Kodak Reports First-Quarter 2024 Financial Results
First-quarter 2024 highlights include:
- Consolidated revenues of
$249 million , compared with$278 million for Q1 2023, a decrease of$29 million or 10 percent - Gross profit of
$49 million , compared with$50 million for Q1 2023, a decrease of$1 million or 2 percent - Gross profit percentage of 20 percent, compared with 18 percent for Q1 2023, an increase of 2 percentage points
- GAAP net income of
$32 million , compared with net income of$33 million for Q1 2023, a decrease of$1 million or 3 percent - Operational EBITDA of
$4 million , compared with$9 million for Q1 2023, a decrease of$5 million or 56 percent - A quarter-end cash balance of
$262 million , compared with$255 million onDecember 31, 2023 , an increase of$7 million ; cash flow from operations improved by$3 million from the prior period
“For the first quarter,
For the quarter ended
GAAP net income was
“Kodak continued to deliver strong cash performance in the first quarter, increasing our cash balance from
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Revenue and Operational EBITDA by Reportable Segment Q1 2024 vs. Q1 2023
($ millions) | |||||||||||||||
Q1 2024 Actuals | Advanced Materials & Chemicals | Brand | Total | ||||||||||||
Revenue | $ | 182 | $ | 59 | $ | 4 | $ | 245 | |||||||
Operational EBITDA * | $ | - | $ | 1 | $ | 3 | $ | 4 | |||||||
Q1 2023 Actuals | Advanced Materials & Chemicals | Brand | Total | ||||||||||||
Revenue | $ | 209 | $ | 61 | $ | 4 | $ | 274 | |||||||
Operational EBITDA * | $ | 6 | $ | - | $ | 3 | $ | 9 | |||||||
Q1 2024 vs. Q1 2023 Actuals B/(W) | Advanced Materials & Chemicals | Brand | Total | ||||||||||||
Revenue | $ | (27 | ) | $ | (2 | ) | $ | - | $ | (29 | ) | ||||
Operational EBITDA * | $ | (6 | ) | $ | 1 | $ | - | $ | (5 | ) | |||||
* Total Operational EBITDA is a non-GAAP financial measure. The reconciliation between GAAP and non-GAAP measures is provided in Appendix A of this press release. |
Foreign currency had no impact on revenues or Operational EBITDA for the three months ended
About
Cautionary Statement Regarding Forward-Looking Statements
This press release includes “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning Kodak’s plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, liquidity, investments, financing needs and business trends and other information that is not historical information. When used in this press release, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “predicts,” “forecasts,” “strategy,” “continues,” “goals,” “targets” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and similar words and expressions, as well as statements that do not relate strictly to historical or current facts, are intended to identify forward-looking statements. All forward-looking statements, including management’s examination of historical operating trends and data, are based upon Kodak’s current expectations and assumptions. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or those expressed in or implied by such forward-looking statements.
Important factors that could cause actual events or results to differ materially from the forward-looking statements include, among others, the risks and uncertainties described in more detail in Kodak’s Annual Report on Form 10-K for the year ended
Future events and other factors may cause Kodak’s actual results to differ materially from the forward-looking statements. All forward-looking statements attributable to
APPENDICES
In this first quarter 2024 financial results news release, reference is made to the following non-GAAP financial measure of Operational EBITDA.
Kodak’s segment measure of profit and loss is an adjusted earnings before interest, taxes, depreciation and amortization (“Operational EBITDA”). Operational EBITDA represents the earnings from continuing operations excluding the provision for income taxes; non-service cost components of pension and OPEB income; depreciation and amortization expense; restructuring costs and other; stock-based compensation expense; consulting and other costs; other operating (income) expense; interest expense; and other income, net.
The following table reconciles the most directly comparable GAAP measure of Net Income to Operational EBITDA for the three months ended
(in millions) | ||||||||||||||
Q1 2024 | Q1 2023 | $ Change | % Decline | |||||||||||
Net Income | $ | 32 | $ | 33 | $ | (1 | ) | -3 | % | |||||
All other | (1 | ) | - | (1 | ) | |||||||||
Depreciation and amortization | 7 | 8 | (1 | ) | ||||||||||
Restructuring costs and other (2) | 5 | 1 | 4 | |||||||||||
Stock based compensation | 3 | 4 | (1 | ) | ||||||||||
Consulting and other costs (1) | - | (10 | ) | 10 | ||||||||||
Other operating (income) expense, net (2) | (17 | ) | 1 | (18 | ) | |||||||||
Interest expense (2) | 15 | 11 | 4 | |||||||||||
Pension income excluding service cost component (2) | (41 | ) | (40 | ) | (1 | ) | ||||||||
Other income, net (2) | (2 | ) | (7 | ) | 5 | |||||||||
Provision for income taxes (2) | 3 | 8 | (5 | ) | ||||||||||
Operational EBITDA | $ | 4 | $ | 9 | $ | (5 | ) | -56 | % |
Footnote Explanations: | ||
(1) | Consulting and other costs are primarily professional services and internal costs associated with certain corporate strategic initiatives, investigations and litigation. Consulting and other costs in the three months ended |
|
(2) | As reported in the Consolidated Statement of Operations |
A. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) | |||||||
(in millions, except per share data) | Three Months Ended | ||||||
2024 | 2023 | ||||||
Revenues | |||||||
Sales | $ | 206 | $ | 224 | |||
Services | 43 | 54 | |||||
Total revenues | 249 | 278 | |||||
Cost of revenues | |||||||
Sales | 168 | 192 | |||||
Services | 32 | 36 | |||||
Total cost of revenues | 200 | 228 | |||||
Gross profit | 49 | 50 | |||||
Selling, general and administrative expenses | 45 | 34 | |||||
Research and development costs | 9 | 9 | |||||
Restructuring costs and other | 5 | 1 | |||||
Other operating (income) expense, net | (17 | ) | 1 | ||||
Income from operations before interest expense, pension income excluding service cost component, other income, net and income taxes | 7 | 5 | |||||
Interest expense | 15 | 11 | |||||
Pension income excluding service cost component | (41 | ) | (40 | ) | |||
Other income, net | (2 | ) | (7 | ) | |||
Earnings from operations before income taxes | 35 | 41 | |||||
Provision for income taxes | 3 | 8 | |||||
NET EARNINGS | $ | 32 | $ | 33 | |||
Basic earnings per share attributable to |
$ | 0.31 | $ | 0.33 | |||
Diluted earnings per share attributable to |
$ | 0.30 | $ | 0.30 |
The notes accompanying the financial statements contained in the Company’s first quarter 2024 Form 10-Q are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited) | |||||||
(in millions) | 2024 | 2023 | |||||
ASSETS | |||||||
Cash and cash equivalents | $ | 262 | $ | 255 | |||
Trade receivables, net of allowances of |
139 | 195 | |||||
Inventories, net | 230 | 217 | |||||
Other current assets | 46 | 45 | |||||
Total current assets | 677 | 712 | |||||
Property, plant and equipment, net of accumulated depreciation of |
171 | 169 | |||||
12 | 12 | ||||||
Intangible assets, net | 23 | 24 | |||||
Operating lease right-of-use assets | 31 | 30 | |||||
Restricted cash | 106 | 110 | |||||
Pension and other postretirement assets | 1,247 | 1,216 | |||||
Other long-term assets | 80 | 82 | |||||
TOTAL ASSETS | $ | 2,347 | $ | 2,355 | |||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY | |||||||
Accounts payable, trade | $ | 129 | $ | 125 | |||
Short-term borrowings and current portion of long-term debt | 1 | 1 | |||||
Current portion of operating leases | 11 | 13 | |||||
Other current liabilities | 133 | 144 | |||||
Total current liabilities | 274 | 283 | |||||
Long-term debt, net of current portion | 447 | 457 | |||||
Pension and other postretirement liabilities | 229 | 237 | |||||
Operating leases, net of current portion | 26 | 24 | |||||
Other long-term liabilities | 208 | 213 | |||||
Total liabilities | 1,184 | 1,214 | |||||
Commitments and Contingencies (Note 6) | |||||||
Redeemable, convertible preferred stock, no par value, |
212 | 210 | |||||
Equity | |||||||
Common stock, |
— | — | |||||
Additional paid in capital | 1,156 | 1,156 | |||||
(11 | ) | (11 | ) | ||||
Accumulated deficit | (463 | ) | (495 | ) | |||
Accumulated other comprehensive income | 269 | 281 | |||||
Total shareholders’ equity | 951 | 931 | |||||
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY | $ | 2,347 | $ | 2,355 |
The notes accompanying the financial statements contained in the Company’s first quarter 2024 Form 10-Q are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited) | |||||||
Three Months Ended | |||||||
(in millions) | 2024 | 2023 | |||||
Cash flows from operating activities: | |||||||
Net earnings | $ | 32 | $ | 33 | |||
Adjustments to reconcile to net cash provided by operating activities: | |||||||
Depreciation and amortization | 7 | 8 | |||||
Pension and other postretirement income | (36 | ) | (36 | ) | |||
Change in fair value of the Preferred Stock and Convertible Notes embedded derivatives | — | 1 | |||||
Non-cash changes in workers' compensation and other employee benefit reserves | (1 | ) | 1 | ||||
Stock based compensation | 3 | 4 | |||||
Net gain on sale of assets | (17 | ) | — | ||||
Provision for deferred income taxes | 1 | — | |||||
Decrease in trade receivables | 53 | 12 | |||||
(Increase) decrease in miscellaneous receivables | (2 | ) | 7 | ||||
Increase in inventories | (15 | ) | (13 | ) | |||
Increase in trade accounts payable | 7 | 3 | |||||
Decrease in liabilities excluding borrowings and trade payables | (19 | ) | (13 | ) | |||
Other items, net | 4 | 7 | |||||
Total adjustments | (15 | ) | (19 | ) | |||
Net cash provided by operating activities | 17 | 14 | |||||
Cash flows from investing activities: | |||||||
Additions to properties | (10 | ) | (5 | ) | |||
Proceeds from sale of assets | 17 | — | |||||
Net cash provided by (used in) investing activities | 7 | (5 | ) | ||||
Cash flows from financing activities: | |||||||
Repayment of Amended and Restated Term Loan Agreement | (17 | ) | — | ||||
Preferred stock cash dividend payments | (1 | ) | (1 | ) | |||
Net cash used in financing activities | (18 | ) | (1 | ) | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3 | ) | — | ||||
Net increase in cash, cash equivalents and restricted cash | 3 | 8 | |||||
Cash, cash equivalents and restricted cash, beginning of period | 377 | 286 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 380 | $ | 294 |
The notes accompanying the financial statements contained in the Company’s first quarter 2024 Form 10-Q are an integral part of these consolidated financial statements.
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Source: Eastman Kodak