Eastman Kodak Company reports 117% Net Income decline in 2018 while 5.8 pp EBITDA Margin growth from -9.2% to -3.4%
04/01/2019 • About Eastman Kodak Company (
$KODK) • By InTwits
Eastman Kodak Company reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Eastman Kodak Company is a company in decline: 2018 revenue growth was -4.4%, 5 years revenue CAGR was -10.9%
- The company operates at negative EBITDA Margin: -3.4%
- EBITDA Margin is quite volatile: -3.4% in 2018, -9.2% in 2017, 13.3% in 2016, 11.0% in 2015, 8.6% in 2014
- Eastman Kodak Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's a lot of higher than industry average of 0.6%.
- CAPEX is quite volatile: $2m in FY2018, $2m in FY2017, $3m in FY2016, $4m in FY2015, $13m in FY2014
- The company has unprofitable business model: ROIC is -26.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.9x while industry average is -2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 4.4%. Revenue decline showed acceleration in 18Q4 - it was 14.5% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.8 pp from -9.2% to -3.4% in 2018.
Gross Margin decreased slightly on 1.6 pp from 15.2% to 13.7% in 2018. SG&A as a % of Revenue showed almost no change in 2018.
Net Income margin decreased on 8.0 pp from 6.8% to -1.2% in 2018. During the last 5 years Net Income margin topped in 2017 at 6.8%.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 2.5%. Eastman Kodak Company's CAPEX/Revenue showed almost no change from 2015 to 2018. For the last three years the average CAPEX/Revenue was 2.6%. During 2014-2018 CAPEX as a % of Revenue topped in 2017 at 2.7%.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2018. Debt showed almost no change in 2018 while cash dropped on 28.3%.
Eastman Kodak Company has short term refinancing risk: cash is only 62.1% of short term debt.
Management team
Eastman Kodak Company's CFO David E Bullwinkle has spent 3 years with the company.
Financial and operational results
FY ended 12/31/2018
Eastman Kodak Company ($KODK) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 2,116 | 1,803 | 1,643 | 1,386 | 1,325 | -4.4% |
| Gross Profit | 456 | 381 | 403 | 211 | 181 | -14.2% |
| SG&A | 310 | 226 | 198 | 239 | 225 | -5.9% |
| EBITDA | 183 | 199 | 218 | -127 | -45 | |
| Net Income | -123 | -80 | 15 | 94 | -16 | -117.0% |
Balance Sheet
|
|---|
| Cash | 712 | 547 | 434 | 343 | 246 | -28.3% |
| Short Term Debt | 5 | 5 | 6 | 4 | 396 | 9,800.0% |
| Long Term Debt | 672 | 675 | 405 | 399 | 5 | -98.7% |
Cash flow
|
|---|
| Capex | 43 | 43 | 41 | 38 | 33 | -13.2% |
Ratios
|
|---|
| Revenue growth | -10.3% | -14.8% | -8.9% | -15.6% | -4.4% | |
| EBITDA growth | -69.7% | 8.7% | 9.5% | -158.3% | -64.6% | |
|
|---|
| Gross Margin | 21.6% | 21.1% | 24.5% | 15.2% | 13.7% | -1.6% |
| EBITDA Margin | 8.6% | 11.0% | 13.3% | -9.2% | -3.4% | 5.8% |
| SG&A, % of revenue | 14.7% | 12.5% | 12.1% | 17.2% | 17.0% | -0.3% |
| Net Income Margin | -5.8% | -4.4% | 0.9% | 6.8% | -1.2% | -8.0% |
| CAPEX, % of revenue | 2.0% | 2.4% | 2.5% | 2.7% | 2.5% | -0.3% |
|
|---|
| ROIC | -1.4% | 6.1% | 17.8% | -43.8% | -26.3% | 17.5% |
| ROE | -27.2% | -45.1% | | | | |
| Net Debt/EBITDA | -0.2x | 0.7x | -0.1x | | |
Eastman Kodak Company ($KODK) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 318 | 372 | 366 | 230 | | -10.9% | -2.4% | -3.4% | -14.5% |
| EBITDA | -16 | 3 | 13 | -54 | | | | | |
| Net Income | -25 | 4 | 19 | -14 | | -457.1% | 0.0% | | -110.9% |
Balance Sheet
|
|---|
| Cash | 313 | 275 | 238 | 246 | | -17.2% | -25.7% | -30.4% | -28.3% |
| Short Term Debt | 4 | 3 | 396 | 396 | | -33.3% | -57.1% | 4,850.0% | 9,800.0% |
| Long Term Debt | 399 | 398 | 5 | 5 | | -1.2% | -1.5% | -98.8% | -98.7% |
Ratios
|
|---|
| Gross Margin | 11.9% | 16.1% | 17.8% | 0.9% | | -5.4% | -2.2% | -5.2% | 19.5% |
| EBITDA Margin | -5.0% | 0.8% | 3.6% | -23.5% | | 0.9% | 2.1% | 12.3% | 29.7% |
| Net Income Margin | -7.9% | 1.1% | 5.2% | -6.1% | | -9.8% | 0.0% | 17.3% | -54.0% |
Peers in Technology Hardware, Storage &
Below you can find Eastman Kodak Company benchmarking vs. other companies in Technology Hardware, Storage & industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Crossroads Systems Inc ($CRSS) | | -90.6% | -35.5% | -89.5% | 39,959.5% |
| Immersion Corporation ($IMMR) | | 19.8% | -9.9% | -38.7% | 217.0% |
| Veritec Inc ($VRTC) | | -42.2% | -28.0% | -52.2% | 53.1% |
| Boxlight Corporation ($BOXL) | | -88.5% | 503.2% | 26.4% | 47.0% |
| Pure Storage, Inc. ($PSTG) | | 308.2% | 152.4% | 67.9% | 38.6% |
| |
|---|
| Median (30 companies) | -16.9% | -3.2% | -4.3% | 2.1% | 5.6% |
|---|
| Eastman Kodak Company ($KODK) | | -14.8% | -8.9% | -15.6% | -4.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Immersion Corporation ($IMMR) | 99.1% | 99.3% | 99.7% | 99.4% | 99.8% |
| Pure Storage, Inc. ($PSTG) | 43.5% | 55.5% | 61.9% | 65.9% | 65.5% |
| NetApp, Inc. ($NTAP) | 62.0% | 62.6% | 60.8% | 61.3% | 62.7% |
| Avid Technology, Inc. ($AVID) | 61.4% | 60.9% | 65.0% | 57.8% | 57.9% |
| Datasea Inc ($DTSS) | | | | 39.3% | 54.4% |
| |
|---|
| Median (29 companies) | 38.6% | 36.3% | 39.3% | 39.6% | 38.8% |
|---|
| Eastman Kodak Company ($KODK) | 21.6% | 21.1% | 24.5% | 15.2% | 13.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Immersion Corporation ($IMMR) | 12.3% | 9.0% | -25.1% | -127.0% | 48.6% |
| Apple Inc. ($AAPL) | 33.1% | 35.3% | 32.7% | 31.2% | 30.8% |
| Western Digital Corporation ($WDC) | 20.1% | 18.7% | 12.5% | 21.4% | 27.5% |
| NetApp, Inc. ($NTAP) | 16.9% | 16.7% | 11.3% | 15.4% | 22.9% |
| Seagate Technology PLC ($STX) | 19.3% | 21.1% | 11.3% | 16.7% | 20.0% |
| |
|---|
| Median (29 companies) | 7.1% | 6.2% | 3.8% | 4.5% | 7.9% |
|---|
| Eastman Kodak Company ($KODK) | 8.6% | 11.0% | 13.3% | -9.2% | -3.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hewlett Packard Enterprise Company ($HPE) | 6.6% | 6.4% | 10.8% | 10.9% | 9.6% |
| Pure Storage, Inc. ($PSTG) | 28.7% | 24.2% | 8.9% | 10.4% | 6.3% |
| 3D Systems Corporation ($DDD) | 3.5% | 3.4% | 2.6% | 4.8% | 5.9% |
| Apple Inc. ($AAPL) | 5.2% | 4.8% | 5.9% | 5.4% | 5.0% |
| Western Digital Corporation ($WDC) | 4.2% | 4.2% | 4.5% | 3.0% | 4.0% |
| |
|---|
| Median (29 companies) | 2.7% | 3.0% | 1.7% | 1.8% | 2.2% |
|---|
| Eastman Kodak Company ($KODK) | 2.0% | 2.4% | 2.5% | 2.7% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Avid Technology, Inc. ($AVID) | | | | | 252.4% |
| Ionix Technology Inc ($IINX) | | | | 23.9% | 204.5% |
| Immersion Corporation ($IMMR) | 7.6% | 5.8% | -21.5% | -138.9% | 96.8% |
| HP Inc. ($HPQ) | 8.0% | 8.7% | 15.8% | 60.8% | 72.9% |
| NetApp, Inc. ($NTAP) | 12.5% | 14.8% | 7.3% | 14.0% | 28.1% |
| |
|---|
| Median (37 companies) | 6.0% | 5.0% | -2.6% | 1.6% | 3.6% |
|---|
| Eastman Kodak Company ($KODK) | -1.4% | 6.1% | 17.8% | -43.8% | -26.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CPI Card Group Inc. ($PMTS) | 3.4x | 3.5x | 5.8x | | 12.4x |
| NCR Corporation ($NCR) | 4.9x | 6.6x | 2.7x | 2.3x | 5.2x |
| Avid Technology, Inc. ($AVID) | -0.7x | 3.1x | 1.7x | 5.6x | 4.8x |
| Xerox Corporation ($XRX) | 3.5x | 3.5x | 3.1x | 3.0x | 3.0x |
| Electronics for Imaging, Inc. ($EFII) | -0.2x | 1.4x | 1.3x | 1.6x | 1.7x |
| |
|---|
| Median (20 companies) | -0.4x | 0.3x | 0.4x | 0.3x | 0.6x |
|---|
