07.01.06
$2.7 Billion ($41.3B Total)
Key Executives:
Antonio M. Perez, Chairman and Chief Executive Officer
Robert H. Brust, Executive VP and Chief Financial Officer
Kevin J. Hobert, President, Kodak Health Group
Charles S. Brown Jr., Chief Administrative Officer
Michael W. Jackman, General Manager, Healthcare Information Systems, Kodak Health Group
No. of Employees: 51,100
World Headquarters: Rochester, NY
Over the last several years, parent company Kodak has been restructuring its divisions. As a result, various plants throughout the world have been closed, and the Health Group area might become the next victim as part of the overall restructuring.
In May 2006, the mega-imaging corporate giant retained Goldman, Sachs & Co. of New York, NY to investigate the possible sale of—or changes to—the unit.
Kodak CEO Antonio M. Perez said that it might be an opportune time because of the competitive marketplace environment for the healthcare imaging field.
“Our stated corporate goal is to be among the top three in each of the businesses in which we compete,” Perez said. “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. Given our valuable assets and the changing market landscape, we feel that now is the time to investigate strategic alternatives.”
If the unit were sold by the Rochester, NY-based company, it would end a long history of healthcare dating back to the late 1800s, when George Eastman, the founder of Kodak, provided the first x-ray film for William Roentgen, the discoverer of the x-ray.
The Healthcare Group, like the rest of the Kodak units, has been transitioning in the last few years to the digital world.
Kodak Health Group suffered through revenue and earnings reductions in 2005 with flat sales and dwindling profits as the company faces stiffer competition and aggressive pricing tactics.
The company suffered from a 5% reduction in sales in its traditional strategic product groups, which include analog film and equipment, while digital product sales were only up 1%.
Overall, though, Kodak corporation sales increased 6% to $14.3 billion.
In the first quarter of 2006, Health Group sales dropped 7% to $585 million while earnings fell further, 41% to $46 million, as a result of reduced profits from traditional radiography film and digital output along with higher silver costs. Earnings in fiscal 2005 for the Health Group dropped 22% as the company was hit with higher prices for silver and rising competitive pressures.
In response to the drop in earnings, in March the Health Group announced worldwide double-digit increases in prices on all of its medical imaging films and related supplies.
“Staggering silver and petroleum costs began impacting our production expenses early last year,” said Kevin Hobert, president of Kodak’s Health Group.
While the Health Group as a whole resulted in flat sales in fiscal 2005, some bright spots in the group emerged from the PACS, RIS and departmental solutions of mammography and dental lines. Kodak’s Healthcare Information Solutions (HCIS) also jumped 39%, and the company inked its biggest-ever HCIS contract with National Services Scotland.
Digital x-ray revenues rose 15% with the help of the March 2005 acquisition of Yokneum, Israel-based OREX Computed Radiography for $51 million. And the field is expected to grow further in 2006 as the company released the DirectView DR 7500 system, which allows medical facilities to configure a digital X-ray solution that meets space, workflow and budget requirements.
The company also logged increased revenues from its CareStream product lines for digital medical imaging and information management systems and added to that with several orders in the first half of 2006.
Key Executives:
Antonio M. Perez, Chairman and Chief Executive Officer
Robert H. Brust, Executive VP and Chief Financial Officer
Kevin J. Hobert, President, Kodak Health Group
Charles S. Brown Jr., Chief Administrative Officer
Michael W. Jackman, General Manager, Healthcare Information Systems, Kodak Health Group
No. of Employees: 51,100
World Headquarters: Rochester, NY
Over the last several years, parent company Kodak has been restructuring its divisions. As a result, various plants throughout the world have been closed, and the Health Group area might become the next victim as part of the overall restructuring.
In May 2006, the mega-imaging corporate giant retained Goldman, Sachs & Co. of New York, NY to investigate the possible sale of—or changes to—the unit.
Kodak CEO Antonio M. Perez said that it might be an opportune time because of the competitive marketplace environment for the healthcare imaging field.
“Our stated corporate goal is to be among the top three in each of the businesses in which we compete,” Perez said. “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. Given our valuable assets and the changing market landscape, we feel that now is the time to investigate strategic alternatives.”
If the unit were sold by the Rochester, NY-based company, it would end a long history of healthcare dating back to the late 1800s, when George Eastman, the founder of Kodak, provided the first x-ray film for William Roentgen, the discoverer of the x-ray.
The Healthcare Group, like the rest of the Kodak units, has been transitioning in the last few years to the digital world.
Kodak Health Group suffered through revenue and earnings reductions in 2005 with flat sales and dwindling profits as the company faces stiffer competition and aggressive pricing tactics.
The company suffered from a 5% reduction in sales in its traditional strategic product groups, which include analog film and equipment, while digital product sales were only up 1%.
Overall, though, Kodak corporation sales increased 6% to $14.3 billion.
In the first quarter of 2006, Health Group sales dropped 7% to $585 million while earnings fell further, 41% to $46 million, as a result of reduced profits from traditional radiography film and digital output along with higher silver costs. Earnings in fiscal 2005 for the Health Group dropped 22% as the company was hit with higher prices for silver and rising competitive pressures.
In response to the drop in earnings, in March the Health Group announced worldwide double-digit increases in prices on all of its medical imaging films and related supplies.
“Staggering silver and petroleum costs began impacting our production expenses early last year,” said Kevin Hobert, president of Kodak’s Health Group.
While the Health Group as a whole resulted in flat sales in fiscal 2005, some bright spots in the group emerged from the PACS, RIS and departmental solutions of mammography and dental lines. Kodak’s Healthcare Information Solutions (HCIS) also jumped 39%, and the company inked its biggest-ever HCIS contract with National Services Scotland.
Digital x-ray revenues rose 15% with the help of the March 2005 acquisition of Yokneum, Israel-based OREX Computed Radiography for $51 million. And the field is expected to grow further in 2006 as the company released the DirectView DR 7500 system, which allows medical facilities to configure a digital X-ray solution that meets space, workflow and budget requirements.
The company also logged increased revenues from its CareStream product lines for digital medical imaging and information management systems and added to that with several orders in the first half of 2006.