471 RESTRUCTURING AT IMAGE STATE
April 15, 2002
Recently, ImageState has gone through some major restructuring of its business. Sheldon
Marshall, President of the company, says they had "geared up the business anticipating a
much bigger business than it is. With the changes in the economy other factors, we found
it necessary to downsize to meet the level of existing business that we have."
They have scaled back their London operation and moved the headquarters of the group to
New York. Marshall and Chief Financial Officer, Chris Adamson, will be working out of New
York for the foreseeable future. All photographic content has been centralized in the New
York office. All relationship management and content production will also be controlled
from New York. However, the International Sales Department will remain in London.
Stephen Harvey Franklin, who formerly headed ImageState's London operation will be leaving
the company. Marshall said, "As a result of the consolidation, fundamentally, we don't
need someone of Stephen's caliber in the UK. We have downsized the management in the UK
and are building up our management in the U.S." Currently ImageState has a staff of
approximately 32 people in New York, and is looking to make additional hires. The Seattle
office has been closed entirely. There is a remote sales staff based in Seattle, but they
will be operating from their homes.
European photographers will still deliver their images to London where a photo liaison
person will make an initial edit. However, the final decisions on what images will be
added to the file, or selected for catalogs, will be made in New York. This will be the
case for both Rights Protected and Royalty Free images. In the future, London will be
primarily a sales office.
The contract of George Sinclair who was Managing Director for North America was not
renewed, and Marshall will be taking over operational control for the medium term.
Sinclair will be handling a few specific integration projects for his remaining months
John Macfie, former president of International Stock, will be leaving the company later in
the year. Donna Sickles who was Director of Operations for International Stock is taking
over the operations role at ImageState. Lindsey Nicholson, former VP of Index Stock, has
recently been hired to be Director of Photographer Relations for ImageState.
In the last fiscal year ending June 30, 2001, Image State had gross sales of 3.164 million
pounds and cost of sales (mostly royalties) of 1.203 million pounds leaving a gross profit
of 1.961 million pounds. Operating expenses, not counting a write down of loans to
discontinued operations, were 8.450 million pounds showing a huge loss on operations.
Marshall says that in the past year they have been trying to get the company to a
breakeven situation and, "now with the restructuring we have put in place, we have managed
to do that. We had record sales last month and have a much healthier run rate. I believe
we are moving forward toward profitability."