Xebec Adsorption Inc. (TSX: XBC) (“Xebec”), a
global provider of clean energy solutions, announced today that the
Company is in the process of finalizing its financial results for
the fourth quarter and year ended December 31, 2020, which will be
released on March 25th, 2021. As a result of extraordinary items in
its Cleantech business segment and due to the impact of the
Covid-19 pandemic, Xebec no longer expects to achieve its previous
full year 2020 revenue guidance of $70 to $80 million. While the
financial review remains ongoing, revenues for the full year are
expected to be approximately $57 million. Full year 2020 gross
margin is expected to be in the range of negative $1.0 million to
positive $1.0 million. SG&A expenses in Q4 2020 are expected to
be between $15 and $16 million. This increase is mainly due to
transaction expenses, provision for bad debt, and an accelerated
amortization amount of capitalized R&D expenses. Final figures
are subject to completion of the Company’s annual audit.
The difference in revenues is mainly due to the
following extraordinary items, all of which occurred within Xebec’s
Cleantech business segment:
List of Extraordinary Items |
|
Impact on Revenue |
Xebec underwent a detailed review of its fixed price contracts for
renewable natural gas (RNG) projects, where revenues are recognized
based on the percentage of completion method. As a result of its
review, Xebec determined that:
- Previously incurred expenses
represented a lower percentage of total costs than previously
estimated, and previously recognized revenue is required to be
adjusted to reflect the revised percentage of completion for
contracts that remain profitable under Xebec's updated
estimates.
- Some of the contracts previously
estimated to be profitable are now projected to result in losses.
The percentage of completion method requires that the losses on
such contracts be recognized immediately.
|
|
$5.6 Million |
Cancellation of the sale of two systems for which approximately 50%
of the revenue was already recognized based on the percentage of
completion method. |
|
$5.4 Million |
Reversal of revenue previously recognized based on the percentage
of completion method due to the deteriorating financial position of
a client where collection for payment became uncertain. |
|
$1.9 Million |
Xebec launched and delivered its first fully
containerized and standardized BGX Biostream™ unit for small-scale
biogas upgrading applications in 2020. The Company expects that
this new product will lead to more predictable cost management and
improved gross margins for RNG projects going forward. Xebec
continues to see a positive backdrop for the industry as
organizations and governments around the world aim to manage
organic waste more effectively and decarbonize their natural gas
supplies.
Since Q4 2020, Xebec has completed several key
strategic investments to better position the company for long-term
growth. This includes the launch of its hydrogen strategy and
on-site oxygen and nitrogen generation business, with the
transformative acquisitions of HyGear and Inmatec, as well as the
continued growth of its Cleantech Service Network in North
America.
As a result of Xebec’s recent acquisitions and
the increasingly diversified nature of its revenues, the company
expects that approximately 20% of its revenues will come from its
renewable natural gas business in 2021. The remainder of revenues
are expected to come from hydrogen generation, recurring 15-year
Gas-as-a-Service contracts, the Cleantech Service Network and
industrial compressed air and gas products.
2020 Q4 and Audited Year End Results
DateXebec will announce its 2020 fourth quarter and
audited year end financial results on Thursday, March 25th, 2021
before the market opens at 7:00 AM EST, followed by a webinar at
8:30 AM EST (5:30 AM PST).
Xebec invites shareholders, analysts, investors,
media representatives, and other stakeholders to attend our webinar
where management will discuss 2020 Q4 and full year results
followed by a Question and Answer (“Q&A”) period.
Kurt Sorschak, President and CEO will host the
webinar alongside CFO, Stéphane Archambault.
Investor Webinar
Registration and ReplayRegister here:
https://app.livestorm.co/xebec-adsorption-inc/2020-q4-investor-webinar.
A recording of the webinar can be accessed with
the above link and supporting materials will be made available in
the investor’s section of the company’s website at
xebecinc.com/investors.
Related
links:https://www.xebecinc.com
Investor Relations:Xebec
Adsorption Inc.Brandon Chow, Director, Investor
Relationsbchow@xebecinc.com+1 450.979.8700 ext 5762
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, xebecinc.com.
Cautionary Statement Neither
Toronto Stock Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the Toronto Stock 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
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 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.
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