Kodak Reports Q3 2018 Net Earnings of $19 Million

Eastman Kodak Company reported financial results for the third quarter 2018, delivering net earnings of $19 million on revenues of $366 million and continued growth in its KODAK SONORA Process-Free Plates, KODAK FLEXCEL NX Packaging and KODAK PROSPER Inkjet businesses.
 
Revenues for the quarter ending September 2018 were $366 million, a decline of $13 million compared with the third quarter of 2017. The company reported third-quarter GAAP net earnings of $19 million and operational EBITDA of $20 million, an increase of $7 million compared with the third quarter of 2017.
 
The increase was driven by continued strong performance in key product lines, cost reductions in Kodak’s Advanced Materials and 3D Printing Technology Division and changes in employee-related reserves, offset by the $6 million year-over-year adverse impacts of the cost of aluminum.
 
“I’m pleased with the continued strong performance of our growth engines, including SONORA Plates, FLEXCEL NX Plates and PROSPER annuities, which contribute an increasing share of our revenues,” said Jeff Clarke, Kodak CEO. “For the fourth quarter of 2018, the company will focus on the expected sale of our Flexographic Packaging Division and improving productivity by completing cost actions announced earlier this year.”
 
The company revised 2018 guidance for revenues to $1.475 billion to $1.525 billion and reiterated operational EBITDA guidance of $55 million to $60 million.
 
Print Systems Division (PSD), Kodak’s largest division, had Q3 revenues of $217 million, a decrease of $15 million compared with Q3 2017. Operational EBITDA for the quarter was $12 million, flat when compared with the same period a year ago, or an increase of $1 million on a constant currency basis.
 
PSD’s environmentally-advantaged KODAK SONORA Process-Free Plates had continued strong performance for the quarter, delivering 17% year-over-year growth in unit sales. SONORA Plates accounted for 24% of the division’s total plate unit sales in the third quarter.
 
Third-quarter unit sales of SONORA X Plates increased 93% compared with Q2, and over 600 customers have been converted to continuous supply. SONORA X is expected to be fully commercialized by the end of the year.
 
Enterprise Inkjet Systems Division (EISD), including the KODAK PROSPER and KODAK VERSAMARK businesses and the investment in ULTRASTREAM inkjet technology, had third-quarter revenues of $39 million, an increase of $6 million compared with the same period in 2017. The increase was a result of higher volume in PROSPER equipment and consumables, partially offset by the expected volume decline in the division’s VERSAMARK Printing System line. Operational EBITDA was $2 million, an increase of $2 million compared with the same period in the prior year.
 
For the third quarter of 2018, the PROSPER business continued to deliver strong performance with year-over-year annuity growth of 8%.
 
The company continues to invest in the development of KODAK ULTRASTREAM, the next-generation inkjet writing system, which is on track for commercialization in 2019.
 
Flexographic Packaging Division (FPD) includes KODAK FLEXCEL NX Systems and Plates as well as other packaging products, such as analog flexographic plates and letterpress plates, proofing products and services. FPD’s performance for the quarter was driven by continued growth in KODAK FLEXCEL NX Plates. Revenues for Q3 were $36 million, up $2 million compared with the same period a year ago, or $4 million on a constant currency basis. Operational EBITDA for Q3 was $8 million, an increase of $1 million compared with the third quarter of 2017, or $3 million on a constant currency basis.
 
Advanced Materials and 3D Print Technology Division (AM3D) had revenues of $1 million for the quarter and Operational EBITDA of negative $2 million, an improvement of $4 million compared with the same period the prior year. The division continues to focus on investments in light-blocking particles and printed electronics.