Eastman Kodak warned investors on Monday that there is "substantial doubt" it will be able to continue to operate. The news came in the company's second-quarter earnings report, as CNN reports.
Kodak currently has roughly $500 million in debt that is due within the next 12 months. The company ended the quarter with a cash balance of $155 million. It also reported a 1% year-over-year decrease in revenue and a GAAP net loss of $26 million for the quarter.
Kodak added that these losses were primarily due to weak sales and higher costs. Jim Continenza, Kodak’s Executive Chairman and CEO said that "tariffs did not have a material impact" on its business in Q2 because it is "committed to US manufacturing" and makes a range of its products in the United States. However, the company added that it is assessing the potential impact of new tariffs moving forward.
Kodak's management says it is seeking ways to manage debt, which includes terminating its US pension plan to redirect cash. It's also focused on "the efficiency of our operations and investing in growth initiatives in our [Advanced Materials & Chemicals] group. " That group, in part, helps produce ingredients for generic drugs domestically, for which it received a $765 million government loan in 2020.
"These conditions raise substantial doubt about the Company’s ability to continue as a going concern"
While Kodak warned about its financial status, it explained that its plan to reduce debt is moving forward. "The termination of our U. S. Kodak Retirement Income Plan and subsequent reversion of excess funds to pay down debt is progressing as planned," said David Bullwinkle, Kodak’s CFO. It added that "these plans are not solely within Kodak’s control and therefore are not deemed 'probable' under U. S. GAAP accounting rules," which raises "substantial doubt about the Company’s ability to continue as a going concern. " Despite that, Bullwinkle says the company "will continue to focus on reducing costs today and converting our investments into long-term growth. "
The historic company, founded more than 130 years ago, is no stranger to financial troubles. It entered Chapter 11 bankruptcy in 2012 and sold off all its consumer-facing photo businesses as a result. While the brand is still associated with photography products, it has largely shifted focus to other industries, such as industrial printing and chemicals. Currently, Kodak is largely a B2B organization, meaning it primarily conducts business with other businesses, not consumers. For example, while it still manufactures film, its still photography film is distributed by Kodak Alaris, a separate entity.
. dpreview.com2025-8-13 00:00
