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Press Release

Xebec Announces 2017 Third Quarter Operating Results -
Growth in Revenue of 130%, 99% in Order Backlog, 8.0% in EBITDA, and, 2.3% Net Profit

Release date: 29.11.2017

Press Release PDF

MONTREAL (QC), November 29, 2017 - Xebec Adsorption Inc. (TSXV: XBC) ("Xebec+"), a provider of gas generation, purification, and filtration solutions announced today its 2017 third quarter operating results.

Financial Results

Revenues of $4.1 million for the third quarter of 2017 compared to $1.8 million for the same quarter in 2016, a 130% increase compared to the same period in 2016.

Revenues of $11.5 million for the nine month period compared to $6.3 million for the same period in 2016, an 82% increase year to date. This is mainly explained by the increase of revenues for the Clean Technology segment and some sales from the oil & gas sector.

Gross profit of $1.7 million or 41.2% of revenues for the third quarter of 2017 compared to $0.3 million for the
same quarter in 2016, a 514% increase.

Gross profit of $4.8 million or 41.4% of revenues for the nine month period of 2017 compared to $1.2 million for
the same period in 2016, a 307% increase.

Net earnings of $0.1 million or $0.002 per share for the three month period ending September 30, 2017 compared to a net loss of $0.5 million or ($0.01) per share for the same period in 2016, an improvement of $0.6 million.

Net earnings of $1.0 million or $0.02 per share for the nine month period ending September 30, 2017 compared to a net loss of $2.5 million or ($0.06) per share for the same period in 2016, an improvement of $3.5 million. The increase of net earnings is explained by the combination of higher sales and margins.

Positive EBITDA of $0.3 million for the three month period ending September 30, 2017 compared to a negative
EBITDA of $0.3 million for the same period in 2016, an improvement of $0.6 million.

Positive EBITDA of $1.7 million for the nine month period ending September 30, 2017 compared to a negative EBITDA of $2.0 million for the same period in 2016, an improvement of $3.7 million.

Backlog of $16.7 million at November 28, 2017 compared to $8.4 million at November 28, 2016 an $8.3 million or 99% increase.

Selling and administrative expenses increased by $0.8 million in the third quarter of 2017 compared to the same quarter of 2016. This is mainly explained by the granting of stock options to directors, officers and employees and some reversal of provisions in the same quarter of 2016.

Selling and administrative expenses increased by $0.3 million in the nine month period of 2017 compared to the same period of 2016. This is mainly explained by the granting of stock options to directors, officers and employees and some reversal of provisions in the same period of 2016.

Trailing Twelve Months (TTM) net earnings were profitable at $0.9 million.

As of September 30, 2017, the Company had $0.4 million of cash on hand, and improved its working capital position from a deficit of ($1.2) million at December 31, 2016 to positive $1.1 million at September 30, 2017.

Market Conditions and Guidance for 2017

Our Cleantech and Industrial segments are performing well and in line with forecasts. We are also seeing a solid increase in our order backlog, pointing toward further revenue growth in 2018. Our Cleantech segment has especially seen a significant increase in quotation and order activity. To fully focus on these opportunities, we will no longer actively pursue the Oil & Gas segment as it still requires short term significant investment with revenue expectations only in the longer term. We are on track to achieve our revenue target of $15 to $18 million. We expect earnings per share (EPS) at the lower end of guidance of 0.04 to 0.06 for 2017, mainly due to option expenses.

Clean Technology – Hydrogen and Renewables

Our activities related to renewable natural gas (RNG) have further improved. We reported the sale of our largest upgrading unit in France to date, as well as our first full system sale in Italy. We have also reported a further project win in China, and are cautiously optimistic about the medium term prospects in the Chinese market. Low carbon, or so-called RIN credits, for RNG under the U.S. Renewable Fuel Standard continue to increase in value and are approaching $3,00 per RIN, making production of RNG extremely attractive. Consequently, the number of projects in North America continues to increase.

Industrial Compressed Air and Gas Treatment

As in the second quarter, the industrial products segment continues to deliver solid results and margins. We have hired a Senior Executive to lead the team and focus on several partnership arrangements that would direct more activity toward the desiccant air dryer segment. This is foundational to our business as it ultimately covers a significant portion of our fixed costs.

Oil and Gas Processing

As indicated above, we are reducing our activities in this segment in order to fully focus on the imminent
opportunities in Cleantech. This reduction in activity has led to some organizational changes that will ultimately
benefit our bottom line.

2017 Third 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 September 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.

Xebec Adsorption Inc. is a global provider of gas generation, purification and filtration solutions for the industrial, energy and renewables marketplace. Its customers range from small to multi-national corporations and governments looking to reduce their carbon footprints. Headquartered in Montreal (QC), Xebec designs, engineers and manufactures innovative and transformative products, and has more than 1,500 customers worldwide. With two manufacturing facilities in Montreal and Shanghai, as well as a sales 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, visit Xebec at xebecinc.com

Cautionary Statement

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 involve 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, 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 forward-looking statements.



For more information:
Kurt Sorschak,
President and CEO,

450-979-8701
ksorschak@xebecinc.com