Kodak's results for third quarter 2023

Kodak has reported its financial results for the third quarter of 2023

Third quarter 2023 highlights include:

• Consolidated revenues of $269 million, compared with $289 million for Q3 2022, a decrease of $20 million or 7 per cent
• Gross profit of $50 million, compared to $43 million for Q3 2022, an increase of $7 million or 16 per cent
• Gross profit percentage of 19 per cent, compared with 15 per cent for Q3 2022
• GAAP net income of $2 million, flat compared with Q3 2022
• Operational EBITDA of $12 million, compared with $7 million for Q3 2022, an increase of $5 million or 71 per cent
• A quarter-end cash balance of $246 million, compared with $217 million on December 31, 2022, increased by $29 million. Cash flow from operations improved $151 million in the nine months ended September 30, 2023, compared with the prior-year period

"Kodak continued to execute its long-term plan and deliver strong results in the third quarter despite ongoing, extraordinary challenges including inflation, high-interest rates, bank failures, labour shortages and now a new war," said Jim Continenza, Kodak’s Executive Chairman and CEO.

"As business conditions continued to worsen, we continued to improve our performance, adapting to circumstances never encountered before and making the changes necessary to deliver increases in gross profit and Operational EBITDA year over year for the fourth consecutive quarter. Through it all, we have focused on driving operational efficiency and smart revenue and investing in initiatives that leverage our strengths as an industrial manufacturer. Our investments in growth initiatives in our Advanced Materials & Chemicals group have resulted in increasing contributions from those businesses, and our investments in print have resulted in the introduction of groundbreaking inkjet presses capable of replacing offset technology. I’m extremely proud of our remarkable ability to build a strong foundation and continue our momentum in the face of unprecedented headwinds. I want to thank our employees for their hard work and resilience and our customers for their loyalty and support during this period."

For the quarter ended September 30, 2023, revenues were $269 million, a decline of $20 million or 7 per cent compared to the same period in 2022. GAAP net income was $2 million for the quarter, flat compared with Q3 2022.

Operational EBITDA for the third quarter of 2023 was $12 million, compared with $7 million in the prior-year period. The increase was primarily driven by improved profitability related to pricing rationalisation and improved operational efficiency executing on cost controls partially offset by higher continued ongoing global cost increases and lower volumes.

The company ended the third quarter with a cash balance of $246 million, compared with $217 million on December 31, 2022, an increase of $29 million. Cash flow from operations improved $151 million in the nine months ended September 30, 2023, compared with the prior-year period, primarily driven by improved profitability and changes in working capital strategies.

"Kodak’s cash performance continued to show improvement for the year-to-date period," said David Bullwinkle, Kodak’s CFO. "For the nine months ended September 30, 2023, cash increased $29 million, compared with a decrease of $146 million in the prior-year period, an improvement of $175 million in cash flow. Following two years of revenue growth, we’ve shifted our focus to generating smart revenue, which, along with productivity gains, enabled us to improve our year-over-year gross profit percentage for the third quarter from 15% to 19%. Although there are more headwinds on the horizon, we will stay committed to executing our long-term strategic plan: investing in innovation, improving efficiency and focusing on meeting the needs of our customers."

Revenue and Operational EBITDA by Reportable Segment Q3 2023 vs. Q3 2022

*Total Operational EBITDA is a non-GAAP financial measure. The reconciliation between GAAP and non-GAAP measures is provided in Appendix A of this press release.