Eastman Kodak Company

Kodak to Acquire Scitex Digital Printing

Expands Participation in Fast-Growing Digital Commercial Printing Industry

ROCHESTER, N.Y. and DAYTON, OH, Nov. 25—Eastman Kodak Company [NYSE: EK] today announced that it has agreed to acquire the assets of Scitex Digital Printing, the world leader in high-speed, variable data inkjet printing systems, from Scitex Corporation Ltd. [Nasdaq: SCIX]. Through this acquisition, Kodak will accelerate its participation in the growing, $30 billion industry for digital commercial printing equipment, part of the broader $385 billion infoimaging industry.

Under the terms of the agreement, Kodak will acquire the assets of Scitex Digital Printing from the parent company for $250 million in cash. After taking into account $10 million expected to be acquired at closing, Kodak will pay a net cash price of approximately $240 million. Kodak expects to fund the acquisition from available cash with no incremental borrowing.

Kodak anticipates Scitex Digital Printing's operations to add approximately $190 million in revenue in its first full year as a wholly owned Kodak subsidiary. Kodak also expects the acquisition to be slightly dilutive in the first full year and to add to earnings thereafter.

The president and CEO of Scitex Corporation and Scitex Digital Printing, Nachum "Homi" Shamir, is expected to join Kodak, along with other key managers of Scitex Digital Printing. Shamir will report to James Langley, President, Commercial Printing, and Senior Vice President, Eastman Kodak Company.

Based in Dayton, Ohio, Scitex Digital Printing is the leading supplier of high-speed, continuous inkjet printing systems, primarily serving the commercial and transactional printing sectors. Scitex Digital Printing's award-winning products include the monochrome, spot and full-color VersaMark page printing systems and the Dijit family of narrow-format printers. Customers use these systems to print utility bills, banking and credit card statements, direct mail marketing materials, as well as invoices, financial statements and other transactional documents. The company employs 733 people and had reported sales of $157 million in 2002. Reported sales revenues through the third quarter of 2003 were $128 million with operating income of $12 million.

"We are moving decisively to implement our growth strategy by expanding into a range of commercial digital businesses," said Daniel A. Carp, Chairman and Chief Executive Officer, Eastman Kodak Company. "One part of that strategy is to acquire in a disciplined manner companies and technologies that complement our existing businesses, capabilities and assets. The acquisition of Scitex Digital Printing is a prime example of how we intend to build upon inkjet technology developed on our own to build business in growing market segments.

"This is the first of several actions Kodak will take to expand our participation in the digital commercial printing industry," Carp continued.

Scitex Digital Printing expands Kodak's capabilities in digital commercial printing and complements Kodak's existing businesses-including Encad, Inc., a leading maker of wide-format inkjet printers; the Kodak Polychrome Graphics joint venture, the leading supplier of plates and other products to the graphic arts industry; and the NexPress Solutions, LLC joint venture, a leading supplier of digital color presses.

With its NexPress joint venture, Kodak is well represented in the on-demand, high-quality color printing segment, based upon electrophotography technology. The acquisition of Scitex will provide Kodak with additional capabilities in the transactional printing and direct mail sectors.

Additionally, Scitex Digital Printing provides Kodak another path to commercialize its proprietary inkjet technology. Kodak intends to incorporate its unique inkjet technology, workflow solutions and color science into future Scitex Digital Printing systems to broaden the range of applications that these machines can fulfill.

"We plan on combining Kodak's proprietary inkjet technology with Scitex Digital Printing's proven printing platform to create a low-cost system that will deliver very high print quality at extremely high speeds," said Kodak's Langley. "This will open new opportunities for us and provide customers with faster, better and less costly solutions for their variable data printing needs."

Variable data printing-which produces materials customized to individual recipients-is the growth segment of the commercial printing industry, with a compound annual growth rate of approximately 10 - 15 percent, according to CAP Ventures, a leading market research firm. Additionally, Scitex Digital Printing is the leader in high-speed variable data printing and remains committed to the transactional and commercial printing industry, where there is a rapidly growing demand for economical, high-speed, full-color variable data printing.

Scitex's Shamir said, "This sale furthers the objectives of Scitex Digital Printing, a company with a rich tradition and leadership in technology innovation and high-speed digital printing. Kodak represents the high-quality partner we have been seeking. We are very excited to be associated with the world-recognized and highly respected Eastman Kodak Company. We believe that, together, we can truly maximize the potential that exists for these two companies and transform the traditional model of printing into digital printing. I am extremely pleased for Scitex Digital Printing and especially for its worldwide customers and dedicated workforce."

Through the acquisition, Kodak will have the industry-leading patent portfolio for continuous inkjet printing technology, which will provide the company with greater ability to innovate in the inkjet industry.

The agreement is subject to customary regulatory approvals. Closing will occur as soon as all required approvals have been obtained.

Dan Carp, Chairman and CEO, Eastman Kodak Company, will host a conference call on Tuesday, November 25, 2003 to discuss the acquisition. Antonio Perez, Kodak's President and Chief Operating Officer, Bob Brust, Kodak's Chief Financial Officer, James Langley and Homi Shamir of Scitex Digital Printing, will join Mr. Carp on the call.

The conference call will take place on Tuesday, November 25, 2003 at 11:00 a.m. ET. All interested parties are invited to participate by calling (719) 457-2641, access code 772720. There is no need to pre-register for the call. The call will also be recorded and available for replay by 2:00 p.m. (Eastern Time) and will be active until Tuesday, December 9, 2003 at 5:00 p.m. (Eastern Time). The replay number is (719) 457-0820, access code 772720.

For those listening via webcast, please access our Kodak.com Investor webpage at:


About Eastman Kodak Company and infoimaging

Kodak is the leader in helping people take, share, print and view images - for memories, for information, for entertainment. The company is a major participant in infoimaging, a $385 billion industry composed of devices (digital cameras and flat-panel displays), infrastructure (online networks and delivery systems for images) and services & media (software, film and paper enabling people to access, analyze and print images). With sales of $12.8 billion in 2002, the company comprises several businesses: Health, supplying the healthcare industry with traditional and digital image capture and output products and services; Commercial Printing, offering on-demand color printing and networking publishing systems; Commercial Imaging, offering image capture, output and storage products and services to businesses and government; Display & Components, which designs and manufactures state-of-the-art organic light-emitting diode displays as well as other specialty materials, and delivers optics and imaging sensors to original equipment manufacturers; and Digital & Film Imaging Systems, providing consumers, professionals and cinematographers with digital and traditional products and services.

About Scitex Digital Printing

Scitex Digital Printing, Inc. is a world leader in ultra-high-speed digital printing solutions with over 9,000 system installations worldwide and in a variety of applications ranging from addressing, personalization and variable messaging, to direct mail and bill and statement printing. The company's products include the VersaMark® high-resolution page printing systems and the Dijit® range of narrow format printers. Scitex Digital Printing is a wholly owned subsidiary of Scitex Corporation, Ltd. Scitex shares trade on NASDAQ under the symbol SCIX. For more information, please visit our web site at www.scitexdpi.com.

The VersaMark family of printing systems from Scitex Digital Printing is built on four basic principles: high-speed, upgrade options, color options (both spot and full color) and low cost of operation. With the highest print speed of any digital printing technology and the lowest cost per impression of any digital color solution, VersaMark systems deliver real value to customers every day. The VersaMark family of printers offers customers a range of 18 different product options with a range of capabilities that include monochrome, spot color and full color output.

Certain statements in this press release may be forward looking in nature, or "forward-looking statements" as defined in the United States Private Securities Litigation Reform Act of 1995. For example, references to Scitex Digital Printing's projected revenue and impact on the Company's earnings are forward-looking statements.

Actual results may differ from those expressed or implied in forward-looking statements. In addition, any forward-looking statements represent our estimates only as of Nov. 25, 2003, and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. The forward-looking statements contained in this press release are subject to a number of risk factors, including the successful:

  • Implementation of product strategies (including product development and commercialization);
  • Implementation of intellectual property licensing strategies;
  • Completion of information systems upgrades, including SAP;
  • Completion of various portfolio actions;
  • Reduction of inventories;
  • Improvement in manufacturing productivity;
  • Improvement in receivables performance;
  • Reduction in capital expenditures;
  • Improvement in supply chain efficiency;
  • Implementation of future focused cost reductions, including personnel reductions;
  • Successful integration of certain operations;
  • Successful exploitation of intellectual property opportunities.

The forward-looking statements contained in this press release are subject to the following additional risk factors:

  • Inherent unpredictability of currency fluctuations and raw material costs;
  • Competitive actions, including pricing;
  • The nature and pace of technology substitution, including the analog-to-digital shift and adoption of variable data printing techniques;
  • Continuing customer consolidation and buying power;
  • General economic, geo-political, public health and business conditions.
  • Other factors disclosed previously and from time to time in the Company's filings with the Securities and Exchange Commission.

Any forward-looking statements in this press release should be evaluated in light of these important risk factors.