Eastman Kodak Company reports 566% Net Income decline in 2020 and almost no change in EBITDA Margin of -1.6%
03/16/2021 • About Eastman Kodak Company (
$KODK) • By InTwits
Eastman Kodak Company reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Eastman Kodak Company is a company in decline: 2020 revenue growth was -17.1%, 5 years revenue CAGR was -10.6%
- The company operates at negative EBITDA Margin: -1.6%
- Eastman Kodak Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: $17m in 2020, $15m in 2019, $33m in 2018, $38m in 2017, $41m in 2016
- The company has unprofitable business model: ROIC is -18.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.8x while industry average is -0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Eastman Kodak Company's Revenue dropped on 17.1%. Annual revenue decline showed slowdown in 20Q4 - revenue decreased on 9.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.0 pp from 11.0% to 15.0% in 2020. During the last 5 years EBITDA Margin bottomed in 2017 at -9.2% and was growing since that time.
Gross Margin decreased slightly on 1.5 pp from 14.7% to 13.1% in 2020. SG&A as a % of Revenue showed almost no change in 2020.
Net Income margin dropped on 61.9 pp from 9.3% to -52.6% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 1.7%. Eastman Kodak Company showed small CAPEX/Revenue decline of 1.1 pp from 2.7% in 2017 to 1.7% in 2020. It's average CAPEX/Revenue for the last three years was 1.8%.
Return on investment
The company operates at negative ROIC (-18.3%) and ROE (-728.9%). ROIC increased on 6.2 pp from -24.5% to -18.3% in 2020. During 2016-2020 ROIC bottomed in 2017 at -43.8% and was growing since that time.
Leverage (Debt)
Debt level is 2.8x Net Debt / EBITDA and Debt / EBITDA. Debt dropped on 52.9% while cash dropped on 15.9%.
Eastman Kodak Company has no short term refinancing risk: cash is higher than short term debt (1,306.7%).
Management team
The company's CEO is James V Continenza "Jim". James V Continenza "Jim" has 2 years tenure with the company. Eastman Kodak Company's CFO David E Bullwinkle has spent 4 years with the company.
Financial and operational results
FY ended 12/31/2020
Eastman Kodak Company ($KODK) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,643 | 1,386 | 1,325 | 1,242 | 1,029 | -17.1% |
| Gross Profit | 403 | 211 | 181 | 182 | 135 | -25.8% |
| SG&A | 198 | 239 | 225 | 211 | 172 | -18.5% |
| EBITDA | 218 | -127 | -45 | -22 | -16 | |
| Net Income | 15 | 94 | -16 | 116 | -541 | -566.4% |
Balance Sheet
|
|---|
| Cash | 434 | 343 | 246 | 233 | 196 | -15.9% |
| Short Term Debt | 6 | 4 | 396 | 15 | 15 | 0.0% |
| Long Term Debt | 405 | 399 | 5 | 157 | 66 | -58.0% |
Cash flow
|
|---|
| Capex | 41 | 38 | 33 | 15 | 17 | 13.3% |
Ratios
|
|---|
| Revenue growth | -8.9% | -15.6% | -4.4% | -6.3% | -17.1% | |
| EBITDA growth | 9.5% | -158.3% | -64.6% | -51.1% | -27.3% | |
|
|---|
| Gross Margin | 24.5% | 15.2% | 13.7% | 14.7% | 13.1% | -1.5% |
| EBITDA Margin | 13.3% | -9.2% | -3.4% | -1.8% | -1.6% | 0.2% |
| SG&A, % of revenue | 12.1% | 17.2% | 17.0% | 17.0% | 16.7% | -0.3% |
| Net Income Margin | 0.9% | 6.8% | -1.2% | 9.3% | -52.6% | -61.9% |
| CAPEX, % of revenue | 2.5% | 2.7% | 2.5% | 1.2% | 1.7% | 0.4% |
|
|---|
| ROIC | 17.8% | -43.8% | -26.3% | -24.5% | -18.3% | 6.2% |
| ROE | | | | | -728.9% | |
| Net Debt/EBITDA | -0.1x | | | | |
Eastman Kodak Company ($KODK) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 267 | 213 | 252 | 297 | | -8.2% | -30.6% | -20.0% | -9.7% |
| EBITDA | -11 | -9 | -24 | 7 | | - | - | -2,500.0% | - |
| Net Income | -111 | -5 | -445 | 20 | | - | -102.5% | - | - |
Balance Sheet
|
|---|
| Cash | 209 | 180 | 193 | 196 | | -12.9% | -16.7% | -14.2% | -15.9% |
| Short Term Debt | 13 | 13 | 14 | 15 | | -96.9% | -55.2% | -51.7% | 0.0% |
| Long Term Debt | 159 | 164 | 66 | 66 | | 200.0% | 24.2% | -52.9% | -58.0% |
Ratios
|
|---|
| Gross Margin | 13.5% | 9.9% | 12.3% | 15.8% | | -0.3% | -3.8% | -4.5% | 1.5% |
| EBITDA Margin | -4.1% | -4.2% | -9.5% | 2.4% | | -0.7% | -2.6% | -9.8% | 6.6% |
| Net Income Margin | -41.6% | -2.3% | -176.6% | 6.7% | | -35.4% | -67.8% | -175.0% | 25.6% |
Peers in Technology Hardware, Storage & Peripherals
Below you can find Eastman Kodak Company benchmarking vs. other companies in Technology Hardware, Storage & Peripherals 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Ionix Technology Inc ($IINX) | - | 246.0% | -5.8% | 92.3% | 66.8% |
| Veritec Inc ($VRTC) | - | -52.2% | 53.1% | -38.5% | 42.9% |
| Pure Storage, Inc. ($PSTG) | - | 67.9% | 38.6% | 32.7% | 20.9% |
| USA Technologies, Inc. ($USAT) | - | 34.5% | - | - | 12.9% |
| CPI Card Group Inc. ($PMTS) | - | -17.4% | 0.4% | 8.7% | 12.3% |
| |
|---|
| Median (20 companies) | 1.4% | 2.1% | 5.6% | -2.0% | -8.8% |
|---|
| Eastman Kodak Company ($KODK) | - | -15.6% | -4.4% | -6.3% | -17.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Immersion Corporation ($IMMR) | 99.7% | 99.4% | 99.8% | 99.5% | 99.4% |
| Datasea Inc ($DTSS) | - | 39.3% | 54.4% | - | 89.7% |
| Pure Storage, Inc. ($PSTG) | 61.9% | 65.9% | 65.5% | 66.4% | 69.0% |
| Avid Technology, Inc. ($AVID) | 65.0% | 57.8% | 57.9% | 60.5% | 63.3% |
| Socket Mobile, Inc. ($SCKT) | 50.2% | 53.5% | 51.4% | 52.5% | 53.1% |
| |
|---|
| Median (21 companies) | 39.3% | 39.6% | 38.8% | 35.1% | 38.2% |
|---|
| Eastman Kodak Company ($KODK) | 24.5% | 15.2% | 13.7% | 14.7% | 13.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Apple Inc. ($AAPL) | 32.7% | 31.2% | 30.8% | 29.4% | 28.7% |
| CPI Card Group Inc. ($PMTS) | 14.9% | -0.0% | 9.0% | 15.2% | 17.9% |
| Immersion Corporation ($IMMR) | -25.1% | -127.0% | 48.6% | -50.4% | 17.4% |
| Avid Technology, Inc. ($AVID) | 17.5% | 6.6% | 8.4% | 13.5% | 13.6% |
| Western Digital Corporation ($WDC) | 12.5% | 21.4% | 27.5% | 11.5% | 11.7% |
| |
|---|
| Median (19 companies) | 3.8% | 4.5% | 7.9% | 7.9% | 7.9% |
|---|
| Eastman Kodak Company ($KODK) | 13.3% | -9.2% | -3.4% | -1.8% | -1.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Datasea Inc ($DTSS) | - | 0.0% | 0.0% | - | 20.9% |
| Hewlett Packard Enterprise Company ($HPE) | 10.8% | 10.9% | 9.6% | 9.8% | 8.8% |
| Pure Storage, Inc. ($PSTG) | 8.9% | 10.4% | 6.3% | 7.4% | 5.3% |
| Stratasys, Ltd. ($SSYS) | 6.7% | 3.3% | 3.5% | 3.5% | 5.2% |
| Western Digital Corporation ($WDC) | 4.5% | 3.0% | 4.0% | 5.3% | 3.9% |
| |
|---|
| Median (19 companies) | 1.7% | 1.8% | 2.2% | 2.3% | 2.3% |
|---|
| Eastman Kodak Company ($KODK) | 2.5% | 2.7% | 2.5% | 1.2% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| HP Inc. ($HPQ) | 15.8% | 60.8% | 72.9% | 116.0% | 109.2% |
| Apple Inc. ($AAPL) | 27.0% | 23.8% | 28.0% | 29.5% | 33.0% |
| Avid Technology, Inc. ($AVID) | - | - | 252.4% | 42.1% | 30.0% |
| CPI Card Group Inc. ($PMTS) | 12.8% | -9.3% | 2.7% | 15.4% | 20.5% |
| NCR Corporation ($NCR) | 13.9% | 16.3% | 4.6% | 14.3% | 5.5% |
| |
|---|
| Median (21 companies) | -2.6% | 1.6% | 3.6% | 4.2% | 2.6% |
|---|
| Eastman Kodak Company ($KODK) | 17.8% | -43.8% | -26.3% | -24.5% | -18.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Diebold Nixdorf Incorporated ($DBD) | - | 8.3x | - | 6.6x | 7.3x |
| CPI Card Group Inc. ($PMTS) | 5.8x | - | 12.4x | 7.2x | 5.2x |
| Hewlett Packard Enterprise Company ($HPE) | 0.4x | 1.2x | 1.6x | 2.6x | 5.2x |
| NCR Corporation ($NCR) | 2.7x | 2.3x | 5.2x | 3.3x | 4.8x |
| Western Digital Corporation ($WDC) | 5.5x | 1.7x | 1.1x | 3.7x | 3.5x |
| |
|---|
| Median (12 companies) | 0.4x | 0.3x | 0.6x | 1.4x | 3.0x |
|---|
