CalComp, Kodak Strike Deal on Printer

ANAHEIM —  Color printing system maker CalComp Inc. said Monday that its new high-speed technology has caught the eye of industry giant Eastman Kodak Co., which will invest as much as $36 million in a joint venture to develop more uses for the process.

As part of the deal, Kodak will receive warrants to acquire almost 15% of CalComp’s common stock in return for an immediate cash investment of $20 million. Kodak has agreed to pump $16 million more into the joint venture over a five-year period if certain performance goals are met.

CalComp’s board will be expanded to nine members to accommodate a new director who will be appointed by Kodak.

“To have a company the stature of Eastman Kodak come in and do this deal is absolutely the highest level of endorsement you can get,” said an enthusiastic CalComp President John C. Batterton.

CalComp, which now is 86% owned by Lockheed Martin Co., announced its new CrystalJet inkjet printing technology last month. The system enables commercial inkjet printing systems to produce photo-quality color images cheaper, faster and with a greater variety of inks, Batterton said.

Under the agreement with Kodak, the joint venture would work on development of printer heads, inks, printing papers and image systems that would broaden the applications for CalComp’s CrystalJet process.

Batterton said CalComp’s inkjet printers can handle paper or material up to 54 inches wide and could be adapted for the paper box and fashion industries, which now rely on larger, more expensive offset color printing presses. Inkjet printing, he said, also makes it economical for printers to do small runs and limited-production custom work.

The deal with Kodak, he said, “most likely will result in us building products for them.” Kodak also will make royalty payments to CalComp for using the technology in Kodak’s own printing products.

If Kodak were to exercise its stock options, the 8 million new shares to be issued would boost CalComp’s total number of shares outstanding to 55.1 million. Lockheed’s stake in the company would drop to 75% while institutional and individual investors would see their 13.5% stake trimmed to 10.5%.

CalComp’s thinly traded stock gained 31 cents Monday to close at $3.88 a share in Nasdaq trading.

The agreement isn’t expected to have an immediate impact on CalComp’s employment. The company, which dismissed more than 200 workers in a cost-cutting move early last year, now employs about 900 worldwide, including 300 at its corporate headquarters in Anaheim.

CalComp was formed in 1958 as a designer and manufacturer of printers and plotters for computer-assisted drafting systems. Over the years, it has shifted its emphasis to the graphic arts industry.

CalComp, which posted a $75.2-million loss on sales of $200 million last year, receives about 25% of its revenue from ink sales and has it own ink-making factory, Batterton said.