Xebec Announces 2012 Third Quarter Financial Results
MONTREAL, Nov. 12, 2012 /CNW Telbec/ - Xebec Adsorption Inc. (TSX: XBC) ("Xebec"), a provider of biogas upgrading, natural gas, field gas and hydrogen purification solutions for the clean energy and crude-derived fuels displacement markets, announced today its 2012 third quarter operating results.
Third Quarter Highlights Include:
--Delivery of the Company's third biogas plant completed for Canada's Fortis BC
--Orders for two high pressure natural gas dehydration and purification units
--Revenue of $3.7 million in the third quarter compared to $2.9 million for the same period in 2011, a 25% increase in the period.
--Revenue for the first nine months in 2012 at $9.4 million, compared to $11.5 million for the same period in 2011, an 18% decrease.
--Total order backlog stood at $11.8 million, compared to $7.1 million as of November 11, 2011.
"We are pleased to report to shareholders a 25% increase in our revenues during our third fiscal quarter of 2012 and an overall increase in our operational performance," stated Mr. Kurt Sorschak, Chief Executive Officer of Xebec. "While there was a decrease in total revenue over the first nine months of 2012, much of the shortfall can be attributed to the working capital deficiency we faced in the first part of the year. During this third quarter we remained diligent in our effort to optimize overall efficiency in our operations. As a result, new levels of cost reduction have been achieved. These cost control measures are proving to be very positive and as a result, we anticipate a return to operational profitability within the next few quarters. As an example, the competitive landscape within our industry is changing and thus, we have begun to leverage our supply chain out of China in order to increase long term margins and profitability for various lines of products. At the same time, we remain focused on growth and are preparing the expansion of our Associated Gas Treatment (AGX) line of products where we believe a tremendous opportunity is slowly materializing. Our technology is highly competitive and can help Customers in the oil and gas industry clean associated gases. Our AGX products can eliminate the need to flare or burn associated gases that cause harmful greenhouse gases and emissions. As a result, customers can now turn waste gas into a valuable clean energy resource as a replacement for diesel, propane or heating oil. We are now assessing potential synergies with a handful of possible strategic partners. While these initiatives are still in the preliminary stages, we do see opportunities materializing within the next few months."
Financial Results
Revenues
Xebec posted revenues of $3.7 million for the third quarter of 2012, a 25.3% increase compared to $2.9 million in the third quarter of 2011. For the nine-month period ended September 30, 2012, the total revenues amounted to $9.4 million, an 18.1% decrease compared to $11.5 million for the same period last year. This decrease is attributed to non-recurring license revenue of $1.5 million in 2011 and working capital deficiencies that impacted the Company for the first three months of 2012.
Order Backlog
As of November 12, 2012, total order backlog stood at $11.8 million, compared to $7.1 million as of November 11, 2011.
Gross Margin
Xebec's gross margin for the third quarter of 2012 amounted to $1.1 million, compared to $1.2 million for the same 2011 period. For the nine-month period ended September 30, 2012, the total gross margin amounted to $2.0 million, compared to $4.1 million for the same period last year. Despite increasing margins from product sales, the non recurring engineering contracts and license revenues prior to the IP transaction of March 22, 2012 inflated the margins positively.
EBITDA and Net Loss
The EBITDA for the third quarter of 2012 amounted to $(0.5) million compared to $2.3 million in the third quarter of 2011. For the nine-month period ended September 30, 2012, the EBITDA amounted to $3.3 million, compared to $1.7 million for the same period last year. The improved EBITDA is the result of our continuous efforts to improve gross margin and control costs and the gain resulting from the IP transaction of March 22, 2012.
The net loss for the third quarter of 2012 totaled $(0.6) million, or $0.02 per share, compared to a net income of $1.7 million, or $0.04 per share for the same 2011 period. For the nine-month period ended September 30, 2012, net income was $2.0 million or $0.05 per share, compared to $0.5 million or $0.01 per share for the same period last year, reflecting primarily a $3.1 million increase in gain on disposition of assets and a $0.05 million decrease in selling and administrative costs and $0.4 million decrease in research and development.
Selling and administrative expenses were $1.6 million in the third quarter of 2012 compared to $1.2 million for the same period last year. For the nine-month period ended September 30, 2012, selling and administrative were $4.4 million, compared to $4.9 million for the same period last year. The decrease in expenses is the results of the company's restructuring and the implementation of cost control measures.
As of September 30, 2012, the Company's cash on hand before restricted cash totaled $1.5 million, compared to $(0.1) million as at September 30, 2011 and $0.4 million as at December 31, 2011.
About Xebec Adsorption Inc.
Xebec Adsorption Inc. is a global provider of clean energy solutions to corporations and governments looking to reduce their carbon footprints. With more than 1,300 customers worldwide, Xebec designs, engineers and manufactures innovative products that transform raw gases into marketable sources of clean energy mainly used as transportation fuel. Xebec's strategy is focused on establishing leadership positions in markets where demand for biogas upgrading, natural gas dehydration, liquefaction and hydrogen purification is growing. Headquartered in Montreal (QC), Xebec is a global company with two manufacturing facilities in Montreal and Shanghai, as well as a sales and distribution network in North America and Asia. Xebec trades on the TSX under the symbol XBC. For additional information on the company and its products and services, please visit the Xebec web site at www.xebecinc.com.
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