MONTREAL (QC), May 27th, 2020 – Xebec Adsorption Inc. (TSXV: XBC) (“Xebec”), a global provider of renewable gas solutions, is pleased to announce today its 2020 first quarter results, with the following highlights:

  • Revenues of $12.2 million in the first quarter of 2020 compared to $9.8 million for the same period in 2019, a 24% increase.
  • Positive EBITDA at $0.8 million for 2020 compared to $1.1 million for the same first quarter in 2019.
  • Net loss of $0.7 million or $(0.01)/share for 2020, compared to a net profit of $0.4 million or $0.01/share for the same period in 2019.
  • Working capital increased at $39.7 million as of March 31, 2020, for a current ratio of 2.9:1 compared with working capital of $36.9 million and a 3.2:1 ratio on December 31, 2019.

Financial Results

  • Revenues of $12.2 million for the first quarter of 2020 compared to $9.8 million for the same period in 2019, a 24% increase. The increase is mainly explained by the higher volume of major cleantech contracts and revenue from the acquisition in California completed in December 2019.
  • Gross profit of $3.0 million or 25% of revenues for the first quarter of 2020 compared to $3.3 million for the same quarter in 2019, a 9% decrease compared to the same period in 2019. The decrease is mainly explained by a different product mix, an increase in amortization expenses of $0.9 million, the disruption in the manufacturing operations in China, Italy and California caused by the COVID-19 pandemic and the resulting reduced productivity.
  • Net loss of $0.7 million or $(0.01) per share for the three-month period ending March 31, 2020, compared to a net profit of $0.4 million or $0.01 per share for the same period in 2019, a deterioration of $1.1 million. The decrease is mainly explained by the negative impact of the COVID-19 on the Q1 2020 revenues and associated gross margin combined with higher administrative and amortization expenses.
  • Positive EBITDA of $0.8 million for the three-month period ending March 31st, 2020, compared to $1.1 million for the same period in 2019, a decrease of $0.3 million.
  • Backlog increased by $17.9 million, from $71.9 million on May 27th, 2019, to $89.8 million on May 20th, 2020.
  • Selling and administrative expenses increased by $1.4 million in the first quarter of 2020 compared to the same quarter of 2019. This is primarily due to the organizational scale-up to meet 2020 objectives for the Cleantech, Industrial and Renewable Gas Infrastructure segments, in addition to increased amortization expense of intangible assets within SG&A.
  • Cash on hand as of March 31st, 2020, of $23.7 million and positive working capital at $39.7 million, compared to $36.9 million as of December 31st, 2019, an increase of $2.8 million.

CEO Quote:

“Despite the global pandemic in the first quarter of 2020, Xebec was able to show resilience and continue its growth trajectory for the year. Our first quarter came in weaker than originally expected due to the impact of COVID-19 on our operations globally. Some industrial order deliveries were delayed and could not be shipped by March 31st, resulting in lower than expected revenues. These deliveries have since resumed and a substantial part of these revenues will be realized in the current quarter. Xebec’s geographical diversity and the essential nature of our businesses have allowed us to continue operating and manufacturing with moderate impact on the first quarter. Our strong balance sheet and backlog provides us a solid foundation for the coming quarters.

We are happy to report that industry activity remains robust as customers remain forward-looking. Renewable gas projects typically span multi-years from inception to commissioning and deliberate planning is needed by all stakeholders. With mandates and targets already in place, the pandemic is not deterring developers from moving projects forward. In addition, governments are now looking at ways to stimulate the economy, and the long-term appeal of renewable energy projects looks to be favourable for policy makers.”
 Kurt Sorschak, President and CEO, Xebec Adsorption Inc.

Impact of COVID-19 on First Quarter and Operational Update

Xebec was not immune to the worldwide impact of COVID-19. The brief business interruptions in our Chinese, Italian and Californian operations in March resulted in shipment delays and consequently resulted in reduced revenues of approximately $3.8 to 4.0 million in Q1/20. These shipment delays in turn resulted in higher inventory levels. In addition, Xebec saw a planned increase of its inventory levels at its Blainville facility to ensure continued supply of critical manufacturing materials and components in the changing environment.

Furthermore, efforts to contain COVID-19 increased operating costs and reduced productivity at all our facilities due to the implementation of additional health and safety measures. Xebec’s “Business Continuity Committee” worked diligently to safeguard our employees, partners, and suppliers. To date, we can report that Xebec has not experienced a single case of COVID-19 throughout its worldwide operations.

With China restarting in mid-March, our Italian operations in early May and shipments from our California subsidiary having restarted in mid- April, our operational performance is improving. Our manufacturing facility in Québec continues to operate at near full capacity and has been deemed an essential business.

Xebec continues to be well-positioned in the event of future disruptions with its strong balance sheet that includes $23.7 million of cash on hand (as of March 31st, 2020) and a $10 million loan facility from the Fonds de Solidarité FTQ that was recently announced. In addition, Xebec will receive additional funds of approximately $14 million if its outstanding warrants are exercised by July 4th, 2020.

Management Guidance for 2020
Despite the weaker than expected Q1/20 numbers, which were primarily tied to our inability to ship products to customers and recognize revenues, Xebec expects to continue its rapid growth and improve its profitability in 2020. As a result, the company maintains its previously announced guidance. With the support of our strong order backlog of $89.9 million, we expect consolidated revenues for 2020 in the range of $80 to $90 million, net earnings of 7 to 9% and EBITDA margins of 11 to 13%.

More specifically, revenues in our Cleantech Systems segment are expected to be $50 to $55 million and revenues from our Industrial Service & Support segment are expected to grow to $30 to $35 million with half of the revenue attributed to acquisitions, and the rest to organic growth. Xebec does not expect to record any revenues from our Renewable Gas Infrastructure segment in 2020.

Cleantech Systems
Due to the shutdown of our operations in China and Italy, which impacted the shipment of products and site construction and commissioning activities, revenue and gross margin profitability came in lower than anticipated. Xebec expects a stronger Q2/20 as the company’s operations in these markets have since restarted.

We regard quote activity as an early indicator for future order activity. Our current quote log remained strong at $937.0 million (as of March 13th, 2020), and our order backlog is $89.8 million.

Xebec had recent success in the quarter with $27.0 million in U.S dairy farm orders announced in February 2020, which will be delivered over the next few quarters. We see this as a reflection of more customers recognizing Xebec’s competitive advantages which are lowest lifecycle costs and local service and support offerings through our North American Xebec Service Subsidiaries.

The company will continue to increase its effort in Europe and North America to market and sell its new BGX Biostream™ product to gain market share in the small to medium size biogas upgrading segment.

Industrial Service & Support
Xebec continues to pursue organic and inorganic growth opportunities. The company views acquisitions as a critical component in supporting Cleantech System’s growth by providing service and support throughout North America.

On December 10th, 2019, we announced our 2nd acquisition as part of this strategy, and we expect another two to three acquisitions in 2020. The targeted acquisitions are in the U.S and Canada.

Revenue growth and profitability were impacted due to delays in product shipments to customers and restrictions in providing on-site service and support to companies that were closed. As economies begin to reopen and our acquisition strategy continues, Xebec expects future quarters to be stronger.

Revenue in this segment is expected to triple from $11.5 million in 2019 to $30 to $35 million in 2020, while gross margins should start improving from around 30% toward the targeted 40% range. In the first quarter we demonstrated being on track for this target with gross margins of 37%.

Renewable Gas Infrastructure
Xebec is in the final stages of formalizing its first strategic investment partnership to actively participate in renewable gas projects in Canada. This partnership will support the growth of companies developing renewable gas and waste recovery projects.

Xebec expects to announce this partnership within the next few days, a key milestone in allowing Xebec to rapidly scale up its efforts to invest in high-quality renewable gas assets in Québec.

On February 18th, 2020, Xebec announced its first renewable natural gas (RNG) infrastructure investment located in Québec, Canada. The $28 million project will be an integrated facility to process various organic wastes to produce renewable natural gas and biofertilizer. The project continues to progress, and the plant is expected to be commissioned by mid- to late 2021.

This project marked the start of Xebec’s newest business segment, which aims to drive predictable recurring and profitable revenue generation through 20-year Gas Purchase Agreements (GPAs) with utilities, tipping fees and bio-fertilizer sales.

Xebec to Host Live Investor Webinar to Discuss Q1 2020 Results
An investor webinar for shareholders, analysts, investors, media representatives, and other stakeholders will be held today, May 27th, 2020 at 11:00AM EDT (8:00AM PDT).

Register here:

A recording of the webinar and supporting materials will be made available in the investors section of the Company’s website at

2020 First 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 March 31st, 2020, are available on the company’s website at or on the SEDAR website at 

Related links:

For more information:
Xebec Adsorption Inc.
Brandon Chow, Investor Relations Manager
+1 450.979.8700 ext 5762
[email protected]

About 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

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. This news release contains forward-looking statements and forward-looking information (together, “forward-looking statements”) within the meaning of applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements, and subject to risks and uncertainties. Generally, forward-looking statements can be identified by the use of terminology such as “plans”, “seeks”, “expects”, “estimates”, “intends”, “anticipates”, “believes”, “could”, “might”, “likely” or variations of such words, or statements that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “will be taken”, “occur”, “be achieved” or other similar expressions. Forward-looking statements, including statements concerning future capital expenditures, revenues, expenses, earnings, economic performance, indebtedness, financial condition, losses and future prospects as well as the expectations of management of Xebec with respect to information regarding the business and the expansion and growth of Xebec operations, involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are subject to business and economic factors and uncertainties, and other factors that could cause actual results to differ materially from these forward-looking statements, including the relevant assumptions and risks factors set out in Xebec’s public documents, including in the most recent annual management discussion and analysis and annual information form, filed on SEDAR at Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include, among others, the uncertain and unpredictable condition of global economy, notably as a consequence of the Covid-19 pandemic, Xebec’s capacity to generate revenue growth, the availability to Xebec of financing and credit alternatives and access to capital, Xebec’s capacity to meet all its other commitments and business plans, Xebec’s limited number of customers, the potential loss of key employees, changes in the use of proceeds relating to the loan, share price volatility, and other factors. Although Xebec believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, Xebec disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.