Eastman Kodak, once among the most recognisable companies in the world, is blaming “misleading media reports” for causing concern after its second-quarter financial results.
Although Kodak reported a gross profit of $51 million this week, the Rochester, New York-based company included a “concern assessment” that unnerved investors, employees and customers.
The assessment warned various conditions “raise substantial doubt about the company’s ability to continue”.
Kodak, which declared bankruptcy in 2012 and emerged in 2013, has tried to climb back to relevance in a vastly changed photography, imaging and chemical market. It said reporters misinterpreted the company's disclosure.
“Media reports that Kodak is ceasing operations, going out of business or filing for bankruptcy are inaccurate and reflect a fundamental misunderstanding of a recent technical disclosure the company made to the Security and Exchange Commission,” read a statement posted to Kodak's LinkedIn page.
Kurt Jaeckel, a senior communications director with Kodak, told The National that the warning “is essentially a required disclosure because Kodak’s debt comes due within 12 months of the filing”.
Mr Jaeckel said the 133-year-old company is confident it will be able to pay its debts by using $300 million from “the reversion and settlement” of Kodak's pension fund.
Yet Art Hogan, chief market strategist at B Riley Wealth in Boston, told The National that despite Kodak recently suggesting otherwise, the company's future is still very much in doubt.
“Any time you ever hear a company say there are questions about continuing to be an continuing entity, it's almost a known quantity, it's theta-complete,” he said.
Mr Hogan said that Kodak – which at its peak employed more than 140,000 workers, but now employs about 3,400 – is struggling to recover from its failure to adapt to digital photography, the decline of film and other market factors.
Despite emerging from bankruptcy protection in 2013 and turning to commercial print, advanced materials and chemicals, the company's earnings and overall financial reality leave a lot to be desired.
“When your debts and liabilities are going to be larger than the other side of your balance sheet, that's when you sort of turn the lights out and close the doors,” Mr Hogan said.
Teachable moment for Big Tech?
The story of Kodak's rise and fall is almost cliched at this point.
The firm's domination of consumer photography through film and camera products, but inability to adjust to digital photography are well documented, although as Mr Hogan says, superficially researched to some extent.
In 1975, a Kodak employee by the name of Steven Sasson invented what many to be the first digital camera.
Although bulky and initially impractical, the technology showed promise, but Kodak failed to see a future in which digital cameras would destroy the profitable film industry it dominated. It shelved Mr Sasson's digital camera project, and sealed the company's fate when digital cameras started to outsell film cameras.
Yet what many often fail to factor in is that even if Kodak supported Mr Sasson's invention, smartphones – not necessarily digital cameras – changed photography forever.
As Mr Hogan says, sometimes the rules of economics and time make a company's demise inevitable. Nothing lasts forever.
“Going from the top of the leader board to being shown the door is something that inevitably happens,” he said, adding that if competition and market forces do not cause company dominance to erode, sometimes government regulators step in and break up that dominance.
“It's the evolution of capitalism and it's just how things work.”
He said that even companies like Nvidia, which is experiencing unprecedented success, inevitably falter, and there is not one single moment it can be pegged to.
Much like Nvidia, Kodak was once considered an invincible darling of S&P 500. Its stock price, as of the writing of this article, hovers at $5 a share.
Mr Hogan also said that although there are optimists who try to compare Kodak's recent struggles to that of Apple, which was nearing irrelevance in the mid-1990s only to come roaring back, those comparisons are ill-conceived.
Apple's struggles occurred while the computer industry was still finding its footing and the company was relatively young, whereas Kodak was already past its prime when its downfall began.
“It's clearly a fallen angel that's not coming back,” Mr Hogan said.
Kodak's brand remains strong despite struggles
Although Kodak has financially meandered for more than a decade, at this point, the company's logo and name still carry weight.
Throughout many parts of the world, and particularly in the Middle East, Kodak signs remain prominent outside print and photo shops.
Timothy Kneeland, a professor of history, politics and law at Nazareth University in western New York, said that the company's contributions to chemical and photography breakthroughs helped to give the US brand unprecedented recognition.
“Overseas, Kodak is loved,” he said. “You can still see retail stores with Kodak branding and merchandise.”
Prof Kneeland also said when Kodak was ascending to its peak of influence, the company made it a priority to send representatives overseas to promote its film, lenses and cameras, giving the brand a significant advantage over competitors.
“Kodak became the standard for film,” he said, adding that the company's prolific TV advertisements boasting of capturing “Kodak moments” with cameras, made it a household name for billions.
Robert Thompson, a professor of pop culture, television, radio and film at Syracuse University's Newhouse School of Public Communications, said that in the 1960s, '70s and '80s, Kodak's products and advertising worked so well that the brand almost took on a generic quality, similar to how people refer to tissues as Kleenex or adhesive bandages as Band-Aids.
“Their advertising essentially taught people how to use what was once just an emerging technology of photography,” he said.
Prof Thompson said Kodak's advertising messages were easily transferable to other parts of the world.
He said the now beleaguered company but resilient brand and logo offer a lesson to others at the centre of the current artificial intelligence boom, such as OpenAI and Anthropic.
“They turned photography into something that was part of the daily activities of a huge portion of the population,” Prof Thompson said.
“AI is obviously a big deal too, but Kodak is admirable because it took technology and turned it into an aspirational product enjoyed by billions.”
