Kodak’s sales of US$ 211 million in Q2 of 2020 are down by 30% from US$ 304 million in the same period last year. The company used US$ 29 million of its cash, due to the impact of the Covid-19 crisis. Kodak ended the quarter with a cash balance of US$ 180 million, down from the 31 March 2020 cash balance of $209 million.
“During the second quarter, we used US$ 29 million of cash, primarily due to the impacts of the Covid-19 pandemic on our business. While the Covid crisis affected our second-quarter sales volumes, we anticipate improvement in both sales volumes and working capital in the third quarter,” said David Bullwinkle, Kodak’s CFO. “Additionally, subsequent to quarter-end, the company significantly reduced its debt as holders of the 5.00% Secured Convertible Notes due November 2021 exercised their right to convert an aggregate of US$ 95 million of principal amount of the Notes into shares of Kodak stock, reducing the remaining outstanding amount to US$ 5 million.”
The Notes converted into shares may well become a part of the SEC insider trading investigation of Kodak’s share price rising manifold just before the official announcement on 29 July 2020 of the US government’s IDFC US$ 765 million loan to Kodak for manufacturing pharma ingredients.
Kodak’s mainstay business of offset plates took the biggest hit in Q2, with sales declining by slightly more than a third from US$ 181 million to US$ 119 million. Sonora plate sales fell 9% on a year to date basis, and by 33% compared to Q2 of last year. The Sonora Xtra plate, a new version of the Sonora process-free plate, is expected to be available commercially by the end of 2020. In its new product announcement, Kodak said the Sonora Xtra is faster in imaging, more robust, and has better image contrast than the Sonora.