Exhibit 99.1
IT&E International Group Reports Second Quarter Results
Company soon to be renamed Averion International Corp.
following completion of merger last month
Integration plans proceeding on schedule
BOSTON and SAN DIEGO (August 16, 2006) — IT&E International Group, Inc. (ITER.OB), a clinical research organization (“CRO”) with substantial regulatory support, today reported results for the second quarter ended June 30, 2006. On July 31, 2006, IT&E, which will be renamed Averion International Corp. pending stockholder approval, completed a series of transactions under the Agreement and Plan of Merger announced on July 6, 2006, with privately held Averion Inc., a Massachusetts corporation. The results for the second quarter do not reflect contributions from Averion Inc.
For the second quarter, IT&E reported total revenue of $4.9 million compared with $4.4 million for the same period a year earlier. The company recorded a gross profit of $1.5 million, which compares with a gross profit of $1.3 million for the same period in 2005. Net operating loss for the recently ended quarter was $0.91 million, as compared with $0.42 million in the year ago period. IT&E reported a net loss of $0.85 million, or $(0.01) per basic and fully-diluted share, for the second quarter of 2006 versus a net loss of $0.59 million, or $(0.03) per basic and fully-diluted share, in the 2005 second quarter.
Dr. Philip T. Lavin, founder and former Chief Executive Officer of Averion and now Chief Executive Officer of the combined company, said, “We have formulated an integration plan across the combined operations inclusive of processes, systems, and cross-training to best serve the needs of our existing as well as future clients. For the balance of the year, we expect to realize expanded revenues deriving from our increased backlog in oncology — most notably in our Millennix Oncology Division, which produced a significant increase in revenues and backlog during the first half of the year. Additionally, we believe that we have a strong management team and plans in place to establish Averion International Corp. as a world class CRO with unique therapeutic areas of expertise in the fields of oncology, dermatology, nephrology and medical devices. Looking ahead, we intend to expand our capabilities worldwide, initiating in Europe.”
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About Averion Inc.
Headquartered in Framingham, Massachusetts, Averion Inc., and its European division located in Darmstadt, Germany, is a full-service CRO in business for 23 years with a therapeutic focus in dermatology, medical devices, nephrology, and oncology and core competence 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 more than 40 FDA approvals to date with no refusals among submissions accepted for filing; in addition, the company has helped achieve approvals for six oncology-related product approvals. (http://www.averioninc.com)
About IT&E International Group, Inc. and its Millennix Oncology Division
Headquartered in San Diego, IT&E International and its Millennix division in Rye Brook, NY, is a full-service CRO that provides pharmaceutical and biotechnology companies with FDA and global regulatory compliance and validation services as well as full-service CRO support with an oncology focus 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 throughout the product development lifecycle 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. Oncology CRO services support Phase I — IV trials, and include regulatory and strategic planning, study design and implementation, site identification and management, safety reporting, data management, biometrics and reporting. (http://www.iteinternational.com) (www.millennix-inc.com)
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.
(Tables to Follow)
For more information, contact:
Hulus Alpay
(212) 508-9600
Makovsky + Company
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IT&E INTERNATIONAL GROUP, INC.
Consolidated Balance Sheets
| | June 30, | | December 31, | |
| | 2006 | | 2005 | |
| | (unaudited) | | | |
Cash | | $ | 5,441,041 | | $ | 6,414,770 | |
Accounts receivable (net of allowance for doubtful accounts of $90,000 for 2006 and $75,000 in 2005) | | 2,884,355 | | 2,989,646 | |
Unbilled revenue | | 422,428 | | 183,938 | |
Prepaid and other current assets | | 220,538 | | 181,823 | |
Total Current Assets | | 8,968,362 | | 9,770,177 | |
| | | | | |
Property and equipment, net | | 396,436 | | 275,263 | |
Deposits | | 114,860 | | 11,679 | |
Finite life intangibles (net of accumulated amortization of $198,876 and of $39,625 in 2006 and 2005, respectively) | | 832,873 | | 991,375 | |
Goodwill | | 3,192,239 | | 3,196,813 | |
Total Assets | | $ | 13,504,770 | | $ | 14,245,307 | |
| | | | | |
Accounts payable | | $ | 799,697 | | $ | 585,590 | |
Accrued payroll and employee benefits | | 450,657 | | 351,238 | |
Current portion of capital lease obligations | | 29,754 | | 3,250 | |
Current portion of notes payable to employees | | 244,113 | | 101,437 | |
Accrued relocation costs to officers | | 220,000 | | 220,000 | |
Deferred revenue — Initiation fees | | 790,115 | | 922,484 | |
Customer Advances | | 742,277 | | 143,520 | |
Deferred rent | | 84,629 | | 22,670 | |
Other accrued liabilities | | 411,311 | | 433,745 | |
Total Current Liabilities | | 3,772,553 | | 2,783,934 | |
Long-term capital lease obligations, less current portion | | 52,921 | | 12,765 | |
Notes payable to employees, less current portion | | 481,154 | | 654,384 | |
Total Liabilities | | 4,306,628 | | 3,451,083 | |
| | | | | |
Stockholders’ equity: | | | | | |
Preferred stock, $.001 par value, 10,000,000 shares authorized: | | | | | |
Series D Convertible Preferred stock, $.001 par value, 16,500 shares authorized 11,500 shares issued and outstanding with a stated value of $11,500,000 | | 8,105,938 | | 8,105,938 | |
Common stock, $.001 par value, 650,000,000 shares authorized, 60,448,875 shares issued and outstanding | | 60,449 | | 60,449 | |
Convertible warrants | | 3,108,944 | | 3,108,944 | |
Call option | | 170,729 | | 285,118 | |
Additional paid-in capital | | 2,852,091 | | 2,504,427 | |
Retained deficit | | (5,100,009 | ) | (3,270,652 | ) |
Total Equity | | 9,198,142 | | 10,794,224 | |
Total Liabilities and Capital | | $ | 13,504,770 | | $ | 14,245,307 | |
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IT&E INTERNATIONAL GROUP, INC.
Consolidated Statements of Operations
(Unaudited)
| | For the three months ended
June 30, | | For the six months ended
June 30, | |
| | 2006 | | 2005 | | 2006 | | 2005 | |
Service revenue | | $ | 4,746,420 | | $ | 4,297,356 | | $ | 9,490,958 | | $ | 8,743,936 | |
Reimbursement revenue | | 176,591 | | 134,608 | | 391,051 | | 232,955 | |
Total | | 4,923,011 | | 4,431,964 | | 9,882,009 | | 8,976,891 | |
| | | | | | | | | |
Cost of revenue | | 3,469,663 | | 3,141,455 | | 7,292,585 | | 6,254,412 | |
Gross profit | | 1,453,348 | | 1,290,509 | | 2,589,424 | | 2,722,479 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
General and administrative | | 1,408,242 | | 973,440 | | 2,751,441 | | 1,773,715 | |
Sales and marketing | | 451,147 | | 470,667 | | 906,531 | | 701,350 | |
Depreciation and amortization | | 112,465 | | 25,601 | | 222,799 | | 42,749 | |
Officer compensation | | 393,634 | | 242,096 | | 651,403 | | 448,843 | |
Total Operating Expenses | | 2,365,488 | | 1,711,804 | | 4,532,174 | | 2,966,657 | |
Net Operating Loss | | (912,140 | ) | (421,295 | ) | (1,942,750 | ) | (244,178 | ) |
| | | | | | | | | |
Other Income (Expense) | | | | | | | | | |
Interest income | | 70,409 | | 2,318 | | 134,451 | | 2,318 | |
Interest expense | | (11,669 | ) | (95,067 | ) | (21,057 | ) | (145,784 | ) |
Loan fee amortization | | | | (72,281 | ) | | | (144,563 | ) |
Fees on long-term debt | | | | | | | | (214,043 | ) |
Non-cash financing costs | | | | | | | | (62,500 | ) |
Total Other Income (Expense) | | 58,740 | | (165,030 | ) | 113,394 | | (564,572 | ) |
| | | | | | | | | |
Loss before income taxes | | (853,400 | ) | (586,325 | ) | (1,829,356 | ) | (808,750 | ) |
Income taxes | | | | | | | | | |
Net Loss | | $ | (853,399 | ) | $ | (586,325 | ) | $ | (1,829,356 | ) | $ | (808,750 | ) |
| | | | | | | | | |
Weighted average number of common shares outstanding-basic and fully-diluted | | 60,448,875 | | 21,344,198 | | 60,448,875 | | 19,938,363 | |
| | | | | | | | | |
Net loss per share-basic and fully-diluted | | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.04 | ) |
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