Eastman Kodak Company reported financial results for the fourth quarter and full year 2017, delivering net earnings for the year of $94 million on revenues of $1.5 billion and continued growth in key product areas.
“Our use of cash in 2017 included meaningful investments in the ULTRASTREAM inkjet platform, FLEXCEL NX packaging, SONORA X plates, advanced materials and brand licensing which will contribute to growth”
Highlights include:
- GAAP net earnings of $94 million for the year ended December 31, 2017. GAAP net earnings for the year includes a tax benefit of $101 million due to the release of a valuation allowance in the fourth quarter of 2017 as a result of increased profits in a location outside the U.S.
- Operational EBITDA for the year of $57 million.
- Revenues for 2017 of $1.5 billion, a decline of $112 million compared with the same period in 2016.
- Key product lines achieved strong year-over-year growth for the full year 2017:
- Volume for KODAK FLEXCEL NX Plates grew by 17 percent.
- Volume for KODAK SONORA Process Free Plates grew by 21 percent.
- Annuity revenues for the KODAK PROSPER inkjet platform grew by 13 percent.
- The company ended the year with a cash balance of $344 million.
2018 Guidance
- 2018 guidance is for revenues of $1.5 billion to $1.6 billion and Operational EBITDA of $60 million to $70 million. Beginning in 2018 Operational EBITDA will only include the service cost component of pension income in conjunction with the adoption of a new accounting standard.1 If this change were made in 2017 Operational EBITDA would have been $49 million.
“2017 was a year of investment in our strategic growth priorities which bodes well for the future,” said Jeff Clarke, Kodak Chief Executive Officer. “We also eliminated several business initiatives while continuing to reduce cost and drive greater efficiency in the company. We enter 2018 with a stronger growth profile and more productive operations.”
Revenues for the full year 2017 were $1.5 billion, down 7 percent from 2016. The revenue decline was driven by volume and pricing declines within the company’s commercial print business and volume declines in the company’s consumer inkjet and industrial film and chemicals businesses.
The company’s cash balance was $344 million at the end of 2017, compared with $434 million at the end of 2016. The company used cash to invest in strategic growth businesses, fund working capital needs, meet legacy cash obligations and service and prepay debt.
“Our use of cash in 2017 included meaningful investments in the ULTRASTREAM inkjet platform, FLEXCEL NX packaging, SONORA X plates, advanced materials and brand licensing which will contribute to growth,” said David Bullwinkle, Kodak Chief Financial Officer. “In the fourth quarter of 2017, we reprioritized our investments to focus on shorter payback periods and reduced costs which will improve our ability to generate cash in 2018 and beyond.”
Consumer and Film Division (CFD) revenues for the fourth quarter were $47 million, flat compared with Q4 of 2016. Operational EBITDA declined from negative $2 million to negative $6 million.
For the year, revenues for CFD were $198 million, down from $221 million in 2016. Operational EBITDA for the division was down $32 million for the year, driven by the continued expected decline in the consumer inkjet business and higher film manufacturing costs associated with a vendor transition.
CFD’s brand licensing business had continued growth in 2017, adding twelve brand licensing partners including the key areas of instant film photography and 3D printing for the educational market.
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