Kodak narrows losses but misses forecast in 2013 results
Monday, March 24, 2014
Kodak has continued to make progress in its first set of results since exiting Chapter 11 in September 2013, with improved margins and reduced losses offset by the fact the company is performing below target.
Kodak recorded a significant improvement in its gross profit margin and operational EBITDA for the 12 months to 31 December 2013 against a backdrop of lower revenues.
Annual sales dropped 14% from $2.7bn to $2.35bn, some $150m below the revenue projection set in Kodak's business emergence plan as a results of the continued decline in sales of motion picture film and consumer inkjet printer ink.
Kodak recorded a gross profit of $486m (2012: $293m) at a margin of 20.7% - almost double the 10.7% margin it achieved in 2012. Operational EBITDA for the year came in a $78m, up from a $215m loss in 2012 but well below the $143m target.
Kodak chief financial officer Becky Roof said: "We had significant year-over-year improvement in our operating performance, but our sales fell short of our plan.
"The decline was primarily due to the accelerated decline in our motion picture film business, the decline in revenues in our consumer inkjet business with the end of printer sales, and the loss of revenue while we were in reorganization."
In Graphic, Entertainment & Commercial Films, Kodak posted sales of $1.5bn (2012: $1.7bn) and an operational EBITDA of $109m (2012: $33m loss), while in Digital Printing & Enterprise it recorded sales of $803m (2012: $939m) and an operational EBITDA loss of $31m (2012: $182m loss).
Kodak has lowered its 2014 revenue expectation from $2.6bn (as stated in the emergence plan) to $2.1-2.3bn and its operational EBITDA expectation from $199m to $145-165m.
Kodak's new chief executive officer Jeff Clarke, said: "I am excited about the strong increases we are seeing in revenues from our emerging technology businesses that will create the foundation for Kodak’s future growth.
"We expect to mitigate the earnings declines in some of our mature businesses with improved performance from our strategic technology businesses. I also believe there are significant opportunities to improve the productivity and effectiveness of our sales, manufacturing and administrative functions."