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Photo-Me Restructures U.S. Distribution Amid Top Management Changes at Home

(November 30, 2007)-- An extensive reorganization of Photo-Me International sees the firm with new top management and a new operation to serve the United States market, KIS USA.

After many months of indecision resulting from maneuvers with a variety of financial challenges, Photo-Me International and its Kis subsidiary, with a re-structured board and a new CEO, appear to now be ready to turn their full attention to the marketplace.

In April, Thierry Barel was named president of Kis replacing Serge Crasnianski and, as of Dec. 1, will take over his responsibilities as CEO of Photo-Me International, as well. Crasnianski is leaving the board although he remains the firm’s largest single shareholder. Barel came to PMI from The Staubli Group, a major Swiss manufacturer of megatronics, where he was CEO.

Nicolas Series, vice president of sales, marketing and communications, said he will also serve as president of Digital Portal, Inc., the operation responsible for U.S. operations but will go to market here with the name of KIS USA.

Kevin Donohue, former president of DPI has left the firm and did not immediately return calls to ask of his future plans. Raphael Soltero, who was formerly handling Latin America for PMI, has joined Noritsu as general manager, marketing support division, international sales and marketing. Christopher Molina has taken over Latin American operations for PMI.

Series said that KIS USA will headquarter in Atlanta. Jeff Rucine, who had been in charge of the Kodak account when that firm was purchasing minilabs from PMI under the Kodak label for a number of years, will become vice president of sales and marketing. Mark Lawrence, for a long time the face of Photo-Me in the U.S., becomes director of business development.

In addition to Atlanta, KIS USA will maintain all warehousing for finished goods, parts, consumables and equipment in the Raleigh-Durham area under the supervision of Elizabeth O’Brien, formerly a Qualex employee.

Series said that the KIS operation in Grenoble, France will continue to function in R&D and manufacturing for the firm’s line of minilab equipment and photo vending machines. Another PMI subsidiary, Imaging Solutions, produces wholesale lab equipment in Switzerland.

On the speculation that PMI would split off minilab and/or photo vending machine operations, a plan that was being pushed by certain financial groups, Series said, “The split is completely behind us. There will be no split.”

He indicated that all of the changes at PMI have been in a positive direction and “we are looking to expand our business in the U.S.”

However, the firm is still suffering financial stress reporting this week that its full year earnings will be “substantially” below analyst estimates. In July PMI reported a 61% drop in net income. A statement distributed by the company indicated, “Difficult marketing conditions at Photo-Me’s KIS unit, which sells photo processing equipment to CVS Pharmacy, Inc., and its Imaging Solutions unit are most responsible for the decline.”

Photo-Me has been providing minilab equipment to the CVS chain, their single major account in the U.S., since 2006. Series said that the contract with CVS had been renewed and that Photo-Me will be the exclusive lab provider to the chain in 2008. He would not reveal the number of units involved. He feels that the renewal by CVS was an endorsement to the service performed by Photo-Me and that he was in talks with other major accounts at this time.

Mark Lawrence said that he and Jeff Rucine would spend their energies seeking large national and regional account business in the U.S. and Canada. He felt with the elimination of one level of management in the U.S., Photo-Me would be able to be more competitive in the marketplace. He noted they would rely on wholesalers to develop business with smaller regional customers and the independent trade.

Lawrence said existing Photo-Me distributors are: APS Imaging Solutions, Fullerton, CA, Kull Photographic Supply, Kent, WA, Liberty Photo Supply, San Clemente, CA, and Sonman, Inc., Rockledge, FL. He noted that discussions for distribution were progressing with Armadillo Photo Supply, Houston, Pakor, Minneapolis, and Photo Wholesaler, Kingston, NY.

Series said that PMI will occupy its usual space at PMA and will be showing a variety of new products.