Kodak Posts 3Q 2016 Profit of $12 Million

Eastman Kodak Company reported financial results for the third quarter, ended Sept. 30, 2016, delivering continued profitability on a GAAP basis driven by improved operations.
 
Highlights include:
•  GAAP net earnings were $12 million for the quarter ended Sept. 30, 2016, compared with a net 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 over the prior year.
•  The company ended the quarter with a cash balance of $489 million, a decline of $24 million for the quarter. Adjusted for cash of $18 million used to prepay debt, the cash balance declined by $6 million in the quarter. In the same period a year ago, the cash balance declined by $55 million.
•  Revenues for the third quarter were $380 million, compared with revenues of $425 million in the same period last year, a decline of $45 million, or 11%.
•  Operating expenses (SG&A and R&D expenses) on a GAAP basis were $54 million for the third quarter, a 14% reduction compared to the prior-year third quarter.
•  Operational EBITDA for the third quarter of 2016 was $35 million, down $12 million compared to the third quarter of 2015. Operational EBITDA declined $9 million for the quarter on a constant currency basis.
•  The company reiterated 2016 revenues guidance of $1.5 billion to $1.7 billion and Operational EBITDA guidance of $135 million to $150 million.
•  The company remains committed to completing the sale of the KODAK PROSPER business, which is presented within discontinued operations. Kodak continues to make significant investments in the business, which grew its year-over-year annuity revenue by 41% in the third quarter.
 
“Kodak posted a second consecutive profitable quarter and we’re on track to meet our full-year guidance,” said Jeff Clarke, Kodak CEO. “We have an increasing proportion of our revenues coming from growth and other strategic businesses which reflects our improved quality of earnings.”
 
Net earnings improved by $33 million year over year to $12 million for the quarter ended Sept. 30, 2016. This was due to improved operations, including $11 million from lower depreciation and amortization expense, as well as $11 million from increased pension income. Excluding the expected decline in Operational EBITDA before corporate costs from the consumer inkjet business, Operational EBITDA for the quarter decreased by $3 million, or 8%, year over year on a constant currency basis, driven by the divisional performance discussed below.
 
Revenues in the third quarter of 2016 were $380 million, an 11% decline from the third quarter of 2015. The decrease was primarily driven by declines in the Print Systems Division, the Kodak Technology Solutions business within the Software and Solutions Division and the expected continuing decline in legacy consumer inkjet printer cartridge sales.
 
“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 CFO. “Generating cash and strengthening our financial position will enable us to invest in future growth opportunities.”