Kodak may go out of business after 133 years
What's the story
Kodak, the iconic photography company, has warned investors that it may go out of business within a year. The 133-year-old US firm raised concerns in a regulatory filing this week, saying there is "substantial doubt" about its ability to continue operations. This comes as Kodak struggles with debt obligations due within the next 12 months, and lacks committed financing or liquidity to meet them under current terms.
Financial woes
Kodak's financial situation
Kodak's financial situation has been dire lately. The company reported a net loss of $26 million in the last quarter and has burned through $46 million in cash since the end of last year. This leaves it with only $155 million on hand against a debt of around $500 million. Despite these challenges, Kodak remains optimistic about its ability to pay off a significant portion of its term loan well before it becomes due, and amend or refinance remaining debts.
Steps
Diversification efforts
Kodak has been diversifying into other industries with growth potential, such as commercial printing services and advanced chemical making. The company is also highlighting its latest move into pharmaceuticals by opening a manufacturing facility in Rochester, NY. This factory will produce key starting ingredients for drugs. In 2024, Kodak announced it would end its pension plan to help reduce debt obligations.
Past struggles
Bankruptcy and missed opportunities
Kodak has faced financial difficulties before, even filing for bankruptcy in 2012. The company once dominated photography with a 90% share of film sales and an 85% share of camera sales in the 1970s. Ironically, Kodak engineers invented the first digital camera in 1975 but company leaders ignored this technology in order to protect their profitable film business. Now, as it looks to renegotiate debts by May next year, Kodak's future hangs in the balance.