After 133 years, a bankruptcy, and multiple reinventions, Kodak’s latest snapshot is grim: The company says there’s “substantial doubt” it can stay in business.
In a quarterly filing released Monday alongside its second-quarter earnings report, Kodak’s management raised serious concerns about its ability to continue operating over the next year. The warning stems from roughly $500 million in debt maturing within 12 months and the lack of committed financing to cover those obligations. Without new funding or successful refinancing, the company could default, they said.
The note’s stark language sent Kodak’s shares tumbling, sliding 21% to $5.43 as of Wednesday morning.
Deep strains in earnings
For the second quarter ended June 30, Kodak booked $263 million in revenue, which was down 1% from a year earlier. However, the real blow came from the bottom line: Profitability took a sharp hit compared to last quarter, with gross profit sinking 12% to $51 million, squeezing Kodak’s margins from 22% to 19%. What had been a $26 million profit in the same period last year flipped 180 degrees to a $26 million loss. Operational EBITDA slipped to $9 million from $12 million, as significantly lower sales volumes and surging manufacturing costs overwhelmed relatively modest price increases.
