Kodak reports Q2 2024 revenue of $267M, down 9%; net income drops 26% to $26M, with a gross profit percentage increase to 22%

Eastman Kodak Company (NYSE: KODK) today reported financial results for the second quarter 2024.

Second-quarter 2024 highlights include:

• Consolidated revenues of $267 million, compared with $295 million for Q2 2023, a decrease of $28 million or 9 percent
• Gross profit of $58 million, compared with $63 million for Q2 2023, a decrease of $5 million or 8 percent
• Gross profit percentage of 22 percent, compared with 21 percent for Q2 2023, an increase of 1 percentage point
• GAAP net income of $26 million, compared with net income of $35 million for Q2 2023, a decrease of $9 million or 26 percent
• Operational EBITDA of $12 million, compared with $22 million for Q2 2023, a decrease of $10 million or 45 percent
• A quarter-end cash balance of $251 million, compared with $255 million on December 31, 2023, a decrease of $4 million

"Our results for the second quarter were in line with our long-term strategic plan: we delivered a year-over-year increase in gross profit percentage for the seventh consecutive quarter despite an anticipated decline in revenue. We are getting leaner, introducing new products and partnering with the right customers," said Jim Continenza, Kodak’s Executive Chairman and CEO. "Building for the future, we continue to invest in our Advanced Materials & Chemicals group and are seeing results in terms of growing revenue in key product areas. The cGMP facility for manufacturing diagnostic test reagents under construction at Eastman Business Park is scheduled to begin production in 2025. In our commercial print business, our participation in the drupa tradeshow earlier this year demonstrated our ability to provide leading-edge solutions for both offset and digital print. We are starting to gain momentum with our groundbreaking continuous inkjet press portfolio, announcing commitments for several KODAK PROSPER ULTRA 520 Presses from the show. Looking forward, we will continue to execute the long-term plan which has created a foundation for growth: increasing efficiency, investing in innovation and infrastructure and focusing on generating smart revenue."

For the quarter ended June 30, 2024, revenues were $267 million, a decrease of $28 million or 9 percent compared to the same period in 2023. Excluding the impact of foreign exchange, revenue declined $24 million or 8 percent.

GAAP net income was $26 million for the quarter, compared to $35 million in Q2 2023, a decrease of $9 million or 26 percent. Operational EBITDA for the quarter ended June 30, 2024 was $12 million, compared to $22 million in Q2 2023, a decrease of $10 million or 45 percent. The decrease was primarily driven by lower volumes and higher manufacturing costs, as well as costs associated with investments in information technology systems and organizational structure to drive further operational efficiencies, costs associated with the drupa trade show and certain litigation matters.

Kodak ended the quarter with a cash balance of $251 million, a decrease of $4 million from December 31, 2023. The decrease was driven by capital expenditures primarily to fund growth initiatives, investments in technology systems and organizational structure and lower profitability from operations, partially offset by improvements in working capital primarily due to cash proceeds of $40 million from brand licensing in the first quarter of 2024.

"Kodak continued to see an improvement in gross profit margins year-over-year for the quarter, reaching 22 percent in Q2," said David Bullwinkle, Kodak’s CFO. "The decline in revenue was driven by our focus on generating smart revenue to strengthen the profitability of our businesses. Our quarter-end cash balance of $251 million represented a decrease of $4 million from December 31, 2023, reflecting continued investment in capital additions as well as the drupa tradeshow and back-office optimization, which we expect to pay off as we continue to execute on our long-term strategy. For the second half of the year, we plan to continue to focus on the fundamentals which have contributed to our turnaround: streamlining operations, investing in new products and businesses and helping our customers stay productive and profitable."