Kodak results 'on track', says Clarke

Jo Francis
Friday, August 7, 2015

Adverse currency fluctuations hit Q2 sales figures at Kodak, but the firm reported significant growth in sales of key graphics arts products and also reduced its losses.

Overall sales were down 13% to $458m (£295m) in the period to 30 June. Kodak said sales were essentially flat, stripping out the currency impact, a one-off intellectual property gain last year, and the effects of the legacy consumer inkjet business.

The net loss was reduced to $23m from $62m.

Turnover at its Print Systems division was down 12% to $282m, while EBITDA was flat at $20m. Kodak said volumes of its Sonora process-free plates increased by 66% and the number of customers grew by 19% to more than 2,700.

In the Enterprise Inkjet Systems division, sales were down 4% to $45m. Kodak said foreign exchange had “a significant impact” on the unit and sales would have been up 4% on a constant currency basis.

EBITDA losses at the inkjet wing were reduced by $7m to $5m. Revenues from Kodak’s Prosper inkjet presses jumped by 23%, and the number of pages produced grew by 11%. It installed five Prosper systems in the quarter, taking the total installs for the first half of the year to 10.

Chief executive Jeff Clarke said he remained confident of meeting the sales target of 25 Prosper systems this year.

“I believe we will meet that goal. We have a pipeline of well over 35 machines and it’s really a matter of executing on those sales in the second half,” he stated.

Clarke said Kodak was also enjoying “a very strong year” with inkjet imprinting systems.

Sales at the Micro 3D Printing & Packaging operation were up 3% to $34m, and it went from breakeven to EBITDA of $4m. The division installed a further 21 Flexcel NX flexo platemaking systems, taking the installed base to 441. Flexcel NX plate volumes grew by 39%.

Software & Solutions posted flat sales of $27m and went from breakeven to operational EBITDA of $1m.

Sales declined by 24% to $66m at the consumer inkjet cartridge and motion film operation. EBITDA there slumped by 46% to $8m.

The Intellectual Property Solutions division, which includes the costs for corporate R&D, had zero sales (2014: $9m) and made an EBITDA loss of $7m. Revenues from the Eastman Business Park were flat at $4m, and it made EBITDA of $2m (2014: zero).

Clarke also said the firm was on track to meet its financial goals for the full year, when it expects to post sales of between $1.8bn-$2bn. “I’m pleased with our Q2 operating performance. Kodak’s performance is non-linear and heavily weighted to the second half of the year,” he added.

He described Sonora, Flexcel, Prosper and the future prospects for Micro 3D printing as "four growth engines".

Operating expenses were cut by 29% to $86m in the quarter, and Kodak said it expected to reduce expenses by more than $100m this year.

Kodak’s share price rose from $13.80 to $15.53 after the results (52 week low: $13.38, high: $25.77).

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