While it is today in many ways a new company — new CEO, new ticker symbol, many of its old legacy expenses wiped away with its bankruptcy — it still remains a work in progress toward that profitability goal.
The iconic Rochester, N.Y.-based company put out its fourth-quarter 2013 and 2013 overall financial results Wednesday after the market's close. The printing technology company's losses were far smaller than in the previous year. And its expectations for 2014 put it close to — though still not at — profitability.
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Kodak's 2013 overall sales of $2.35 billion were $150 million short of what the company previously had forecast.
Chief Financial Officer Becky Root said in a conference call Wednesday that sales were down for the quarter and the year largely because of:
• An accelerated decline in the company's motion picture film business.
• Slumping desktop inkjet sales as the company got out of the printer business in 2012 (it now just sells replacement inks).
• Overall "customer reluctance to make commitments to us while we were in bankruptcy proceedings."
But even with that sales shortfall, Root said, Kodak beat earnings targets for 2013, thanks to high profit margins on desktop inkjet inks, lower-than-expected commodity costs and income from brand and intellectual property licensing. It ended the year with operational earnings of $160 million, not counting certain expenses such as taxes and depreciation.
If you remove both those various business expenses, plus reorganization and restructuring spending, Kodak had an operational profit of $46 million for the quarter, versus a $50-million loss the same quarter a year earlier.
For 2014, Kodak is not projecting a majo! r turnaround, with anticipated sales of $2.1 billion to $2.3 billion and comparable earnings of $145 million to $165 million.
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For the businesses that represent its future, such as various aspects of printing technology, Kodak expects sales to be flat to up as much as 8% in 2014. For one of its flagship products, the Prosper high-speed inkjet printing system, Kodak is expecting to double the number installed this year, CEO Jeff Clarke said.
Meanwhile, judging by how quickly their fortunes are plummeting, motion picture film and desktop inkjet inks may not be long for this world. Those businesses meant $521 million in sales for Kodak in 2013. The company is expecting them to bring in $275 million to $325 million this year.
The company also anticipates yet more cost cutting in 2014.
"We still have significant restructuring to do" in general and administrative operations, Clarke said. "There's never a company that's worked hard enough on cost reduction and productivity improvement."
These latest financial figures — covering the last three months of 2013 — are the first look at Kodak completely post bankruptcy, as the company ended its 20-month Chapter 11 in September 2013. It filed for bankruptcy protection in January 2012.
That bankruptcy saw the company hugely reducing costs — and headcount. The last time Kodak was in this kind of watershed moment was arguably the first half of 2008, after it had finished wrapping up its massive 2004-2007 restructuring that similarly saw it widely cutting costs.
"Kodak is fundamentally a new company," Clarke said.
Kodak shares were up 1.7% to close at $27.60, before earnings were released. Shares rose nearly 2.5% in after-hours trading.
Daneman also reports for the Rochester (N.Y.) Democrat and Chronicle
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