Carestream Health Inc.

Overview Key strengths Key risks Leading market position in digital radiography in the U.S. and digital print film in China, where physicians and patients continue to rely on printed images. Secular decline in digital print film revenue, which accounts for over 40% of sales. No near-term debt maturities. Reliance on cost-reduction efforts to mitigate the effect of revenue declines on its margins and cash flow. Limited free operating cash flow (FOCF). Exposed to China?s volume-based procurement (VBP) policy, which could lead to additional price and volume reductions. Competes against larger and better capitalized medical device companies. Since emerging from bankruptcy in September 2022, the company's operating performance has remained weak due to secular industry pressures in digital print film that

...We expect Carestream's top-line revenue will remain pressured over the next couple of years amid the uncertainty around its long-term prospects. Since emerging from bankruptcy in September 2022, the company's operating performance has remained weak due to secular industry pressures in digital print film that continue to erode its top-line revenue. During the second quarter of 2023, Carestream's total revenue declined 5% year over year, or 3% on a constant currency basis, due to the drop in its value tier sales amid lower print film volumes and market declines in its computed radiography (CR) equipment and services business. The company's premium tier revenue fell by 4% while its non-destructive testing (NDT) rose 4% relative to the same period the prior year. While we expect some improvement in Carestream's NDT segment revenue, due to solid demand from oil and gas customers, we anticipate this will largely be offset by continued declines in its digital print film sales amid secular pressures....

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