Xebec Announces 2017 Second Quarter Operating Results - Reports Revenue Growth of 95%, EBITDA at 16.3% and 8.9% Net Profit
MONTREAL (QC), August 28, 2017 - Xebec Adsorption Inc. (TSXV: XBC) ("Xebec"), a provider of gas generation, purification, and filtration solutions announced today its 2017 second quarter operating results.
Revenues of $4.0 million for the second quarter of 2017 compared to $2.1 million for the same quarter in 2016, a 95% increase. Revenues of $7.3 million for the six month period compared to $4.5 million for the same period in 2016, a 63% increase year to date. This is mainly explained by the increase of revenues for the Clean Technology segment.
Gross profit of $1.6 million or 39.9% of revenues for the second quarter of 2017 compared to $0.5 million for the same quarter in 2016, a 304% increase. Gross profit of $3.0 million or 41.5% of revenues for the six month period of 2017 compared to $0.9 million for the same period in 2016, a 342% increase.
Net earnings of $0.36 million or $0.01 per share for the three month period ending June 30, 2017 compared to a net loss of $0.99 million or ($0.02) per share for the same period in 2016, an improvement of $1.35 million. Net earnings of $0.93 million or $0.02 per share for the six month period ending June 30, 2017 compared to a net loss of $2.0 million or ($0.05) per share for the same period in 2016, an improvement of $3.0 million. The increase of net earnings is explained by the combination of higher sales and margins.
Positive EBITDA of $0.7 million for the three month period ending June 30, 2017 compared to a negative EBITDA of $0.8 million for the same period in 2016, an improvement of $1.5 million. Positive EBITDA of $1.3 million for the six month period ending June 30, 2017 compared to a negative EBITDA of $1.7 million for the same period in 2016, an improvement of $3.0 million.
Backlog of $8.9 million at August 25, 2017 compared to $5.8 million at August 29, 2016 a $3.1 million increase.
Selling and administrative expenses decreased by $0.3 million in the second quarter of 2017 compared to the same quarter of 2016. Selling and administrative expenses decreased by $0.5 million in the six month period of 2017 compared to the same period of 2016.
Positive Trailing Twelve Months (TTM) net earnings of $0.3 million
As of June 30, 2017, the Company had $0.5 million of cash on hand, and improved its working capital position from a deficit of ($1.2) million at December 31, 2016 to $0.6 million at June 30, 2017.
Current Market Conditions and Guidance for 2017
Current market conditions remain favorable in the Industrial, Cleantech and Oil & Gas segments. We are on track to achieve our revenue target of $15 to $18 million, and earnings per share (EPS) of 0.04 to 0.06 for 2017. Historically, our third and fourth quarter results are stronger than the first two quarters.
Clean Technology – Hydrogen and Renewable Natural Gas (RNG)
During the second quarter Xebec made significant progress in its marketing activities for its renewable natural gas products. We have increased our sales and marketing activities both in Europe and North America, with more potential customers considering Xebec “clean technology”. We have added sales partners in several countries, and we expect to see an impact on revenue later this year and going into next year. Positive news for us: the price for renewable natural gas (RNG) has continued to climb, especially in North America. Prices for RNG have historically been in the $7 to $15 range; they are now in the $30 to $70 range per MMBTU, or ten to twenty times the price of fossil natural gas.
Oil and Gas Processing
During this last quarter Xebec has started to quote several larger membrane replacement units, targeting a number of existing operating plants in North and South America, as well as South East Asia. Work continues on improving the pipeline of projects and increasing the number of leads which will hopefully result in near term orders and an acceleration in revenue. Xebec expects that this quotation activity will lead to first sales orders for replacements and new systems within the next 6 to 12 months.
Industrial Compressed Air and Gas Treatment
The industrial products segment has continued to deliver solid results and margins. We have expanded our partnerships throughout Canada and continue to introduce new products to accelerate growth in this segment. We are also seeing an increase in demand for highly energy efficient products, especially in the compressed air dryer segment, which should lead to stronger order flow for the rest of the year.
2017 Second Quarter Financial Statements and Management’s Discussion and Analysis
The complete financial statements, notes to financial statements and Management’s Discussion and Analysis for the three-month period ended June 30, 2017, are available on the Company’s Website at www.xebecinc.com or on the SEDAR Website at www.sedar.com.
About Xebec Adsorption Inc. Xebec Adsorption Inc. is a global provider of clean energy solutions to corporations and governments looking to reduce their carbon footprints. With more than 1,500 customers worldwide, Xebec designs, engineers and manufactures innovative products that transform raw gases into marketable sources of clean energy. Xebec’s strategy is focused on establishing leadership positions in markets where demand for renewable energy through gas purification and generation, natural gas dehydration, and filtration is growing. Headquartered in Montreal (QC), Xebec is a global company with two manufacturing facilities in Montreal and Shanghai, as well as a sales office in Houston Texas (USA) and distribution network in North America, Europe, and Asia. Xebec trades on the TSX Venture Exchange under the symbol XBC. For additional information on the company, its products and services, please visit the Xebec website at www.xebecinc.com
Caution Concerning Forward-Looking Statements Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Certain statements in this press release may constitute "forward-looking" statements within the meaning of applicable securities laws. This forward looking information includes, but is not limited to, the expectations and/or claims of management of Xebec with respect to information regarding the business, operations and financial condition of Xebec. Forward-looking information contained in this press release involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Xebec or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. This list is not exhaustive of the factors that may affect forward-looking information contained in this press release. When used in this press release, such statements use such words as "anticipate", "believe", "plan", "estimate", "expect", "intend", "may", "will" and other similar terminology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this presentation. Forward-looking statements involve significant risks and uncertainties, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forwardlooking statements.
SOURCE Xebec Adsorption Inc.
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