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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 20, 2003
Eastman Kodak Company
(Exact name of registrant as specified in character)
New Jersey 1-87 16-0417150
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
343 State Street
Rochester, New York 14650
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (585) 724-4000
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Item 5. Other Events
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Exhibit:
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Press Release issued July 21, 2003 Furnished with
regarding agreement by the Company this document
to acquire the stock of PracticeWorks, Inc.
SIGNATURES
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Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EASTMAN KODAK COMPANY
By: /s/ Robert P. Rozek
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Name: Robert P. Rozek
Title: Controller
Date: July 21, 2003
Kodak to Acquire PracticeWorks, Inc.,
and its Trophy Radiologie, S.A. Subsidiary
Pursues Growth Opportunity in the Dental Digital Market
ROCHESTER, N.Y.--(BUSINESS WIRE)--July 21, 2003--Eastman Kodak
Company today announced that it has entered into an agreement to
acquire PracticeWorks, Inc. (NASDAQ: PRWK), Atlanta, Ga., a leading
provider of dental practice management software (DPMS) and digital
radiographic imaging systems.
Under the agreement, Kodak will acquire all outstanding shares of
PracticeWorks for approximately $500 million in cash. Kodak will pay
$21.50 for each share of PracticeWorks common stock (and equivalents)
and $7.33 for each share of PracticeWorks Series B preferred stock,
plus approximately $34 million in net assumed debt and transaction
fees. Accordingly, Kodak will also become the 100% owner of
Paris-based subsidiary Trophy Radiologie, S.A., a developer and
manufacturer of dental digital radiography equipment, which
PracticeWorks acquired in December 2002. The deal is expected to add
approximately $215 million to Kodak's revenue in the first full year
and to be slightly dilutive through 2005, and accretive thereafter.
Kodak, the world leader in dental x-ray film, expects this
acquisition to vault the company into the leading position in the DPMS
and dental digital radiographic market - much the same way that the
company's 1998 acquisition of Imation's medical imaging business
boosted Kodak to the market-leading position in medical dry laser
printing.
"We will be able to offer choices within a full spectrum of dental
imaging products and services - from traditional film to digital
radiography and photography," said Dan Kerpelman, president of Kodak's
Health Imaging Group, and senior vice president, Eastman Kodak
Company.
"We'll also be able to provide innovative information technology
to digitally integrate dental images with patient health records. This
infoimaging capability, ultimately, will enable dental professionals
to manage patient care from the front office all the way through
treatment with high-quality Kodak images at key points in the process.
Such marrying of imaging and information is at the core of our growth
strategy for the Health Imaging Group."
PracticeWorks currently is the leader of a growing market for
DPMS, in the United States and has made solid inroads in Europe and
other parts of the world. Trophy Radiologie was the first company to
develop and sell intraoral dental digital x-ray detectors and is the
worldwide market leader in dental digital radiography, or "DR." (DR
allows dentists, orthodontists and oral surgeons to capture
high-resolution digital images.)
DPMS allows dentists to manage a variety of dental front office
functions, such as scheduling, billing and record keeping, and is
evolving into a more complete patient management tool that extends to
treatment planning and delivery. Kodak estimates that worldwide
industry sales of DPMS exceed $200 million annually and are expected
to grow 8% to 10% per year.
The company also estimates that current dental digital radiography
sales worldwide total $100 million to $120 million annually, yet the
penetration rate of DR remains low in the U.S. and other large
markets. About 13% of dental offices in the U.S. account for these
sales, according to the leading trade publication Dental Products
Report, along with a correspondingly low percentage of dental offices
in the rest of the world. "The market opportunity is significant,"
Kerpelman said.
"And what makes it significant is this key fact: While dental DR
has been available for a number of years, the time has now arrived
where its value is becoming important not just to early adopters, but
also to more mainstream practitioners," Kerpelman said.
Coupled with DPMS software, DR can integrate images and
information in ways that enable dentists to save time and money and to
increase productivity. Image quality of such systems also has improved
dramatically. Moreover, the growing trend among insurers to handle
claim submissions electronically - with digital images and information
attached - is prompting many dental practices to adopt digital
systems.
Accordingly, Kodak expects DR adoption to reach approximately 30%
in the U.S. by 2007, with a compound annual growth rate of about 20%,
as dentists become more familiar with the technology and its benefits
for improving productivity and overall efficiency in the dental
practice.
"During the same period," Kerpelman said, "adoption will
accelerate considerably in other parts of the world, as the level of
dental care continues to improve in key global markets."
PracticeWorks and Trophy Radiologie already have benefited from
these trends. Both have reported double-digit growth rates in revenue
and earnings. The combined proforma revenue of PracticeWorks and
Trophy Radiologie for the full-year 2002 totals approximately $141
million. Prior to its acquisition by PracticeWorks, Trophy Radiologie
recorded a three-year compound annual growth rate in revenue of 18% -
without a significant contribution from the United States, the largest
dental market in the world.
"Our vision for the future of the dental practice is to fully
integrate practice management software with digital imaging technology
to enable dentists to capture, share and archive their work as never
before," said PracticeWorks Chief Executive Officer Jim Price. "With
the addition of Kodak's imaging science technology - and the trusted
Kodak brand - PracticeWorks will have an unparalleled opportunity to
better meet the information and imaging needs of the dental office
both now and in the future."
"With its 100-year history in the radiographic film business,
Kodak is in a unique position to advance imaging and information
technology in the dental practice," said Richard Hirschland, vice
president, Health Imaging Group, and the general manager of Kodak's
dental business. "Radiographic film will continue to be an important
product in our portfolio, but with this acquisition, Kodak will be in
a position to also help guide dental professionals along the
evolutionary path of dental radiographic imaging."
Upon closing, Kodak will add the product lines of the two
companies into the portfolio marketed by the dental business in its
Health Imaging Group. The dental business, along with other businesses
in the Health Imaging Group, competes in the $97 billion global
healthcare infoimaging market created by the convergence of imaging
and information technology.
The agreement is subject to regulatory approvals and to approval
by PracticeWorks shareholders. Pending these approvals, the deal is
expected to close by the end of 2003.
Dan Carp, Chairman and CEO, Eastman Kodak Company, will host a
conference call today to discuss this acquisition. Mr. Carp will be
joined by Bob Brust, Kodak's Chief Financial Officer, Dan Kerpelman,
President, Heath Imaging, and PracticeWorks CEO Jim Price.
The conference call will take place on Monday, July 21, 2003 at
11:00 am ET. All interested parties are invited to participate by
calling 913-981-4910, access code 248024. There is no need to
pre-register for the call. The call will also be recorded and
available for replay by 2:00 PM on Monday, July 21, 2003 by dialing
719-457-0820 access code: 248024.
For those listening via webcast, please access our Kodak.com
Investor webpage at: http://www.kodak.com/US/en/corp/investorCenter/
investorsCenterHome.shtml (Due to the length of this URL, it may be
necessary to copy and paste this hyperlink into your Internet
browser's URL address field.)
The conference call audio will be archived and available for
replay on this site approximately one hour following the live
broadcast.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are based on the
current expectations and beliefs of management of Kodak and
PracticeWorks and are subject to a number of factors and uncertainties
that could cause actual results to differ materially from those
described in the forward-looking statements. In particular, the
following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements:
failure of the transaction to close due to the failure to obtain
regulatory or other approvals; failure of PracticeWorks stockholders
to approve the merger; the risk that the Kodak and PracticeWorks
businesses will not be integrated successfully and anticipated costs
of such integration; failure of the combined company to retain and
hire key executives, technical personnel and other employees; failure
of the combined company to successfully manage its changing
relationships with customers and suppliers; and those risks detailed
from time to time in Kodak's reports filed with the SEC, including the
report on Form 10-Q for the period ended March 31, 2003, and
PracticeWorks' reports filed with the SEC, including the report on
Form 10-Q for the period ended March 31, 2003.
Additional Information
PracticeWorks, Inc. will file a proxy statement describing the
proposed merger with the United States Securities and Exchange
Commission (SEC). WE URGE INVESTORS IN THE COMMON STOCK OF
PRACTICEWORKS TO REVIEW THE PROXY STATEMENT AND OTHER INFORMATION TO
BE FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
These documents will be available without charge on the SEC's web site
at www.sec.gov or from the chief financial officer, PracticeWorks,
Inc., 770-850-5006. INVESTORS SHOULD READ THE PROXY STATEMENT
CAREFULLY BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS.
PracticeWorks and its executive officers and directors may be
deemed to be participants in the solicitation of proxies from
stockholders of PracticeWorks with respect to the transactions
contemplated by the merger agreement. Information regarding such
officers and directors will be included in PracticeWorks' Proxy
Statement for its Special Meeting of Stockholders to be filed with
SEC. This document will be available at the SEC website at
http://www.sec.gov and from PracticeWorks.
Editor's Note: For additional information about Kodak products for
health imaging, visit Kodak's web site on the Internet at:
http://www.kodak.com/go/health.
CONTACT: Eastman Kodak Company
Media Contacts:
John LaBella, 585-724-6891
john.labella@kodak.com
or
Gerard Meuchner, 585-724-4513
gerard.meuchner@kodak.com
or
Anthony Sanzio, 585-781-5481
anthony.sanzio@kodak.com
or
Investor Contacts:
Don Flick, 585-724-4352
donald.flick@kodak.com
or
Patty Yahn-Urlaub, 585-724-4683
patty.yahn-urlaub@kodak.com
or
Roberto Trevino, 585-724-6791
roberto.trevino@kodak.com