Eastman Kodak Company (NYSE: KODK) has reported financial results for the fourth quarter and full year 2016, delivering net earnings of $16 million on revenues of $1.5 billion and continued growth in key product lines.
• GAAP net earnings of $16 million for the year ended December 31, 2016, an improvement of $91 million over 2015.
• Operational EBITDA for the year of $144 million.
• Revenues for 2016 of $1.5 billion, compared with revenues of $1.7 billion for 2015, down $166 million, or 10 per cent.
• Key product lines achieved strong growth:
* Volume for KODAK SONORA Process Free Plates grew by 9 percent for the full year. o Volume for KODAK FLEXCEL NX Plates grew by 16 percent for the full year.
* Operating expenses (total SG&A and R&D expenses) were $212 million for the year ended
• December 31, 2016, a $36 million, or 15 per cent, improvement compared with 2015. $15 million of this improvement was due to increased non-cash components of pension income.
The company ended the year with a cash balance of $433 million. Cash used in operating activities improved by $82 million compared with 2015.
• 2017 guidance is for revenues of $1.4 billion to $1.5 billion and Operational EBITDA of $130 million to $145 million. This guidance is on a continuing operations basis and excludes the KODAK PROSPER business, which is reported within discontinued operations.
“I’m pleased we delivered a GAAP profit and met our revenue and Operational EBITDA goals for 2016,” said Jeff Clarke, Kodak chief executive officer. “We continue to drive growth in our SONORA Plates and FLEXCEL NX packaging businesses and improve the quality of our earnings.”
Revenues in the fourth quarter of 2016 were $404 million, an 8 per cent decline from the fourth quarter of 2015. On a constant currency basis, revenues in Q4 2016 declined by 7 per cent compared with Q4 2015.
The decrease was primarily driven by the expected continued decline in legacy consumer inkjet printer cartridge sales and pricing reductions in digital plates within the Print Systems Division.
The company’s cash balance was $433 million at the end of 2016, compared with $546 million at the end of 2015. The cash decline in 2016 was $53 million less than in the prior year. Excluding net debt prepayments, cash usage decreased from $162 million in 2015 to $29 million in 2016 for a year-over-year improvement of $133 million.
“I’m encouraged by the significant year-over-year improvement in our use of cash,” said David Bullwinkle, Kodak chief financial officer. “The repayment in full of our second-lien debt will reduce the use of cash for interest payments going forward and we expect to generate cash in 2017.”
Print Systems Division (PSD), Kodak’s largest division, had Q4 revenues of $279 million, a 4 per cent decline compared with Q4 in 2015. Operational EBITDA for the quarter was $38 million, 3 per cent better than the same period a year ago.
Print Systems Division had full-year 2016 revenues of $1 billion, an 8 percent decline compared with 2015. Full-year operational EBITDA was $105 million, 6 per cent better than the prior year. The decline in year-over-year revenues was due primarily to worldwide competitive pricing pressures and an unfavorable economic environment in Latin America.
Highlights for the division include 9 per cent year-over-year growth in unit sales of environmentally-advantaged KODAK SONORA Process Free Plates and continued success with KODAK LIBRA Plates and KODAK ELECTRA MAX Plates.
Enterprise Inkjet Systems Division (EISD) - which now comprises the KODAK VERSAMARK business due to the classification of the PROSPER business as a discontinued operation - had fourth-quarter revenues of $19 million, down from $22 million in the same period in 2015. Operational EBITDA was $5 million, compared with $6 million in the fourth quarter of 2015.