ImageMax, Inc. - Document Management - Category Main Page 

(215) 628-3600

455 Pennsylvania, Suite 200

Fort Washington, PA 19034
www.imagemax.com

Business Description

ImageMax, Inc. is a single-source provider of outsourced document management

solutions to U.S. companies and concentrated primarily in the health care, financial

services, engineering and legal services industries. The Company's services include
electronic (digital) and micrographic media conversion, data entry and indexing,
Internet retrieval and hosting services, document storage (including Internet
"web-enabled" document storage and retrieval) and system integration. The
Company also sells and supports document management equipment and proprietary,
as well as third party open architecture imaging and indexing software. The
Company has one reportable segment.

Image Max's strategy is to work with clients to develop the best solution to
their document management needs, including solutions involving both outsourced
and in-house document capture, conversion, storage and retrieval. The Company
believes that a majority of current document management industry revenue is
derived from the management of film and paper media. Advances in digital and
Internet based services and other technologies continue to provide organizations
with increasingly attractive document management options and accordingly, the
Company believes the most successful service providers are those that can offer
a complete spectrum of document management services and products encompassing
solution design and expertise in the management of digital, film and paper
media. The Company has targeted a broad array of services and products, as well
as technical and vertical market expertise, in order to create a platform from
which it can become a leading national, single-source option for clients with
intensive document management needs.

SERVICES AND PRODUCTS

Services

The Company offers a broad range of document management services across a
variety of media types and formats. This broad range of services, together with
the Company's technical capabilities and experience in selected vertical
markets, enables the Company to tailor document management solutions for its
clients based on their specific needs. The document management services that are
currently provided by the Company include:

Media conversion services

Media conversion is labor intensive and, particularly in the case of digital
imaging, requires increasingly sophisticated equipment and systems to be
accomplished efficiently. By maintaining a large skilled labor pool, sufficient
production capacity and technical capability, the Company believes that it can
provide a responsive and cost effective outsource alternative to its customers.

Digital Imaging. The Company's digital imaging services involve the conversion
of paper or microfilm documents into digital format through the use of optical
scanners and the conversion of computer output to digital images. Once
converted, digital images can be returned for client use on a CD-ROM or optical
disk or stored by the Company via its web-enabled hosting site ImageMaxOnline
for subsequent retrieval and distribution. The Company believes that digital
imaging is becoming the preferred format of storage for many organizations due
to benefits such as high-speed retrieval, and the ability to support and
distribute digital images directly to the desktop of multiple workers in
multiple locations at any time.

Micrographics. The Company performs micrographic services, including the
conversion of paper documents into microfilm images, the indexing of film for
computer-aided retrieval systems and computer output to microfilm ("COM").
Micrographic media are selected as an alternative to paper or digital media for
one or more of the following reasons: (i) film archives are more accessible,
longer-lived and less expensive to store than paper; (ii) film is eye-readable
and not subject to technological obsolescence; (iii) converting paper to film is
currently more cost-effective than scanning paper for most documents where
ease of accessibility is not needed; and (iv) there is a large base of
organizations with existing film archives and reader-printer equipment.

Data Entry and Indexing. The creation of index files for the rapid retrieval of
images is a critical part of most value-added document management solutions. The
Company provides specialized indexing services to a variety of clients for both
film and digital-format documents. These labor-intensive services are often
contracted for outside the U.S., as a means to utilize qualified personnel at
generally lower cost than is available domestically.

Storage and retrieval services

Film and Paper Storage and Retrieval. The Company manages the archiving of
client documents, including processing (i.e., indexing and formatting), storage,
retrieval, delivery and return to storage of documents within a rapid time
frame. Typical archival documents include medical and legal case files, business
records and financial transaction documents. Service fees generally include
billing for storage space, plus activity charges for retrieval, delivery and
return to storage, and ultimately for document destruction.

Products

The Company develops proprietary, open-architecture software products, which
support electronic imaging and indexing services. In addition, the Company sells
and supports third-party software and offers a wide range of digital imaging,
scanning and viewing hardware, micrographic reader-printers, micrographic film
and supplies and other equipment.

Software

The Company sells and supports third party document management software. These
software products are marketed by the Company through a network of other
document management companies acting as value-added resellers and also directly
through the Company's own sales force to end-users including, in some cases,
other document management companies. The Company has also established partnering
relationships with software and equipment providers, which enable the Company's
software to be packaged and sold with their product offerings.

In addition, the Company markets and supports a suite of proprietary
open-architecture software products that support and enhance the scanning,
indexing and retrieval of digital images for its own use and for sale to other
document management companies and end-users. Versions of these software products
can be run on Microsoft Windows-equipped networks or personal computers, and
simplify the process of scanning, indexing and retrieving electronic images of
documents. One of the Company's products, called ScanTrax(TM), was initially
developed for use by document management companies in their digital conversion
operations. Other Company products, such as FileTrax(R), were developed for
marketing to end-users. The Company has also developed and markets scanning and
viewing software package for the aperture card market called ImageMax ES. This
product is utilized by both service companies and end-users to convert and index
micrographic images of large format documents (in the form of 35-millimeter
aperture cards) into digital images.

Hardware and other equipment

The Company maintains broker or dealer relationships with a number of document
management equipment suppliers, including Bell & Howell, Kodak, Minolta and
Xerox. These relationships allow the Company to provide clients with the latest
micrographic and digital image viewing, printing and conversion equipment.
Several production facilities provide extensive field maintenance and repair
services for the equipment they sell. Various production facilities have
specialized technical hardware and systems integration expertise that is shared
across the Company's operations. The Company also provides to its clients a wide
range of micrographic film products, digital media and other graphic supplies.
The Company has achieved certain purchasing efficiencies with film suppliers and
believes that it is an attractive dealer to equipment manufacturers seeking to
achieve broad geographic coverage with a single company.

BUSINESS STRATEGY

The Company's goal is to serve as a leading national provider of outsourced
document management solutions. The Company believes that customer and business
trends indicate (i) a movement towards outsourcing, which allows companies to
focus on core competencies; (ii) demand for value-added digital conversion
services, whereby imaging is becoming part of the business process rather than
paper replacement; and (iii) increased focus on business continuity in light of
the events of September 11, 2001. In addition, the Company believes consulting
organizations, document management providers and technology firms are
increasingly pursuing service company partnerships to provide conversion
capabilities for their customers that augment the outsourcing model.

In serving its customers and in developing its strategic and business goals, the
Company has shifted its focus to digital conversion and related service
offerings in order to meet the changing demands of the marketplace. This shift
is designed to address specific customer needs, such as: (i) the replacement of
microfilm with digital imaging; (ii) the transition of in-house document
management operations to an outsourced approach; (iii) on-line access of digital
documents via Internet web-enabled document storage and retrieval such as
ImageMaxOnline; and (iv) the continued support of product-based offerings, such
as software and equipment. The formation of strategic partnerships with, for
example, document management providers, integrators, technology firms, and
software providers, is an element of the Company's strategy to leverage its
capabilities and provide superior service to customers.

While streamlining operations and implementing a new organization structure, the
Company continues to enhance its sales, marketing, and technical capabilities
and will continue to improve the skill base of its sales force through such
tools as an on-line application database, specialized training programs, and a
hiring program emphasizing digital imaging. These activities are managed through
the position of EVP - Sales and Marketing and include web and intranet
initiatives, collateral and sales aids, trade shows and seminars, and a
telemarketing campaign.

In pursuing its strategic and business goals, the Company has focused its
efforts organizationally on integrating operations and building a management
structure that supports a regionally-based sales and service organization. These
efforts to date have included the consolidation of operations in several
markets, the reassignment of former managers, sales force investments, the
alignment of production facilities into three regions (East, Central, and West)
along geographic/vertical market lines, and the establishment of a formal
organization structure that facilitates an integrated national approach. The
Company believes it has begun to realize the benefits of this structure through
improved coordination of sales activities, production capabilities, and
technical skills in the fulfillment of customer requirements.

DOCUMENT MANAGEMENT INDUSTRY OVERVIEW

The Company believes that the continued growth of the document management
industry is driven by such principal factors as: (a) improvement of digital
technology (i.e., CD-ROM, computer networking, Internet retrieval and
image-enabled software applications) which has dramatically reduced the cost of
imaging, storing, indexing and retrieving documents while improving users'
ability to manage documents more efficiently; (b) greater focus by many
organizations, especially those in document-intensive industries such as health
care, financial services and engineering, on document management processes and
systems as part of a wider effort to manage their information more efficiently
in order to improve productivity, competitiveness and client service; (c)
organizations' need to manage the ever increasing volume of information
facilitated by document-generating technologies such as facsimile, high-speed
printing, the Internet and computer networking; (d) increased outsourcing of
document management services which allows organizations to focus on core
competencies and revenue generating activities, reduce fixed costs, and gain
access to new technologies without the risk and expense of near-term
obsolescence; and (e) increased focus on business continuity in light of the
events of September 11, 2001.

The Company is a national service provider in a highly fragmented industry. More
than 2,000 companies serve the document management needs of industry and
government, with a majority of these companies generating annual revenues of
less than $10 million. Many of the small businesses with which the Company
competes presently lack the capital for expansion, cannot keep abreast of
rapidly changing technologies, are unable to effectively manage large complex
projects, have not developed marketing and sales programs and do not have the
volume buying power needed to negotiate favorable supply contracts. The
continuing migration from paper and film to digital media has broken down many
geographic barriers to the provision of document management services and has
increased client demands for integrated operations. The Company believes that
its broad capabilities will provide an increasing competitive advantage.

COMPETITION

The document management services industry is highly competitive, with a
significant source of competition being the in-house document management
capability of the Company's target client base. Additionally, the Company
competes with local or regional, independent document management companies. The
Company's competitors include Affiliated Computer Services, Inc., Anacomp Inc.,
IKON Office Solutions, Lason, Inc., On-Site Sourcing, Inc., and SourceCorp.

These competitors may be larger than the Company, have greater financial and

other resources and/or operate in broader geographic areas than the Company.

Additionally, other potential competitors may choose to enter the Company's areas of

operation in the future. As a result of this competitive environment, the Company may

lose clients or have difficulty in acquiring new clients and its revenues and margins may

be adversely affected.
 

The Company believes that the principal competitive factors in document
management services include the breadth, accuracy, speed, reliability and
security of service, technical expertise, industry specific knowledge and price.
The Company competes primarily on the basis of the breadth and quality of
service, technical expertise and industry specific knowledge, and believes that
it competes favorably with respect to these factors.
 

Document Management Companies in the Business Directory

Anacomp

Bowne & Co.

Iron Mountain

IKON Office Solutions

ImageMax

Lason

SourceCorp