Headline: Grim Picture for Polaroid

Source: Reuters, 10 August 2001

URL: http://www.thestandard.com/article/0,1902,28615,00.html

Polaroid's quarterly filing with the U.S. Securities and Exchange Commission on Thursday has raised doubts about the company's viability.

Accompanying the financial statements included in the filing is a report from independent auditor KPMG LLP containing a "going concern" qualification, used by auditors to indicate uncertainty that the company will be able to meet its liabilities as they fall due. Failure to meet liabilities can lead to creditors seeking a bankruptcy order.

Polaroid, which is saddled with huge debts and is considering a possible sale, said in July that it planned to default on interest payments to bondholders in July and August.

In its quarterly filing on Thursday, Polaroid said it in fact did not make $10.5 million in interest payments on July 16 and will not make its scheduled $15.8 million interest payment due Aug 15.

Analysts have previously said that the bondholders could force Polaroid, which traces its roots back to the 1920s, to seek bankruptcy protection in court. "Holders of the notes also have the right to sue the company to collect interest that is accrued and unpaid when due and payable," Polaroid said in its filing.

Polaroid said it has not received notice that any bondholder "has taken action or notified the company that it will take action to enforce its rights or remedies against the company as a result of the defaults."

The report from KPMG said the financial statements in the filing "have been prepared assuming that the company will continue as a going concern" and that the statements do not include any adjustments that might be necessary if that assumption proves to be inappropriate. The valuations of some assets and liabilities on the company's balance sheet could change if the company is no longer considered a going concern.

A Polaroid spokesman could not be immediately reached early on Friday to comment on the note from KPMG.

Shares of Cambridge, Massachusetts-based Polaroid fell 29 cents, or 16.67 percent, to $1.45 in New York Stock Exchange trading on Thursday, well below a 52-week high of $18.50 reached on Aug 9, 2000.

Polaroid, whose once-potent instant film business has slumped amid the rise of one-hour developing and digital cameras, is pinning its hopes on digital products -- if it can escape critical debt issues. It has been reconfiguring operations and said in June it would cut up to a quarter of its work force in a bid to return to profitability.

-- Andre Weltman (aweltman@state.pa.us), August 10, 2001

Answers

What was that old story of the late 1070's, if you'd invested X dolloras in Polaroid at inception, you would have xxxxxxxx gadzllion dollars today? Now they are just about out of business, with their stock down to $1 and change.

How the mighty have fallen. Same for Zerox. Shows that no good thing goes on forever.

I don't think that Microsoft will come down, but I don't know about Cisco.

-- JackW (jpayne@webtv.net), August 10, 2001.

Obviously (I hope) the above date was supposed to read, "l970's" And, I DO know how to spell, "dollars." (Maybe it was the coming earthquake, which came to pass about 10 minutes later, that spooked me.)

-- JackW (jpayne@webtv.net), August 10, 2001.

Earthquake? What EQ?

-- Andre Weltman (aweltman@state.pa.us), August 10, 2001.

Ah, I see your mention of it in anther reply: <>

I presume everything is OK.

-- Andre Weltman (aweltman@state.pa.us), August 10, 2001.