As part of its ongoing strategic review process “and commitment to drive sustainable profitability through its most valuable business lines” the company notes these changes:

• Phase out its dedicated capture devices business in the first half of 2012, comprising digital cameras, pocket video cameras and digital picture frames. Kodak will instead expand its current brand licensing program, and seek licensees in these categories.
• Kodak’s Consumer Business will include online and retail-based photo printing, as well as desktop inkjet printing. 
• Kodak says that it will “continue to honor all related product warranties, and provide technical support and service for its cameras, pocket video cameras and digital picture frames.”  Good luck.
• Kodak expects annual operating savings of more than $100 million, and it will incur a separation benefits charge of about $30 million as it exits these.
• The Commercial Businesses segment includes the Digital and Functional Printing, Enterprise Services and Solutions, and Graphics, Entertainment and Commercial Films units. Kodak’s digital businesses now comprise approximately three-fourths of total revenues.         

The company claims to still have a strong position in the personal imaging market. Unfortunately, this long slow death march doesn’t seem over.  Those OTC shares are still worth $0.44 today and we have no personal expectation of any left over value unless it can monetize those patents beyond the wildest expectations.

JON C. OGG

Jon Marino of PEHub.com noted that P.E. firms are hiring and referenced a follow-up report for BDO USA’s third annual private equity “PErspective” report… 57% of private equity executives increased professional staffing and 62% plan to hire again this year.  This is a complete reversal from the layoff waves of prior years.  Here is more detail from that report.

Whether you like millionaires or billionaires or hate them, the one aspect that is so unfairly portrayed about companies bought by private equity firms is as follows: Most businesses bought by private equity firms need to be turned around or need to be run better.  Sure, they get leveraged up and they scrap inefficient operations.  The dirty secret that private equity firms are not defending enough is that many of these companies would have headed for bankruptcy in the long-term if they had not stepped in.  If that results in a liquidation rather than a pure bankruptcy, guess how many jobs get lost at those companies… all of them, rather than some.

The business sector is not just a one-way street.  Companies hire workers in good times and most fire in bad times.  We even ran our own 2011 Layoff Kings.

JON C. OGG

Keating has been a Director of the Group Finance.  The strategy change is to effect a split in the Irish and U.K. Retail Division into separate units for each country.  Each unit will be led by separate chiefs and both chiefs will be members of the group executive committee.  U.K. Retail will be led by Des Crowley; Ireland Retail will be led by Liam McLoughlin. The new structure’s implementation date is expected to be in mid-March of 2012.

Shares at the local level in Dublin were up 5.2% on last look, but the ADRs in New York were up 3.1% at $6.46 against an adjusted 52-week range of $3.99 to $27.00 if you account for the reverse split.

Our take: This could lead to more of a break-up or allow asset sales more easily down the road.  It certainly is not growth ambitions, but whatever adds to survival chances right now is what matters the most.

JON C. OGG

FULL PRESS RELEASE FROM THE P.R. DEPT. BELOW:

The Governor and Company of the Bank of Ireland (the “Bank of Ireland”)
1 February 2012

Bank of Ireland Announces Board and Executive Management Changes

Bank of Ireland has today announced changes to its Group Structure and to its Senior Executive Team.

Board Change
Andrew Keating has been appointed an Executive Director of Bank of Ireland and Group Chief Financial Officer with immediate effect, replacing John O’Donovan who has retired from that role.  Andrew was formerly Director of Group Finance where he spearheaded a major transformation of the Finance Division in the Bank of Ireland Group.  He joined Bank of Ireland in 2004, prior to which he held a number of senior finance roles with Ulster Bank having qualified as a chartered accountant with Arthur Andersen.

Andrew is also a Director of Bristol & West plc, which is a wholly owned subsidiary of Bank of Ireland.

There are no details requiring disclosure for Andrew under paragraph 6.6.7 (2) to (6) of the Listing Rules.

Changes to Group Structure
Having embedded considerable benefits from the sharing of best practice and synergies in areas such as segment/product propositions, operational management and infrastructure the Group is enhancing the visibility of and focus on two of our most significant businesses.  Accordingly, for strategic management purposes we will split our Retail (Ireland & UK) Division into Retail Ireland Division and Retail UK Division.  Each will be headed up by separate Divisional Chief Executives who will be members of the Group Executive Committee.

Changes to Group Executive Committee
Des Crowley will be Chief Executive of the Retail UK Division where he will be responsible for the various UK based retail businesses within our subsidiary Bank of Ireland (UK) plc and outside the subsidiary.  Prior to this he held a number of positions on the Group Executive Committee since 2000, including Chief Executive, Retail Financial Services and Chief Executive UK Financial Services, having joined Bank of Ireland from Arthur Andersen.  As we work through the revised structure we will need FSA regulatory approval for key changes/appointments which we make during the course of transition.

Liam McLoughlin will be Chief Executive of the Retail Ireland Division, where he will be responsible for the Branch Network, Business Banking, Mortgages, Personal Lending, Debit & Credit Cards and Wealth Management.  Liam has been Head of Group Manufacturing since July 2009.  Prior to that he held a number of senior positions in the Capital Markets and Finance Divisions.  He joined Bank of Ireland in 2004 from Ulster Bank Group prior to which he had been Financial Controller with the National Treasury Management Agency.  Qualifying with PricewaterhouseCoopers he is a fellow of Chartered Accountants Ireland.

Senan Murphy joins Bank of Ireland to become Head of Group Manufacturing.  Senan , a chartered accountant , was most recently Chief Operating Officer and Finance Director at Ulster Bank whom he joined in 2008 having previously been Finance Director at Airtricity. Before that Senan worked in a number of senior roles in General Electric in both the US and Ireland.  In his role with Bank of Ireland, Senan will be responsible for managing and enhancing the Group’s infrastructure (including its technology), customer service and contact centres, collection activities, its customer payment activities and cash distribution.  Senan will be a member of the Group Executive Committee.

Mr Murphy will join the Bank shortly and will transition into his new role for the implementation date of the new Group Structure at which time Mr Crowley and Mr McLoughlin will formally take on their new roles.

The new Group Structure will have an implementation date of mid March 2012.

1 February 2012
 
Enquiries:
Dan Loughrey, Head of Group Corporate Communications Ph: 00-353-623-4770
Helen Nolan, Group Secretary Ph: 00-353-76-623-4710

Kodak has desperately begun several patent suits, the most recent of which was against Samsung. The firm announced that:

[I]t and its U.S. subsidiaries filed voluntary petitions for chapter 11 business reorganization in the U.S. Bankruptcy Court for the Southern District of New York.

The business reorganization is intended to bolster liquidity in the U.S. and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities, and enable the Company to focus on its most valuable business lines. The Company has made pioneering investments in digital and materials deposition technologies in recent years, generating approximately 75% of its revenue from digital businesses in 2011.

Kodak has obtained a fully-committed, $950 million debtor-in-possession credit facility with an 18-month maturity from Citigroup to enhance liquidity and working capital. The credit facility is subject to Court approval and other conditions precedent. The Company believes that it has sufficient liquidity to operate its business during chapter 11, and to continue the flow of goods and services to its customers in the ordinary course.

Kodak expects to pay employee wages and benefits and continue customer programs. Subsidiaries outside of the U.S. are not subject to proceedings and will honor all obligations to suppliers, whenever incurred. Kodak and its U.S. subsidiaries will honor all post-petition obligations to suppliers in the ordinary course.

Kodak has traded below $1 for some time, with occasional runs up as investors believed it had made decisions that would allow the company to continue as a going concern. Those equity investors have now been wiped out.

Douglas A. McIntyre

Kodak’s Consumer Digital Imaging Group probably will be closed. Or its assets may be sold to another camera company, likely without most of the employees who work in the division. The operation makes video and still cameras. It also manufactures and markets ink jet printers. None of these businesses has much of a future as the hardware of each becomes little better than a commodity. Revenue for the group fell from $644 million in the third quarter of the previous year to $408 million in the same period of 2011. It lost $90 million in Q3 2011.

Kodak’s Film, Photofinishing and Entertainment Group makes disposable cameras, entertainment and imaging products and consumer film. Most of these products are no longer profitable, or they are made and sold for less by Kodak’s competitors in the sector. And there are many such competitors. Revenue for the group dropped from $433 million in the third quarter of the previous year to $389 million in the same period last year. The group made $15 million, but that number continues to decline.

The focus of the news about Kodak is that it has a number of patents, the value of which is supposed to save the company. Less is said about businesses owned by the Kodak that probably will disappear.

Kodak still has nearly 19,000 workers. When the company buckles under the weight of its debt and losses, the dismantling of Kodak may be shuffled out of the headlines. But for the people who work for the dying firm, the future of their division will matter. The fate of the patents will not.

Douglas A. McIntyre

Fortunately for investors in retail stocks, Target and Wal-Mart are not Sears. We just featured this one as one of the worst big stock stories of 2011, but we did not call for a bankruptcy nor did we include it on our list of stocks unlikely to survive 2012.  The most recent effort to spin off Orchard Supply Hardware Stores (NASDAQ: OSH) is interesting on the surface but it is just too small to make a difference at this point.

Unfortunately, a report on the CNN Money site did note that there are rumors of a Sears bankruptcy.  That is their story rather than ours.  Still, analysts have pounded upon Sears and some see much more downside on top of the pain and suffering we have seen in recent weeks (and years).

• In early December came word that Imperial Capital issued a “underperform (SELL) rating and said that it could go down to $6.00 in the new two to three years.
• Barclays recently cited that Sears appliance market share could fall to 31% from 39% and offer a large reward for other appliance sellers.
• On December 30, Zacks put Sears on its #5 list, a list of stocks with a “Strong Sell” rating.
• On December 28 came word that Credit Suisse was maintaining and Underperform rating… with a $20 price target objective.
• Fitch also lowered its corporate credit rating in the last week of December.
• Barron’s called for the start of 2012 that Sears could lose another 80% of its value.

Sears is up 0.1% on Tuesday at $31.46 verus a new 52-week range of $31.17 to $94.97 and its market cap is now down to about $3.35 billion.  The most recent short interest was listed as 10.88 million shares as of mid-December before the latest warning.

The saga continues. The question is whether or not this turnaround can ever come to fruition. Please feel free to take the absolute yes/no anonymous poll below.

JON C. OGG

Now comes news after the close that the company is facing a potential delisting from the New York Stock Exchange after having received a “continued listing standards notice” from the NYSE because the average closing price of its common stock has remained under $1,00 per share for more than 30 consecutive trading days.

Eastman Kodak noted that it has six months after the receipt of this notification to regain compliance with the minimum share price requirement, assuming that no other listing standards arise and remain.  It regains compliance if the closing share price of at least $1.00 on the last trading day of any calendar month during the period and also has an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month or on the last day of the cure period.

All that has to happen is for Kodak to see a 50% gain in its share price from the $0.65 close.  With Antonio Perez’great track record it is not major feat to question whether or not he will be able to easily accomplish that.  Perez may elect for a reverse stock split, but he should be reminded that reverse splits at troubled companies generally only allow short sellers to short sell more shares betting against a company.

JON C. OGG

The list includes the following still-public stocks: Alimera Sciences, Inc. (NASDAQ: ALIM); AMR Corporation (NYSE: AMR); American Apparel, Inc. (AMEX: APP); Eastman Kodak Co. (NYSE: EK); Energy Conversion Devices, Inc. (NASDAQ: ENER); FriendFinder Networks, Inc. (NASDAQ: FFN); Nortel Networks Corp. (NRTLQ); Pinnacle Airlines Corp. (NASDAQ: PNCL); Reddy Ice Holdings, Inc. (RDDY); YRC Worldwide Inc. (NASDAQ: YRCWD). 

Almost all of these have either had a form of bankruptcy or reorganization, while others have been in the rumor mill for quite some time.  We included a write-up on each, and have even have gone as far as discussing some caveats which could help some of these stocks to survive. There is even a chance that a couple of these could end up being major turnaround stocks.

Alimera Sciences, Inc. (NASDAQ: ALIM) saw a share price implosion take place in November after the FDA all but rejected its eye drug.  We covered this one at BioHealthInvestor with a near 75% drop on the news after being public less than two years.  Shares fell to $1.96 with a $61 million market cap and shares are now at $1.30 with a $41 million market cap.  The good news is that it has no debt overhang and it may be able to scrap operating costs down to nothing.  Still, we cannot see how it can fund itself through another set of trials.  Mathematically it is more than financially challenged, even if the company manages to hang on as a NASDAQ listing.

AMR Corporation (NYSE: AMR) is effectively done already.  We had been expecting an NYSE delisting notice to come for a while, even though there was a time even in the last week of the year where shares gapped up big and traded as though there may be some intrinsic post-bankruptcy value left for common shareholders.  That would not be the normal post-bankruptcy value.  While anything is possible, this one will move to the pink sheets and will trade around with a 5-ticker symbol for a while.

American Apparel, Inc. (AMEX: APP) has so far managed to avoid being delisted and so far managed to avoid a bankruptcy through a shaky history.  Still, things have been sketchy here for so long that even a near-40% jump in shares from $0.57 to $0.75 since its early December business update showed improving store sales metrics.  This company has managed to survive on less than $10 million in cash but still has a net tangible value of $56 million despite a loss in 2010 of $86 million.  Here is the caveat” American Apparel has managed to exist in this diminished state for some time and its controversial CEO has managed to hang on.  Maybe the company can pull a rabbit out of a hat and turnaround.  American Apparel often notes “going concern” as a risk under its safe harbor statements in press releases.

Read Also: Analysts Top Biotech Stocks For 2012

Eastman Kodak Co. (NYSE: EK) has done everything wrong and had everything go wrong that could go wrong.  Antonio Perez has been on our list of CEOs that need to be fired for years now and the company has stuck its head in the sand for far too long.  The bankruptcy rumors have swirled for long enough.  The real value left in the company is in the patents, but the company has not been able to make its patent machine turn into a survival machine.  The KKR board members have also resigned and that could be a sign that the private equity firm will try to force a move here so it can secure whatever value is left. At the end of September when we polled our readers, the poll response was that Kodak was more likely to go bankrupt than Greece.  Ouch.

With American Airlines on the sidelines, we’ve looked at the stocks of several other US carriers in a search for some hidden value: Delta Air Lines Inc. (NYSE: DAL), United Continental Holdings Inc. (NYSE: UAL), Southwest Airlines Co. (NYSE: LUV), US Airways Group Inc. (NYSE: LCC), JetBlue Airways Corp. (NYSE: LCC), Alaska Air Group Inc. (NYSE: ALK), Hawaiian Holdings Inc. (NASDAQ: HA), and Spirit Airlines Inc. (NASDAQ: SAVE).

Delta Air Lines has a median target price of $18.00 and is trading at $8.39 around noon today. The implied gain here is about 115%. Delta’s share price is about -1.5% lower than it was on October 21st, so the implied gain is growing because the share price is falling. The target price is unchanged since October.

US Airways has a median target price of $10.00 and is trading today at $5.36, about -7.6% lower than the share price in late October. The implied gain is about 86.6%, and the target price is unchanged since October.

United Airlines has a median target price of $32.50 and is trading today at $19.94, yielding a potential upside of nearly 63%. The stock’s target price rose by $0.50 in the past six weeks, but the share price has fallen by about -1.4% in the same period.

Every one of the nine stocks we looked at has an implied gain of greater than 20%, proving once again that numbers often don’t tell the whole story. The only stock with a chance of offering investors some value is Alaska Air. But the chance is a very slim one.

Alaska Air’s median target price was raised from $80.00 to $83.00, and the share price has increased by about 5% since late October. It’s the only one of these nine to perform that combined feat. The stock’s potential upside is 22% and its forward P/E is 7.39. The company does not pay a dividend.

Alaska has ordered 15 new 737s from Boeing Co. (NYSE: BA) and deliveries are scheduled to begin in 2012. Thirteen of the new planes will be 737-900ERs, which carry a list price of $89.6 million each. That’s a total of about $1.2 billion, which is roughly equal to both the company’s long-term debt and to its available cash.

The company does not indicate how it will finance the purchase of these planes, but a recent report in the Financial Times indicates that European banks, the main lenders to global airlines, have cut back lending for commercial aircraft purchases. That means the airlines will have to issue debt or perhaps resort to leasing new planes.

The impact on aircraft makers like Boeing is likely to be greater than the impact on airlines, but what’s reasonably certain is that the cost of capital for aircraft is going to rise. For that reason, if for no other, investing in any airline stock now is a speculative play rather than a value play.

Paul Ausick

Of course, many big public corporations also did very poorly. Several nearly destroyed their business and dragged down shareholder value with it. 24/7 Wall St. combed through the S&P 500 to find the best and worst managed companies in America for 2011.

Read: The Best Run Companies In America
Read: The Worst Run Companies In America 

To make a list of semifinalists, 24/7 Wall St. considered stock price, changes in earnings per share, major shifts in market share and changes in management, among other data. Once the initial screen was complete, we reviewed product launch success, financial results, success of new management and the performance of each company within its industry. The editors then sifted through the finalist to identify those that rewarded both customers and shareholders and those that caused these two groups the most harm.

Neither the best-run companies list nor the worst-run companies list includes a large number of corporations from any single industry. This indicates our methodology identifies well- and worst-managed companies regardless of the industry. Based on our criteria, the management of Starbucks did as good a job as the management of Oracle — two of the best-run companies. Similarly, Eastman Kodak management did as poorly as the management of American Airline parent AMR — two of the worst-run companies.

This is 24/7 Wall St.’s Best and Worst Run Companies of 2011.