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Eastman Kodak has announced that revenue for its film business grew in the last quarter by 21%, offering a rare glimmer of positive news in a generally shrinking market. The growth though is somewhat tempered by the fact that the company made a loss of $5 million over all in the same period, and that total revenue was down compared to the same quarter last year.
Much of the company’s business is tied up in the industrial sector with specialist printing and graphics applications, and a deal with Chinese counterpart Lucky has seen it off-loading a printing plate factory in China while securing licence fees from Lucky for the use of Kodak technology. The deal also ensures that Lucky will provide services to Kodak so it can fulfil its own customer demand.
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It would be nice to think that the uplift in the film business came from a rush in demand from enthusiast and professional stills photographers through sales to Kodak Alaris, but it is likely that it is the movie industry that is driving that growth. A number of recent big-budget films have been shot using Kodak stock including Once Upon A Time In Hollywood, Ad Astra and half of The Irishman – all of which have a run time of between 2 and 3 and a half hours. That’s a lot of film!
Hopefully this success will spur the company on to produce the 120 version of Ektachrome E100 that we’ve been waiting for since the summer.
For more information see the Kodak website.
Press Release:
Kodak Reports Third-Quarter Revenue of $315 Million and Growth in Key Product Areas
ROCHESTER, N.Y.--Eastman Kodak Company (NYSE: KODK) today reported financial results for the third quarter 2019, including a net loss of $5 million on revenues of $315 million and growth in key print and film product areas.
Highlights include:
GAAP net loss of $5 million for the quarter ended September 30, 2019, compared to GAAP net earnings of $19 million for the quarter ended September 30, 2018.
Revenues for Q3 2019 of $315 million compared to revenues for Q3 2018 of $329 million.
Operational EBITDA for the quarter of $14 million compared to Operational EBITDA of $9 million in the prior-year period.
The Company finalized the establishment of a strategic relationship with Lucky HuaGuang Graphics Co, Ltd in the People’s Republic of China, including the sale of Kodak’s offset printing plates facility in Xiamen, China, a supply agreement to help Kodak fulfill its customer demand, and an IP agreement under which Kodak licenses its plates technology to HuaGuang to expand the market in China. The current quarter Operational EBITDA includes $13 million of license revenue received from this transaction.
Key product lines achieved strong year-over-year growth for the year to date:
Volume for KODAK SONORA Process Free Plates grew by 22 percent.
Annuities revenues for the KODAK PROSPER Inkjet Platform grew by 5 percent.
Revenues for the Company’s film business grew 21 percent year over year for the year to date.
The Company ended the quarter with a cash balance of $225 million.
“The Company will continue to concentrate on delivering industry-leading solutions to customers in our core print and film businesses,” said Jim Continenza, Kodak’s Executive Chairman. “Looking ahead to 2020, we will focus on generating cash by growing profitable revenue, making smart investments and eliminating unnecessary spending.”
For the quarter ended September 30, 2019, revenues decreased by approximately $14 million compared with the same period in 2018. Kodak ended the quarter with a cash balance of $225 million, an increase of $27 million from the June 30, 2019 cash balance of $198 million when adjusted for the assets associated with Kodak’s offset printing plates facility in Xiamen, China being reported as assets held for sale. The current quarter revenues and Operational EBITDA include $13 million of license revenue related to the HuaGuang Graphics Co. Ltd transaction.
“We have strengthened our financial position by eliminating significant interest costs with the transactions completed earlier in the year,” said David Bullwinkle, Kodak’s CFO. “For the year to date we have delivered growth in SONORA Process Free Plates, PROSPER Inkjet annuities and our film business. We plan to build on those successes and drive further cost efficiencies to help achieve our goal of generating cash.”