On Jim Continenza’s inaugural day as Eastman Kodak executive chairman in 2019, he received a call from a prominent Hollywood director indicating that the company was making a significant error.
The photography technology firm was in the midst of closing its acetate plant, which produces a crucial component for film. Christopher Nolan, the filmmaker known for major hits like “Inception” and “Oppenheimer,” urged Continenza to halt the closure.
“He said, ‘Don’t shut this down. Please reconsider.’ And I did,” Continenza, who is now the CEO, recounted to CNBC. “He was correct. I started evaluating it because I shoot 35 millimeter [film], and I’m thinking, ‘Why would such an esteemed director even initiate this discussion?'”
Continenza, a self-described “turnaround expert,” quickly came to understand how integral film was to Kodak’s heritage, and how it could serve as one of its greatest assets while he endeavored to rescue the company from the brink of insolvency.
Fast forward approximately seven years, and numerous Oscar-winning films slated for 2026, including “One Battle After Another” and “Sinners,” were filmed using Kodak film. This trend is part of a broader movement as the format experiences a revival driven by nostalgia for film in Hollywood and interest from younger audiences.
However, the journey was not effortless. The company filed for bankruptcy in 2012 and resurfaced a year later. Subsequently, it warned last year that its financial circumstances “cast substantial doubt on Kodak’s ability to continue as a viable entity.”
During the earnings report for the second quarter when it issued that statement, Kodak reported a 12% decline in gross profit, alongside significant debt commitments.
Nonetheless, Continenza stated it was merely a step in a more extensive journey toward restoring the company to its prior glory.
Last month, the earnings report for the company showed improvement. Its gross profit for the fourth quarter reached $67 million, reflecting a 31% rise compared to the previous year. Kodak also reported a decrease in its annual interest expenses by approximately $40 million.
Continenza remarked at that time that these results were indicative of the long-term strategy he initiated in 2019. He shared with CNBC that he selected Kodak as his final endeavor to revitalize before concluding his tenure as a C-suite executive, having previously held leadership positions at telecom companies such as AT&T and Lucent.
“Our goal is clear: We’re going to generate jobs for future generations. Understand this, we’re going to rectify this company, establish a solid foundation, and build systems that facilitate growth,” Continenza explained. “We didn’t invest what we needed; we invested what we desired, and that is a significant distinction.”
Challenging waters
In an era of rapid digital transformation, Kodak has been striving to retain its relevance.
The company’s bankruptcy protection in 2012 followed its inability to enhance its finances as the boom in digital photography disrupted the industry. Upon its resurgence the subsequent year as a more compact entity, it redirected its focus towards commercial printing.
While it’s no longer a company attracting extensive investor coverage, Melius Research analyst Ben Reitzes noted in a report last year that the advent of digital technology was a significant hurdle for Kodak.
“At that time, Kodak’s management assured us that film would coexist with digital photography, suggesting that more photos would be taken — and consequently, more would require printing by Kodak,” he recounted.
Nevertheless, Kodak encountered numerous challenges. Its stock plummeted by over 35% in 2014, continuing to experience a gradual decline throughout the following years, ultimately reaching a record low of $1.55 per share during the early days of the pandemic in March 2020.
By last August, the century-old photography firm disclosed having around $155 million in cash alongside nearly $600 million in loans.
A Kodak spokesperson stated at that time that the going concern language had to be included due to insufficient available liquidity to meet debt obligations maturing within a year. Nevertheless, the company expressed confidence in its ability to repay a substantial portion of that loan before it matured by winding down its pension plan, labeling the disclosure as merely a required technical report.
Wall Street investors responded negatively to the news. The stock price fell from about $7 per share just days earlier to slightly above $5 per share on the earnings announcement day.
“We could have managed that better, as to us, it was not as critical; it was more of a GAAP accounting coincidence with dates,” Continenza remarked, treating it as a “timing issue” regarding the loans.
Continenza noted that Kodak’s primary obstacles lay in its substantial debt and inadequate communication with its shareholders and customers.
The CEO mentioned he has never sold a share of Kodak and has instead purchased shares following the company’s going concern notification.
“You must put in the effort and make long-term investments; you need to be systematic, and you must refine your operations, which I’ve dedicated seven years to doing,” he stated. “[It’s] a company over 130 years old, right? You can imagine what’s hidden in the attic.”
Defining success
Continenza asserted that he has been deliberate in implementing long-lasting changes since taking over the enterprise. He has transformed approximately 90% of the company’s leadership, cleared over $400 million in debt, and reorganized the company’s priorities to emphasize print and advanced materials and chemicals.
Furthermore, he recognized the significance of being “transparent” with his team and accepted that the turnaround process would necessitate layoffs and adjustments in staffing.
“The first thing I do is seek individuals who are committed to the company and acquire them, and that’s the approach we took,” he added. “I’ve assembled a board and investors who support our mission — we keep them updated, and they provide valuable guidance.”
As he assessed what succeeded for the company, Continenza identified a prospective opportunity with Generation Z and the revival of film appreciation. The aesthetic of photographs and videos captured on film evokes something that “penetrates your heart and soul,” he mentioned.
Kodak has embraced the analog and authenticity trend, channeling its resources into film production capabilities and developing products that appeal to consumers, filmmakers, and directors alike.
Continenza also revealed he has refinanced the company three times and appropriately balanced its financials.
This strategy appears to resonate well on Wall Street. Over the past year, Kodak’s stock has increased by nearly 100%.
“We’re fulfilling our duties. Stocks aren’t meant for rapid spikes; they’re designed to grow steadily, as that’s how we expand,” he commented. “I don’t monitor our stock price. It doesn’t concern me. I couldn’t tell you what it is today. I am a long-term investor.”
To Continenza, true success will be defined by ongoing financial improvements and ensuring Kodak has a robust succession plan to maintain its upward trajectory.
Despite being more than a century old, he chooses to regard Kodak as a startup, with all debts settled, the brand cherished, and at this juncture, only Kodak itself could potentially “mess it up.”
“We don’t aspire to be a $5 billion, $20 billion, or $80 billion corporation,” Continenza remarked. “We’re a multi-billion-dollar international entity, but our key advantage lies in our brand recognition. It is beloved worldwide and will remain so.”
