25 Jun 2021

Kodak reports 2nd Quarter results

Kodak logo

Eastman Kodak Company today reported second-quarter 2009 results that reflect the weak global economic climate and forecasted improved financial results for the second half of the year.

The company's second-quarter results also reflect focused investments that Kodak is making in new products and core growth businesses, as well as disciplined cost management and more tightly focused spending on research and development. These actions will lay the groundwork for the second-half cash and earnings improvement that the company expects.

For the second quarter, Kodak reported a loss from continuing operations of $191 million, or $0.71 per share. Second-quarter sales were $1.766 billion, a 29% decline from the year-ago quarter, including approximately 5% of unfavorable foreign exchange impact.

"While we continue to be challenged by the global recession, we remain committed to our strategy and have the financial resources available to implement our business plans," said Antonio M. Perez, Chairman and Chief Executive Officer, Eastman Kodak Company. "We have every expectation that our cash flow pattern this year will mirror the pattern of previous years, with a sizable increase in cash generation in the second half of 2009. During the second quarter we continued to execute on our strategy, with our consumer inkjet hardware and ink revenue growth significantly outpacing the market. We've recently announced the first sale of our KODAK PROSPER S10 Imprinting System, and the first letter of intent to purchase a KODAK PROSPER Press powered by our Stream Inkjet Technology. We are successfully focusing on those things within our control – strengthening the return on our cash-generating businesses, further developing our core growth businesses, maintaining and enhancing our leading market share position, introducing innovative new products, and driving a leaner cost structure – all of which will create operating leverage and position Kodak for a stronger second half of 2009."

For the second quarter of 2009:

- Sales worldwide totaled $1.766 billion, a decrease of 29% from $2.485 billion in the second quarter of 2008, including 5% of unfavorable foreign exchange impact. Revenue from digital businesses totaled $1.173 billion, a 28% decline from $1.636 billion in the prior-year quarter, primarily as a result of the global recession and continued restrictions in the credit markets. Revenue from the company's traditional business decreased 30% to $593 million, primarily as a result of industry-related declines in our traditional businesses and the negative impact on volumes related to the uncertainty of labor contract negotiations in the entertainment industry. These labor contract negotiations were concluded in June 2009.

- The company's second-quarter loss from continuing operations, before interest expense, other income (charges), net, and income taxes was $119 million, compared with earnings on the same basis of $18 million in the year-ago quarter.

On the basis of U.S. generally accepted accounting principles (GAAP), the company reported a second-quarter loss from continuing operations of $191 million, or $0.71 per share, compared with earnings on the same basis of $200 million, or $0.66 per share, in the year-ago period. Items of net expense that impacted comparability in the second quarter of 2009 totaled $75 million after tax, or $0.28 per share, primarily related to restructuring charges and tax related items. Items of net benefit that impacted comparability in the second quarter of 2008, totaled $245 million after tax, or $0.79 per share, due primarily to a tax refund from the U.S. Internal Revenue Service. (Please refer to the attached Items of Comparability table for more information.)

Other second-quarter 2009 details:

- Gross Profit was 18.5% of sales, a decline from 23.6% in the year-ago period. This decline in margin was driven by reduced volumes, along with the impact of negative price/mix, including lower intellectual property licensing royalties, and unfavorable foreign exchange, partially offset by continued cost reductions.

- Selling, General and Administrative (SG&A) expenses were $324 million in the second quarter, down 26%, or $114 million, from $438 million in the year-ago quarter, as a result of company-wide cost reduction actions.

- Research and Development expenses were $84 million in the second quarter, down 38%, or $51 million, from $135 million in the year-ago quarter, driven by more tightly focused investments in core growth businesses.

- Second-quarter 2009 cash generation, before restructuring, reflected a use of $136 million. This compared with cash usage on the same basis of $158 million in the year-ago quarter, after excluding the impact of a tax refund received from the IRS in that period. This corresponds to net cash used in continuing operations from operating activities on a GAAP basis of $161 million in the second quarter, compared with net cash provided of $162 million in the second quarter of 2008. As was the case in 2008, the company expects cash usage to be heaviest in the first part of the year, with cash trends expected to be significantly improved for the second half of the year.

- Kodak held $1.132 billion in cash and cash equivalents as of June 30, 2009.

- The company's debt level stood at $1.311 billion as of June 30, 2009.

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 second-quarter sales were $503 million, a 33% decline from the prior-year quarter, including 5% of unfavorable foreign exchange impact. Second-quarter loss from operations for the segment was $99 million, compared with a loss of $49 million in the year-ago quarter. The year-over-year variance was driven primarily by price/mix impacts, including lower intellectual property licensing royalties and unfavorable foreign exchange, and market-related volume declines. This was partially offset by improved profitability in consumer inkjet systems, driven by a 44% revenue increase in consumer inkjet printer hardware and ink, along with lower costs as a result of the company's move to a more efficient product platform, and reduced SG&A and R&D expenses across the segment. Kodak continues to forecast an average of at least $250 million to $350 million in intellectual property licensing revenue for 2009 and the next few years.

- Graphic Communications Group second-quarter 2009 sales were $670 million, a 24% decline from the second-quarter of 2008, including 5% of unfavorable foreign exchange impact. This revenue decrease was primarily driven by a market-related decline of 27% in Prepress Solutions as well as associated declines in workflow. Second-quarter loss from operations for the segment totaled $28 million, compared with earnings of $13 million in the year-ago quarter. This earnings decline was primarily driven by lower volume and price/mix across several product lines, along with a negative impact from foreign exchange, partially offset by operational improvements in Electrophotographic Printing Solutions.

- Film, Photofinishing and Entertainment Group second-quarter sales were $593 million, a 30% decline from the year-ago quarter, including 6% of unfavorable foreign exchange impact. Second-quarter earnings from operations for the segment were $51 million, compared with earnings of $54 million in the year-ago period. These earnings results were driven by declines in consumer film sales volumes, price/mix across several product lines and unfavorable foreign exchange impacts, primarily in Entertainment Imaging, largely offset by operational improvements in Traditional Photofinishing, significant cost reductions across the segment, improvement in raw material costs, and the impact of previously announced changes in post-employment benefits.

Océ Pension Fund recovery plan approved

Océ logo

The Océ Pension Fund has informed Océ N.V. that the Dutch Central Bank has approved its recovery plan. The fund ratio of the Océ Pension Fund had dropped to 79.4% on 31 December 2008 as a result of the crisis in the financial markets. The Central Bank requested the Fund to submit a recovery plan.
 
As part of the recovery plan and for a four-year period as of mid-2010, Océ N.V. will make a further annual contribution to the Pension Fund expected to amount to approximately EUR 7.5 million. The additional contributions have no impact whatsoever on the profit and loss account of Océ N.V. Should the financial position of the Océ Pension Fund deviate positively or negatively from the forecast as projected in the recovery plan, Océ will amend its further contributions accordingly.
 
On 30 June 2009, the fund ratio amounted to 83.9%.
 
As announced earlier, the Océ Pension Fund had raised the pension premiums from
9 to 10% of the pensionable salary (for employees) and from 18 to 20% (for the company) effective 1 January 2009. This increase will remain in effect until the fund ratio has been restored to 105%.
 
The Océ Pension Fund applies the pension scheme to (former) employees in the
Dutch subsidiaries Océ-Technologies B.V. and Océ-Nederland B.V.

X-Rite announces 2nd Quarter Results

X-Rite logo

X-Rite, Incorporated today announced its financial results for the quarter ended July 4, 2009.

Highlights of today's announcement:

•    Second quarter 2009 net sales of $49.4 million
•    Improved profitability as a result of the Company's profit improvement plan
    -    Second quarter operating income of $2.5 million and a significant reduction in the net loss in the second quarter versus prior year
    -    Adjusted EBITDA margin in the quarter of 24.8 percent of net sales, up 1.1 percentage points from prior year
   -    Healthy cash flow from operations
•    Strengthened balance sheet
    -    Debt paid down in the second quarter by $13.4 million and $34.2 million year-to-date
    -   Net debt balance of $202.9 million at close of second quarter
    -    Second quarter ending cash balance of $33.8 million
•    Closure of Viptronic business operations in June 2009
    -   Expected completion of campus sale by end of third quarter 2009 for $2.4 million
•    New MatchRite iVue color matching system announced as next generation solution for Benjamin Moore stores in North America
•    Increased adoption of ColorMunki Design by major industry partners and customers as key workflow tool in creative phase of product realization process

The Company reported second quarter 2009 net sales of $49.4 million compared to $73.5 million in second quarter 2008. These results are in the range of Company expectations given market conditions and reflect a decline of 32.8 percent (29.8 percent after a currency impact of $2.2 million) versus a comparatively strong prior year performance. On a year-to-date basis net sales were $96.0 million, 31.1 percent (27.9 percent after $4.5 million of currency impact) below the same period results last year. Both the Color Measurement and Color Standards segments experienced similar year over year declines as many customers and channel partners continued to delay purchase decisions in key X-Rite markets.

"While we are beginning to make progress in some new market segments that have been less affected by the global economic slump, core markets such as printing and automotive continue to face weak customer demand and corresponding investment levels, which in turn impact the demand for X-Rite's products. Generally, discretionary CAPEX spending remains below pre-recession levels," said Thomas J. Vacchiano Jr., X-Rite's chief executive officer. "Some good news is that we are beginning to see an increasing number of customers and partners reengaging in discussions with X-Rite about previously suspended projects or new projects, which may be an indicator of improving order rates later this year or in 2010."

Supported by the Company's profit improvement actions, the second quarter net loss was $7.6 million versus a loss of $20.9 million in the same period in 2008. Adjusted EBITDA in the second quarter was $12.3 million compared to $17.4 million in the second quarter 2008. Adjusted EBITDA as a percentage of net sales was 24.8 percent in the second quarter, an improvement of 1.1 percentage points from 2008. Operating income for the second quarter of 2009 was $2.5 million or 5 percent of net sales as compared to $0.4 million in the same period last year.

The Company reported that despite the net sales decline in the second quarter, successful execution of the profit improvement plan along with effective working capital management practices yielded healthy cash flows. The Company's cash position ending the period was $33.8 million and debt was reduced by $13.4 million in the second quarter to $236.7 million.

Bradley J. Freiburger, X-Rite's interim chief financial officer commented, "While we are pleased with our progress managing costs and working capital during these challenging times, we remain committed to keeping costs and working capital levels aligned with the realities of the current market. We believe X-Rite is poised to deliver attractive levels of cash flow and profitability when market opportunities improve."

The Company has completed its announced closure of business operations for Viptronic, a subsidiary of X-Rite located in Brixen, Italy as of June 2009. It is expected that the sale of the campus will be completed by September of this year at a price estimated to be $2.4 million.

X-Rite also announced that momentum for its new MatchRite iVue system continues to build as Benjamin Moore recently decided to adopt this technology as the next generation solution for its retail stores. Additionally, the Company reported that an increasing number of customers adopted its new ColorMunki Design product to improve speed, cost or quality in the design phase of their product realization processes. Early adopters include partners such as Corel and Bunkspeed, and customers such as Kohl's and Columbia Sportswear.

Vacchiano closed by commenting, "The general economic climate continues to cause substantial uncertainty making it impractical to provide guidance. That said, I am encouraged by new project design wins as noted in this press release. It is an indicator of the future opportunity for our industry and the leadership role that X-Rite has established."

EFI reports 2nd Quarter Results

EFI logo

Electronics For Imaging, Inc. (Nasdaq:EFII), the world leader in customer-focused digital printing innovation, today announced its results for the second quarter of 2009. For the quarter ended June 30, 2009, the Company reported revenues of $90.1 million, compared to second quarter 2008 revenue of $143.8 million.

GAAP net loss was $(13.3) million or $(0.27) per diluted share in the second quarter of 2009, compared to a GAAP net loss of $(0.1) million or $(0.00) per diluted share for the same period in 2008.

GAAP net income was $13.4 million or $0.26 per diluted share for the six months ended June 30, 2009, compared to a GAAP net loss of $(5.3) million or $(0.10) per diluted share for the same period in 2008.

Non-GAAP net loss was $(6.1) million or $(0.12) per diluted share in the second quarter of 2009, compared to non-GAAP net income of $12.0 million or $0.21 per diluted share for the same period in 2008.

Non-GAAP net loss was $(10.5) million or $(0.21) per diluted share for the six months ended June 30, 2009, compared to non-GAAP net income of $24.0 million or $0.41 per diluted share for the same period in 2008.

“Our results reflect the continued challenges in our industry compounded by the delay in broad availability of our new line-up of inkjet printers. While our overall results are disappointing, we are pleased with the approximately 14% sequential growth in our Inkjet business and the execution on our commitment to align spending with revenue, with operating expenses reduced by 22% year-over-year,” said Guy Gecht, CEO of EFI. “Despite the product delay, we remain very excited with the opportunities for our inkjet segment and the record number of industry-leading new products we plan to bring to market over the next several months.”

EFI will discuss the Company’s financial results by conference call at 2:00 p.m. PDT today. Instructions for listening to the conference call over the Web are available on the investor relations portion of EFI’s website at www.efi.com.

About our Non-GAAP Net Income and Adjustments

To supplement our consolidated financial results prepared under generally accepted accounting principles, or GAAP, we use non-GAAP measures of net income and earnings per diluted share that are GAAP net income and GAAP earnings per diluted share adjusted to exclude certain recurring and non-recurring costs, expenses and gains.

We believe that the presentation of non-GAAP net income and non-GAAP earnings per diluted share provides important supplemental information to management and investors regarding non-cash expenses, significant recurring and nonrecurring items that we believe are important to understanding our financial and business trends relating to our financial condition and results of operations. Non-GAAP net income and non-GAAP earnings per diluted share are among the primary indicators used by management as a basis for planning and forecasting future periods and by management and our board of directors to determine whether our operating performance has met specified targets and thresholds. Management uses non-GAAP net income and non-GAAP earnings per diluted share when evaluating operating performance because it believes that the exclusion of the items described below, for which the amounts and/or timing may vary significantly depending upon the Company’s activities and other factors, facilitates comparability of the Company’s operating performance from period to period. We have chosen to provide this information to investors so they can analyze our operating results in the same way that management does and use this information in their assessment of our business and the valuation of our Company.

We compute non-GAAP net income and non-GAAP earnings per diluted share by adjusting GAAP net income and GAAP earnings per diluted share to remove the impact of recurring amortization of acquisition-related intangibles, stock-based compensation expense, as well as restructuring related and non-recurring charges and gains and the tax effect of these adjustments. Such nonrecurring charges and gains include project abandonment costs, asset impairment charges, costs related to our stock option review completed in 2008, certain legal settlements, and our sale of certain real estate assets. Examples of these excluded items are described below:

    - Amortization of acquisition-related intangibles. Intangible assets acquired to date are being amortized on a straight-line basis.
    - Stock-based compensation expense is recognized in accordance with SFAS 123R.
    - Non-recurring charges and gains, including:

          o Restructuring related charges. We have incurred restructuring charges as we reduce the number and size of our facilities and the size of our workforce.
          o Asset impairment costs consist of equipment and non-cancellable purchase orders incurred relating to a planned product that was cancelled.
          o Gain on sale of building and land. On January 29, 2009, we sold a portion of the Foster City, California campus for $137.3 million to Gilead Sciences, Inc., resulting in a gain on sale of $80.0 million.
    - Tax effect of these adjustments.

These non-GAAP measures are not in accordance with or an alternative for GAAP and may be materially different from non-GAAP measures, including similarly titled non-GAAP measures, used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income or earnings per diluted share prepared in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results. We expect to continue to incur expenses of a nature similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP net income and non-GAAP earnings per diluted share should not be construed as an inference that these costs are unusual, infrequent or non-recurring.

The full report can be read on the EFI website.

Agfa reports 2nd Quarter Results

 Agfa logo

Agfa-Gevaert reports second quarter results - Regulated information

    - Market trends in line with previous statements: Group sales decreased in line with Q1 trend
    - Recurring EBIT at 38 million Euro versus 37 million Euro in the second quarter of 2008 and 28 million Euro in the first quarter of 2009
    - Operating result (26 million Euro) remained stable versus the second quarter of 2008
    - Decrease of SG&A costs well ahead of previously announced plans
    - Net result at minus 9 million Euro
    - Net financial debt improved considerably versus the first quarter of 2009
    - Agreement with banks about the sale of receivables for an amount of 160 million Euro

Compared to the second quarter of 2008, Group sales decreased 12.9 percent to 677 million Euro. In Agfa Graphics and Agfa Specialty Products, the sales trend was in line with the first quarter of 2009, whereas Agfa HealthCare's sales figures showed the impact of the longer decision processes for investments in IT and equipment.

The sales decrease affected the Group's manufacturing efficiency due to lower use of capacity. This was partially offset by the positive effects of the lower raw material prices. As a result, the Group's recurring gross profit margin decreased from 32.6 percent in the second quarter of 2008 to 31.6 percent. However, the decrease versus last year's quarter is less than in the first quarter of 2009.

Due to its strict cost management, Agfa-Gevaert succeeded in further reducing its Selling and General Administration expenses. The monthly SG&A expense was brought down from 57 million Euro in the second quarter of 2008, to 46 million Euro in the second quarter of 2009, which is a cost decrease by 19.3 percent. The SG&A expenses represented 20.4 percent of sales, versus 22.0 percent in the second quarter of 2008. The Group has taken a number of additional measures to further lower its costs. It will continue to evaluate the market trends in all business groups and take further action if necessary.

The recurring EBIT was affected by a newly imposed pension charge (amounting to 4 million Euro) related to pension insurances in Germany.

The Group's recurring EBITDA (the sum of Graphics, HealthCare, Specialty Products and the unallocated portion) decreased from 66 million Euro in the second quarter of 2008 to 64 million Euro. Recurring EBIT increased from 37 million Euro to 38 million Euro.

The restructuring and non-recurring items resulted in an expense of 12 million Euro, stable compared to the second quarter of 2008.

As in the first quarter of 2009, the non-operating result was affected by pension provisions (mainly concerning inactives), to cover for increased pension deficits in the USA and the UK. The non-operating result amounted to minus 27 million Euro.

Taxes amounted to 8 million Euro versus 2 million Euro in the second quarter of 2008.

The net result amounted to minus 9 million Euro, compared to 3 million Euro in the second quarter of 2008.
Balance sheet and cash flow

- Next to its long-term funding, the Group improved its mid-term funding options by signing agreements with three core banks about the sale of receivables for an amount of 160 million Euro. This transaction has reduced the Group's net debt by 40 million Euro in the second quarter. It is one of the levers to further reduce net debt in the future.
- At the end of June 2009, total assets were 2,963 million Euro, compared to 3,160 million Euro at the end of 2008.
- Inventories were 543 million Euro (or 99 days). Trade receivables amounted to 657 million Euro, or 69 days (including deferred revenue and advanced payments) and trade payables were 187 million Euro, or 34 days.
- Net financial debt further improved to 569 million Euro at the end of June 2009, compared to 673 million Euro at the end of 2008, and 737 million Euro at the end of June 2008. In addition to the sale of receivables (40 million Euro), this improvement is due to working capital improvements and the strict cash management control.
- Net operating cash flow amounted to 106 million Euro.

Following the trend of the previous months, Agfa Graphics' sales were severely hit by the impact of the global economic crisis on the printing industry. The effects of the crisis are the strongest in the field of investment goods, but the slowdown in the advertising markets also resulted in a lower use of consumables, such as graphic film and printing plates. Competitive pressure also increased in recent months, mainly due to - among other reasons - overcapacity. Agfa Graphics' sales decreased 15.3 percent versus last year's second quarter.

The volume decline as well as the competitive pressure affected Agfa Graphics' gross margin. These adverse effects were partially offset by some positive effects of the lower raw material prices. The business group continued its efforts to reduce its Selling and General Administration costs, which decreased by 19 million Euro versus the second quarter of 2008. The recurring EBITDA margin increased to 7.3 percent of sales. The recurring EBIT margin was 3.7 percent of sales, which is a status quo compared to last year's second quarter, but a significant improvement versus this year's first quarter.

In prepress, Agfa Graphics added a new solution to its :Avalon N range of platesetters. The :Avalon N4 is fit for midsize commercial printers and ideally suited to work with Agfa Graphics' :Azura chemistry-free printing plates. Agfa Graphics also introduced a new release of its :Apogee Suite workflow software, which allows printers to shorten their production time and to further simplify their production chain.

In industrial inkjet, Agfa Graphics unveiled the second generation of its :M-Press industrial flatbed press at the Fespa Digital 2009 trade fair. The :M-Press Tiger combines a 300 percent increase in productivity with higher quality output. Agfa Graphics' single pass :Dotrix Modular inkjet press was acclaimed as the 'Best Industrial (Specialty) Printing Solution of the Year 2009' by the European Digital Press Association. Furthermore, Agfa Graphics sold its first :Dotrix Modular in the Asian region to Unit Safety Signs in Tokyo (Japan). At the Sign Expo trade fair (Las Vegas, US), numerous :Anapurna systems were sold, stressing the success of Agfa Graphics' range of large-format inkjet printers.


Outlook

As announced in the publications concerning the first quarter results, Agfa-Gevaert is inclined to believe that the crisis-driven decline in its most important markets is bottoming out. However, it is still impossible to predict when the markets will pick up and when demand will recover. Meanwhile, Agfa-Gevaert continuously adapts the cost structures of its business groups to the situation in their respective markets in order to safeguard and strengthen their competitive positions.

The full report can be found on the Agfa website.

New report on Current State of Green Printing

green earth

WhatTheyThink, the leading news and information site for the graphic communications industry, announces the immediate availability of Printing Continues to Go Green: An Updated WhatTheyThink Primer on Environmental Sustainability in the Commercial Printing Industry. This 68-page report provides an overview of the state of green printing initiatives in the U.S. commercial printing industry.

The report, an update to a special primer report first published in April 2008, provides the results of a June 2009 survey of commercial printing establishments conducted by WhatTheyThink’s Economics and Research Center, descriptions of the leading green certification organizations—such as the Sustainable Green Printing Partnership, the Forest Stewardship Council, and the Sustainable Forestry Initiative, to name but three—and a variety of steps commercial printers can take toward becoming environmentally sustainable and responsible. The report also seeks to dispel the increasingly common notion that print is more environmentally harmful than electronic media.

Printing Continues to Go Green gathers together secondary research that gauges the real “carbon cost” of a Google search, the environmental impact of the myriad servers and workstations that comprise the Internet, the looming e-waste epidemic, and more.

The report also offers conclusions, recommendations, and strategies both simple and complex for companies that are interested in pursuing green initiatives, as well as resources with which to obtain additional information.

Printing Continues to Go Green is available for online purchase at the WhatTheyThink Store in PDF format

Researcher’s Comments...

“How many times have you heard, ‘We’ve cut down on the use of print to save trees’; ‘Electronic media are more environmentally friendly than print’; ‘Print just clogs landfills’; ‘We’re reducing our carbon footprint by printing less’? We don’t grant the premise that print is less environmentally responsible than other media, but the green printing issue is no longer ‘How green is my printer?’ but has now become ‘How green is print at all?’ Every human activity has an environmental impact of some kind, but it now behooves the printing industry to fight back by showing how environmentally sustainable we can be as an industry.”

According to the Report…

— in a June 2009 survey conducted by WhatTheyThink’s Economics and Research Center, the top green practice that U.S. commercial printers say they have currently implemented is “identify itself in marketing and sales materials and promotions as an environmentally sensitive business,” cited by 33% of all respondents, up from the 26% who said this in a March 2008 survey;

— 43% of all responding companies said that sustainable printing initiatives are “critically important to only a select few customers,” up from 41% in March 2008;

— 26% of all respondents say they plan to implement some form of certification from an environmentally sustainable printing authority, up from 20% in April 2008;

WhatTheyThink reports are available for online purchase at the WhatTheyThink Store in PDF format.

Availability

The WhatTheyThink special report, Printing Continues to Go Green: An Updated WhatTheyThink Primer on Environmental Sustainability in the Commercial Printing Industry is available for purchase by visiting the secure WhatTheyThink Store online at https://store.whattheythink.com/operations-management/printing-goes-green. The price for the 68-page report is $195. WhatTheyThink eStore customers can download this report in PDF Acrobat format immediately after purchase. An enterprise site license  for this report is also available for $995.