Company: KODK
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0000950170-25-040256
Chunk: 193

Company: EASTMAN KODAK CO
Filing Date: 2025-03-17
Form: 10-K
Item: Item 7
Chunk 193
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 environment, heightened levels of inflation, the war in Ukraine, the conflicts involving Israel, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, and other global events which impacted Kodak’s operations. Kodak is experiencing revenue declines and increased manufacturing costs for certain businesses due to lower volumes and increases in labor, material and distribution costs, as well as supply chain disruptions and shortages in materials and labor. 

Kodak has implemented various pricing actions and customer-focused initiatives to mitigate the impact of increased manufacturing costs, primarily within its Print and Advanced Materials and Chemicals segments. Largely beginning in the latter part of the second quarter of 2021, in order to mitigate the impact of higher aluminum, energy and packaging costs within Prepress Solutions, the Print segment implemented pricing actions on purchases of plates that continue to be periodically reviewed and adjusted accordingly. In addition, the Advanced Materials and Chemicals segment implemented various pricing actions primarily within its Industrial Films and Chemicals and Motion Picture businesses. 

The Print segment is experiencing a slowdown in customer demand for plates that negatively impacted volume due to current global economic conditions and the impact of pricing actions. In addition to the pricing actions and customer initiatives described above, Kodak has implemented supply chain and workforce optimization, productivity improvements and other cost savings activities. The combined actions have largely mitigated the impact of lower volumes and increased manufacturing costs. However, the potential worsening of economic conditions, continued decreases in volume and increases in manufacturing and other costs without further price increases, productivity improvements or other cost saving measures, could unfavorably impact this segment's operating results.

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Table of Contents

The Electrophotographic Printing Solutions business (the "EPS Business") within the Print Segment experienced higher than expected volume declines in 2024. During the third quarter of 2024, Kodak recorded an inventory reserve adjustment of $4 million resulting from higher-than-expected volume declines for certain component and service parts sold to its installed base of NEXFINITY printers due to the negative impact of recent pricing actions and ceasing the manufacturing of NEXFINITY printers effective December 2022. During the fourth quarter of 2024, Kodak recorded an inventory reserve adjustment of $4 million related to EPS Business black and white consumables and service parts due to the reduction in forecasted demand communicated from its primary distributor. As of December 31, 2024, the carrying value of inventory for the EPS Business was approximately $7 million. 

The Advanced Materials and Chemicals segment has also experienced labor