Kodak Earns $19 Million in 3Q 2014

Driven by strong sales increases for key strategic technology products and intellectual property licensing payments, Eastman Kodak Company reported net earnings of $19 million for the third quarter of 2014. Net earnings in the third quarter of 2013 were $1.99 billion as a result of a $2.21 billion reorganization item gain in that quarter. Operational EBITDA increased to $89 million in the third quarter from $42 million in the previous-year quarter.
 
Sales in the quarter were $564 million, up $1 million from the previous-year quarter, despite declines totaling $43 million in the Consumer Inkjet and Entertainment Imaging films mature businesses.
 
“Our first profitable quarter since our emergence is a milestone,” said Jeff Clarke, CEO. “Strategic technology product areas, especially in our graphics business, are showing momentum, and we continue to invest significantly in our technology and to build our installed base.
 
“However, Kodak continues to operate too closely to our breakeven point. While our costs are down, we will continue to reengineer processes, streamline our organization, and improve execution and accountability to accelerate and broaden our momentum.
 
“Our digital plates and CTP platesetter product lines delivered solid growth, with continuing robust growth in sales of KODAK SONORA Process Free Plates,” Clarke added. “Customers worldwide recognize the cost, workflow and environmental advantages offered by this product line, which eliminates use of water, chemistry and energy associated with processing of plates without sacrificing quality. We also showed strong growth for our unique packaging solution, the KODAK FLEXCEL NX System. Our KODAK PROSPER Systems had growth of more than 50% in pages printed.”
 
“Kodak is on track to meet guidance for 2014 revenue of $2.1 to $2.3 billion and operational EBITDA of $145 to $165 million. Liquidity remains strong, with a cash balance of $744 million,” said CFO John McMullen.
 
Digital Printing and Enterprise (DP&E): DP&E had sales of $164 million in the third quarter of 2014, a decline of 17% from the $198 million of the previous-year quarter, driven primarily by the decline in the Consumer Inkjet business. Sales of KODAK FLEXCEL NX Products for package printing continued to enjoy strong growth in the quarter, on track with expectations, with revenue from FLEXCEL NX Plates up by 34%.
 
Operational EBITDA for the DP&E Segment declined from $6 million in the 2013 third quarter to zero in the 2014 quarter, largely as a result of the decrease in consumer inkjet ink sales. Gross profit percentage remained essentially flat, with positive impacts from inventory revaluation as a result of fresh start accounting being offset by consumer inkjet ink sales constituting a lower percentage of the segment’s gross profit dollars, as well as lower sales of consumables in the digital printing business.