MONTREAL, Nov. 14 /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 first quarter of fiscal year 2009, ended September 30, 2008.

The results for this first quarter are in line with our expectations. Total consolidated revenue for the first quarter, ended September 30, 2008, rose 16% to $5.7 million from the $4.8 million recorded in the first quarter of fiscal 2007.

Gross margin on a consolidated basis of $1.8 million for the quarter was 31%, as a percentage of consolidated revenues, down from 43% for the same period in the previous year. While Avensys Solutions gross margins remain unchanged and healthy, Avensys Tech's gross margins are highly dependent on product mix. This quarter's sales were more heavily weighted by our lower margin FBG commodity products. Net loss for the quarter was $570K compared to $2.1 million for the same period last year.

As a result of the Willer acquisition, Avensys Solutions, our environmental and process monitoring business, more than doubled its revenues compared to a year ago. It also booked more than $1.8 million in systems integration orders, an indication that it is successfully moving up the value chain.

Avensys Tech, our optical component business, performed in line with expectations, but is running behind the results for the same period in the previous fiscal year showing at 9% decrease in revenues.

Our Fiber Bragg Grating (FBG) business achieved outstanding growth representing an increase of 199% in monthly shipments compared to the same period last year. Considering the highly competitive nature of this business, this significant gain in market share leads to greater efficiency and economies of scale. Our Multi-mode combiners (MMC) sales, addressing the industrial fiber laser market, were also ahead of last year's pace.

We are proud to announce some recent successes related to key R&D efforts. We received our first purchase order for 40 units of our new micro-DPSK product launched in February 2008. This device was designed to meet the 40Gbit/s technical and competitiveness requirements and we are encouraged by the reception from our target customers. ITF Labs, our partner, was awarded another overseas military contract to build leading edge high power fiber laser components and systems.

Our undersea business, which is driven by large project builds and therefore does not provide a comparable stream of revenues from quarter to quarter, played a major role in the overall reduction of revenues for Avensys Tech when comparing with results for the same period last year. However, booked orders so far indicate that the business will pick up as expected in the second quarter.

President and Chief Executive Officer, John G. Fraser of Avensys Corporation, commented, "We have completed the integration of the operations of Willer Engineering and the benefits are starting to be realized including increased profitability due to economies of scale, access to new markets and new product lines, and significantly more integrated solutions sales."

Mr. Fraser added, "In order to support our growing operations and to address liquidity concerns, we are exploring means of restructuring our debt and of obtaining additional conventional short term credit. However, we are satisfied with our overall performance during the first quarter of fiscal year 2009. Given the current global economic situation, we will remain careful, and continue to monitor market trends while ensuring that we invest wisely and control expenses diligently."

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 surveillance applications for air, water and soil in the Canadian marketplace. To find out more about Avensys, please visit our website at www.avensys.com. For Avensys Corporation company news and updates you can also visit 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 first quarter of 2009 is as follows:




                                 Adjusted EBITDA
                     (Expressed in thousands of US Dollars)

                                                    For the Three Months Ended
                                                            September 30,
                                                         2008          2007

    Net Income (Loss)                                     (570)       (2,142)
    Plus
      Interest expense, net                                 75           309
      Depreciation and amortization                        306           297
      Loss on redemption of convertible debentures           -         1,423
      Debentures and preferred shares accretion            303           227
      Change in fair value of derivative financial
       instruments                                        (332)          272
      Income Tax Benefit                                  (158)         (169)

    Adjusted EBITDA (Loss)                                (376)          217


    Condensed Financial Statements

                      Consolidated Statements of Operations
     (Expressed in thousands of U.S. Dollars, except for per share amounts)

                                                   For the Three Months Ended
                                                           September 30,
                                                        2008            2007
                                                         $               $

    Revenue                                            5,691           4,798

    Cost of Revenue                                    3,930           2,749

    Gross Margin                                       1,761           2,049

    Operating Expenses

    Depreciation and amortization                        231             209
    Selling, general and administration                1,770           1,564
    Research and development                             397             464

    Total Operating Expenses                           2,398           2,237

    Loss from Operations                                (637)           (188)

    Other Income (Expenses)                              (91)         (2,218)
    Income Tax Benefit - Refundable tax
     credits                                             158             169
    Non-Controlling Interest                               -               -
    Results of Discontinued Operations                     -              96

    Net Loss                                            (570)         (2,141)

    Net Loss per share - Basic and Diluted             (0.01)          (0.02)

    Weighted Average Common Shares
     Outstanding                                  99,072,565      95,212,000



                           Consolidated Balance Sheets
                    (Expressed in thousands of U.S. Dollars)

                                                    September 30,     June 30,
                                                        2008            2008
                                                          $               $
                      ASSETS
    Current Assets                                      9,990          9,836
    Property and equipment, net                         2,288          2,490
    Intangible assets                                   3,585          3,879
    Goodwill                                            4,451          4,645
    Deferred financing costs                              380            405
    Deposits                                              166             85
    Total Assets                                       20,860         21,340

       LIABILITIES AND STOCKHOLDERS' EQUITY
    Total Current Liabilities                           9,700          9,137
    Long-term debt, less current portion                  164            191
    Convertible debentures                              1,494          1,299
    Balance of purchase price payable                   1,383          1,706
    Derivative financial instruments                    1,440          1,364
    Total Liabilities                                  14,181         13,697
    Non-controlling Interest                                7              8
    Total Stockholders' Equity                          6,672          7,635
    Total Liabilities and Stockholders' Equity         20,860         21,340

SOURCE Avensys Corporation