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Kodak Announces Agreement
With Flextronics for Design, Production
and Distribution of its Consumer Digital
Cameras
Move will bring greater
flexibility and cost efficiency while ensuring
Kodak’s world-class quality and product
leadership in the digital camera marketplace
ROCHESTER, NY and SINGAPORE, Aug. 1
-- Eastman Kodak Company (NYSE: EK) today
announced an agreement in which Flextronics
International Ltd. (NASDAQ: FLEX) will manufacture
and distribute Kodak consumer digital cameras
and will manage certain camera design and
development functions. Under the agreement,
Kodak will divest its entire digital camera
manufacturing requirements to Flextronics,
including assembly, production, and testing.
Flextronics will also manage the operations
and logistics services for Kodak’s
digital still cameras. Kodak will continue
to develop the high-level system design,
product look and feel and user experience,
and will conduct advanced research and development
for its digital still cameras. Kodak will
also retain its intellectual property.
Upon closing of the transaction, Flextronics
will acquire a significant portion of the
Kodak Digital Product Center, Japan, Ltd.
(“KDPC”) in Chino and Yokohama,
Japan, and associated camera design functions
and its employees and the digital camera
manufacturing, assembly and warehousing
requirements and related employees of Kodak
Electronics Products, Shanghai Co. Ltd.
(“KEPS”) in China.
“This is another move in Kodak’s
overall strategy to further drive improvements
for profitability and efficiency in the
operating model of our consumer digital
business,” said John Blake, Jr., general
manager, Digital Capture & Devices,
Consumer Digital Imaging Group and vice
president, Eastman Kodak Company. “By
partnering with Flextronics, Kodak will
streamline our digital camera operations.
This agreement will bring our camera products
to market more quickly, with greater predictability,
flexibility, and cost efficiency while maintaining
the innovative ease-of-use for which the
Kodak brand is renowned.“
“Most importantly, this strategy enables
us to sustain our history of innovation
and sharpen our focus on advanced development
and other areas of the business where we
can gain the greatest competitive differentiation
and advantage,” Blake said. “This
will ensure that we continue to bring innovative
products to the marketplace that delight
our customers.”
“The expansion of our business relationship
with Kodak adds significant strategic value
to Flextronics’ Consumer Digital market
segment. The design expertise we will acquire
from Kodak’s operations in Japan and
the transferring of its production into
our China facility will broaden the scope
of the competitive services we can provide
on a global scale as well as leverage operating
efficiencies for both companies. We are
extremely excited about the opportunities
this business relationship will bring to
our company,” said Greg Westbrook,
President of Flextronics’ Consumer
Digital market segment. “Today’s
announcement is another demonstration of
the immense value of our vertically-integrated
services by providing global, end-to-end
design, manufacturing, logistics, and end-to-end
supply chain architecture services. The
results to Kodak of leveraging these vertically-integrated
services will be extensive, and will include
lower costs, faster time to market, substantially
improved efficiencies.”
Kodak will retain all intellectual property
and patents as part of the transaction as
well as Kodak trademarks, Kodak trade names,
Kodak customers, customer information and
customer relationships, Kodak feature specifications,
Kodak digital camera designs and Kodak digital
camera technologies.
Under the agreement, approximately 550
Kodak personnel are expected to be transferred
to Flextronics facilities.
The transaction is subject to customary
regulatory approvals. The agreement does
not require shareholder approval from either
company. Closing is expected to occur after
all required approvals have been obtained
and certain other conditions are satisfied,
which is anticipated to be during Kodak’s
3 rd quarter of 2006.
About Eastman Kodak Company
Kodak is the world’s foremost imaging
innovator, providing leading products and
services to the photographic, graphic communications
and healthcare markets. With sales of $14.3
billion in 2005, the company is committed
to a digitally oriented growth strategy
focused on helping people better use meaningful
images and information in their life and
work. Consumers use Kodak’s system
of digital and traditional image capture
products and services to take, print and
share their pictures anytime, anywhere;
Businesses effectively communicate with
customers worldwide using KODAK solutions
for prepress, conventional and digital printing
and document imaging; Creative Professionals
rely on KODAK technology to uniquely tell
their story through moving or still images;
and leading Healthcare organizations rely
on Kodak’s innovative products, services
and customized workflow solutions to help
improve patient care and maximize efficiency
and information sharing within and across
their enterprise. More information about
Kodak (NYSE: EK) is available at www.kodak.com.
About Flextronics
Headquartered in Singapore (Singapore Reg.
No. 199002645H), Flextronics is a leading
Electronics Manufacturing Services (EMS)
provider focused on delivering complete
design, engineering and manufacturing services
to aerospace, automotive, computing, consumer
digital, industrial, infrastructure, medical
and mobile OEMs. With fiscal year 2006 revenues
from continuing operations of US$15.3 billion,
Flextronics helps customers design, build,
ship, and service electronics products through
a network of facilities in over 30 countries
on five continents. This global presence
provides design and engineering solutions
that are combined with core electronics
manufacturing and logistics services, and
vertically integrated with components technologies,
to optimize customer operations by lowering
costs and reducing time to market. For more
information, please visit http://www.flextronics.com.
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