Kodak reports improved profits for 2023, commits to film production

Eastman Kodak Co. reported financial results for the fourth quarter and full year 2023, as well committing to be the “last manufacturer standing” for photographic film. The company showed lower revenue but improved profits.

Fourth-quarter 2023 highlights include:

• Consolidated revenues of $275 million, compared with $305 million for Q4 2022, a decrease of $30 million or 10 percent (decreased by $35 million on a constant currency basis, or 11 percent)
• Gross profit of $47 million, compared with $43 million for Q4 2022, an increase of $4 million or 9 percent
• Gross profit percentage of 17 percent, compared with 14 percent for Q4 2022 an increase of 3 percentage points
• GAAP net income of $5 million, compared with net income of $7 million for Q4 2022, a decrease of $2 million or 29 percent
• Operational EBITDA of $2 million, compared with $7 million for Q4 2022, a decrease of $5 million or 71 percent
• A year-end cash balance of $255 million, compared with $246 million at the end of the third quarter of 2023, an increase of $9 million; cash flow from operations improved by $3 million from the prior period

Full-year 2023 highlights include:

• Consolidated revenues of $1.117 billion, compared with $1.205 billion for the full year 2022, a decrease of $88 million or 7 percent (decreased by $89 million on a constant currency basis, or 7 percent)
• Gross profit of $210 million, compared with $170 million for full year 2022, an increase of $40 million or 24 percent
• Gross profit percentage of 19 percent, compared to 14 percent in the prior year, an increase of 5 percentage points
• GAAP net income of $75 million, compared with $26 million for 2022, an increase of $49 million or 188 percent
• Operational EBITDA of $45 million, compared with $18 million for 2022, an increase of $27 million or 150 percent
• A year-end cash balance of $255 million, compared with $217 million on December 31, 2022, an increase of $38 million; cash flow from operations improved by $154 million from the prior period

“After almost five years of executing our plan, we saw our efforts start to come to fruition in 2023, delivering year-over-year improvements in gross profit and Operational EBITDA and building a strong foundation for growth,” said Jim Continenza, Kodak’s Executive Chairman and CEO. “Our recent progress has been the result of our ability to adapt to difficult business conditions and our commitment to executing our long-term plan: investing in innovation, improving efficiency and helping our customers stay productive and profitable. We continue to innovate across our traditional and digital print portfolio, and we will introduce a wide range of products at the upcoming drupa tradeshow. We continue to invest in growth initiatives in our Advanced Materials & Chemicals group and have seen increasing revenue contributions from those businesses. We continue to improve our infrastructure and streamline processes to increase capacity in our film business and gain efficiencies across our enterprise. And most importantly, we have continued to deliver for our customers — and they have shown their appreciation by staying with us through this challenging period. I’d like to thank our customers for their loyalty and our employees for their hard work and winning attitude as we continue the Kodak transformation.”

In a call with analysts, Continenza noted Kodak will remain committed to the production of film. “As part of our heritage, we are committed to being the last manufacturer standing in film, and proud of our role in continuing to make this artistic medium available to photographers and filmmakers who love the unique look of film. We are investing in a new film spooler in our manufacturing plant to increase our capacity and meet growing demand. Film is still the choice of many prominent directors and cinematographers, and I am proud of the fact that many of this year’s Oscar nominees were shot on Kodak film. Again, I’d like to congratulate the entire cast, crew, producer, and director of ‘Oppenheimer’ for choosing Kodak. We continue to invest in innovation across our complete portfolio of print solutions.

For the full year ended Dec. 31, 2023, revenues were $1.117 billion, a decrease of $88 million or 7 percent compared to the same period in 2022. Adjusting for the favorable impact of foreign exchange of $1 million, revenues decreased by $89 million, or 7 percent compared to the prior year.

GAAP net income was $75 million for the full year, compared to $26 million in 2022, an increase of $49 million or 188 percent. Operational EBITDA for the year ended December 31, 2023 was $45 million, compared to $18 million in 2022, an increase of $27 million or 150 percent. The increase was primarily driven by profitability relating to pricing rationalization and improved operational efficiency executing on cost controls, partially offset by higher continued ongoing global cost increases.

Kodak ended the year with a cash balance of $255 million, an increase of $38 million from December 31, 2022. The increase was primarily driven by the net proceeds of $31 million received from July 2023 refinancing transactions.

“Kodak delivered strong cash performance in 2023, generating cash in the fourth quarter and increasing full year cash flow from operations by $154 million compared to 2022,” said David Bullwinkle, Kodak’s CFO. “Throughout the year, our team improved profitability and performance in working capital to enhance the Company’s ability to generate cash which we delivered in three of the last four quarters. The Company also delivered year-over-year improvement in gross profit percentage, reflecting our strategic focus on improving operational efficiency and driving smart revenue. For the year ahead, we plan to build on our momentum by continuing to execute our long-term plan.

* Total Operational EBITDA is a non-GAAP financial measure. The reconciliation between GAAP and non-GAAP measures is provided in Appendix A of this press release.

** The impact of foreign exchange represents the foreign exchange impact using average foreign exchange rates for the three or twelve months ended December 31, 2022, rather than the actual average exchange rates in effect for the three or twelve months ended December 31, 2023.

Eastman Business Park segment is not a reportable segment and is excluded from the table above.

About Kodak
Kodak (NYSE: KODK) is a leading global manufacturer focused on commercial print and advanced materials & chemicals. With 79,000 worldwide patents earned over 130 years of R&D, we believe in the power of technology and science to enhance what the world sees and creates. Our innovative, award-winning products, combined with our customer-first approach, make us the partner of choice for commercial printers worldwide. Kodak is committed to environmental stewardship, including industry leadership in developing sustainable solutions for print. For additional information on Kodak, visit us at kodak.com, or follow us on Twitter @Kodak and LinkedIn.