ACD Systems Announces Third Quarter 2002; Strong Growth Both for ACD Systems and the Digital Imaging Industry.

Business Editors

VICTORIA, British Columbia--(BUSINESS WIRE)--Feb. 19, 2002

ACD Systems International Inc. (TSE: ASA), the digital imaging company, today reported results for the third quarter of fiscal 2002.

Third Quarter Results:   (three months ended December 31, 2001
---------------------     compared with three months ended
                          December 31, 2000)

- Revenues were $4.8 million compared with $2.6 million
- EBITDA(a) were $533,590 compared with a loss of $676,877
- Net loss was $139,404 compared with $414,547
- Loss per share was $0.00 compared with $0.02

Year to Date Results:    (nine months ended December 31, 2001
--------------------      compared with nine months ended
                          December 31, 2000)

- Revenues were $11.2 million compared with $7.1 million
- EBITDA(a) were $132,406 compared with a loss of $949,796
- Net loss was $725,825 compared with $543,775
- Loss per share was $0.03 compared with $0.03

---------------
(a)Earnings before interest, taxes, depreciation, amortization

Doug Vandekerkhove, Chair and CEO, said, "The third quarter continued to show strong growth for both ACD Systems and the industry as a whole. This period was marked by a number of key achievements including industry awards, new products, important contracts, solutions for new target markets and strengthening of Company management".

Strong download levels and increased revenue continued during the third quarter, following the September 25th launch of the Company's flagship product ACDSee 4.0(TM). The growth in downloads, expected to result in strongly enhanced revenues for the future, are seen as highly positive despite the associated increase in bandwidth requirements which have led to significantly higher computer services fees. The Company anticipates that service bureau fees will be reduced substantially as early as the fourth quarter, as a result of modified contract terms with ACD's service providers. Additionally, ACD Systems implemented further cost reductions (including reduced selling expenses and general and administrative costs) in late November, the benefits of which will also be apparent in the fourth quarter. Cost rationalization and minimization will continue to be a priority for ACD's management.

During and subsequent to the quarter, ACD Systems received five prestigious industry awards, four for ACDSee 4.0 and one for RoboEnhancer(TM). The first four awards are for ACDSee 4.0 and include the Editors' Choice award from PCPhoto Magazine, the leading guide to digital photography; the Editors' Choice award from PC Magazine; it was named Best Product: Software Applications at VARVision Fall 2001, as voted on by more than 130 value added resellers (VARs); Photo Electronic Imaging (PEI), a monthly magazine considered to be one of the world's leading publications for digital photography and imaging, named ACDSee 4.0 the Best Imaging Product; and RoboEnhancer, the Company's batch processing tool won the award for Best Image Processing Add-On also from PEI.

During this period, ACD Systems announced the release of a number of new and ancillary products. Shortly following the September 25, 2001 launch of ACDSee 4.0, the Company introduced ACDSee 4.0 PowerPack(TM), which combines ACDSee with FotoCanvas(TM) and FotoAngelo(TM) to provide a complete imaging solution. Other new products from ACD Systems include ACDSee Mobile for Windows(R) CE to support the Microsoft Windows-Powered Pocket PC 2002 Software platform; ACDZip(TM), the zip tool for digital images that provides users with the ability to compress, preview and share digital images, audio, video and document files; and 2D Vector Pak, a set of plug-ins that seamlessly integrate with ACDSee to enable users to quickly view, browse and manage DWF, HPGL and CGM vector graphics.

During the quarter ACD Systems also announced another Original Equipment Manufacturer (OEM) agreement. ACDSee will be bundled with select models of HP Photosmart digital cameras and printers. In January, 2002, ACD Systems signed a contract with the British Columbia Ministry of Education to provide ACD's digital imaging software to over 1700 schools. B.C. students will learn, using ACDSee, to manage, print and share digital images as well as create multimedia presentations and Web sites. Also in January, ACD Systems signed a one-year distribution agreement with MicroBasic GmbH, of Germany. MicroBasic has well-established markets in Germany, Austria & Switzerland and will focus on the commercialization and distribution of ACDSee 4.0 through retail, reseller and direct sales channels.

Subsequent to the end of the quarter, ACD Systems announced a new solution addressing the significant opportunities in the photofinishing market created by the transition from film-based photography to digital photography. ACD Systems' new end-to-end software solution enables retail and wholesale photofinishers to gain easy entry and increased market share in this rapidly growing digital market by enabling their customers to order prints securely from their desktops, and for photofinishers to receive and manage those print orders in their labs. Following the release of this solution, ACD announced two new contracts in this expanded market area. The first agreement, with Ofoto, Inc., a wholly-owned subsidiary of Eastman Kodak Company (NYSE: EK), will allow ACDSee users access to Ofoto's online photo printing services from within ACDSee. The second agreement, with Future Shop Ltd., a wholly owned subsidiary of Best Buy Co. Inc. (NYSE: BBY), will bundle a customized "Future Photo" version of ACDSee allowing users to access Future Photo print ordering services from within ACDSee.

Also during the quarter the Company announced management changes which will provide ACD Systems with the strategic focus to take the Company to the next level. Doug Vandekerkhove has been appointed Chairman of the Board and maintains his position as Chief Executive Officer; Mike Zelen has been appointed President of ACD Systems and continues in his role as Chief Financial Officer; Lee Richardson, has retired as Chairman of the Board although will remain a director and John Fliczuk has resigned from the Board of Directors and Office.

The outlook for the remainder of the year is for continued strong growth. In addition, plans are well advanced to launch a vigorous program within the next few months to convert the huge base of shareware users to paying customers. It is anticipated this program will result in positive results in the first half of Fiscal 2003.

It now appears that non-recurring charges will offset a portion of anticipated profits for the fourth quarter. The digital imaging market has and continues to be in a state of rapid change. The Company had invested in excess infrastructure and long-term research activities as a means to keep its strategic options open as the digital image market underwent rapid change during the past year. Armed with key market information from the successful launch of ACDSee 4.0, management intends to eliminate non-strategic infrastructure and research investments. Accordingly, the Company's scope of activities will be reduced prior to the end of the fiscal year. One-time costs associated with curtailment of such activities will likely result in the Company not reporting a net profit for the fiscal year. However, the reduced cost structure and more aggressive user monetization program are expected to positively impact fiscal 2003.

ACD Systems will be holding a conference call on Wednesday, February 20th, 2002 at 10:00 a.m. Eastern. To participate in the conference call please call Ellen Leesti or Christina Osler at Hume, Kieran, 416-868-1079 or email [e-mail].

About ACD Systems International Inc.

Headquartered in British Columbia since 1993, ACD Systems International (TSE: ASA) is one of the world's leading developers and marketers of digital imaging software. The company has a history of rapid revenue growth and consistent profitability. ACD has penetrated the global marketplace through advanced Internet distribution and strategic partnerships with manufacturers and developers. ACD has millions of consumer users and over 33,000 corporate customers including many Fortune 500 companies. For further details, please visit us at our corporate web site: www.ACDSYSTEMS.com

THIS NEWS RELEASE MAY CONTAIN FORWARD-LOOKING STATEMENTS BASED ON THE ESTIMATES AND OPINIONS OF MANAGEMENT AT THE DATE THE STATEMENTS WERE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS IF CONDITIONS OR OPINIONS SHOULD CHANGE.