Kodak ready for reorganization plan negotiation with stakeholders

By Jim Witters

Wilmington, Del., Oct. 12 - Eastman Kodak Co. has made significant progress in its restructuring efforts and is ready to begin negotiations with key creditor groups on a plan of reorganization, according to an Oct. 12 company press release.

The company also filed an 8-K with the U.S. Securities and Exchange Commission outlining financial projections through 2015.

The projections include forecasts of Kodak's U.S. operating cash flow through June 2013, as well as pro-forma projections of the company's combined operating cash flow after taking into account previously announced portfolio strategy decisions, such as the intention to divest of the document imaging and personalized imaging businesses.

The projections also include Kodak's intention to wind down the sale of consumer inkjet printers and focus on servicing its installed base of customers.

The company expects to emerge from Chapter 11 in the first half of 2013 with a "strong, cash-generating set of Kodak businesses," according to the release.

"As we move forward to emergence and explore an array of financing options, we believe there is confidence and interest among the financial community in our commercial imaging business and its future business plans. We are gratified that there appears to be interest among several potential lenders to finance this business and its emergence, and with this disclosure, we are now better positioned to explore these funding opportunities," said Antonio M. Perez, Kodak chairman and CEO.

According to the 8-K filing, U.S. operating cash flow for the company is projected to grow from $1 million in September 2012 to $17 million by June 2013. The projections include negative cash flow in some months, ranging as low as negative $49 million in January 2013.

Combined commercial imaging

The company's combined commercial imaging business expects a gross profit of $195 million on $1.2 billion of revenue in the first half of 2013, steadily rising to $780 million gross profit on $3.04 billion of revenue for 2015.

EBITDA after corporate costs is projected to reach $57 million in the first half of 2013, rising to $353 million in 2015.

Commercial digital printing

Gross profit for the commercial imaging digital printing and enterprise division is projected to be $53 million gross profit on revenue of $333 million during the first half of 2013, rising to $420 million on $1.37 billion in 2015.

EBITDA before corporate allocation is projected at negative $9 million for the first half of 2013, growing to $229 million in 2015. No figures were listed for the EBITDA after corporate costs.

Graphics, entertainment, films

Kodak's commercial imaging graphics, entertainment and commercial films division projects gross profit of $140 million on $794 million of revenue during the first half of 2013, with steady increases to $338 million gross profit on $1.64 billion in revenue in 2015.

EBITDA before corporate allocation is expected to be $101 million in the first half of 2013, rising to $257 million in 2015. No figures were listed for the EBITDA after corporate costs.

Other business units

The company projects that its other commercial imaging business units will post a gross profit of $2 million on $75 million of revenue during the first half of 2013. The gross profit is expected to rise to $71 million in the second half of 2013, before falling to $44 million in 2014 and to $23 million in 2015.

EBITDA before corporate allocation is projected at $45 million during the first half of 2013, rising to $89 million in the second half of 2013, then falling to $60 million in 2014 and to $32 million in 2015. No figures were listed for the EBITDA after corporate costs.

Kodak is a Rochester, N.Y.-based imaging technology products and services provider to the photographic and graphic communications markets. The company filed for bankruptcy on Jan. 19, 2012. Its Chapter 11 case number is 12-10202.

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