Eastman Kodak exiting still photography business

ROCHESTER, N.Y. -- After decades of churning out untold millions of little yellow boxes of camera film, Eastman Kodak is saying goodbye to the still photography business.

The company synonymous with photography said Thursday it is putting a batch of businesses up for sale, including more than 100,000 photo kiosks installed at retailers around the globe and its professional and consumer still camera film operation.

"These are attractive, market-leading businesses with great teams of employees and products," CEO Antonio M. Perez said in a phone briefing with reporters. "We believe they have good long-term prospects."

Perez's decision to sell the still film and photo kiosk businesses marks a 180-degree turn from just a few weeks ago. When Kodak gave creditors a rough sketch of its post-bankruptcy business plan, it included the personalized imaging unit, of which the still film and kiosk businesses are parts. Kodak estimated at the time that the personalized imaging business would generate $1.1 billion in revenue this year.

"These are not easy decisions," Perez said, adding that selling the businesses was motivated in part by the need to satisfy creditors of the bankrupt company.

Kodak's fortunes for much of its history revolved around camera film, with the company in 1885 rolling out Eastman American Film, the first transparent film negative. And the sale follows Kodak's announcement in February that it was shuttering its digital camera business. That unit is to close by Sept. 30.

The latest sales add to the growing list of operations the Rochester icon has unloaded in the past year. In the months leading up to the Chapter 11 bankruptcy filing in January, Kodak sold its CMOS and CCD sensor businesses and its microfilm business. Since the filing, it has sold the Cinesite special effects business and Kodak Gallery.

Also up for sale are Kodak's document imaging business, which is primarily document scanners; its silver halide paper business; and its specialty imaging business, which primarily does souvenir photos at events and theme parks.

The sale of these businesses doesn't automatically mean the end of such manufacturing work being done locally. Indeed, the Rochester economy is increasingly peppered with Kodak spinoffs, from medical imaging company Carestream Health to CCD image sensor firm Truesense Imaging.

Perez said Kodak, through its investment banker and financial adviser Lazard, is marketing the businesses now and hoping to have them sold off in the first half of 2013. He declined to say how much Kodak is counting on from the sale.

In the conference call, Perez repeatedly circled back to the idea that these sales were part of Kodak's goal to focus in the future on a set of core businesses — commercial printing, packaging printing and various printing services.

Kodak made a point of saying that businesses, such as consumer inkjet printing, motion picture and television film, and specialty chemicals, are outside of the core. Ken Luskin, president of California wealth management firm Intrinsic Value Asset Management, said the company seems to be indicating that it will also sell those businesses.

Kodak spokesman Christopher Veronda, when asked if Kodak has plans to sell the consumer inkjet line, said that it is "one of the other businesses that we continue to own and operate."

"Our consumer inkjet printers have built a strong market niche," Veronda said. "We continue to sell and support printers and ink, including through partnerships."

The sales announced Thursday should lead to a Kodak that fits together better and could give investors more confidence, Luskin said.

"Here's a nice cohesive company that makes sense and has a mid-cap niche, something that Wall Street with a new CEO in there would say, 'Hey, this is a new Kodak.' This is the right thing to do and it keeps their creditors at bay."

During the 15-minute briefing, Perez provided few details about the status of Kodak's ongoing auction of 1,100 digital imaging patents for potentially billions of dollars. The auction began Aug. 8 and the company had initially planned on wrapping it up by Aug. 13. Kodak has said, and reiterated Thursday, that it is still in discussions with unnamed parties regarding the potential sale and that it might opt ultimately to not sell them at all.

Perez declined to elaborate. "There are a lot of companies that are interested," he said. "There are all sorts of issues to deal with."

Daneman also reports for The Rochester (N.Y.)Democrat and Chronicle