Coupled with an organizational shakeup and disappointing first-quarter financial results, Eastman Kodak Co., announced today it has retained Wall Street investment banker Goldman, Sachs & Co. to explore what Kodak is calling "strategic alternatives" including the sale of its $2.7 billion dollar per year Kodak Health Group digital X-ray, medical printer and X-ray film business unit.
In a news statement, Antonio Perez, chairman and chief executive officer of the Rochester, N.Y.-based parent corporation, said, "We have built a business with significant market presence and intellectual property assets," but added the company's goal is to be among the top three firms in each of the business lines in which it competes.
"While the Health Group is enjoying strong organic growth in elements of its digital portfolio, such as digital capture solutions and healthcare information solutions, we have been observing for some time consolidation in this industry," Perez said. "Given our valuable assets and the changing market landscape, we feel that now is the time to investigate strategic alternatives."
Kodak was a pioneer in radiology with a presence in the medical specialty that goes back more than 120 years and more recently became a player in digital PACS/RIS systems technology. But at the Radiological Society of North America in December 2003, it offered its customers a first glimpse at plans to develop an enterprisewide clinical IT system targeting the midsized hospital market. In July 2003, Kodak paid $500 million for PracticeWorks, an Atlanta,-based developer of clinical IT and digital imaging systems for dentists.
Companywide, Kodak reported first quarter 2006 sales of nearly $2.89 billion, up 2% from $2.83 billion in the first quarter of 2005, with a net loss of $298 million, or $1.04 per share, compared with a net loss of $146 million, or $0.51 per share, in the year-ago period. Kodak reported the loss as "largely stemming" from restructuring.