Kodak Reassures That It Will Handle Debt Obligations, Remain in Business

Earlier this week, Eastman Kodak released its second-quarter earnings, with a note indicating that there was “substantial doubt about the Company’s ability to continue as a going concern.” 

However, the company, which was established 145 years ago, told ABC News that it “is confident it will be able to pay off a significant portion of its term loan well before it becomes due, and amend, extend or refinance our remaining debt and/or preferred stock obligations.” Kodak’s loan obligations total approximately $550 million, and need to be met within the next year.

One way the company will do this is by ending its pension plan after paying proceeds due to retirees, with any remaining funds earmarked for paying off debt.

For its second quarter, the company had reported revenue of $263 million million, down 1 percent year-over-year (YoY), and a loss of $26 million.

In its second-quarter report, Kodak CFO David Bullwinkle also said that the company expects to know by today “how we will satisfy our obligations to all [pension] plan participants, and we anticipate completing the reversion by December of 2025.”

“For the second half of the year, we will continue to focus on reducing costs today and converting our investments into long-term growth,” he added.

More Details

“To fund the repayment, we plan to draw on the approximately $300 million in cash we expect to receive from the reversion and settlement of our U.S. pension fund (the Kodak Retirement Income Plan, or ‘KRIP’) in December,” the company said, adding that “once the KRIP reversion is completed Kodak will be virtually net debt free and will have a stronger balance sheet than we have had in years.”

This isn’t the first time the company has had financial struggles. It entered Chapter 11 bankruptcy proceedings in 2012 and emerged from them in 2013.