Kodak’s corporate doom: 133-year-old photo icon warns investors it may cease operations with $500 million debt problem

In a quarterly file issued on Monday, along with the second quarter profit report, the Kodak administration has sparked serious concerns about its ability to continue working next year. The warning stems from about $ 500 million of debt that ripens within 12 months and that there is no committed financing to cover these obligations. They said that without new financing or successful re -financing, the company can fail to pay.

Kodak shares have decreased, and slipped by 21 % to $ 5.43 as of Wednesday morning.

Deep strains of profits

For the second quarter ending on June 30, Kodak booked $ 263 million of revenues, which decreased by 1 % from the previous year. However, the real blow came from the minimum: profitability achieved sharp success compared to the last quarter, as total profits drowned by 12 % to $ 51 million, pressing Kodak’s margins from 22 % to 19 %. The earnings of $ 26 million in the same period last year turned 180 degrees to 26 million dollars. EBITDA operational declined to $ 9 million from $ 12 million, as sales volumes decreased significantly and high manufacturing costs overwhelmed by relatively modest prices.

Cash reserves also decreased. Kodak ended the quarter with $ 155 million on hand, only 70 million dollars in the United States less than $ 46 million than it was in December, and drained the growing costs and the weakest operating results.

Financial director David Bolnolke said in the note that the company relies on a somewhat random source for liquidity: ending the American retirement income plan in Kodak and using excess assets to pay debts. Kodak said he expected clearly by mid -August on how to settle the obligations to plan the participants, and aims to complete the process by December.

Dave Chang, a print expert from the group of analytics, said that Kodak’s pain is not unique.

“Every company manufacturing major commercial printing equipment feels the same pressure this year, in the United States and Europe,” Zhang told Zhang. luck. “Customers refrain from large purchases unless they are at all. Definitions and economic uncertainty do not give them warmth and investment for investment.”

Codak long fall

Kodak, founded by George Eastman in the late nineteenth century, was founded by a revolution in photography by giving the democratic character to the film, making the cameras affordable to the masses. Its logo – “You pay the button, do the rest” – dribbling with comfortable passion. At its peak in the 1970s, Kodak dominated nearly 90 % of American film sales and 85 % of the camera market.

Then the digital revolution raised the industry, and Kodak stumbled. In the development of the paradox, it was Kodak’s engineer who created the first digital camera – but for fear that innovation would create its current product, the company sat in the invention. They are betting that the film is a source of nostalgia, even when digital cameras on the market have seized a promise of more comfort.

By 2012, billionaires in debt, Kodak submitted a request for bankruptcy 11. However, Zhang followed the dissolution backward even early, until mid-2000, when CEO ANTONIO Pérez “mainly moved” in chemical manufacturing and the film for Kodak- “The Roots of the Company”-which starts from tens of thousands of thousands and destroyed Main facilities or destroy them.

Zhang warned, “Do not expel the child with bathing water.” “They blew their future.”

When the current CEO Jim Continza took over, his job was to direct Kodak from bankruptcy and rebuild his essence.

The analyst said: “It is not only a matter of nostalgia.” “They had to rebuild a script line – equipment that you can not only order on Amazon – and now they are with a full manufacturing ability.”

Today’s Kodak movie includes industrial products such as car components films, not just 35 mm rolls.

In addition, Kodak has turned from the consumer camera to focus on commercial printing, packaging and specialized chemicals.

In recent years, it has sought to grow in advanced materials, including films for filmmaking and drug components. In fact, the pharmaceutical axis was so successful that Kodak’s day got a government loan to follow up on manufacturing, its shares rose very quickly.

Kodak also bowed to nostalgia with hundreds of bricks from bricks and mortar shells, which are particularly universal popular. Although the brand was directed, Timothy Kalkins, Professor of Marketing at Kelog Faculty of Administration at Northwestern University, told the University of Northwestern, New York Times He found “amazing” and “sad” brands license, indicating a feeling of despair in the Kodak brand.

Undoubted road forward

Kodak has a bright point one of its profits in the second quarter: The advanced chemical and chemicals department witnessed the growth of revenue, and the company recently obtained the registration of the FDA administration for a new pharmaceutical manufacturing facility, allowing it to produce organized products.

Jim Continza CEO has developed development as part of Kodak’s transformation into a manufacturer with various products.

“We continue to accelerate the growth of our advanced business of chemicals and chemicals,” he wrote in the release of profits.

The question is whether this shield will be strong enough. The continuous disclosure, near the end of the profit report, shows that Kodak’s plans to correct the ship-recovery, restructuring debt, and re-financing-are not fully in its control. American accounting rules require such a warning when the administration cannot conclude these “possible” steps.

“They need time and money,” said Zhang. “It is difficult to get time, but if they can get money, they may rebuild this thing.”

At the present time, investors are wondering whether the company can re -invent itself not specified for the second, third, or fourth time, or if this is the long -awaited fading of a company that once determined how the world has seized its memories.