Media Releases

Victoria, British Columbia – February 9, 2007 – ACD Systems International Inc. (TSX: ASA), makers of ACDSee® photo management software and Canvas™ technical illustration software, today reported its Q3 2007 results. The financial figures in this release are reported in Canadian dollars in accordance with Canadian generally accepted accounting principles.

Summary of Financial Results (unaudited)
(millions of Canadian dollars except per share data)

“The poor results reflected in the nine month period ended December 31, 2006 resulted in the Company undertaking a review its operational efficiency” says George Mitchell, director and chief financial officer of ACD Systems. “Accordingly, on January 30, 2007, the Company approved and carried out a down-sizing of its operations resulting in a 35% reduction in headcount.”

Financial Highlights

Sales for the quarter ended December 31, 2006 were $3.6 million compared to $4.9 million in same quarter in the prior year. Year-to-date sales were $10.4 million compared to $13.4 million in the nine-month period ended December 31, 2005.

Digital imaging software sales during the third quarter, ended December 31, 2006 were $3.0 million versus $3.6 million in the same quarter of the prior year. In the nine month period ended December 31, 2006 digital imaging sales were $8.7 million, a decrease from $9.9 million in the same period in the prior year. This decline was primarily due to increased competition in the distribution of free and name-brand digital image management and editing applications and lower than normal site traffic and conversion. The Company’s digital imaging software segment derives the majority of its revenues in U.S. dollars and Euros. Both the U.S. dollar and the Euro have weakened compared to the prior year, which resulted in a $0.4 million decrease in sales for the nine months ended December 31, 2006 compared to the prior year’s nine month period. The Euro strengthened compared to the prior year third quarter in excess of the weakening US dollar resulting in an increase of $0.06 million in sales for the quarter ended December 31, 2006.

Technical drawing software sales decreased from $1.2 million in the quarter ended December 31, 2005 to $0.7 million for the three months ended December 31, 2006. In the nine month period ended December 31, 2006, technical drawing software sales decreased from $3.5 million in the prior year period to $1.7 million in the current nine month period. These decreases were the result of Canvas™ X being released in the first quarter of the prior year on a two year development cycle. The decrease was exacerbated by uncertainty regarding the release timing of the next version of Canvas. The Company derives the majority of its technical illustration software revenue in U.S. dollars. The weakening U.S. dollar year over year to date resulted in a $0.1 million reduction in revenue. The US dollar was stable quarter over quarter, however, resulting in a nil impact on revenues compared to the prior year third quarter.

Restructuring costs of $0.3 million in the current year to date consisted of wages, severance and associated costs related to the restructuring of operations carried out during the first nine months of fiscal 2007.

Operating expenses, excluding amortization, foreign currency gains and losses, restructuring costs, intangible asset impairment charges and investment tax credit allowances charged to R&D, were $4.2 million for the three months ended December 31, 2006 compared to $4.9 million for the same quarter in the prior year and for the nine months ended December 31, 2006 were $12.3 million compared to $14.5 million for the same nine month period in the prior year. The decrease in operating expenses is primarily due to lower sales, marketing and customer service expenses, an outcome of the restructure which took place early in the second quarter of the current year.

Operating loss excluding non-recurring expenditures for the current nine months was $4.4 million versus a $5.3 million loss in the first nine months of the prior year. The non-recurring expenditures in the current nine months consisted of $2.8 million in intangible asset impairment losses, $0.33 million in restructuring costs, $0.34 million in investment tax credit write downs and $0.2 million in severance. There were no such expenditures in the first nine months of the prior year.

Net loss for the current quarter was $1.0 million compared to a net loss of $1.3 million in the third quarter of the previous fiscal year. Net loss for the nine months ended December 31, 2006 was $8.0 million compared to a net loss of $4.0 million for the nine months ended December 31, 2005. Excluding the intangible asset impairment loss, restructuring and severance costs and the net effect of the write down of future income taxes and investment tax credits, the net loss for the current nine month period was $4.3 million.

Total assets at December 31, 2006 were $12.8 million, a decrease of $12.1 million, compared to $24.9 million at March 31, 2006. The Company’s cash position was $9.2 million at December 31, 2006 compared to $12.7 million at March 31, 2006. Working capital at December 31, 2006 decreased by $4.0 million from March 31, 2006 due to reduced cash, accounts receivable, and future income tax assets.

ACD Systems will conduct a teleconference on February 13, 2007 at 10:30 a.m. Eastern Standard Time. To participate in the conference call, please use the phone numbers listed below.

Members of the news media, investors and the general public are invited to access a live broadcast of the conference call via the Investor Relations page of ACD Systems Web site at:

http://www.acdcorporate.com/english/Investors/financial.htm

The event will be archived and available for replay through 2/13/2008.

Further details with respect to ACD Systems’ year-end results, including the complete financial statements, will be available for download at http://www.sedar.com/.

About ACD Systems
Headquartered in British Columbia since 1993, ACD Systems International Inc. (TSX: ASA) is one of the world's leading developers and marketers of digital imaging software, including the renowned ACDSee image management tool and Canvas, an advanced cross-platform technical illustration and graphics program. ACD has delivered value to a global marketplace through Internet distribution and through partnerships with manufacturers and developers. ACD has millions of consumer and business users and over 33,000 corporate customers including many Fortune 500 companies. For further details, please visit us at our corporate web site: http://www.acdsystems.com/.
ACD, ACD Systems and ACDSee are trademarks or registered trademarks of ACD Systems Ltd. in Canada, the United States, or certain other jurisdictions. Trademarks of ACD Systems Ltd. are used under license by ACD Systems of America, Inc. Canvas is a trademark or registered trademark of ACD Systems of America, Inc. in Canada, the United States, or certain other jurisdictions. Trademarks of ACD Systems of America, Inc. are used under license by ACD Systems Ltd.

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