Xebec Announces 2014 Second Quarter Operating Results

MONTREAL, Aug. 28, 2014 /CNW Telbec/ - Xebec Adsorption Inc. (TSXV: XBC-V) ("Xebec"), a provider of biogas upgrading, natural gas, field gas and hydrogen purification and filtration solutions for the clean energy and crude-derived fuels displacement markets, announced today its 2014 second quarter operating results.

• Revenues of $3.5 million for the second quarter of 2014 compared to $2.7 million for the same quarter in 2013, a 28.3% increase compared to the same period in 2013.
• Net loss of $0.7 million or $0.02/share for the three month period in 2014 compared to a net loss of $0.4 million for the same period in 2013.

Financial Highlights:

	Three months ended June 30,		% of Change	Six months ended June 30,		% of Change
	2014	2013		2014	2013
(In dollars)	(unaudited)	(unaudited)		(unaudited)	(unaudited)
Revenues	3,521,039	2,744,601	28.3%	6,148,267	6,569,540	-6.4%
Gross margin	990,939	447,905	121.2%	1,631,587	827,716	97.1%
Gross margin as a percentage of revenues	28.1%	16.3%		26.5%	12.6%
EBITDA*	(627,968)	(218,448)		(1,412,554)	(1,200,893)
Net income (loss)	(738,006)	(381,585)		(1,613,236)	(1,462,823)
Net income (loss) per share - basic  ($/share)	(0.02)	(0.01)		-	(0.04)
Net income (loss) per share - diluted ($/share)	(0.02)	(0.01)		-	(0.04)
Weighted average number of shares	39,363,867	39,363,867		39,363,867	39,363,867
As at:				June 30, 2014	December 31, 2013
Total assets				7,309,019	9,749,397
Total Long term Liabilities				654,173	1,026,078
Equity				497,515	1,958,988
As at:				August 28, 2014	August 14, 2013
Back log				6,718,705	5,608,316
* 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

Revenues

Xebec posted revenues of $3.5 million for the second quarter of 2014, a 28.3% increase compared to $2.8 million in the second quarter of 2013. The increase is mainly explained by the revenues in the associated gas segment since the Company had no contract in 2013 for the corresponding period.

Revenues were $6.1 million for the six-month period ended June 30, 2014 compared to $6.6 million for the corresponding period. This decrease is due mainly to the $1.1 million decrease in sales of custom biogas plants and Hydrogen PSAs, partly offset with a $0.5 million increase in the associated gas segment as explained above.

Order Backlog

As of August 28, 2014, total order backlog stood at $6.7 million, compared to $5.6 million as at August 14, 2013. Part of the increase in the backlog is explained by the increased orders for our NGX products.

Gross Margin

Xebec's gross margin for the second quarter of 2014 amounted to $1.0 million compared to $0.4 million for the same period in 2013. The increase versus the same period last year is mostly explained by the negative margin incurred on a biogas project completed during the previous corresponding quarter and better margins realized on the associated gas segment.

For the six-month period ended June 30, 2014, the total gross margin amounted to $1.6 million, compared to $0.8 million for the same period in 2013. Margins were affected negatively in 2013 by a $200,000 provision for an ongoing biogas project in Asia and by the completion of a biogas project with a negative margin.

EBITDA and Net loss

The EBITDA for the second quarter of 2014 amounted to $(0.6) million compared to $(0.2) million in the second quarter of 2013. The reduction is mainly explained by the additional non-recurring $0.5 million gross proceeds received in the previous corresponding quarter for the remaining milestone related to the sale of the IP portfolio to Air Products.

For the six-month period ended June 30, 2014, the EBITDA amounted to $(1.4) million compared to $(1.2) million for the same period in 2013. The EBITDA decline reflects primarily the $0.5 million non-recurring gain on the additional proceeds in Q2-2013 as mentioned above. Furthermore, the six-month period ended June 30, 2014 shows better margins realized on slightly fewer sales to those of the comparative period in 2013.

The net loss for the second quarter of 2014 totaled $0.7 million, or $0.02 per share, compared to a net loss of $0.4 million, or $0.01 per share for the same 2013 period. The slight increase in net loss is explained by with an increase in research and development expenses of $0.04 million, the increase in selling and administrative expense of $0.1 million related to professional fees incurred to create Xebec Adsorption USA Inc. ("Xebec USA"). It is also explained by a non-recurring gain of $0.5 million in Q2-2013 due to the additional proceeds pursuant to the agreement with Air Product and an increase in net financial expenses for the additional royalty of $0.06 million related to agreement mentioned above.

Net loss for the six-month period ended June 30, 2014 was $1.6 million, or $0.04 per share, compared to $1.5 million, or $0.04 per share, for the same period in 2013. Compared to the same period in 2013, the gross margin increased by $0.8 million, while research and development expenses and selling and administrative expenses, each increased by $0.1 million. The increase of the net loss for the six-month period ended June 30, 2014 is also explained by the aforementioned non-recurring gain of $0.5 million in Q2-2013.

Selling and administrative expenses were $1.6 million in the second quarter of 2014, compared to $1.5 million for the same period last year. The increased is mainly due to higher professional fees incurred for the creation of Xebec USA.

For the six-month period ended June 30, 2014, the selling and administrative expenses were $3.0 million, compared to $2.9 million for the same period last year. The increase is explained by the aforementioned professional fees.

As of June 30, 2014, the Company had $1.3 million of cash on hand, $0.1 million of bank loan and $0.8 million of long-term debt outstanding, of which $0.3 million is due within one year

2014 Second 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 six and three-month periods ended June 30, 2014, are available on the Company's Website at www.xebecinc.com or on the SEDAR Website at www.sedar.com.

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 TSXV under the symbol XBC-V. Since February 25th 2014, Xebec has opened a sales office in Houston, Texas (USA), in order to cover sales opportunities in the United States. For additional information on the company and its products and services, please visit the Xebec web site at www.xebecinc.com.

Caution Concerning Forward-Looking Statements

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.

For further information: Kurt Sorschak, President and CEO, 450-979-8701, [email protected]; Eric Favreau, Chief Financial Officer, 450-979-8706, [email protected]