FormerXBC Inc XEBEQ

Q2 highlights

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Highlights from Q2 numbers, and management's discussion of results:

• Record revenues of $32.7 million for the three-month period ended June 30, 2021, compared to $19.6 million for the same period the prior year. (  Revenues up 67%. Not shoddy. )

 

• Adjusted EBITDA of ($4.6) million for the three-month period ended June 30,  ( Q4 Ebitda was ($22 million), Q1 was ($5.8 million).  Trending in the right direction )

• Working capital of $97.4 million on June 30, 2021, for a current ratio of 2.9:1

• August 11, 2021 backlog amount does not include the 18-unit Biostream agreement because the execution (task) orders have not yet been processed.
• Gross margin increased from $7.3 million to $9.2 million for the six-month period ended June 30, 2021 compared to the same period the prior year. The gross margin percentage decrease from 23% to 17% is due to working through the company’s lower margin RNG projects.
• SG&A expenses increased due to an organizational scale up of employees, hiring fees and associated costs to support the increased level of future sales.

• CEO Quote:

    “In Q2 we delivered record quarterly revenues as we continued to build the organisational foundations which will support us to manage and operate a significantly larger and more diversified cleantech company. While we still saw a meaningful impact from our legacy production type RNG contracts, I am happy to report that this impact will be reduced going forward. The rest of our verticals in hydrogen, oxygen, nitrogen, and the Cleantech Service Network, are EBITDA profitable and continue to perform very well from a revenue growth and margin perspective.
    A significant commercial milestone this quarter was the Biostream contract signed with one of the leading U.S. dairy RNG developers. Our continued improvements in the Biostream product will allow us to target a large addressable market with a one-of-its-kind offering. This standardized product will have better scalability and margins than our previous customized systems and will become a major contributor to our future organic RNG segment growth. Given the positive market reception of our Biostream product, we have started the production of 30 units in our Canadian facility, which represents a significant expansion of our existing manufacturing capacity."  ( well, that's history )
    2021 has been challenging so far, but we anticipate improved performance for the rest of the year accompanied by strong year-over-year revenue growth as we prepare for continued growth into 2022 and beyond. Over the next few quarters, we also expect a progressive return to normal EBITDA performance. 
    Overall, Xebec expects that Biostream will lead to a stronger organic revenue growth profile for the segment, more predictable cost management and improved gross margins. With larger quantities of standardized components and parts, Xebec has started to see significant improvements in economies of scale as it prepares for assembly of the second-generation Biostream. This is an improvement over the less predictable and lower gross margins seen in its long-term, production-type RNG contracts, which have experienced cost overruns.