SOURCE: Averion International Corp.

November 28, 2006 09:58 ET

Averion International Corp. Reports Third Quarter Results

Revenues Increase 88% Year-Over-Year Due in Large Part to CRO Acquisition

BOSTON, MA -- (MARKET WIRE) -- November 28, 2006 -- Averion International Corp. (OTCBB: AVRO), a clinical research organization (CRO) specializing in oncology, nephrology, dermatology and medical devices, announced today the results of its third fiscal quarter of 2006. On July 31, 2006, Averion International Corp.'s predecessor company, IT&E, completed a series of transactions under the Agreement and Plan of Merger announced on July 6, 2006 with Averion Inc., formerly a privately held Massachusetts corporation. Shortly after, the company was renamed Averion International Corporation following approval by the SEC and Nasdaq.

For the third quarter ended September 30, 2006, the company reported total revenues of $8.36 million, an 88% increase over total revenues of $4.44 million in the third quarter of 2005. Included in the quarterly revenue amount was $4,829,955 from Averion's acquired CRO businesses, comprised of $1,455,407 from Millennix, Inc. (acquired in November 2005) and $3,374,548 from Averion Inc. (acquired in August of this year).

Gross profit for the three months ended September 30, 2006 was $3,098,097, as compared to $1,328,556 for the three months ended September 30, 2005. Gross profit margin as a percentage of sales, was 37% of sales, including Millennix, Inc. and Averion Inc., and 29.3%, excluding Millennix, Inc. and Averion Inc., for the three months ended September 30, 2006 as compared to 29.9% of sales for the three months ended September 30, 2005.

The net operating loss for the recently ended quarter was $1.03 million, as compared with $0.17 million in the year ago period. Impacting the quarter ended September 30, 2006 were a number of one-time costs associated with the acquisitions, among other items. For example, general and administrative expenses were $2,914,759, compared to $852,437 for the same period in 2005. The increase in general and administrative expenses was due primarily to the acquisitions of Millennix, Inc. and Averion Inc.; increased costs associated with being a public company, including legal and accounting fees, public relations costs and additional insurance costs; costs relating to a move of corporate headquarters, corporate integration, and re-organization; costs associated with the search for acquisition targets and funding sources, and costs associated with outsourcing information technology, human resource, financial advisory services. Averion International reported a net loss for the quarter of $1.05 million, or $(0.03) per basic and diluted share based on the weighted average of 159,876,736 shares outstanding. This compares to a net loss in the third quarter a year ago of $0.42 million, or $(0.02) per basic and diluted share based on the weighted average of 21,344,198 shares outstanding.

"Our CRO backlog has increased to approximately $36 million, constituting projects to be performed in 2007 through 2011, and we expect to continue realizing expanded revenues -- most notably in our Millennix Oncology Division, which continues to produce significant revenues," said Philip T. Lavin, PhD, President and Chief Executive Officer of Averion International Corp. "Our European operations are expanding and our integration plans continue on schedule. In addition, we expect to benefit from various cost efficiencies as we have successfully negotiated a reduction in a number of operating expenses such as rent which will add nearly $1 million to our bottom line as we look ahead to 2007."

For the nine-month period ended September 30, 2006, which includes time when the company was IT&E International, total revenue was $18.25 million, as compared to $13.04 million in the same period a year ago. This increase is primarily attributable to the revenues earned from the Company's recently acquired CRO businesses. The net loss for the nine-month period of 2006 was $2.88 million, $(0.07) per basic and diluted share based on the weighted average of 93,591,496 shares outstanding. This compares to a net loss in the same year-ago period of $1.23 million, or $(0.06) per basic and diluted share based on the weighted average of 20,412,124 shares outstanding.

Averion International's balance of cash and cash equivalents at September 30, 2006, totaled $5.06 million, as compared to a balance totaling $2.18 million at September 30, 2005.

As the Company's corporate headquarters including the finance division have relocated to Southborough, Massachusetts from San Diego, Michael L. Jeub resigned effective November 15, 2006, as Averion's interim Chief Financial Officer. A search for a replacement CFO is already underway. During this interim period, Scott L. Millman, the Company's Chief Accounting Officer, is serving as the principal financial and accounting officer.

"We have appreciated Mike's help in the initial time of transition, and we wish him well after taking this planned step," added Dr. Lavin. "Our next appointment to this position will support the strong management team we already have in place."

About Averion International Corp.

Headquartered in Southborough, Massachusetts, Averion International Corp. (Averion) is a full-service Clinical Research Organization (CRO) that provides clinical research and regulatory compliance & validation services to the pharmaceutical, biotechnology and medical device/diagnostic industries. The company has a therapeutic focus in dermatology, medical devices, nephrology, and oncology. Averion clinical research core competencies are in FDA and product registration support, site selection, project management, medical and site monitoring, data management, biometrics, pharmacovigilance, medical writing, and full clinical trial management services throughout the clinical trials lifecycle. The company has supported 50 FDA approvals to date with no refusals among submissions accepted for filing; in addition, the company has helped achieve approvals for twelve oncology-related products as well as multiple approvals in medical devices, cardiology, and dermatology.

Averion Millennix Oncology Division provides Oncology-specific clinical research services. (

Averion IT&E International Division offers global regulatory compliance and validation services throughout the product development lifecycle. The company's team of industry veterans utilizes the latest tools and procedures to help its clients move quickly and effectively from drug development through the FDA approval process. Consulting services include regulatory planning, providing skilled personnel for development operations, enterprise software and training to manage data and ensure FDA compliance and validation of new pharmaceutical manufacturing facilities. (

Averion is headquartered in Southborough, MA and has additional office locations in San Diego, CA, San Francisco, CA, Rye Brook, NY, and Darmstadt, Germany. (

Forward-Looking Statement

Included in this release are "forward-looking statements." Statements in this press release that are forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties. In some cases, forward-looking statements can be identified by terminology such as "may," "should," "potential," "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates" and similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations reflected in such forward-looking statements will prove to have been correct. The Company's actual results could differ materially from those anticipated in the forward-looking statements. The Company refers you to the cautionary statements and risk factors set forth in the documents it files with the Securities and Exchange Commission, including its most recent 10-KSB. The Company is not under any obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.

                 Consolidated Statements of Operations

                             For the three              For the nine
                              months ended              months ended
                              September 30,             September 30,
                            2006         2005         2006         2005

Service revenue         $ 7,881,002  $ 4,292,422  $17,266,398  $13,036,358
Reimbursement revenue       482,931      146,878      979,274      379,833
Total                     8,363,933    4,439,300   18,245,672   13,416,191

Cost of revenue           5,265,836    3,110,744   12,558,151    9,365,156
Gross profit              3,098,097    1,328,556    5,687,521    4,051,035

Operating expenses:
General and
 administrative           2,914,755      852,437    5,579,146    2,635,622
Sales and marketing         434,372      296,392    1,340,904      988,273
Depreciation and
 amortization               319,706       23,742      542,505       66,491
Officer compensation        460,108      329,739    1,105,513      778,582
Total Operating Expenses  4,128,945    1,502,310    8,645,050    4,468,968
Net Operating Loss       (1,030,848)    (173,754)  (2,951,529)    (417,933)

Other Income (Expense)
Interest income              90,072       56,013      224,521       58,331
Interest expense           (106,312)    (230,172)    (143,439)    (375,960)
Loan fee amortization                    (72,282)                 (216,845)
Fees on long-term debt            -            -            -     (214,039)
Non-cash financing
 costs                            -            -            -      (62,500)
Total Other Income
 (Expense)                  (16,240)    (246,441)      81,082     (811,013)

Income/(Loss) before
 income taxes            (1,047,088)    (420,195)  (2,876,447)  (1,228,946)
Income taxes                      -            -            -            -
Net income (loss)        (1,047,088)    (420,195)  (2,876,447)  (1,228,946)
Beneficial conversion
 feature                 (4,069,022)           -   (4,069,022)           -
Net income/(loss)
 applicable to common
 shareholders           $(5,116,110) $  (420,195) $(6,945,469) $(1,228,946)
Weighted average number
 of common shares
 and fully-diluted      159,876,736   21,344,198   93,591,496   20,412,124

Net income (loss) per
 share-basic and
 fully-diluted          $     (0.03) $     (0.02) $     (0.07) $     (0.06)

                         Consolidated Balance Sheets

                                         September 30,         December 31,
                                              2006                  2005
Cash                                     $ 5,060,655           $ 6,414,770
Accounts receivable (net of
 allowance for doubtful
 accounts of $190,679 for 2006
 and $75,000 in 2005)                      5,068,278             2,989,646
Unbilled revenue                           4,039,527               183,938
Prepaid expenses and other
 current assets                            1,040,268               181,823
     Total Current Assets                 15,208,728             9,770,177

Property and equipment, net                1,513,175               275,263
Deposits                                     114,860                11,679
Finite life intangibles (net of
 accumulated amortization of
 $379,211 and of $39,625 in
 2006 and 2005, respectively)              4,803,789               991,375
Goodwill                                  21,920,838             3,196,813
Total Assets                             $43,561,390           $14,245,307

Accounts payable                         $ 1,259,362           $   585,590
Accrued payroll and employee benefits        989,283               351,238
Current portion of capital
 lease obligations                            29,754                 3,250
Current portion of notes
 payable to employees                         19,513               101,437
Current portion of notes
 payable to shareholders                     610,256
Accrued relocation costs to officers         220,000               220,000
Deferred revenue                           3,358,733               922,484
Customer Advances                          1,140,492               143,520
Deferred rent                                450,742                22,670
Other accrued liabilities                  1,246,407               433,745
     Total Current Liabilities             9,324,542             2,783,934
Long-term capital lease obligations,
 less current portion                         52,923                12,765
Notes payable to employees,
 less current portion                             --               654,384
Notes payable to Averion shareholders      6,716,527                    --
Deferred tax liability                        68,680                    --
Total Liabilities                         16,162,672             3,451,083

Stockholders' equity:
Preferred stock, $.001 par
 value, 10,000,000 shares
Series D Convertible Preferred
 stock, $.001 par value, 16,500
 shares authorized 16,500
 shares issued and outstanding
 with a stated value of
 $11,500,000                             $12,174,960            $8,105,938
Series E Convertible Preferred
 stock, $.001 par value, 8,300
 shares authorized, 8,300
 shares issued and outstanding
 with a stated value of
 $8,300,000                                8,300,000                    --
Common stock, $.001 par value,
 650,000,000 shares authorized,
 159,876,736 shares issued and
 outstanding                                 159,877                60,449
Convertible warrants                              --             3,108,944
Call option                                       --               285,118
Common stock To be Issued                    837,363
Additional paid-in capital                12,073,617             2,504,427
Retained deficit                          (6,147,099)           (3,270,652)
Total Equity                              27,398,718            10,794,224
Total Liabilities and Capital            $43,561,390           $14,245,307

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