195 ROBERT TOD REPLYS
January 25, 1999
In response to our
Story 192 last week on Picture Perfect, Robert Tod,
President of Todtri and Picture Perfect, has submitted the following information.
In response to the article appearing in Selling Stock by Jim Pickerell, while it
is true that both companies are behind in their financial obligations the vast
majority of our contributors are fully aware of our situation, our imminent
refinancing, and our repayment proposal to all concerned.
There are inaccuracies, assumptions, some erroneous statements that have been
made in this article that need clarification. Firstly, I am totally unaware of
any request for information from Mr. Pickerell and have been in daily contact
with my office since leaving on my business trip on January 11. Fred Harris is
not my second-in-command - he is a temporary bookkeeper working in our office two
days a week and he has not been contacted by Jim Pickerell as is alleged.
It is unfortunate that the article has been published particularly when we are so
close to resolving all our issues to re-finance and pay all our contributors. It
is one thing to publish factual information, but when much of the information is
based on hypothesis, all it does is create a negative impact all round, that in
some cases causes irreparable damage to relationships.
Picture Perfect and Todtri Productions are two separate companies. The article
is confusing as it mixes and matches as if dealing with one company.
So far as Todtri is concerned, the company has been around for 10 years, is a
multi-million dollar a year business and purchases approximately $500,000 of
photo rights per year. In 1997 there was a downswing in the publishing industry
and Todtri coincidentally suffered a number of calamities that took place at the
same time--late deliveries, high returns, slow payments from principal customers,
bad debts of more than 600,000. This was communicated to our vendors and with
many of them we did our best to reduce our liability by entering into payment
Some of our vendors were paid off in full, some have received partial payments
and some have yet to be paid. Art Resource is still owed approximately $42,000
and the "few small payments" as reported in the article have amounted to half the
debt. Unfortunately, our trading has taken considerably longer to improve due to
the overall poor performance of illustrated books in general and as a result it
became necessary for us to bring additional liquidity into our business which is
what we are accomplishing with Capstone. We were forced to downsize our
operations which involved laying off 50% of our staff and in turn this caused us
a huge amount of additional work in operating the business. At the same time [we
were] dealing with an increased number of calls from our vendors seeking payment.
We became overloaded and regretfully were unable to maintain the level of
communication that everyone would have liked to have received from us.
The refinancing has been very complicated, as the amount is large, and slow due
to circumstances beyond our control. The world outside of the United States is
having the worst financial crisis since the Great Depression. It is almost as if
the rest of the world is in financial meltdown. All lenders have been swamped by
other companies seeking funds and although banks and financial institutions are
all lending money they pick and choose who they want and a company the size of
Todtri takes a rear position in overall importance.
Nonetheless, we have restructured the business both operationally and financially
and expect to complete our re-financing within the next 2-3 weeks.
The lender has required us to enter into Agreements of Composition and
Forbearance Agreements with our principal vendors according to different classes.
Our vendors who are owed in excess of $50,000 and that in totality represents
94% or our indebtedness, have now all entered into these Agreements as a result
of my trip to the Far East where most of them are located. Each vendor has been
placed in a particular class according to the dollar amount owed. All vendors
within each class get treated the same way. ALL vendors get repaid 100% of what
is owed, most over a period of time, those less than $1,000 in one shot.
The date of January 15 was a date that Capstone created and was purposefully
short notice so as to get an immediate response -- which has been achieved by the
majority of our vendors. We have, for the most part, enjoyed long term and
mutually satisfying relationships with our vendors and most have been supportive
to us through these troubled times. We have simply had financial difficulties
due to misfortune and have every good intention of meeting our financial
obligations. Regretfully, a handful of dissatisfied, disgruntled contributors
are stirring things up at everyone else's expense and this is both unfortunate
and unproductive. Simply put, they represent a minority of people who simply
It is our understanding that all vendors have been sent either an Agreement of
Composition or a letter advising them of our re-financing and our intended
payments to them. If there are any vendors who have not received the above, then
I request that they fax or write to me personally so I can ensure immediate
action takes place.
As far as Picture Perfect is concerned, the company has enjoyed accelerated
growth in recent years due to the growth of its parent company (Todtri). Todtri
not only loaned Picture Perfect a considerable amount of money for investment
purposes, but it also provided color separation and printing services for Picture
Perfect's catalog as well as catalogs of many overseas agencies that the company
represents. [Editors Note: This doesn't sound like two separate, arms length
companies as implied in the fourth paragraph.]
The majority of the images (90-95% appearing in our P12 catalog have been
supplied by agency contributors. Therefore, the percentage of individual
photographer participation is small. Furthermore, there is no fee for
participation, unlike most other stock agencies, therefore photographers have not
contributed any money to the catalog costs, the dupes, buying of the mailing
lists, mailing cartons, postage, color separation, design and overheads of
Picture Perfect. The assumptions in the distribution costs, volume of sales,
receipts and percentage of dollar disbursements are all assumptions and needless
to say, are all wrong.
All the Agency contributors have receive sales reports for the entire year and
the individual contributors are about to be sent sales reports along with full
payment as soon as our refinancing is in place. The Agency contributors receive
payments over a period of time due to the dollar amounts involved.
Photographer, Andy Goodwin, is not a Picture Perfect contributor. He belongs to
one of our Agency contributors. When he saw the Kellogg's usage recently, he
telephoned me personally. I accepted his call, brought up the sale on our
computer system, told him the dollar amount ($10,000) not $20,000 as stated in
the report and also advised him that the sale had only recently been made and
payment not received.
The implication made in the report suggests that photographers don't make any
money from catalog sales despite the fact the larger agencies derive 70-80% of
their revenue stream from catalog sales. I should know since I spent 9 years as
a Director of the Image Bank and 4 years with the Telegraph Colour Library, now
part of Visual Communications Group that purchased FPG. This has also been our
experience at Picture Perfect with the 13 catalogs we have.
Of course, the most effective way for individual photographers to market their
images is to go round and visit every photo buyer in the country. Don't be
surprised to read in Selling Stock suggestions to stop taking pictures because of
the increased costs in film and processing.
Don't believe everything you read.
No-one likes being owed money; however, most of our contributions are sympathetic
and have confidence in our ability to resolve our difficulties, make full
payments and move on together. The alternative of filing for court protection is
so easy to do and the majority of our contributors should recognize the integrity
I have as a business owner to re-pay what is outstanding and be more appreciative
of my efforts to pay them in full through our re-financing with Capstone.
Robert M. Tod
I do not believe that Mr Todd is telling the truth, for one
thing, although I have not contributed for production costs on Picture
Perfect catalog #12, I have been CHARGED for production costs on Picture
Perfect catalog #12, I am charged $100.00 on the first sale of any image
in PP #12. In addition I have not received sales reports for the entire
year and when I do get them they only have a total dollar amount, no info
on how the image was used or to whom it was sold. Plus, I would not say
that the majority of his suppliers/vendors have enjoyed a long term
satisfying relationship rather to the contary.