The note’s stark language sent Kodak’s shares tumbling, sliding 21% to $5.43 as of Wednesday morning.
For the second quarter ended June 30, Kodak booked $263 million in revenue, which was down 1% from a year earlier. However, the real blow came from the bottom line: Profitability took a sharp hit compared to last quarter, with gross profit sinking 12% to $51 million, squeezing Kodak’s margins from 22% to 19%. What had been a $26 million profit in the same period last year flipped 180 degrees to a $26 million loss. Operational EBITDA slipped to $9 million from $12 million, as significantly lower sales volumes and surging manufacturing costs overwhelmed relatively modest price increases.
Cash reserves also slimmed down. Kodak ended the quarter with $155 million on hand, just $70 million of it in the U.S. That’s $46 million less than it had in December, drained by rising costs, and weaker operating results.
Chief financial officer David Bullwinkle said in the note the company is counting on a somewhat random source of liquidity: terminating its U.S. Kodak Retirement Income Plan and using excess assets to pay down debt. Kodak said it expects clarity by mid-August on how it will settle obligations to plan participants, and aims to complete the process by December.
Dave Zhang, a printing industry expert from analyst group WhatTheyThink, said Kodak’s pain isn’t unique.
“Every major equipment manufacturer in commercial printing is feeling the same squeeze this year, in the U.S. and in Europe,” Zhang told Fortune. “Customers are holding back on big buys unless they absolutely have to. Tariffs and economic uncertainty aren’t giving them the warm-and-fuzzy to invest.”
“Don’t throw out the baby with the bathwater,” Zhang warned. “They blew their future.”
When current CEO Jim Continenza took over, his job was to steer Kodak out of bankruptcy and rebuild its core.
“It’s not just about nostalgia film,” the analyst said. “They’ve had to rebuild a film line from scratch—equipment you can’t just order on Amazon—and now they’re at full manufacturing capacity.”
Kodak’s film output today includes industrial products like films for automotive components, not just 35mm rolls.
Additionally, Kodak shifted from its consumer camera business to focus on commercial printing, packaging, and specialty chemicals.
CEO Jim Continenza framed the development as part of Kodak’s transformation into a manufacturer with diversified products.
“We continue to accelerate the growth of our Advanced Materials & Chemicals business,” he wrote in the earnings release, adding that U.S. manufacturing capacity could help shield Kodak from potential tariff shocks.
The question is whether that shield will be strong enough. The going-concern disclosure, near the end of the earnings report, makes clear that Kodak’s plans to right the ship—pension reversion, debt restructuring, and refinancing—are not entirely within its control. U.S. accounting rules require such a warning when management cannot conclude those steps are “probable.”
“They need time and money,” Zhang said. “Time is hard to get, but if they can get the money, they might just rebuild this thing.”
For now, investors are wondering if the company can improbably reinvent itself for the second, third, or fourth time, or if this is the long-awaited fade-out of a company that once defined how the world captured its memories.
