kodak's bankruptcy: manufacturing a 21st century rebirth - digital document camera

About the second part of Eastman Kodak series. ROCHESTER, N. Y. (TheStreet)--
George Eastman's former residence is a museum dedicated to the life of Eastman Kodak's founder, immersed in the company's powerful past, without showing the future.
Curator Kathy Connor and Eastman mansions collect the Centennial value of Kodak camera breakthroughs, factory blueprints that no longer exist, and photos of what used to be called Kodak Park, once the world's largest industrial complex.
This is a museum that captures Kodak's best memories and the personality of founder George Eastman, but it is not mentioned about the future of 133 --old company.
Kodak broke down in January.
19,2012, after 30-
The collapse of its leading film business and the failure to identify the next big idea to replace it.
Since then, the company has sold many of its most recognized businesses and inventions.
When Kodak prepares for the second time
Life outside of bankruptcy, for historians like Connor, the company may not be recognized.
However, Kodak hopes to give the Eastman building another story for visitors to see.
Eighteen months ago, many thought Kodak's restructuring would lead to the liquidation of American company icons.
On the contrary, the company seems to have found a foothold in businesses at the crossroads of technology and manufacturing, and it is exactly the 21st century.
Kodak is now positioning itself as a printer manufacturer, with 90% of its revenue coming from repeat digital printing boards, services and ink sales.
More importantly, investors believe the company has the ability to make semiconductors, holographic photography, batteries, biomedical equipment and circuits using its printing assets.
Overall, Kodak is optimistic that its printers, ink, paper and toner will serve the $720 billion commercial printing and packaging market, which could grow nearly twice as much
Global digital interest rates over the next few years.
Kodak will also retain its famous film and film business, which only appeared on the Hollywood screen a few years ago.
Kodak is currently carrying out a $0. 406 billion equity offering that will allow creditors to exchange billions of dollars in debt for shares in the company.
Unsecured creditors are expected to see their claims restored to a minimum, while Kodak recently said in an amendment to the second issue
The lien holder will be fully restored.
The company plans to file a restructuring plan in New York court in August 20, and is expected to withdraw from bankruptcy soon after.
Sources familiar with Kodak's bankruptcy proceedings said the company would re-
Listed shortly after the bankruptcy of the New York Stock Exchange.
Even so, the company will remain a shadow of its past.
In the 1980 s, Kodak had 145,300 employees around the world. In its 1990 s, the company's revenue peaked at $16 billion and its market value reached $30 billion.
Kodak's current market capitalization is about $1.
2 billion, the company stated in its presentation to the lender on July 15.
The company expects 2013 of its revenue to be around $2.
5 billion, down from the previous year.
Kodak may also have fewer employees than it did in 2012.
However, these projections may put the company at the top of its first growth peak in decades.
2017, the company expects revenue to grow by more than 6% for the whole year, due to the digital printing business, which is growing compound in 20%.
The company is expected to have a profit margin of 15 times.
4% in that time frame.
Kodak spokesman Christopher Veronda expects the company to restart the university campus recruitment program after the company goes bankrupt and eventually start hiring again.
The source also said Kodak would seek to reconnect with the Rochester community after the company froze its former business
Generous charitable donations during bankruptcy
If there is any positive view of the fall of a former manufacturing giant,
Billions of dollars in Africa
The pension benefits of the company's more than 50,000 retirees, and the huge losses of most investors, Kodak's bankruptcy does not seem to end.
Before filing for bankruptcy, Kodak had insisted on what it thought was a winning strategy to protect the company's digital images and camera patents by filing a lawsuit.
The day before Chapter 11, Kodak claimed a patent infringement lawsuit against South Korean electronics giant Samsung.
A week ago, the company sued rival Fujifilm and brought smartphone makers Apple and HTC to court on January.
Kodak said it could raise nearly $3 billion in total by filing a lawsuit against its intellectual property and selling about 1,100 high-value digital imaging patents.
Kodak said the cash would help the company reinvest its digital business and drive its strategy into the consumer and commercial printing markets.
After a day in court, Kodak received little money from the infringement claim.
In bankruptcy, the company also sold its patent portfolio to technology companies such as Apple (AAPL -Get Report), Facebook (FB)and Google (GOOG)
$0. 53 billion, or about 20% of the previous forecast.
In retrospect, the company's survival strategy was disappointing.
Many see this as an inevitable failure, and in the context of Kodak's filing, some parties are preparing different solutions for the company's plight.
Bankruptcy created an opportunity for Kodak to try a new strategy.
In particular, investors and management honed Kodak's commercial printing technology while allowing Kodak's pensioners to own businesses that the company was destined to fail but had positive cash flow.
Instead of focusing on winning consumer inkjet market share from HPPackard (HPQ)
As CEO Antonio Perez tried to do before going bankrupt, the company now thinks it's re-established
Located around a much more advanced commercial printer.
Kodak's SONORA and PROSPER printers and Its FLEXCEL system for FlexPrint packaging stand out as part of the company and can be connected to growing terminalsmarkets.
They also appear to be part of Kodak's printing business where there may be fighter jets, in stark contrast to the company's previous efforts to win inkjet users from HP.
When Kodak filed for bankruptcy, the company initially listed its consumer print booth, document scanner and digital print board as "core business" and characterized the consumer inkjet as "core business ", digital printing and packaging technology as a "growth Enterprise.
Kodak's best known products such as film, digital camera, film and online photos
The Kodak Gallery shared platform is listed as an asset for sale or cash management.
However, what Kodak decided to keep and sell during bankruptcy has changed, and the company has hardly kept any consumers --
For enterprises.
Especially the height of Kodak.
Terminal function printing capability is the future of the company.
Shareholders will have 100-
Day plan after the company withdrew from bankruptcy, including re-
Positioning and marketing companies by using printing assets to manufacture technology products such as semiconductors.
Continued operational changes, such as more targeted R & D spending, also contribute to Kodak's financial and technical base.
This is in sharp contrast to the era when Kodak patents broke through but were not commercialized.
"If there is no end-use for R & D, no matter how cool it is, it doesn't matter," a source said . ".
According to the source, Kodak's ambitious benchmark in the public market will be 3 m (MMM -Get Report)and not Xerox (XRX -Get Report).
A technology company should trade at 8: 00. or-nine-
Earnings before interest, tax, depreciation and amortization (EBITDA)
The transaction cost of the printing company is low.
According to public documents, Kodak expects revenue from Operating EBITDA to reach nearly $0. 5 billion, or about $3, by 2017.
Income is 2 billion.
Kodak's revival is a boon to the rest of Rochester.
A company located at the intersection of manufacturing and technology.
Former Kodak employee Bill Pollock's Optimation recently acquired Kingsbury, a manufacturer that will open a factory in Kodak's Eastman Business Park to produce silver-halogen technology that leverages the company
Kodak will also provide chemical and technical support and assist in the marketing of Kingsbury.
The Eastman Commercial Park, once the world's largest manufacturing facility, could stand out from the bankruptcy freeze as another piece of Kodak.
In June, Kodak and New York state reached an agreement to establish an environmental trust worth $49 million for Eastman Commercial Park, which will address the environmental responsibility of the industrial park, and help introduce new businesses to take advantage of a large number of idle factories.
Kodak received
Equal demand for its patent portfolio and sold the Kodak Gallery to Shutterfly (SFLY -Get Report)
Just $23. 2 million.
But a turning point in Kodak's bankruptcy was that the company sold its personalized camera film and file imaging business to the United States. K. pensioners.
The deal was announced at the end of April and $2 was settled.
Kodak's largest creditor claimed a pension liability of 8 billion.
Kodak received about $0. 325 billion in cash and other benefits from the United States, worth about $0. 325 billion. K.
Pension and gave up all previous control over the company
An outstanding cash cow
"This is a real bright spot in the restructuring process," said a source involved in Kodak's bankruptcy . ".
According to The Wall Street Journal, the deal was under negotiation before Kodak filed for bankruptcy and throughout Chapter 11. Those $2.
8 billion of pension claims threaten Kodak to go bankrupt for a long time, which could set up obstacles for the company to go bankrupt againemergence.
Within a few months after the deal was approved by the bankruptcy court, Kodak set up a second
GSO Capital Partners, a subsidiary of lien creditor Blackstone Group (BX -Get Report)
Blue Mountains Capital Management, United stock corporation of the United States and reverse Capital Corporation.
The company also arranged a $0. 895 billion withdrawal financing commitment from JPMorgan Chase (JPM)
Bank of America (BAC)and Barclays (BCS).
Kodak in particular is over $50,000. S. -
Due to the bankruptcy of the company, retirees are facing huge losses.
For example, about a month after Kodak applied for Chapter 11, the company said it would terminate its non-
Benefits for retirees.
These benefits include health and dental insurance, survivor income benefits and life insurance, which are distributed when the company is known for its generosity.
They are about $1 in total.
Kodak's liabilities on its balance sheet are 2 billion.
"Bankruptcy may have a particularly painful impact on retirees . "S.
Judge Alan groper of the bankruptcy court said in court.
When the company set up a committee to represent retirees through bankruptcy proceedings, the company changed direction.
The Kodak board of retirees received $7.
The company pledged $5 million in cash, $15 million after withdrawing from bankruptcy, and an unsecured bankruptcy claim of about $0. 635 billion, which was sold to undisclosed parties for about $70 million.
All in all, the Commission was able to get about 10-
Kodak has 1 cent for every $1 owed to retirees and is able to subsidize some COBRA benefits for retirees who are not yet eligible for health insurance.
Kodak has also set up a voluntary employee benefits program to cover a fraction of the previously guaranteed survivor's income benefits.
At a series of town hall meetings held on December, the committee's recovery was explained.
Scott Williams, a lawyer in Birmingham, Alabama
Slaughter Young & Rediker, based in Haskel, faces the hardships and losses of many retirees.
Retired employees talk about colleagues who are forced to sell homes to help pay thousands of dollars for lost benefits or life insurance losses.
"I hate this result," Williams said in a telephone interview about the recovery . ".
"The company is simply unable to meet its commitments and obligations," he added . ".
Nevertheless, Williams said that the board of retirees gave workers a voice during Kodak's bankruptcy and received a recovery, which was the best result given the situation.
Arthur Roberts, chairman of the Kodak association of retired employees beneficiaries, said in a telephone interview: "retirees have been hit hard, and there is no doubt about it . ".
Roberts promoted on behalf of the pensioner and helped to establish a Retirement Committee.
He said that although the retirees have recovered
Rochester's expectation is that a healthy Kodak will be able to maintain a pension promise of more than $4 billion.
While Roberts said Kodak's retirees were used in bankruptcy because their recovery was small compared to the ticket holders, he added, "Overall, we understand that it happened
We are learning the lesson and accepting it.
We hope Kodak will succeed.
Read Part 3 of Kodak's time of decline: Part 1 of Kodak's time of decline: the rise of Rochester in Kodak's time of decline: Kodak: the end of the American moment-
The author is Antoine Gallas, with Joe Deaux in Rochester, NY. Y.
> Contact by email.
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