I’ve reviewed the year end 2023 financials for Kodak. Why? Really no reason except 1) financial analysis was one of the things I did during my corporate life & 2) curiosity as a film photographer. The important facts about financial analysis are to avoid the corporate PR & scripted talking points and simply focus on the facts and numbers. The numbers tell all.

After examining Kodak's year-end financials for 2023, Kodak’s consumer and motion picture film business, housed within its Advanced Materials & Chemicals unit (AMC), comprise 2 of 4 segments: Industrial Film & Chemicals (IFC) and Motion Picture film.

Kodak manufactures and directly markets Motion Picture film (Vision3), whereas consumer 35mm and 120 photographic films are NOT SOLD by Kodak but by Kodak Alaris, a separate entity owned by the UK Kodak Pension Plan. Kodak Alaris holds the exclusive contract for selling all consumer film. Kodak Alaris is listed as a CUSTOMER within Kodak’s AMC unit.

In terms of financial performance, Kodak's total revenue for the 2023 was $1.17 billion, reflecting a 7% decline from the previous year. The AMC unit totaled $255 million of Kodak’s total sales. Earnings from operations are a modest $4 million, with a reported net income of $75 million, largely attributed to non-business related activities. The IFC unit totaled $201 million. On a positive note, Kodak maintains a healthy cash balance, crucial for business operations.

Within the AMC unit, IFC contributes $201.1 million, with sales to Kodak Alaris totaling $86.7 million, representing a small fraction (7.8%) of Kodak's total sales. Additionally, Vision3 sales, part of the AMC but outside of IFC, likely amount to less than $20 million.

Despite Kodak's acknowledgment of the importance of consumer and motion picture film, challenges such as equipment condition, staffing levels, and supply chain constraints have hindered capacity, necessitating additional future capital for improvement.

In conclusion, while Kodak remains a very important player in the film industry, producing film both for consumers (sold to you through Kodak Alaris) and motion pictures, the business's financial returns are not substantial. However, as long as demand persists, Kodak will continue to support the business. The next step will be to review the financial condition of Kodak Alaris. 

Stay tuned!

Basic Bitcoin: An Investor's Perspective

 

As an investor with a background in corporate finance, my approach to Bitcoin is based on both appreciation for its technology and a keen awareness of associated risks. Despite the different opinions on Bitcoin, I have a small high-risk allocation in both my taxable and non-taxable (IRA) portfolios. Here's a short breakdown of my views on Bitcoin:

Risks Associate with Bitcoin:

Regulatory Ambiguity - The lack of clear regulations and the application of outdated rules to new technologies pose significant risk.

Lack of Understanding - The industry's complexity and misconceptions surrounding Bitcoin contribute to it's risk.

Evolving Ecosystem - The rapidly changing landscape of cryptocurrency, being relatively new introduces uncertainty.

Price Volatility - Bitcoin and other cryptocurrencies exhibit aggressive and rapid price movements which adds to the risk. 

Own Worse Enemy - There continues to be a "bro", "hustler", "scammy" personality associated with the industry and some promoters. This is not unique to Bitcoin or other cryptocurrencies and with the involvement in more traditional financial industries this will moderate over time.  However, this personality turns away many.

The Way I Invest:

Investing in Bitcoin or cryptocurrencies is not a casual investment. It requires a basic understanding of the asset and your must risk tolerance. I study the industry regularly,  use dollar cost averaging, and don't try to time the market when investing. Finally, I have an set percentage allocation specifically for high-risk investments and a portion of this is Bitcoin. I encourage others to do the same if thinking about investing in Bitcoin. It should not be your only investment and don't go into it blindly.

Common Misconception:

Contrary to some beliefs associated with Bitcoin with illegal activities, it serves legitimate purposes globally. Falling for fear, uncertainty and doubt (FUD) can cloud your judgement. While Bitcoin has been misused and associated with bad actors, so have other fiat currencies. 

Use Cases for Bitcoin:

Investment - In the USA, Bitcoin's primary use case IMHO is as a buy & hold investment, providing a non-correlated asset in your portfolio. This can be both a store of value or long term growth approach.

Medium of Exchange - While available but less relevant in the USA, Bitcoin serves as a medium of exchange (money), particularly in countries with political or economic instability. 

International transactions - transacting purchases in a foreign currency can be VERY expensive and take a good amount of time through the traditional financial channels. Using Bitcoin (or stablecoins) significantly lowers the transaction cost and time if the seller and buyer accepts Bitcoin.

Purchasing Bitcoin:

Two accessible methods include online exchanges (e.g., Gemini, Kraken) and recently approved exchange-traded funds (EFTs) from traditional investment companies (e.g., Fidelity, Blackrock). EFTs offer exposure to Bitcoin prices without direct ownership. 

Personally, I do both. I buy Bitcoin thru Gemini & Kraken for my taxable accounts and EFTs for my retirement accounts.

Secure Handling of Bitcoin:

Consider self-custody by transferring Bitcoin to a hardware wallet for added control and security. While not mandatory it provides an extra layer of protection. Note, this is for Bitcoin purchased on an exchange. This does not apply to EFTs.

In conclusion, now may be a good time to look into Bitcoin. If you do be a smart investor and do your homework. 

My New Blog - "The Random"

Hi, I'm Steve. I decided to start this new blog as a place to share musings, thoughts, going on's, issues, etc that don't fit nicely into my other blogs. 

Who am I you ask?

Well, I'm a retired corporate finance executive that decided to leave that all behind a few years ago so I could focus on my real passions including fashion, beauty and portrait photography operating as Steven Brokaw Photography; street photography; operating a photography studio called M10 Studio in Indianapolis, IN; a partner in a boutique model agency called SEEN Model Management as the Business Director; doing film photography for fun; bicycling; trying to stay up on news and politics; and finally hanging out with my family.

Since it's the first day of 2019 I thought I might as well start up the blog to document some of these passions. Mostly for my own use...kind of a digital diary. If others find it interesting, useful or informative then that's groovy.

I make one big promise. I'm snarky by nature, but I will never be disrespectful. That's not my style. Beyond that...no promises. I don't promise to post on a regular schedule, I will be random in my topics based upon what I'm working on (thus the name of the blog). Sometimes my posts will be about biking, or photography, running a modeling agency or some insight I have on a current issue...you get the idea...RANDOM.

So what's in store for 2019 you might ask? 

First, I decided to check off a big bucket list item and ride my bike across the USA on the Southern Tier from St. Augustine, FL or San Diego. Yikes. Next I plan to realign and redesign my photography studio to be more focused on the genre I've been doing exclusively for the last few years. The rest right now will be played by ear.  No other grand 2019 resolutions.

And with that...let's go.