Eastman Kodak Company reported financial results for the fourth quarter and full year 2017. Revenues for the full year 2017 were US$1.5 billion, down seven percent (or US$112 million) from 2016. The revenue decline, explains Kodak, 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, however, reported GAAP net earnings of US$94 million for the year ended December 31, 2017, which includes a tax benefit of US$101 million due to the release of a valuation allowance in the fourth quarter of 2017.
“2017 was a year of investment in our strategic growth priorities which bodes well for the future,” said Jeff Clarke, Chief Executive Officer, Kodak. “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.”
Kodak explains key product lines achieved strong year-over-year growth for the full year 2017, including: Volume for Flexcel NX Plates grew by 17 percent, volume for Sonora Process Free Plates grew by 21 percent; and annuity revenues for the Prosper inkjet platform grew by 13 percent. The company ended the year with a cash balance of US$344 million, compared with US$434 million at the end of 2016.
“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’s 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.”
Print Systems Division (PSD), Kodak’s largest division, had Q4 revenues of US$261 million, a six percent decline compared with Q4 in 2016. Operational EBITDA for the quarter was US$16 million, compared with US$39 million for the same period a year ago.
Print Systems Division had full-year 2017 revenues of US$942 million, a seven percent decline compared with 2016. Full-year Operational EBITDA was US$58 million, a decline of US$48 million compared with the prior year. Kodak explains the decline was due primarily to industry pricing pressures, higher aluminum costs and an overall commercial print industry slowdown.
Enterprise Inkjet Systems Division (EISD) had fourth-quarter revenues of US$39 million, down from US$43 million in the same period in 2016. Operational EBITDA was US$3 million, an increase of US$1 million compared with the fourth quarter of 2016.
For the full year 2017, EISD revenues were US$144 million, compared with US$166 million in 2016. Operational EBITDA for the full year 2017 increased by US$21 million from 2016 to US$5 million in 2017. The results, explains Kodak, reflect the positive impact of cost control actions and continued strong growth in Prosper annuities. Kodak’s next-generation inkjet writing system, Ultrastream, is scheduled for launch in 2019.
Flexographic Packaging Division (FPD) had 2017 revenues of US$145 million, compared with US$132 million in the prior year, or a 10 percent improvement. Full-year Operational EBITDA of US$31 million is an improvement of Us$7 million compared with the prior year.
Software and Solutions Division (SSD) had 2017 revenues of US$85 million, down from Us$90 million last year. Full-year Operational EBITDA remained flat compared with the prior year.
Consumer and Film Division (CFD) revenues for the full year were US$198 million, down from US$221 million in 2016. Operational EBITDA for the division was down US$32 million for the year.
Advanced Materials and 3D had Operational EBITDA for the full year of negative US$26 million. Kodak explains this division took significant cost actions in Q4 and sharpened its focus on investments in light-blocking particles, printed electronics and advanced materials.
2018 guidance is for revenues of US$1.5 billion to US$1.6 billion and Operational EBITDA of US$60 million to US$70 million.