FormerXBC Inc XEBEQ

Renewable Enthusiasm

[kulewater]

I was expecting progress not perfection. And thats what we got. 

We also got from the CC after some great insight into how the company is now shifting its rev rec to a more transparent and predictable model. Overall the company continues to scale and make the right moves, which are also often the hardest to make.

Kurt and team have done their best to compress the slippage across a few quarters instead of a few years. A bitter pill for some, a welcome approach for others. 

A few key highlights from my view:

• Revenue was lighter due to change in rev rec mentioned above which will defer a good chunk into Q4. 
• POSTITIVE adjusted EBITDA - a huge metric that shows what the landscape of profitability will look like now that the company is unshackled from legacy loss contracts.
• One time transition costs are now off the books and payable severance will not be an overhang moving forward. A significant reduction moving forward.
• Normalized margins that are in the high 30% range which is a MATERIAL improvement and again shows the potential in operating profits.
• Signed 4 LOIs with potential projects in Alberta and Quebec. More validation and long term service agreements which will underpin service revenue and high margin business
• Jim V presented well. Good command of his area and seemed optimistic.
• 100M backlog.. 
• CarbonQuest pilot project #2 is in motion.. another iron in the fire for a great use-case of XBC's technology.
• Recent acquisitions are huge value differentiators and will support the ramp up of production, revenue and geographic reach in attracting more customers.

It appears that the worst is over and we are going to end the year with a favourable turn into profitability and optimization. Some challenges still remain across the entire industry with supply chains, labour and freight.  

Full disclosure: I am long, have been so since .40 and have never been more optimistic for what this company will accomplish.