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Kodak posts Q4 profit; in talks to sell its Prosper business

Eastman Kodak Co. is looking to sell off one of its highly touted businesses.

The company is in talks with prospective buyers about offers to purchase its Kodak Prosper Enterprise Inkjet business, officials said Tuesday.

“The Prosper business has significant potential for accelerated growth, which will expand even further with the planned introduction of Kodak Ultrastream, a next generation inkjet writing system,” CEO Jeffrey Clarke said. “To achieve its full economic potential, Prosper will be best leveraged by a company with a larger sales and distribution footprint in digital printing markets.”

Sagent Advisors, an independent investment bank, and DC Advisory, a European corporate finance adviser, which share Daiwa Securities, a Japanese investment bank, as a common shareholder, have been engaged by Kodak to manage the sale process.

The news of the talks came as Kodak reported net income of $24 million for the fourth quarter, compared with a net loss attributable to the company of $42 million a year ago.

Its revenues in the fourth quarter fell 12 percent to $467 million from $532 million. On a constant currency basis, revenues declined by 7 percent. The decrease primarily was driven by the expected continued decline in legacy consumer inkjet printer cartridge sales, non‐recurring licensing revenue in the prior‐year period as well as pricing reductions in digital plates within the Print Systems Division, the company said.

The company posted a net loss attributable to Kodak of $80 million for full-year 2015, compared with a net loss of $123 million in 2014. Kodak logged revenues for 2015 of $1.8 billion, down 15 percent from $2.1 million in 2014.

The company ended the year with a cash balance of $547 million, which reflects an increase in cash of $26 million for the fourth quarter 2015. The company ended 2014 with $712 million in cash.

“I am pleased with the performance of the company for 2015,” Clarke said. “We delivered strong operating performance, exceeding the operational (earnings before interest, taxes, depreciation and amortization) guidance we provided for the year, delivering greater than the targeted cost structure savings and meaningfully improving the quality of our earnings.”

Operating expenses were $330 million for the year ended Dec. 31, a 24 percent decrease from the prior‐year period.

The company released guidance for its 2016 results: revenues of $1.5 billion to $1.7 billion and operational EBITDA of $130 million to $150 million. The Operational EBITDA guidance represents 12 percent to 29 percent improvement, but the revenues reflect a drop of 5.5 percent to 16.6 percent.

Kodak shares (NYSE: KODK) closed Tuesday at $11.02, down 2 percent from Monday’s close of $11.25.

(c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.


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