Kodak has posted its results for the second quarter of 2025, complete with a warning of “substantial doubt about Kodak’s ability to continue as a going concern,” prompting a fresh round of obituaries for the 133-year-old company.
This is because Kodak has around US$600 million worth of debt coming due within 12 months and does not yet have any financing plan in place to meet that debt, forcing the company to issue this warning under American Generally Accepted Accounting Practices.
More accurately, Kodak does have a plan – making changes to its pension plan – but does not yet know if this will cover the shortfall. The debt consists of US$99 million of Series B Preferred Stock, US$477 million in Term Loans, and US$24 million in letters of credit.
In January 2025, Kodak announced that it would close the Kodak Retirement Income Plan by 31 March 2025, freezing all benefits. It’s being replaced by a new Kodak Cash Balance Plan, with beneficiaries having until 15 August to choose between a lump sum payout or an annuity from an insurance company. Once Kodak has settled any remaining liabilities for the older pension plan, it will be able to collect whatever is left over.
David Bullwinkle, Kodak’s chief financial officer, said the company should have a “clear understanding” of how it will satisfy these obligations by Friday, 15 August. That’s because once the pension beneficiaries have made their choice, Kodak should have a good idea of how much it will pick up from this change. Given the impact this announcement has had on Kodak’s share price, it’s likely that Kodak will issue a further update then or early next week.
In the meantime, Kodak has said that it expects there should be around US$500 million left over once it has capitalized the replacement fund and paid the requisite taxes. To complicate matters, some of this will come in the form of hedge funds that will take up to three years to redeem. Nonetheless, Kodak should have enough cash to be able to extend or refinance its outstanding debt before it becomes due next May, though there are no guarantees for any of this, hence the ‘going concern’ warning.
The rest of the Q2 results show a continuing downward trend year on year. Thus, revenues of US$263 million were 1% lower than Q2 last year of US$267 million. Gross profit was US$51 million, down 12% from last year’s Q2 of US$58 million. Overall, the company made a net loss of US$26 million, compared with a net profit of US$26 million the previous year.
The operational Earnings Before Interest, Taxes, Depreciation and Amortisation for the quarter ended 30 June 2025, was US$9 million, compared to US$12 million in 2024, but this figure includes an extra US$1 million due to favourable currency exchange. Kodak blames this drop on lower volumes and higher aluminium and manufacturing costs.
Remarkably, Jim Continenza, Kodak’s executive chairman and CEO, commented, “In the second quarter, Kodak continued to make progress against our long-term plan despite the challenges of an uncertain business environment.”
Kodak ended the quarter with a cash balance of US$155 million, which is US$46 million less than at 31 December 2024. This is mostly due to capital expenditures to fund growth initiatives, changes in working capital, the impact of higher costs and lower profitability from operations.
Additionally, its cash flows continue to suffer from falling sales volumes, higher manufacturing costs, and increased labor, material and distribution costs, as well as supply chain disruptions and shortages in materials and labor. However, the company did benefit from price increases, continued cost reduction actions and supply chain-related cost improvements continue to positively impact the company operations. The company points out that it has not been affected by the American tariffs as it already manufactures in the US.
All of the problems come from the largest division, Print, which reported revenue of US$178 million, down from US$186 million in Q2 2024. However, there is better news from the Advanced Materials & Chemicals division, which saw revenues rise by US$2 million.
Continenza explained, “I’m pleased to report that our AM&C group’s cGMP pharmaceutical manufacturing facility is now registered with the FDA and certified to manufacture and sell regulated pharmaceutical products, expanding our current business in unregulated pharmaceutical products. The facility will begin manufacturing phosphate-buffered saline (PBS) for laboratory use and create a bridge to manufacturing more sophisticated specialty products, such as injectable IV saline, in the future.”
He concluded, “For the balance of the year, we plan to focus on serving our customers, strengthening our balance sheet and developing growth businesses for our future.”
You can find further details from the investors page at kodak.com.
(First published in the Print and Manufacturing Journal)
