Kodak 2012 Annual Report Download - page 42

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Table of Contents
Revenues
Current Year
The decrease in the Digital Printing and Enterprise Segment net sales of approximately 14% for the year ended December 31, 2012 was driven
by volume declines within Digital Printing attributable to lower placements of commercial equipment (-6%), and within Consumer Inkjet
Systems (-7%) driven by lower consumer printer sales. Partially offsetting these declines was favorable price/mix within Consumer Inkjet
Systems (+3%) due to pricing actions in the current year.
Prior Year
The increase in Digital Printing and Enterprise Segment net sales of approximately 16% for the year ended December 31, 2011 was primarily
attributable to volume improvements within Consumer Inkjet Systems (+13%) and within Packaging and Functional Printing (+4%) due to
increased demand. Partially offsetting these increases was unfavorable price/mix within Consumer Inkjet Systems (-2%) due to competitive
pricing for consumer printers.
Gross Profit
Current Year
The increase in the Digital Printing and Enterprise Segment gross profit percent for the year ended December 31, 2012 was primarily due to
favorable price/mix within Consumer Inkjet Systems
(+14pp), due to a greater proportion of consumer ink sales and pricing actions in the current
year. Also contributing to the increase in gross profit percent were cost reductions within
Digital Printing (+3pp), driven by improved inventory
management as Kodak continued to focus on liquidity.
Prior Year
Gross profit percent in the Digital Printing and Enterprise Segment for the year ended December 31, 2011 decreased driven by increased
manufacturing and other costs within Digital Printing (-7pp), attributable to start-up costs associated with the stabilization of the PROSPER
printing systems. Also contributing to the decrease was unfavorable price/mix within Consumer Inkjet Systems (-3pp) due to the competitive
pricing noted above. Partially offsetting these declines were cost improvements within Consumer Inkjet Systems (+6pp) due to improved quality
and component cost reductions.
Selling, General and Administrative Expenses
The decrease in SG&A from 2011 to 2012 was driven by reductions in advertising expense (-15%) and selling expense (-11%) as part of
Kodak’s focused cost reduction actions. The increase in SG&A from 2010 to 2011 was primarily due to increased investment in selling expense
associated with increasing the installed base within Digital Printing .
Research and Development Costs
The decrease in R&D from 2011 to 2012 was primarily attributable to cost reduction actions.
39
For the Year Ended
December 31,
Change vs. 2010
2011
Amount
Change vs.
2010
Volume
Price/Mix
Foreign
Exchange
Manufacturing
and Other Costs
Total net sales
$
1,098
16
%
15
%
-
1
%
2
%
n/a
Gross profit margin
-
3
%
-
3pp
n/a
-
2pp
1pp
-
2pp