Revenues in the first quarter of 2017 were $357 million, a 5% decline from the first quarter of 2016 or 4% on a constant currency basis. The decrease was primarily driven by pricing pressures in the pre-press plates business and the expected continued decline in legacy consumer inkjet printer cartridge sales. Partially offsetting these impacts was growth in Prosper annuities, Sonora Plates and Flexcel NX Plates.
GAAP net earnings were $7 million for the quarter ended March 31, 2017, an improvement of $22 million compared with the first quarter 2016. The company delivered first quarter operational EBITDA of $8 million, consistent with the company’s expectations but down $11 million compared with the first quarter of 2016, or $9 million on a constant currency basis.
The company adjusted 2017 guidance to reflect the retention of Prosper as well as supplier price increases in aluminum impacting Kodak’s largest division. The company now expects revenues of $1.5 billion to $1.6 billion and operational EBITDA of $105 million to $120 million. Net earnings for 2016 was $16 million. The adjusted 2017 guidance reflects a 40 to 60% improvement over 2016 comparable operational EBITDA of $75 million.
“I’m pleased with our continued profitability and by the strong performance of our growth engines— Sonora Plates, Flexcel NX Packaging and the Prosper Inkjet business,” said Jeff Clarke, Kodak CEO “We expect continued strong execution in these growth businesses, which will continue to increase our quality of earnings.”
The company ended the quarter with a cash balance of $378 million, down $56 million from the Dec. 31, 2016 balance of $434 million.
“The increased use of cash in the first quarter compared with the prior year is consistent with our expectations,” said David Bullwinkle, Kodak CFO “Our higher use of cash in Q1 2017 primarily reflects an increased seasonal build of inventory, year-over-year reduction in operational EBITDA and non-recurring items last year. In total for the remaining nine months of 2017, we expect to generate cash.”