ACD Systems International Inc.
TSX : ASA

ACD Systems International Inc.

August 03, 2005 16:30 ET

ACD Systems Announces Fiscal 2006 First Quarter Results

VICTORIA, BRITISH COLUMBIA--(CCNMatthews - Aug. 3, 2005) - ACD Systems International Inc. (TSX:ASA), makers of ACDSee™ photo management software and Canvas™ technical illustration software, today reported its Q1 2006 results. The financial figures in this release are reported in Canadian dollars in accordance with Canadian generally accepted accounting principles.



Summary of Financial Results (unaudited)
(millions of Canadian dollars except per share data)

Three months ended
June 30
2005 2004
--------------------
Sales $ 4.1 $ 5.5

Net earnings (loss) (0.9) 0.4

Number of shares - basic (millions) 23.6 23.8

Number of shares - diluted (millions) 23.6 24.0

Earning (loss) per share, basic and diluted $(0.04) $0.02



"ACD Systems continues to invest in opportunities created by the rapid growth of the digital media market," says Doug Vandekerkhove, chairman, chief executive officer and president of ACD Systems. "We are leveraging our digital imaging expertise, the ACDSee brand, our large global user base and our strong balance sheet to build a solid foundation for profitability and shareholder value."

Summary of Q1 FY2006 Accomplishments

- ACD launched FotoSlate 4.0 Photo Print Studio.

- ACD launched the retail version of its flagship product, Canvas X at the end of June 2005.

- ACD achieved operational cost savings in the technical drawing segment of $0.2 million after the April 2005 restructuring.

- ACD continues to build a strong infrastructure to support the launch of upcoming products.

Financial Highlights

Sales for the quarter ended June 30, 2005 have declined to $4.1 million from $5.5 million in the prior year first quarter.

Digital imaging software sales decreased in the first quarter ended June 30, 2005 to $2.9 million from $4.4 million in the prior year as a result of the restructuring of an OEM contract as well as the timing of German and Japanese product launches. The Company's digital imaging software segment derives the majority of its revenues in US dollars and Euros. Both the US dollar and the Euro weakened compared to prior year first quarter resulting in a $0.2 million decrease in sales.

Technical drawing software sales of $1.2 million for the three months ended June 30, 2005 were consistent with the prior year first quarter. Offsetting first quarter sales is a $0.1 million provision for retail product returns expected as a result of the Japanese launch of Canvas X. The Company derives the majority of its technical illustration software revenue in US dollars. The weakening US dollar resulted in a $0.1 million reduction in revenue year over year. Excluding the effect of foreign currency fluctuations and the Japanese retail return provision, technical illustration software sales increased by 17%. Technical illustration sales for the first quarter of fiscal 2006 increased by 13% compared to the fourth quarter of fiscal 2005 as a result of the Canvas X product launch.

Operating expenses, excluding amortization and foreign currency gains and losses were $4.6 million for the three months ended June 30, 2005 compared to $4.0 million for the same period in the prior year. The increase in operating expenses in the first quarter of fiscal 2006 is primarily due to higher advertising and salary expenses. While consolidated operating expenses increased quarter over quarter, operating expenses in the technical illustration segment decreased by 17% as a result of the April 2005 restructuring.

Net loss for the current quarter was $0.9 million compared to net earnings of $0.4 million in the first quarter of the previous fiscal year.

Total assets decreased by $3.4 million to $35.9 million at June 30, 2005 from $39.3 million at March 31, 2005. The Company's cash position was $17.7 million at June 30, 2005 compared to $19.1 million at March 31, 2005. Working capital at June 30, 2005 decreased by $0.9 million from March 31, 2005 due to reduced cash and accounts receivable balances.

ACD Systems will conduct a teleconference on August 4, 2005 at 11:00 a.m. Eastern Standard Time. To participate in the conference call, please use the phone numbers listed below.



Date: August 4, 2005
Time: 11:00 am EST (8:00 am PST)
Dial In Numbers:
Toll Free (North America): 877-407-9205
International: 201-689-8054


Members of the news media, investors and the general public are invited to access a live broadcast of the conference call via the Investor Relations page of ACD Systems Web site at http://www.acdcorporate.com/english/Investors/financial.

The event will be archived and available for replay through 10/04/2005.

Further details with respect to ACD Systems' year-end results, including the complete financial statements, will be available for download at http://www.sedar.com/.

About ACD Systems

Headquartered in British Columbia since 1993, ACD Systems International Inc. (TSX:ASA) is one of the world's leading developers and marketers of digital imaging software, including the renowned ACDSee image management tool and Canvas, an advanced cross-platform technical illustration and graphics program. ACD has delivered value to a global marketplace through Internet distribution and through partnerships with manufacturers and developers. ACD has millions of consumer and business users, and over 33,000 corporate customers including many Fortune 500 companies. For further details, please visit us at our corporate web site: www.ACDSYSTEMS.com.

Certain statements contained in this press release including words such as "looks forward", "anticipate", "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Contact Information

  • ACD Systems International Inc. - Contacts for Investors
    Martin Winstanley
    Corporate Affairs
    (250) 544-6700
    ir@acdsystems.com
    or
    ACD Systems International Inc. - Contacts for Media
    James Latham
    Vice President Marketing
    (250) 544-6700
    pr@acdsystems.com
    www.ACDSYSTEMS.com