While the Avensys business generated a robust year-on-year improvement of 32% in revenues, there was a 15% decline in revenues from the first quarter of the current fiscal year. The second quarter is historically a slow sales cycle. This slowdown is typically offset by increased spending from customers in the second half of the fiscal year and the Company has no reason to believe that this year will be any different.
In addition, Avensys Tech, the optical component division, curtailed output production during the period in order to train new staff, as demand for products continues to gain momentum. Notwithstanding this, Avensys Tech generated a remarkable 57% increase in sales year-on-year. Avensys Environmental Solutions' revenues declined by 13%. The six month figures are plus 51% and minus 8%, respectively for the two divisions.
The decline in Avensys Corporation's revenues in the three months ended
As previously communicated, Avensys is focused on its fiber optics and environmental solutions business segments which have demonstrated the most potential for sustainable and long-term growth. As a result, the Company has ended the relationship with its C-Chip business partner, completing this transformation and allowing it to focus on these core businesses.
President and Chief Executive Officer,
Six Months Results
For the six months ended
Conference Call
Avensys Corporation will host a conference call today at
Those who would like to participate on the conference call should dial
877-407-9210 (US and
A replay of the call will be available on the Company's Web site or by
dialing 877-660-6853 (US and
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 before discontinued operations for the second quarter of 2008 is as follows: Adjusted EBITDA (Expressed in thousands of US Dollars) For the Three Months For the Six Months Ended Ended December 31, December 31, 2007 2006 2007 2006 $ $ $ $ Net Loss (420) (1,461) (2,562) (1,691) Add (Subtract) Interest expense, net 178 189 515 435 Depreciation and amortization 281 216 490 394 Debentures and preferred shares accretion 219 753 446 1,394 Loss on redemption of convertible debentures - - 1,423 - Change in fair value of derivative financial instruments (611) (229) (339) (987) Income Tax Benefit (425) (165) (594) (529) Adjusted EBITDA (Loss) (778) (697) (621) (984) Condensed Financial Statements Interim Consolidated Financial Statements of Operations and Comprehensive Income (Loss) - Unaudited (Expressed in U.S. Dollars, except for per share amounts) Three Months Six Months December 31, December 31, 2007 2006 2007 2006 $ $ $ $ Revenue 4,306,647 4,865,465 9,276,528 8,623,670 Cost of Revenue 2,811,805 3,947,264 5,561,197 6,336,547 Gross margin 1,494,842 918,201 3,715,331 2,287,123 Gross Margin as % of Revenue 34.7 % 18.9 % 40.1 % 26.5 % Operating expenses Depreciation and amortization 281,076 215,775 489,967 393,643 Selling, general and administration 1,565,472 1,451,790 3,177,088 2,861,274 Research and development 697,951 365,957 1,162,262 742,704 Total Operating expenses 2,544,499 2,033,522 4,829,317 3,997,621 Operating (loss) gain (1,049,657) (1,115,321) (1,113,986) (1,710,498) Other income (expenses) 204,571 (508,765) (2,041,814) (507,626) Income tax benefits - refundable tax 425,422 164,501 594,423 529,102 credits Non-Controlling interest (160) (1,438) (299) (1,547) Results of discontinued operations - - - - Net (loss) income for the period (419,824) (1,461,023) (2,561,676) (1,690,569) Interim Consolidated Balance Sheets - Unaudited (Expressed in thousands of U.S. Dollars) December 31, June 30, 2007 2007 $ $ ASSETS Current Assets 8,153,786 7,346,722 Property and equipment, net 2,514,374 2,279,973 Intangible assets 3,971,008 3,967,213 Goodwill 4,424,610 4,116,872 Deferred financing costs 428,501 376,794 Deposits 104,096 105,915 Total Assets 19,596,375 18,193,489 LIABILITIES AND STOCKHOLDERS' EQUITY Total Current Liabilities 6,543,151 6,749,921 Long-term debt, less current portion 203,855 174,412 Convertible debentures 986,238 1,275,458 Balance of purchase price payable 1,462,423 1,194,096 Derivative financial instruments 1,961,146 64,510 Total Liabilities 11,156,813 9,458,397 Non-controlling Interest 25,232 23,193 Total Stockholders' Equity 8,414,330 8,711,899 Total Liabilities and Stockholders' Equity 19,596,375 18,193,489
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 leading edge intellectual property. Avensys Environmental Solutions, also a division of Avensys Inc., is an industry leader in providing environmental monitoring solutions for air, water and soil in the Canadian marketplace.
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: Truc Nguyen or Christopher Chu The Global Consulting Group T: +1-646-284-9400 E: tnguyen@hfgcg.com | E: cchu@hfgcg.com
SOURCE Avensys Corporation