Kodak Could Leave the Market After 133 Years

This is not a drill. Eastman Kodak, the company that brought photography to everyone, is raising concerns. In its latest earnings report, the 133-year-old business warned investors that Kodak could end operations. This news is tough for me and anyone who grew up with those recognizable yellow boxes and thinks of the well-known “Kodak moment.”

The situation is more complicated than saying “everything is falling apart.” The company issued a “going concern” warning, an accounting term that means they are worried about being able to keep running for at least the next year. Kodak has mentioned that it doesn’t have enough money to cover around $500 million in debt that’s coming due. That’s serious. This is a big issue and it’s a major factor in why their stock dropped sharply, falling more than 25% after the news broke.

Kodak’s CEO and the Path Forward

Kodak’s CEO, Jim Continenza, is trying to present a more positive view of the company, at least in public. In the earnings report, he mentioned that Kodak is “making progress” with its long-term plans, despite facing a challenging business climate.

Kodak plans to raise funds by halting payments for its retirement pension plan. This strategy has been in development for some time and is a key part of their overall plan. Kodak explained that the “going concern” warning was issued because the pension plan transaction is not fully under their control and is therefore seen as “not probable” according to accounting standards. While it’s not finalized yet, they seem optimistic it will work out. Kodak claims that once the pension deal is complete, they will be “virtually net debt free.” It’s a hopeful perspective, but we’ll have to wait and see how it turns out.

[Related Reading: Kodak has ceased film production – but only for a little while]

The Rise and Fall of a Photography Giant

Kodak has had quite a journey. It all started back in 1879 when George Eastman invented a machine to coat photographic plates. Then, in 1888, the first Kodak camera was released for $25. At a time when taking pictures was very complicated, Eastman made it simple for everyone with the catchy phrase, “You push the button, we do the rest.” Interestingly, he created the name “Kodak” because he liked the letter “K.”

For a hundred years, Kodak enjoyed great success and was a leader in the market. In the 1970s, it controlled about 90% of film sales and 85% of camera sales in the U.S. Paul Simon even wrote a hit song about “Kodachrome.” But as you might know, photography changed significantly over time.

The Irony of the Digital Age

Kodak created the first digital camera back in 1975. You would think they were set to take charge of the digital world. However, they held back, worried about hurting their very successful film business. This decision turned out to be a huge mistake. When digital technology took over, Kodak found itself struggling and eventually went bankrupt in 2012.

Since then, the company has been working on reinventing itself by focusing on commercial printing, specialty chemicals, and even pharmaceuticals. They say that making many of their products — like cameras, inks, and film — in the United States helps them avoid tariffs.

Personally, I think Kodak is aiming for a comeback, but their financial situation seems very unstable right now. They’ve been such a major player in photography for so long that it’s hard to picture a world without them. We’ll need to watch closely how their planned pension fund deal goes to see if this famous company can manage to bounce back again.

[via CNN; Image credits: Pexels]

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