|
||||||||||||||
|
Kodak to Sell Remote Sensing Systems to ITT Industries Sale of Non-Core Business Sharpens Portfolio Focus, Strengthens Balance Sheet ROCHESTER, N.Y., Feb. 9, 2004 - Eastman Kodak Company (NYSE: EK) announced that it has agreed to sell its Remote Sensing Systems operation to ITT Industries, Inc. (NYSE: ITT), the latest action by Kodak to further align its product portfolio with its business strategy. Under the terms of the agreement, Kodak will sell the assets and business of the Remote Sensing Systems (RSS) operation, including the stock of Kodak's wholly owned subsidiary, Research Systems, Inc. (RSI), to ITT Industries for $725 million in cash. Net of tax and transaction costs, but subject to post-closing adjustments, Kodak expects to realize approximately $475 million in cash. RSS is a part of Kodak's Commercial & Government Systems' operation within the Commercial Imaging Group and its customers include NASA, other U.S. government agencies, and aerospace and defense companies. The proceeds will further strengthen the company's financial position and flexibility during its business model transition. Kodak expects that all 1,800 RSS and RSI employees will transfer to ITT Industries and that Rochester will be the headquarters for ITT's new Space Systems Division. James Manchisi, president of RSS, will join the new organization as President and General Manager, ITT Industries Space Systems Division, reporting to Henry J. Driesse, President, ITT Industries Defense Electronics & Services. "As we sharpen our focus on the commercial, consumer and health imaging markets, we will look to divest lines of business that do not fit tightly with our growth strategy," said Daniel A. Carp, Chairman and Chief Executive Officer, Eastman Kodak Company. "By selling RSS, we have taken another aggressive step toward remaking Kodak, while the employees of RSS will enjoy the benefits of working for a company whose core business is serving the aerospace and defense market." "Effective implementation of our growth strategy requires us to make choices," said Antonio Perez, President and Chief Operating Officer, Eastman Kodak Company. "As we said when we discussed our growth strategy in September, we will pursue business transactions in a disciplined manner so that we can build shareholder value." Kodak's RSS operation, including RSI, had sales last year of approximately $425 million and is a leading provider of specialized imaging solutions to the aerospace and defense community. The company expects that the sale of RSS will dilute operational earnings by approximately $.05 per share in 2004. Kodak's stated 2004 full-year guidance for operational earnings remains unchanged at $2.25 to $2.55 per share. However, as a result of the approximately $430 million earnings gain on the sale of the business, full-year 2004 GAAP earnings guidance will increase to a range of $2.25 to $2.75 per share, from the previous range of $.80 to $1.30 per share. "Selling RSS to a buyer with a major focus on aerospace and defense will benefit Kodak, ITT, the employees of RSS and the Rochester community," said Carl Marchetto, President, Commercial Imaging, and Senior Vice President, Eastman Kodak Company. "Aerospace and defense-the cornerstone of the RSS operation-are not core to Kodak's strategy of expanding its growth efforts in commercial, consumer and health imaging markets. Now is the right time to divest this business to ITT, which will provide the resources to expand on RSS's capabilities in these markets and which has committed to maintaining and growing operations in Rochester." Headquartered in White Plains, New York, ITT Industries supplies advanced technology products and services in key markets including: defense communication, opto-electronics, information technology and services; fluid and water management including water treatment; electronic interconnects and switches; and other specialty products. The company generated $5.63 billion in 2003 sales and employs approximately 36,000 people around the world. "The acquisition of RSS is a key component of ITT Industries' strategy to enhance our space businesses, an area we recognized a number of years ago as an attractive market that has grown in importance to our largest government customers," said ITT's Driesse. "RSS has strong customer relationships, a reputation for quality and many innovative technologies. By combining RSS' offering with our own meteorological and navigational space payloads, we will create a new Space Systems Division, based in Rochester, within our Defense Electronics & Services segment, a world leader in developing and integrating a full spectrum of space-based sensors and data processing products for science, government and commercial applications." The agreement is subject to customary regulatory approvals. Closing will occur as soon as all required approvals have been obtained. Certain statements in this press release may be forward looking in nature, or "forward-looking statements" as defined in the United States Private Securities Litigation Reform Act of 1995. For example, references to expectations for the Company's earnings and the dilutive effect of particular transactions are forward-looking statements. Actual results may differ from those expressed or implied in forward-looking statements. In addition, any forward-looking statements represent our estimates only as of the date they are made, and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. The forward-looking statements contained in this press release are subject to a number of factors and uncertainties, including:  The successful implementation of our recently announced digitally-oriented growth strategy; Implementation of product strategies (including category expansion, digitization, organic light emitting diode (OLED), and digital products); Implementation of intellectual property licensing strategies; Development and implementation of e-commerce strategies; Completion of information systems upgrades, including SAP, our enterprise system software; Completion of various portfolio actions; Reduction of inventories; Integration of newly acquired businesses; Improvement in manufacturing productivity and techniques; Improvement in receivables performance; Reduction in capital expenditures; Improvement in supply chain efficiency; Implementation of future focused cost reductions, including personnel reductions Development of our business in emerging markets like China, India, Brazil, Mexico and Russia; Inherent unpredictability of currency fluctuations and raw material costs; Competitive actions, including pricing; The nature and pace of technology evolution, including the analog-to-digital transition; Continuing customer consolidation and buying power; General economic, business, geopolitical and public health conditions; and other factors and uncertainties disclosed from time to time in our filings with the Securities and Exchange Commission.
Any forward-looking statements in this press release should be evaluated in light of these important factors and uncertainties. About Eastman Kodak Company and infoimaging Kodak is the leader in helping people take, share, print and view images - for memories, for information, for entertainment. The company is a major participant in infoimaging, a $385 billion industry composed of devices (digital cameras and flat-panel displays), infrastructure (online networks and delivery systems for images) and services & media (software, film and paper enabling people to access, analyze and print images). With sales of $13.3 billion in 2003, the company comprises several businesses: Health, supplying the healthcare industry with traditional and digital image capture and output products and services; Commercial Printing, offering on-demand color printing and networking publishing systems; Commercial Imaging, offering image capture, output and storage products and services to businesses and government; Display & Components, which designs and manufactures state-of-the-art organic light-emitting diode displays as well as other specialty materials, and delivers optics and imaging sensors to original equipment manufacturers; and Digital & Film Imaging Systems, providing consumers, professionals and cinematographers with digital and traditional products and services. About RSS Remote Sensing Systems (RSS), headquartered in Rochester, New York, provides imaging solutions including digital imaging systems for commercial imaging satellites; optical systems for land- and space-borne telescopes; remote sensing image products, services, and systems integration; image and data analysis, visualization and application development software; and custom solutions. Remote Sensing Systems employs 1,800 people worldwide. About ITT Industries ITT Industries, Inc. (www.itt.com) supplies advanced technology products and services in key markets including: fluid and water management including water treatment; defense communication, opto-electronics, information technology and services; electronic interconnects and switches; and other specialty products. Headquartered in White Plains, NY, the company generated $5.63 billion in 2003 sales and employs approximately 36,000 people around the world. In addition to the New York Stock Exchange, ITT Industries stock is traded on the Midwest, Pacific, Paris and Frankfurt exchanges. Editor's Note: For additional information about ITT Industries Space Systems visit our Web site at http://www.ssd.itt.com/ © ITT Industries, 2004. |
|||||||||||||
 |
|
|