PNI Digital Media Inc.
TSX : PN
OTCBB : PNDMF

PNI Digital Media Inc.

August 09, 2012 16:00 ET

PNI Digital Media Reports Fiscal Third Quarter 2012 Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 9, 2012) - PNI Digital Media (TSX:PN)(OTCBB:PNDMF), ("PNI"), the leading innovator in digital media solutions for retailers, reported financial results for the third quarter of fiscal 2012 ended June 30th, 2012.

Fiscal Q3 2012 Financial Highlights

  • Revenue for the quarter of $5.7 million compared to $5.3 million in the same quarter last year, an improvement of 7%
  • Transactional revenue was $4.4 million, an increase of 10% compared to fiscal Q3 2011
  • Transactional revenue comprised 77% of total revenue for the quarter
  • Generated a loss after income taxes of $83,000 for the quarter, compared to a profit after taxes of $22,000 during the same period last year
  • Generated non-IFRS adjusted EBITDA1 of $328,000, compared to $608,000 in fiscal Q3 2011
  • Processed a record 4.5 million transactions over the PNI Digital Media Platform, an improvement of 6% from the same quarter last year
  • Strong balance sheet with $5.6 million in cash and no debt

"PNI set a record this past quarter for transactions during the period," said Kyle Hall, Chief Executive Officer of PNI Digital Media. "Effective promotions by our retail customers coupled with consistent innovation in our core photo business have helped drive results while we extend further into our new business lines."

Conference Call

The company will host a conference call Thursday, August 9th, 2012 at 4:30 p.m. ET (1:30 p.m. PT) to discuss these financial results. PNI Digital Media's Chief Executive Officer Kyle Hall and Chief Financial Officer Simon Bodymore will host the presentation, followed by a question and answer period.

Dial-In Number: (888) 241-0394
International: (647) 427-3413
Conference ID#: 96508585

Institutional investors and interested participants should dial the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization

PNI Digital Media will also provide a live webcast and slide presentation, which will be available on the company's website at www.pnimedia.com/webcast. An archived replay of the webcast will be available on the company's website for 45 days following the live event.

Consolidated Statements of Income and Comprehensive Income

Three Months Ended Nine Months Ended
June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
Revenue $ 5,684,509 $ 5,316,242 $ 17,640,111 $ 18,081,310
Cost of sales 2,357,555 2,195,707 7,219,803 7,079,740
Gross Profit 3,326,954 3,120,535 10,420,308 11,001,570
Expenses
Software development 2,444,446 2,200,333 6,880,736 6,916,791
General and administration 938,997 1,007,813 3,005,713 3,200,433
Sales and marketing 262,854 207,375 689,729 805,457
3,646,297 3,415,521 10,576,178 10,922,681
(Loss) profit from operations (319,343) (294,986) (155,870) 78,889
Foreign exchange (loss) gain (7,673) (42,184) (57,111) (34,274)
Finance income 1,847 446 2,775 494
Finance costs - (464) - (6,015)
(5,826) (42,202) (54,336) (39,795)
(Loss) profit before income tax (325,169) (337,188) (210,206) 39,094
Current income tax recovery (expense) - - - -
Deferred income tax recovery (expense) 241,905 359,428 806,454 80,079
Income tax recovery (expense) 241,905 359,428 806,454 80,079
(Loss) profit for the period (83,264) 22,240 596,248 119,173
Other comprehensive gain (loss):
Cumulative translation adjustment 53,341 24,492 (89,107) (369,203)
Total comprehensive (loss) income for the period $ (29,923) $ 46,732 $ 507,141 $ (250,030)
(Loss) earnings per share
Basic $ (0.00) $ 0.00 $ 0.02 $ 0.00
Fully diluted $ (0.00) $ 0.00 $ 0.02 $ 0.00

Consolidated Statements of Financial Position

June 30, 2012 September 30, 2011 October 1, 2010
Assets
Current assets
Cash and cash equivalents $ 5,636,031 $ 3,936,176 $ 4.690,355
Accounts receivable 4,349,986 4,535,912 5,302,865
Prepaid expenses and other current assets 609,876 460,140 541,026
10,595,893 8,932,228 10,534,246
Property and equipment 4,534,220 5,140,150 5,230,829
Deferred income tax asset 7,856,622 7,065,857 5,861,504
Intangible assets 700,708 680,437 1,115,794
Goodwill 649,470 654,222 658,904
$ 24,336,913 $ 22,472,894 $ 23,401,277
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 3,981,475 $ 3,284,311 $ 5,471,878
Current portion of deferred revenue 347,359 250,323 613,081
Current portion of finance lease obligations - - 107,964
4,328,834 3,534,634 6,192,923
Deferred revenue 453,428 33,898 78,876
4,782,262 3,568,532 6,271,799
Shareholders' Equity
Share capital $ 66,817,352 $ 66,420,572 $ 66,307,826
Contributed surplus 19,268,788 19,522,420 18,933,619
86,086,140 85,942,992 85,241,445
Deficit (66,416,119) (67,012,367) (68,111,967)
Accumulated other comprehensive loss (115,370) (26,263) -
(66,531,489) (67,038,630) (68,111,967)
19,554,651 18,904,362 17,129,478
$ 24,336,913 $ 22,472,894 $ 23,401,277

Non-IFRS Financial Measures

Three Months Ended
June 30, 2012 June 30, 2011
Net loss in accordance with IFRS $ (83,264) $ 22,240
Amortization of property and equipment 430,712 541,290
Amortization of intangible assets 183,830 209,258
Interest expense - 464
Income taxes (241,905) (359,428)
Stock based compensation expense (1,322) 153,656
Unrealized foreign exchange loss 40,542 40,749
Adjusted EBITDA $ 328,593 $ 608,229
Nine Months Ended
June 30, 2012 June 30, 2011
Net profit in accordance with IFRS $ 596,248 $ 119,173
Amortization of property and equipment 1,253,165 1,538,348
Amortization of intangible assets 717,628 594,432
Interest expense - 6,015
Income taxes (806,454) (80,079)
Stock based compensation expense 143,439 700,577
Unrealized foreign exchange loss (gain) 75,529 (50,159)
Adjusted EBITDA $ 1,979,555 $ 2,828,307

Notes:

1 - Non-IFRS Measures

The Company continues to provide all information required in accordance with IFRS, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only IFRS financial measures. Accordingly, the Company uses non-IFRS financial information to evaluate its ongoing operations and for internal planning and forecasting purposes. The primary non-IFRS financial measures utilized by the Company include adjusted EBITDA. Adjusted EBITDA is non-IFRS financial measure which the Company defines as net profit plus amortization, interest expense, tax expense, share-based compensation expense and unrealized foreign exchange loss (gain).

To supplement the Company's financial statements presented on an IFRS basis, we believe that these non-IFRS measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future. These adjustments to the Company's IFRS results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance. Management uses these non-IFRS measures to evaluate the Company's financial results, develop budgets, manage expenditures, and determine employee compensation. The presentation of additional information is not meant to be considered in isolation or as a substitute for or superior to net (loss) earnings or net (loss) earnings per share determined in accordance with IFRS.

Currency:

All amounts are expressed in Canadian dollars. This notice is qualified in its entirety by reference to the Company's financial statements and accompanying Management Discussion and Analysis, which are accessible on the SEC'S website at www.sec.gov/edgar.shtml and on SEDAR at www.sedar.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 online, in-store kiosks, desktop software or mobile phones, with retailers that have on-demand manufacturing capabilities for the production of personalized products such as photos, photo books and calendars, business cards and stationery. PNI Digital Media successfully generates millions of transactions each year for retailers and their thousands of locations worldwide. Further information on our company can be found at www.pnimedia.com.

The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties. PNI Digital Media's actual results could differ materially from 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. The information contained herein is subject to change without notice. PNI Digital Media shall not be liable for technical or editorial errors or omissions contained herein.

PNI Digital Media relies upon litigation protection for "forward-looking" statements.

PNI Digital Media is a registered trademark of PNI Digital Media Inc.

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

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