Kodak financial results Q2 2020 hit by Covid-19

US$ 95 million debt turned into Kodak shares

Sonora X
Kodak’s new Sonora X process-free plate suitable for longer press runs Photo: Kodak

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.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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