Good afternoon. Thank you for attending today's Eastman Kodak First Quarter 2022 Earnings Call. My name is Bethany, and I will be your moderator for today's call. [Operator Instructions].

I would now like to pass the conference over to our host, Paul Dils. Please go ahead. .

Thank you, and good afternoon, everyone. I am Paul Dils, Eastman Kodak Company's Chief Tax Officer and Director of Investor Relations. Welcome to Kodak's First Quarter 2022 Earnings Call. At 4:15 p.m. this afternoon, Kodak filed its Form 10-Q and issued its release on financial results for the first quarter 2022.

You may access the presentation and the 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. All forward-looking statements are based upon 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.

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 apply only 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 Chief Executive Officer and Executive Chairman; and David Bullwinkle, Chief Financial Officer of Kodak. 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. .

Welcome, everyone, and thank you for joining the first quarter investor call for Kodak. We started 2022 with a strong balance sheet, including $309 million of cash and cash equivalents as of March 31, 2022. We are building off the success of 2021.

Our revenues increased by $25 million or 9% compared to the prior year quarter, which demonstrates our commitment to our customers in the midst of a challenging economic environment. When excluding the impact of foreign exchange, revenue increased $35 million or 13% compared to the prior year quarter. This is following a growth year in 2021. .

We are recognizing a strong growth in our Print businesses, including KODAK SONORA Process Free Plates and KODAK PROSPER annuities and overall volume increase in our businesses. During the first quarter, volume of SONORA Process Free Plates grew by 24% and the annuity revenue for PROSPER improved by 2%. .

supply chain disruptions, shortages in distribution, material and labor; and increased cost of distribution, materials and labor. We have implemented numerous measures to mitigate these challenges, including increasing safety stock materials, increasing lead times and implementing pricing actions.

Despite the above shortages and cost increases, we have taken unprecedented steps to ensure supply for our customers. .

Our long-term strategy continues to focus on our core competencies in print, advanced materials and chemicals, turning the business to focus on innovation, growth and profitability.

We remain committed to continued innovation in digital print, including the revolutionary new KODAK ASCEND Digital Press, which is aimed at the retail, point of purchase and packaging markets. .

EV/energy storage battery material manufacturing. We have started coating substrates for EV and energy storage materials. We will continue to apply our extensive expertise to produce coated substrates in the U.S. .

Light-blocking technology. We plan to commercialize a carbonless fabric coating branded KODALUX. The product is designed to offer superior light management properties and coating capabilities with an unmatched range of fabrics. .

Transparent antennas. We are leveraging our proprietary technologies and high-resolution printing to manufacture custom transparent antennas for the automotive and other applications. .

Reagent manufacturing. As we continue to leverage our trusted brand and expertise in chemicals, we have started the construction of an approximately $20 million lab and manufacturing facility to produce reagents for health care applications. .

We will now turn it over to Dave to discuss the first quarter 2022 financial results. .

Thanks, Jim, and good afternoon. Before we get into the details for the quarter, I would like to make a few general comments. The company's performance for the first quarter reflects the results of strategic efforts we have taken based on our long-term strategy. This is evidenced by revenue growth that we have reported.

However, the ongoing global impacts associated with the COVID-19 pandemic, the war in Ukraine and other global events continue to impact the company's operations. The company is experiencing supply chain disruptions, shortages in materials and shortages of labor. Costs for labor, material and distribution are rising rapidly as well.

We have implemented numerous measures to mitigate these challenges, including increasing safety stock on certain materials, increasing lead times, providing suppliers with longer forecasts of future demand, certifying additional sources of substitute materials where possible and implementing pricing actions.

These countermeasures are providing us the opportunity to continue levels of supply to our customers. .

I will now share details on the full company results, operational EBITDA and cash flow results for the first quarter. Turning to Slide 7. As we reported in our earnings release, for the first quarter of 2022, we reported revenues of $290 million compared to $265 million in the prior year quarter or an improvement of $25 million.

On a constant currency basis, revenue improved by $35 million. On a U.S. GAAP basis, we reported net loss of $3 million for the first quarter, compared to net income of $6 million in the prior year quarter.

The 2022 and 2021 first quarter results include expense of $3 million and $1 million, respectively, related to changes in the fair value of embedded derivative liabilities. The first quarter of 2022 also includes income of $4 million related to noncash changes in workers' compensation reserves.

Excluding these current and prior year items, loss for 2022 was $4 million, compared to income of $7 million in the prior year quarter. .

Operational EBITDA for the quarter was a negative $7 million, compared to a positive $3 million in the prior year quarter. Excluding the unfavorable impact of foreign exchange and adjusting for noncash changes in workers' compensation reserves in the current year, operational EBITDA decreased $13 million from the prior year quarter.

Operational EBITDA for the first quarter of 2022 was favorably impacted by growth in revenue due to improved pricing and volume, offset by higher ongoing global cost increases. During the first quarter, volumes for SONORA Process Free Plates grew by 24%, and the annuity revenue for PROSPER improved by 2%.

We continued to invest in our core competencies and future growth areas of ULTRASTREAM and advanced materials and chemicals. .

Moving on to the company cash performance presented on Slide 8. The company ended the first quarter with $309 million in cash and cash equivalents, a decrease of $53 million from December 31, 2021.

As presented on the bottom portion of the slide, excluding the prior year impact of net proceeds from refinancing transactions, funding of the letter of credit facility and the effect of exchange rates on cash, the quarter-to-date decrease in cash and cash equivalents was $29 million, primarily driven by a use of cash from working capital.

Cash used in operating activities was $43 million, driven primarily by cash use from net earnings.

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Cash used by financing activities was $1 million in the quarter compared to cash provided by financing activities of $242 million in the prior year period. Cash provided by financing activities in the prior year period included $247 million of incremental cash after fees and expenses, driven by the financial transactions announced on March 1, 2021.

Restricted cash at the end of the quarter was $65 million, an increase of $4 million from December 31, 2021, mainly related to legal contingency collateral required outside the U.S. Restricted cash primarily represents cash collateral required under the new letter of credit facility in addition to escrows to secure various ongoing obligations.

We will continue to focus on alternatives to reduce restrictions on cash, and we view this as an upside opportunity for incremental liquidity for the company. Finally, we remain in compliance with applicable financial covenants. .

I will now turn the discussion back to Jim. .

Thank you, Dave. In summary, we continue to navigate through an unusual challenging business environment and deliver overall growth. We also continue to see increase in customer satisfaction and market share in key print businesses, achievements which reflect the success of our ongoing strategy.

As we stated, we plan to continue to focus on commercial print as well as a number of long-term growth initiatives in advanced materials and chemicals. We also continue to invest in product innovations. We at Kodak will continue to execute on our customer-first and One Kodak model.

Thank you all for attending the call and your continued interest in Eastman Kodak. Have a good evening. .

That concludes the Eastman Kodak First Quarter 2022 Earnings Call. I hope you all enjoy the rest of your day. You may now disconnect your lines..