MONTREAL, Oct. 17 /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 fourth quarter and full fiscal year ended, June 30, 2008.
Fourth Quarter of Fiscal 2008 Results
Total consolidated revenue for the fourth quarter, ended June 30, 2008, rose 29% to $6.9 million from the $5.4 million recorded in the fourth quarter of fiscal 2007. The increase in revenue during this quarter was generated from the additional revenues contributed by the Willer Engineering acquisition in March 2008.
Gross margin on a consolidated basis for the current quarter of $2.6 million was 37%, as a percentage of consolidated revenues, down from 43% for the same period in the previous year. The Company made an adjusted EBITDA loss of $541,000, as compared with an adjusted EBITDA loss of $196,000 for the same period last year.
Fiscal Year 2008 Results
Total revenue for the fiscal year 2008 ended June 30, 2008, increased 30% to $21.6 million, from $16.6 million reported for the same period in 2007. This increase was driven organically by a 32% increase in demand for fiber optic components from the previous year. Total fiber optic sales made up 67% of the total revenues for the year, or roughly $14.5 million. Revenues for the environmental and process monitoring division increased to $7.1 million during this period, a 26% increase compared to the previous fiscal year. Results for the environmental division include three months of revenues, or $1.4 million, resulting from the Willer Engineering acquisition, which was completed on March 28, 2008.
Gross margin widened 30% to $7.9 million during fiscal year 2008 compared to $6.1 million reported in the same period last year. Gross margin as a percentage of sales was 36.6% for the reporting period, which is on par with the same period a year ago. 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%. This significant increase has been almost completely offset by higher plant utilization and higher product yields due to improvements in manufacturing processes.
Adjusted EBITDA of negative $1.12 million during fiscal year 2008 compared to a negative $1.28 million in the previous fiscal year, is an improvement of $160,000, year on year. The healthy $1.8 M increase achieved in gross margin dollars was in large part offset by an increase in SG&A costs due to an approximate 13% annual appreciation of the Canadian dollar and an additional cost of $700K representing severances paid to departed executives and compliance with Sarbanes Oxley. Our net loss was further impacted by non-cash costs of $1.4M due to the redemption of the Series B Subordinated Secured Convertible Debentures in the first quarter.
The necessity to resolve defaults with certain debt holders prior to filing caused the delay in the presentation of our annual report. These matters were successfully resolved during the course of this week.
President and Chief Executive Officer, John G. Fraser of Avensys Corporation, commented, "We are very proud of our overall performance during fiscal year 2008. Our strategy to focus on the core business segments which have demonstrated the most potential for growth has been validated by these results. As a key player within the fiber optics industry, we are well positioned to capitalize on a renewed growth 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. We made a number of new product announcements during the year, and demand for our Fiber Bragg Grating line continues unabated."
Mr. Fraser added, "In March of this year, we acquired Willer Engineering, which provided industrial process measurement and continuous emission monitoring instrumentation solutions to the Eastern Canada industrial marketplace. We integrated this operation into Avensys Solutions, our environmental and process monitoring division, and the benefits are starting to be realized. We believe this acquisition will enhance the profitability of this division by providing economies of scale, access to new markets and new product lines, and added engineering and integration capabilities."
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 industrial processes and environmental surveilance 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. Marie-Annick Riel 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 fourth quarter and twelve months of 2008 is as follows:
Adjusted EBITDA (Expressed in thousands of US Dollars) For the Fiscal Years Ended June 30, 2008 2007 $ $ Net Loss (3,121) (2,371) Plus Interest expense, net 702 799 Depreciation and amortization 970 851 Loss on redemption of convertible debentures 1,423 - Debentures and preferred shares accretion 965 2,421 Change in fair value of derivative financial instruments (936) (1,762) Income Tax Benefit (1,125) (1,218) Adjusted EBITDA (Loss) (1,122) (1,280) Condensed Financial Statements Consolidated Statements of Operations (Expressed in thousands of U.S. Dollars, except for per share amounts) For the Year Ended June 30, 2008 2007 $ $ Revenue 21,603 16,576 Cost of Revenue 13,698 10,473 Gross Margin 7,905 6,103 Operating Expenses Depreciation and amortization 970 851 Selling, general and administration 7,213 6,041 Research and development 2,477 1,572 Total Operating Expenses 10,660 8,464 Loss from Operations (2,755) (2,361) Other Income (Expenses) (2,097) (1,285) Income Tax Benefit - Refundable tax credits 1,125 1,218 Non-Controlling Interest 0 2 Results of Discontinued Operations 606 56 Net Loss (3,121) (2,370) Net Loss per share - Basic and Diluted (0.03) (0.03) Weighted Average Common Shares Outstanding 97,408,832 82,513,000 Consolidated Balance Sheets (Expressed in thousands of U.S. Dollars) June 30, June 30, 2008 2007 $ $ ASSETS Current Assets 9,837 7,346 Property and equipment, net 2,490 2,280 Intangible assets 3,879 3,967 Goodwill 4,645 4,117 Deferred financing costs 405 377 Deposits 84 106 Total Assets 21,340 18,193 LIABILITIES AND STOCKHOLDERS' EQUITY Total Current Liabilities 9,137 6,750 Long-term debt, less current portion 191 174 Convertible debentures 1,299 1,275 Balance of purchase price payable 1,706 1,194 Derivative financial instruments 1,364 65 Total Liabilities 13,697 9,458 Non-controlling Interest 8 23 Total Stockholders' Equity 7,635 8,712 Total Liabilities and Stockholders' Equity 21,340 18,193
