.

Thanks for the news Jim.  I think this would have slipped by most of us.

The sounds like Shutterstock entrace into the German market was quite well timed.  For better or worse...

Quote from: BaldricksTrousers on December 09, 2013, 14:58

I certainly won't weep if they go under and that $87m gets spent elsewhere.

No tears here either.

I agree Fotolia is one of the least contributor-friendly agencies, they had a very negative influence in the development of microstock from a contributor point of view.

This does make it fairly clear why they apparently demote high-ranking contributors' portfolios - they'll want to cut every penny they can to service their borrowings.  It also explains why they might have shut the German office even though it's meant to be their big market.

It is very hard to see how they could possibly service a loan of that size on that turnover. If you borrow $300m at 7% over 10 years you would have to pay back about  $42m a year. To do that, almost 50% of their turnover would have to be profit. And with all the money going into repayments, how would you fund growth? You'd most likely end up like Greece, cutting and cutting and cutting instead of investing and growing, and wondering why things keep getting worse.

Why can�t owners pay themselves from hard earned profits instead??

I may be wrong (but I think I am roughly right): my understanding of this sort of thing is that in the most general terms immediate investors earn their vig on the risk associated with immediately providing necessary funds which the company would not itself be able to raise otherwise. They then make whatever crucial structural and management changes are required to make the company sufficiently attractive for that risk to then be sold on longer term (at cost) on the market.

Roughly. I think. It's fairly normal stuff TBH. If an investment is being sold on then, more or less, I think it is fair to assume that the company is very likely deemed to be in much better shape than it was when it first needed money. Debt itself is not necessarily a big issue - being just one type of corporate finance and less of a burden in many ways than having stock holders in an uncertain market.

Kiss of death obviously, my optimism

PS - great thing for the investor is that they get it back now and later!

Thanks Jim, for posting this. 

Guess Fotolia contributors can look forward to more royalty cuts in the new year.   

Noodle you are probably right but it would be a quicker route

Also stopped uploading there a long long long time ago, for their behavior, not for low sales...

I wonder who would reckless enough to finance a �special dividend� like that?

Those who have blind hope?

Seems they might be setting the stage for chapter 7...

Fotolia did have senior staff at the expo, but you are right I don�t remember them sponsoring a workshop or having a stand this year. They do however have a very active presence on all kinds of photo related events in Germany, at least I keep running into them.

Yes, "special dividend" does�t sound good. Why can�t owners pay themselves from hard earned profits instead??

Anyway, I hope some of that debt also gets used to move the business forward, SS is obviously making strong inroads in Europe and just opened a major office in Berlin.

I like to see balance in the market, as much as I like the SS team, I do worry if they become the only strong business in the industry.

And istock seems to have given up the fight long ago.

I agree they should not borrow to pay themselves up front at the expense of our assets. Generating instant cash for owners is a juggling act that catches up with all business's eventually when business slows down or other micros under cut pricing. They are well aware of this fact. If you notice SS is now pushing for a new crop of contributors and driving more business to BS to help drive profit in the short term. It remains to be seen how the new markets they are moving into will pan out. If SS stake holders felt confident about driving increased revenue in new markets they would not be selling personal stock, they would be holding out for higher values.

Historically @ SS "our supposedly low worth assets" provided monthly cash distributions to members of Shutterstock Images LLC with respect to their membership interests totaling $90.5 million in less than 3 years. To my knowledge there is no public information for cash distributions for the years prior to those reported via the SEC.

IS, Fotolia, etc. can see that SS paid down $12.0 million of the $12 million term loan term loan facility that it entered into on September 21, 2012 to fund working capital needs following the corps final $36.0 million cash distribution to the members of Shutterstock Images LLC prior to the pre IPO Reorganization.

Pocketing $90.5 million cash in less than three years is telling when you also consider current revenue. The micros have no problem driving the value of our assets down to participate in the race to gain market share but how long will it be before the gig is up and they hit diminishing returns?

Shutterstock Images LLC Cash Distributions prior to the IPO Reorganization

For the years ended December 31, 2011 and 2010, distributions to the members of Shutterstock Images LLC were $28.6 million and $25.9 million, respectively.

Additionally, between January 1, 2012 and October 4, 2012, we distributed $36.0 million to the members of Shutterstock Images LLC.

10Q 3/31/2013 http://www.secinfo.com/d11MXs.x17an.htm#1stPage

Snip
On October 4, 2012, we made a final distribution to the LLC members constituting approximately all of the cash generated from the operations of the LLC, since the last distribution to members and any other cash and cash equivalents on hand at the time of the distribution, other than any amounts received under the term loan facility, as described below. Following this final distribution, no additional distributions were made to members of the LLC prior to the Reorganization. Additionally, following the Reorganization, our tax rate and related tax payments have increased significantly as we became subject to federal, state and additional city income tax.

We entered into a term loan facility in September of 2012 that provided for a $12 million term loan. Following the final distribution to members described above, the borrowings from the term loan facility were used to fund the short-term capital needs of our operations following the final distribution to members described above and our IPO. On December 24, 2012, we paid down $6.0 million of the term loan and on March 25, 2013, we paid off the remaining outstanding balance of $6 million. As of March 31, 2013, we have no outstanding debt. Additionally, we believe our existing cash and cash equivalents and cash flow generated from operations will be sufficient to meet our working capital and capital expenditure for at least the next twelve months.

We plan to finance our operations and capital expenses largely through our operations. Since our results of operations are sensitive to the level of competition we face, increased competition could adversely affect our liquidity and capital resources, both by reducing our revenues and our net income, as a result of reduced sales, reduced prices and increased promotional activities, among other factors, as well as by requiring us to spend cash on advertising and marketing in an effort to maintain or increase market share in the face of such competition. In addition, the advertising and marketing expenses used to maintain market share and support future revenues will be funded from current capital resources or from borrowings or equity financings. As a result, our ability to grow our business relying largely on funds from our operations is sensitive to competitive pressures and other risks relating to our liquidity or capital resources.

Quote from: Mantis on December 11, 2013, 21:29

Quote from: NaturaLight on December 11, 2013, 20:27

Seems they might be setting the stage for chapter 7...

Better cash out now while you can

On a related note - anyone get paid by Fotolia recently?  I've got a payout pending from the 2nd of Dec.  I'm about ready to request another on the 15th.  Since I switched to a twice-a-month payout request, I haven't had any problem getting paid before I was due to request again.  Until now...?

Now I'm a little nervous because I just left my earnings in there for the year. Going to request now.

Never had any problems with payouts.....takes anything from a couple of days to a couple of weeks but I always cash out at around 50 credits.

FT is going well for me the last couple of months...sales both subs as well as dl's. Probably cuz many of you competitors have already left.   

FT's payments always take the longest. I requested mine on Dec 1st, still pending. But usually it does not come before the 15th of a month.

They must do them in groups. I remember them paying fairly quickly.

I left as $0.22 subs was ridiculous, I'm on SS but at least they have good volume and they use "life time" earnings to up your level/royalty 


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