Medical imaging company Carestream Health files for Chapter 11 bankruptcy

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  • Carestream reported $1 billion in debt and $1.1 billion in revenue in 2021
  • Company highlights declining demand for medical films and printed products amid Chapter 11 filing

(Reuters) – Carestream Health Inc, an X-ray and medical imaging company, filed for bankruptcy protection on Tuesday with a deal in place to reduce its $470 million debt.

The Rochester, New York-based company said its level of debt was unsustainable given the long-term headwinds in the medical imaging industry, in court documents filed in the bankruptcy court in Wilmington, Delaware.

Carestream, which reported $1.1 billion in revenue in 2021 and had $1.03 billion in debt, said it intended to seek quick approval for a restructuring plan it would reduce its debt by $470 million. Most of the company’s lenders have already agreed to back the restructuring, which would return the company’s equity to lenders and pay junior creditors in full, according to Carestream.

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Carestream said in its court documents that its annual revenue fell $100 million from 2018 levels due to customer preference for digital-only medical imaging systems, which are less profitable for the company than its printed products.

Carestream’s medical films and printing products, including printing systems, laser imaging films and dental films, accounted for about 44% of the company’s revenue in 2021, according to court filings . Carestream has a 37% market share for global medical films, according to the company.

Developed markets, in particular, are shifting away from print products and now account for just 4% of the company’s medical film sales, Carestream said.

The company is also facing challenges in emerging markets due to government cost-cutting efforts, such as the Chinese government’s recent shift to volume-based procurement of medical imaging services.

Carestream tried to find a buyer for its business in 2021, but none of the offers were greater than the company’s $1 billion in debt, according to its court documents.

Carestream was part of Eastman Kodak Co before it was acquired by Onex Corp for $2.35 billion in 2007. It has 3,410 employees and serves medical customers in more than 130 countries, according to its court documents.

Carestream intends to seek bankruptcy court approval for its restructuring on Sept. 28.

The case is In re Carestream Health Inc, US Bankruptcy Court for the District of Delaware, No. 22-10778.

For Carestream: Timothy Cairns and Laura Davis Jones of Pachulski Stang Ziehl & Jones

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