Kodak Reports Continued Progress in Q3 Segment Profitability
Thursday, November 01, 2012
Press release from the issuing company
Company demonstrates success in reducing costs and focusing on most profitable businesses
ROCHESTER, N.Y., - Eastman Kodak Company reported today that it made continued performance improvement in segment profitability for the third quarter of 2012 as a result of tightened focus on the company's most profitable customer accounts and businesses and a substantial reduction in costs. The company's focus on cost reductions and profitability resulted in a decrease in selling, general and administrative expenses of $63 million, a 24% reduction from the same period in the prior year.
The segment operating loss for the third quarter was $37 million, an $87 million improvement from the prior year. The company's gross profit margin increased by 2 percentage points. On a GAAP basis, the third quarter loss from continuing operations before interest expense, other income (charges), net, reorganization items, net and income taxes was $193 million, compared to the prior year quarter loss of $167 million. Excluding restructuring costs, the operating loss was $76 million.
The company's worldwide cash balance was $1.13 billion at the end of the third quarter.The company has submitted to the U.S. Bankruptcy Court for approval an agreement with the Official Committee of Retired Employees that will substantially reduce the company's payments for non-pension benefits for U.S. retirees, beginning in 2013, an action that would save the company about $100 million in cash expenditures next year (prior to reduction for appropriate expenses related to the agreement).
Kodak's revenue of $1.018 billion in the third quarter represented a decline of 19% from the year-ago quarter. This reduction reflects strategic decisions to focus on profitable businesses and accounts, lower sales of traditional products, unfavorable foreign exchange impact, and soft industry demand as a result of the broader economic downturn in some businesses and regions. The net loss for the quarter was $312 million. Excluding restructuring and reorganization costs, the loss would have narrowed to $139 million, an improvement of $66 million over the prior-year quarter.
"Since our Chapter 11 filing in January, we have focused on the businesses that are core to our future strategic direction and exited businesses that were unprofitable," said Antonio M. Perez, Chairman and Chief Executive Officer. "The actions we are taking in response to economic and market conditions are working and will position us to emerge in 2013 as a growing, profitable, sustainable company."
A full disclosure of Kodak's quarterly performance is contained in a 10-Q report filed today with the U.S. Securities and Exchange Commission.
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