November 11, 2021 07:00 ET | Source: RBK Absorption RBK Absorption
Montreal, November 11, 2021 (Global News Agency) - Xebec Adsorption Inc. (TSX: XBC) ("Xebec"), a global clean energy solution provider, today announced its third quarter 2021 results. The highlights are as follows:
"In the third quarter, we made progress in executing our growth plans, while also reducing the impact of our traditional, customized RNG projects. This resulted in higher gross profit margins compared to the first and second quarters of this year. Because the total revenue contributed by the legacy contracts is less, and we see higher quality revenue in various departments. Ultimately, we focus on the transition to standardized products, which will gain benefits in terms of scale and cost. In addition, the end of the quarter Later, we announced the acquisition of UECompression in Colorado, which gave us a reliable ability to achieve significant organic growth through containerized renewable natural gas and hydrogen power generation systems for the North American market.
In 2021, we have made progress in team building and operational setup to take advantage of the accelerated development of renewable gas. However, as we continue to execute and grow our company, we will need to be vigilant against supply chain risks and other operational disruptions,” said Kurt Sorschak, Chairman, President and CEO of Refco Adsorption Inc..
Refco continues to see continuous improvement in the political and regulatory background of its products and services. This can be seen from the Biden administration’s "Better Rebuild Act", which will allocate US$555 billion for US investment in clean energy and climate change. The bill specifically includes tax credits for biogas, renewable natural gas, hydrogen, and local manufacturing. In addition, a global methane commitment was announced at the COP26 meeting, with the goal of reducing methane emissions by 30% by 2030 compared to 2020 production. Among other things, these initiatives continue to support RBK's proven technologies and solutions for reducing renewable gas emissions.
In addition, the company has felt the impact of the supply chain disruption and continues to manage its risks, including higher-than-normal inventory purchases and double purchases. Refco is also preparing for potential transportation challenges, which may cause revenue delays in the next few quarters. The company's strategy of locally manufacturing and establishing a strategic sourcing function is expected to help reduce this risk.
Renewable Natural Gas (RNG) RUBIC continues to implement its long-term production-oriented RNG projects, with the last few projects in the final stages of implementation and commissioning. Due to the reduced contribution to total revenue, the impact of these legacy contracts has gradually weakened, and the gross profit margin has increased this quarter. In general, standardized products such as Biostream are expected to bring stronger organic revenue growth, more predictable cost management and higher gross profit margins to this segment.
The company has also begun production of the second-generation Biostream in Canada, with the goal of producing 30 to 40 devices per year. Revenue for the most recent 18 Biostream orders has not yet been confirmed, as they will now be confirmed upon delivery rather than on a percentage completion basis.
The recently announced additional capacity through UECompression will add another 120 to 150 containerized renewable gas systems to North American capacity, totaling 150 to 190 units. This significant increase in manufacturing capacity reflects the expected demand for the agricultural product market from RBK. In addition, the success of the first-generation Biostream and positive feedback from customers further supported the expansion. The company now has multiple RNG-producing units in American dairy farms, and their performance has met or exceeded expectations.
Hydrogen won a number of hydrogen contracts this quarter, including a new industrial application (annealing heat treatment process) contract with Turkish flat steel manufacturers for two Hy.GEN® 150 units. Refco also commissioned a key project in the Czech Republic, in which hydrogen will be delivered to tungsten manufacturing and photonics factories with local partners.
In addition, the growing demand for distributed hydrogen production in the United States has led to the establishment of a local manufacturing process through UECompression. The company sees more and more offers to convert renewable natural gas into green hydrogen, for which the company has world-leading technology.
Finally, with the development of the mobile market, RBK's hydrogen PSA purification platform has become more and more active. For example, an order was received from a leading marine robotics company that used ammonia cracking to produce high-purity hydrogen for fuel cells on ships. RBK expects that with the development of the mobile market, the demand for high-purity hydrogen will accelerate the growth opportunities of its PSA platform.
Oxygen and Nitrogen Inmatec continues to maintain record production levels, mainly due to the increased demand for sustainable and reliable sources of medical-grade oxygen due to the COVID-19 pandemic. To meet this demand, a lease was signed last quarter to double the production area of the manufacturing plant in Herrsching, Germany, and this expansion is in progress.
Organizations around the world continue to see the benefits of on-site gas production. Inmatec recently delivered a large amount of cargo to a hospital in Saint Lucia, demonstrating its value proposition. Historically, there was no available oxygen on the island, and the gas had to be imported in liquid form through containers. The cost of this supply will exceed $250 per ton. By generating gas on site, the hospital now only pays one-tenth of the cost, reduces its carbon footprint, ensures a safe supply, and can provide services to more intensive care unit (ICU) patients.
Finally, as the restrictions imposed by COVID-19 were lifted and industrialized economies reopened around the world, Inmatec saw an increase in on-site nitrogen production activities.
Support-Industrial Products and Services RBK has made multiple progress in its aggregation strategy of acquiring compressed air service companies to establish the company's clean technology service network. Two acquisitions were made this quarter, including the assets of California Compression in California and Wisconsin Compressed Air in Wisconsin.
Although the service center felt the impact of the supply chain disruption, overall bookings were strong this quarter, and several departments are now seeing a meaningful contribution from clean technology equipment. Refco expects that as the company is committed to integration, optimization and focus on this market segment, the pace of acquisitions may slow down.
Renewable natural gas infrastructure Xebec is addressing renewable natural gas infrastructure opportunities through GNR Quebec Capital LP ("GNRQC"), which was created in collaboration with Quebec's largest capital development fund The Fonds desolidarité FTQ ("Fonds"). Refco is an equal equity investor with Fonds and will participate in the sale of renewable natural gas equipment and long-term parts and service agreements for the equipment.
The fund has so far evaluated 28 projects and has actively participated in 18 green and brown land varieties in the fields of agriculture, municipal administration, landfills, mixed utilization and industrial waste applications. The fund has now successfully executed several letters of intent (LOI) for projects in Quebec.
Management Guidelines for 2021 For the full year of fiscal 2021, RBK is updating its previously announced guidelines and now expects revenue to be between US$120.0 and US$130 million, from US$110 million to US$130 million, adjusted EBITDA The profit margin ranges from -3.0% to -5.0%, and from -3.0% to -4.0%. This guide reflects the recently announced contribution to UECompression’s acquisition and increased supply chain risk.
RBK will hold an on-site investor webinar to discuss the results of the third quarter of 2021. The investor webinar for shareholders, analysts, investors, media representatives and other stakeholders will be held today (November 2021). 11th) 8:30 AM Eastern Standard Time (5:30 AM Pacific Standard Time).
Register here: https://app.livestorm.co/xebec-adsorption-inc/2021-q3-investor-webinar
The recordings and supporting materials of the webinar will be available on the investor section of the company's website at xebecinc.com/investors later today.
Financial statements for the third quarter of 2021 and management’s discussion and analysis. The condensed financial statements, notes to the financial statements, and management’s discussion and analysis for the three-month period ended September 30, 2021 are available on the company’s website at xebecinc.com/ investors or on the SEDAR website www.sedar.com.
Related link: https://xebecinc.com/
For more information: Xebec Adsorption Inc. Brandon Chow, Director of Investor Relations 1 450.979.8700 ext. 5762 bchow@xebecinc.com
About Adsorption Inc. Adsorption Inc. Adsorption is a global supplier of clean energy solutions for renewable and low-carbon gases used in energy, transportation and industrial applications. The company specializes in deploying a series of proprietary technologies for the distributed production of hydrogen, renewable natural gas, oxygen and nitrogen. By focusing on environmentally responsible natural gas production, RBK has helped thousands of customers around the world reduce their carbon footprint and operating costs. Refco is headquartered in Quebec, Canada, with operations all over the world, with 8 manufacturing plants, 13 clean technology service centers and 5 sales offices on four continents. RBK's trading code on the Toronto Stock Exchange is (TSX code: XBC). For more information, please visit xebecinc.com.
Cautionary Statement This press release contains forward-looking statements within the meaning of applicable Canadian securities laws. These statements are related to future events or future performance, and reflect management's expectations for the company or its industry's growth, operating performance, performance, and business prospects and opportunities. Forward-looking statements usually include information such as "believes", "anticipates", "anticipates", "continues", "may", "shows", "plans", "will", "intends", "may", "project", "Schedules", "would" or similar expressions that imply future results or events, although not all forward-looking statements contain these identifying words. Examples of such statements include, but are not limited to, statements regarding: (i) expected actions to achieve the company’s strategic goals; (ii) major market drivers that affect the company’s success; (iii) work on future renewable natural gas (Iv) expectations of business activities and orders that may be received in fiscal year 2021 and beyond; (v) trends and developments in the company’s target market; (vi) the company’s market opportunities; (vii) the benefits of the company’s products , (Viii) Intent to reach agreements with partners; (ix) Future outsourcing and supply chain; (x) Expectations of competitors; (xi) Expected impact of risks and uncertainties; (xii) Regarding payments Dividend intention; (xiii) manage the company’s liquidity risk based on current economic conditions; (xiv) the company’s cost reduction plan; (xv) seek additional financing in the next few months; (xvi) on Statement of the class action case filed by the company; (xvii) 2021 revenue and EBITDA guidance; (xviii) the Blainville plant is expected to produce 30 to 40 Biostream systems per year; (xix) the UECompression facility is expected to allow 120 to 150 Biostream systems per year Hy.GEN® system; (xx) The second-generation Biostream system is expected to be delivered in 2022.
These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that may cause the company’s actual results, activity levels or performance to be different from those expressed or implied in these forward-looking statements. Any future results, activity levels or performance are materially different. Look at the statement. These risks generally include risks related to revenue growth, business performance, industry and products, technology, competition, economics, insurance adequacy, and other factors discussed in more detail in this press release and annual information sheet. The company submitted an application to SEDAR on www.sedar.com.
The forward-looking statements contained herein are based on certain assumptions that the company believes to be reasonable on the date of this press release, including but not limited to the results of certain market segments, overall economic environment, pace and technological development, competitors and customers The identity and expected actions of the company, assumptions related to the facts of the class action lawsuit filed against the company and its impact, the value of Canadian dollar and foreign currency fluctuations, interest rates, working capital requirements, the expected profit rate of the new contract award, the current state of the company's backlog, The regulatory environment, the adequacy of internal and disclosure controls, the company's ability to successfully integrate acquired businesses, and the ability to acquire and integrate businesses in the future. Other assumptions (if any) are specified in this press release. If these assumptions prove to be inaccurate, the company's actual results may differ materially from the results expressed or implied in the forward-looking statements. The forward-looking statements contained herein were made on the date of this press release, and as a whole, they are expressly qualified by this cautionary statement. Except as required by law, the company assumes no obligation to publicly update or revise any forward-looking statements contained herein. Readers should not rely excessively on forward-looking statements.
Non-International Financial Reporting Standards ("IFRS") This press release refers to financial measures that are not recognized by International Financial Reporting Standards ("IFRS"). Non-IFRS financial indicators are numerical indicators of company performance, financial status, or cash flow. They do not include or include amounts, or are affected by adjustments. These amounts are excluded or included in the calculation of the most directly comparable measure. The effect of the report is presented in accordance with International Financial Reporting Standards. Non-IFRS measures do not have any standardized meaning under IFRS, and therefore are unlikely to be compared with similar measures provided by other companies with the same or similar businesses.
The company considers these measures to be useful supplementary information. The company uses the following non-IFRS measures in this press release: EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, and RBK's backlog of orders.
Please find below the definition of the non-IFRS financial measures used here:
"EBITDA" refers to earnings before interest, income tax, depreciation and amortization, where interest is defined as the net financing cost in the consolidated statement of comprehensive income.
"EBITDA margin" is EBITDA as a percentage of revenue.
"Adjusted EBITDA" starts with EBITDA, and adjusts tangible for stock compensation expenses, inventory impairment, foreign exchange gains/losses due to non-controlling interests participating in the obligations of subsidiaries, foreign exchange losses (gains), debt increases, and impairments. The cost of assets, as well as a one-time payment due to the early departure of the employee.
"Adjusted EBITDA margin" is the percentage of adjusted EBITDA to revenue.
"Backlog" refers to contracts that have been received and considered to be confirmed orders.