Xebec Announces 2011 Second Quarter Financial Results Reports 9% Increase in Revenue and Significant Reduction in Losses
MONTREAL, Aug. 12, 2011 /CNW Telbec/ - Xebec Adsorption Inc. (TSX: XBC) ("Xebec"), a provider of biogas upgrading, natural gas and hydrogen purification solutions for the clean energy market, announced today its 2011 second quarter financial results.
Revenue increased 9% compared with second quarter 2010 and 40% over the six month period.
EBITDA is now at $(0.466M) for the six month period ended June 30, 2011 compared to $(5.164M) for the same period in 2010.
Net Loss was reduced by 63% versus the same period last year and 80% over the six month period.
"We are pleased to report revenue growth in the second quarter. The increase is in-line with our growth initiatives in the biogas and hydrogen segments, while continuing strong performance from natural gas dryers for refueling stations. Engineering service agreements now in place are also having a positive impact on margin contribution. We are continuing to review our operations, giving special attention to the control of our gross margins and the improvement of our working capital. We are steadily moving to a more efficient structure, focused on our strategic priorities, said Mr. Kurt Sorschak, Chief Executive Officer of Xebec.
Financial Results
Revenues
Xebec posted revenues of $4.5 million for the second quarter of 2011, an 8.8% increase compared to $4.1 million in the second quarter of 2010. For the six-month period ended June 30, 2011, the total revenues amounted to $8.6 million, a 39.6% increase compared to $6.1 million for the same period last year. This increase is the result of a stronger order backlog going into Q2/11 and revenue from the monetization of certain intellectual property.
Order Backlog
As of August 11, 2011, total order backlog stood at 11.4 million, compared to 11.7 million as at August 10, 2010.
Gross Margin
Xebec's gross margin for the second quarter of 2011 amounted to $0.9 million, compared to $0.5 million for the same 2010 period. For the six-month period ended June 30, 2011, the total gross margin amounted to $2.9 million, compared to $0.6 million for the same period last year, resulting mainly from an increase in margin from product sales, newly added engineering contracts and license revenues, combined with our cost control measures.
EBITDA and Net Loss
The EBITDA for the second quarter of 2011 amounted to $(0.6) million compared to $(2.5) million in the second quarter of 2010. For the six-month period ended June 30, 2011, the EBITDA amounted to $(0.5) million, compared to $(5.2) million for the same period last year. The improved EBITDA is the result of improved gross margin and lower overhead expenses.
The net loss for the second quarter of 2011 totaled $1.0 million, or $0.03 per share, compared to a net loss of $2.8 million, or $0.10 per share for the same 2010 period. For the six-month period ended June 30, 2011, net loss was $1.3 million or $0.03 per share, compared to $6.2 million or $0.21 per share for the same period last year, reflecting primarily a $2.2 million increase in gross margins and a $1.7 million decrease in selling and administrative costs
Selling and administrative expenses were $1.8 million for the second quarter of 2011, compared to $2.7 million for the same 2010 period. For the six-month period ended June 30, 2011, selling and administrative were $3.7 million, compared to $5.4 million for the same period last year. The decrease is mainly attributable to the implementation of cost control measures.
As at June 30, 2011, the Company's cash on hand totaled $0.5 million, compared to $2.3 million as at December 31, 2010 and $2.3 million as at June 30, 2010.
Xebec 2011 second quarter Financial Statements and Management's Discussion and Analysis include further information on the Company.
Outlook
For the remainder of this year, Xebec will focus on further improving its financial position, finalizing its standardization work on biogas upgrading plants and improving its market position in its various market segments. In addition Xebec will continue its efforts to monetizing some of its assets and certain parts of its intellectual property, in order to create additional liquidity and strengthen its balance sheet.
Options
On June 13, 2011, the Company granted 185,000 share purchase options at $0.26 per share to employees. On July 4, 2011, the Company granted 200,000 share purchase options at $0.27 per share to one of its officers. On August 11, 2011, the Company granted 875,000 share purchase options at $0.22 per share of which 150,000 were to officers of the Company. Furthermore, non-management Board members agreed to a Board fees reduction. To compensate the decreased retainer, the company will grant options to those members for a value of $12,000 annually. The grant will be $6,000 (54,545 share purchase options) for the remainder of this fiscal year.
Sale and Leaseback of the Blainville Building
On July 21, 2011, the Company has accepted an offer to purchase its building in Blainville. The closing shall occur on or about September 30, 2011. This transaction will be accounted for as a sale and leaseback transaction; the purchaser is leasing back the Blainville location to the Company for fifteen years.
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