First profit for 'new' Kodak

By Jo Francis, Wednesday 05 November 2014

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“Solid growth” in its printing plates and CTP business has helped propel Kodak to its first profit since emerging from Chapter 11 bankruptcy protection, although the results were also boosted by a one-off gain from its intellectual property (IP).

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Sonora plates: "robust growth" for process-free product line

Sales in the three months to 30 September nudged up by $1m (£629k) to $564m compared with the previous year.

The group posted net earnings of $19m for the period. In 2013 it was in the red in Q3 prior to a $2.21bn exceptional gain due to its reorganisation.

Chief executive Jeff Clarke described the profit as “a milestone”, while at the same time sounding a cautionary note and signalling that further restructuring lay ahead for the business.

He said: “However, Kodak continues to operate too closely to our break-even point. While our costs are down, we will continue to re-engineer processes, streamline our organisation, and improve execution and accountability to accelerate and broaden our momentum.”

Sales in its Graphics, Entertainment & Commercial Films division jumped 13% to $400m, despite “significant” decline in motion picture film sales.

The figure was also boosted by one-off IP licensing revenues of $51m.

Kodak highlighted growth in sales of platesetters and its Sonora process-free plates, although price competition remains stiff.

“Unit volume growth more than offset price erosion and resulted in a modest increase in revenue for the pre-press solutions business,” the firm stated.

Gross margins in the business unit increased from 12% to 26%, and operational EBITDA more than doubled, from $36m to $89m, boosted by the IP revenue gain, lower material and manufacturing costs, and “fresh start accounting” that has improved comparisons.

Results in the Digital Printing & Enterprise division were less positive. Sales were hit by lower sales of Kodak’s consumer inkjet products, and slumped by 17% to $164m.

While the division maintained gross margins at 24%, its operational EBITDA figure was zero (2013: $6m).

The performance of graphic arts products in the unit was more positive – sales of Flexcel NX to packaging printers rose by 34%, and Kodak said pages printed using its Prosper inkjet systems had jumped by more than 50% – although sales of consumables in its digital printing business overall were lower.

Chief financial officer John McMullen said Kodak remained on track to meet forecasts that it will post operational EBITDA of $145m-$165m on sales of between $2.1bn-$2.3bn for the full year.

Kodak emerged from Chapter 11 in September 2013. Clarke joined seven months ago.

 

 

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