Revenue up 100%, EBITDA of $1.1million, and Net Profit of $0.64 million
MONTREAL, QC / ACCESSWIRE / November 8, 2018 / Xebec Adsorption Inc. (TSX-V: XBC) ("Xebec"), a global provider of clean energy solutions announced its 2018 third quarter and nine month results.
Financial Results
• Revenues of $8.2 million in the third quarter of 2018 compared to $4.1 million for the same period in 2017, a 100% increase.
• Positive EBITDA at $1.1 million in the third quarter 2018 compared to $0.3 million in 2017.
• Gross profit of $2.8 million or 34% of revenues for the third quarter of 2018 compared to $1.7 million for the same quarter in 2017, a 65% increase compared to the same period in 2017.
• Net profit of $0.64 million or $0.01/share in third quarter of 2018, compared to net income of $0.1 million or $0.00/share for the same period in 2017.
• Working capital improved to $3.9 million for a current ratio of 1.4:1 compared with a working capital of $1.8 million and a 1.3:1 ratio in December 31, 2017.
Financial Highlights:
Three months ended | % of | Nine months ended | % of | |||
2018 | 2017 | 2018 | 2017 | |||
(In millions of dollars) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||
Revenues | 8.2 | 4.1 | 100% | 18.0 | 11.5 | 57 % |
Gross profit | 2.8 | 1.7 | 65 % | 5.7 | 4.7 | 21% |
Gross profit as a percentage of revenues | 34% | 41% | 31% | 41% | ||
EBITDA* | 1.1 | 0.3 | 0.8 | 1.7 | ||
Net income (loss) | 0.6 | 0.1 | (0.4) | 1.0 | ||
Net income (loss) per share - basic ($/share) | 0.01 | 0.00 | (0.01) | 0.02 | ||
Weighted average number of shares | 47,578,304 | 40,613,063 | 47,578,304 | 40,613,063 | ||
As at: | Sept. 30, | Dec. 31, | ||||
Total assets | 15.3 | 8.3 | ||||
Total Liabilities | 19.1 | 12.7 | ||||
Equity | (3.8) | (4.4) | ||||
As at: | Nov. 8, | Nov. 28, | ||||
Back log | 65.5 | 16.7 | ||||
* 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. | ||||||
Financial Results Cont'd
• Revenues for the nine-month period ended September 30, 2018, amounted to $18.0 million compared to $11.5 million for the corresponding period, an increase of $6.5 million.
•Gross profit for the nine-month period ended September 30, 2018, of $5.7 million or 32% of revenue compared to $4.7 million for the same period in 2017, a 21% increase compared to the same period in 2017.
•For the nine-month period ended September 30, 2018, net loss of $0.4 million or $(0.01) per share compared to a net profit of $1.0 million or $0.02 per share for the same period in 2017, a deterioration of $1.4 million.
•Positive EBITDA for the nine-month period ended September 30, 2018, of $0.8 million compared to a positive EBITDA of $1.7 million for the same period in 2017.
•Backlog increased by $48.8 million, from $16.7 million at November 28, 2017 to $65.5 million at November 8, 2018.
•Selling and administrative expenses increased by $0.3 million in the third quarter of 2018 compared to the same quarter of 2017. For the nine-month period ended September 30, 2018, SG&A increased by $1.3 million compared to the same period of 2017. Intensive efforts and investments are being made to support the anticipated rapid growth of the Company.
As at September 30, 2018, the Company had $0.8 million of cash on hand and its positive working capital has increased from $1.8 million at December 31, 2017 to $3.9 million at September 30, 2018.
Current Market Conditions and Guidance for 2018
The company was able to grow revenues by 100% in Q3/18 compared to the same period in 2017. Management partially resolved the working capital issues early in Q3/18 through credit facilities with EDC. With the November 7th closing announcement of a $6.1 million equity raise, and with conditions in Xebec's target markets remaining favourable, Xebec anticipates that revenue generation will continue to increase, allowing us to maintain our guidance for revenue in 2018. We expect revenue growth for 2018 of 50% to 70%, leading to revenues in the range of CDN$ 22.0 to 25.0 million. Earnings per share (EPS) are expected to be somewhat weaker due to higher interest rate expenses and increases in overall spending, and are now expected to be in the range of 0.01 to 0.02.
Clean Technology
Our Cleantech segment continues to perform to expectations and our quote activity in the Cleantech segment has strengthened compared to prior years. We regard quote activity as an early indicator for future order activity. With a current order backlog of over $63 million, Xebec is emerging as a worldwide leader in biogas upgrading technology. We maintain our forecast that the Cleantech segment will grow 80 % to 100% in 2018, generating revenues of $16 million to $18 million.
Industrial Air & Gas Products
Xebec continues to push revenue growth in the Industrial Products Segment and we expect double digit organic revenue growth in 2018, up by 25% to 35% compared to last year. GM has been lower than expected but steps are in place to bring the gross margin back in line with guidance. We are already seeing an improvement in Q3/18. The first acquisition is on track to close in Q4/18. For the full year we expect revenues of $6.0 million to $6.5 million, and gross margins to move closer to our target range of 40%.
Guidance 2019
For 2019 Xebec expects growth and profitability to continue. Given the current order backlog of $65 million we expect revenues to increase to approx. $40 million, generating net income of $3 to $4 million ($0.05 to $0.07 per share) and EBITDA of $4 to $6 million.
A strong focus in 2019 will be on Xebec's organizational development to allow the company to continue its successful growth in future years, while taking advantage of increasing short term opportunities in the Industrial and Cleantech market place.
As Xebec continues to grow, management is focused on balancing growth and profitability with the goal to maximize shareholder value.
2018 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 and nine-month periods ended September 30, 2018, are available on the Company's Website at www.xebecinc.com or on the SEDAR Website at www.sedar.com.
For more information:
Xebec Adsorption Inc.
Kurt Sorschak, President and Chief Executive Officer
ksorschak@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) 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.
SOURCE: Xebec Adsorption Inc.
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