Eastman Kodak Co. on Friday said it will "wind down" sales of its consumer inkjet printers, though the company plans to continue to sell ink for the devices.
Kodak also said it had boosted by 200 the number of jobs it will eliminate by year’s end.
The company expects to incur charges of some $90 million, including $20 million related to separation benefits, $32 million in non-cash related charges for accelerated depreciation and asset write-offs, and $38 million in other cash-related charges, the company states in filing with the Securities and Exchange Commission.
Meanwhile, Kodak intends to submit a motion to the Bankruptcy Court on Friday to extend until Feb. 28 its exclusive right to file a plan of reorganization. A hearing to consider the motion and other matters is slated for Oct. 17.
The extension will assist the company as it continues its progress toward successful emergence in the first half of 2013, Kodak said. In the motion, Kodak describes the progress it has made toward reorganization since filing for Chapter 11 on Jan. 19.
Kodak previously had announced its plan to emerge as a company focused on commercial, packaging and functional printing solutions and enterprise services, as well as processes to sell its personalized imaging and document imaging businesses.
Chairman and CEO Antonio Perez last month indicated that reflected the company’s shift from a consumer-focused business to one focused on business-to-business sales.
Consistent with that emergence strategy, the company said, Kodak has continued to manage its consumer inkjet business for profitability. Starting in 2013, it will focus that business on the sale of ink to its installed base. Kodak expects the move to significantly improve cash flow in the United States beginning in the first half of next year.
"Kodak is making good progress toward emergence from Chapter 11, taking significant actions to reorganize our core ongoing businesses, reduce costs, sell assets and streamline our organizational structure," Perez said. "Steps such as the sale of personalized imaging and document imaging, and the consumer inkjet decision, will substantially advance the transformation of our business.
"As we complete the other key objectives of our restructuring in the weeks ahead, we will be well-positioned to emerge successfully in 2013."
In its motion to the court, Kodak states its specific accomplishments, including an extensive operational restructuring that has streamlined businesses and reduced corporate costs.
The restructuring includes the downsizing of Kodak’s global workforce by more than 2,700 positions this year, with the current expectation of a further reduction of at least 1,200 employees. That is up 200 from the 1,000 announced this month.
The 23 percent headcount reduction will result in savings of more than $340 million a year and a smaller workforce of roughly 13,100 employees, the company said.
Kodak said it also has used the bankruptcy code to renegotiate existing supply contracts or to enforce pre-filing contracts to achieve substantial cost savings. It has acted to exit or sell unprofitable and declining businesses, such as the digital camera and online photo services businesses.
While the sale processes for its personalized imaging and document imaging businesses are in the early stages, the company said, there already has been significant interest among potential buyers. Negotiations related to the sale of its intellectual property assets continue.
Kodak expects soon to begin realizing savings from its moves, and continues to look at additional operational and workforce reductions.
"The actions we are taking are significant steps toward our successful emergence," Perez said.
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