Upstate New York firm issues stark announcement concerning its potential demise
Kodak Faces Financial Challenges but Pursues Debt Reduction Strategy
Eastman Kodak Co, the iconic photography company, is currently grappling with financial difficulties as it reported a decline in profits and faces substantial debt obligations. In its second quarter of 2025, Kodak recorded a 12% drop in gross profit, a 1% decrease in revenue, and a GAAP net loss of $26 million, compared to the same period in 2024 [1][2].
The company's regulatory filing states that there are conditions raising substantial doubt about Kodak's ability to continue as a going concern, primarily due to significant upcoming debt obligations within the next year [1]. Kodak's total term debt is approximately $477 million, with additional $177 million in other debt and $100 million in preferred stock outstanding [3].
To address these financial hurdles, Kodak plans to use approximately $300 million in cash it is expected to receive by December 2025 from terminating its pension plan for former U.S. employees [1][3]. The remaining funds from the pension plan after paying participants will be directed towards reducing Kodak's debt. The company is confident it will pay off a substantial portion of its term loan well before the due dates and aims to amend, extend, or refinance its remaining debt and preferred stock obligations [1][3].
Last year, Kodak announced its intention to end its retirement income plan to pay down debt [3]. The company expects to know by Friday how it will satisfy its obligations to pay all pension plan participants [4]. Kodak foresees completing the reversion of its retirement income plan by December [4].
In a positive development, Kodak is nearing completion on a manufacturing plant to create regulated pharmaceutical products [5]. The company, which already makes unregulated key starting materials for pharmaceuticals, is focusing on this sector [5]. Kodak is also actively engaged in commercial and packaging printing [5].
Despite these efforts, Kodak does not have committed financing or available liquidity to meet its debt obligations if they were to become due [6]. The statement from Kodak on Tuesday indicates that the going concern language in its regulatory filing is a required disclosure because its debt comes due within 12 months of the filing [6].
In the past, Kodak has faced similar challenges. The company filed for bankruptcy protection in 2012 due to increasing competition, continuing growth in digital photography, and growing debt [7]. However, Kodak received approval for its plan to emerge from court oversight in 2013 [7].
Recently, Kodak wound up selling off many of its businesses and patents [8]. Shares of Eastman Kodak Co. slid more than 25% in midday trading [9]. In a move that signalled a shift in its business focus, Kodak shut down the camera manufacturing unit that first made it famous [10].
Despite the current financial struggles, Kodak remains optimistic about its future. The company is confident it will be able to pay off a significant portion of its term loan before it becomes due [1][3]. Kodak is aiming to continue operations and strengthen its financial position by early 2026 [3].
[1] - [https://www.kodak.com/us/en/investor-relations/financial-reports.html] [2] - [https://www.marketwatch.com/story/kodak-shares-plunge-more-than-25-on-fears-of-bankruptcy-2025-08-03] [3] - [https://www.reuters.com/business/kodak-says-it-will-avoid-bankruptcy-using-pension-plan-cash-2025-08-02] [4] - [https://www.bloomberg.com/news/articles/2025-08-05/kodak-says-it-will-know-by-friday-how-it-will-pay-pension-plan-participants] [5] - [https://www.fiercepharma.com/pharma/kodak-nearing-completion-on-manufacturing-plant-to-create-regulated-pharmaceutical-products] [6] - [https://www.wsj.com/articles/kodak-says-it-faces-financial-doubt-but-has-a-plan-to-avoid-bankruptcy-11628253821] [7] - [https://www.nytimes.com/2013/03/19/business/kodak-wins-approval-for-plan-to-exit-bankruptcy.html] [8] - [https://www.reuters.com/article/us-kodak-patents-idUSKCN1QS1YO] [9] - [https://www.marketwatch.com/story/kodak-shares-plunge-more-than-25-on-fears-of-bankruptcy-2025-08-03] [10] - [https://www.nytimes.com/2012/01/19/business/kodak-to-close-its-camera-manufacturing-operations.html]
Kodak is relying on the $300 million in cash from terminating its pension plan to address its substantial debt obligations, which primarily stem from its finance sector. To strengthen its business position, Kodak plans to utilize this cash for debt reduction, indicating its commitment to the industry, particularly in sectors such as regulated pharmaceutical products and commercial printing.
