Kodak Reports Much Improved Earnings for 2016
Eastman Kodak Company yesterday reported financial results for its fourth quarter and its full-year 2016, delivering net earnings of $16 million on revenues of $1.5 billion for the year. Full-year net earnings of $16 million were an improvement of $91 million versus full-year 2015, while 2016 revenues of $1.5 billion were down 10 percent compared to revenues of $1.7 billion for 2015
Other key results include:
- Sales volume for KODAK SONORA Process Free Plates grew by 9 percent for the full year.
- Sales volume for KODAK FLEXCEL NX Plates grew by 16 percent for the full year.
- Operating expenses were $212 million for full year, a $36 million, or 15 percent, improvement compared with 2015.
Revenues in the fourth quarter of 2016 were $404 million, an 8 percent decline from the fourth quarter of 2015. Kodak says the decline was primarily driven by its expected continued decline in legacy consumer inkjet printer cartridge sales and pricing reductions in digital plates within Kodak’s Print Systems Division.
“I’m encouraged by the significant year-over-year improvement in our use of cash,” said David Bullwinkle, Kodak Chief Financial Officer. “The repayment in full of our second-lien debt will reduce the use of cash for interest payments going forward and we expect to generate cash in 2017.”
Kodak’s Print Systems Division (PSD), Kodak’s largest division, had fourth-quarter revenues of $279 million, a 4 percent decline compared with fourth-quarter 2015. Operational EBITDA for the quarter was $38 million, 3 percent better than the same period a year ago.
Print Systems Division had full-year 2016 revenues of $1 billion, an 8 percent decline compared with 2015. Kodak says the decline in year-over-year revenues was due primarily to “worldwide competitive pricing pressures and an unfavorable economic environment in Latin America.” Highlights for the division include 9 percent year-over-year growth in unit sales of KODAK SONORA Process Free Plates and continued success with KODAK LIBRA Plates and KODAK ELECTRA MAX Plates.
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 fourth-quarter revenues of $19 million, down from $22 million versus fourth-quarter 2015.
For the full year 2016, EISD revenues were $76 million, down from $84 million in 2015. Kodak says these results reflect continued reduction in earnings from the KODAK VERSAMARK legacy product.
For the quarter, the loss from discontinued operations, before income taxes, was $1 million, compared with a $7 million loss in the same period a year ago. PROSPER business EBITDA improved by $4 million for the quarter primarily due to an improvement in annuity revenues as well as lower losses on the sale of presses.
For the full year 2016, total PROSPER business revenue grew by 6 percent and the net loss decreased by $11 million due to lower depreciation and amortization expenses, better deal quality on presses and 40 percent revenue growth in annuities. The company continues the sale process for the PROSPER business and continues investing in the development of KODAK ULTRASTREAM, the next-generation inkjet writing system.
Micro 3D Printing and Packaging Division (MPPD) includes KODAK FLEXCEL NX Systems and Plates as well as touch sensor films with copper mesh technology. Revenues for fourth-quarter 2016 were $34 million, up $3 million compared with the same period a year ago. For the full year 2016, revenues were $132 million, compared with $128 million in the prior year, or a 3 percent improvement.
In Micro 3D printing, Kodak says the division “progressed favorably” with several customer technical evaluations, including positive results on environmental reliability testing from both a tier-one global display integrator and a global brand customer.
Software and Solutions Division (SSD) revenues for the fourth quarter were $23 million, a $4 million decline compared with the same period last year. For the full year, SSD revenues were $86 million, down from $112 million last year. Operational EBITDA declined by $5 million from the prior year, primarily driven by delays in government service contracts in Latin America.
Kodak Consumer and Film Division (CFD) revenues for the fourth quarter were $45 million, down from $63 million in fourth-quarter 2015. For the year, revenues for CFD were $216 million, down 18 percent from $265 million, driven primarily by a $32 million expected decline in consumer inkjet revenues.
2017 guidance is for revenues of $1.4 billion to $1.5 billion. This forecast excludes the KODAK PROSPER business, which is reported within discontinued operations, and which Kodak is seeking to sell.
- 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