Eastman Kodak Company (NYSE: KODK) today reported financial results
for the first quarter 2024.
First-quarter 2024 highlights include:
- Consolidated revenues of $249
million, compared with $278 million for Q1 2023, a decrease of $29
million or 10 percent
- Gross profit of $49 million,
compared with $50 million for Q1 2023, a decrease of $1 million or
2 percent
- Gross profit percentage of 20
percent, compared with 18 percent for Q1 2023, an increase of 2
percentage points
- GAAP net income of $32 million,
compared with net income of $33 million for Q1 2023, a decrease of
$1 million or 3 percent
- Operational EBITDA of $4 million,
compared with $9 million for Q1 2023, a decrease of $5 million or
56 percent
- A quarter-end cash balance of $262
million, compared with $255 million on December 31, 2023, an
increase of $7 million; cash flow from operations improved by $3
million from the prior period
“For the first quarter, Kodak continued to build on its strong
foundation, generating cash and delivering a gross profit
percentage of 20 percent, which reflects our ongoing commitment to
improving operational efficiency,” said Jim Continenza, Kodak’s
Executive Chairman and CEO. “Sticking to our long-term strategic
plan, we continue to invest in innovation in our core businesses of
print and advanced materials and chemicals. In print, we will
showcase exciting new products for both offset and digital print
this month at the drupa tradeshow in Germany. No one can match our
ability to help customers successfully integrate offset and digital
capabilities as the print industry evolves. In AM&C, we are
committed to our film business and are expanding our manufacturing
capacity to meet growing demand for both still and motion picture
film. At the same time, we are setting the stage for Kodak as a
growth company by investing in a number of AM&C initiatives
that leverage our unmatched knowledge of chemicals, layering and
coating and vast manufacturing infrastructure. Looking ahead, we
plan to continue our momentum by meeting the needs of our customers
today and investing in growth for the next generation.”
For the quarter ended March 31, 2024, revenues were $249
million, a decrease of $29 million or 10 percent compared to the
same period in 2023. Foreign currency had no impact on revenues in
the three months ended March 31, 2024 compared to the three months
ended March 31, 2023.
GAAP net income was $32 million for the quarter, compared to $33
million in 2023, a decrease of $1 million or 3 percent. Operational
EBITDA for the quarter ended March 31, 2024 was $4 million,
compared to $9 million in Q1 2023, a decrease of $5 million or 56
percent. The decrease was primarily driven by lower volumes and
higher costs associated with investments in information technology
systems and organizational structure to drive further operational
efficiencies, partially offset by lower manufacturing costs due to
customer focused initiatives, supply chain and workforce
optimization, productivity improvements and other cost savings
activities.
Kodak ended the quarter with a cash balance of $262 million, an
increase of $7 million from December 31, 2023. The increase was
driven by improvements in working capital primarily due to cash
proceeds of $40 million from brand licensing.
“Kodak continued to deliver strong cash performance in the first
quarter, increasing our cash balance from $255 million to $262
million,” said David Bullwinkle, Kodak’s CFO. “We also improved our
gross profit percentage year over year for the quarter, which
reflects our ongoing focus on streamlining our operations and
generating smart revenue. Operational EBITDA for the quarter was
impacted by significant investments in automation and
simplification of back-office functions. For the balance of the
year, we plan to concentrate on the fundamentals from our strategic
plan: investing for growth, increasing operational efficiency and
helping our customers succeed.”
##
Revenue and Operational EBITDA by Reportable Segment Q1
2024 vs. Q1 2023
|
($ millions) |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Q1 2024 Actuals |
Print |
|
Advanced Materials & Chemicals |
|
Brand |
|
Total |
|
Revenue |
$ |
182 |
|
|
$ |
59 |
|
|
$ |
4 |
|
|
$ |
245 |
|
|
Operational EBITDA * |
$ |
- |
|
|
$ |
1 |
|
|
$ |
3 |
|
|
$ |
4 |
|
|
|
|
|
|
|
|
|
|
|
Q1 2023 Actuals |
Print |
|
Advanced Materials & Chemicals |
|
Brand |
|
Total |
|
Revenue |
$ |
209 |
|
|
$ |
61 |
|
|
$ |
4 |
|
|
$ |
274 |
|
|
Operational EBITDA * |
$ |
6 |
|
|
$ |
- |
|
|
$ |
3 |
|
|
$ |
9 |
|
|
|
|
|
|
|
|
|
|
|
Q1 2024 vs. Q1 2023 Actuals B/(W) |
Print |
|
Advanced Materials & Chemicals |
|
Brand |
|
Total |
|
Revenue |
$ |
(27 |
) |
|
$ |
(2 |
) |
|
$ |
- |
|
|
$ |
(29 |
) |
|
Operational EBITDA * |
$ |
(6 |
) |
|
$ |
1 |
|
|
$ |
- |
|
|
$ |
(5 |
) |
|
|
|
|
|
|
|
|
|
|
* Total Operational EBITDA is a non-GAAP financial measure. The
reconciliation between GAAP and non-GAAP measures is provided in
Appendix A of this press release. |
Foreign currency had no impact on revenues or Operational EBITDA
for the three months ended March 31, 2024 compared to the three
months ended March 31, 2023.
Eastman Business Park segment is not a reportable segment and is
excluded from the table above.
About KodakKodak (NYSE: KODK) is a leading
global manufacturer focused on commercial print and advanced
materials & chemicals. With 79,000 worldwide patents earned
over 130 years of R&D, we believe in the power of technology
and science to enhance what the world sees and creates. Our
innovative, award-winning products, combined with our
customer-first approach, make us the partner of choice for
commercial printers worldwide. Kodak is committed to environmental
stewardship, including industry leadership in developing
sustainable solutions for print. For additional information on
Kodak, visit us at kodak.com, or follow us on
Twitter @Kodak and LinkedIn.
Cautionary Statement Regarding Forward-Looking
Statements
This press release includes “forward-looking statements” as that
term is defined under the Private Securities Litigation Reform Act
of 1995.
Forward-looking statements include statements concerning Kodak’s
plans, objectives, goals, strategies, future events, future revenue
or performance, capital expenditures, liquidity, investments,
financing needs and business trends and other information that is
not historical information. When used in this press release, the
words “estimates,” “expects,” “anticipates,” “projects,” “plans,”
“intends,” “believes,” “predicts,” “forecasts,” “strategy,”
“continues,” “goals,” “targets” or future or conditional verbs,
such as “will,” “should,” “could,” or “may,” and similar words and
expressions, as well as statements that do not relate strictly to
historical or current facts, are intended to identify
forward-looking statements. All forward-looking statements,
including management’s examination of historical operating trends
and data, are based upon Kodak’s current expectations and
assumptions. Forward-looking statements are subject to risks,
uncertainties and other factors that could cause actual results to
differ materially from historical results or those expressed in or
implied by such forward-looking statements.
Important factors that could cause actual events or results to
differ materially from the forward-looking statements include,
among others, the risks and uncertainties described in more detail
in Kodak’s Annual Report on Form 10-K for the year ended December
31, 2023 under the headings “Business,” “Risk Factors,” “Legal
Proceedings,” and/or “Management’s Discussion and Analysis of
Financial Condition and Results of Operations–Liquidity and Capital
Resources,” in the corresponding sections of Kodak’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2024, and in
other filings Kodak makes with the U.S. Securities and Exchange
Commission from time to time, as well as the following: Kodak’s
ability to improve and sustain its operating structure, cash flow,
profitability and other financial results; Kodak’s ability to
achieve strategic objectives, cash forecasts, financial
projections, and projected growth; Kodak’s ability to achieve the
financial and operational results contained in its business plans;
Kodak’s ability to obtain additional or alternate financing if and
as needed, Kodak’s continued ability to manage world-wide cash
through inter-company loans, distributions and other mechanisms,
and Kodak’s ability to provide or facilitate financing for its
customers; Kodak’s ability to fund continued investments, capital
needs, collateral requirements and restructuring payments and
service its debt and Series B Preferred Stock and Series C
Preferred Stock; Changes in foreign currency exchange rates,
commodity prices, interest rates and tariff rates; the impact of
the global economic environment, including inflationary pressures,
geopolitical issues such as the war in Ukraine and conflicts
involving Israel, medical epidemics, and Kodak’s ability to
effectively mitigate the associated increased costs of aluminum and
other raw materials, energy, labor, shipping, delays in shipment
and production times, and fluctuations in demand; Kodak’s ability
to effectively compete with large, well-financed industry
participants or with competitors whose cost structure is lower than
Kodak’s; the performance by third parties of their obligations to
supply products, components or services to Kodak and Kodak’s
ability to address supply chain disruptions and continue to obtain
raw materials and components available from single or limited
sources of supply, which may be adversely affected by the war in
Ukraine, the conflicts involving Israel, and residual effects of
the COVID-19 pandemic; Kodak’s ability to comply with the covenants
in its various credit facilities; Kodak’s ability to effectively
anticipate technology and industry trends and develop and market
new products, solutions and technologies, including products based
on its technology and expertise that relate to industries in which
it does not currently conduct material business; Kodak’s ability to
effect strategic transactions, such as investments, acquisitions,
strategic alliances, divestitures and similar transactions, or to
achieve the benefits sought to be achieved from such strategic
transactions; Kodak’s ability to discontinue, sell or spin-off
certain non-core businesses or operations, or otherwise monetize
assets; the impact of the investigations, litigation and claims
arising out of the circumstances surrounding the announcement on
July 28, 2020, by the U.S. International Development Finance
Corporation of the signing of a non‐binding letter of interest to
provide a subsidiary of Kodak with a potential loan to support the
launch of an initiative for the manufacture of pharmaceutical
ingredients for essential generic drugs; and the potential impact
of force majeure events, cyber‐attacks or other data security
incidents that could disrupt or otherwise harm Kodak’s
operations.
Future events and other factors 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 press release and
are expressly qualified in their entirety by the cautionary
statements included or referenced in this press release. 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,
except as required by law.
APPENDICES
In this first quarter 2024 financial results news release,
reference is made to the following non-GAAP financial measure of
Operational EBITDA.
Kodak believes that this non-GAAP measure represents an
important internal measure of performance. Accordingly, where it is
provided, it is to give investors the same financial data
management uses with the belief that this information will assist
the investment community in properly assessing the underlying
performance of Kodak, its financial condition, results of
operations and cash flow.
Kodak’s segment measure of profit and loss is an adjusted
earnings before interest, taxes, depreciation and amortization
(“Operational EBITDA”). Operational EBITDA represents the earnings
from continuing operations excluding the provision for income
taxes; non-service cost components of pension and OPEB income;
depreciation and amortization expense; restructuring costs and
other; stock-based compensation expense; consulting and other
costs; other operating (income) expense; interest expense; and
other income, net.
The following table reconciles the most directly comparable GAAP
measure of Net Income to Operational EBITDA for the three months
ended March 31, 2024 and 2023, respectively:
|
(in millions) |
|
|
|
|
|
|
|
|
|
Q1 2024 |
|
Q1 2023 |
|
$ Change |
|
% Decline |
|
Net Income |
$ |
32 |
|
|
$ |
33 |
|
|
$ |
(1 |
) |
|
-3 |
% |
|
All other |
|
(1 |
) |
|
|
- |
|
|
|
(1 |
) |
|
|
|
Depreciation and amortization |
|
7 |
|
|
|
8 |
|
|
|
(1 |
) |
|
|
|
Restructuring costs and other (2) |
|
5 |
|
|
|
1 |
|
|
|
4 |
|
|
|
|
Stock based compensation |
|
3 |
|
|
|
4 |
|
|
|
(1 |
) |
|
|
|
Consulting and other costs (1) |
|
- |
|
|
|
(10 |
) |
|
|
10 |
|
|
|
|
Other operating (income) expense, net (2) |
|
(17 |
) |
|
|
1 |
|
|
|
(18 |
) |
|
|
|
Interest expense (2) |
|
15 |
|
|
|
11 |
|
|
|
4 |
|
|
|
|
Pension income excluding service cost component (2) |
|
(41 |
) |
|
|
(40 |
) |
|
|
(1 |
) |
|
|
|
Other income, net (2) |
|
(2 |
) |
|
|
(7 |
) |
|
|
5 |
|
|
|
|
Provision for income taxes (2) |
|
3 |
|
|
|
8 |
|
|
|
(5 |
) |
|
|
|
Operational EBITDA |
$ |
4 |
|
|
$ |
9 |
|
|
$ |
(5 |
) |
|
-56 |
% |
|
Footnote Explanations: |
| |
|
|
| |
(1) |
Consulting and other costs are primarily professional services and
internal costs associated with certain corporate strategic
initiatives, investigations and litigation. Consulting and other
costs in the three months ended March 31, 2023 included $10 million
of income in representing insurance reimbursement of legal costs
previously paid by the Company associated with investigations and
litigation matters. |
| |
(2) |
As reported in the Consolidated Statement of Operations |
A. FINANCIAL STATEMENTS
|
EASTMAN KODAK COMPANY |
|
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) |
|
|
|
|
|
|
(in millions, except per share data) |
Three Months Ended |
|
|
March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenues |
|
|
|
|
Sales |
$ |
206 |
|
|
$ |
224 |
|
|
Services |
|
43 |
|
|
|
54 |
|
|
Total revenues |
|
249 |
|
|
|
278 |
|
|
Cost of revenues |
|
|
|
|
Sales |
|
168 |
|
|
|
192 |
|
|
Services |
|
32 |
|
|
|
36 |
|
|
Total cost of revenues |
|
200 |
|
|
|
228 |
|
|
Gross profit |
|
49 |
|
|
|
50 |
|
|
Selling, general and administrative expenses |
|
45 |
|
|
|
34 |
|
|
Research and development costs |
|
9 |
|
|
|
9 |
|
|
Restructuring costs and other |
|
5 |
|
|
|
1 |
|
|
Other operating (income) expense, net |
|
(17 |
) |
|
|
1 |
|
|
Income from operations before interest expense, pension income
excluding service cost component, other income, net and income
taxes |
|
7 |
|
|
|
5 |
|
|
Interest expense |
|
15 |
|
|
|
11 |
|
|
Pension income excluding service cost component |
|
(41 |
) |
|
|
(40 |
) |
|
Other income, net |
|
(2 |
) |
|
|
(7 |
) |
|
Earnings from operations before income taxes |
|
35 |
|
|
|
41 |
|
|
Provision for income taxes |
|
3 |
|
|
|
8 |
|
|
NET EARNINGS |
$ |
32 |
|
|
$ |
33 |
|
| |
|
|
|
|
Basic earnings per share attributable to Eastman Kodak Company
common shareholders |
$ |
0.31 |
|
|
$ |
0.33 |
|
| |
|
|
|
|
Diluted earnings per share attributable to Eastman Kodak Company
common shareholders |
$ |
0.30 |
|
|
$ |
0.30 |
|
The notes accompanying the financial statements contained in the
Company’s first quarter 2024 Form 10-Q are an integral part of
these consolidated financial statements.
|
EASTMAN KODAK COMPANY |
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
(in millions) |
|
2024 |
|
|
|
2023 |
|
|
ASSETS |
|
|
|
|
Cash and cash equivalents |
$ |
262 |
|
|
$ |
255 |
|
|
Trade receivables, net of allowances of $7 and $8,
respectively |
|
139 |
|
|
|
195 |
|
|
Inventories, net |
|
230 |
|
|
|
217 |
|
|
Other current assets |
|
46 |
|
|
|
45 |
|
|
Total current assets |
|
677 |
|
|
|
712 |
|
|
Property, plant and equipment, net of accumulated depreciation of
$471 and $450, respectively |
|
171 |
|
|
|
169 |
|
|
Goodwill |
|
12 |
|
|
|
12 |
|
|
Intangible assets, net |
|
23 |
|
|
|
24 |
|
|
Operating lease right-of-use assets |
|
31 |
|
|
|
30 |
|
|
Restricted cash |
|
106 |
|
|
|
110 |
|
|
Pension and other postretirement assets |
|
1,247 |
|
|
|
1,216 |
|
|
Other long-term assets |
|
80 |
|
|
|
82 |
|
|
TOTAL ASSETS |
$ |
2,347 |
|
|
$ |
2,355 |
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
EQUITY |
|
|
|
|
Accounts payable, trade |
$ |
129 |
|
|
$ |
125 |
|
|
Short-term borrowings and current portion of long-term debt |
|
1 |
|
|
|
1 |
|
|
Current portion of operating leases |
|
11 |
|
|
|
13 |
|
|
Other current liabilities |
|
133 |
|
|
|
144 |
|
|
Total current liabilities |
|
274 |
|
|
|
283 |
|
|
Long-term debt, net of current portion |
|
447 |
|
|
|
457 |
|
|
Pension and other postretirement liabilities |
|
229 |
|
|
|
237 |
|
|
Operating leases, net of current portion |
|
26 |
|
|
|
24 |
|
|
Other long-term liabilities |
|
208 |
|
|
|
213 |
|
|
Total liabilities |
|
1,184 |
|
|
|
1,214 |
|
|
|
|
|
|
|
Commitments and Contingencies (Note 6) |
|
|
|
|
|
|
|
|
|
Redeemable, convertible preferred stock, no par value, $100 per
share liquidation preference |
|
212 |
|
|
|
210 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
Common stock, $0.01 par value |
|
— |
|
|
|
— |
|
|
Additional paid in capital |
|
1,156 |
|
|
|
1,156 |
|
|
Treasury stock, at cost |
|
(11 |
) |
|
|
(11 |
) |
|
Accumulated deficit |
|
(463 |
) |
|
|
(495 |
) |
|
Accumulated other comprehensive income |
|
269 |
|
|
|
281 |
|
|
Total shareholders’ equity |
|
951 |
|
|
|
931 |
|
|
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK
AND EQUITY |
$ |
2,347 |
|
|
$ |
2,355 |
|
The notes accompanying the financial statements contained in the
Company’s first quarter 2024 Form 10-Q are an integral part of
these consolidated financial statements.
|
EASTMAN KODAK COMPANY |
|
CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited) |
| |
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
(in millions) |
|
2024 |
|
|
|
2023 |
|
|
Cash flows from operating activities: |
|
|
|
|
Net earnings |
$ |
32 |
|
|
$ |
33 |
|
|
Adjustments to reconcile to net cash provided by operating
activities: |
|
|
|
|
Depreciation and amortization |
|
7 |
|
|
|
8 |
|
|
Pension and other postretirement income |
|
(36 |
) |
|
|
(36 |
) |
|
Change in fair value of the Preferred Stock and Convertible Notes
embedded derivatives |
|
— |
|
|
|
1 |
|
|
Non-cash changes in workers' compensation and other employee
benefit reserves |
|
(1 |
) |
|
|
1 |
|
|
Stock based compensation |
|
3 |
|
|
|
4 |
|
|
Net gain on sale of assets |
|
(17 |
) |
|
|
— |
|
|
Provision for deferred income taxes |
|
1 |
|
|
|
— |
|
|
Decrease in trade receivables |
|
53 |
|
|
|
12 |
|
|
(Increase) decrease in miscellaneous receivables |
|
(2 |
) |
|
|
7 |
|
|
Increase in inventories |
|
(15 |
) |
|
|
(13 |
) |
|
Increase in trade accounts payable |
|
7 |
|
|
|
3 |
|
|
Decrease in liabilities excluding borrowings and trade
payables |
|
(19 |
) |
|
|
(13 |
) |
|
Other items, net |
|
4 |
|
|
|
7 |
|
|
Total adjustments |
|
(15 |
) |
|
|
(19 |
) |
|
Net cash provided by operating activities |
|
17 |
|
|
|
14 |
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Additions to properties |
|
(10 |
) |
|
|
(5 |
) |
|
Proceeds from sale of assets |
|
17 |
|
|
|
— |
|
|
Net cash provided by (used in) investing activities |
|
7 |
|
|
|
(5 |
) |
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Repayment of Amended and Restated Term Loan Agreement |
|
(17 |
) |
|
|
— |
|
|
Preferred stock cash dividend payments |
|
(1 |
) |
|
|
(1 |
) |
|
Net cash used in financing activities |
|
(18 |
) |
|
|
(1 |
) |
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
(3 |
) |
|
|
— |
|
|
Net increase in cash, cash equivalents and restricted cash |
|
3 |
|
|
|
8 |
|
|
Cash, cash equivalents and restricted cash, beginning of
period |
|
377 |
|
|
|
286 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
380 |
|
|
$ |
294 |
|
The notes accompanying the financial statements contained in the
Company’s first quarter 2024 Form 10-Q are an integral part of
these consolidated financial statements.
Media Contact:Kurt Jaeckel,
Kodak, +1 585-490-8646, kurt.jaeckel@kodak.com
Investor Contact:Anthony
Redding, Kodak, +1 585-724-4053, shareholderservices@kodak.com
Eastman Kodak (NYSE:KODK)
Historical Stock Chart
From Dec 2024 to Jan 2025
Eastman Kodak (NYSE:KODK)
Historical Stock Chart
From Jan 2024 to Jan 2025
