Stock Alert for Eastman Kodak Co. (EKDKQ)
Eastman Kodak Company (EKDKQ) engages in the sale of imaging products, technology, solutions and services to consumers, businesses and professionals. The Company’s products span digital still and video cameras and related accessories; consumer inkjet printers and media; digital picture frames; retail printing kiosks; APEX drylab systems and related media and services; and KODAK Gallery online imaging services. The Company’s products also include prepress equipment and consumables; imaging sensors; workflow software and services electro-photographic printing equipment, consumables and service; commercial inkjet printing equipment, consumables and service, and document scanners.
| Share Statistics (20-Jan-12) | FY
2009 |
FY
2010 |
%
Chg |
Q3
2009 |
Q3
2010 |
%
Chg |
||
| Symbol | EKDKQ | Revenue, $ | 7.61B | 7.19B | -5.5% | 1.76B | 1.46B | -17.0% |
| Current price | $0.31 | Gross marg. | 23.2% | 27.1% | 16.8% | 27.0% | 14.2% | -47.4% |
| 52wk Range: | $0.28-$0.55 | Oper. margin | – | -6.1% | – | – | -11.9% | – |
| Avg Vol (3m): | 14,167,000 | Net margin | -2.8% | 9.6% | -442.9% | -2.6% | -15.2% | 484.6% |
| Market Cap. | 84.50M | |||||||
| Shares Outstanding | 269.95M | EPS, $ | 0.04 | -0.60 | 1600.0% | -0.16 | -0.69 | 331.3% |
Source: Reuters.com, SEC Filings.
Investment Highlights
Eastman Kodak Co. (Kodak) and its U.S. subsidiaries last week filed to reorganize its U.S. business under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York. The Company’s board of directors concluded that a court-supervised plan of reorganization would best protect long-term business interests as the Rochester, N.Y.-based Company intends to complete its transformation and emerge as a more competitive, sustainable enterprise. Kodak’s non-U.S. subsidiaries were not part of the filing.
Following the Chapter 11 announcement, the Company reported that Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York has approved initial availability of $650 million in interim Debtor-in-Possession (DIP) financing by Citigroup. The Company said it will use these funds, among other things, to pay vendors and other suppliers for all post-petition goods and services, and to operate its day-to-day business activities. As reported, Kodak obtained a fully-committed, $950 million DIP credit facility with an 18-month maturity from the bank to enhance liquidity and working capital.
Kodak said it will be filing monthly operating reports with the Bankruptcy Court and will continue to file quarterly and annual reports with the Securities and Exchange Commission.
Antonio Perez, chairman and CEO of Kodak, commented in the release, “Chapter 11 gives us the best opportunities to maximize the value in two critical parts of our technology portfolio: our digital capture patents, which are essential for a wide range of mobile and other consumer electronic devices that capture digital images and have generated over $3 billion of licensing revenues since 2003; and our breakthrough printing and deposition technologies, which give Kodak a competitive advantage in our growing digital businesses.”
The NYSE suspended trading of Kodak stock on Thursday after Kodak made the announcement, and also notified the Company that its stock will be delisted. Kodak does expect to resume trading during the Chapter 11 proceeding.
The imaging technology provider, now trading OTC under the symbol EKDKQ, closed at $0.31 on Friday on volume of almost 66 million shares. The penny stock surged to an intra-day high of $0.38, its low being $0.31.
Source: http://www.kodak.com/ek/US/en/News_Media/News_Releases.htm
Financial Summary
Kodak reported sales of $1.462 billion for the third quarter 2011, representing a 17% decrease from the year-ago quarter or only 5% when excluding the benefit of a $210 million non-recurring patent licensing transaction in the year-ago period.
Third-quarter digital revenue grew 3% excluding the year-ago intellectual property revenue and a 25% decline in the Company’s Digital Cameras & Devices business, which reflects the strategic decision this year to trade revenue for improved earnings. Revenue from the core digital growth businesses – Consumer and Commercial Inkjet, Workflow Software & Services, and Packaging Solutions – increased 13%, fueled by 44% revenue growth in Consumer Inkjet printers and ink, and 89% revenue growth in Packaging Solutions. The revenue decline rate for the Company’s Film, Photofinishing and Entertainment Group slowed to 10% in the third quarter.
On the basis of U.S. generally accepted accounting principles (GAAP), the Company reported a third-quarter loss from continuing operations of $222 million, or $0.83 per share, compared with a loss from continuing operations on the same basis of $43 million, or $0.16 per share, in the year-ago period. The results largely reflect the absence of sizable patent licensing revenue in this year’s third quarter versus the year-ago period and the continued secular decline of traditional products¸ partially offset by better operating performance, excluding non-recurring intellectual property revenue, in the Company’s digital businesses.
For the full year, the Company now expects its total revenue to be in the range of $6.3 billion to $6.4 billion, compared to its previous forecast of $6.4 billion to $6.7 billion. On a GAAP basis, the Company now expects earnings from continuing operations before interest expense, other income (charges), net, and income taxes in the range of a negative $300 million to negative $400 million, reflecting lower earnings and lower gains on asset sales. Previously, the Company forecasted GAAP earnings in the range of $50 million to negative $150 million.
Comparative Analysis
| Company Name | Ticker | Price per | Mrkt. Cap. | P/E | P/S | ||
| Jan-20-2011 | symbol | Share, $ | $ Mn | 2011 | 2012 | 2011 | 2012 |
| Ricoh Co. Ltd. | RICOY | 42.01 | 6.10B | 15.22 | 15.84 | 0.25 | 0.25 |
| Canon Inc. | CAJ | 44.50 | 53.47B | 17.12 | 15.66 | 1.13 | 1.09 |
|
Photographic Equipment & Supplies Median Median |
17.00 | n/a | 1.10 | n/a | |||
| Eastman Kodak Co. | EKDKQ | 0.31 | 84.50M | n/a | n/a | n/a | n/a |
Source: Thomson Financial
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