PhotoChannel Networks Inc.
TSX VENTURE : PN
OTC Bulletin Board : PNWIF

PhotoChannel Networks Inc.

June 04, 2009 08:00 ET

PNI Digital Media Provides Q3 Business Update

PhotoChannel's Record Transaction Volumes Continue for the 26th Straight Quarter

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 4, 2009) - PNI Digital Media (TSX VENTURE:PN)(OTCBB:PNWIF), ("PNI", "PhotoChannel", or the "Company"), the leading innovator in digital photography and media solutions for retailers, announces the Company continues to see record transaction volumes during its current third quarter of fiscal 2009.

A record 2,299,923 orders have been transacted via the PNI Digital Media Platform thus far this quarter. This represents a 134% increase in orders over the comparable period of fiscal 2008 and the 26th straight quarter of record orders transacted when comparing year over year same quarters. As of today, PNI has transacted and distributed more orders via the PNI Digital Media Platform this fiscal year than were transacted in the entire previous fiscal year.

To date the average daily order volume for fiscal Q3 is 36,507, compared to 15,626 for the same period of fiscal 2008. Overall retail sales processed through the PNI Digital Media Platform for retail partners show an increase of over 200% for the quarter compared to the comparable period in fiscal 2008.

Organic growth of retail partners on the PNI Digital Media Platform continues to be very strong, up an aggregate 20% year over year. The Company's 3rd quarter financial results are expected to be announced in early August 2009.

"Orders transacted through the PNI Digital Media Platform this quarter continue to be very strong," said Kyle Hall, Chief Executive Officer of PNI. "In the face of deteriorating reports across most sectors of the economy, including the retail photo industry, PNI's business platform again proves its effectiveness for our retail partners, as more consumers migrate to our online solution. Clearly, our retail partners are outperforming the expectations of the industry. Combined with our last two quarterly results of digital orders transacted, these interim results further reinforce our industry leading position as the platform of choice for effective growth."

Business Update:

- As announced on April 30th, 2009, roll-out of the PNI ConnectedKiosk™ software with Fred Meyer and King Sooper's retail locations continues on schedule with a website launch expected by the end of this month. The Company is currently in the process of deploying the PNI ConnectedKiosk software on more than 700 kiosks for King Soopers and Fred Meyer. In addition to the provision of 1-hour print services, the PNI-powered online photo centers and PNI ConnectedKiosks will support a range of personalized photo gifts.

- PNI Digital Media is very pleased with the effectiveness of its integration of the Works Media operations as announced on March 11th, 2009 and continues to execute on its plan of reducing overall operating expenses.

Corporate Update:

- The Company is finalizing the requirements to change its official name from PhotoChannel Networks Inc. to PNI Digital Media Inc. A press release will be issued with more details in the near future.

- PNI Digital Media ranked 1st amongst public companies in the annual PROFIT 100 ranking of the nation's fastest-growing companies and a very strong 5th overall as the Company grew revenues by 6571 % over the eligible five-year period. The full ranking is available at: http://www.profit100.com.

About PNI Digital Media - Founded in 1995, PNI Digital Media operates the PNI Digital Media Platform, which provides transaction processing and order routing services for major retailers. The PNI Digital Media Platform connects consumer ordered digital content, whether from in-store kiosks, online sites or desktop software, with retailers that have on-demand manufacturing capabilities for the production of merchandise such as photos and business documents. PNI Digital Media successfully generates millions of transactions each year for retailers and their thousands of locations worldwide. Follow us on Twitter®: @PNI_Kyle and @PNI_Yasmin

For more information please visit www.pnimedia.com.

The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties. PhotoChannel's actual results could differ materially for those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, changes in technology, employee retention, inability to deliver on contracts, failure of customers to continue marketing the online solution, competition, general economic conditions, foreign exchange and other risks detailed in the Company's annual report and other filings. Additional information related to the Company can be found on SEDAR at www.sedar.com and on the SEC'S website at www.sec.gov/edgar.shtml

PhotoChannel relies upon litigation protection for "forward-looking" statements.

The TSX Venture Exchange has neither approved nor disapproved the information contained in this release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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