Kodak Reports Loss for Quarter, but Says Financial Picture Improving
May 12, 2015 – Eastman Kodak reported a net loss of $54 million for first-quarter 2015, compared to a lost of $34 million for first-quarter 2014. The loss included $19 million in income from discontinued operations related to Kodak Alaris.
First-quarter sales totaled $427 million, a decline of $61 million from first-quarter in 2014, which Kodak says was due to the negative impact of foreign-currency exchange rates and expected declines in revenue from legacy products.
During the first quarter, it says these key product lines achieved strong sales growth:
- Volume for KODAK SONORA Process Free Plates increased by 94 percent.
- Volume for KODAK FLEXCEL NX Plates grew by 27 percent.
- Revenues from the KODAK PROSPER Portfolio increased by 23 percent.
The firm also says it achieved a $35 million or 29 percent improvement in operating expenses in the first quarter, and is on track to achieve a more than $100 million improvement in 2015. It also says its loss from continuing operations before income taxes improved by $10 million.
Kodak notes that the negative foreign-currency exchange=rate impact and decline in legacy products more than offset significant increases in sales of key strategic products, including KODAK SONORA Process Free Plates, KODAK FLEXCEL NX Plates, and the KODAK PROSPER Portfolio.
“I am pleased with our first-quarter performance and we are clearly seeing the benefits of our new divisional structure,” commented Jeff Clarke, Kodak Chief Executive Officer. “Our continued progress in improving productivity and re-engineering our cost structure, with $35 million in year-over-year operating expense savings in the first quarter, is reflected in the improved performance. Our transition to sustained growth and profitability will become more evident in the second half of the year as we continue to drive revenue growth in key strategic products and leverage our improved operating performance.”
Print Systems Division (PSD), Kodak’s largest division, had first quarter 2015 sales of $254 million, a decline of $34 million, or 12 percent, from $288 million in the prior-year quarter, driven by the impact of currency exchange rates and competitive industry pricing. For the fourth straight quarter, unit volume of digital plates increased, led by strong continuing demand for KODAK SONORA Process Free Plates. At the end of the first quarter, the number of customers using SONORA Plates reached 2,274, up 12 percent from year-end 2014.
Enterprise Inkjet Systems Division (EISD) had sales of $39 million for first-quarter 2015, a decrease of $9 million or 19 percent from the first quarter of 2014. Kodak attributed the decline to to the expected decline in revenues from legacy inkjet-printing systems and the negative impact of foreign-currency exchange rates in the first quarter of last year.
Five PROSPER Press Systems were added to Kodak’s installed base during the first quarter, and agreements have been reached with customers for the installation of five additional press systems. In the first quarter, total pages produced on PROSPER Presses increased by 46 percent.
Micro 3D Printing and Packaging Division (MPPD) had revenue of $31 million in the first quarter of 2015, compared to $29 million in the 2014 first quarter, an increase of $2 million, or 7 percent, driven by a 27 percent increase in unit volume for KODAK FLEXCEL NX Plates, which was partially offset by the negative impact of currency exchange rates.
Commercial production of silver-mesh film for touch screen sensors is expected to begin during the second quarter at the Eastman Business Park manufacturing facility. Kodak is building a similar facility to produce the silver-based sensor film at its plant in Xiamen, China, where it expects to begin production by late in the year. Kodak also recently announced it will independently pursue development and production of copper mesh film for touch sensors.
Software & Solutions Division (SSD) had sales of $28 million in the first quarter of 2015, compared to $24 million in 2014, an increase of $4 million, or 17 percent, despite the negative impact from currency-exchange rates. Kodak attributed the increase largely to increased government contracts in the Kodak Services for Business unit.
Kodak’s Consumer and Film Division (CFD) had sales of $72 million in the first quarter of 2015, compared to $86 million in the prior-year quarter, a decline of $14 million or 16 percent. The decline was primarily due to the expected volume declines for consumer-inkjet printer cartridges and motion-picture film.
CFD had Operational EBITDA of $18 million for the first quarter, an improvement of $8 million from $10 million in the 2014 first quarter. The improvement was primarily due to improved inventory management and increased production efficiency for Entertainment & Commercial Films.
Kodak’s two other operating divisions are Eastman Business Park Division (EBPD) and its Intellectual Property Solutions Division (IPSD). EBPD had revenue of $3 million in the quarter and IPSD had no revenue.
“Continuing robust growth in the customer base for our key PROSPER, FLEXCEL, and SONORA product lines provides a foundation for Kodak’s future success,” Kodak CEO Clarke said. “Our momentum is clear and we are on a path to drive future growth and sustained profitability.”
- March 2015: KODAK REPORTS LOSS FOR ITS FOURTH QUARTER, REVENUE SLIDES
- December 2014: KODAK LOOKS TO BECOME FASTER, MORE COMPETITIVE WITH REORGANIZATION
- November 2014: IN LANDMARK THIRD QUARTER, KODAK RETURNS TO PROFITABILITY
- August 2014: IMPROVED EARNINGS FOR KODAK IN SECOND QUARTER, SMALLER LOSS
- May 2014: KODAK REPORTS LOSS FOR FIRST QUARTER, SALES DOWN
- March 2014: IMPROVING FINANCIAL PICTURE AT KODAK
- November 2013: KODAK REPORTS SMALLER LOSS FOR THIRD QUARTER