MONTREAL (QC), March 25, 2021 – Xebec Adsorption Inc. (TSXV: XBC) (“Xebec”), a global provider of clean energy solutions, announced today its 2020 fourth quarter and full year results, with the following highlights:

  • Revenues increased by $7.2 million to $56.5 million for the twelve-month period ended December 31, 2020, compared to $49.3 million for the same period the prior year.
  • Adjusted EBITDA of ($22.0) million for the twelve-month period ended December 31, 2020, compared to $7.0 million for the same period last year.
  • Net loss of $32.0 million or ($0.33) per share compared to $2.0 million or $0.03 per share in the twelve-month period ended December 31, 2020 compared to the same period in the prior year.
  • Working capital increased to $171.2 million on December 31, 2020, for a current ratio of 4.1:1, from working capital of $37.3 million and a current ratio of 3.2:1 on December 31, 2019.
  • Management guidance for fiscal 2021 of consolidated revenues in the range of $110.0 to $130.0 million and an adjusted EBITDA margin in the range of 3.0% to 4.0%.
  • As at December 31, 2020, the company had $168.6 million of cash compared to $22.7 million as at December 31, 2019.

Financial Highlights:

Three months ended
December 31,
% of
Twelve months ended
December 30,
% of
2020 2019 2020 2019
(In millions of dollars) (audited) (audited) (audited) (audited)
Revenues 6.4 13.6       -53% 56.5 49.3 15%
Gross margin (11.4) 4.1       N/A 0.3 15.5 (98%)
Gross margin as a percentage of revenues (178%) 30% 0.5% 31%
Adjusted EBITDA (1) (22.6) 2.1 (22.0) 7.0
Net income (loss) (28.3) (0.5) (32.0) 2.0
Net income (loss) per share – basic ($/share) (0.33) (0.01) (0.33) 0.03
Weighted average number of shares 106,774,312  72,547,423 96,492,983 64,319,442
As at: December 31,
December 31,
Total assets 444.7 66.3
Total liabilities 100.7 27.4
Equity 344.0 39.0
As at:  March 18,
April 14,
Backlog 100.1 99.3
(1) Adjusted EBITDA starts with EBITDA and adjusts for Stock-based compensation expenses, impairment of inventories, exchange gain/loss on the obligation arising from non-controlling interest participation in a subsidiary, foreign exchange loss (gain) and accretion of debt.


Financial Results

  • Revenues decreased by $7.2 million to $6.4 million for the three-month period ended December 31, 2020, compared to $13.6 million for the same period the prior year. The decrease is mainly due to revenue adjustments in the last quarter due to extraordinary items in the Cleantech Systems business segment resulting from the impact of the COVID-19 pandemic and other operational issues, which substantially increased product, operational and installation costs. With the impact of COVID-19 lasting longer than expected and additional restrictions being re-imposed by local authorities in Q4/20, Xebec undertook a detailed accounting review of its long-term, production-type contracts for its renewable natural gas projects where revenues are recognized based on the percentage of completion method. As a result of the projected total cost of fulfilling these contracts having increased substantially, Xebec determined that previously incurred expenses represent a lower percentage of total costs than previously estimated. As such, revenues recognized to date had to be adjusted ($5.2 million) to reflect the revised percentage of completion for contracts under Xebec’s updated estimates. Furthermore, Xebec reversed revenues ($1.9 million) previously recognized based on the percentage of completion method due to the deteriorating financial position of a client where the likelihood of payment became uncertain in early 2021. Finally, two contracts that had become unprofitable were cancelled by a customer in early 2021 as a result of the delivery delays, due to COVID-19 and other related disruptions. This impact led to a $5.4 million revenue adjustment. The parts and materials used for these contracts have since been inventoried and are expected to be used for future contracts.
  • Gross margin decreased from $4.1 million to ($11.4) million for the three-month period ended December 31, 2020 compared to the same period the prior year. The gross margin % decrease from 30% to (178%) is mainly due to the reversal of revenues described earlier and some of the contracts previously estimated to be profitable now projected to result in losses. The percentage of completion method requires that losses on such contracts be recognized immediately, further impacting the Company’s gross margin. Moreover, the impact of COVID-19 increased costs for projects in Italy and China, which also resulted in a gross margin deterioration.
  • Selling and administrative expenses (“SG&A”) for the three-month period ended December 31, 2020, of $13.6 million were higher by $10.0 million compared to $3.6 million for the same three months of 2019. This is primarily due to several expenses that are non-recurring in nature that have been accounted for in the fourth quarter of 2020: (1) $4.8 million of transaction costs for the HyGear and Inmatec acquisitions; and (2) a $1.1 million provision for bad debt relating to uncollectible accounts receivable and a penalty for a biogas project in Europe. Additionally, $0.7 million of recurring administrative expenses resulted from the acquisitions of Titus and ACS. Finally, overall SG&A expenses increased due to an organizational scale up of employees and associated costs to support the increased level of sales, and from grants of restricted and deferred share units made to key employees.
  • Net loss of $28.3 million or ($0.26) per share in the three-month period ended December 31, 2020 compared to a net loss of $0.5 million or ($0.01) per share for the same period the prior year.
  • Adjusted EBITDA decreased to ($22.6) million for the three-month period ended December 31, 2020, from $2.1 million for the same period last year.
  • Backlog increased by $0.8 million over the last 12 months, from $99.3 million on April 14, 2020 to $100.1 million on March 18, 2021.

Recent Events

  • On March 16, 2021, Xebec commented on class action lawsuit application filed in Québec
  • On March 15, 2021, Xebec partnered with Coregas, one of Australia’s largest gas companies, to accelerate the development of hydrogen ecosystems in Australia and New Zealand
  • On February 24, 2021, Xebec secured $59.3 million in new credit facilities from National Bank of Canada
  • On February 22, 2021, Xebec completed its acquisition of Inmatec
  • On February 16, 2021, Xebec launched UK hydrogen supply strategy with 15-year Gas-as-a-Service contract and construction of first Hydrogen Decentralized Production Hub in the country
  • On February 11, 2021, Xebec received an order for FuelCell Energy’s Port of Long Beach Project with Toyota
  • On January 7, 2021, Xebec graduated to the TSX and started trading on the exchange
  • On December 31, 2020, Xebec completed its transformative acquisition of HyGear, a leading provider of local hydrogen through steam methane reforming and electrolysis
  • On December 30, 2020, Xebec closed its $143.8 million bought deal public offering and $63.3 million concurrent private placement with CDPQ
  • On December 17, 2020, Xebec entered the hydrogen and renewable natural gas markets in Germany with the acquisition of Inmatec, a world leader in on-site oxygen and nitrogen generation products
  • On December 8, 2020, Xebec launched its hydrogen strategy with the transformative acquisition of HyGear
  • On November 12, 2020, Xebec strengthened its partnership with Shenergy in China with a strategic investment


CEO Quote: 

“Despite positive developments in certain segments and acquisitions that we believe position us well for the future, 2020 was a challenging year for Xebec’s financial results as a result of different factors, including the negative impact of COVID-19.

Going forward, several changes have been put in place to ensure that the issues we encountered in 2020 do not reoccur. These changes include adjusting our quote templates to better account for risks associated with installation activities, launching our standard containerized biogas upgrading system called BGX Biostream™, which offers more predictable production and installation costs, and changes to our project management practice to better anticipate future cost increases. Furthermore, as a result of its graduation from the TSX Venture to the main TSX exchange in January 2021, Xebec has been working with external consultants to implement internal controls at the level required for non-venture issuers in the required transition timeframe, to enhance our systems and process to better support our growth globally.

In 2020, we also expanded our management and operational capabilities, which allowed us to launch on several internal improvement projects such as upgrading our ERP system, provide support in publishing our first ESG report, support the establishment of our internal M&A team and provide assistance and training for internal controls.

Although the year did not evolve as initially planned as we faced headwinds, including COVID-19, I am excited about the road ahead as the company is in a strong financial position and the market opportunities for us continue to expand. For example, our new Biostream product is targeted at small to mid-sized renewable natural gas projects, and the standardization of our design will allow us to scale manufacturing in line with demand. Coupled with more favourable renewable energy policies in North America, we believe that we are at the start of a broader renewable gas infrastructure build-out. The addition of HyGear and Inmatec to our operations also positions us favourably to benefit from the hydrogen and onsite generation trends. Overall, in 2021 we expect to continue to build on strong revenue growth and plan a return to positive adjusted EBITDA,” stated Kurt Sorschak, Chairman, President and CEO of Xebec Adsorption Inc.


Current Market Outlook
The political and regulatory backdrop for Xebec’s products and services remains positive, and both Europe and North America are moving aggressively towards net-zero positions by 2050. In the United States, the new Administration reaffirmed is leadership as it relates to climate change and rejoined the Paris Agreement in January. Consequently, the EPA has reviewed its past practices under the Renewable Fuel Standard (RFS) and RINs (renewable identification numbers or low carbon fuel credits) have significantly increased in value from its three-year low in 2019 and is approaching its all-time-high from 2017. The increase in value of these credits is one factor that drives renewable gas project development.

Despite challenges faced by the COVID-19 pandemic and related operational issues, Xebec believes that the outlook for 2021 and beyond continues to be very positive. Xebec anticipates strong revenue growth and a return to positive adjusted EBITDA in 2021.


Cleantech Systems

Renewable Natural Gas
Xebec is accelerating its shift towards standardized biogas upgrading products for the renewable natural gas market. The company launched and delivered its first fully containerized and standardized BGX Biostream™ (“Biostream”) unit for small-scale biogas upgrading applications in 2020. Xebec expects that this new product will lead to predictable cost management and improved gross margins. In addition, Biostream will allow Xebec to scale its operations to fill the growing demand for RNG systems. The product’s value proposition offers customers significantly shorter lead times, one week installation and start-up periods, a modular and scalable design, and the ability to handle smaller, fluctuating biogas flow rates.

According to the American Biogas Council, it is estimated that 8,574 dairy, poultry, and swine farms and 3,878 water resource recovery facilities, are primed for biogas and renewable natural gas production. Biostream is estimated to cover approximately 80% of these use cases with its two standardized configurations. In addition, oil majors such as BP, Shell and Chevron, who are potential partners or customers, have become increasingly engaged in the market and have started to directly fund RNG developments.

Overall, the company continues to see a positive backdrop for the RNG industry as organizations and governments around the world aim to manage organic waste more effectively and decarbonize the energy supply, transportation and industry.

Xebec regards renewable natural gas quote activity as an early indicator of future order activity. The company’s quote log remains strong at over $1 billion quotes outstanding, of which $439.6 million (as of March 24, 2021) are actively being pursued. Biostream quotes have increased significantly over the last several months, as a result of new marketing and sales efforts, and now make up 23.8% of total quotes. The company is in final negotiations for several projects, leading to the expectation of positive short-term order outlook and an increased backlog.

The company expects that the renewable natural gas segment will comprise approximately 20% to 30% of total revenues in 2021.

The hydrogen economy is rapidly growing and presents a large-scale market worldwide. Xebec’s hydrogen purification business coincides with the market’s expanding opportunities as the need for high-purity hydrogen for use in fuel cell electric vehicles increases.

On February 11, 2021, Xebec announced a contract for Fuel Cell Energy’s Port of Long Beach project with Toyota. This recent order, among others, showcases the growing interest in Xebec’s proprietary PSA technology for such applications.

As a result of Xebec’s acquisition of HyGear in December 2020, the company obtained a world leading hydrogen generation business with both steam methane reforming and electrolysis technologies. HyGear is expected to start contributing revenues and profits to Xebec in 2021 through a combination of equipment sales, long-term Gas-as-a-Service contracts and R&D projects.

The cornerstone of HyGear’s strategy is to satisfy the existing and evolving needs for industrial hydrogen, while also facilitating the upcoming demand for fuel cell electric vehicles (FCEVs). This is supported by both on-site hydrogen generation equipment and local decentralized hydrogen production hubs in strategic areas. Customers can either purchase equipment or sign long-term, 15-year Gas-as-a-Service contracts and pay for the molecule itself.

On February 16, 2021, Xebec announced the construction of the company’s second Decentralized Hydrogen Production Hub in West Bromwich, United Kingdom with Buse Gases Ltd as a joint venture. This hub is in addition to the one currently operational in Arnhem, The Netherlands, which was commissioned in 2017 and is delivering hydrogen to customers locally.

Decentralized Production Hubs will be a key aspect of Xebec’s hydrogen supply strategy going forward and the full details will be provided in a corporate update later this year.


Industrial Service & Support
Xebec continues its roll-up strategy by acquiring compressed air service companies to build out the company’s Cleantech Service Network throughout North America. With the strategic acquisitions of HyGear and Inmatec, the Cleantech Service Network coverage will now include Europe.

When customers select a vendor for a multi-million-dollar renewable natural gas or hydrogen system, the ability to provide local service and support figures prominently in their purchasing decision. The company continues to aggressively expand its Cleantech Service Network across its operating regions. As a result, Xebec is targeting approximately 30 companies (5 completed to date) by 2025, resulting in a yearly revenue run rate of about $250 million by 2025.

This strategy supports Xebec’s long-term plan to transition to a more services-based company. Increased exposure to service revenues is expected to improve the company’s overall revenue predictability and profitability. Lastly, the company’s service offering is not limited to its own equipment as technicians can interface with other vendors’ renewable natural gas and hydrogen systems.


Renewable Gas Infrastructure
Xebec is addressing the renewable gas infrastructure opportunity through GNR Quebec Capital L.P. (“GNRQC”), a fund created in partnership with The Fonds de solidarité FTQ (“Fonds”), the largest capital development fund in Québec. As a result, all of Xebec’s renewable gas infrastructure investment activities were folded into GNRQC. Xebec is an equal equity investor alongside the Fonds and will participate in the sale of renewable natural gas equipment alongside long-term service contracts for the equipment.

GNRQC is dedicated to developing high-performance organic waste treatment facilities for the production and distribution of renewable natural gas (RNG) in Québec. When fully capitalized with $100 million in equity and appropriately leveraged, GNRQC expects to finance approximately 12 to 15 renewable natural gas projects in the province over the next decade.

RNG production is supported by both the Québec government through targets and incentives and private corporations who are seeking ESG friendly solutions to reduce their carbon footprints. In the “2030 Plan for a Green Economy” announced on November 16, 2020, the Québec government’s budget included $213 million for the PSPGNR program (MERN), which will provide financial support for agricultural projects. Québec is also maintaining its target to increase bioenergy production by 50% and has a target of 10% RNG in the pipeline by 2030. This follows the government’s announcement on July 7, 2020 for its organic material management plan which set a target to recycle or recover 100% of organic waste in the province by 2030.

GRNQC started its operations in Q3 2020 and now employs a team comprising waste management, business development and project finance expertise. The fund has more than 20 projects under evaluation of both greenfield and brownfield varieties in agriculture, municipal and industrial waste applications. GRNQC expects to complete several investments in 2021 as projects progress over their average three-to-four-year development cycle.

Xebec does not expect to realize any investment income or losses for renewable gas infrastructure in 2021.


Management Guidance for 2021

For fiscal full-year 2021, Xebec expects to continue its revenue growth and a return to positive adjusted EBITDA. Given the current order backlog of $100.1 million (as of March 18, 2021), including projected revenues of HyGear, Inmatec and the Cleantech Service Network, we expect consolidated revenues for 2021 in the range of $110.0 to $130.0 million and adjusted EBITDA margins in the range of 3.0% to 4.0%.


Xebec to Host Live Investor Webinar to Discuss Q4 and Year End 2020 Results
An investor webinar for shareholders, analysts, investors, media representatives, and other stakeholders will be held today, March 25, 2021 at 8:30AM EST (5:30AM PST).

Register here:

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

2020 Fourth Quarter and Year End Financial Statements and Management’s Discussion and Analysis
The complete financial statements, notes to financial statements, and Management’s Discussion and Analysis for the twelve-month period ended December 31, 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, Director, Investor Relations
+1 450.979.8700 ext 5762
[email protected]

About Xebec Adsorption Inc.
Xebec is a global provider of clean energy solutions for renewable and low carbon gases used in energy, mobility and industry applications. The company specializes in deploying a portfolio of proprietary technologies for the distributed production of hydrogen, renewable natural gas, oxygen and nitrogen. By focusing on environmentally responsible gas generation, Xebec has helped thousands of customers around the world reduce their carbon footprints and operating costs. Headquartered in Québec, Canada, Xebec has a worldwide presence with five manufacturing facilities, eight Cleantech Service Centers and four sales offices spanning over four continents. Xebec trades on the Toronto Stock Exchange under the symbol (TSX: XBC). For more information,

Cautionary Statement

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 the global economy, Xebec’s capacity to generate revenue growth, a limited number of customers, 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.

Non-IFRS Measures

This press release refers to financial measures that are not recognized under International Financial Reporting Standard (“IFRS”). A non-IFRS financial measure is a numerical indicator of a company’s performance, financial position or cash flow that excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts that are included or excluded in most directly comparable measures calculated and presented in accordance with IFRS. Non-IFRS measures do not have any standardized meaning under IFRS and therefore are unlikely to be comparable to similar measures presented by other companies having the same or similar businesses.

The Corporation believes these measures are useful supplemental information. The following non-IFRS measures are used by the Corporation in this press release: EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, backlog, quote log of Xebec. 

Please find below definitions of non-IFRS financial measures used by herein:

“EBITDA” means the earnings before interest, income taxes, depreciation and amortization, where interest is defined as net finance costs as per the consolidated statement of comprehensive income.

“EBITDA margin” being EBITDA as a percentage of revenues.

“Adjusted EBITDA” means starting with EBITDA and adjust for Stock-based compensation expenses, impairment of inventories, exchange gain/loss on the obligation arising from non-controlling interest participation in a subsidiary, foreign exchange loss (gain) and accretion of debt. 

“Adjusted EBITDA margin” being Adjusted EBITDA as a percentage of revenues.

“Backlog” means contracts that have been received and considered as firm orders.

“Quote log” means sales quotes that have been provided and are being pursued by business development and sales representatives of Xebec.