A person uses a Kodak disposable camera in October 2012. Eastman Kodak company officials said on Tuesday that there’s “substantial doubt” over the company’s future after 2025’s second-quarter financial results. File Photo By Pat Benic/UPI | License Photo
The New York-based Eastman Kodak company says there’s “substantial doubt” over its future after 2025’s second-quarter financial results pictured a negative future for the once-renowned camera and film brand.
Kodak ended the quarter with a $155 million case balance but lost $46 million from December of last year as company revenue decreased by $4 million with a $26 GAAP net loss for the quarter, according to a corporate report.
“These conditions raise substantial doubt about the company’s ability to continue as a going concern,” Kodak wrote in its filing.
Company officials explained in the report that losses were due to capital expenditures and effects of higher costs. They added it was compounded by changes in the 133-year-old Kodak’s working capital and lower profitability.
“In the second quarter, Kodak continued to make progress against our long-term plan despite the challenges of an uncertain business environment,” Kodak CEO Jim Continenza stated in the earnings release.
Kodak’s slow downfall arrived on the heels of years of layoffs, long-existing issues over the company’s pension and retirement plan and failed attempts to expand via global investments in the Japanese market.
Tuesday’s news also comes months after the Rochester company announced it will terminate pension plans and use proceeds to pay down debt, which Kodak executives said is “progressing as planned.”
Officials at Eastman Kodak noted that some of the language deployed in its reporting was “essentially required disclosure because Kodak’s debt comes due within 12 months of the filing.”
“Kodak is confident it will be able to pay off a significant portion of its term loan well before it becomes due, and amend, extend or refinance our remaining debt and/or preferred stock obligations,” a Kodak spokesperson told News 8 in New York.
The company will begin to draw on some $300 million in December from its “KRIP” pension fund settlement in order to fund the repayment, the spokesperson said.
But the KRIP reversion is, according to Eastman Kodak, not solely within Kodak’s control and “therefore is not deemed ‘probable’ under U.S. GAAP accounting rules, which is what triggered the ‘going concern.'”
“Once the KRIP reversion is completed Kodak will be virtually net debt free and will have a stronger balance sheet than we have had in years.”
Meanwhile, Eastman Kodak’s stock shares dived on Tuesday more than 25% by midday trading.
