The manufacturer had largely been expected to announce the identity of the buyer of its high-speed inkjet business alongside its 2016 Q4 and full-year results this week. However, Kodak chief executive Jeff Clarke said Prosper was a complex business and negotiations were taking longer than anticipated. 

“We continue to work towards the disposition of our Prosper business but have not yet entered into a binding sales agreement. There are multiple global parties interested in Prosper and in order to maximise the value, we have been patient as prospective buyers work to develop their most competitive bid for the business,” he said.

“We announced in December the sale process was delayed and have taken longer than we originally anticipated. As I have said in the past, Prosper is a complex business with great technology but still requires additional investment in its next-generation Ultrasteam platform, which has added to the time needed in the sale diligence and negotiating process.”

Kodak had hoped to have the deal sealed – with Xerox hotly tipped to be the buyer – by the end of 2016, but the manufacturer announced a delay in December and no further timeframe has been included in its annual report, published last night.

Across the company, revenues fell by $166m or 10% to $1.5bn (2015: $1.7bn) in the year ending 31 December 2016 while operational EBITDA fell $27m to $144m (2015: $171m). However net earnings made a marked improvement of $91m over 2015 moving from a $75m loss to a positive figure of $16m.

Operating expenses improved by 15% to $212m with $15m of the improvement due to increased non-cash components of pension income.

Cash balance at the end of the year was $433m, down by $113m from 2015 although cash decline was $53m less than the previous year. Cash usage, excluding net debt prepayments, decreased sharply from $162m in 2015 to just $29m last year.

Commenting on the cash usage Kodak CFO David Bullwinkle said the significant improvement was encouraging and that repayments in full of Kodak’s second-lien debt would reduce cash used to pay off interest going forward with the firm expecting to generate cash in 2017.

Presenting the full-year results, Clarke commented: “The company has made progress in 2016 across many areas. We entered 2017 with a much stronger balance sheet as a result of the repayment of the entire second-lien debt during the fourth quarter of 2016.

“Our quality of earnings improved meaningfully in 2016. Operational Ebitda improved year-over-year in our print systems, micro 3D printing and packaging and our intellectual property solutions divisions, while we effectively managed the expected declines in the enterprise inkjet and consumer and film divisions. Our software and solutions division saw declines during a transitional year while we expected to move to double-digit growth in operational Ebitda in 2017.”

In the segments the Print Systems Division (PSD), Kodak’s largest division, reported full-year 2016 revenues of $1bn, down $87m or 8% compared with 2015, with “worldwide competitive pricing pressures and an unfavorable economic environment in Latin America” cited for the decline. Operational EBITDA meanwhile, improved by 6% to $105m. A key performer was its Kodak Sonora Process Free plate product, which saw a 9% growth in unit sales while its Libra and Electra Max experienced “continued success”.

The company said PSD would face economic headwinds in 2017, including competitive pricing and a $12m year-on-year increase in aluminium costs compared with 2016, resulting in an expected EBITDA decline for the division.

Clarke said with projections for the packaging market to grow by 4% between 2017 and 2022, Kodak's 2016 Flexcel NX plate volume growth of 16% was four times that market projection. “I'm particularly pleased with Kodak's Flexcel NX packaging business, which is our strongest performing product set,” he said.

In the Software Solutions Division, which includes its Prinergy workflow software as well as Kodak technology solutions, revenues dropped $24m to $86m with EBITDA down $4m to $4m. The figures were impacted by “delayed timing of government service contracts in Latin America” affecting Kodak technology solutions as well as the divestment of D2L and Kodak Security Solutions business during 2016. Prinergy workflow software sales were down slightly due to delays in customer conversions although the manufacturer said it expacted double-digit percentage growth in licence revenue in 2017.

Revenues in Enterprise Inkjet Solutions Division, which now comprises the Versamark legacy business since Prosper was reclassified as discontinued, were $76m in 2016, down from $84m in 2015 with operational EBITDA down $1m to $19m.

Revenues for the Prosper business, meanwhile, improved 6% to $94m and net loss decreased by $11m due to lower depreciation and amortisation expenses, better deal quality on presses and 40% revenue growth in annuities, the company reported. Improvements here were offset by continued investment in Kodak’s next-generation Ultrastream platform.

Clarke said that despite the delay in selling the Prosper business the company was pleased with progress achieved within the business. “We expect the standalone Prosper business, excluding continued investment in Ultrastream, to be profitable in 2017.

In the Micro 3D Printing and Packaging Division, which includes Kodak Flexcel NX Systems and Plates as well as touch sensor films with copper mesh technology, full-year revenues were up 3% to $132m, compared with $128m in 2015. 

In its Intellectual Property Solutions division, which is responsible for 3D development as well as R&D in other areas, the business reduced its EBITDA losses from $22m in 2015 to $14m last year as a result of reorganising research porgrammes. 

"The division expanded its efforts in new materials development for 3D printing and light blocking in 2016, which will continue into 2017."

Looking ahead to 2017 Clarke said the company expected group revenues of $1.4bn to $1.5bn and operational EBITDA of $130m to $145m, the latter representing a 3%-15% improvement on 2016’s figure, taking into consideration expected reduction in consumer inkjet figures.

He added: “We expect double-digit percentage improvements in operational Ebitda in our packaging business and our unified workflow solutions business. We also expect strong performance in brand licensing and in the commercialization of intellectual property, each contributing high single-digit to low double-digit EBITDA contribution in 2017.”

Kodak’s share price was $13.75 at the time of writing (52-week high: $17.30, low: $9.78).