PNI Digital Media (TSX VENTURE: PN)(OTCBB: PNDMF) ("PNI" or the
"Company"), the leading innovator in digital media solutions for
retailers, announced financial results for Fiscal 2010 year-end and
fourth quarter financial results. Revenue for the year was $25.4
million, representing an increase of 4% over the same period last
year on a reported basis. If foreign currency exchange rates had
remained constant, revenue for the year would have been
approximately $27.9 million, an increase of 14% over the same
period last year.
Fiscal 2010 Full Year Financial and Operational Highlights:
-- GAAP net income before income taxes of $2.0 million, compared to a GAAP
loss before income taxes of $1.6 million in Fiscal 2009
-- Revenue of $25.4 million, compared to $24.4 million in Fiscal 2009
-- Non-GAAP adjusted EBITDA(1) of $7.4 million, an increase of 20% compared
to Fiscal 2009
-- Transactional revenue of $19.3 million, an increase of 6% compared to
Fiscal 2009
-- Overall expenses fell 11% to $23.4 million for the year
-- Cash expenses fell 3% for the year to $17.8 million
-- Record adjusted EBITDA margin of 29% for the year
-- Transacted a record 17.1 million orders over the PNI Digital Media
Platform, a 17% increase compared to Fiscal 2009
-- Extended the PNI Digital Media Platform to enable retailers to connect
with their consumers on iPhone® and Google Android-powered® mobile
phones
-- Launched the PNI Express Pick Up Service, enabling consumers to create
and order a photo book, photo calendar or personalized greeting card
online for pick up in store in about an hour
-- The Company won multiple awards for performance and innovation,
including the annual PROFIT 100 ranking in Canada and the Deloitte Fast
500 ranking of North American technology companies
"Our goal for this year was to deliver on profitability and we
did with $2.0 million in income from operations," said Kyle Hall,
Chief Executive Officer of PNI Digital Media. "Our ability to
generate cash and now profits has been proven, even as we continue
to invest in software development for our future. Our strategy to
leverage the PNI Digital Media Platform is succeeding as showcased
by our record EBITDA this year. We are now heavily focused on
growing our top line revenue through the invigoration of our
current customers' and by broadening our offering into new
categories."
Fiscal 2010 Fourth Quarter Financial and Operational
Highlights:
-- GAAP net income before income taxes of $0.9 million
-- Revenue for the quarter of $6.7 million vs. $6.8 million in Fiscal 2009
-- Non-GAAP adjusted EBITDA of $2.1 million, vs. $2.1 million in Fiscal
2009
-- Overall expenses of $5.4 million, a decrease of 18% compared to the same
period last year
-- Cash expenses of $4.5 million, a decrease of 6% compared to the same
period last year
-- Orders transacted via the PNI Digital Media Platform increased 14% to
4.0 million for the quarter
Conference Call
The Company will host a conference call on Tuesday, December
14th at 4:30pm ET (1:30pm PT) to discuss the Company's Fiscal 2010
year-end and fourth quarter financial results. To join the call,
please dial (888) 300-8196 (US/Canada) or (647) 427-3426
(International) and quote conference ID no. 23392363. Please call
10 minutes prior to the scheduled start time. PNI Digital Media
will also provide a live webcast and slide presentation, available
on the Company's website at http://www.pnimedia.com/webcast. The
presentation will be available for download for dial-in
callers.
Consolidated Balance Sheets
September 30, September 30,
2010 2009
---------------- ----------------
Assets
Current assets
Cash and cash equivalents $ 4,690,355 $ 4,237,284
Accounts receivable 5,302,865 4,855,114
Prepaid expenses and other
current assets 541,026 312,687
Current portion of future income
tax asset 1,026,651 -
---------------- ----------------
11,560,897 9,405,085
Property and equipment 5,230,829 6,174,920
Future income tax asset 4,953,934 -
Intangible assets 1,115,794 3,892,211
Goodwill 658,904 1,664,759
---------------- ----------------
$ 23,520,358 $ 21,136,975
---------------- ----------------
---------------- ----------------
Liabilities
Current liabilities
Accounts payable and accrued
liabilities $ 5,471,878 $ 7,785,812
Purchase consideration payable - 869,803
Current portion of deferred revenue 613,081 410,088
Current portion of capital lease
obligation 107,964 490,072
Loan payable - 937,548
Asset retirement obligation - 41,503
Future income tax liability 119,081 -
---------------- ----------------
6,312,004 10,534,826
Deferred revenue 78,876 195,059
Long-term portion of capital lease
obligations - 38,500
Restructuring liability - 176,056
---------------- ----------------
6,390,880 10,944,441
---------------- ----------------
Shareholders' Equity
Share capital $ 66,200,215 $ 66,017,456
Contributed surplus 18,933,619 18,521,086
---------------- ----------------
85,133,834 84,538,542
---------------- ----------------
Deficit (65,684,820) (72,536,814)
Accumulated other comprehensive loss (2,319,536) (1,809,194)
---------------- ----------------
(68,004,356) (74,346,008)
---------------- ----------------
17,129,478 10,192,534
---------------- ----------------
$ 23,520,358 $ 21,136,975
---------------- ----------------
---------------- ----------------
Consolidated Statements of Earnings (Loss) and Comprehensive Gain (Loss)
2010 2009 2008
--------------- --------------- ---------------
Revenue $ 25,356,570 $ 24,446,569 $ 17,049,587
Expenses
Network delivery 5,376,920 6,672,583 7,409,525
Software development 8,162,595 7,566,227 6,914,291
General and
administration 4,021,971 4,893,640 4,480,258
Sales and marketing 896,791 1,202,699 1,140,028
Amortization of
intangible assets 2,550,452 3,243,359 3,214,908
Amortization of
property and equipment 2,368,539 2,770,357 2,044,145
--------------- --------------- ---------------
23,377,268 26,348,865 25,203,155
Earnings (loss) from
operations before the
undernoted 1,979,302 (1,902,296) (8,153,568)
Realized foreign
exchange (loss) gain (119,561) 115,526 53,818
Unrealized foreign
exchange gain 304,331 435,467 407,223
Interest income 642 8,759 134,848
Interest expense -
capital lease (75,850) (120,696) (109,383)
Interest expense - other (1,839) (99,255) (13,809)
(Loss) on disposal of
property and equipment (40,085) (56,171) (35,698)
(Loss) gain on
settlement of asset
retirement obligation (4,810) - 86,120
Goodwill impairment - - (1,086,577)
--------------- --------------- ---------------
62,828 283,630 (563,458)
--------------- --------------- ---------------
Earnings (loss) before
income taxes 2,042,130 (1,618,666) (8,717,026)
Current income tax
(expense) (11,892) - -
Future income tax
(expense) benefit 4,821,756 (151,000) -
--------------- --------------- ---------------
Net earnings (loss) 6,851,994 (1,769,666) (8,717,026)
Other comprehensive
loss:
Unrealized foreign
exchange loss on
translation of self-
sustaining foreign
operations (510,342) (652,661) (346,964)
--------------- --------------- ---------------
Comprehensive gain
(loss) $ 6,341,652 $ (2,422,327) $ (9,063,990)
--------------- --------------- ---------------
--------------- --------------- ---------------
Earnings (loss) per
share
Basic $ 0.20 $ (0.05) $ (0.26)
Fully diluted $ 0.20 $ (0.05) $ (0.26)
Non-GAAP Financial Measures
Three Months Ended
September 30, September 30,
2010 2009
---------------- ----------------
Net profit (loss) in accordance
with GAAP $ 5,808,317 $ 642,806
Amortization 823,120 1,473,805
Interest expense 11,036 52,799
Income taxes (4,911,022) 151,000
Stock based compensation expense 154,692 449,691
Unrealized foreign exchange (gain) 192,232 (632,708)
---------------- ----------------
Adjusted EBITDA $ 2,078,375 $ 2,137,393
---------------- ----------------
---------------- ----------------
Adjusted EBITDA per share - Basic $ 0.06 $ 0.06
Adjusted EBITDA per share - Fully
Diluted $ 0.06 $ 0.06
Weighted average shares outstanding -
Basic 33,857,236 33,707,682
Weighted average shares outstanding -
Fully Diluted 33,900,653 33,812,179
Twelve Months Ended
September 30, September 30,
2010 2009
---------------- ----------------
Net profit (loss) in accordance
with GAAP $ 6,851,994 $ (1,769,666)
Amortization 4,918,991 6,013,716
Interest expense 77,689 219,951
Income taxes (4,809,864) 151,000
Stock based compensation expense 690,020 2,016,015
Unrealized foreign exchange (gain) (304,331) (435,467)
---------------- ----------------
Adjusted EBITDA $ 7,424,499 $ 6,195,549
---------------- ----------------
---------------- ----------------
Adjusted EBITDA per share - Basic $ 0.22 $ 0.18
Adjusted EBITDA per share - Fully
Diluted $ 0.22 $ 0.18
Weighted average shares outstanding -
Basic 33,804,338 33,610,843
Weighted average shares outstanding -
Fully Diluted 33,908,352 33,710,038
Notes:
1 - Non-GAAP Measures
The Company continues to provide all information required in
accordance with GAAP, but believes evaluating its ongoing operating
results may not be as useful if an investor is limited to reviewing
only GAAP financial measures. Accordingly, the Company uses
non-GAAP financial information to evaluate its ongoing operations
and for internal planning and forecasting purposes. The primary
non-GAAP financial measures utilized by the Company include
adjusted EBITDA and adjusted EBITDA per share. Adjusted EBITDA is
defined as earnings (loss) before interest expense, taxes,
depreciation, amortization, unrealized foreign currency gains and
losses and stock-based compensation.
To supplement the Company's financial statements presented on a
GAAP basis, we believe that these non-GAAP 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 GAAP 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-GAAP 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
GAAP.
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.
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.
Google and Android are registered trademarks of Google Inc.
iPhone is a registered trademark of Apple Inc.
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.
Contacts: PNI Digital Media Inc. - Financial Information Simon
Bodymore CFO (604) 893-8955 ext.229 PNI Digital Media Inc. -
Investor Relations and Press Simon Cairns (866) 544-4881
ir@pnimedia.com www.PNIMEDIA.com
Pni Digital Media Inc. (TSXV:PN)
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