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 www.avensyscorporation.com or 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 www.avensyssolutions.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.

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

SOURCE Avensys Corporation