A top Kodak official said the company still plans to move ahead with its pharmaceutical business, even if it doesn’t get a government loan.
Kodak CEO Jim Continenza told investors on the company's quarterly earnings conference call Tuesday that the company still wants to push ahead with its plans for making ingredients used in pharmaceuticals, even with the questions raised in the summer that caused the federal government to put a hold on a $765 million loan to the company. Continenza made similar comments at a conference last month held by the Wall Street Journal.
He reiterated this week that Kodak still sees the pharmaceutical business as part of the company’s overall plans.
“As part of our long term strategy, we will continue to move forward with expanding the existing pharmaceutical business regardless of whether we received the potential DFC (U.S. International Development Finance Corp.) loan,” Continenza said during this week's earnings conference call.
The U.S. Securities and Exchange Commission began an investigation a few months ago into questions about the timing of the federal loan; congressional panels also called for investigations. An internal probe by Kodak found the company did not violate the law, but had some corporate governance issues.
On Wednesday, the Wall Street Journal reported that five former Kodak executives were able to collect millions of dollars by selling stock options that they did not own. A company official said the error did not result in any misstatements of its financial results and it expects to fix its internal controls by the end of the year.
Kodak said that it saw about $5.1 million in compensation expenses related to the ex-employees and that it will try to recover about $3.9 million of that. In a financial statement, the company said that “there are no assurances” that Kodak will be successful in its claims against the former employees.
When Kodak reported earnings on Tuesday, the company posted a 20% drop in revenues and a $445 million net loss including a $416 million non-recurring accounting charge.
"Looking forward, we’ll continue to build on our strengths in print and advanced materials & chemicals, including our existing business in manufacturing pharmaceutical ingredients," Continenza said.
