133-year old Kodak says it might have to cease operations
In its earnings report Monday, the company warned that it doesn't have 'committed financing or available liquidity' to pay its roughly $500 million in upcoming debt obligations. 'These conditions raise substantial doubt about the company's ability to continue as a going concern,' Kodak said in a filing.
Kodak aims to conjure up cash by ceasing payments for its retirement pension plan. It also said that it doesn't expect tariffs to have 'material impacts' on its business because it manufactures its many of its products, includings cameras, inks and film in the United States.
'In the second quarter, Kodak continued to make progress against our long-term plan despite the challenges of an uncertain business environment,' said Kodak CEO Jim Continenza in the earnings release.
Shares of Eastman Kodak (KODK) slumped more than 7% in premarket trading Tuesday.
The Eastman Kodak Company incorporated in 1892, but the company traces its roots back to 1879, when George Eastman obtained hist first patent for a plate-coating machine. In 1888, Eastman sold the first Kodak camera for $25.
At the time, photography was not a mass business because of the technical skills and equipment needed to do it, but the Kodak camera was designed to make photography more widely accessible. Eastman coined the slogan: 'You push the button, we do the rest.'
The name was largely meaningless, with the word 'Kodak,' according to the company, being invented by Eastman out thin air: 'The letter 'K' had been a favorite with me — it seems a strong, incisive sort of letter.'
Kodak had a century of success producing cameras and film. At one point in the 1970s, it was was responsible for 90% of film and 85% of camera sales in the United States, according to The Economist. Paul Simon's hit song 'Kodachrome' topped the charts in 1973.
But that powerful market position would not last because of technology that the company invented: Kodak introduced the first digital camera in 1975.
Kodak failed to capitalize on the rise of the digital technology. In 2012, it filed for bankruptcy. At the time of its Chapter 11 filing, it had 100,000 creditors and debts totaling $6.75 billion.
In 2020, Kodak had a brief moment of reprieve when the US government tapped it to transform into a pharmaceutical ingredients producer. Kodak's stock price rose so fast it tripped 20 circuit breakers throughout the trading session.
Despite its recent losses, Kodak recently said it aims to expand that part of its business. The company continues to manufacture films and chemicals for businesses, including the movie industry, and it licenses its brand for a variety of consumer products.
CNN's Clare Duffy contributed to this report.
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