CoActive Marketing Group is in the early stages of a restructuring even as the agency reviews its financial reporting.
Nasdaq notified CoActive on Nov. 21 that it could be delisted because the agency was late filing its financial report for the quarter ended Sept. 30. CoActive has requested a hearing, which automatically delays the delisting, as it works to restate its financials for fiscal 2006 and for first-quarter 2007, ended June 30.
President-CEO Charlie Tarzian called the restatement “a technical dispute, a balance-sheet issue” that arose when CoActive changed auditors this fall. BDO Seidman resigned as the agency’s independent auditor in July; CoActive hired Grant Thornton as its new auditor in September. The accounting firms must hash out a common agreement on CoActive’s financials, especially the way it collects and reports sales tax, before the agency can restate its figures. Until the accountants agree, “we’re in a holding pattern,” Tarzian told PROMO.
While he’s waiting, Tarzian, who took charge of the New York agency in October, has begun to restructuring to better integrate its disciplines, which include events (via its U.S. Concepts division), retail, digital and multicultural marketing. The new organization, to be unveiled in early 2007, will be “built around clients’ challenges but dedicated to best practices across disciplines,” Tarzian said.
“We have the foundation here for success; now we’re adding the process and organizational structure we need to build on that skill,” he said.
Tarzian hopes to break down silos between disciplines and foster more integrated work. That could change CoActive’s compensation structure.
“People need to be compensated for the company’s overall success,” he said.
He also plans to beef up CoActive’s marketing planning services, and leverage the street teams that execute event and retail campaigns for in-market research and buzz marketing. Tarzian expects to hire additional staff; he demurred about whether CoActive will replace any more of its old-guard management.
“We’re looking at individuals’ skills, which will have to be baked into the new structure,” he said.
Tarzian is taking the reins from interim CEO Marc Particelli, who ran the shop for three months following the July departure of longtime CEO John Benfield (PROMO Xtra, July 6, 2006).
Tarzian had been CEO-New York at Euro RSCG Worldwide, and earlier held executive posts at direct-marketing shop Barry Blau & Partners and Circle.com (which was absorbed by Euro RSCG in 2001).
CoActive reported sales of $98 million for fiscal 2006, up nearly 17% from the year before. The agency ranked No. 33 in the 2006 PROMO 100 with 2005 net revenues of $35.2 million, up 18% from 2003.
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