Kodak Reports $7 Million in Net Earnings, ‘Continued Growth in Key Product Areas’
Eastman Kodak – which last month said it’ll be hanging on to its PROSPER commercial inkjet-printer business – reported financial results for the first quarter 2017, delivering net earnings of $7 million, with continued strong growth for its KODAK SONORA Process Free Plates, KODAK FLEXCEL NX Packaging, and KODAK PROSPER inkjet businesses.
The $7 million in net earnings was an improvement of $22 million compared with the same quarter a year ago. Revenues were $357 million, compared with revenues of $377 million for the first quarter of 2016, down $20 million or 5 percent.
Kodak says these product lines achieved strong growth in the quarter:
- Annuities revenue for KODAK PROSPER Inkjet grew by 26 percent.
- Volume for KODAK SONORA Process Free Plates grew by 24 percent.
- Volume for KODAK FLEXCEL NX Plates grew by 22 percent.
New 3D Printing Group
Kodak also announced a change to its reporting structure, moving its Micro 3D Printing business within the Micro 3D Printing and Packaging Division (MPPD) into a new division called Advanced Materials and 3D Printing Technology (AM3D), which also includes the operations of the prior Intellectual Property Solutions Division, and creating the standalone Flexographic Packaging Division (FPD), formerly part of MPPD.
Kodak also adjusted its 2017 guidance to reflect the retention of PROSPER group, as well as supplier price increases in aluminum affecting Kodak’s largest division. The company now expects revenues of $1.5 billion to $1.6 billion and Operational EBITDA of $105 million to $120 million. Net earnings for 2016 was $16 million. The adjusted 2017 guidance reflects a 40 to 60 percent improvement over 2016 comparable Operational EBITDA of $75 million.
Kodak CEO Jeff Clarke commented on the first-quarter results: “I’m pleased with our continued profitability and by the strong performance of our growth engines— SONORA Plates, FLEXCEL NX Packaging and the PROSPER Inkjet business. We expect continued strong execution in these growth businesses, which will continue to increase our quality of earnings.”
Slight Decline in Revenues Due to Pre-Press Plate Business Price Pressure, Exit from Consumer Inkjet
Kodak says the 5-percent decline in revenues for the first quarter was primarily due by pricing pressures in the pre-press plates business and the expected continued decline in legacy consumer-inkjet printer-cartridge sales.
It says that partially offsetting this was growth in PROSPER annuities, SONORA Plates, and FLEXCEL NX Plates.
- Print Systems Division (PSD), Kodak’s largest division, had first-quarter revenues of $213 million, an 8-percent decline compared to second-quarter 2016. Operational EBITDA for the quarter was $13 million, a 28 percent decline compared with the same period a year ago. The decline was due primarily to pricing pressures in digital plates.
- For the quarter, the KODAK SONORA Plates line delivered “strong performance,” with volume increasing by 24 percent compared with the same period a year ago. Total year-over-year plate volume remained stable, due to SONORA Plates growth and the success of new products, including SONORA UV Process Free Plates.
- Enterprise Inkjet Systems Division (EISD), including the KODAK VERSAMARK and KODAK PROSPER businesses, had first-quarter revenues of $37 million, compared with $34 million in the same period in 2016, an increase of 9 percent. Operational EBITDA was negative $1 million, an improvement of $4 million compared with first-quarter 2016.
- For the first quarter of 2017, Kodak says its PROSPER business continued to deliver improved performance with year-over-year annuity growth of 26 percent.
In April 2017, Kodak also announced it will continue to invest in its next-generation KODAK ULTRASTREAM inkjet writing technology, and expects products built with ULTRASTREAM technology to go to market in 2019.
Kodak’s newly established Flexographic Packaging Division (FPD) includes KODAK FLEXCEL NX Systems and Plates as well as other packaging businesses, which include SR and letterpress plates, proofing products, and services. FPD had “strong performance for the quarter,” driven by consistent growth in KODAK FLEXCEL NX Plates. Revenues for the first quarter were $33 million, an increase of $4 million or 14 percent over the same period a year ago. Operational EBITDA was $6 million, an increase of $2 million compared with the first quarter of 2016.
In April 2017, Kodak commenced the $15 million expansion of its Weatherford, Oklahoma, manufacturing facility to accommodate the production of KODAK FLEXCEL NX Plates. For the quarter, FLEXCEL NX revenues were $24 million, a 19-percent improvement over the prior-year period and FLEXCEL NX Plate volume continued to deliver strong growth in all regions, increasing by 22 percent year over year.
Software and Solutions Division (SSD) delivered Q1 revenues of $21 million, down from $22 million in the same period last year. Operational EBITDA was $1 million, down $1 million compared with the prior-year period.
Consumer and Film Division (CFD) revenues for the first-quarter were $49 million, down 14 percent from $57 million in first-quarter 2016. Operational EBITDA declined from $7 million in the same period last year to negative $3 million,, primarily driven by a $5 million revenue decline in consumer inkjet. Additionally, the prior year included $3 million related to the fulfillment of motion picture film commitments.
The newly established Advanced Materials and 3D Printing Technology Division (AM3D) represents Kodak’s research lab and associated new business opportunities including touch-sensor films with copper mesh technology and intellectual property licensing not directly related to other business divisions. AM3D had Operational EBITDA of negative $8 million, compared to negative $7 million for first-quarter 2016. The division continues to expand its efforts in developing new materials for 3D printing and light-blocking materials.
In Micro 3D printing, the division continued to progress favorably with several customer technical evaluations of touch sensors for industrial designs.
Eastman Business Park Division (EBP) had revenues of $4 million, which was flat compared with revenues for the first quarter of 2016. Operational EBITDA was flat compared with the same period a year ago. During the quarter, the division signed lease agreements with the Park’s first photonics company tenant and an energy-storage company.
- April 2017: Kodak Won’t Be Selling its PROSPER Commercial Inkjet-Printing Businesses
- March 2017: Kodak Reports Much Improved Earnings for 2016
- March 2017: Xerox May be Purchasing Kodak’s Commercial Inkjet Business
- January 2017: Kodak Expected to Take $17 Million Loss for Sale of Prosper Commercial-Inkjet-Printing Business
- November 2016: Kodak Posts Third-Quarter Earnings of $12 Million
- August 2016: Kodak Returns to Profitability in Second Quarter
- May 2016: Kodak Reports Smaller Loss for First Quarter, But Revenues Lower Due to Decline in Legacy Consumer Inkjet
- March 2016: On Heels of $75 Million Loss, Kodak Seeking to Sell PROSPER Enterprise Inkjet Business
- October 2014: Loss for Kodak’s Third Quarter, but Says ‘On Track’ to Meet 2015 Earnings Goals