Exhibit 99.1
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| News Release | For Immediate Release |
PNI Digital Media Reports Fiscal Second Quarter 2012 Financial Results
VANCOUVER, BC–May 10th, 2012 -PNI Digital Media (TSX: PN; OTCBB: PNDMF), (“PNI”), the leading innovator in digital media solutions for retailers, reported financial results for the second quarter of fiscal 2012 ended March 31st, 2012.
Fiscal Q2 2012 Financial Highlights
Revenue was $5.0 million compared to $5.0 million in the same quarter last year
Transactional revenue was $3.6 million, an increase of 6% compared to Q2 FY11. Transactional revenue comprised 73% of total revenue for the quarter
Generated an IFRS loss before income taxes of $0.9 million for the quarter, an improvement compared to a loss of $1.1 million in the quarter last year
Non-IFRS adjusted EBITDA1loss of $39,000, an improvement compared to a loss of $123,000 in fiscal Q2 2011
Processed 3.8 million transactions over the PNI Digital Media Platform, an improvement of 4% from the same quarter last year
Strong balance sheet with $5.8 million in cash and no debt
Fiscal Q2 2012 Operational Highlights & Recent Events
Launched all-new iPhone app for Tesco Photo, helping to increase transactions for the quarter
Successfully launched Folded Words (www.foldedwords.com), taking orders for stationery and invitations
Successfully launched an all-new update to the award-winning PNI Connected Kiosk™ software for retail photo kiosks
Strengthened the company’s management team with the addition of Zack Wickes as VP Technology
“Our second quarter saw record transactions for our seasonally-weakest quarter,” said Kyle Hall, Chief Executive
Officer of PNI Digital Media. “We saw a solid performance in our core photo business while we continued our push into our new business lines.”
Conference Call
The company will host a conference call Thursday, May 10that 4:30 p.m. ET (1:30 p.m. PT) to discuss these financial results. PNI Digital Media's CEO Kyle Hall, and CFO, Simon Bodymore, will host the presentation, followed by a question and answer period.
Dial-In Number: 1-888-241-0394
International: 1-647-427-3413
Conference ID#: 75283626
Please call 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.
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| News Release | For Immediate Release |
Consolidated Statements of Income and Comprehensive Income
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| | | Three Months Ended | | | Six Months Ended | |
| | | March 31, 2012 | | | March 31, 2011 | | | March 31, 2012 | | | March 31, 2011 | |
| | | | | | | | | | | | |
| Revenue | $ | 5,005,226 | | $ | 5,031,263 | | $ | 11,955,602 | | $ | 12,765,068 | |
| Cost of sales | | 2,270,679 | | | 2,229,508 | | | 4,862,248 | | | 4,884,033 | |
| Gross Profit | | 2,734,547 | | | 2,801,755 | | | 7,093,354 | | | 7,881,035 | |
| | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | |
Software development | | 2,272,113 | | | 2,410,604 | | | 4,436,290 | | | 4,716,458 | |
General and administration | | 973,687 | | | 1,092,311 | | | 2,066,716 | | | 2,192,620 | |
Sales and marketing | | 255,921 | | | 274,237 | | | 426,875 | | | 598,082 | |
| | | | | | | | | | | | |
| | | 3,501,721 | | | 3,777,152 | | | 6,929,881 | | | 7,507,160 | |
| | | | | | | | | | | | |
| (Loss) profit from operations | | (767,174 | ) | | (975,397 | ) | | 163,473 | | | 373,875 | |
| | | | | | | | | | | | |
| Foreign exchange (loss) gain | | (154,724 | ) | | (162,529 | ) | | (49,438 | ) | | 7,910 | |
| Finance income | | 369 | | | - | | | 928 | | | 48 | |
| Finance costs | | - | | | (15 | ) | | - | | | (5,551 | ) |
| | | | | | | | | | | | |
| | | (154,355 | ) | | (162,544 | ) | | (48,510 | ) | | 2,407 | |
| | | | | | | | | | | | |
| (Loss) profit before income tax | | (921,529 | ) | | (1,137,941 | ) | | 114,963 | | | 376,282 | |
| | | | | | | | | | | | |
| Current income tax recovery (expense) | | - | | | - | | | - | | | - | |
| Deferred income tax recovery (expense) | | 560,818 | | | 255,184 | | | 564,549 | | | (279,349 | ) |
| Income tax recovery (expense) | | 560,818 | | | 255,184 | | | 564,549 | | | (279,349 | ) |
| | | | | | | | | | | | |
| (Loss) profit for the period | | (360,711 | ) | | (882,757 | ) | | 679,512 | | | 96,933 | |
| | | | | | | | | | | | |
| Other comprehensive gain (loss): | | | | | | | | | | | | |
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Cumulative translation adjustment | | | | | | | | | | | | |
| | | 144,610 | | | 62,942 | | | (142,448 | ) | | (393,695 | ) |
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| Total comprehensive (loss) income for the period | $ | (216,101 | ) | $ | (819,815 | ) | $ | 537,064 | | $ | (296,762 | ) |
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| (Loss) earnings per share | | | | | | | | | | | | |
| Basic | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.02 | | $ | 0.00 | |
| Fully diluted | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.02 | | $ | 0.00 | |
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| News Release | For Immediate Release |
Consolidated Statements of Financial Position
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| | | March 31, 2012 | | | September 30, 2011 | | | October 1, 2010 | |
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| Assets | | | | | | | | | |
| | | | | | | | | |
| Current assets | | | | | | | | | |
Cash and cash equivalents | $ | 5,794,912 | | $ | 3,936,176 | | $ | 4.690,355 | |
Accounts receivable | | 4,443,280 | | | 4,535,912 | | | 5,302,865 | |
Prepaid expenses and other current assets | | 469,297 | | | 460,140 | | | 541,026 | |
| | | | | | | | | |
| | | 10,707,489 | | | 8,932,228 | | | 10,534,246 | |
| | | | | | | | | |
| Property and equipment | | 4,880,256 | | | 5,140,150 | | | 5,230,829 | |
| Deferred income tax asset | | 7,606,322 | | | 7,065,857 | | | 5,861,504 | |
| Intangible assets | | 1,001,448 | | | 680,437 | | | 1,115,794 | |
| Goodwill | | 647,219 | | | 654,222 | | | 658,904 | |
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| | | | | | | | | |
| | $ | 24,842,734 | | $ | 22,472,894 | | $ | 23,401,277 | |
| | | | | | | | | |
| Liabilities | | | | | | | | | |
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| Current liabilities | | | | | | | | | |
Accounts payable and accrued liabilities | $ | 4,379,176 | | $ | 3,284,311 | | $ | 5,471,878 | |
Current portion of deferred revenue | | 374,991 | | | 250,323 | | | 613,081 | |
Current portion of finance lease obligations | | - | | | - | | | 107,964 | |
| | | | | | | | | |
| | | 4,754,167 | | | 3,534,634 | | | 6,192,923 | |
| | | | | | | | | |
| Deferred revenue | | 502,572 | | | 33,898 | | | 78,876 | |
| | | 5,256,739 | | | 3,568,532 | | | 6,271,799 | |
| Shareholders’ Equity | | | | | | | | | |
| Share capital | $ | 66,817,451 | | $ | 66,420,572 | | $ | 66,307,826 | |
| Contributed surplus | | 19,270,110 | | | 19,522,420 | | | 18,933,619 | |
| | | 86,087,561 | | | 85,942,992 | | | 85,241,445 | |
| | | | | | | | | |
| Deficit | | (66,332,855 | ) | | (67,012,367 | ) | | (68,111,967 | ) |
| | | | | | | | | |
| Accumulated other comprehensive loss | | (168,711 | ) | | (26,263 | ) | | - | |
| | | | | | | | | |
| | | (66,501,566 | ) | | (67,038,630 | ) | | (68,111,967 | ) |
| | | | | | | | | |
| | | 19,585,995 | | | 18,904,362 | | | 17,129,478 | |
| | | | | | | | | |
| | $ | 24,842,734 | | $ | 22,472,894 | | $ | 23,401,277 | |
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| News Release | For Immediate Release |
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| Non-IFRS Financial Measures | | | | | | |
| | | Three Months Ended | |
| | | March 31, 2012 | | | March 31, 2011 | |
| | | | | | |
| Net loss in accordance with IFRS | $ | (360,711 | ) | $ | (882,757 | ) |
| | | | | | |
| Amortization of property and equipment | | 417,678 | | | 501,683 | |
| Amortization of intangible assets | | 268,467 | | | 191,170 | |
| Interest expense | | - | | | 15 | |
| Income taxes | | (560,818 | ) | | (255,184 | ) |
| Stock based compensation expense | | 65,492 | | | 217,287 | |
| Unrealized foreign exchange loss | | 130,659 | | | 104,980 | |
| | | | | | |
| Adjusted EBITDA | $ | (39,233 | ) | $ | (122,806 | ) |
| | | | | | |
| | | Six Months Ended | |
| | | March 31, 2012 | | | March 31, 2011 | |
| | | | | | |
| Net profit in accordance with IFRS | $ | 679,512 | | $ | 96,933 | |
| | | | | | |
| Amortization of property and equipment | | 822,453 | | | 997,058 | |
| Amortization of intangible assets | | 533,798 | | | 385,174 | |
| Interest expense | | - | | | 5,551 | |
| Income taxes | | (564,549 | ) | | 279,349 | |
| Stock based compensation expense | | 144,761 | | | 546,921 | |
| | | | | | |
| Unrealized foreign exchange loss (gain) | | 34,987 | | | (90,908 | ) |
| | | | | | |
| Adjusted EBITDA | $ | 1,650,962 | | $ | 2,220,078 | |
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
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| News Release | For Immediate Release |
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.
For Financial Information, Contact:
Simon Bodymore, CFO
(604) 893-8955 ext.229
For Investor Relations and Press, Contact:
Simon Cairns
(866) 544-4881
ir@pnimedia.com
Twitter: @pni_media
Michael Koehler or Matt Glover
Liolios Group, Inc.
949-574-3860
pni@liolios.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.
The TSX has neither approved nor disapproved the information contained in this release. PNI Digital Media relies upon litigation protection for "forward-looking" statements.
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.
PNI Digital Media is a registered trademark of PNI Digital Media Inc. All other trademarks are property of their respective owners.
