Kodak Says Goodbye to Digital Cameras
Plans to phase out dedicated capture devices business
ROCHESTER, N.Y., February 09 --
Eastman
Kodak Company (the “Company”) (OTB: EKDKQ.PK) announced today that, as a
result of its ongoing strategic review process and commitment to drive
sustainable profitability through its most valuable business lines, it
plans to phase out its dedicated capture devices business – comprising
digital cameras, pocket video cameras and digital picture frames – in
the first half of 2012. Kodak will instead expand its current brand
licensing program, and seek licensees in these categories. Following
this decision, Kodak’s Consumer Business will include online and
retail-based photo printing, as well as desktop inkjet printing.
Kodak
has contacted its retail partners, and is working closely with them to
ensure an orderly transition. Kodak will continue to honor all related
product warranties, and provide technical support and service for its
cameras, pocket video cameras and digital picture frames.
“For
some time, Kodak’s strategy has been to improve margins in the capture
device business by narrowing our participation in terms of product
portfolio, geographies and retail outlets. Today’s announcement is the
logical extension of that process, given our analysis of the industry
trends,” said Pradeep Jotwani, President, Consumer Businesses, and Kodak
Chief Marketing Officer.
Upon
completion of the phase out, Kodak expects to achieve annual operating
savings of more than $100 million. Kodak expects to incur a charge
related to separation benefits of approximately $30 million resulting
from the exit of the business.
In addition to its
Consumer Businesses segment, Kodak has a Commercial Businesses segment
that includes the Digital and Functional Printing, Enterprise Services
and Solutions, and Graphics, Entertainment and Commercial Films units.
Kodak’s digital businesses now comprise approximately three-fourths of
total revenues.
Kodak continues to have a strong position in the personal imaging market. While
photos are increasingly taken on multi-function mobile devices, Kodak
technology makes it easy for consumers to produce a broad range of photo
products, anywhere, anytime – from prints to photobooks, photo greeting
cards and personalized calendars. These items can be made on Kodak
products, with Kodak quality at retail, at home, and ordered for
delivery to home.
Kodak’s continuing consumer products and services will include:
- Retail-based
photo kiosks and digital dry lab systems, a market in which Kodak is
the clear worldwide leader. Kodak pioneered the retail-based kiosk
market, and the company now has more than 100,000 kiosks and order
stations for dry lab systems around the world, with some 30,000 of those
units connected to the most popular photo-sharing sites.
- Consumer
inkjet printers, where Kodak has outpaced overall market growth for
several years. Kodak consumer inkjet printers provide consumers with
high-quality output and the lowest total ink replacement cost. Consumers
can send documents and photos to Kodak printers from anywhere, using
any web-connected device.
- Kodak apps for Facebook, which make it easy for consumers to obtain photo products using photos from their Facebook albums.
- Kodak Gallery (www.kodakgallery.com),
a leading online digital photo products service. Kodak Gallery enables
consumers to share their photos, and offers product and creation tools
that enable people to do more with their photos.
- The
Kodak camera accessories and batteries businesses. These products are
universally compatible with all camera brands, and extend into other
consumer product segments such as charging units for smartphones.
- The
traditional film capture and photographic paper business, which
continues to provide high-quality and innovative products and solutions
to consumers, photographers, retailers, photofinishers and professional
labs.
CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This
document includes "forward–looking statements" as that term is defined
under the Private Securities Litigation Reform Act of 1995.
Forward–looking statements include statements concerning the Company's
plans, objectives, goals, strategies, future events, future revenue or
performance, capital expenditures, financing needs, plans or business
trends, and other information that is not historical information. When
used in this document, the words "estimates," "expects," "anticipates,"
"projects," "plans," "intends," "believes," "forecasts," or future or
conditional verbs, such as "will," "should," "could," or "may," and
variations of such words or similar expressions are intended to identify
forward–looking statements. All forward–looking statements, including,
without limitation, management's examination of historical operating
trends and data are based upon the Company's expectations and various
assumptions. 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 risks and
uncertainties described under the heading "Risk Factors" in the
Company's most recent annual report on Form 10–K under Item 1A of Part
1, in the Company's most recent quarterly report on Form 10–Q under
Item 1A of Part II and those described in filings made by the Company
with the U.S. Bankruptcy Court for the Southern District of New York and
in other filings the Company makes with the SEC from time to time, as
well as the following: the ability of the Company to continue as a going
concern, the Company's ability to obtain Bankruptcy Court approval with
respect to motions in the chapter 11 cases, the ability of the Company
and its subsidiaries to prosecute, develop and consummate one or more
plans of reorganization with respect to the chapter 11 cases, Bankruptcy
Court rulings in the chapter 11 cases and the outcome of the cases in
general, the length of time the Company will operate under the chapter
11 cases, risks associated with third party motions in the chapter 11
cases, which may interfere with the Company's ability to develop and
consummate one or more plans of reorganization once such plans are
developed, the potential adverse effects of the chapter 11 proceedings
on the Company's liquidity, results of operations, brand or business
prospects, the ability to execute the Company's business and
restructuring plan, increased legal costs related to the Bankruptcy
Filing and other litigation, our ability to raise sufficient proceeds
from the sale of non-core assets and the potential sale of our digital
imaging patent portfolios within our plan, the Company's ability to
generate or raise cash and maintain a cash balance sufficient to fund
continued investments, capital needs, restructuring payments and service
its debt; the Company's ability to manage contracts that are critical
to its operation, to obtain and maintain appropriate terms with
customers, suppliers and service providers, to maintain product
reliability and quality, to effectively anticipate technology trends and
develop and market new products, to retain key executives, managers and
employees, our ability to successfully license and enforce our
intellectual property rights and the ability of the Company's non-U.S.
subsidiaries to continue to operate their businesses in the normal
course and without court supervision. There may be other factors that
may cause the Company's actual results to differ materially from the
forward–looking statements. All forward–looking statements attributable
to the Company or persons acting on its behalf apply only as of the date
of this document and are expressly qualified in their entirety by the
cautionary statements included in this document. The Company undertakes
no obligation to update or revise forward–looking statements to reflect
events or circumstances that arise after the date made or to reflect the
occurrence of unanticipated events.
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