth. This reflects our transformation over the last 7 years and our focus on execution and our continued investment in the business. Now I'm pleased to see strong year-over-year performance over the last 3 consecutive quarters.

Let me give you some highlights from the first quarter. Consolidated revenue is up 7% to $265 million compared with $247 million for first quarter 2025. Revenue increased in both our key businesses, print and AM&C. We had gross profit percentage of 22%. That's 3 percentage points or 16% higher than 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&C revenue grew by $2 million or 3%, which was driven by a $3 million increase in film and chemicals, which was partially offset by $1 million for lower inks and consumables.

Let's talk about our still films. We've invested heavily back into film, and we're starting to see great results from that. An example, in still film, 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 VERITA 200D, which was used in Euphoria Season 3. A lot is going on. Many Oscar winning movies, including One Battle After Another and Sinners were shot on Kodak film and the long-anticipated Christopher Nolan's The Odyssey is also shot on Kodak 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 Kodak 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 2 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 revenues increased by 9%, even in the difficult times we're going through. There are some supply issues on aluminum. There is issues on delivery, logistics. A lot is going on. Prices have increased greatly on raw materials such as aluminum, but yet we're still able to maintain our revenue and supply our customers.

As our commitment to print continues, and we continue to invest in innovation, I'm pleased to announce we recently launched the SONORA UltraXR plate in Europe, which will expand our SONORA Ultra portfolio. As I stated last quarter, and I'll 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 Kodak by consistently executing our long-term plan. We stay on track regardless of all the events happening around us.

We're leveraging our core strengths. We're strengthening our balance sheet. We're investing in growth products. As we continue to invest in operational excellence and execution, right, we continue to diversify our portfolio by using the different technologies and skill sets we have in the business. As we stated before, right, our goal is to continue to work on the balance sheet. I'm proud to say today, we are net debt positive.

One of the most important aspects is by 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're going to continue to keep investing and getting better every single year.

Now I'm going to turn it over to Dave Bullwinkle to discuss our first quarter financial results. Dave?

Thanks, Jim, and welcome to the call, everybody. Thanks for joining us today. This afternoon, the company filed its Form 10-Q for the quarter ended March 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.

So let's begin with the key financial highlights for the first quarter of 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.

Key metrics. Revenue was $265 million, an increase of $18 million or 7% year-over-year with increases in Print, 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, and that's 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 our 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 noncash expense and does not impact our liquidity.

We also recognized $4 million of noncash pension income this quarter, but this reflects an $18 million decrease compared to the prior year quarter. This is driven by the termination of the KRIP pension plan, which we completed in the fourth quarter of 2025. As a result of the planned 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've explained some of the key drivers of the year-over-year change in our net loss, I've also included a simple reconciliation in today's materials to explain how the GAAP net loss translates to operational EBITDA. We received feedback from investors and questions about this, so we're covering it here.

EBITDA measures the profitability of our business by excluding its components of interest, taxes and noncash 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 Kodak, we remove those nonoperational 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 derivative. 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.

Second category are noncash 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's 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've 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 don't 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 December 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 KRIP 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&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&C also increased as we built ahead of a 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 KRIP investment asset redemptions. These actions strengthen our liquidity profile and reduce future interest expense.

As of March 31, 2026, the company's net debt positive position increased from $128 million at December 31, 2025, to $139 million at March 31, 2026. This is an $11 million improvement in the quarter. This reflects a 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, and we fully reconciled for you, operational EBITDA is our key internal measure of profitability. It's 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's been in many, many years as we continue to see the benefit of the decisions we've 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'll now return it back to Jim.

Thank you, Dave. In summary, we've built a strong, stable Kodak over the last several years, by consistent execution of our long-term plan and making the appropriate changes in the environment as it changes around us. We have delivered 3 consecutive strong quarters year-over-year. We continue to invest in AM&C and print and grow those products.

We focus on operations, but more importantly, 3 key areas that we always focus on manufacturing, selling and service. Everyone in the company is geared around focusing on those 3 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 listening to the Eastman Kodak First Quarter 2026 Investor Call.

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

Good day, and thank you for standing by. Welcome to the Eastman Kodak Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Today's call is being recorded.

I would now like to hand the conference over to your speaker host, Anthony Redding. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to Kodak's Fourth Quarter and Full Year 2025 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 and full year of 2025. You may access the presentation and webcast for today's call on our Investor Center at investor.kodak.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 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 risks, uncertainties and other factors described in more detail in Kodak's filings with the U.S. Securities and Exchange Commission from time to time.

All forward-looking statements attributable to Kodak or persons acting on its behalf only apply as of the date of the presentation and are expressly qualified in their entirety by the cautionary statements included or referenced in this presentation. Kodak undertakes no obligation to update or revise forward-looking statements to reflect events or circumstances that 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 and within the presentation on our website in our Investor Center at investor.kodak.com.

Speakers on today's call are Jim Continenza, Kodak's Executive Chairman and Chief Executive Officer; and David Bullwinkle, Kodak's Chief Financial Officer and Senior Vice President. We will not be holding a formal Q&A during today's call. However, as always, the Investor Relations team is available for follow-up.

I will now turn the call over to Jim. Thank you, and have a great day.

Welcome, everyone, and thank you for joining the Fourth Quarter and Full Year 2025 Investor Call for Eastman Kodak. I'm proud to say our long-term plan continues to be on track. We finished the quarter and the year very strong. It's almost a tale of 2 halves. If you look at the first and second quarter and look at the results of the third and fourth and the closet of the year, and we're going to cover that through the presentation, you'll see the difference. And the difference really comes from the long-term investments that we've made are really starting to pay off.

One piece you'll notice going forward is the pension fund and the reversion. As you look at the reversion in the 2025 numbers, right, it really took place in late November, early December. So the numbers you're seeing, the interest expense and the reversion had very little impact. These are true operating numbers within the business. By completing that, we're able to focus more clearly on our financial reporting and operations. It simplifies the company and easier for everyone to understand the true impact of the operations.

And I'm proud to say our balance sheet hasn't been this strong in many years. We have continued to reduce debt over the last several years. We've reduced over $40 million of interest expense, and that all falls to the bottom line.

So where does Kodak go from here, right? We stabilized the business. We put the investments in place. We fixed the balance sheet over several years. We've lowered our interest. We're poised for growth. And that is where we're going. When you look at the company going forward, heavily delevered, streamlined operations and investments in new products. We have continued to rationalize the business, focused on smart revenue, took out over $200 million of operating expense over the last few years, invested heavily in new infrastructure and new products. Today, Kodak is well positioned to drive growth. Kodak is in a good position between balance sheet and operations to focus on free cash flow.

Highlights for the fourth quarter, as I said, it's a tale of 2 halves of the year, the success of the third quarter carried into the fourth quarter as we expected, increase in both revenue and profits. Revenues of $290 million, an increase of 9%. Fourth quarter revenues grew for both AM&C and Print. Said differently, both sides of the company are now contributing to our growth and our success. Gross profit percentage of 23%, an increase of 4 percentage points demonstrates our value of executing on smart revenue.

Now let's jump to highlights of the full year. Consolidated revenues of $1.069 billion, an increase of $26 million or 2%. Gross profit percentage of 22% compared with 19% for the prior year is an increase of 3 percentage points. What's driving these results are a number of factors: streamlined operations focused on innovation, putting that customer first and continuing to drive smart revenue.

Moving on, let me give you an update on AM&C. As we said for the last several years, right, we're a great industrial manufacturer and primarily American manufacturer, bringing back that Park and investing into our core competencies, we're starting to see the results truly pay off. When you look at revenue, up 25% for the fourth quarter. We launched owned direct distribution brand of still films to stabilize the market and to provide distributors and retailers, consumers with a more reliable source. Many Oscar nominees were shot on Kodak film. As an example, One Battle After Another, Sinners, Marty Supreme and many others. We've seen a real resurgence in our film group.

And on to Pharma, we've invested into our Pharma group. And let's be very clear, our goal here is to get Class II certification. In the interim, we also launched 4 new products from PBS to Water for Injection.

Continued highlights, right? Again, remind everyone the 3 core things Kodak does today: brand licensing, AM&C and commercial print. I'm pleased to say our investment in commercial print has been paying off. We continue to be heavily committed to Print. Areas of growth for our Print division have been in North America in our Plates division, imprinting systems. I'm proud to say finally, the PROSPER 520 is moving from controlled introduction to full production.

We've also invested in a new rapid response service system to better serve our customers, and we continue to incorporate AI and machine learning to also better serve our customers. These investments will help drive additional growth and better margins.

As I touched on brand licensing, something we should not forget, it continues to grow. It's a significant contributor to our gross profit. It adds value, increased awareness of Kodak, especially among the next-generation of consumers. Our brand continues to grow outside the U.S., particularly in Asia, there are stores that sell only Kodak-branded clothes and materials.

I will now turn it over to Dave to discuss the fourth quarter and full year financial results.

Thanks, Jim, and welcome, everyone. Thank you for joining us today. This afternoon, we filed the annual Form 10-K for the year ended December 31, 2025, with the SEC. As always, I encourage you to read this filing in its entirety.

Before we review the details for the quarter and full year, I want to address a few significant developments that occurred after the filing of our Form 10-Q for the third quarter 2025. In November 2025, following the full settlement of all Kodak retirement income plan obligations, we successfully completed the pension reversion process. This transaction generated approximately $1.023 billion in pension reversion proceeds, a combination of cash and investment assets that strengthens our balance sheet, establishes an overfunding of the new Kodak cash balance pension plan, reduces our ongoing interest expense and supports future growth.

Here is a brief overview of the pension reversion proceeds which totaled $870 million of net benefit to the company after excise tax payments of $153 million on the reversion surplus. Number one, debt reduction. Under the November 2025 term loan credit agreement amendment, we paid $312 million of cash proceeds to reduce the term loan principal to $200 million and to satisfy accrued interest and prepayment premiums, significantly lowering our ongoing interest expense by approximately $40 million annually and further strengthening our capital structure.

Number two, funding the new pension plan. We contributed $251 million in investment assets and $5 million in cash to fund the new Kodak cash balance plan. The establishment of this replacement plan provides the same level of benefit for active Kodak employees that was available under the KRIP plan, which is very rare in pension terminations.

Number three, net proceeds to Kodak. After the pay down of debt, replacement plan funding and excise tax payments, Kodak received net cash of $144 million and $158 million in investment assets. $9 million of these investment assets was redeemed in the form of cash proceeds in December 2025. As a result, Kodak ended 2025 in a net positive cash position relative to our $300 million in term loan and Series B preferred equity obligations with a cash balance of $337 million as of December 31, 2025.

Lastly, on March 11, 2026, the company filed the 2026 Series B amendment effective on the same date. In summary, the amendments extended the mandatory redemption date of the Series B preferred equity obligation out 3.25 years' time from the effective date of the amendment to June 2029. It revised the terms of the cumulative dividends payable to a rate of 6% per annum from 4% previously. It reduced the conversion price from $10.50 to $10 per share, and it revised the mandatory conversion terms.

In parallel to this amendment, the term loan credit agreement was also amended on March 11, 2026, and requires the company to further pay down the term loans by $50 million within 5 days of the effective date and by another $50 million on or before June 1, 2026.

As a reminder, prior to this amendment, the Series B preferred equity obligation of approximately $100 million was coming due in May 2026.

Also note, that the term loans accrue interest at a rate of 12.5%. Thus, by extending the preferred equity obligation, the company will be using $100 million to pay down the higher interest rate bearing term loan balance over the next 3 months, which will further strengthen the company's liquidity position as well as reduce our weighted average interest rate and therefore, cash used for interest and dividend payments.

Please refer to the annual Form 10-K filed with the SEC today for further information and disclosure on all of these matters.

I will now review the financial highlights, including operational EBITDA and cash flow performance for both the fourth quarter and full year 2025. Despite a challenging global environment marked by economic and geopolitical uncertainty, including pressures on global trade and inflation, we delivered strong financial results. Our progress is especially evident in gross profit and operational EBITDA, demonstrating continued execution against our priorities and long-term objectives.

Turning to Slide 7. Key highlights for the fourth quarter of 2025 include revenue of $290 million, an increase of $24 million or 9% year-over-year. Revenue increased $19 million on a constant currency basis. Gross profit of $67 million, up $16 million or 31% from 2024. Foreign exchange had no impact on gross profit. The gross profit percentage was 23% compared to 19% in the prior year quarter.

Our GAAP net loss of $108 million compared to GAAP net income of $26 million in the fourth quarter of 2024 represents a decline of $134 million. The primary drivers impacting fourth quarter GAAP net loss are $153 million related to excise tax expense on the KRIP reversion surplus and a $7 million loss on early extinguishment of debt tied to the term loan paydown using reversion proceeds. These were partially offset by a $66 million gain on the settlement of the KRIP plan.

Adjusting for these nonrecurring items and excluding noncash asset impairment charges and noncash changes in workers' compensation and other employee benefit reserves impacting both periods, net loss was $12 million for the fourth quarter of 2025 compared to net income of $27 million in the prior year quarter for a decline of $39 million. This decline was largely due to a $41 million year-over-year reduction in noncash pension income, excluding service cost component and a gain on the settlement of KRIP, stemming from a lower expected return on KRIP assets following a strategic shift in investment strategy leading up to the planned termination and a $7 million increase in restructuring costs compared to the prior year quarter as we continue to streamline our global operating model.

All these factors weighed on our year-over-year comparison, each reflects deliberate decisions that enhance the company's long-term stability, strengthen our balance sheet and position us to drive sustainable value creation going forward.

For the quarter, operational EBITDA was $22 million, up $13 million or 144% year-over-year, driven by improved pricing and higher volume, partially offset by higher manufacturing costs and continued global cost increases. Our operational EBITDA increased $15 million year-over-year when adjusted for noncash changes in workers' compensation and other employee benefit reserves impacting both periods.

Moving on to the company's cash performance for the fourth quarter of 2025 as shown on Slide 8. The company ended the quarter with $337 million in unrestricted cash. On an adjusted basis, cash and cash equivalents increased by $24 million year-over-year after excluding the favorable impact of net proceeds from the KRIP reversion, net of debt-related repayments and excise tax as well as the effects of changes in restricted cash and foreign exchange.

Turning to Slide 9, which summarizes our full year 2025 results. Consolidated revenue was $1.069 billion, an increase of $26 million or 2%. On a constant currency basis, revenue increased $15 million. Gross profit improved $29 million or 14%. On a constant currency basis, gross profit improved $28 million. Gross profit percentage was 22% for 2025, up from 19% in the prior year period, reflecting stronger pricing discipline and continued operational execution.

The GAAP net loss for the full year 2025 was $128 million compared to GAAP net income of $102 million in 2024, for a decline of $230 million. However, similar to the impact of nonrecurring items on our fourth quarter results, full year net loss includes the impact of pension-related excise tax and a loss on early debt extinguishment, partially offset by a gain on the settlement of KRIP.

In addition, the prior year period includes a net gain on sale of assets and both years reflect noncash asset impairment charges and noncash changes in workers' compensation and other employee benefit reserves. Adjusting for these current and prior year items, net loss was $11 million for 2025 compared to net income of $87 million in 2024, a decline of $98 million. This is largely driven by $111 million reduction in noncash pension income, excluding service cost component in 2025 and a gain on the settlement of KRIP and a $13 million increase in restructuring costs when compared to the prior year.

Our full year operational EBITDA was $62 million, an increase of $36 million or 138% year-over-year. This increase was driven by improved pricing, operational efficiencies and lower inventory reserve adjustments in our EPS business, partially offset by higher aluminum and manufacturing costs. There was no net impact on the year-over-year change in operational EBITDA when adjusted for the impact of foreign exchange in the current year and the impact of noncash changes in workers' compensation and other employee benefit reserves in both periods.

Moving to Slide 10, which outlines our full year 2025 cash performance. As I stated earlier, we ended the year with $337 million in unrestricted cash, up $136 million from year-end 2024, largely reflecting proceeds from the KRIP settlement and asset reversion and operational improvements. We reduced the principal balance of our term loans by $303 million, bringing the year-end balance to $200 million. As a result, Kodak is in a net positive cash position relative to our term loans and Series B preferred equity obligations, significantly strengthening our balance sheet and supporting future growth.

Excluding the favorable impact of the KRIP settlement and reversion proceeds, net cash provided by operating activities was $21 million, an improvement of $28 million compared to 2024, driven by stronger operating performance, partially offset by working capital changes. Excluding the net impact of the KRIP reversion, debt-related repayments, excise tax, changes in restricted cash and the effects of foreign exchange, we decreased our use of cash year-over-year by $26 million.

Finally, as disclosed in our annual Form 10-K, we remain in full compliance with all financial covenants.

I will now turn the discussion back to Jim. Thank you.

If you can leave here with anything that you've heard or seen today, I want to make sure you leave with this message. Kodak is focused on growth following a very strong 2025. We continue to be one Kodak. Customer-first has not changed. Today, we are a diversified industrial manufacturer with one goal, winning. We put our customers first because we only win when they win.

We had a very strong finish to 2025. Year-over-year, fourth quarter 2025 revenue increased by $24 million or 9%. Gross profit increased by $16 million or 31%. Operational EBITDA increased by $13 million or 144%. Growth in key businesses, plates and in film. Kodak today is on a very solid foundation for growth. We have a strong balance sheet with more cash than debt. In many years, that has not been the case. Back in second quarter, we had approximately $700 million of debt. Today, we're sitting at $300 million with $300 million plus of cash. We're on the way of taking out another $100 million of long-term debt, which will leave us with over $200 million of cash and $200 million of debt. We'll continue to strengthen that balance sheet, which allows us to execute on growth in our long-term plan.

All 3 businesses, Print, AM&C and Brand Licensing are contributing. And inside of that, we have promising new investments in our pharma division, in our battery coating. We continue to invest in the business for a long-term plan. We are pleased with the direction we're in. We have a long way to go. But I can tell you, this is a good start, especially having the balance sheet out of the way. We're really truly focused on growth in our business.

I would be remiss if I didn't again thank the leadership team. Over the last several years, we made over a 50% change in the leadership and a melding of the best of what Kodak had and the best of the skills that we knew we needed to bring in to help drive the fundamentals of this company to bring Kodak where it is today. We look forward to the future, and thank you for your support.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Eastman Kodak Quarter 3 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to the first speaker today, Anthony Redding. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to Kodak's Third Quarter 2025 Earnings Call. At 4:15 p.m. this afternoon, Kodak filed its Form 10-Q and issued its release on financial results for the third quarter and the 9 months ending September 30, 2025. You may access the presentation and webcast for today's call on our Investor Center at investor.kodak.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 upon Kodak's expectations and various assumptions. Future events or results may differ from those anticipated or those expressed in 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 Kodak's filings with the U.S. Securities and Exchange Commission from time to time. 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 arise after the date made or to reflect the occurrence of unanticipated events. 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.

Speakers on today's call are Jim Continenza, Kodak's Executive Chairman and Chief Executive Officer; and David Bullwinkle, Kodak'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 Jim Continenza. Thank you, and have a great day.

Welcome, everybody, and thank you for joining Eastman Kodak Third Quarter 2025 Investor Call. Let me start off with saying this quarter has been our best performance in years. I can't wait to share the information with you. We are starting to see a return from our long-term investments and growth initiatives. We also continue to increase our operational efficiencies. It's just part of our culture to get better every day. As you'll see as we go through this presentation, we continue to delever the balance sheet. I will talk more about this later in the presentation.

The third quarter was our best quarter in many years. The highlights include revenue, $269 million versus $261 million last year. That's an $8 million improvement or approximately 3%. This doesn't happen accidentally. We have continued to execute on our long-term plan and our investments, and we're seeing the results of those investments.

I'm not concerned about the revenues staying pretty much flat, considering all the upheaval in the markets today. We continue to focus on smart revenue and growth initiatives and investing in the company. We are a proud U.S. American manufacturer. The company is proud to see the hard work of our senior team and all of our employees and executing our long-term plan is resulting in gross profit of 25% versus 17% in the third quarter last year, equal to an increase of 8%, which translates into $23 million in gross profit.

Let me give you an update on the U.S. pension reversion process. We're approaching the culmination of a multiyear process of accessing the overfunding of our U.S. pension plan. It has always been our intention to access the excess funds to delever and strengthen our balance sheet.

Based on our strong execution of managing the pension plan reversion process, we now expect to get approximately $600 million, which is $100 million more than we originally estimated. About $450 million will be in cash and $150 million will be in hedge funds that will convert to cash over time. The company will have the opportunity to not only pay down term debt, but also repay other obligations. Once everything is settled, we expect to be net cash positive. Over the last several years in this role, we've done 3 financings to continue to keep our balance sheet ahead of the company's needs.

This is the next step. The appropriate amount of debt and minimal covenants and the freedom to accelerate growth is what we're trying to achieve. All the plan participants are getting everything they're entitled to under the pension plan. Our new benefit plan offered to U.S.-based employees is identical to the prior plan. It's part of our culture to always take care of our people.

Moving on back to the company and business results. Advanced Materials and Chemicals, we continue to invest in our core business of Advanced Materials and Chemicals. The business today is seeing the growth of those investments as expected. Revenue is up 15% year-over-year. Our growth initiatives -- we went back to our core competency of layering and coating. We pretty much over the years have abandoned the park and our core competencies.

We reinvested in those and brought those back. It is fundamentally who Kodak is. We are the world's best at layering and coating, and we brought back those competencies to Rochester, New York. In doing so, we expect to continue to see growth in these initiatives. Some are in their infancy and some have matured, but we are going to continue to invest in our Advanced Materials and Chemicals. It's what we do best.

Our Advanced Materials and Chemicals pharmaceutical initiative is in progress as expected. Our new cGMP pharmaceutical manufacturing facility is now certified to manufacture and sell regulated products and is up and running, starting with diagnostic reagents. Our goal is to continue to expand our product line over time.

Let me give you some additional news in the Advanced Materials and Chemicals [indiscernible] film in particular, again, one of our greatest core competencies over a century of making film. We've added millions of dollars into that factory into finishing our lines and increased capacity into OEM and other products. We shut the plant down last year to rebuild it, and we pretty much almost doubled our capacity in the finishing side of our business, and there are different types of film.

In doing so, we also recently launched our own direct distribution brand of films. The purpose in doing so is to stabilize the market and make sure that supply is available everywhere as demand has increased. We're excited about the motion picture business, the increase we've seen there, the commitment that more and more directors are using motion picture film and also the increase in demand in still film. This is part of our ongoing commitment to the industry.

I'm going to move on to some of our highlights of our core business, our commercial print business. As we did over the years, we continue to invest in new products, and you're seeing that today. We will continue to deliver and provide a full range of product solutions to both offset and digital print. As an example, we provide pre-press workflow software called PRINERGY from their world-class CTP, Computer Plate Machines that etches the plate.

We then provide lithographic printing plates that are made right here in Columbus, Georgia and the United States. We also manufacture them in Germany and in Japan. This allows us to supply each region and make sure we're meeting customer demand. We also offer some of the best digital presses in the market.

On top of that, right, world-class service. What that tells you is we're a full-service provider for our printing industry customers. We also don't have print isn't litho or digital. It's both, it's and. Customers need both. That's why we supply both. But we will continue to be very clear, to grow, innovate and invest in our printing business. I want to touch on a topic from last quarter that generated a lot of misleading reporting and demonstrated a fundamental misunderstanding of the circumstances leading to the going concern disclosure.

The media coverage caused a diversion of resources to answer unfounded questions from a variety of sources. Management spent countless hours with customers, suppliers and investors around the globe counteracting the false narrative that was created.

This is a complicated topic, closely related to the reversion process. Please read the 10-Q disclosure carefully and feel free to reach out to our Investor Relations team if you have any questions at all. The prior condition about Kodak's ability to continue as an ongoing concern has been resolved, eliminating the need for the going concern disclosure in this quarter. Again, please read the 10-Q carefully or call our Investor Relations if you have any questions. I will now turn it over to Dave to discuss our third quarter financial results.

Thanks, Jim, and good afternoon, everyone. Thank you for joining us today. This afternoon, the company filed its Form 10-Q for the third quarter ended September 30, 2025, with the SEC. As I always do, I recommend you read this filing in its entirety.

We are very pleased to report Kodak had an excellent quarter with strong business performance that delivered significant year-over-year growth in gross profit and operational EBITDA. Additionally, our consolidated revenue grew as a result of the continued expansion of our Advanced Materials and Chemicals business. We also increased our cash balance by $13 million from June 30, 2025.

Later in my remarks, I will provide a summary of financial highlights and additional commentary on the quarter and year-to-date results. At this time, I would like to provide an update on significant developments in the termination and settlement process for the U.S. Kodak Retirement Income Plan or KRIP.

On the second quarter 2025 earnings call, we communicated key milestone events within the termination and settlement process that were expected to occur. These were the transfer of annuity obligations and lump sum settlements. We have executed on these items and are on plan for a reversion of excess assets in December of 2025.

Now for the specifics on these milestones. On October 21, 2025, the annuity obligations for all KRIP annuitants was transferred to Metropolitan Tower Life Insurance Company through the purchase of a group annuity contract. The premium for this was funded directly and solely by the assets of KRIP. This covers approximately 27,000 participants and beneficiaries and represents $1.8 billion of pension obligations. On October 1, 2025, KRIP settled approximately $76 million of pension obligations through lump sum payments to deferred vested participants.

And on October 31, 2025, KRIP settled approximately $157 million of pension obligations through lump sum payments to active participants. We expect the remaining liabilities for missing participants approximately $15 million of pension obligations to be transferred to the Pension Benefit Guaranty Corporation, or PBGC missing participant program in late November 2025.

After KRIPs liabilities and applicable regulatory requirements have been fully satisfied, we estimate KRIPs surplus assets at $1 billion. From these surplus assets, the company expects to transfer or otherwise contribute 25% to fund the new U.S. Kodak cash balance replacement plan for active participants, which is identical to active employee benefit features of the prior plan and settle the 20% excise tax liability attributable to the reversion.

After the capitalization of the replacement plan and settlement of the excise tax, the company projects remaining proceeds will approximate $600 million, consisting of cash of approximately $450 million and $150 million in noncash assets, primarily hedge funds, which are in the process of redemption. Kodak believes no material amount of income tax will be owed on the reversion proceeds due to available tax attributes at the company.

How will we utilize these funds? Approximately $305 million of the cash proceeds will be used to pay the company's term loans as required by our credit agreements, which will reduce the principal balance to approximately $200 million, lowering interest expense going forward.

Furthermore, including the reversion proceeds, we expect to end 2025 with a cash balance of more than $300 million. Kodak will then be in a net positive cash position with respect to the term loans and our Series B preferred stock obligations. The replacement plan is projected to have assets with a value of approximately $250 million after initial funding, allowing Kodak to provide valuable benefits to its current employee base for the foreseeable future without additional cash cost to the company.

As stated earlier, the replacement plan provides benefits to active employees at the same level as the KRIP plan. Additionally, as we previously reported, on August 8, 2025, the Series C preferred stock held by Grand Oaks Capital was exchanged for shares of common stock of the company. This exchange eliminated the entire outstanding amount of the original $100 million in Series C preferred stock and over $24 million of outstanding accrued paid-in-kind dividends.

Lastly, as disclosed in the company's quarterly report on Form 10-Q for the quarter ended June 30, 2025, Kodak had debt coming due within 12 months and its plans to adequately fund its debt obligations at that time were not solely within the company's control, and therefore, were not deemed probable under U.S. GAAP.

As included in our Form 10-Q filing today, the company extended the maturity dates of the term loans and the letter of credit facility agreement, settled approximately $2.1 billion of KRIP pension obligations and is in the process of transferring the remaining liabilities of approximately $15 million for any missing participant to the PBGC.

Upon completing the transfer of these remaining liabilities to the PBGC, all pension obligations under KRIP will be fully settled and the excess pension assets will be distributed to the company and the Kodak cash balance plan. Based on the actions completed by management, the company plans to receive sufficient proceeds from the reversion of cash to the company in December 2025 to adequately fund the company's debt obligations required to be paid from such proceeds or otherwise maturing within 12 months as of the filing of our Form 10-Q for the third quarter 2025.

Therefore, the prior conditions that required Kodak under U.S. GAAP accounting standards to include cautionary disclosure about its ability to continue as a going concern have been fully resolved. Please refer to the Form 10-Q filed with the SEC today for further information and disclosure on all of these matters.

I will now share a summary of financial highlights of the full company results, operational EBITDA and cash flow for the third quarter and first 9 months of 2025. Kodak continued to build on its strong foundation during the third quarter of 2025. In the face of an extremely difficult global environment with economic uncertainties around global trade and inflation, Kodak delivered strong financial results, particularly within gross profit and operational EBITDA, which reflects meaningful progress towards executing against our priorities and long-term goals.

On Slide 7, highlights of the third quarter 2025 results are as follows: revenues of $269 million, up $8 million or 3% year-over-year. Revenue up $4 million on a constant currency basis. Gross profit of $68 million, up $23 million or 51% compared to 2024, attributable to improved pricing and volume and lower aluminum costs, partially offset by higher manufacturing costs.

Gross profit is up $22 million on a constant currency basis. Our gross profit percentage for the third quarter was 25% compared to 17% in 2024. The company's GAAP net income for the third quarter of 2025 was $13 million, down $5 million or 28% from 2024. These results include a $26 million decrease in noncash pension income, excluding service cost component in 2025 due to our lower expected return on assets for KRIP as a result of a change in investment strategy.

Net income was down $4 million year-over-year when adjusted for an asset impairment charge and noncash changes in workers' compensation and employee benefit reserves. The company's operational EBITDA for the third quarter 2025 was $29 million, up $28 million from 2024, favorably impacted by improved pricing and volume, lower aluminum costs, lower spend related to certain litigation matters and a prior period inventory reserve adjustment, partially offset by higher manufacturing costs.

Operational EBITDA was up $24 million year-over-year when adjusted for noncash changes in workers' compensation and employee benefit reserves and the impact of foreign exchange.

Turning to Slide 8. A summary of year-to-date results for the 9 months ended September 30, 2025, include revenues of $779 million, up $2 million or roughly flat year-over-year. Revenue is down $4 million on a constant currency basis year-over-year. Gross profit improvement of $13 million or 9% or $12 million on a constant currency basis. The company's gross profit percentage was 21% compared to 20% in 2024.

Company's net loss was $20 million, down $96 million when compared to 2024. This is largely driven by a $70 million decrease in pension income, excluding service cost component in 2025 related to the KRIP plan. The company's net income was down $59 million when adjusted for an asset impairment charge, a gain on the sale of assets and noncash changes in workers' compensation and employee benefit reserves as presented on the slide.

Operational EBITDA was $40 million, up $23 million from 2024, favorably impacted by improved pricing, lower spend on investments and a prior period inventory reserve adjustment, partially offset by higher aluminum and manufacturing costs and a decline in manufacturing volume.

Operational EBITDA was up $21 million year-over-year when adjusted for noncash changes in workers' compensation and employee benefit reserves as well as the impact of foreign exchange.

Moving on to cash performance highlights for the 9 months ended September 30, 2025, as presented on Slide 9. The company ended the third quarter with an unrestricted cash balance of $168 million, an increase of $13 million from June 30, 2025, primarily driven by improved profitability from operations covered earlier in my remarks.

In addition, as presented on the slide, net cash used in operations improved by $2 million for the 9 months ended September 30, 2025. The 2024 period includes $40 million of cash proceeds from brand licensing. This is partially offset by a $19 million increase in PIK interest under the term loan arrangement in 2025. The cash balance at September 30, 2025, decreased $33 million from December 31, 2024, primarily driven by capital expenditures to fund growth initiatives and changes in working capital.

Restricted cash increased by $3 million, primarily due to an increase in cash collateral required to support the company's actuarial workers' compensation obligations with the New York State Workers' Compensation Board. Excluding the change in restricted cash and the effects of foreign exchange, the company recognized a $2 million increase in cash and cash equivalents when compared to the prior year period.

In closing, and as highlighted earlier, we delivered strong third quarter financial results. And we have executed flawlessly on the pension reversion process, which resolves any uncertainties with respect to our ability to deal with our debt obligations. We continue to improve the strength of the foundation we have worked diligently to create, which provides us the opportunity to fund our ongoing operations, invest in our growth initiatives and convert our historical investments into returns for the long term.

In addition, we will continue our disciplined approach to cash management, driving operational efficiencies and margin improvement to deliver sustainable long-term value for our shareholders. Finally, as disclosed in our Form 10-Q, we remain in compliance with all applicable financial covenants. I will now turn the discussion back to Jim. Thank you.

Thank you, Dave. In summary, as we continue to invest in our core business, it gives us a competitive advantage. It's a core competency. We've done most of this for decades. Once again, a strong quarter in many ways, one of our best quarters in many years, $23 million in gross profit.

Advanced Materials and Chemicals continues to execute as expected. We continue to execute on the reversion plan, which is allowing us to then fix the balance sheet to where we deem it appropriate and giving us the freedom to accelerate our growth.

Let me be clear, so there's no misunderstanding. Just delevering and fixing your balance sheet doesn't make you a better company. We have to continue to put our customer first, care for our employees, execute on our long-term plan, invest in R&D, expect execution and operational excellence at all times. It is our job to make sure that this company is better today and better when we leave than when we got here.

Our job is to care for shareholders and make sure they get the return they're looking for from a company. Our job is to take care of our customers and make sure we're exceeding their expectations and most importantly, care for our employees to make sure they're equipped to do all the things that are needed to deliver excellence in this company.

Once again, I want to thank our employees, outstanding job of delivering, our leadership team that makes this happen and our customers for staying with us. I'm blessed to have great investors and a Board who has stayed the course on long-term investing and never took a shortcut and delivering for shareholders. Thank you, and good night.

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

Good day, and thank you for standing by. Welcome to the Eastman Kodak Q2 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Anthony Redding, Chief Compliance Officer.

Thank you, and good afternoon, everyone. I am Anthony Redding, Eastman Kodak Company's Chief Compliance Officer. Welcome to Kodak's Second Quarter 2025 Earnings Call. At 4:15 p.m. this afternoon, Kodak filed its Form 10-Q and issued its release on financial results for the second quarter and first half of 2025.

You may access the presentation and webcast for today's call on our Investor Center at investor.kodak.com. During today's call, we will be making certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. 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 risks, uncertainties and other factors described in more detail in Kodak's filings with the U.S. Securities and Exchange Commission from time-to-time.

There may be other factors that may cause Kodak's actual results to differ materially from 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 this presentation.

Kodak undertakes no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. 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.

Speakers on today's call are Jim Continenza, Kodak's Executive Chairman and Chief Executive Officer; and David Bullwinkle, Kodak'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 Jim. Thank you, and good afternoon.

Welcome, everyone, and thank you for joining the second quarter 2025 investor call. As we remind everyone, we continue to execute on our long-term plan despite all the uncertainty happening in the business environment around the world from tariffs to logistics, to wars. Delevering the business and strengthening our balance sheet has [ been ] a key initiative from day 1. We continue to do that and see improvements. Investing in growth businesses, and you'll see many of them come to fruition.

We invested heavy [ back in cell ] paying off, EV batteries or battery [ substrate coating and ] in our medical group that we just recently launched and more to come as we go through the presentation. One of the key items in delevering and investing in business growth is by increasing our operational efficiencies. We continue to do that through technology and automation and standardized practices throughout the business. Our core business continued to perform as expected. Highlights from the second quarter include revenue of $263 million compared with $267 million for second quarter 2024, roughly flat year-over-year.

I'm proud to say we continue to see revenue growth in our Advanced Materials and Chemicals business, known as AMC. Those investments are paying off, and we're excited with the progress we've made. Gross profit percentage of 19% compared with 22% for the second quarter 2024 is in line with our expectations with all the changes happening quickly in the business environment. I think it's important for me to remind our investors and our customers, our commitment to U.S. manufacturing.

And I'll discuss the impact of the tariffs. But to be clear, several years ago, we brought back our heritage as a U.S. manufacturer from our manufacturing facilities up in Rochester, all motion picture film made in the U.S., [ most De film ] made in the U.S., a lot of other types of films made in the U.S., all of the Rochester plant.

Our digital printers made in the U.S., our ink made in the U.S., our chemicals made in the U.S. We continue to be a U.S. manufacturer, and we're the only manufacturer of lithographic plates in the United States. Kodak is proud to be a global company and our key manufacturing taking place right here at home.

These advantages helped us greatly with logistics and servicing and supplying our customers. In addition, our AMC growth initiatives include a new cGMP pharmaceutical manufacturing facility located in the United States in Rochester, New York. Our plan to continue to delever allows us to execute our long-term growth initiatives.

Let's talk about tariffs. Year-to-date, tariffs did not have a material impact in our business. We're supportive of tariffs as long as they benefit the U.S. manufacturer. We would hope the impact of the tariffs would not negatively impact the last U.S. manufacturer of lithographic plates. Moving on to highlights of our commercial print business, which is still our largest business.

We continue to see improvements in efficiency and products and acceptance of our products. Again, right, there's a lot going on in the world that impacts print. We continue to provide our customers with reliable supply and a full range of solutions from offset to digital print. We've completed initial sale of several PROSPER 520, which are currently being installed at customer sites as we speak.

An update on our U.S.-based Advanced Materials and Chemicals Pharmaceutical initiative. As we continue to invest in our U.S. print business, we continue to also see acceleration of growth in our AMC business. Our cGMP pharmaceutical manufacturing facility is now registered with the FDA and certified to manufacture and sell certain regulated pharmaceutical products.

This initiative is an extension of our current business in unregulated pharmaceutical key starting material known as KSM. The facility will begin operation manufacturing phosphate buffered saline known as PBS for laboratory use and create a bridge to manufacturing more sophisticated products and ultimately injectables such as IV saline.

Let me give you an update on Kodak's U.S. pension plan. A lot has been written about it. The KRIP termination and reversion process is proceeding as planned. We expect a significant portion of any reverted asset to be used to reduce our long-term debt and therefore, the annual cost of servicing that debt.

David Bullwinkle will be providing much more detail, and you can find additional information in our Form 10-Q filing. Now I will turn it over to Dave to discuss the second quarter financial results.

Thanks, Jim, and good afternoon. Today, the company filed its Form 10-Q for the quarter ending June 30, 2025, with the SEC. As I always do, I recommend you read this filing in its entirety. Before I get into the details for the second quarter and first half of 2025, I would like to provide a brief status update on the termination and settlement process for the U.S. Kodak Retirement Income Plan or KRIP on the status of our Series C preferred stock and on the disclosure we made in our Form 10-Q filing.

First and foremost, the KRIP termination and settlement process is proceeding as planned. By the close of the participant settlement election period, which ends on August 15, 2025, we expect to have a clear understanding of how we will satisfy our obligations to all planned participants. This window allows certain participants to elect whether their benefit will be settled via an annuity or a variety of lump sum options.

Once that process is complete, the company intends to finalize the purchase of an annuity contract in October 2025 for participants who elect to receive regular annuity payments and payouts are expected to be distributed in November 2025 to those who choose to receive lump sums.

We expect KRIP to distribute excess assets to the company and the Kodak cash balance replacement plan in December of 2025. At this time, our best estimate of pension assets that will revert to the company from the settlement of KRIP is approximately $500 million with approximately $300 million of this in cash and the remaining amount in [ liquid ] assets, primarily hedge funds, which are in the process of redemption.

A large portion of the reverted cash will be used to reduce term debt as required by the company's credit agreements. Please note, as previously disclosed, this time frame is subject to factors beyond Kodak's control, including, but not limited to, the regulatory review and approval of various aspects of the terms of KRIP, KRIP's activities and the termination and liquidation process.

Additionally, we are pleased to report on August 8, 2025, the Series C preferred stock held by Grand Oaks Capital was exchanged for shares of common stock of the company at an exchange price of $8.25 per common share. On the date of exchange, the shares issued represented approximately 15.7% of the outstanding shares of common stock of the company post exchange.

This exchange eliminates the entire outstanding amount of the original $100 million in Series C preferred stock, which had a mandatory redemption date of May 28, 2026, and over $24 million of outstanding accrued paid-in-kind dividends. Finally, included in our Form 10-Q filing is disclosure regarding the company's determination that there is substantial doubt about its ability to continue as a going concern. This disclosure is driven by the existing Series B preferred stock not being extended or refinanced past the current mandatory redemption date of May 28, 2026, and the spring maturity of the company's term loan, which is May 22, 2026, or 5 days before the mandatory redemption date of the company's Series B preferred stock.

As a result, both the Series B preferred stock and term loan contractual maturity is within 12 months. The company chose not to extend the maturity of or replace the Series B preferred stock based on unacceptable terms in light of the 4% dividend rate for the remainder of the term.

As we have discussed and disclosed, the company's plan to address these maturing obligations is to complete the termination of KRIP and revert excess cash and assets of approximately $500 million to the company by December 2025 prior to the maturity dates in May 2026. The company expects to use cash received to repay the term loans and subsequently refinance or extend our remaining preferred stock and debt obligations.

As these plans are not solely within the company's control and therefore, are not deemed probable as defined under U.S. GAAP accounting rules, we are required to provide this disclosure. Please refer to the Form 10-Q filed with the SEC today for further information and disclosure. In order to provide the flexibility to generate additional liquidity for the company, we entered into an ATM equity offering sales agreement with BofA Securities, Inc. on May 21, 2025.

Under this agreement, the company may offer and sell up to $100 million of shares of Kodak's common stock from time-to-time in at-the-market offerings through BofA as sales agent or as principal. If executed, we intend to use the net proceeds from the sale of the shares for general corporate purposes.

To date, the company has not sold any shares under this arrangement. The company also has the ability under the term loan credit agreement amendment entered into in May 2025 to pay the cash interest payment entirely in PIK for the next 6 quarterly interest payments. The company elected to pay the cash interest payment for the second quarter of 2025 entirely in PIK.

We are also exploring various opportunities to reduce or eliminate restricted cash on our balance sheet. As of June 30, 2025, the total amount of restricted cash was $98 million. I will now share details on the full company results, operational EBITDA and cash flow for the second quarter and first half of 2025. Kodak continued to build on its strong foundation during the second quarter of 2025.

In the face of an extremely difficult global environment with economic uncertainties around global trade and inflation, Kodak delivered results that were within our expectations. These results reflect the continued focus on executing against our priorities and long-term plan, including driving smart revenue, 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 $263 million for the second quarter of 2025 compared to $267 million in the prior year quarter, for a decline of $4 million or 1%. On a constant currency basis, revenue decreased by $9 million or 3% when compared to the prior year quarter. The lower decline in revenue reflects our ongoing focus on driving smart revenue and strong profitability.

The continued revenue growth in our Advanced Materials and Chemicals business manifests the results of our efforts. Gross profit decreased by $7 million or 12% when compared to the prior year quarter. Excluding the impact of foreign exchange, gross profit declined by $8 million or 14% when compared to the prior year quarter. Our gross profit percentage was 19% in the second quarter of 2025 compared to 22% in the prior year quarter.

Gross profit for the second quarter of 2025 was unfavorably impacted by lower volumes and higher aluminum and manufacturing costs, partially offset by price increases. On a U.S. GAAP basis, we reported a net loss of $26 million for the second quarter of 2025 compared to net income of $26 million in the prior year quarter, a decrease of $52 million, $17 million of this decrease was for a noncash asset impairment charge in the current year quarter related to an equity investment held by the company.

After adjusting for the noncash asset impairment charge, net loss was $9 million for the second quarter of 2025 compared to net income of $26 million in the prior year quarter, a decrease of $35 million. This decrease was largely driven by a $25 million decline in pension income, excluding service cost component, given our change in strategy for the KRIP, which resulted in a lower expected return on assets.

Operational EBITDA for the second quarter of 2025 was $9 million compared to $12 million in the prior year quarter for a decline of $3 million. Excluding the impact of foreign exchange in the current year quarter, operational EBITDA declined by $4 million when compared to the prior year quarter. Operational EBITDA for the second quarter of 2025 was unfavorably impacted by lower volumes and higher aluminum and manufacturing costs, partially offset by price increases and lower spend on investments in IT systems, organizational structure and costs associated with trade shows.

Turning to Slide 8. For the first half of 2025, we reported revenues of $510 million compared to $516 million in the prior year period for a decrease of $6 million or 1%. Adjusting for the impact of foreign exchange of $2 million in the current year period, revenue decreased by $8 million or 2% when compared to the prior year period.

Gross profit decreased by $10 million or 9% when compared to the prior year period. Foreign exchange had no impact on gross profit in the current year period. Our gross profit percentage was 19% for the first half of 2025 compared to 21% in the prior year period. Gross profit for the first half of 2025 was unfavorably impacted by lower volumes and higher aluminum and manufacturing costs, partially offset by price increases. On a U.S. GAAP basis, we reported a net loss of $33 million for the first half of 2025 compared to net income of $58 million in the prior year period, a decrease of $91 million, $17 million of this decrease was for a noncash asset impairment charge in the current year period related to an equity investment as previously indicated.

After adjusting for the noncash asset impairment charge of $17 million in the current year period, a net gain on the sale of assets of $17 million in the prior year period and noncash changes in workers' compensation and employee benefit reserves, net loss for the first half of 2025 was $15 million compared to net income of $40 million in the prior year period for a decrease of $55 million.

This decrease was largely driven by a $44 million decline in pension income, excluding service cost component related to the KRIP as stated earlier. Operational EBITDA for the first half of 2025 was $11 million compared to $16 million in the prior year period or a decline of $5 million. Excluding the impact of noncash changes in workers' compensation and employee benefit reserves in the current and prior year periods, operational EBITDA decreased by $3 million when compared to the prior year period.

Foreign exchange had no impact on operational EBITDA in the current year period. Operational EBITDA for the first half of 2025 was unfavorably impacted by lower volumes and higher aluminum and manufacturing costs, partially offset by price increases and lower spend on investments on organizational structure changes.

Moving on to the company's cash performance presented on Slide 9. The company ended the second quarter with an unrestricted cash balance of $155 million, a decrease of $46 million from December 31, 2024, of which $43 million occurred in the first quarter of 2025. This reflects significant improvement in our use of cash during the second quarter of 2025.

Our use of cash was primarily driven by our continued investments in Advanced Materials and Chemicals growth initiatives and increased commodity and manufacturing costs. Foreign exchange had a favorable impact on cash of $5 million in the current year period. Cash used in operating activities was $30 million for the first half of 2025, primarily driven by the use of cash from net earnings of $4 million and a use of cash from balance sheet changes of $26 million, including a change in working capital of $24 million, a decrease in miscellaneous receivables of $3 million and a decrease in other liabilities of $21 million.

Within working capital, accounts payable decreased by $8 million, inventory increased by $13 million and accounts receivable increased by $3 million. The change in working capital for the prior year period included the impact of $40 million of cash proceeds from brand licensing. The team continues to focus on improving profitability and performance in working capital, which enhances the company's ability to generate cash.

Cash used in investing activities was $19 million for the current year period compared to $2 million in the prior year period, primarily due to a decrease in proceeds received of $12 million related to the sale of assets and an increase in capital expenditures of $5 million, primarily driven by our investments in Advanced Materials and Chemicals business.

Cash used in financing activities for the first half of 2025 improved by $16 million when compared to the prior year period, primarily driven by the $17 million prepayment of the amended and restated term loan agreement made in the prior year period. Restricted cash decreased by $2 million when compared to the balance as of December 31, 2024, primarily driven by strategic efforts to reduce cash collateral and escrow requirements for certain company obligations and business arrangements.

Restricted cash primarily represents cash collateral supporting the company's undiscounted actuarial workers' compensation obligations with the New York State Workers' Compensation Board and cash collateral required under the letter of credit facility in addition to escrows to secure various ongoing obligations. As I stated earlier, we continue to focus on opportunities to reduce restrictions on cash.

As presented on the bottom portion of the slide, excluding the change in restricted cash and the effects of foreign exchange, the company recognized a $52 million decrease in cash and cash equivalents in the first half of 2025 when compared to the prior year period. We remain committed to maintaining the strength of the foundation we have worked diligently to create. This foundation provides us the opportunity to fund our ongoing operations, invest in our growth initiatives and convert our historical investments into returns for the long term. Finally, as disclosed in our Form 10-Q, we remain in compliance with all applicable financial covenants. I will now turn the discussion back to Jim. Thank you.

Thank you, Dave. In summary, some key messages to walk away from this call is we continue to fix our balance sheet by delevering the business and investing in growth areas. As an American manufacturer for over 100 years, we remain committed to manufacturing in the U.S. and expect U.S. tariffs to protect U.S. businesses like ours.

Our cGMP pharmaceutical manufacturing facility is now registered with the FDA and certified to manufacture and sell regulated pharmaceutical products, starting with PBS, again, phosphate buffered saline. Again, just as a reminder, our U.S. pension plan termination and reversion process is right on track with expectations.

And we plan to use excess assets to pay down debt and reduce our interest costs, allowing Kodak to continue to invest in profitable growth businesses. I want to make sure I thank all of our employees around the world for all their hard work and all of our customers around the world for their loyalty.

I'd like to thank our shareholders for continuing to believe in us and invest in us. We are committed to working through the uncertain business environment and executing our long-term plan and delivering shareholder value for all of our investors. Thank you, and have a good day.

And this concludes today's conference call. Thank you for participating. You may now disconnect. Have a good day.