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Kodak reported to be preparing for bankruptcy protection

By dpreview staff on Jan 4, 2012 at 22:08 GMT

Financial paper the Wall Street Journal is reporting that former photography giant Kodak is preparing for 'Chapter 11' bankruptcy protection. The company's shares fell below $1 per share yesterday, with the New York Stock Exchange announcing that the price must rise above this level within the next six months if the company is to avoid being de-listed (the share price must exceed $1 at the end of a calendar month and have averaged above $1 for the preceding 30 days). Reports claim that the company is planning to enter the court-administered Chapter 11 process if it cannot find a buyer for its portfolio of 1,100 patents covering many aspects of digital imaging.

Press release:

Kodak Receives Continued Listing Standards Notice from the New York Stock Exchange

ROCHESTER, N.Y.--(BUSINESS WIRE)--Jan. 3, 2012-- Eastman Kodak Company (NYSE:EK) today announced that the Company has received a continued listing standards notice from the New York Stock Exchange (the “NYSE”) because the average closing price of the Company’s common stock was less than $1.00 per share over a period of 30 consecutive trading days.

The Company’s common stock continues to trade on the NYSE. Under NYSE rules, the Company has six months following receipt of the notification to regain compliance with the minimum share price requirement. The Company can regain compliance at any time during the six-month cure period if the Company’s common stock has a closing share price of at least $1.00 on the last trading day of any calendar month during the period and also has an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month or on the last day of the cure period.

The Company’s Securities and Exchange Commission reporting requirements and debt obligations are not affected by the receipt of the NYSE notification.

CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements in this document may be forward-looking in nature, or "forward-looking statements" as defined in the United States Private Securities Litigation Reform Act of 1995. For example, references to the Company's expectations regarding the following are forward-looking statements: the future trading price of the Company’s common shares; and compliance with or the Company’s ability to cure deficiencies under the NYSE listing standards.

Future events or results may differ from those anticipated or expressed in these forward-looking statements. Important factors that could cause actual events or results to differ materially from these forward-looking statements include, among others, the following risks, uncertainties, assumptions and factors as described in more detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011, June 30, 2011, and September 30, 2011, under the headings "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Litigation Reform Act of 1995" and in other filings the Company makes with the SEC from time to time:

  • Whether we can generate or raise cash and maintain a cash balance sufficient to fund our continued investments, capital needs, restructuring payments and service our debt;
  • Whether we can raise sufficient proceeds from the sale of non-core assets and the potential sale of our digital imaging patent portfolios within our plan;
  • Whether we are successful in licensing and enforcing our intellectual property rights on which our business depends, or if third parties assert that we violate their intellectual property rights which could adversely affect our revenue, earnings, expenses and liquidity;
  • The competitive pressures we face which could adversely affect our revenue, gross margins and market share;
  • Whether our commercialization and manufacturing processes fail to prevent product reliability and quality issues which could adversely affect our financial results, harm our reputation and delay product launch plans;
  • Whether we are successful with the strategic investment decisions we have made which could adversely affect our financial performance;
  • Whether we effectively anticipate technology trends and develop and market new products to respond to changing customer preferences which could adversely affect our revenue, earnings and cash flow;
  • Continued weakness or worsening of economic conditions which could continue to adversely affect our financial performance and our liquidity;
  • Whether we are successful in attracting, retaining and motivating key employees which could adversely affect our revenue and earnings;
  • Whether our future pension and postretirement plan costs and required contribution levels are impacted by changes in actuarial assumptions, future market performance of plan assets or obligations imposed by legislation or pension authorities which could adversely affect our financial position, results of operations and cash flow;
  • Due to the nature of products we sell and our worldwide distribution, we are subject to changes in currency exchange rates, interest rates and commodity costs which could adversely affect our results of operations and financial position;
  • Whether we are able to provide competitive financing arrangements to our customers or if we extend credit to customers whose creditworthiness deteriorates which could adversely affect our revenue, profitability and financial position;
  • Our failure to implement plans to reduce our cost structure in anticipation of declining demand for certain products or delays in implementing such plans which could adversely affect our consolidated results of operations, financial position and liquidity;
  • We have outsourced a significant portion of our overall worldwide manufacturing, logistics and back office operations and face the risks associated with reliance on third party suppliers.

The Company cautions readers to carefully consider such factors. Many of these factors are beyond the Company’s control. While the Company may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, even if its expectations change. In addition, these forward-looking statements represent the Company’s expectations only as of the date they are made, and should not be relied upon as representing the Company’s expectations as of any subsequent date.

Notwithstanding the opportunity for a six-month grace period to return to compliance with NYSE continued listing requirements, given the liquidity challenges confronting the Company and the recent market experience with our listed securities, there can be no assurance that the Company will return to compliance with the NYSE listing standards. Moreover, no assurance can be given that future actions by the Company or the marketplace will not give rise to alternative bases for potential delisting from the NYSE.

Any forward-looking statements in this document should be evaluated in light of the factors and uncertainties referenced above and should not be unduly relied upon.

Comments

Total comments: 115
12
Terry L
By Terry L (Jan 4, 2012)

This is sad news indeed. Actually I don't know why I should care what happens to a company, but in this case I do. My first camera (1951) was a Box Brownie. My first 35mm camera (1956) was the gorgeous Retina 1b.(I now have a collection of folding Retinas.) My first colour film was Kodachrome. The excitement of waiting for the little yellow box to turn up in the letter box was almost intolerable. For B&W I used Kodak film. And the tragic irony of it all is that the first working digital camera was created in the Kodak R and D laboratory. How could a company contribute so much to the development of new technology and yet fail to grasp the benefits? It's as though they invented Kodachrome and then gave it away.

4 upvotes
fmian
By fmian (Jan 4, 2012)

Just got some Elite Chrome the other day. Might get some more E100 before it's all gone as well.
It's sad news, made worse by the fact that digital is still trying to emulate the look of film, and in my opinion doesn't quite produce the same result.

2 upvotes
T3
By T3 (Jan 4, 2012)

It's all because they changed their logo. I liked their previous one.

0 upvotes
Glen Barrington
By Glen Barrington (Jan 4, 2012)

Are any of us surprised?

1 upvote
Andrew Higgins
By Andrew Higgins (Jan 4, 2012)

Fuji has survived the decline of film, but sadly not Kodak is seems. I've just bought a few rolls of Tri-X, as I always meant to use more of that classic film. Might be my last chance...

0 upvotes
Dan Nikon
By Dan Nikon (Jan 4, 2012)

The Film division of Kodak is still profitable, like Ilford's. So hopefully it will remain in production via either a streamlined Kodak or another buyer takes it over. I spent a couple grand on Tmax 100 and Tri-X and related chemistry a couple months ago just in case. The day I can no longer shoot film is the day I get out of photography, but I don't see that happening since film use is a nice niche now...

1 upvote
mister_roboto
By mister_roboto (Jan 4, 2012)

I've still got an old roll of Tech-pan in the fridge... I think I may bust that sucker out finally.

1 upvote
Dan Nikon
By Dan Nikon (Jan 4, 2012)

I have about 400 rolls of TP in 120 and 35mm, last batch, awesome stuff.

4 upvotes
Nate21
By Nate21 (Jan 4, 2012)

A very dark day in the world of photograpghy i enjoy the kodak film

3 upvotes
kwa_photo
By kwa_photo (Jan 4, 2012)

This is no surprise, other than it took this long. Buy your b&w film now while you still can. I loved Tri-X and TMAX in my film days.

As for their digital products that were supposed to help them make the transition from film? Their DSLR business went away years ago once they stopped making them based on Nikon/Canon bodies.

Most of their sensor business is gone as well (I really like the Kodak sensor in the Olympus E-1).

Their consumer grade digital cameras are really sub-par compared to most everyone on the market and its VERY rare I ever see a happy snapper using their products.

How about inkjet printers? Sure, people still use them. But more and more people are moving away from home printing (and it's frustration) towards easy/cheap prints at their local WalMart, Target or online services like Shutterfly. If you are a pro and printing in the studio, you aren't using a Kodak printer OR you use a pro lab.

Goodbye Kodak. I don't think you will survive. Patent sale!

Comment edited 4 minutes after posting
2 upvotes
Button Pusher
By Button Pusher (Jan 5, 2012)

kwa_photo... I agree with the vast majority of your post but have a question for you. What evidence do you have that people don't print at home as much? Are sales figures on the way down for printers and their consumables? I don't see any immediate evidence in the people I know that have computers, they all seem to semi-regularly buy new printers and consumables to print pictures and documents with at home.

0 upvotes
openskyline
By openskyline (Jan 4, 2012)

I will buy some more TMAX, TRI-X 120 and 8x10 for the future use. Very sad news!

1 upvote
Total comments: 115
12