Kodak to lay off 400 workers

[Berri]

That is not a good news. I hope this won't affect the resurrection of Ektachrome. Few days ago Kodak announced that later next week they will release more information about ektachrome through their Kodakery podcast. Fingers crossed!
https://www.thephoblographer.com/2017/11/10/eastman-kodaks-revenue-will-lay-off-400-workers/

 

[dabsond]

I am very interested to see if Ektachrome goes into full production and pricing. Undercut the Fuji line of E-6 and they may have a winner.

 

[RattyMouse]

I am very interested to see if Ektachrome goes into full production and pricing. Undercut the Fuji line of E-6 and they may have a winner.

Jeff Clarke, Kodak Chief Executive Officer: “We are taking immediate actions to accelerate cost reduction and reduce investments to sharpen our focus as we continue to actively pursue changes to the Kodak product and divisional portfolio.”

100 of those layoffs were in Rochester.

 

[Berri]

I really don't know what to think. Kodak isn't doing too good, but they are willing to invest in a product discontinued years ago because it wasn't selling. I am really looking foreward to use the new ektachrome, but I'd gladly give up on it if this would cause kodak to fail and eventually quit the whole film market. I'd rather stick with ektar than having both ektachrome and ektar but just for a few years. I hope this won't be their swan song

 

[BrianShaw]

“Sharpen our focus”

Which focus?

 

[railwayman3]

I really don't know what to think. Kodak isn't doing too good, but they are willing to invest in a product discontinued years ago because it wasn't selling. I am really looking foreward to use the new ektachrome, but I'd gladly give up on it if this would cause kodak to fail and eventually quit the whole film market. I'd rather stick with ektar than having both ektachrome and ektar but just for a few years. I hope this won't be their swan song

It is all rather odd. Without checking back on the details, I think that the Ektachrome project was to include a new Super-8 camera, and maybe try to appeal to enthusiasts, film students, etc. IDK?

 

[AgX]

Yes, the original impetus was on cine-film, and that S-8 camera. In general in the last years before their insolvency it was their cine department that was doing marketing on the analog field.

 

[aleckurgan]

That is not a good news. I hope this won't affect the resurrection of Ektachrome. Few days ago Kodak announced that later next week they will release more information about ektachrome through their Kodakery podcast. Fingers crossed!
https://www.thephoblographer.com/2017/11/10/eastman-kodaks-revenue-will-lay-off-400-workers/

According to Photo Engineer they should be hiring people to restart Ektachrome, not laying them off. "There are no engineers to begin the remanufacture of Kodachrome NOR Ektachrome. Both are difficult, but the Ektachrome is a bit easier in that most all components are on hand."

 

[Lachlan Young]

Almost certainly this will be to do with the industrial print division and not the photographic coated products sector. They make a huge range of products in the (changing & declining in some sectors) printing industry with multiple manufacturing plants worldwide.

 

[kuparikettu]

Almost certainly this will be to do with the industrial print division and not the photographic coated products sector. They make a huge range of products in the (changing & declining in some sectors) printing industry with multiple manufacturing plants worldwide.

Exactly. In the press release:
“An overall print market slowdown and rising aluminum costs have impacted our commercial print business,” said Jeff Clarke, Kodak Chief Executive Officer. “We are taking immediate actions to accelerate cost reduction and reduce investments to sharpen our focus as we continue to actively pursue changes to the Kodak product and divisional portfolio.”

https://www.kodak.com/corp/Press_ce...rd_Quarter_2017_Financial_Results/default.htm

On the other hand:
“We expect to generate cash in the fourth quarter of 2017,” said David Bullwinkle, Kodak Chief Financial Officer. “We plan to improve our cash balance through reducing working capital and through cost actions including focusing investments in technologies most likely to deliver near-term returns.”

So it all comes down to the question, what are the technologies "most likely to deliver near-term returns".

Also, I find it interesting that the press release says:
"Consumer and Film Division (CFD) revenues for Q3 were $55 million, flat compared with Q3 of 2016. Operational EBITDA was negative $2 million, a decline of $3 million compared with the prior-year period, driven primarily by lower volumes in industrial film and chemicals, vendor transition costs in motion picture film and the expected continued decline in the consumer inkjet business offset by a payment of contractual minimum royalties from a brand licensing arrangement."

How I see it, the demand for motion picture film and photographic film hasn't declined (at least demand for motion picture film might have even grown). That's a good thing. I do wonder what those vendor transition costs they mention are...

 

[BrianShaw]

Thank you for adding the first sentence of the quote!

 

[Poisson Du Jour]

Operational EBITDA was negative $2 million, a decline of $3 million compared with the prior-year period

The EBITDA is disturbing over such a short period of time. A $3 million decline is parlous for any company, much less one that has restructed before and is heading for yet another restructure and shedding of jobs -- an indicator of instability and directional gear-changing driven by institutional investor sentiment, second to market product uptake. The bland and negative operating trend is reflected in Kodak's declining share performance -- a red flag to future developments. Investor Notes do not paint a particularly rosy picture about Kodak in the way hobbyists do. The job losses news is a very bad development at a time when they are supposed to be trumpeting the return of Ektachrome.

So it all comes down to the question, what are the technologies "most likely to deliver near-term returns".

That most likely does not refer to analogue products because the target market is continually declining, so film could well be the first casualty going forward.

 

[RattyMouse]

How I see it, the demand for motion picture film and photographic film hasn't declined (at least demand for motion picture film might have even grown). That's a good thing. I do wonder what those vendor transition costs they mention are...

I'm not sure how you see such a good situation. Year-to-date Kodak's Consumer Film Division has lost 10 million dollars, vs a profit of 18 million dollars last year prior year. That's a nearly 30 million dollar swing to the down side.

I just read the conference call transcript from the CEO and CFO. Not one mention of any improvement in film sales.

Not one of Kodak's divisions experienced an increase in revenue in the past quarter. All 7 divisions saw a drop in sales or at best, flat.

Kodak stock is at an all time post-bankruptcy low.

This part was interesting:

Analyst: And then, with regards to potential asset sales, how are you thinking about divestitures? I know you mentioned they would go to debt pay down, but I'm curious as to, as you're shutting down some of these technologies in that, that you had, is it possible to monetize some of them? And even maybe bigger divisions within Kodak?

CEO: Yes, again, we're in dialogue, I mean, Shannon, so I can't share a lot of detail because we're in dialogue with them, and I noted, with multiple parties. Clearly, we are doing very well in certain businesses and some of our businesses are now starting to be subscale. And some of those that are subscale, we'll obviously, we'll look at, and the ones that are going well, we hope to get more focused behind. In terms of technologies and IP, while we're going to shut down a significant piece of our advanced research and development of material science products, we do still believe that there are parties out there who are interested in licensing and buying some of those intellectual property assets and pre-commercialization activity. And so we'll work toward that as well.

Is film now running at scale in Kodak's eyes? That's the key question. Sadly, no one asked it.

 

[RattyMouse]

The bland and negative operating trend is reflected in Kodak's declining share performance -- a red flag to future developments. Investor Notes do not paint a particularly rosy picture about Kodak in the way hobbyists do. The job losses news is a very bad development at a time when they are supposed to be trumpeting the return of Ektachrome.

Ektachrome isnt mentioned a single time in either the financial report, or the transcripts of the conference call with investors and analysts. The CEO trumpets many moves that he is making to improve Kodak's financial situation, but none of them involve the film division.

Here are the growth plans: Focus product investment in growth engines - Sonora, Prosper, FLEXCEL NX Systems and Plates, Advanced Materials and 3D Printing and Software and Services;

More ominously is this part of the plan: Manage the expected decline in and maximize cash generated by mature businesses;

 

[MattKing]

For clarity, it is the Consumer and Film Division, which includes things like the Ektar smart phone and the remnant of the consumer inkjet business.
Nothing I have seen separates out the Film related business.

 

[kuparikettu]

Well, we'll see. Worst case scenario film-wise is that all film production stops. In the resulting avalanche, with Kodak ending business in film, the film ecosystem becomes unsustainable as labs dedicated to ECN2 and C41 process close down. Without color negative process motion picture films being manufactured, motion picture film labs close down. Demand for black and white chemicals crashes with no big players around. Only wet plate enthusiast continue to use film, and finally APUG.. sorry, Photrio Analog Industry News... can dedicate itself to what it in reality all the time was: a place to wail about the golden, lost youth and the good times of 1960s-70s.

There, now it has been spelled out. It's a filmapocalypse. Go hoard film and freezers. Large freezers. Time to build a darkroombunker and learn to survive with nothing but a bag of silver grains and live cows.

 

[RattyMouse]

For clarity, it is the Consumer and Film Division, which includes things like the Ektar smart phone and the remnant of the consumer inkjet business.
Nothing I have seen separates out the Film related business.

True...I looked for any documents that dived into that division in more detail but came up empty. Kodak really hides that information good. The CFD division is only 10% of the company by revenue so you'd figure that film has to be a huge slug of that. The inkjet business has been dying for years and is virtually gone while sales of the Ektar phone have to be beyond minimal.

 

[Tim Stapp]

Question is: Will Kodak Alaris survive? I've come to depend on Kodak (Alaris) XTOL as my main developer for B&W films. Will I have to resort to a third party or scratch mixed equivalent? I know that the Foma Excel or Arista equivalent is "supposed" to be the same. BUT! is it?

 

[MattKing]

I don't think that the still film business is Kodak Alaris' largest business.
The colour photographic paper business is probably larger, and they manufacture it, without any involvement from Eastman Kodak.
Eastman Kodak also has no involvement in any of the Kodak chemicals that relate to still photography.
I'm sure that there are synergies between the Eastman Kodak motion picture business and the Kodak Alaris still picture business that would be hurt by Eastman Kodak failing.
And it would not be good for Kodak Alaris to lose their still film manufacturer.
And it certainly would be terrible for public perception.
But as the last photographic "Kodak" standing, I expect Kodak Alaris could succeed.

 

[Cholentpot]

I guess I can get used to Ilford films if I need too...

 

[MattKing]

I guess I can get used to Ilford films if I need too...

Okay, if colour doesn't matter.

 

[BrianShaw]

Well, we'll see. Worst case scenario film-wise is that all film production stops. In the resulting avalanche, with Kodak ending business in film, the film ecosystem becomes unsustainable as labs dedicated to ECN2 and C41 process close down. Without color negative process motion picture films being manufactured, motion picture film labs close down. Demand for black and white chemicals crashes with no big players around. Only wet plate enthusiast continue to use film, and finally APUG.. sorry, Photrio Analog Industry News... can dedicate itself to what it in reality all the time was: a place to wail about the golden, lost youth and the good times of 1960s-70s.

There, now it has been spelled out. It's a filmapocalypse. Go hoard film and freezers. Large freezers. Time to build a darkroombunker and learn to survive with nothing but a bag of silver grains and live cows.

I think that perhaps you may have left something out: zombies. Don’t forget the zombies!

 

[mshchem]

Ektachrome will make it, color film isn't going away. These guys need to stick to what they know how to do. Unload all the business they can't make work. The Consumer and Film division is sustainable for the foreseeable future.

MHO Mike

 

[Lachlan Young]

Ektachrome will make it, color film isn't going away. These guys need to stick to what they know how to do. Unload all the business they can't make work. The Consumer and Film division is sustainable for the foreseeable future.

MHO Mike

Exactly. Essentially they're going to need to aggressively rationalise certain other divisions (like they did with the film manufacturing side) owing to changes in the printing industry. Alaris had to be similarly ruthless in dealing with the shrinking demand for C-print products - they transferred all production to Windsor, CO & shut the Harrow plant. Again this had more to do with changes in the graphics/ advertising industry & shrinking demand for Duratrans etc.

The bits of the film side that are probably still going to see some decline/ bottoming out are amateur colour negative film & lab/ print films for cinema, even if there are now a handful more prints being struck for Europe & North America than in the last few years. Were it to come to it, Alaris would probably have a preferential interest in taking control of the film plant & the cinema division.

 

[RattyMouse]

Ektachrome will make it, color film isn't going away. These guys need to stick to what they know how to do. Unload all the business they can't make work. The Consumer and Film division is sustainable for the foreseeable future.

MHO Mike

I dont see how you can say that. There was a nearly 30 million dollar swing to the negative for Kodak's Consumer and Film division.