Record Quarterly Revenues Fuelled by Strong Demand for Fiber Optic
Components MONTREAL, May 14 /PRNewswire-FirstCall/ -- Avensys
Corporation (OTC Bulletin Board: AVNY; FRANKFURT WKN: A0M9YA), a
leading manufacturer of high-end fiber optic components and
distributor and integrator of environmental and process monitoring
systems, today reported its financial results for the third quarter
ended, March 31, 2008. With its operational and financial
re-structuring completed, the Company recorded record-high
quarterly revenues of $5.8 million, or a 30.5% increase compared to
the same quarter last year, driven by strong demand for its fiber
optic components. Fiber optic revenues increased 40.5% and
environmental solutions improved 15.0% from the third quarter of
2007. These results do not include any revenues from the
acquisition of Willer Engineering Ltd., which was completed on
March 28, 2008. Gross margin increased 25.7% to $2.0 million during
the third quarter compared to the same period last year. The gross
margin as a percentage of sales was 34.7% compared to 36.0% during
the third quarter of last year. The Company's revenues are
primarily in U.S. dollars while the majority of its costs are in
Canadian dollars. Over the past 12 months, the Company has had to
bear the burden of increased expenses as the Canadian dollar has
appreciated by more than 13.0%. These significant costs have been
almost completely offset by higher plant utilization and much
higher product yields due to improvements in manufacturing
processes. Adjusted EBITDA is positive with the current quarterly
result of $188,000 which is a substantial improvement over last
year's result of $65,000. SG&A increased by 31.5%, or $401,000
compared to the same period last year. Much of this increase can be
attributed to the stronger Canadian dollar. As the exchange rate
seems to have stabilized for the time being, SG&A levels should
remain relatively flat going forward, excluding cost increases
related to acquisitions. President and Chief Executive Officer,
John Fraser of Avensys Corporation, commented, "We are encouraged
to see that our strategy to focus on the core business segments
which have demonstrated the most potential for growth has been
validated by the results we experienced this quarter. As key
players within the fiber optics industry, we are well positioned to
capitalize on an industry that is an area which is experiencing
renewed and remarkable growth in the past few years. This growth is
being driven by new digital media, high throughput communication
devices, as well as an emerging technology shift to high output
lasers in the fiber optic laser industry." During the third
quarter, Avensys successfully qualified its new high powered pump
laser combiner; launched a miniature DPSK demodulator for high
bitrate telecommunications systems, experienced increased sales of
its micro DPSK demodulator, and shipped a record 30,000 fiber bragg
gratings. The Company is now manufacturing leading-edge components
used in 40 gigabit communication systems and its fiber laser
components are in significant demand. Avensys Solutions division
continues to perform steadily and is a solid contributor to our
overall revenue stream. On March 28, Avensys announced the
acquisition of the operating assets of Willer Engineering Limited,
a provider of industrial process measurement and continuous
emission monitoring instrumentation solutions to the Canadian
industrial marketplace. This acquisition is expected to provide
significant new growth opportunities resulting from the synergies
derived from the combination of our respective expertise, market
niches, product lines, sales skills and geographical coverage. Nine
Months Results For the nine months ended, March 31, 2008, Avensys
Corporation reported consolidated revenues of $14.7 million
compared to $11.2 million for the same period in the prior year,
representing a 31.0% increase. The revenues of the Avensys Tech
fiber optics division increased 47.0% compared to the nine month
period of the previous year and revenues of the Avensys
Environmental Solutions division increased 2.2% compared to the
nine month period of the previous year. Gross margin improved to
36.3% as a percentage of consolidated revenues as compared to 33.7%
for the same period in the previous year. Loss from Operations was
$2.0 million, compared to $1.8 million for the same period last
year. Net cash used in operating activities for the period was $1.5
million, as compared with net cash used of $2.9 million for the
same period last year. The Company made an adjusted EBITDA loss of
$352,000, as compared with an adjusted EBITDA loss of $859,000 for
the same period last year. John Fraser concluded, "The future is
promising as the Company continues to increase sales and starts
generating positive cash flow from operations." Conference Call
Avensys Corporation will host a conference call today at 11:00 am
ET and will be simultaneously broadcast live over the Internet at
http://www.avensyscorporation.com/ or http://www.vcall.com/. Please
allow extra time prior to the call to visit the site and download
the streaming media software required to listen to the Internet
broadcast. The online archive of the broadcast will be available
within one hour of the live call. Those who would like to
participate on the conference call should dial 877-407-0782 (US and
Canada) and +1-201-689-8567 (International). A replay of the call
will be available on the Company's Web site or by dialing
877-660-6853 (US and Canada) and +1-201-612-7415 (International).
When prompted please enter access code, #286 and conference ID
#285093. The replay will be available one hour following the live
call and for two weeks. About Avensys Corporation Avensys operates
two divisions. Avensys Technologies designs, manufactures,
distributes, and markets high reliability optical components and
modules as well as FBGs for the telecom market and high power
devices and sub- assemblies for the industrial market. Avensys
Environmental Solutions, the other division of Avensys, is an
industry leader in providing instrumentation and integrated
solutions for the monitoring of industrial processes and
environmental surveillance applications for air, water and soil in
the Canadian marketplace. To find out more about Avensys
Technologies, please visit our website.avensystech.com. For more
information on Avensys Environmental Solutions, please visit
http://www.avensyssolutions.com/. For Avensys Corporation company
news and updates you can also visit
http://www.avensyscorporation.com/. Forward-Looking Statements:
Except for historical information contained herein, the statements
in this news release are forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties, which may cause a
company's actual results, performance and achievement in the future
to differ materially from forecasted results, performance, and
achievement. These risks and uncertainties are described in the
Company's periodic filings with the Securities and Exchange
Commission. The Company undertakes no obligation to publicly
release the result of any revisions to these forward-looking
statements that may be made to reflect events or circumstances
after the date hereof, or to reflect the occurrence of
unanticipated events or changes in the Company's plans or
expectations. Use of Non-GAAP Financial Measures The Company
provides non-GAAP financial measures, such as adjusted EBITDA, to
complement its consolidated financial statements presented in
accordance with GAAP. Non-GAAP financial measures do not have any
standardized definition and, therefore, are unlikely to be
comparable to similar measures presented by other reporting
companies. These non-GAAP financial measures are intended to
supplement the user's overall understanding of the Company's
current financial and operating performance and its prospects for
the future. Specifically, the Company believes the non-GAAP results
provide useful information to both management and investors by
identifying certain expenses, gains and losses that, when excluded
from the GAAP results, may provide additional understanding of the
Company's core operating results or business performance, which
management uses to evaluate financial performance for purposes of
planning for future periods. However, these non-GAAP financial
measures are not intended to supersede or replace the Company's
GAAP results. The company uses adjusted EBITDA (earnings before
interest, taxes, depreciation and amortization, adjusted for
debentures and preferred shares accretion, and changes in fair
value of derivative instruments) as a non-GAAP financial measure in
this press release. A reconciliation of EBITDA to the operating
loss for the third quarter of 2008 is as follows: Adjusted EBITDA
(Expressed in thousands of US Dollars) For the Three For the Nine
Months Ended Months Ended March 31, March 31, 2008 2007 2008 2007 $
$ $ $ Net Income (Loss) (274) 32 (2,835) (1,658) Plus Interest
expense, net 83 192 552 564 Depreciation and amortization 323 257
940 774 Loss on redemption of convertible debentures - - 1,423 -
Debentures and preferred shares accretion 234 588 679 1,981 Change
in fair value of derivative financial instruments 97 (676) (242)
(1,663) Income Tax Benefit (275) (328) (869) (857) Adjusted EBITDA
(Loss) 188 65 (352) (859) Condensed Financial Statements Interim
Consolidated Statements of Operations - Unaudited (Expressed in
thousands of U.S. Dollars, except for per share amounts) For the
Three Months Ended March 31, 2008 2007 $ $ Revenue 5,780,795
4,428,989 Cost of Revenue 3,774,855 2,833,282 Gross Margin
2,005,940 1,595,707 Operating Expenses Depreciation and
amortization 222,350 180,203 Selling, general and administration
1,676,049 1,275,013 Research and development 643,452 403,793 Total
Operating Expenses 2,541,851 1,859,009 Loss from Operations
(535,911) (263,302) Other Income (Expenses) (358,846) (107,783)
Income Tax Benefit - Refundable tax credits 274,922 328,168
Non-Controlling Interest 86 (440) Results of Discontinued
Operations 345,970 75,424 Net Income (Loss) (273,779) 32,067 Net
Loss per share - Basic and Diluted (0.01) (0.00) Weighted Average
Common Shares Outstanding 98,290,264 81,304,000 Interim
Consolidated Balance Sheets - Unaudited (Expressed in thousands of
U.S. Dollars) March 31, June 30, 2008 2007 $ $ ASSETS Current
Assets 9,232,389 7,346,722 Property and equipment, net 2,495,938
2,279,973 Intangible assets 3,790,548 3,967,213 Goodwill 4,709,417
4,116,872 Deferred financing costs 418,501 376,794 Deposits 101,081
105,915 Total Assets 20,747,874 18,193,489 LIABILITIES AND
STOCKHOLDERS' EQUITY Total Current Liabilities 7,898,391 6,749,921
Long-term debt, less current portion 170,617 174,412 Convertible
debentures 1,132,045 1,275,458 Balance of purchase price payable
1,580,545 1,194,096 Derivative financial instruments 2,058,234
64,510 Total Liabilities 12,839,832 9,458,397 Non-controlling
Interest 8,038 23,193 Total Stockholders' Equity 7,900,004
8,711,899 Total Liabilities and Stockholders' Equity 20,747,874
18,193,489 DATASOURCE: Avensys Corporation CONTACT: Ms.
Marie-Annick Riel, Avensys Corporation, +1-877-904-6030 Web site:
http://www.avensystech.com/ http://www.avensyssolutions.com/
http://www.avensyscorporation.com/
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