Today Eastman Kodak Company announced it has reached an agreement with Lucky HuaGuang Graphics Co. Ltd (“HuaGuang”) to establish a strategic relationship in the People’s Republic of China, including Hong Kong SAR, Macau SAR and Taiwan (“China”). By partnering with one of the largest graphics players in a region that is seeing a growing demand for resource-efficient solutions, Kodak seeks to significantly increase the adoption of its SONORA plates in China.
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The Kodak/HuaGuang relationship will be comprised of an agreement for Kodak to sell its offset printing plates facility in Xiamen, China to HuaGuang, a supply agreement for HuaGuang to help Kodak fulfill its existing customer demand, and an IP agreement under which Kodak licenses its technology to HuaGuang to expand the market in China.
This relationship will leverage the combined strength of HuaGuang’s market leadership and world-class Kodak technology, which together are expected to accelerate the broad conversion to Kodak’s process free technologies in China.
“The endorsement of SONORA by one of the biggest players in the industry is a testament to the strength of Kodak’s technology,” said John O’Grady, Senior Vice President, Kodak. “We are excited to work with HuaGuang to advance the conversion of China’s print market to process free plates and help print industry customers – and those they serve – lower their environmental impact.”
Kodak and HuaGuang have successfully collaborated in a variety of different business models and cooperative ventures spanning decades, building a history of mutual trust and respect that underpins the current deal.
Mr. Zhang, Tao, President of HuaGuang, mentioned, “Kodak is a well-known company in the prepress field, the new cooperation with Kodak can speed up the conversion of offset plates to process free plates in China, which will promote the process of green environmental protection in the printing industry in China.”
Customers in the region will experience no interruption in supply, and the companies will work together to ensure the delivery of new, innovative products moving forward.
Kodak will maintain its current go-to-market structure in China, with expectations that SONORA volumes will continue to ramp up, alongside growing sales of the full portfolio of Kodak solutions.
The relationship is expected to be formally established at a closing in the third quarter of 2019, subject to the satisfaction of customary closing conditions.
Kodak and Sonora are trademarks of the Eastman Kodak Company.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release that are not statements of historical or current fact constitute “forward-looking statements” within the meaning of Section 21E of the US Securities Exchange Act of 1934. These statements may be identified by the use of words such as “may,” “will,” “expect,” “should,” “anticipate,” “intend,” “believe” and “plan” or similar expressions. The forward-looking statements contained in this press release include, without limitation, statements related to: the establishment of the planned relationship with HuaGuang and the timing thereof; the ability to meet conditions for the planned closing; the entry into certain commercial agreements in connection with the planned relationship; the potential positive impact of the relationship on the growth of SONORA plates in China; and future product supply and development expectations. These and other forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could significantly affect expected results. Results may be materially affected by factors such as: risks associated with strategic transactions generally, such as the inability to obtain, or delays in obtaining, third party consents and approvals; issues, delays or complications in completing required carve-out activities to enable the manufacturing facility to operate on a stand-alone basis after the closing, including incurring unanticipated costs to complete such activities; potential volatility in the capital markets; unfavorable reaction to the relationship by customers, competitors, suppliers and employees; conditions affecting the industry generally; local and global political and economic conditions including international trade tensions; and other risks described in Kodak’s filings with the Securities and Exchange Commission, including Kodak’s Annual Report on Form 10-K for the year ended December 31, 2018, Kodak’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, and Kodak’s Current Report on Form 8-K dated August 8, 2019.
Actual results could differ materially from those predicted by the forward-looking statements. Kodak undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.