Eastman Kodak(KODK)2023-11-07 16:00Revenue Performance - Consolidated revenues for the three and nine months ended September 30, 2023 were $269 million and $842 million, respectively, representing a decrease of $20 million (7%) and $58 million (6%) compared to the same periods in 2022[185] - Print revenues declined by $28 million (13%) and $84 million (12%) for the three and nine months ended September 30, 2023, accounting for 73% and 74% of total revenues, respectively[186] - Advanced Materials and Chemicals revenue increased by $6 million (10%) and $24 million (14%) for the three and nine months ended September 30, 2023 compared to the prior year periods[186] - Advanced Materials and Chemicals segment revenues increased by $6 million to $64 million in Q3 2023, with Operational EBITDA improving by $1 million to $4 million[228] - Year-to-date Operational EBITDA for Advanced Materials and Chemicals improved by $14 million, driven by price and product mix improvements and higher margins in Industrial Film and Chemicals[232] Acquisitions and Investments - Kodak acquired 100% of Graphic Systems Services, Inc. on May 26, 2023, a provider of web inkjet press transport systems and print-related components, though the acquisition was immaterial to financial results[162] - Kodak acquired 100% of Graphic Systems Services, Inc. (GSS) on May 16, 2023, which represented less than 1% of consolidated revenues and total assets as of September 30, 2023[275] Financial Instruments and Risk Management - The notional amount of Kodak's foreign currency forward contracts open at September 30, 2023 was approximately $270 million, primarily denominated in euros, Chinese renminbi, and Japanese yen[164] - Kodak's exposure to foreign currency exchange rates and interest rates is managed through derivative financial instruments, with no derivatives designated as hedging instruments in 2023[163][165] - The fair value of embedded conversion features derivatives for Convertible Notes was $5 million as of July 21, 2023, calculated using a binomial lattice model[173] Cost Management and Restructuring - Kodak decreased workers' compensation reserves by approximately $5 million and $13 million in the three and nine months ended September 30, 2022, respectively, impacting gross profit and expenses[158] - Kodak implemented pricing actions to mitigate increased labor, material, and distribution costs, including surcharges on plate purchases starting in Q2 2021[190] - Restructuring actions in the first nine months of 2023 are expected to generate $7 million in annual cash savings, with $3 million in SG&A and $4 million in cost of revenues reductions[236] - Kodak recorded $9 million in restructuring charges for the nine months ended September 30, 2023, including $8 million in severance charges and $2 million in inventory write-downs[234] Supply Chain and Operational Challenges - Supply chain disruptions and material shortages led Kodak to increase safety stock, extend lead times, and certify additional sources, enabling the company to largely meet demand[189] - Kodak's cash flows were negatively impacted by supply chain disruptions, labor shortages, and increased costs, but price increases and cost reduction actions positively impacted operations in the first nine months of 2023[243] Insurance and Reimbursements - Kodak received $17 million in insurance reimbursement proceeds in the first nine months of 2023, with $5 million recorded in Other current assets as of December 31, 2022[158] Financing Activities - Net cash from financing activities increased by $42 million for the nine months ended September 30, 2023, driven by $90 million in net proceeds from financing transactions in Q3 2023[263] Inter-company Loans - Outstanding inter-company loans to the U.S. increased to $426 million as of September 30, 2023, with $139 million from Kodak's international finance center[241] Strategic Objectives and Risks - The company's ability to achieve strategic objectives, cash forecasts, and projected growth is contingent on factors such as global economic conditions, supply chain disruptions, and compliance with credit facility covenants[180]