FormerXBC Inc XEBEQ

Surprised by the market reaction

[tamaracktop]

I expected the stock to react positively to these numbers.

Adjusting for legacy contracts the numbers showed substantial improvement.

Q1 showed an ebitda ex legacy contracts of negative $6.4 million. In Q2 the adjusted loss was $3.4 million.

Net loss in Q1 was $18.4 million. Adjusting for legacy costs, net loss in Q2 was $11.4 million.

Gross margin ex legacy was 23%

The company is turning the corner but the market is obviously concerned about the balance sheet.

Working capital is getting skinny at $36 million, but Jim addressed that to an extent when he talked of selling less profitable assets.

I don't think a financing is in the cards.

He's only been at the helm for 4 months, and so far he's made the right moves.

[Gann999]

Turning the corner how exactly? How can anyone be assured that the provisions taken in q2 will be sufficient when last q they said they expected the costs to extend throughout the year? So q3 another disaster with more "provisions" possible plus severance costs? But hey look at the numbers if we totally didn't sell stuff that doesn't work properly aren't they a thing of

[babedinkleman]

This post has been removed in accordance with Community Policy

[Gann999]

Nah that's just you, and those are honest questions. And no I didn't sell but 4 million others did

[Gann999]

I will hold until I either lose all my money completely or make it all back plus some for my trouble there is no in between option.

[Gann999]

[tamaracktop]

Oh I'm confident we've seen the last of the legacy overhang. In Q1 they wrote off $2.6 million. In Q2 they wrote off $8.6 million, which was the right thing to do. I don't think we'll hear the word legacy again.

[Gann999]

Good cause it's now my least favourite word.

[tamaracktop]

"Xebec aimed to capture all the estimated losses related to the full completion of this discontinued product line for the balance of the year. Going forward, the Company does not currently expect any further financial impact relating to these legacy activities."

[ZouZS3]

They "aimed" does not mean they necessarily captured it all. They don"t "expect" further impact does not mean they won't have further impact.

[LongoGlueStick]

And given their track record and poor communication, we will probably hear about more legacy loses in Q3.

[tamaracktop]

Track record? Who's track record? New management has been in place for 4 months. And they're doing exactly what they said they would do. At less than half this year's revenues and a fraction of book value, Xebec is an incredibly good buy at 60 cents.

[Gann999]

Management has done the right thing here as much as it sucks now show us improvement and get the cash burn under control. This can still be a billion dollar company it's far from over. People throw bankruptcy around like a company is not going to fight against it bankruptcy is the least likely scenario here.

[bmbruce]

Yes indeed it's an excellent buy at this price... the new management team may take a couple of quarters to get things under control but they will definitely do so... this together with the exponential growth that's going to happen in the RNG and hydrogen sectors, XBC's path forward will only be positive...

[therealmccoy]

you've left quite a legacy of posts there TT/the titanic.... you'll hear the word legacy again, i can almost sense it....