NZX MediaAnnoucnementFeb07 by Ea18e2


									NZX Statement                                                                26 February 2007

    Solution Dynamics Reports Satisfactory Turnaround Progress in first Half

                       Highlights for Six Months to December 31 2006
     Net Profit after Tax before Amortisation $116,000 versus half year loss in corresponding
     EBITDA up 8% to $479,000
     Group revenue down 8% to $4.98 million as low margin print sales decrease and focus
      shifts to higher margin core mailhouse business
     Planned investment of $850,000 in upgrading production platform on track for completion
      in second half
     New executive leadership and dedicated sales, marketing and business development
      team in place
     Strategic alliances in NZ and Australia extending reach and range of offering.

Customer mail and document management company, Solution Dynamics, has reported
satisfactory progress in rebuilding the business during the first six months, achieving a modest
half year surplus and progressing on schedule with its production platform upgrade and back to
basics service strategy.

“First half results are in line with expectations,” said Chief Executive Nelson Siva in the Half
Yearly Report for the period to December 31 2006.

“It is pleasing to note achievement of a small surplus of $116,000 before amortisation for the
period, attributable to growing existing customer business, improving production efficiencies
and disposal of surplus equipment.
“The back to basics strategy and the focus on core business enabled us to increase mail house
revenues by 12% which contributed towards a 5% growth in gross margin,” he said, adding that
the 8% decrease in total revenues was a result of a drop in sales activity in the low margin print
Solution Dynamics is investing $850,000 to build the most up to date and comprehensive
production platform available with the capability and capacity to service existing and changing
requirements of the mail house market.

“Specific benefits will be delivered by improving data integrity, responsiveness and the
introduction of high volume transactional, mail inserting and promotional colour services that
will be completed in the June quarter,” Mr Siva said.

Progress has also been made in lifting competitive appeal with innovative and efficient product
and service initiatives, including an agreement with PrintSoft, a subsidiary of Australia Post, to
market DeskDirect, a unique and simple to use desk top direct mail product.

Introduced late last year to existing customers, Mr Siva said early contracts have been secured
with a wider market launch scheduled during the June quarter

“We have also formed Trans Tasman alliances with three Australian enterprises to enable
cross-border processing of mail,” he said.

An upgrade to Déjar, Solution Dynamics’ proprietary archival and retrieval product, has been
completed and is being rolled out to existing customers in New Zealand and Europe. Mr Siva
reported that some small new contracts had been secured locally with distribution agreements
in target offshore markets currently being sought.

Full Year Outlook

Mr Siva said the period to June 30 2007 would be one of consolidation and investment to
position the company for long term, sustainable and profitable growth.

“Although we have made satisfactory progress in rebuilding the business during the first six
months, with the new management team working well, much work remains to be completed.

“We expect to deliver a full year result slightly ahead of the previous financial year but with the
business in a sounder position to lift performance in the following year.”

For further information please contact:
Nelson Siva, CEO
P:+64 9 970 7772, M:+ 64 21 415 027, E:

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