Eastman Kodak, which filed for Chapter 11 bankruptcy protection in January, reported first-quarter revenue of $965 million, a 27 percent decline versus first-quarter 2011, and a first-quarter loss of $366 million, compared with a loss of $246 for first-quarter 2011.
Kodak says the declines reflects its exiting of the digital-camera market, continued decline of traditional businesses, and a $61 million reduction in revenue associated with a tax-refund sharing agreement with intellectual-property licensees. It also says the decline is a result of a refund of Korean withholding taxes recorded in the quarter as a $122 million income tax benefit.
Consumer Ink-Jet Consumables Revenue Improving
Kodak’s Consumer Segment – which includes consumer and office ink-jet printers – reported a smaller loss for the first quarter versus first-quarter 2011 – a $164 million loss for first-quarter 2012 versus a $187 million loss for first-quarter 2011. Excluding the impact of the Korean tax refund, Kodak says the Consumer Segment generated an $84 million year-over-year improvement in profitability. Factors driving growth better cost controls, solid revenue growth in its retail systems solutions business driven by higher demand for consumables, and a 34 percent increase in consumer ink-jet ink revenues.
For its Commercial Segment, which consists of commercial printing systems, Kodak reported a loss of $64 million. It says an improvement in operating expenses was partially offset by continued decline in the traditional business, price erosion on plates due to industry overcapacity, and the slowdown in industry activity prior to the start of the drupa trade show for the commercial-printing market.
At the drupa trade show, opening next week in Dusseldorf, Germany, Kodak will show new products such as the 1,000 fpm Prosper 6000XL Press, 3,000 fpm Prosper S30 Imprinting System, Flexcel Direct Platemaking System, and Sonora XP Process-Free Plates.
Kodak stresses that it’s focusing on its most profitable businesses, which includes exiting the digital-camera market, and has also focused on cost control – it says it’s reduced SG&A (Selling, General and Administrative) expenses by $84 million compared to first-quarter 2011. It’s also consolidated two business segments – Commercial and Consumer – and says its cash liquidity improved, as it ended first-quarter 2012 with a cash balance of $1.4 billion, up $500 million versus first-quarter 2011, and a result of $600 million in new financing, utilization of the Chapter 11 process, and reduced year-over-year cash usage for continuing operations.
“Kodak is focusing on its opportunities, reducing costs, and fine-tuning the balance between liquidity and growth to enable the enterprise to emerge from its Chapter 11 restructuring in 2013 as a leaner, stronger, and sustainable business,” said Kodak Chairman and CEO Antonio M. Perez.
Kodak noted that as of March 31, 2012, it was in compliance with all covenants under its lender agreements.
Kodak Chairman and CEO Perez also commented, “During the quarter, we took decisive steps – including filing for Chapter 11 and exiting unprofitable businesses – to accelerate our transformation and emerge in 2013 as a profitable, sustainable business. As a result, during the quarter we saw improved profitability of our Commercial and Consumer business segments. We will continue to exploit our competitive advantage at the intersection of materials science, digital imaging, and deposition technologies. Our commercial and consumer products and services continue to offer unique technologies and market-leading value propositions.”