PNI Digital Media Reports Fiscal 2012 Full Year and Fourth

PNI Digital Media Reports Fiscal 2012 Full Year and Fourth Quarter
Financial Results 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/07/13 -- PNI
Digital Media (TSX:PN)(OTCBB:PNDMF) ("PNI" or the "Company"), the
leading innovator in digital media solutions for retailers, reported
financial results for the fiscal 2012 full year and fourth quarter
ended September 30th, 2012 and discussed key operational development
for the year. 
"This past year we evolved the Company to position ourselves for the
future markets we believe are integral to the growth of PNI," said
Kyle Hall, Chief Executive Officer of PNI Digital Media. "As we saw
in the past, once the investments were made we turned our focus to
rolling out customers and improving operational efficiencies. We have
a proven track record in these aspects of the business and will
utilize these strengths to further the ambitions of the Company.
Furthermore, we plan to continue to invest in driving strong organic
growth with our retail partners, who in aggregate transacted $236.2
million in online sales over our platform this year." 
Fiscal 2012 Operational Highlights 

--  Announced a new multi-year agreement with Tesco PLC.  
--  Announced a new agreement and launched a new photo website with Rite Aid
--  Launched a new series of mobile apps with Tesco, Costco, Sam's Club and
--  Announced second generation of PNI Connected Kiosk(TM) software. 
--  Launched a new business printing website with Costco Wholesale Canada
--  Launched a new social stationery website with Walgreen Co. 
--  The Company graduated from the TSX Venture Exchange to the Toronto Stock
--  Processed $236.3 million in online transactions over our platform on
    behalf of our retail partners, an improvement of 4.9% from the same
    period last year. 
--  Processed a record 19.1 million transactions over the PNI Digital Media
    Platform, an improvement of 4% from the same period last year.

Fiscal 2012 Full Year Financial Highlights 

--  Revenue for the year of $22.7 million compared to $23.7 million in
    fiscal 2011. The majority of change in year on year revenue was due to a
    $0.7 million decrease in one-time software installation fees from the
    previous year. 
--  Transactional revenue was $17.7million, compared to $18.1M for the same
    period last year. 
--  Transactional revenue comprised 78% of total revenue for the year. 
--  Generated a loss after income taxes of $4.1 million for the year,
    compared to a profit of $1.1 million in fiscal 2011. $1.8 million of the
    loss resulted from the Company recording income tax expense, compared to
    the recognition of an income tax recovery of $1.3 million during fiscal
--  Also contributing to the current period loss was non-cash impairment
    charges of $77,000 and $540,000 recorded in relation to our goodwill and
    intangible assets. These non-cash charges relate primarily to
    underperforming revenues associated with previously capitalized costs
    for our social stationery product offering, as well as changes in
    estimates in relation to the recoverability of goodwill. 
--  Generated non-IFRS adjusted EBITDA1 of $1.5 million, compared to $3.6
    million in fiscal 2011. 
--  The Company ended the year with $4.6 million in cash and cash
    equivalents and no debt.

Fiscal 2012 Fourth Quarter Financial and Operational Highlights: 

--  Revenue for the quarter of $5.1 million, compared to revenue of $5.6
    million in the same quarter last year. 
--  Transactional revenue for the quarter of $3.9 million, compared to
    transactional revenue of $4.3 million in the fourth quarter last year. 
--  Transactional revenue comprised 77% of total revenue for the quarter. 
--  Generated a non-IFRS adjusted EBITDA loss of $515,000 compared to
    adjusted EBITDA of $793,000 in the same quarter last year.

Conference Call 
The company will host a conference call on January 7th, 2013 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 Cameron Lawrence will host the presentation, followed by a
question and answer period. 

Dial-In Number:     (888) 241-0394      
International:      (647) 427-3413      
Conference ID#:     85534992            

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 An archived replay of the webcast will be
available on the company's website for 45 days following the live

Consolidated Statements of Operations and Comprehensive Income (Loss)       
                                                September 30,  September 30,
                                                         2012           2011
Revenue                                          $ 22,712,805   $ 23,686,351
Cost of sales                                      10,458,022      9,399,107
Gross Profit                                       12,254,783     14,287,244
 Software development                               9,678,638      9,439,423
 General and administration                         3,768,203      3,928,210
 Sales and marketing                                1,038,374        988,289
                                                   14,485,215     14,355,922
Loss from operations                              (2,230,432)       (68,678)
Foreign exchange loss                                (82,647)      (125,148)
Finance income                                          4,647              -
Finance costs                                               -        (5,599)
                                                     (78,000)      (130,747)
Loss before income tax                            (2,308,432)      (199,425)
Deferred income tax (expense) recovery            (1,814,221)      1,299
Income tax recovery (expense)                     (1,814,221)      1,299,025
(Loss) profit for the period                      (4,122,653)      1,099,600
Other comprehensive gain (loss):                                            
 Exchange difference on translation of foreign                              
  operations                                        (170,956)       (26,263)
Total comprehensive (loss) income for the                                   
 period                                         $ (4,293,609)    $ 1,073,337
Loss per share                                                              
Basic                                                $ (0.12)         $ 0.03
Fully diluted                                        $ (0.12)         $ 0.03
Weighted Average Number of Shares Outstanding                               
 - Basic                                           34,178,165     33,927,659
Weighted Average Number of Shares Outstanding                               
 - Diluted                                         34,199,622     33,985,271
Consolidated Balance Sheets                                                 
                                 September 30,  September 30,     October 1,
                                          2012           2011           2010
Current assets                                                              
 Cash and cash equivalents         $ 4,611,824    $ 3,936,176    $ 4,690,355
 Accounts receivable                 4,253,541      4,535,912      5,302,865
 Prepaid expenses and other                                                 
  current assets                       622,970        460,140        541,026
                                     9,488,335      8,932,228     10,534,246
Property and equipment               4,683,355      5,140,150      5,230,829
Deferred income tax asset            5,222,603      7,065,857      5,861,504
Intangible assets                        2,124        680,437      1,115,794
Goodwill                               568,479        654,222        658,904
                                  $ 19,964,896   $ 22,472,894   $ 23,401,277
Current liabilities                                                         
 Accounts payable and accrued                                               
  liabilities                      $ 4,390,437    $ 3,284,311    $ 5,471,878
 Current portion of deferred                                                
  revenue                              318,107        250,323        613,081
 Current portion of finance                                                 
  lease obligations                          -              -        107,964
                                     4,708,544      3,534,634      6,192,923
Deferred revenue                       437,140         33,898         78,876
                                     5,145,684      3,568,532      6,271,799
Shareholders' Equity                                                        
Share capital                     $ 66,817,352   $ 66,420,572   $ 66,307,826
Contributed surplus                 19,334,098     19,522,420     18,933,619
                                    86,151,450     85,942,992     85,241,445
Deficit                           (71,135,021)   (67,012,367)   (68,111,967)
Accumulated other comprehensive                                             
 loss                                (197,217)       (26,263)              -
                                  (71,332,238)   (67,038,630)   (68,111,967)
                                    14,819,212     18,904,362     17,129,478
                                  $ 19,964,896   $ 22,472,894   $ 23,401,277
Non-IFRS Financial Measures                                                 
                                                        Year Ended          
                                                September 30,  September 30,
                                                         2012           2011
Net loss in accordance with IFRS                $ (4,122,653)    $ 1,099,600
Amortization of property and equipment              1,808,725      2,036,953
Amortization of intangible assets                   1,091,024        858,354
Impairment of intangible assets                       540,735              -
Impairment of goodwill                                 77,382              -
Interest expense                                            -          5,553
Income taxes                                        1,814,221    (1,299,025)
Stock based compensation expense                      208,749        848,243
Unrealized foreign exchange loss                       46,601         71,930
Adjusted EBITDA                                   $ 1,464,784    $ 3,621,608

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, impairment, 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. 
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 and on
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  
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 and on the SEC'S website at
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. 
PNI Digital Media and Connected Kiosk are registered trademarks of
PNI Digital Media Inc. All other trademarks are property of their
respective owners. 
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 Inc. - Investor Relations and Press
Simon Cairns
(866) 544-4881
Twitter: @pni_media
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