Kodak 2005 Annual Report Download - page 6

4
Antonio M. Perez
Chairman and Chief Executive Offi cer
“ Staying true to our strategy, by 2008 we expect
all of Kodak’s businesses to be leaders in their
industry segments — achieving attractive margins
and generating substantial cash.”
Our digital x-ray revenues grew 15% in 2005, and we continue to raise the bar with new digital capture products. In the fourth quarter, we began
shipping the Kodak DirectView DR 7500 system. Praised for its fl exibility, the DR 7500 allows medical facilities of any size to confi gure a digital
x-ray solution that meets their space, workfl ow and budget requirements.
We are also adapting our digital solutions to meet the unique needs of select specialty markets. For example, Kodak has earned the world’s #1
position in dental imaging and information systems with the most complete and innovative portfolio in the marketplace. In women’s health, our
full portfolio of capture, storage, output and detection solutions is enabling us to maintain our strong customer base as mammography providers
migrate to digital imaging.
Our computed radiography system for mammography has proven successful at hundreds of sites around the world and is currently in clinical trials
for FDA approval in the large U.S. market. In fact, our system was selected for China’s fi rst national breast cancer screening program, a two-year
effort aimed at reaching one million women in that country.
We are also branching into new fi elds like molecular imaging. Through a non-invasive procedure, Kodak products can identify molecular
abnormalities that are the origin of a disease before it causes a condition, like a tumor, that can be seen on conventional images. At this point
the systems are not intended for human use; however, they will aid laboratory researchers working in areas like cancer, heart disease or
drug discovery.
Outlook
With such exciting opportunities in each of our business areas, we are forging ahead with the second half of our transformation.
I must acknowledge that, with the need for continued restructuring of our traditional business and administrative functions, it remains a painful and
anxious time for many of our employees. Still, I continue to be impressed with how Kodak people remain focused on innovation and dedicated to our
company’s success. I am confi dent the end of restructuring is now in sight. In fact, 2006 and 2007 should be the last full years of substantial
restructuring activity.
With the restructuring proceeding as planned, and having built the critical mass necessary to compete in key digital markets, we will now focus on
digital earnings expansion. We intend to achieve that through continued innovation, gross margin improvement and operational effi ciencies.
Starting in 2006, we have split our consumer business into two groups — the Consumer Digital Imaging Group and the Film and Photofi nishing Sys-
tems Group — which will allow us to effectively address differences in how you manage a growing and a declining business. We expect signifi cant
digital earnings growth from our more unifi ed Graphic Communications Group, and our Health Group, having addressed some structural issues last
year, is poised to continue growing the scale of its digital business.
Staying true to our strategy, by 2008 we expect all of Kodak’s businesses to be leaders in their industry segments — achieving attractive margins
and generating substantial cash. You will also see more balance between our consumer and commercial portfolios. This will provide diverse sources
of sales and earnings for the company and, with time, moderate much of the seasonality in our business that today “backloads” results to the second
half of the year.
It is truly an exciting era for Kodak. We have the products, the brand, the intellectual property and the people required to succeed. We have built our
digital foundation, and will now expand upon it to complete Kodak’s historic transformation for the benefi t of our customers and our shareholders.