Xebec Adsorption Inc. (TSXV: XBC) ("Xebec"), a
global provider of clean energy solutions announced today its
2019 fourth quarter and twelve-month period results, with the
following highlights:
- Record revenues of
$13.6 million in the fourth quarter of 2019 compared to $6.1
million for the same period in 2018, a 123% increase.
- Positive EBITDA at
$1.4 million for the fourth quarter 2019 compared to ($0.8) million
for the same period in 2018.
- Net loss of ($0.5)
million or ($0.01)/share for the fourth quarter 2019, compared to a
net loss of ($1.0) million or ($0.02)/share for the same period in
2018. Quarterly earnings were negatively impacted by significantly
higher amortization & depreciation, audit, recruiting and
consulting expenses.
- Working capital
increased to $36.9 million on December 31, 2019, for a current
ratio of 3.2:1 compared with working capital of $5.3 million and a
1.6:1 ratio on December 31, 2018.
- Cash on hand of
$22.7 million on December 31, 2019 compared with $3.9 million on
December 31, 2018.
|
|
|
|
|
|
|
|
Three months ended December
31, |
|
% of Change |
|
Twelve months ended December
31, |
|
% of Change |
|
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
|
(In millions of dollars) |
(unaudited) |
|
(unaudited) |
|
|
(audited) |
|
(audited) |
|
|
Revenues |
13.6 |
|
6.1 |
|
123% |
|
49.3 |
|
20.2 |
|
144% |
|
Gross profit |
4.1 |
|
1.5 |
|
173% |
|
15.5 |
|
5.7 |
|
172% |
|
Gross profit as a percentage
of revenues |
30% |
|
25% |
|
|
31% |
|
28% |
|
|
EBITDA
(1) |
1.4 |
|
(0.8) |
|
|
5.1 |
|
(1.9) |
|
|
Adjusted EBITDA
(2) |
1.9 |
|
(0.8) |
|
|
6.3 |
|
(1.2) |
|
|
Net income (loss) |
(0.5) |
|
(1.0) |
|
|
2.0 |
|
(2.9) |
|
|
Net income (loss) per share -
basic ($/share) |
(0.01) |
|
(0.02) |
|
|
0.03 |
|
(0.07) |
|
|
Weighted average number of shares |
77,547,423 |
|
52,913,937 |
|
|
64,319,442 |
|
42,737,000 |
|
|
As at: |
|
|
|
Dec. 31, 2019 |
|
Dec. 31, 2018 |
|
|
Total assets |
|
|
|
64.5 |
|
15.1 |
|
|
Total liabilities |
|
|
|
25.6 |
|
15.7 |
|
|
Equity |
|
|
|
38.9 |
|
(0.6) |
|
|
As at: |
|
|
|
April 14, 2020 |
|
April 16, 2019 |
|
|
Backlog |
|
|
|
99.3 |
|
78.3 |
|
|
(1) EBITDA is a non-IFRS financial measure and the
Company defines it as earnings from operations excluding financial
charges, taxes, foreign exchange loss (gain) and amortization.(2)
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 of $49.3 million for
the twelve-month period ended December 31, 2019 compared to $20.2
million for the same period in 2018, a 144% increase. The increase
is mainly explained by the high volume of major cleantech contracts
and a company acquisition.
- Gross profit of $15.5 million or 31% of
revenues for the twelve-month period ended December 31, 2019
compared to $5.7 million for the same period in 2018, a 172%
increase compared to the same period in 2018. The company has a
higher gross margin in the cleantech segment and a better
absorption of the overhead cost due to a higher volume of
sales.
- Net profit of $2.0 million or $0.03 per share
for the twelve-month period ended December 31, 2019, compared to a
net loss of ($2.9) million or ($0.07) per share for the same period
in 2018, an improvement of $4.9 million. The increase is mainly due
to higher sales and margin.
- Positive adjusted EBITDA of $6.3 million for
the twelve-month period ended December 31, 2019, compared to ($1.2)
million for the same period in 2018, an increase of $7.5
million.
- Backlog increased by $21.0 million, from $78.3
million on April 16, 2019, to $99.3 million on April 14, 2020.
- Selling and administrative expenses increased
by $4.1 million in the twelve-month period ended December 31, 2019
compared to the same period in 2018. This is primarily due to an
organizational scale-up of employees and associated costs to
support the increased level of sales, order backlog and building
quote log. Acquisition costs related to the acquisition of CDA
Systems LLC and additional costs associated with acquisition
activities and legal expenses related to the establishment of our
Infrastructure segment increased SG&A expenses in the fourth
quarter of 2019.
- Cash on hand as of December
31, 2019 was $22.7 million compared to $3.9 million in 2018 and
working capital has increased to $36.9 million compared to $5.2
million on December 31, 2018.
- Bought Deal for aggregate gross proceeds of
$23.0 million closed on December 27, 2019, at a price of $2.10
per share.
- Acquisition of CDA Systems closed on December
10th, 2019 for a preliminary cash consideration of $6,782,433. The
agreed earnout payments are dependent on certain future performance
targets.
CEO Quote: “2019 was a
transformative year for Xebec with record revenues, profit and
order backlog numbers. I’m proud of what our team has accomplished,
leaving us well equipped to deliver another record year in
2020.
With our improved balance sheet, our strong
order backlog, our growing quote log, our pipeline of potential
acquisitions, and our position as an essential business in a time
of crisis, Xebec will be well able to maneuver through what will be
a difficult economic environment in the year ahead. We believe that
we will emerge from this crisis even stronger than we entered
it.
On a more personal note, I am happy to report
that Xebec did not have to furlough or lay-off any of our
employees. We successfully migrated office work to home-based work,
while our production and service staff continue to manufacture and
service much-needed products for our healthcare and other essential
institutions.
Finally, let me assure everyone that employee
health and safety as well as shareholder value creation remain our
absolute focus.”– Kurt Sorschak, President and
CEO, Xebec Adsorption Inc.
COVID-19 Operational UpdateWith
operations on three continents, Xebec continues to monitor
worldwide developments of the novel coronavirus and its potential
impact on its global operations. At our head office location in
Québec, the company has been deemed an “essential business” and
continues its regular course of operations and manufacturing.
Although we remain open, we have shifted our office staff to work
from home while we continue to provide service and emergency
support through our home-based service technicians. We also
maintain our warehouse operations to ship equipment, parts, and
provide rentals.
Our operations in Shanghai, China, are fully
operational with deliveries having restarted in March, and continue
to expand. Manufacturing in our Italian subsidiary remains on hold
at this point, and we expect to restart by early to mid-May.
Our service and support subsidiary Compressed
Air International Inc. in Toronto remains open and having been
deemed an essential business is operating as normal. Xebec’s recent
acquisition, CDA Systems in Livermore, California, likewise
operates as an essential business. Its office staff has
transitioned to home base work, while its service, parts and rental
activities continue as normal.
Management Guidance for
2020Despite the impending global backdrop of economic
hardship, Xebec expects to continue its rapid growth and improved
profitability in 2020. As a result, the company will maintain its
previously announced guidance. With the support of our increasing
order backlog of $99.3 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. Lastly, Xebec does
not expect to record revenues for our Renewable Gas Infrastructure
segment in 2020.
Cleantech SystemsOur renewable
gas solutions continue to deliver expected results. Our efforts to
expand into more geographies and win market share are gaining
traction and we expect this to continue in the coming quarters. We
regard quote activity as an early indicator for future order
activity. Our current quote log exceeds $937.0 million (as of March
13th, 2020), and our order backlog is $99.3 million, a record for
Xebec.
Xebec has had recent success in the U.S dairy
market with $27.0 million in orders announced in February 2020. 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.
Furthermore, we are seeing growth across all
geographies, most notably in China where revenues in 2019 have
increased nearly 400% and are expected to double in 2020. This
growth is primarily driven by hydrogen purification systems for
petrochemical, refinery and by-product hydrogen applications. In
2020 Xebec will 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 & SupportXebec continues
to pursue organic and inorganic growth opportunities. The company
views acquisitions as a critical component in supporting
Cleantech’s growth by enabling 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 company’s acquisitions strategy so far is
performing better than expected with our first acquisition
(Compressed Air International Inc.) organically growing revenues by
35% year-over-year. This is reflective of management’s objective to
not only achieve a competitive advantage in the Cleantech segment
through these service company acquisitions, but to also increase
sales in the core industrial air treatment business and growing
associated margins and EBITDA.
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% towards the
targeted 40% range. The introduction of additional air dehydration,
accessories and filtration products combined with an improved
product mix should help gross margins over the coming quarters.
Renewable Gas InfrastructureXebec has started
to actively participate in renewable gas projects and act as an
investor through strategic partnerships. These partnerships support
the growth of companies developing renewable gas and waste recovery
projects.
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 plant is expected to be
commissioned in early to mid-2021.
This marked a key milestone for Xebec’s newest business segment,
which aims to drive predictable recurring and profitable revenue
through 20-year Gas Purchase Agreements (GPAs) with utilities,
tipping fees and bio-fertilizer sales.
In addition, Xebec is finalizing the establishment of a
significant partnership to co-invest into multiple renewable gas
infrastructure projects in Canada and expects to announce this
partnership in the near future. This will allow the company to
rapidly scale up its efforts to invest in high-quality renewable
gas assets.
Xebec to Host Live Investor Webinar to Discuss Q4 and
Year End 2019 Results An investor webinar for
shareholders, analysts, investors, media representatives, and other
stakeholders will be held today, April 15, 2020 at 11:00AM EDT
(8:00AM PDT).
Register here:
https://app.livestorm.co/xebec-adsorption-inc/2019-q4-investor-webinar
A recording of the webinar and supporting materials will be made
available in the investor’s section of the Company’s website
at investors.xebecinc.com.
2019 Fourth Quarter Financial Statements
and Management’s Discussion and AnalysisThe complete
financial statements, notes to financial statements, and
Management’s Discussion and Analysis for the twelve-month period
ended December 31, 2019, are available on the company’s website at
www.xebecinc.com or on the SEDAR website at www.sedar.com
Related
links:https://www.xebecinc.com
https://investors.xebecinc.com/press/2020-02-12-xebec-receives-27-million-in-orders-for-u-s-dairy-projects/
https://investors.xebecinc.com/press/2020-02-18-xebec-announces-its-first-canadian-renewable-natural-gas-infrastructure-project/
For more information:Xebec
Adsorption Inc.Brandon Chow, Investor Relations Manager+1
450.979.8700 ext 5762bchow@xebecinc.com
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 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) accept
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
www.sedar.com. 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.
Xebec Adsorption (TSXV:XBC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Xebec Adsorption (TSXV:XBC)
Historical Stock Chart
From Apr 2023 to Apr 2024