ROCHESTER, N.Y.--(BUSINESS WIRE)--Eastman Kodak Company (NYSE: EK) today announced the successful completion of its previously announced private placement of $250 million aggregate principal amount of Senior Secured Notes due 2019. The Notes were offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States to persons other than U.S. persons in reliance upon Regulation S under the Securities Act.
The notes are secured obligations of Kodak and will bear interest at a rate of 10.625% per year.
Kodak intends to use the net proceeds from the offering for general corporate purposes and to repurchase $50 million in currently outstanding debt, including its 7.25% Senior Notes due 2013.
“I am very pleased with the success of this notes offering and with the positive response of the investment community,” said Antoinette McCorvey, Kodak’s Chief Financial Officer. “We are committed to completing Kodak’s transformation into a sustainable, profitable company in 2012, and we have the financial resources necessary to achieve that goal. This action was an opportunistic move on Kodak’s part to take advantage of recent improvements in the high-yield credit market, to provide ourselves with additional financial flexibility, and to reduce near-term debt.”
Kodak Updates Cash Outlook
In conjunction with the action referenced above, Kodak is updating its guidance for 2011 cash balance. Previously, the company forecasted a year-end cash balance of $1.5 billion to $1.6 billion. With the action completed today, the company now expects to end 2011 with a cash balance of $1.7 billion to $1.8 billion.
CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements in this press release may be forward-looking in nature, or "forward-looking statements" as defined in the United States Private Securities Litigation Reform Act of 1995. For example, references to the Company's expectations regarding the following are forward-looking statements: revenue; revenue growth; gross margins; earnings; earnings growth; sales, use of cash and cash generation; operational costs and performance improvements; interest payments; liquidity; and debt.
Actual results may differ from those expressed or implied in forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the following risks, uncertainties, assumptions and factors as described in more detail under the heading “risk factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Cautionary Statement Pursuant to Safe Harbor Provisions the Private Litigation Reform Act of 1995" in the Annual Report on Form 10-K for the year ended December 31, 2010 and in other filings the Company makes with the SEC from time to time:
- Continued weakness or worsening of economic conditions which could continue to adversely impact our financial performance and our liquidity;
- Whether we are successful with the strategic investment decisions we have made which could adversely affect our financial performance;
- Whether we effectively anticipate technology trends and develop and market new products to respond to changing customer preferences which could adversely affect our revenue and earnings;
- The competitive pressures we face which could adversely affect our revenue, earnings and market share;
- Whether our commercialization and manufacturing processes prevent product reliability and quality issues which could adversely affect our revenue, earnings and market share;
- Whether we are successful in licensing and enforcing our intellectual property rights or in defending against alleged infringement of the intellectual property rights of others which could adversely affect our revenue, earnings, expenses and liquidity;
- Whether our pension and post-retirement plan costs and contribution levels are impacted by changes in actuarial assumptions, future market performance of plan assets or obligations imposed by legislative or regulatory authorities which could adversely affect our financial position, results of operation and cash flow;
- Whether we are successful in attracting, retaining and motivating key employees which could adversely affect our revenue and earnings;
- Changes in currency exchange rates, interest rates and commodity costs which could adversely impact our results of operations and financial position;
- Whether we are able to provide competitive financing arrangements or extend credit to customers which could adversely impact our revenue and earnings;
- Our reliance on third party suppliers which could adversely affect our revenue, earnings and results of operations; and
- Whether we can generate or raise sufficient cash to fund our continued investments, capital needs, restructuring payments and service our debt.
The Company cautions readers to carefully consider such factors. Many of these factors are beyond the Company’s control. In addition, any forward-looking statements represent the Company’s estimates only as of the date they are made, and should not be relied upon as representing the Company’s estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, even if its estimates change.
Any forward-looking statements in this press release should be evaluated in light of the factors and uncertainties referenced above and should not be unduly relied upon.