Thanks for that clarification. I have to go now and wash all the egg off my face for reacting without reading the details.
It seems that people have latched on to the headlines and paid zero attention to what a Kodak spokesperson was actually quoted as saying:
“The ‘going concern’ language in Kodak’s 10-Q is essentially required disclosure because Kodak’s debt comes due within 12 months of the filing. Kodak is confident it will be able to pay off a significant portion of its term loan well before it becomes due, and amend, extend or refinance our remaining debt and/or preferred stock obligations,” the spokesperson says.
“To fund the repayment, we plan to draw on the approximately $300 million in cash we expect to receive from the reversion and settlement of our U.S. pension fund (the Kodak Retirement Income Plan, or ‘KRIP’) in December. However, the KRIP reversion is not solely within Kodak’s control and therefore is not deemed ‘probable’ under U.S. GAAP accounting rules, which is what triggered the ‘going concern.’ Once the KRIP reversion is completed Kodak will be virtually net debt free and will have a stronger balance sheet than we have had in years.”
So much needless hand-wringing.
It seems that people have latched on to the headlines and paid zero attention to what a Kodak spokesperson was actually quoted as saying:
“The ‘going concern’ language in Kodak’s 10-Q is essentially required disclosure because Kodak’s debt comes due within 12 months of the filing. Kodak is confident it will be able to pay off a significant portion of its term loan well before it becomes due, and amend, extend or refinance our remaining debt and/or preferred stock obligations,” the spokesperson says.
“To fund the repayment, we plan to draw on the approximately $300 million in cash we expect to receive from the reversion and settlement of our U.S. pension fund (the Kodak Retirement Income Plan, or ‘KRIP’) in December. However, the KRIP reversion is not solely within Kodak’s control and therefore is not deemed ‘probable’ under U.S. GAAP accounting rules, which is what triggered the ‘going concern.’ Once the KRIP reversion is completed Kodak will be virtually net debt free and will have a stronger balance sheet than we have had in years.”
So much needless hand-wringing.
And exactly why we don't want Alaris to buy out the film division.
Kodak needs to find a way to dump Alaris.
The thing is, there might be a reason the GAAP accounting rules are strict in this sense. The question is how big the risk is that EK won't be able to use the anticipated $300m in cash. It's apparently not zero. Does that mean it's "significant", "big", or "not meaningful"?
It's still not clear to me what legal relationships between Alaris and Eastman still exist? And if and when they end?
qualify as a “going concern,”
“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.”
That they don't have the available liquidity is technically true, in the sense that they only have $155 million in cash-on-hand to pay off the $477 million in term loans that are due in May 2026. However, they plan to use some of the surplus money ($1.2 billion) in the pension plan to pay off those loans (i.e., a pension reversion). Because the surplus funds in the pension plan can't be accessed until after the reversion is finalized (expected in December of this year), they are required by law to say: "We don't, as of this exact minute, have the liquid assets to pay back the loans, and if we don't pay the loans back, it would be a problem for us." It sounds more dire than it really is because the preciseness of the law prevents them from being able to invoke future liquidity to address present debts.
I also find it interesting that those were the words they, themselves, published.
Been saying this for a while. Even to the point of dumping them and going to court. Litigate the whole mess but be free of them. Alaris is holding back Kodak from riding this current film wave.
Kodak could easily double sales of motion-picture film, if they would lower prices while at the same time start pushing the stocks to dealers, onto the sales desks, paralleled by decent publicity efforts.
All this talk of them “going under” is a gross misunderstanding of the situation.
If its not too late, make yourself a nice Eggs Benedict!Thanks for that clarification. I have to go now and wash all the egg off my face for reacting without reading the details.
I do think they would benefit from putting out more film products with higher regularity
If its not too late, make yourself a nice Eggs Benedict!
Kodak could easily double sales of motion-picture film, if they would lower prices while at the same time start pushing the stocks to dealers, onto the sales desks, paralleled by decent publicity efforts. The present-day Ektachrome is beautiful, no-one else has anything like it. The black-and-white films are way too expensive and too sensitive. 25 ISO should be brought back. Panatomic-X reversal on colorless TAC.
Kodak does not fight for film projection. They have given up cinema being a photochemistry enterprise. Kodak could revive slides projection. Big fun.
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