Kodak Posts Third-Quarter Earnings of $12 Million
On November 9th, Eastman Kodak reported upbeat financial results for its third-quarter, with earnings of $12 million, compared with a loss of $21 million for the same period a year ago. Income from continuing operations was $22 million for the quarter, a $28-million improvement versus third-quarter 2015.
Revenues for the third quarter were $380 million, compared with revenues of $425 million for the same quarter last year, a decline of $45 million, or 11 percent.
The company restated its 2016 revenues guidance of $1.5 billion to $1.7 billion.
Kodak states that it’s committed to completing the sale of its PROSPER business, and says it continues to make significant investments in the business, which grew its year-over-year annuity revenue by 41 percent in the third quarter.
“Kodak posted a second consecutive profitable quarter and we’re on track to meet our full-year guidance,” commented Kodak CEO Jeff Clarke. “We have an increasing proportion of our revenues coming from growth and other strategic businesses which reflects our improved quality of earnings.”
Kodak says its improved earnings for the third quarter were due to improved operations, including $11 million from lower depreciation and amortization expenses, as well as $11 million from increased pension income.
As noted, revenues in the third quarter of 2016 were $380 million, an 11 percent decline from the third quarter of 2015. Kodak says the decline was primarily driven by declines in the Print Systems Division, the Kodak Technology Solutions business within its Software and Solutions Division, and the expected continuing decline in legacy consumer-inkjet printer cartridge sales.
The company’s cash balance was $489 million at the end of the quarter. For the nine-month period that ended on September 30, 2016, the company reduced cash usage by 70 percent, versus $191 million in 2015 to $57 million this year, which included $20 million in debt payments.
“I’m especially pleased with the improvement of our cash flow performance this year and the progress we’ve made toward our full-year goal of cash generation,” said David Bullwinkle, Kodak Chief Financial Officer. “Generating cash and strengthening our financial position will enable us to invest in future growth opportunities.”
Print Systems Division
Print Systems Division (PSD) Kodak’s largest division, had third-quarter revenues of $250 million, a 10-percent decline compared to the third quarter of 2015, primarily due to “competitive pricing pressures and unit sales declines in Prepress.” Operational EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter was $27 million, down $2 million, or 7 percent, versus the same period a year ago.
KODAK SONORA Plate volume increased by 9 percent for the third quarter. Excluding the Latin American region, which Kodak says was affected by trade and economic factors, SONORA Plate volume was up 16 percent year-over-year. In addition to SONORA growth, the company saw continued success with two new products, KODAK LIBRA Plates and KODAK ELECTRA MAX Plates, which expand the application set for Kodak plates.
Enterprise Inkjet Systems Division
Enterprise Inkjet Systems Division (EISD) (which now comprises the KODAK VERSAMARK business due to the classification of the PROSPER business as a discontinued operation) had third-quarter revenues of $18 million, which was flat compared with third-quarter 2015.
For the quarter, PROSPER business EBITDA declined by $6 million, primarily due to “costs related to under-performing presses and losses related to the placement of four PROSPER presses in the quarter.” Annuity revenues, which Kodak says are the key measure of success in this business, improved year over year by 41 Enterprise Inkjet Systems Division. The sale process for the PROSPER business continues, and Kodak expects to make an announcement by the end of 2016.
Micro 3D Printing and Packaging Division
Micro 3D Printing and Packaging Division (MPPD) had “solid results for the quarter,” driven by continued strong performance of the KODAK FLEXCEL NX Packaging business. Revenues for the third quarter increased to $34 million from $32 million versus the same period a year ago, which was a 6-percent improvement.
Revenues for the FLEXCEL NX Packaging business increased by 17 percent, and the company placed 10 Computer-to-Plate units in the quarter. FLEXCEL NX Plate volume grew by 13 percent year-over-year, “reflecting consistent growth in all regions.”
In Micro 3D printing, Kodak continues to focus on advancing its copper-metal mesh technology, which it says will broaden its markets into tablet and notebook computers. In the third quarter, the company recognized revenue from an Asian OEM customer.