It is a simple equation.
An iconic brand reinvented into a standalone firm. Add a leader with years of working with iconic brands ready to grow the company in new ways.
That equals forward movement for Kodak Alaris Inc. in 2017.
Jan. 1 marked the start of Marc Jourlait’s role as CEO. He replaced interim CEO Jeff Goodman, who in May 2016 succeeded Ralf Gerbershagen, who had held the CEO role since 2014.
Jourlait previously held leadership roles with a range of technology firms, including Apple Inc., Hewlett-Packard Co., Seagate Technology PLC, Technicolor S.A., and Bose Corp. His office is in Rochester and he will spend on average two weeks a month here. He lives in New York City.
The privately held Kodak Alaris did not disclose financials. The Rochester office, which is slated to relocate from Eastman Business Park to the Rochester Technology Park in Gates next year, is the company’s largest footprint.
Other offices are in Colorado, North Carolina, California and Massachusetts as well Mexico, Germany, France, England, Australia and China.
The firm ranked No. 50 on the 2017 RBJ 75 list of the Rochester region’s largest employers with 656 local employees.
Kodak Alaris spun off of Eastman Kodak Co. in September 2013. KPP Trustees Ltd.—trustee of the Kodak Pension Plan of the United Kingdom—is a privately held U.K. company that owns Kodak Alaris.
Kodak Alaris focuses on information management; imaging-consumer and imaging-professional paper; as well as photochemicals and film segments.
Changes under Jourlait already have taken place.
The company sold its Harrow facility in England, had a balance sheet restructuring and negotiated better terms for its rotating credit facility.
The Rochester Business Journal recently sat down with Jourlait to discuss the company’s future in Rochester under his leadership. An edited transcript of the conversation follows.
Focus for 2017
ROCHESTER BUSINESS JOURNAL: What are your thoughts on your new role and what is the focus of Kodak Alaris for 2017?
MARC JOURLAIT: I joined in early January to come and run Kodak Alaris, and most of my career is in high-tech.
I worked at Apple, HP, Seagate, Technicolor, Bose … so a lot of household consumer brand names but a strong B2B play also in a number of those.
I was intrigued by the opportunity at Kodak Alaris, obviously because of the heritage of the brand and the strong acumen in image science. I was also intrigued by the unique ownership. We’re privately held by a pension fund out of the UK so off the traditional Wall Street radar.
So it had a lot of the elements that attracted me: an interesting business situation and a growth agenda with a long-term-minded owner.
It had a lot of things that checked the boxes of, ‘this could be a really interesting business case to build and solve and grow and make this once again the iconic company that it should be.’
I’ve been commuting to Rochester since January and moving forward I will be here two weeks a month because Rochester is our largest site around the world.
Three out of the four business units are headquartered here and it has some manufacturing and warehousing, as well as the bulk of our engineers and R&D function, and a whole host of sales, marketing, finance, IT, HR. It is the largest site but certainly a very important one when it comes to the number of functions that are housed here.
The larger hub is clearly Rochester in terms of just the sheer number of employees and functions that are here but I want to make sure I’m visible in all of our locations.
RBJ: What changes do you see for the rest of this year in regards to Rochester or the company overall?
JOURLAIT: We’re privately held so we don’t publish any numbers, but we’re continuing to try and grow the company and the various core businesses that we have.
We have some new initiatives—some here in Rochester and some in other parts of the world—to grow new revenue streams. Obviously (we’re) trying to make sure we maintain a good cost base so we’re profitable and we can pay our owners as they require.
It’s an interesting agenda of growth (and) continuous improvement. Being privately held means we have different cash and balance sheet structure than normal companies.
We just concluded three important financial decisions.
One was a balance sheet restructuring, which is a lot of accounting technical jargon but it basically means we have equitized our balance sheet. We have a very strong balance sheet and that’s how our owners own us—through equity, and it allows us to consider potential mergers and acquisitions on the horizon, because we have equity that we can then put in play. That does change how we are perceived by the capital markets and by potential acquisition targets.
The second thing is we renewed, with even better terms, our rotating credit facility with our bank, which allows us—if we need to—to tap into a credit facility.
We actually don’t currently use it because we don’t need it—we have enough cash to run our operations—but if we were to need it because business was growing, we had to flare up on inventory for whatever reason, we would have access to a substantial credit line.
The good news is we don’t need it right now.
The third element is we just sold a piece of real estate in a historical factory that was part of the Eastman Kodak heritage, and it was part of the creation of Kodak Alaris, which was the site outside of London called Harrow—which I believe was one of the first Kodak sites outside of the United States. (It) turns out that site is one that we no longer needed.
We consolidated a lot of our manufacturing in other parts of the world, including Colorado here in the U.S., and in Shanghai and a number of other sites.
So we sold that site off and concluded the sale about eight weeks ago; sold it to a real estate developer. It’s very well-located land just outside of London; it’s pretty rare to find a site like that and so that allowed us to dispose of an asset and get cash out of it.
So we have a solid cash situation, so financially that’s probably the highlight this year.
Those (decisions) put us in very good stead and solid footing from a financial standpoint for us as a company to operate moving forward.
We can consider mergers and acquisitions, we have cash, (and) we have a credit facility if we need it. That’s a good position to be in as a company.
RBJ: What are some of the lessons you think the company has learned since coming out of Kodak?
JOURLAIT: I think there’s always a balance. We have a very proud heritage and legacy and strong DNA certainly here in the Rochester area from Eastman Kodak and we’re very good partners with Eastman Kodak. We partner; we jointly own a brand; we have a professional license to the Kodak brand and we sell a number of products under that brand.
We are a large customer of theirs. We buy a number of products from them, we’re currently leasing a building from them. We have a lot of employees who have a long tenure previously at Eastman Kodak, so there are a lot of reasons for the companies to partner.
We’re separate, financially independent companies—they’re publicly traded, we’re privately held so we both have a fiduciary duty toward our respective owners, but we try to do that in our own intelligence and make sure the partnership is as positive and as win-win as possible.
For me, that’s one thing, the proud heritage and the strong roots we have in the Rochester area and the Kodak heritage around the world, but also we’re a different company. We’re a separate company. We have our own trajectory and plans, and our owners obviously have aspirations for us to achieve, and we need to chart our own path.
That’s what we’re doing and that’s why we’re entering into new ventures and new growth initiatives, hiring a good mix of talent, keeping of course the best of the Kodak heritage and the incredible engineers in image science that we have. But we also tap into the best of the best coming out of RIT, and try to attract talent here to anywhere in Kodak Alaris and in particular here in the Rochester area.
For me there’s balance between appreciation and respect for the heritage in the past but not staying stuck in it; using the best of that and moving forward because we need to chart our own path as an independent company.
RBJ: Do you have specific expectations for yourself or the company looking toward the rest of 2017? Is there any specific challenge from where you sit?
JOURLAIT: We have financial responsibilities toward our owners and we set our own budgets and our own targets, and we want to make sure that we hit our financial commitments to ourselves and to our owners.
There’s still five months left in the year, so we need to continue to deliver on our commitments, on our numbers. That’s sales and profit and all the other financial metrics that you try to achieve, and then manage our cash.
I came on board to make this a great company and to grow it and to make it as valuable as possible for our owners, and bring the employees along for hopefully a fun ride in making this a great independent standalone company.
2017 is my first year, (and) with the help of the team I think we need to keep executing as we have been. You always hit some bumps in the road and some headwinds, but you also have some good things coming your way. I think that’s what makes business fun. It would be boring if you didn’t have challenges, and it wouldn’t be as entertaining if you didn’t have some positive things.
I’m optimistic by nature, but it’s a lot of hard work. You’ve got competition, you’ve had quite a bit of geopolitical uncertainty and that affects some of our markets. We’re constantly trying to improve our own operations, and continuous improvement is the philosophy that we try and live by.
You should never sit back and rest on your laurels and be satisfied with where you are. You should constantly try to improve what you’re doing, because there’s inevitably a way to make it better, faster, cheaper, more efficient, more fun, less time consuming, etc.
I’m not one to just sit back and wait for things to happen. I certainly inspire the teams to constantly challenge ourselves and question, ‘Why do we do it this way?’ Well, let’s do it better let’s do it faster, let’s do it cheaper so we can free up time and resources to go do other things.
Commitment to Rochester
RBJ: In terms of the Rochester operations what do you see on the horizon for the next few years?
JOURLAIT: We’re here to stay; we signed a long-term lease.
Our lease was coming due a year from now, so as any good practice for a company, you look at, do you want to move or stay where you are? And we considered staying where we currently are and we looked at about half a dozen options in the Greater Rochester area, and we also looked at other options around the country.
The economics, the financials behind the move are an important criteria because we just don’t want to spend money willy-nilly on things that we don’t have to, so the financial economics around this site made a lot of sense and more than the other sites.
The amenities that we’re going to be able to offer and the work environment that we we’re going to be able to offer to our employees was certainly the best option here.
The Rochester Tech Park is not the Rochester Tech Park of old— the former Eastman Kodak (Elmgrove) campus. The place has been completely updated, has some great new tenants. We’ll have neighbors (such as) the University of Rochester, Harris Communications—some great neighbors. The part of the Tech Park that we are going to be occupying is going to be refitted to our specifications.
We’ll have natural light, we’ll have an adjacent parking lot, we’ll have in the neighborhood a number of restaurants, fitness centers, child care (and) easy access from just about anywhere in the Rochester area. Most of our employees’ commutes won’t change that much.
So for our employees (it is great to) just be able to offer really good working conditions, because we spend most of our waking hours at work as humans.
And the last criteria was determining the local incentives the town of Gates, Monroe County, the state of New York, RG&E—they made sure that we had the appropriate tax and incentives and rebates that made the math even more compelling.
We did look at other states and other parts of the state, and Monroe County really made it clear they wanted us to stay. In the end that was the best combination of criteria between the financials, the economics of the lease, the employee conditions and amenities, and of course the local incentives.
You add those up and this was the clear choice that we presented to our board of directors.
RBJ: How does the company view competition?
JOURLAIT: We have some very distinct businesses.
We have our film and color negative paper business, which was part of the Kodak heritage. With our partners at Eastman Kodak, we just re-launched EktaChrome, which is one of those iconic film types that we launched earlier this year.
Of course we compete with film and color negative paper competitors.
If you look at our kiosk business and our direct-to-consumer premium photo products, we compete with a completely different set of players. And if you look at our scanner and information management business, it’s a completely different set.
We have three distinct sets of competitors that have different strengths and weaknesses and different geographic footprints.
There’s no single competitor that I could call out and say, well, it’s all about them. I guess we’re lucky to have a portfolio of products which means we have the added benefit of having a portfolio of competitors to fight against, but that’s what makes business fun and interesting.
You’ve got different business challenges and different headwinds and different competitors and strategic moves that you make, so there’s no single competitor. We face them around the world.
We fight a good fight everywhere, and we try to win as much profitable business for us and make it a win-win for our partners and for our customers.
RBJ: Has anything surprised you since taking this role?
JOURLAIT: When I was called, clearly the Kodak brand carries a lot, and I’ve been fortunate in my life, my professional career, to work for some incredible brands…they’re fantastic iconic brands and there’s no question Kodak is one of those, so that certainly caught my attention.
What I’ve come to really appreciate is how important that heritage is, particularly here in Rochester, but throughout the world there’s a lot of pride in that. I want to tap into that pride. (There’s an) eagerness to see this brand—along with our partners at Eastman Kodak—come back with a lot of strength, and we want to help with that.
I think what surprised me was the very palpable, tangible Kodak heritage pride that is there, and I think that’s a big positive. On the flip side: it’s a complicated business. You never know until you open up the hood of the engine and look in and you realize, ‘OK, it’s more complicated than what it might appear from the outside, but I’m a glass half-full kind of person; that’s what makes it fun.
I’ve been drinking through a fire hose in the last six months and learning a lot about our businesses, about our people, about our organization, about our competitors, about our partners. Then you launch different work streams to go fix things, improve things, grow things, try things out. So I guess you never know what you’re really going to uncover until you get into it.
But I like that because in my career it’s what’s made my businesses experiences fascinating and fun.
We’re happy we’re staying in the Greater Rochester area, and we’re grateful that the town of Gates and Monroe County and the state of New York wanted to keep us here, and our local utility partners wanted us to stay here.
We’re a fairly large employer for the Rochester area, and it’s nice to feel welcome and wanted and desired in an area. I think that people had a lot of pride in that. We recommitted for quite a while here to be in the area, which I think is a strong message.
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