23 Jun 2021

Kodak's revenue drops 26%, loss of $81M on quarter

Kodak logo

Eastman Kodak Company has reported third-quarter 2009 results that reflect improved operating performance in a number of businesses, contributing to significant year-over-year improvement in cash performance including positive cash generation before restructuring payments.

The company’s third-quarter results also demonstrate the success of continued focused investments that Kodak is making in new products and core growth businesses, especially consumer and commercial inkjet. Cost containment and more tightly focused spending on research and development also positively contributed to the company’s third-quarter results. Consistent with its seasonal trend, the company expects cash and earnings performance to improve significantly in the fourth quarter of the year.

The company’s ability to achieve significant improvement in fourth-quarter results is predicated upon a modest improvement in the market for its consumer and commercial products, the introduction of new, higher-margin digital cameras and devices, stronger demand for its Prepress products, and the benefits from a number of intellectual property transactions executed in a manner that maximize shareholder value.

“On a sequential basis, the positive trends are clear. Our sales are stabilizing and some businesses are showing real signs of growth in the fourth quarter. That, combined with operational improvements in several of our key product lines, increases our optimism for significant improvement in the fourth quarter, our largest quarter of the year,” said Antonio M. Perez, Chairman and Chief Executive Officer, Eastman Kodak Company. “We also continue to gain significant traction with our new consumer and commercial inkjet businesses, and the productivity improvements that we’ve implemented thus far are helping to drive improved cash performance. We believe all of these factors are sustainable and they give me increased confidence that we are on track for a much improved fourth-quarter performance and achievement of our full-year earnings and cash targets.

“Our consumer inkjet hardware and ink products enjoyed another quarter of revenue growth that exceeded 100 percent, earning us a larger share of the market, and commercial inkjet customer commitments for our PROSPER Press Platform continue to grow rapidly in anticipation of delivery beginning in early 2010. While consumer demand and commercial credit markets remain constrained for the time being, we are well positioned to deliver sustained profitability as the economy improves.”    

For the third quarter of 2009:

* Sales worldwide totaled $1.781 billion, a decrease of 26% from $2.405 billion in the third quarter of 2008, including 2% of unfavorable foreign exchange impact. Revenue from digital businesses totaled $1.209 billion, a 26% decline from $1.641 billion in the prior-year quarter, primarily as a result of the global recession and continued restrictions in the credit markets that are dampening commercial printing purchases. Revenue from the company’s traditional business decreased 25% to $572 million, in line with the industry decline.
* The company’s third-quarter loss from continuing operations, before interest expense, other income (charges), net, and income taxes was $81 million, compared with earnings on the same basis of $147 million in the year-ago quarter.

On the basis of U.S. generally accepted accounting principles (GAAP), the company reported a third-quarter loss from continuing operations of $111 million, or $0.41 per share, compared with earnings on the same basis of $101 million, or $0.35 per share, in the year-ago period. Items of net expense that impacted comparability in the third quarter of 2009 totaled $48 million after tax, or $0.18 per share, primarily related to restructuring charges, asset sales, and tax related items. Items of net benefit that impacted comparability in the third quarter of 2008 totaled $40 million after tax, or $0.13 per share, due primarily to certain changes to the company’s post-employment benefits, partially offset by restructuring and rationalization costs. (Please refer to the attached Items of Comparability table for more information.)

Other third-quarter 2009 details:

* Gross Profit was 20.3% of sales, a decline from 27.5% in the year-ago period. This decline in margin was driven by lower intellectual property licensing royalties and unfavorable foreign exchange, partially offset by continued productivity improvements.
* Selling, General and Administrative (SG&A) expenses, on a GAAP basis, were $318 million in the third quarter, down 14%, or $51 million, from $369 million in the year-ago quarter, as a result of company-wide efficiency gains. Excluding a non-cash benefit from a change in the company’s post-employment benefits in the prior year quarter, the company reduced SG&A expenses, relative to the prior year quarter, by $78 million, or 20%.
* Research and Development expenses, on a GAAP basis, were $81 million in the third quarter, down 15%, or $14 million, from $95 million in the year-ago quarter, driven by a focus on investments in core growth businesses. Excluding a non-cash benefit in the prior year quarter, the company reduced R&D expenses, relative to the prior year quarter, by $33 million, or 29%.
* Third-quarter 2009 cash generation, before restructuring payments, was $29 million, compared with cash usage on the same basis of $78 million in the year-ago quarter. This corresponds to net cash used in continuing operations from operating activities on a GAAP basis of $16 million in the third quarter, compared with a net cash usage of $47 million in the third quarter of 2008. As was the case in 2008, the company expects to generate the majority of its cash flow in the fourth quarter of the year, consistent with its historic seasonal pattern.
* Kodak held $1.147 billion in cash and cash equivalents as of September 30, 2009, up from $1.132 billion on June 30. This excludes $575 million of restricted cash that the company deposited in a cash collateral account to be used to fund the previously announced repurchase of Convertible Senior Notes due 2033.
* The company’s debt level stood at $1.748 billion as of September 30, 2009, and includes $575 million in Convertible Senior Notes due 2033, for which the company completed a tender offer on October 19, 2009. As of the tender offer expiration date, approximately 98% of the outstanding 2033 Notes were tendered, representing an aggregate principal amount of approximately $563 million. The company’s debt balance as of September 30, 2009 would have been $1.185 billion if the tender offer for the 2033 Notes had been completed at that date.

Segment sales and earnings from continuing operations before interest, taxes, and other income and charges (segment earnings from operations), are as follows:

* Consumer Digital Imaging Group third-quarter sales were $535 million, a 35% decline from the prior-year quarter, including a decrease in intellectual property royalties. Third-quarter loss from operations for the segment was $89 million, compared with a profit of $24 million in the year-ago quarter. The year-over-year variance was driven by lower intellectual property licensing royalties of $157 million. Excluding the impact of intellectual property royalties, segment earnings improved. This was driven by improved profitability in consumer inkjet systems, including a 128% revenue increase in consumer inkjet printer hardware and ink and lower costs as a result of the company’s move to a more efficient product platform; improved operating performance in Digital Capture & Devices; and reduced SG&A and R&D expenses across the segment.
* Graphic Communications Group third-quarter 2009 sales were $674 million, an 18% decline from the third quarter of 2008. This revenue decrease was primarily driven by a market-related decline of 16% in Prepress Solutions as well as associated declines in workflow. Third-quarter earnings from operations for the segment totaled $10 million, compared with earnings of $22 million in the year-ago quarter. This earnings decline was primarily driven by lower volume, which resulted in unfavorable factory absorption and negative price/mix across several product lines, along with a negative impact from foreign exchange, partially offset by cost reduction efforts across all product lines and significant operational improvements in Electrophotographic Printing Solutions.
* Film, Photofinishing and Entertainment Group third-quarter sales were $572 million, a 25% decline from the year-ago quarter. Third-quarter earnings from operations for the segment were $47 million, compared with earnings of $77 million in the year-ago period. The decrease in earnings was driven by industry-related declines in volumes, negative price/mix, and unfavorable foreign exchange, partially offset by significant operational improvements in Traditional Photofinishing, cost reductions across the segment, and improvement in raw material costs.

2009 Outlook

Kodak today provided an updated outlook regarding its targets for 2009 performance, recognizing the ongoing uncertainty created by the global economic environment.

* For the full year, Kodak now expects its total revenue decline rate to be at the high end of the previously forecasted range of 12% to 18%, due, in part, to results to date and to the company’s increased focus on cash and earnings.
* Kodak is targeting 2009 segment earnings that will be within the previously communicated range of $0 to $200 million. Correspondingly, the company previously forecasted 2009 GAAP loss from continuing operations of $200 million to $400 million, and continues to forecast that GAAP results will be at the low end of that range, reflecting its latest assessment of restructuring charges, interest expense, and interest income.
* For full-year 2009, the company reiterates its goal to achieve positive cash generation before restructuring payments. This corresponds to a 2009 goal of net cash used in continuing operations from operating activities on a GAAP basis of not more than $250 million.

EFI reports Q3 2009 results - sequential revenue growth reported

EFI logo

Electronics For Imaging, Inc., a world leader in customer-focused digital printing innovation, has announced its results for the third quarter of 2009. For the quarter ended September 30, 2009, the Company reported revenues of $100.9 million, compared to third quarter 2008 revenue of $144.7 million.

GAAP net loss was $(12.2) million or $(0.25) per diluted share in the third quarter of 2009, compared to a GAAP net loss of $(3.6) million or $(0.07) per diluted share for the same period in 2008.

GAAP net income was $1.2 million or $0.02 per diluted share for the nine months ended September 30, 2009, compared to a GAAP net loss of $(8.9) million or $(0.17) per diluted share for the same period in 2008.

Non-GAAP net loss was $(2.6) million or $(0.05) per diluted share in the third quarter of 2009, compared to non-GAAP net income of $10.4 million or $0.20 per diluted share for the same period in 2008.

Non-GAAP net loss was $(13.1) million or $(0.26) per diluted share for the nine months ended September 30, 2009, compared to non-GAAP net income of $34.5 million or $0.61 per diluted share for the same period in 2008.

"We are pleased with the sequential revenue increases in all our lines of business, led by 22% growth in our inkjet business driven by several new inkjet product introductions," said Guy Gecht, CEO of EFI. "We will continue to bring industry-leading innovation to the market and expect our positive momentum to continue which combined with strict cost controls should result in our return to profitability in the current quarter."

Separately, the Company announced today that its Board of Directors has approved the use of the balance, in the amount of $70 million, of its previously authorized $100 million share repurchase program.

EFI to commence tender offer to repurchase up to $70 million worth its common stock

EFI logo

Electronics For Imaging, Inc., a world leader in customer-focused digital printing innovation, today announced that its Board of Directors (the "Board") has approved the repurchase of up to $70 million worth of shares of its common stock through the use of a "modified Dutch auction" tender offer. This approval utilizes the balance of the previously authorized $100 million share repurchase program. EFI currently expects that it will commence the tender offer during the fourth quarter of 2009, at which time it will announce, among other things, the price range in which it will offer to purchase shares.

The tender offer will be financed from EFI's existing cash reserves. The funding of the $100 million share repurchase authorization represents the approximate after tax cash proceeds received from the sale of EFI's excess real estate holdings earlier this year.

"The decision by the Board and Management to immediately deploy the remaining balance of our $100 million repurchase program through a tender offer completes our goal of returning the cash generated from our real estate sale to our stockholders," said Guy Gecht, CEO of EFI. "We believe repurchasing our shares combined with bringing new innovative products to market will create value for our stockholders."

The tender offer announced in this press release has not yet commenced. This press release is for informational purposes only, and is not an offer to purchase or the solicitation of an offer to sell any shares of EFI common stock. The tender offer, if commenced, will be made solely by and subject to the terms and conditions set forth in the tender offer documents, including the Offer to Purchase and the Letter of Transmittal, that will be distributed to holders of EFI's common stock and filed with the Securities and Exchange Commission ("SEC"). Before any decision is made with respect to the tender offer, holders of EFI's common stock are urged to read the Schedule TO, including the Offer to Purchase, the Letter of Transmittal and other related materials when they become available and any other documents filed with the SEC because they will contain important information about the tender offer.

Holders of common stock will be able to obtain these documents as they become available free of charge at the SEC's website at www.sec.gov, or at the SEC's public reference room located at 100 F Street, N.E., Washington, DC 20549. In addition, holders of common stock may also request copies of the Schedule TO, the Offer to Purchase, the Letter of Transmittal and other related materials filed with the SEC free of charge by contacting EFI's information agent for the tender offer. The tender offer will not be made to, and tenders of EFI's common stock will not be accepted from or on behalf of holders, of EFI's common stock in any jurisdiction in which the making or acceptance of such tender offer is not permissible.

Avery Dennison announces Q3 2009 Results

Avery Dennison logo

"In the face of continuing tough market conditions we increased operating margin, reflecting the strength of our franchise businesses and the effectiveness of our operating model," said Dean A. Scarborough, president and chief executive officer of Avery Dennison. "The combination of fixed-cost reductions and increasing variable margins positions the Company for strong profit growth when markets improve."

"While the rate of volume decline in the third quarter improved compared with the first half of the year, this was largely due to a slowdown in inventory reductions," Scarborough said. "Our end-markets remain soft, and we continue to be cautious about the pace of their recovery."

"I want to note the excellent performance of our employees in such uncertain times," Scarborough said. "They have maintained their focus on serving our customers, operating our businesses, and laying the groundwork for the future. This has been hard work, and they've done a tremendous job."

For more details on the Company's results for the quarter, see the Company's supplemental presentation materials, "Third Quarter 2009 Financial Review and Analysis," posted at the Company's Web site at www.investors.averydennison.com, and furnished under Form 8-K with the SEC.

Third Quarter, 2009 Results by Segment
All references to sales reflect comparisons on an organic basis, which exclude the impact of acquisitions and foreign currency translation. All references to operating margin exclude the impact of restructuring, asset impairment charges, lease cancellation costs, and other items.

Pressure-sensitive Materials (PSM)
* Roll Materials sales declined, reflecting weakness in end-markets. Sales continued to decline in the more economically sensitive Graphics and Reflective Products division.
* Operating margin increased as productivity offset the impact of reduced fixed-cost leverage, while the effects of pricing and raw material trends continued to cover the cumulative impact of 2008 inflation.

Retail Information Services (RIS)
* The decline in sales primarily reflected reduced demand for apparel in the U.S. and in Europe, and caution on the part of retailers.
* The decline in operating margin reflected reduced fixed-cost leverage, pricing, and other factors that more than offset the benefit of restructuring and productivity actions.
* The Company is continuing initiatives to reduce fixed costs in light of current market conditions, while introducing new products and improving value-added services to increase its share of this large market.

Office and Consumer Products (OCP)
* The decline in sales reflected weak end-market demand, led by slower corporate purchase activity. The sales decline was partially offset by strong back-to-school sales, due in part to expanded distribution and consumer trade-up to more durable binders.
* Operating margin declined as the benefit of productivity actions was more than offset by the impact of reduced fixed-cost leverage.

Other specialty converting businesses
* The decline in sales is primarily attributable to lower volume of products sold to the housing and construction industries.
* The increase in operating margin reflected restructuring and productivity improvements that more than offset reduced fixed-cost leverage.

Consolidated Items and Actions
* In the fourth quarter of 2008, the Company began a restructuring program expected to reduce costs across all segments of the business. The Company is targeting $160 million in annualized savings by mid-2010 (estimating $75 million benefit, net of transition costs, in 2009). The Company estimates that it will incur approximately $130 million of total restructuring charges associated with these actions, with approximately $110 million to be incurred in 2009. In addition to the savings from these new actions, the Company expects approximately $40 million of carryover savings in the year from previously implemented actions.

At the end of the third quarter of 2009, the Company achieved run-rate savings representing approximately 70 percent of its restructuring target.

* The effective tax rate in the third quarter was negative 7 percent, while the adjusted tax rate was positive 7.5 percent. The effective and adjusted tax rates for the full year are expected to be in the low single-digits and low double-digits, respectively. The ongoing annual tax rate is expected to be in the low 20 percent range, varying significantly from quarter to quarter.

DiMS.NET! end-to-end ERP solution now available in Europe

DiMS ERP-MIS Software

DiMS! organising print, a world leader in MIS systems for the printing and packaging industries, is now introducing its latest DiMS.NET! MIS/ERP solution in Europe. The new generation of the popular DiMS! system automates the complete range of web-enabled administrative and printing processes across an entire enterprise, helping businesses to streamline their operations, increase productivity and cut costs. Based on Microsoft’s latest .NET technology and featuring the familiar look and feel of Microsoft software, DiMS.NET! is easy to learn and use, as it automatically adapts to the preferred work method of the individual user. 

Gerard Marneth, co-founder and CEO of DiMS! organizing print, comments: "By building upon the comprehensive end-to-end functionality of the existing DiMS! solution, we've created a brand new ‘plug & play’ category in MIS/ERP. DiMS.NET! is an all-in-one application with true end-to-end integration—from estimating to planning and scheduling, prepress to production, shipping to invoicing, and financials.  It reduces errors, accelerates processes, improves flow, increases efficiency and delivers significant cost savings. But most importantly, DiMS.NET! is easy to implement and very intuitive to use”.

Michael Murphy, President Japs-Olson Company, was involved in a long and extensive search for a Web-enabled MIS system and selected DiMS! because “it was the best product that would enable us to operate at a world-class level and provide solutions for challenges in the marketplace.  It enables us to streamline our operations and significantly reduce setup and rollout times. All relevant information—such as customer, job and material data—only needs to be entered once, which greatly reduces mistakes. Plus, we can configure DiMS.NET! to automatically push information to the appropriate employee, which saves a lot of time”, concludes Michael Murphy.
Business-enhancing benefits
DiMS.NET! is also particularly well suited to medium-to-large printers with multiple facilities. It delivers a raft of business-enhancing benefits, such as improved performance and faster server applications.
It enables clear communication of data in multiple currencies and multiple languages across every location.  The product-focused business templates decrease setup times, permit greater efficiency and reduce rollout time. Customers who have moved to the .NET technology typically experience an increase in speed and efficiency between 300% and 500%.

With DiMS.NET! delivery times are dramatically decreased.  A single point of entry for all information decreases the risk for mistakes.  Every step in the workflow presents numerous options to match the preferred work approach of each individual user.  Printers can now configure DiMS.NET! so that information is automatically pushed to the appropriate employee in the company.  This means, for example, that a production planner will not have to check whether a required roll of paper has arrived: the system will deliver the relevant information as soon as that roll arrives and it will also warn them if it doesn’t arrive on time.

Improved security and integration
DiMS.NET! integrates smoothly within existing IT environments. The .NET framework makes it easy to deploy, run and manage applications. In addition it offers mobility support, providing one unified programming model for smart client and web applications for both PCs and mobile devices.

“DiMS.NET! provides the essential technologies and interfaces allowing users to securely run the application in a broader business environment”, remarks Gerard Marneth. “The code access security methods in the .NET framework check against administrator-set or default security policies before deciding to run an application or enabling it to access a particular resource. The .NET framework also supports XML web services, which can be used to integrate applications across different platforms, or to offer software-as-a-service. Plus there is support for more than 20 programming languages.”

DiMS.NET! comes packed with valuable features for end users, including:

  • DiMS! eLearning system - users can access the training course via the internet at any time.  Intuitive online lessons simulate the look, feel and behavior of the actual live system. Lessons are presented in a preview format, whereby the user learns by watching a simulation.  The training session is followed by a testing module where users are presented with generic instructions to verify their capability to correctly execute the task.
  • One integrated database – users get an enterprise-wide view using visually appealing and easy-to-understand personal dashboards. In addition they can filter and analyze real-time data according to their needs, and act quickly if production problems occur. Drill-downs and dashboards to the transaction level are standard. Internal and external documents are available in the integrated archive, providing real-time access to current communications. A personal cockpit enables company management to view real-time key data at a glance. This places the business data essential for decision making at the manager's fingertips, in a clear and intuitively understandable form.  Direct access to data can even be tuned precisely to individual requirements.
  • An enhanced scheduling board is an integral part of the new DiMS.NET!.  Scheduling captures all characteristics of each job and proposes the most efficient way to run it.  Scheduling can be viewed across departments, plants, and even international borders.  Flag support and dashboards give a visual status of the jobs. This optimizes production times and gives users the best scenarios to manage the plant.
  • Web-based application – customers can upload orders via DiMS.NET! directly to the web-based server, and order details can be delivered to all relevant areas of the company.
  • Scalability - DiMS.NET! provides an easy upgrade path. Companies can decide to start with only estimating, scheduling or job tickets, and can easily upgrade to a more complete solution at any time. If a DiMS! customer expands services or moves into a new market, they can rely upon DiMS.NET! being flexible enough to evolve with them. The extensive 25 year history and experience of the DiMS! solution have been incorporated into DiMS.Net!, which means that DiMS! can handle any specific print product and also any fulfillment, mailing and shipping activity. There is no risk of outgrowing the system, or having to buy add-ons in order to expand.
  • Full JDF integration – DiMS.NET!’s integration with prepress systems through JDF allows to automatically plan the print job and see how it’s progressing through prepress. To date, DiMS! has achieved the highest possible MIS-ICS level of conformance in terms of JDF submission and JMF handling, and is the first and only to be certified in commercial web printing–after acquiring JDF certifications for prepress, conventional printing (sheet-fed), imposition ICS and base ICS.

Gerard Marneth concludes: “DiMS.NET! builds on our company’s recognized experience in print business management systems. Some of the most respected printers in the world rely on DiMS! to manage their businesses. DiMS.NET! demonstrates the strength of our software and its ability to quickly adapt to the latest technologies available.  We anticipate that DiMS.NET! will further strengthen our position in the industry.”

Velmex Distribution open Canon's largest UK LFP Showroom

Velmex Distribution - Canon Showroom

Velmex Distribution leading Large Format Printer distributor for Canon UK, welcomed Canon directors, senior management and partners for a showroom opening at their newly acquired premises in Mitcham, Surrey. The showroom is now thought to be the biggest Canon large format printer demonstration facility in the UK.

Velmex Distribution the leading distributor for Canon large format printers celebrated the opening of a showroom facility in their new premises on Willow Lane Industrial Park in Mitcham, Surrey.  The premises comprises of a much larger office and warehousing space as well as an impressive 30ft demonstration suite and showroom, filled with Canon’s full range of printers, making it the largest Canon LFP showroom in the UK.

The showroom opening was attended by two Canon Directors; Mr Yuichi Miyano, Director LFP Solutions for Canon Europe as well as Matthew Seale, Director, Canon Partner Channel, Canon UK & Ireland.

By opening the showroom Velmex Distribution demonstrates a strong level of confidence in Canon’s products and market direction in a difficult financial climate.   Velmex Distribution has worked closely with Canon since 2001, together developing the sales channel and improving the value proposition collectively offered.  Matthew Searle Canon UK Directory said “Our partnership with Velmex over the last 8 years has been a model of how a vendor and distributor partnership should work”.

Mr Yuichi Miyano, Director LFP Solutions for Canon Europe visited Velmex Distribution for the first time at the opening. He was suitably impressed by the facilities and said “Velmex’s expertise is highly regarded by Canon and recognised as far a field as Canon Inc in Japan,”
The launch of the showroom coincides with Velmex Distribution’s recent Fogra certification for engineer, Daniel Judge, further proof of the service Velmex are intent on providing.

The impressive facilities are at the forefront of the move to Mitcham, “We desperately needed more space both for warehousing, office and showroom facilities.  Says Mark Keeley, Managing Director for Velmex Distribution “The premises offers us all of this”  The showroom is believed to be the largest Canon LFP showroom in the country and the only of its kind to offer all the Canon LFP line up as well as the C1+ a new light production printer in Velmex Distribution’s portfolio.

The showroom, filled with Canon’s range of Image PROGRAF printers and the Canon C1+, is smartly painted in slate grey, and provides a large boardroom table and presentation display system for meetings. The facilities offer customers the chance to see the products and have their own output printed before they invest.  Shane Burchett, LFP Channel Development Manager  said, “It’s wonderful to see a showroom with all our products so impressively displayed, it gives us a fantastic facility in the South East to showcase our printers and with Velmex’s technical expertise it provides our channel with an exceptional tool”