Kodak Moments Just a Memory as Company Exits Bankruptcy
Eastman Kodak Co. (EKDKQ), the photography pioneer overcome by digital competition, emerged from bankruptcy today as a commercial-printing company that sells nothing to consumers.
The new, smaller Kodak has shed the cameras, film sales and consumer photo developing that made it a household name, focusing on printing technology for corporate customers, touch-screen sensor components for smartphones and computer tablets, and film for the movie industry. U.S. Bankruptcy Judge Allan Gropper last month approved Kodak’s exit plan, which cut about $4.1 billion of debt and left shareholders empty-handed.
Kodak, based in Rochester, New York, filed for bankruptcy in January 2012 after earlier spending $3.4 billion to shrink and restructure. Businesses including photographic film and digital patents, consumer-printing products, photo kiosks, online picture-sharing and document scanners were sold during the bankruptcy or spun off to settle pension claims. The commercial-printing businesses will continue making presses and technology to print documents, publications and product packaging.
“This is a totally new company,” Antonio Perez, Kodak’s chairman and chief executive officer, said in an interview. “When we created the new portfolio we were very aware of the fact that we were going to be late coming into this market. The only way that you could be successful coming in late is to come into the market with breakthrough technologies and very differentiated value propositions, and this is what we have.”
The new Kodak -- excluding units that have been sold or spun off -- will report about $2.5 billion in revenue in 2013, Perez forecast. It will have $167 million in earnings before interest, tax, depreciation and amortization, he said.
The Kodak brand remains “very valuable” in the imaging industry and will remain lucrative through licensing deals, Perez said.
“If it has to do with imaging, Kodak is a very strong brand all over the world,” he said.
Perez will continue as CEO for another year, or until his successor is elected. He will serve as a special adviser to Kodak’s board for up to three years, the company said in July.
Most of Kodak’s unsecured creditors, who recovered 4 cents to 5 cents on the dollar for their debt in bankruptcy, bought stock in the emerging company through a rights offering.
Kodak’s restructuring before bankruptcy included shuttering facilities and payouts to fire 47,000 employees since 2003. It entered court protection with about 17,000 employees and emerges with about 8,500, after previously agreed unit sales and spinoffs.
The company, which sold the first consumer camera 125 years ago, was founded by George Eastman, who developed a method for dry-plate photography before introducing the Kodak camera in 1888, according to the company’s website.
It went on to invent film, enabling Thomas Edison to develop the motion-picture camera, and introduced Brownie cameras selling for $1 and Kodachrome film. It also invented the digital camera -- a technology it mothballed and failed to commercialize.
In April, Kodak spun off its personalized- and document-imaging businesses for $650 million to its U.K. pension plan in a deal that settled $2.8 billion in claims against the company. It also reached a deal to resolve environmental liabilities in New York by establishing a trust and contributing $49 million.
“Chapter 11 is a complex, very expensive and exhausting process, but it does have certain positives and among them is that you are able to deal with and resolve legacy issues in a way that you wouldn’t have been able to do without it,” Perez said. “I wouldn’t recommend to anybody to file for Chapter 11, but if you have to deal with legacy costs, in my opinion it’s the only way you can do it.”
The bankruptcy case is In re Eastman Kodak Co., 12-10202, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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