Positive Cash Flow Generated Despite Slower Growth Due to the
Economic Downturn MONTREAL, Feb. 13 /PRNewswire-FirstCall/ --
Avensys Corporation (OTC Bulletin Board: AVNY; FRANKFURT WKN:
A0M9YA), a leading manufacturer of high-end fiber optic components,
and a distributor and integrator of environmental and process
monitoring systems, today reported its financial results for the
second quarter of fiscal year 2009, ended December 31, 2008. Second
Quarter Fiscal 2009 Results Total consolidated revenue for the
fiscal second quarter 2009 ended December 31, 2008, rose 32% to
$5.4 million as compared to $4.1 million in the year ago period, as
a result of increased revenue from Avensys' environmental and
process monitoring business, Avensys Solutions. For the second
quarter of fiscal 2009, consolidated gross profit was $1.8 million
as compared to $1.3 million year-over-year. Gross margin for the
quarter was 33%, as a percentage of revenues, a slight increase
compared to the same period a year ago. Cash flow generated by
operations for the second quarter was $535,000 as compared to cash
used in operations of $345,000 for the same period a year ago. Net
loss for the second quarter was $3.4 million compared to $609,000
for the same period the previous year. The Company wrote down the
full amount of goodwill for the second quarter of fiscal 2009, a
negative impact of $3.9 million on the operating results. The fair
values of the Company's reporting units have been impacted by the
continued decline in the Company's market capitalization, coupled
with weak industry outlook and a change in the timeframe to realize
growth and cash flows objectives. Six Month Fiscal 2009 Results
Total consolidated revenue for the six months ended December 31,
2008, rose 25% to $11.1 million, from the $8.9 million recorded for
the same period a year ago. First half gross profit on a
consolidated basis was $3.6 million as compared to $3.3 million in
the year ago period. First half gross margin was 32%, as a
percentage of consolidated revenues, compared to 37% for the same
period a year ago. Cash flow used in operations for the first six
months was $319,000, compared to cash flow used in operations of
$882,000 for the same period a year ago. Net loss for the six
months was $3.9 million as compared to $2.6 million a year ago.
Avensys Solutions Avensys' environmental and process monitoring
business, Avensys Solutions continues to see the positive returns
from the Willer acquisition with revenues of $4.6 million for the
six month period ended December 31, 2008, which has more than
doubled from the same period a year ago. Avensys Solutions also
realized more than $1.8 million in systems integration orders
during the six month period, an indication that it is successfully
moving up the value chain. Avensys Tech Avensys' optical component
business, Avensys Tech reported revenues of $6.5 million for the
six month period ending December 31, 2008, a 5% decline from the
$6.8 million reported for the same period a year earlier. Avensys
Tech experienced a decline in demand from the telecommunications
market, particularly as it relates to undersea components and
demodulators during this period. Partially offsetting this decline
has been an increase in demand of multi-mode combiners for the
industrial fiber laser market and an increase in revenues derived
from contracts to build leading-edge high power fiber laser
components and systems. We continue to ship substantial quantities
of Fiber Bragg Gratings. President and Chief Executive Officer,
John G. Fraser of Avensys Corporation, commented, "We are working
hard in the current economic environment to conserve cash, to match
costs with revenues, to intensify our sales efforts, and to
diversify our portfolio. Currently, the impact of the global
economic downturn has, in part, been mitigated by Avensys
Corporations' balanced portfolio of businesses, diverse client
base, and product lines. We will continue to monitor the situation
and act accordingly." Mr. Fraser added, "In addition, our new and
expanded Avensys Solutions division is allowing us to seek ways of
benefiting from the recent focus on government sponsored
infrastructure projects." About Avensys Corporation Avensys
Corporation operates Avensys Inc., its wholly-owned core
subsidiary. Avensys Inc., through its manufacturing division
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 Technologies is
also a pioneer in the development of packaged fiber-based sensors
and possesses licences in regards to leading edge intellectual
property. Avensys Solutions, the other division of Avensys Inc., 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 Solutions,
please visit our website at 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. For more information, please contact: Ms. Sherine
Attia Avensys Corporation Tel: 1.877.904.6030 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 first
quarter of 2009 is as follows: Adjusted EBITDA (Expressed in
thousands of US Dollars) For the Three For the Six Months Ended
Months Ended December 31, December 31, 2008 2007 2008 2007 Net
Income (Loss) (3,351) (420) (3,921) (2,562) Plus Interest expense,
net 112 106 232 243 Depreciation and amortization 266 320 572 618
Loss on impairment of goodwill 3,889 - 3,889 - Loss on redemption
of convertible debentures - 1,423 - 1,423 Debentures and preferred
shares accretion 308 219 610 445 Change in fair value of derivative
financial instruments (845) (611) (1,177) (339) Income Tax Benefit
(199) (425) (357) (594) Adjusted EBITDA (Loss) 180 612 (152) (766)
Condensed Financial Statements Consolidated Statements of
Operations (Expressed in thousands of U.S. Dollars, except for per
share amounts) For the Three For the Six Months Ended Months Ended
December 31, December 31, 2008 2007 2008 2007 $ $ $ $ Revenue 5,396
4,080 11,088 8,878 Cost of Revenue 3,594 2,812 7,524 5,561 Gross
Margin 1,802 1,268 3,564 3,317 Operating Expenses Depreciation and
amortization 204 281 436 490 Selling, general and administration
1,501 1,546 3,272 3,110 Loss on impairment of goodwill 3,889 -
3,889 - Research and development 357 698 754 1,162 Total Operating
Expenses 5,951 2,525 8,351 4,762 Loss from Operations (4,149)
(1,257) (4,787) (1,445) Other Income (Expenses) 599 222 508 (1,996)
Income Tax Benefit - Refundable tax credits 199 425 357 594
Non-Controlling Interest - - - - Results of Discontinued Operations
- 189 - 285 Net Loss (3,351) (421) (3,922) (2,562) Net Loss per
share - Basic and Diluted (0.03) (0.00) (0.04) (0.03) Weighted
Average Common Shares Outstanding 99,086,152 97,096,800 99,079,359
96,154,500 Consolidated Balance Sheets (Expressed in thousands of
U.S. Dollars) December 31, June 30, 2008 2008 $ $ ASSETS Current
Assets 8,962 9,836 Property and equipment, net 1,905 2,490
Intangible assets 2,983 3,879 Goodwill - 4,645 Deferred financing
costs 333 405 Deposits 139 85 Total Assets 14,322 21,340
LIABILITIES AND STOCKHOLDERS' EQUITY Total Current Liabilities
8,879 9,137 Long-term debt, less current portion 119 191
Convertible debentures 1,456 1,299 Balance of purchase price
payable 1,294 1,706 Derivative financial instruments 559 1,364
Total Liabilities 12,307 13,697 Non-controlling Interest - 8 Total
Stockholders' Equity 2,015 7,635 Total Liabilities and
Stockholders' Equity 14,322 21,340 DATASOURCE: Avensys Corporation
CONTACT: Ms. Sherine Attia of Avensys Corporation, +1-877-904-6030
Web Site: http://www.avensyscorporation.com/
http://www.avensyssolutions.com/
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