SOUTHBOROUGH, Mass.--(BUSINESS WIRE)--Averion International Corp. (OTC BB: AVRO), a full service international clinical research organization specializing in oncology, cardiovascular diseases and medical devices, today announced financial results for the three months and nine months ended September 30, 2008. These financial results include nine months in 2008 of combined operations following the October 31, 2007 closing of Averion’s business combination with Hesperion Ltd., a full service clinical research organization based in Basel, Switzerland.

Markus H. Weissbach, MD, PhD, Chief Executive Officer of Averion International commented, “During the nine months ended September 30, 2008, we continued to realize positive trends in our net service revenue despite the difficulties facing many of our clients who are currently seeking additional sources of funds. We continue to mange our business very carefully and capitalize on the efficiencies of our expanded international operations through the integration of Hesperion and Averion.”

Dr. Weissbach continued, “As illustrated by the recent opening of our Czech office, we are increasing our global footprint in order to better meet the needs of our clients. We are continuing to evaluate other opportunities to increase the scope of our existing geographic and therapeutic capabilities in emerging regions of the world. We continue to pursue new business opportunities that utilize the scope of our significantly enhanced capabilities in North America and Europe.”

Dr. Philip Lavin, Executive Chairman, added, “We are very encouraged by the continued progress that has been made over the past year in the integration of Hesperion and Averion. The combination of these companies has enhanced our operations, strategic capabilities and core expertise while maintaining our core values. The Board is pleased with the execution of the Company’s growth strategies and accomplishments through the course of this year.”

2008 Third Quarter Financial Results

Net service revenue for the three months ended September 30, 2008 increased $8.1 million to $15.9 million as compared to $7.8 million for the three months ended September 30, 2007, an increase of 103%. The increase in net service revenue was primarily related to the inclusion of results from the Hesperion acquisition completed on October 31, 2007.

Direct expenses for the three months ended September 30, 2008 increased by $5.7 million to $9.9 million from $4.2 million during the same period prior year. The increase in direct expenses was primarily related to the inclusion of results from the Hesperion acquisition completed on October 31, 2007 which contributed $5.4 million in direct expenses during the three months ended September 30, 2008. As a percentage of net service revenue, direct expenses increased to 62% during the three months ended September 30, 2008 from 54% during the comparable period in 2007. The increase in direct expenses as a percentage of net service revenue was principally the result of a decrease in the rate of staff utilization.

Selling, general and administrative expenses (SG&A) for the three months ended September 30, 2008 were $5.9 million or 37% of net service revenue, as compared to $2.8 million or 36% of net service revenue for the three month period ended September 30, 2008. The increase in SG&A of $3.1 million was the result of a larger administrative structure due to the scope of our global operations associated with the Hesperion acquisition.

Net loss from continuing operations for the three months ended September 30, 2008 increased to $2 million as compared to net income of $498 thousand from continuing operations for the three months ended September 30, 2007.

At September 30, 2008 we had cash and cash equivalents of $2.4 million as compared to $7.4 million at December 31, 2007.

2008 Nine Months Financial Results

Net service revenue for the nine months ended September 30, 2008 increased $28.1 million to $50.3 million as compared to $22.2 million for the nine months ending September 30, 2007, an increase of 127%. The increase in net service revenue was primarily related to the inclusion of results from the Hesperion acquisition completed on October 31, 2007.

Direct expenses increased by $16 million to $29.3 million for the nine months ended September 30, 2008 from $13.3 million for the nine months ended September 30, 2007. The increase in direct expenses was primarily related to the inclusion of results from the Hesperion acquisition completed on October 31, 2007 which contributed $15.8 million in direct expenses during the nine months ended September 30, 2008. As a percentage of net service revenues, direct expenses decreased to 58% during the nine months ended September 30, 2008 versus 60% during the comparable period in 2007.

Selling, general and administrative expenses (SG&A) for the nine months ended September 30, 2008 were $18.3 million or 36% of net service revenue, as compared to $8.3 million or 37% of net service revenue for the nine month period ended September 30, 2007. The increase in SG&A of $10.0 million was the result of the increased administrative cost structure associated with the Hesperion acquisition and expenses associated with increased professional fees related to the acquisition. The improvement in SG&A expenses as a percentage of net service revenue during the nine months ended September 30, 2008 as compared to the similar period in 2007 was principally the result of increased net service revenue which offset the effect of a 122% increase in SG&A expenses.

For the nine months ended September 30, 2008, the Company experienced a foreign currency exchange loss of approximately $244 thousand. This loss was primarily due to the net effect of a weaker U.S. dollar against the Swiss Franc and the Euro.

Net loss from continuing operations for the nine months ended September 30, 2008 increased to $5.4 million or $0.01 per share, as compared to a net loss from continuing operations of $1.2 million, or $0.00 per share, for the nine months ended September 30, 2007.

Backlog

Our backlog at September 30, 2008 increased to $68 million from $39.5 million at September 30, 2007 due to the Hesperion acquisition.

About Averion International Corp.

Averion International Corp. is a leading international CRO with proven expertise in supporting global clinical trials for pharmaceutical, biotechnology and medical device companies. The Company has a therapeutic focus in oncology, cardiovascular diseases and medical devices. Averion’s 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 FDA approvals for products in many therapeutic areas including oncology, cardiovascular diseases and medical devices.

Averion is headquartered in Southborough, Mass., with European operations based in Basel, Switzerland. Averion has additional U.S. offices in California, Maryland and New York; and additional offices outside the U.S. in France, the Netherlands, United Kingdom, Poland, Russia, Israel, Germany, Austria, Czech Republic and Ukraine. We have additional operation centers in Slovakia and Hungary, and research partnerships in India, Asia and South America. For more information, visit www.averionintl.com.

Forward-Looking Statement

Statements contained in this press release that are not historical information are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Those risks and uncertainties include, but are not limited to: our ability to attract, retain or integrate key personnel, including scientific and technical personnel; the termination, modification or delay of contracts which would, among other things, adversely impact our recognition of revenue included in backlog and our cash-on-hand; risks associated with our pursuit of strategic acquisitions or investment in new markets; our ability to acquire and integrate new businesses; our dependence on certain industries and clients; our ability to adequately protect sensitive patient information and confidential information of clients; our ability to keep pace with rapid technological changes; fluctuation in our operating results; our ability to service our outstanding debt and comply with requirements, including financial covenants, associated with that debt; our ability to recruit suitable volunteers for the clinical trials of our clients; our exposure to exchange rate fluctuations and international economic, political and other risks; our ability to develop and market new services in the U.S., Europe and internationally; the highly competitive nature of our market; our exposure to changes in outsourcing trends in the pharmaceutical and biotechnology industries; the impact of government regulation on our business; whether we can achieve and maintain effective internal controls; and other risks. Certain of these risks and uncertainties, in addition to other risks, are more fully described in the Company's annual report on Form 10-KSB for the period ending December 31, 2007 and in the Company's other periodic reports filed with the Securities and Exchange Commission. These forward-looking statements are made only as of the date of this press release, and the Company assumes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise.

AVERION INTERNATIONAL CORP. Consolidated Balance Sheets (In thousands, except share and per share amounts)
		September 30,			December 31,
		2008			2007
		(unaudited)
Assets
Current Assets:
Cash and cash equivalents		$	2,371		$	7,384
Accounts receivable (net of allowance for doubtful accounts of $307 and $376 for 2008 and 2007, respectively)		14,146			14,293
Unbilled accounts receivable		6,714			2,571
Prepaid and other current assets		2,272			2,413
Total Current Assets		25,503			26,661
Property and equipment, net		6,324			6,509
Goodwill		51,595			48,717
Finite life intangibles (net of accumulated amortization of $3,306 and $1,614 for 2008 and 2007, respectively)		11,777			13,469
Deposits		689			658
Other non-current assets		2,369			1,878
Total Assets		$	98,257		$	97,892
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable		$	3,111		$	2,737
Accrued payroll and employee benefits		3,815			3,405
Deferred revenue		21,362			18,532
Current portion of notes payable		31			813
Current portion of accrued lease obligations		574			610
Deferred rent		475			510
Current portion of capital lease obligations		12			25
Deferred transaction obligation		560			3,683
Other accrued liabilities		2,736			4,313
Total Current Liabilities		32,676			34,628
Capital lease obligations, less current portion		—			8
Notes payable, less current portion		28,679			24,266
Accrued lease obligations, less current portion		2,702			2,966
Deferred income taxes		3,146			1,047
Other long-term liabilities		53			29
Total Liabilities		$	67,256		$	62,944
Stockholders’ Equity:
Common stock, $.001 par value, 950,000,000 and 750,000,000 shares authorized, 634,972,039, and 625,632,455 shares issued and outstanding, respectively		$	635		$	626
Convertible warrants		164			164
Common stock to be issued		837			837
Additional paid-in capital		48,418			47,308
Other comprehensive income (loss)		6			(316		)
Retained deficit		(19,059		)	(13,671		)
Total Stockholders’ equity		31,001			34,948
Total Liabilities and Stockholders’ Equity		$	98,257		$	97,892

AVERION INTERNATIONAL CORP. Consolidated Statements of Operations (In thousands, except share and per share amounts) (Unaudited)
		For the three months ended September 30,						For the nine months ended September 30,
		2008			2007			2008			2007
Net service revenue		$	15,900		$	7,820		$	50,339		$	22,197
Reimbursement revenue		2,153			980			6,321			2,005
Total revenue		18,053			8,800			56,660			24,202
Operating expenses:
Direct expenses		9,868			4,214			29,326			13,301
Reimbursable out-of-pocket expenses		2,153			980			6,321			2,005
Sales, general and administrative expenses		5,878			2,800			18,325			8,266
Depreciation and amortization expense		1,011			338			3,058			1,044
Restructuring charges		—			—			—			723
Total operating expenses		18,910			8,332			57,030			25,339
Net operating income (loss)		(857		)	468			(370		)	(1,137		)
Other income (expense):
Interest income		7			76			27			247
Interest expense		(454		)	(141		)	(1,529		)	(435		)
Foreign currency exchange gain (loss)		509			—			(244		)	—
Amortization of debt discount		(1,199		)	—			(3,258		)	—
Other		76			95			200			124
Total other income (expense)		(1,061		)	30			(4,804		)	(64		)
Income (loss) from continuing operations before income taxes		(1,918		)	498			(5,174		)	(1,201		)
Income tax expense		122			—			212			—
Net income (loss) from continuing operations		$	(2,040	)	$	498		$	(5,386	)	$	(1,201	)
Loss from discontinued operations		—			(375		)	—			(1,227		)
Net income (loss)		$	(2,040	)	$	123		$	(5,386	)	$	(2,428	)
Net income (loss) per share
Net income (loss) from continuing operations		$	(0.00	)	$	0.00		$	(0.01	)	$	(0.00	)
Loss from discontinued operations		—			$	0.00		—			$	(0.00	)
Net income (loss)		$	(0.00	)	$	0.00		$	(0.01	)	$	(0.00	)
Weighted average number of common shares outstanding		634,996,948			502,423,301			628,833,185			498,484,840

Averion International Corp.
Lawrence R. Hoffman, 508-597-6000
larry.hoffman@averionintl.com