133-year old Kodak warns it may go out of business, here's why
Kodak doesn't have enough money to pay $500 million in debts due within the next year . The warning sent its stock crashing 25% in a single day as panicked investors sold shares . Kodak currently has just $155 million in cash, far less than what it owes.
CEO Jim Continenza tried to calm fears, insisting Kodak is "confident" it can renegotiate its debts.
But the grim announcement marks another crisis for the company that brought photography to millions of families worldwide with its iconic Brownie cameras and yellow film boxes.
Kodak's emergency plan involves taking money from employee retirement funds. The company will stop putting cash into its pension plan and use $500 million from that fund to pay down debts . Finance chief David Bullwinkle promised workers they'll still get their pensions through insurance contracts.
By this Friday, Kodak expects to finalize how it will handle these pension changes, with the full switch planned by December . Meanwhile, Kodak reported dismal financial results: a $26 million loss last quarter compared to a $26 million profit a year earlier. Its cash reserves dropped $46 million since December.
The company blames rising material costs and weaker sales for the financial meltdown.
This isn't Kodak's first brush with death. The company once ruled photography, controlling 90% of film sales and 85% of camera sales in the 1970s.
Ironically, Kodak engineers invented the first digital camera in 1975 but company leaders ignored the technology to protect their profitable film business.
That mistake proved disastrous when digital photography took over. Kodak filed for bankruptcy in 2012 with $6.75 billion in debts, laying off thousands and shutting camera factories.
After emerging as a smaller company focused on commercial printing, Kodak briefly rallied in 2020 when the government gave it a $765 million loan to make drug ingredients during the pandemic. Its stock soared so fast it triggered 20 trading halts in one day.
Kodak's last hope might be a surprising shift to pharmaceuticals. The company is finishing a government-backed factory in Rochester, New York, to make medical chemicals.
The plant recently won FDA approval to produce phosphate buffered saline (a lab solution) and eventually aims to make injectable medicines . Kodak also benefits from young photographers rediscovering film cameras, leading it to increase film production recently.
Despite the crisis, Kodak still makes film, inks, and printing plates in America, something it says protects it from tariff problems.
Whether these efforts can save the iconic company remains uncertain. As Kodak races to renegotiate its debts by next May, its future hangs in the balance.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India Today
6 hours ago
- India Today
Kodak warns it may shut down after 133 years, faces $500 million debt and uncertain future
Eastman Kodak, the photography pioneer with more than a century of history, has warned it could be forced to close if it cannot find a way to pay off around $500 million in looming debt. In an earnings report released on Monday, the 133-year-old company told investors it lacks 'committed financing or available liquidity' to meet these obligations. In its filing, Kodak said these circumstances 'raise substantial doubt about the company's ability to continue as a going concern.' Shares in Kodak fell by more than 25 per cent during midday trading on Tuesday following the raise cash, the company plans to stop making payments to its retirement pension plan, according to a report by CNN. It also said it does not expect tariffs to have a significant impact, as many of its products, including cameras, inks, and film, are made in the United reportedly told CNN that they are 'confident' about paying off a significant part of the term loan before it is due. They added that the company would seek to amend, extend, or refinance the rest of its debt and preferred stock obligations. According to the spokesperson, the 'going concern' language in the filing was a required disclosure. Chief executive Jim Continenza said the business was still making progress on its long-term strategy despite 'the challenges of an uncertain business environment.'Founded in 1892 and tracing its roots back to 1879, Kodak revolutionised photography when George Eastman sold the first Kodak camera in 1888 for $25. The camera made photography accessible to the public, leading to the famous slogan: 'You push the button, we do the rest.'By the 1970s, Kodak was a dominant force, responsible for 90 per cent of film and 85 per cent of camera sales in the United States, according to The Economist. Musician Paul Simon's 1973 hit 'Kodachrome' paid tribute to its iconic a twist of fate, the same company that introduced the first digital camera in 1975 struggled to adapt to the digital revolution. By 2012, Kodak had filed for bankruptcy, with debts of $6.75 billion and more than 100,000 then, Kodak has shifted towards industrial printing and brand licensing. It has also ventured into consumer gadgets, such as themed mini photo printers. In 2020, it briefly enjoyed a surge in share price after being awarded, and later facing scrutiny over, a $765 million US government loan to produce pharmaceutical company continues to make films and chemicals for commercial use, including the movie industry, and still licenses its brand. But with the debt clock ticking, its future is clouded by uncertainty. - EndsMust Watch
Time of India
8 hours ago
- Time of India
Kodak refund plan explained: Photography giant faces survival threat, plans pension halt amid massive debt repayment; details here
Eastman Kodak, the 133-year-old photography company, has warned investors it may not survive much longer as a standalone business. In its latest earnings report, the company said it lacks 'committed financing or available liquidity' to cover roughly $500 million in debt due soon. 'These conditions raise substantial doubt about the company's ability to continue as a going concern,' Kodak stated in a filing. The company plans to raise cash by halting payments to its retirement pension plan. Despite the financial strain, Kodak said tariffs are unlikely to have a 'material impact' since it manufactures most of its products — including cameras, inks and film — in the United States. Debt pressure and company response Kodak CEO Jim Continenza said in the earnings release that the company 'continued to make progress against our long-term plan despite the challenges of an uncertain business environment.' A spokesperson told CNN that Kodak remains 'confident' it can pay a significant portion of its term loan before it is due and seek to amend, extend, or refinance its remaining debt and preferred stock obligations. Shares of Eastman Kodak (KODK) dropped more than 25% in midday trading Tuesday following the announcement. Everyone start buying film from kodak NOW!!!! And give it to me A century of success and innovation Kodak was incorporated in 1892 but traces its origins to 1879, when founder George Eastman patented a plate-coating machine. In 1888, Eastman launched the first Kodak camera for $25, making photography accessible to the general public. Its slogan, 'You push the button, we do the rest,' reflected its aim to simplify the process. At its peak in the 1970s, Kodak controlled 90% of the US film market and 85% of camera sales. It was even celebrated in popular culture, such as in Paul Simon's 1973 hit 'Kodachrome.' The company invented the first digital camera in 1975 but failed to adapt to the digital shift. Decline, bankruptcy, and recent shifts In 2012, Kodak filed for Chapter 11 bankruptcy with $6.75 billion in debt and 100,000 creditors. In 2020, it briefly revived interest when the US government tapped it to produce pharmaceutical ingredients, causing a sharp but temporary surge in its stock price. Today, Kodak continues to produce film and chemicals for industries such as filmmaking and licenses its brand for consumer products. It has also expressed plans to expand its pharmaceutical business despite ongoing financial challenges.
Indian Express
9 hours ago
- Indian Express
Counterfeit Ozempic drugs sold abroad: Delhi court junks anticipatory bail plea of man involved in racket
A Delhi court has dismissed the anticipatory bail plea of a man accused in an international racket involving the supply of counterfeit Ozempic — the anti-diabetic and weight loss drug. The man, Vicky Ramancha, is accused of orchestrating an international criminal conspiracy to supply counterfeit drugs to foreign entities. Additional Sessions Judge Saurabh Pratap Singh Laler of Patiala House Court noted in his order, 'Swift legal action against pharmaceutical crimes is essential for maintaining India's position as the 'Pharmacy of the World' and protecting legitimate manufacturers from regulatory backlash.' 'India's pharmaceutical industry represents a strategic national asset requiring protection from criminal exploitation. The supply of counterfeit pharmaceuticals represents a direct threat to public health and safety,' he added. As per the Economic Offences Wing which is investigating the crime, the 'sophisticated transnational fraud operation' allegedly caused financial losses close to 19 million US dollars to Assure Global LLC, which was the complainant in this case. 'Economic consequences (of such an offence) include loss of market share for legitimate manufacturers, reduction in export revenues and foreign exchange earnings, increased regulatory compliance costs for entire industry, and potential trade sanctions and import restrictions by recipient countries,' the court said. 'The regulatory and diplomatic impact involves damage to India's reputation as a reliable pharmaceutical manufacturer, increased scrutiny from international regulatory bodies (FDA, EMA, WHO), potential disruption of pharmaceutical trade agreements, and strain on diplomatic relationships with importing nations,' it added. The prosecution outlined that there were broader implications of such a crime, including public health and safety concerns. It also stated that the international nature of the alleged crimes created concerns about destruction of electronic records and communications, influencing international co-conspirators and manipulation of complex financial records across jurisdictions. The accused had argued over territorial jurisdiction, stating that no part of the alleged criminal conspiracy occurred within Indian territory. It was the contention of the defence counsel that all agreements were executed outside India and the pharmaceutical products were delivered from China to the USA. The lawyer also stated that the complainant in this case was a foreign entity. To which the judge said, 'The applicant allegedly used Indian legal systems to lend legitimacy to fraudulent operations through notarisation of key documents at Patiala House Courts, creation of false impression of government backing through use of official Indian legal processes.' 'Modern criminal law recognises that transnational crimes cannot escape prosecution merely because they span multiple jurisdictions. The principle of territoriality must be applied pragmatically in cases involving international fraud schemes,' he added, dismissing the defence counsel's argument.
