Eastman Kodak(US:KODK)2025-11-06 21:19Financial Performance - Consolidated revenues for the three and nine months ended September 30, 2025, were $269 million and $779 million, representing increases of $8 million (3%) and $2 million (0%) compared to the same periods in 2024[168]. - Revenues for Q3 2025 increased by $8 million to $269 million compared to Q3 2024, driven by improved pricing in Print and Advanced Materials and Chemicals, and favorable foreign currency fluctuations[186][187]. - Kodak's consolidated total revenue for the three months ended September 30, 2025, was $269 million, a decrease of $5 million compared to $261 million in the same period of 2024[200]. - Print revenues decreased by $5 million (3%) to $177 million for the three months and by $30 million (5%) to $520 million for the nine months ended September 30, 2025, accounting for 66% and 67% of total revenues, respectively[169]. - Advanced Materials and Chemicals revenues increased by $11 million (15%) to $82 million for the three months and by $28 million (14%) to $231 million for the nine months ended September 30, 2025[169]. Cost and Expenses - Kodak has faced increased manufacturing costs due to tariffs on imported goods, particularly aluminum, but has largely mitigated these costs through pricing actions and supplier negotiations[171]. - Gross profit for Q3 2025 improved by $23 million to $68 million, primarily due to better pricing and lower aluminum costs, despite higher manufacturing costs in Print[186][189]. - Selling, general and administrative expenses decreased by $3 million in Q3 2025, attributed to lower litigation-related costs compared to the prior year[192]. - Kodak recorded restructuring costs of $1 million and $12 million for the three and nine months ended September 30, 2025, respectively[217]. - The restructuring actions implemented in 2025 are expected to generate future annual cash savings of approximately $17 million, reducing SG&A expenses, Cost of revenues, and R&D costs[218]. Cash Flow and Liquidity - Kodak ended the quarter with a cash balance of $168 million, a decrease of $33 million from December 31, 2024[219]. - Cash, cash equivalents, and restricted cash balances were $271 million as of September 30, 2025, down from $301 million at December 31, 2024[242]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $(9) million, an improvement of $2 million compared to $(11) million in the same period of 2024[243]. - Net cash used in financing activities decreased by $18 million to $(3) million for the nine months ended September 30, 2025, primarily due to a $17 million prepayment in the prior year[245]. - Kodak's plans to return to sustainable positive cash flow include generating profitable revenues and reducing operating expenses[232]. Strategic Initiatives - Kodak plans to expand its manufacturing capabilities for EV battery materials and diagnostic test reagents, leveraging its existing chemical manufacturing expertise[185]. - The company aims to capitalize on its intellectual property through new business opportunities in 3D printing materials and printed electronics markets[185]. - Kodak has implemented measures to address supply chain disruptions, including increasing safety stock and certifying additional sources of materials[178]. - The company has filed petitions for anti-dumping and countervailing duties on imported plates from China and Japan, resulting in significant duties imposed on these imports[179]. Market Conditions and Challenges - The company is actively monitoring global economic conditions, including inflation and geopolitical issues, which have led to revenue declines and increased manufacturing costs[170]. - Kodak's ability to offset higher costs and secure raw materials remains uncertain due to ongoing global economic changes and supply chain challenges[183]. - Kodak's digital plate products are facing challenges from higher raw material prices and competitive pricing pressures[185]. - Kodak's operations in Israel and Russia have been minimally impacted, with less than 1% of total consolidated revenue and assets affected by the conflicts in these regions[180][182]. - The Advanced Materials and Chemicals segment has experienced labor shortages and increased demand for consumer film products, leading to backorders despite capital investments to increase capacity[177]. Investments and Impairments - Kodak's investment in Wildcat Discovery Technologies resulted in an impairment charge of $17 million in Q2 2025 and an additional $4 million in Q3 2025 due to strategic options being contemplated by Wildcat[185]. - Kodak expects to receive approximately $600 million from the KRIP reversion, consisting of $450 million in cash and the remainder in non-cash assets[238]. - The company plans to use $300 million of the expected $450 million from the KRIP reversion to pay down Term Loans[240]. Operational Performance - Operational EBITDA for the Print segment improved by $17 million to $8 million for the three months ended September 30, 2025, due to favorable pricing and lower costs[207]. - Advanced Materials and Chemicals segment's Operational EBITDA increased by $10 million to $16 million for the three months ended September 30, 2025, reflecting improved pricing and volume[212]. - The Advanced Materials and Chemicals segment's Operational EBITDA as a percentage of revenues improved to 20% for the three months ended September 30, 2025, compared to 8% in the prior year[209]. Pension and Liabilities - Kodak's pension income excluding service cost component decreased by $26 million in Q3 2025 compared to the prior year, due to lower expected returns on assets[195]. - The company anticipates that the undiscounted actuarial liability for workers' compensation obligations will continue to decline, averaging a decrease of $5 million per year from 2014 to 2024[247]. Accounting and Compliance - The Company has not made any material changes to its critical accounting policies or estimates since December 31, 2024[254]. - Kodak is exposed to fluctuations between the U.S. dollar and other currencies due to its operations in many foreign countries[255]. - Volatility in global financial markets could increase foreign currency exchange rate volatility, impacting sales and net income[255].