Xebec Announces Q4 and Year End 2021 Financial Results

MONTREAL–(BUSINESS WIRE)–Xebec Adsorption Inc. (TSX: XBC) (“Xebec”), a global provider of sustainable gas technologies, announced today its 2021 fourth quarter and year end results, with the following highlights:

Fourth Quarter 2021 Highlights

  • Revenues of $45.9 million compared to $6.4 million
  • Gross margin of $10.3 million (22%) compared to ($11.4) million (-180%)
  • Adjusted EBITDA of $0.2 million compared to ($22.6) million
  • Net income of $2.4 million or $0.02 per share compared to a net loss of $28.3 million or ($0.26) per share

Full Year 2021 Highlights

  • Revenues of $125.9 million compared to $69.4 million
  • Gross margin of $29.5 million (23%) compared to ($0.3) million (0.5%)
  • Adjusted EBITDA of ($8.8 million) compared to ($22.0) million
  • Net loss of $23.5 million or ($0.15) per share compared to a net loss of $32.0 million or ($0.33) per share
  • Record backlog of $123.8 million on March 16, 2022 compared to $100.1 million on March 18, 2021
  • Working capital of $82.1 million on December 31, 2021 for a current ratio of 1.98:1, compared to working capital of $170.4 million and a current ratio of 4.07:1 on December 31, 2020
  • As at December 31, 2021 the company had $51.1 million of cash and restricted cash compared to $168.6 million as at December 31, 2020

Financial Highlights:









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Adjusted EBITDA starts with EBITDA and adjusts for Stock-based compensation expenses, impairment of inventories, exchange gain/loss on the obligation arising from non-controlling interest participation in a subsidiary, foreign exchange loss (gain), accretion of debt, impairment charge of tangible assets, remeasurement of investments, M&A transaction fees, and one-time payments arising from the prior departure of employees and legal costs.

Financial Results

  • Revenues increased by $69.4 million to $125.9 million for the twelve-month period ended December 31, 2021 compared to $56.5 million for the same period the prior year. The 123% increase is mainly explained by acquisitions completed in 2020 and 2021, including (1) $32.0 million for services companies and ACS, and (2) $54.8 million for HyGear, Inmatec and UEC. Xebec is also undergoing a transition from long-term production-type RNG projects to standardized products such as Biostream, where revenues are recognized on delivery. Biostream revenues related to new orders received in H2 2021 are expected to be recognized in 2022.
  • Gross margin increased from $0.3 million to $29.5 million, or 23% of revenue compared to 0.5% of the revenues for the same period the prior year. The increase is mainly due to the positive impact of acquisitions completed in 2020 and 2021, a more profitable product mix, which was offset by supply chain impacts.
  • Selling and administrative expenses (“SG&A”) for the twelve-month period ended December 31, 2021 were $51.8 million, an increase of $30.2 million when compared to $21.6 million for the same twelve months of 2020. The increase is primarily due to additional SG&A expenses associated with the newly acquired companies: (1) $8.1 million for services companies and ACS, and (2) $16.1 million for HyGear, Inmatec and UEC. In addition, SG&A expenses increased due to higher amortization of intangible assets from acquisitions, as well as an overall scale up of the organization to support the increased level of current and expected future sales.
  • Research and development expenses of $1.6 million for the twelve-month period ended December 31, 2021 related to the development of the company’s second generation of the Biostream product and the continued development of biogas upgrading and hydrogen technologies.
  • Other (gains) and losses of ($8.8) million for the twelve-month period ended December 31, 2021 compared to $6.7 million for the same twelve months of 2020. The improvement is mainly due to a gain recorded on the remeasurement of our investment in Xebec Adsorption (Shanghai) Co LTD of $19.0 million combined with lower integration and acquisition costs, partly offset by to a one-time payment arising from the prior departure of employees and legal costs.
  • Operating loss of $14.4 million for the twelve-month period ended December 31, 2021, compared to an operating loss of $29.2 million for the same period in 2020. The improvement is mainly explained by the above-noted improvement in revenues, gross margin and other gains and losses, offset by the increase in SG&A expense.
  • Net loss of $23.5 million or ($0.15) per share decreased from $32.0 million or ($0.33) per share in same period last year.
  • Adjusted EBITDA increased to ($8.8) million for the twelve-month period ended December 31, 2021 compared to ($22.0) million for the same period last year.

Current Market Outlook

Xebec continues to see positive leading indicators for demand of its cleantech products. This is driven by regulatory and voluntary supports in the company’s core markets. Although the “Build Back Better Act” by the Biden administration was not passed in its original form, the company remains hopeful that parts of it, such as the tax credits for renewable natural gas, hydrogen and local manufacturing, can be passed separately through Congress. The previously passed U.S. “Infrastructure Investment and Jobs Act” provides provisions for low carbon gases including $9.5 billion USD for clean hydrogen hubs, $2.5 billion USD for refueling infrastructure and $3.5 billion USD for carbon capture projects.

In addition, the Russian invasion of Ukraine has put into spotlight the need to reduce Europe’s reliance on Russian gas from an energy security and cost perspective. On March 8, 2022, the EU announced REPowerEU, where they intend to increase the supply of renewable gases (hydrogen and renewable natural gas) to reduce EU’s demand for Russian gas by two thirds before the end of the year. Given Xebec’s strong presence in Europe, this initiative presents opportunities as a worldwide renewable gas technology leader. Overall, Xebec believes its key markets remain supportive for the development of sustainable gases, particularly as climate change moves more into focus and energy independence becomes more important.

Furthermore, the Company continues to manage the impacts of rising supply chain disruptions, labor shortages, inflationary pressures and logistical barriers. However, given the uncertainties relating to the geopolitical crisis in Ukraine and continued impacts of the COVID-19 pandemic, we have stopped providing annual revenue and adjusted EBITDA guidance. While Xebec aims to continue its growth strategy, we believe that this approach better reflects the global situation.

Systems – Cleantech

Renewable Natural Gas (RNG)

On March 4, 2022, NGO Energy Vision released its 2021 annual assessment of the U.S. (RNG) industry. The assessment found the number of RNG facilities grew 34% and production by 24% in 2021 over 2020. The assessment also found that decomposing organic waste (landfill, wastewater, animal manure, food waste) account for 30% of U.S. methane emissions. Xebec believes that RNG production will be an important and cost-effective tool in cutting methane emissions for the Global Methane Pledge. Realizing RNG’s full potential in the U.S. represents up to 30 times more production from current supply levels.

Furthermore, Xebec continues to focus on small-scale RNG flow rates with its standardized and containerized Biostream product. The company is targeting the agriculture sector and seeing robust quoting levels for the all-in-one solution. The number of outstanding quotes in the first two months of 2022 are more than double the number from the same period last year. Xebec believes the shift from long-term production-type projects to small-scale standardized products is critical to supporting industry targets and improving our overall profitability in this segment. Anticipation of this demand was the basis of our recently announced acquisition of Colorado-based UECompression, which increases our manufacturing capacity roughly five-fold.

Production of the second generation Biostream is ongoing at two of Xebec’s North American manufacturing facilities (Blainville and UECompression). Revenues for these units have not yet been recognized in 2021 and will be recognized on delivery to customers in 2022. The company is also finalizing the last two of its long-term production-type RNG projects and expects to continue seeing the tapering down of impact from these legacy contracts.


Xebec’s hydrogen segment continues to make inroads within the industrial sector as it gains reference installations, sales traction and creates local hydrogen supply for the emerging mobility sector. Over the last year, the sales pipeline for equipment and Gas-as-a-Service customers has become more global with industrial customers. There are now deliveries scheduled in 2022 that are designated for the United Kingdom, Turkey, Poland, Saudi Arabia, Poland, Belgium, Chile, and Spain. Expanding business development activities to North America is a priority in 2022.

The Company’s hydrogen generation products are seeing increased quoting activity for the energy and mobility sector, particularly with heavy transport and rail applications. Customers are starting to recognize the cost and emission benefits of on-site reforming of natural gas for hydrogen. Xebec’s technology agnostic approach ensures that customers can produce clean hydrogen utilizing either steam methane reforming or electrolysis technologies.

Lastly, the company is continuing its Decentralized Hydrogen Production Hub activities and expects to develop more hubs. Today there is one operating in The Netherlands and another under construction in the United Kingdom. Xebec is also exploring opportunities to secure financial partnerships to help fund the underlying hydrogen assets to accelerate these efforts globally.

Carbon Capture and Sequestration

Carbon capture is becoming an increasingly important tool for reducing emissions and achieving a net-zero or carbon negative economy. Xebec has leveraged its PSA and compression technology platforms to create new carbon capture solutions for customers who wish to reduce their emissions further in energy, heating and industrial processes.

One of Xebec’s first initiatives in carbon capture is with Washington-based partner CarbonQuest. CarbonQuest integrated Xebec’s PSA technology into their patent pending “4-Step Carbon Capture Process” which enables the separation and liquefaction of CO2 from natural gas when used in a high-rise boiler to heat a building. The first project with CarbonQuest was launched in January 2022 and Xebec has recently received a purchase order for a new project.

Furthermore, through the acquisitions of Applied Compression Systems and UECompression, Xebec has gained renewable and low carbon gas compression expertise to help customers compress their gases for efficient transportation in physical or virtual pipelines. Transporting carbon dioxide in pipelines is expected to become a more widespread solution for moving the gas across long distances cost effectively.

While Xebec’s revenue exposure to carbon capture and sequestration to date is small, the Company expects that the market for carbon capture and sequestration will become another key pillar of its Cleantech Systems segment.

Oxygen and Nitrogen

2021 marked a record year for oxygen and nitrogen generators with over 600 units produced. Approximately 40% of the sales were attributed to oxygen and Xebec expects that as the impact of COVID winds down, the demand will shift back towards nitrogen generators. While supply chain and logistics disruptions remain a strong headwind, the Company is expanding its sales and distribution channels to drive further organic growth. Lastly, new applications are being reflected in recent customer inquiries such as the sustainable and cost-optimised production of nitrogen for soldering electronic components.

Support – Industrial Products & Services

The Support segment, also known as the Cleantech Service Network, continues to deliver strong results despite seeing continued supply chain and COVID-19 impacts. In Q4 2021, the added three service centers with the acquisition of UECompression but did not close any additional acquisitions. Xebec currently aims to integrate, optimize and focus its efforts within the segment. Several developments achieved in the quarter and planned for 2022 revolve around driving more revenue and cost synergies, expanding distribution networks and building a training academy for technicians in partnership with community colleges.

The Cleantech Service Network now boasts over 60 qualified technicians who support the Cleantech Systems in product installation, commissioning, operations and maintenance. Over 3,000 hours were logged in 2021 to support renewable natural gas installations in North America. As more installations come online, Xebec expects to leverage its industrial service success to cement itself as the go-to market leader for professional, courteous and knowledgeable service for renewable gas equipment.

Renewable Gas Infrastructure

Xebec is addressing the renewable gas infrastructure opportunity through GNR Quebec Capital L.P. (“GNRQC”), a fund created in partnership with The Fonds de solidarité FTQ (“Fonds”), the largest capital development network in Québec. Xebec is an equal equity investor alongside the Fonds and will participate in the sale of renewable natural gas equipment alongside long-term parts & service agreements for the equipment.

The fund has evaluated 31 projects to date and is actively involved with 18 of both greenfield and brownfield varieties in agriculture, municipal, landfill, mixed use, and industrial waste applications. The fund has now successfully executed several letters of intent (LOI) for projects in Québec.

Xebec to Host Live Investor Webinar to Discuss Q4 and Year End 2021 Results

An investor webinar for shareholders, analysts, investors, media representatives, and other stakeholders will be held today, March 17, 2022, at 8:30AM EDT (5:30AM PDT).

Register here: https://app.livestorm.co/xebec-adsorption-inc/2021-q4-investor-webinar

A recording of the webinar and supporting materials will be made available later today in the investor’s section of the Company’s website at xebecinc.com/investors.

Xebec to Host First Investor Day in Colorado on March 29, 2022

Xebec will hold its first investor day, in person and on livestream, on Tuesday, March 29, 2022, in Denver, Colorado. The event will begin at 11:00 AM MDT (1:00 PM EDT) and will showcase the company’s worldwide capabilities, disruptive clean technologies for sustainable gases, and the multi-year strategic plan to enable the successful execution of its many growth opportunities.

Livestream registration details will be provided closer to the date.

2021 Fourth Quarter and Year End Financial Statements and Management’s Discussion and Analysis

The financial statements, notes to financial statements, and Management’s Discussion and Analysis for the three-month period ended December 30, 2021, are available on the company’s website at xebecinc.com/investors or on the SEDAR website at www.sedar.com.

Related links:


About Xebec Adsorption Inc.

Xebec is a global provider of clean energy solutions for renewable and low carbon gases used in energy, mobility and industrial applications. The company specializes in deploying a portfolio of proprietary technologies for the distributed production of hydrogen, renewable natural gas, oxygen and nitrogen. By focusing on environmentally responsible gas generation, Xebec has helped thousands of customers around the world reduce their carbon footprints and operating costs. Headquartered in Québec, Canada, Xebec has a worldwide presence with eight manufacturing facilities, seventeen Cleantech Service Centers and four sales offices spanning over four continents. Xebec trades on the Toronto Stock Exchange under the symbol (TSX: XBC). For more information, xebecinc.com.

Cautionary Statement

This press release contains forward-looking statements within the meaning of applicable Canadian securities law. These statements relate to future events or future performance and reflect the expectation of Management regarding the growth, results of operations, performance and business prospects and opportunities of the Corporation or its industry. Forward-looking statements typically contain words such as “believes”, “expects”, “anticipates”, “continues”, “could”, “indicates”, “plans”, “will”, “intends”, “may”, “projects”, “schedules”, “would” or similar expressions suggesting future outcomes or events, although not all forward-looking statements contain these identifying words. Examples of such statements include, but are not limited to, statements concerning: (i) actions expected to be undertaken to achieve the Company’s strategic goals; (ii) the key market drivers impacting the Company’s success; (iii) intentions with respect to future renewable gas work; (iv) expectations regarding business activities and orders that may be received in fiscal 2022 and beyond; (v) trends in, and the development of, the Company’s target markets; (vi) the Company’s market opportunities; (vii) the benefits of the Company’s products, (viii) the intention to enter into agreements with partners; (ix) future outsourcing and supply chain; (x) expectations regarding competitors; (xi) the expected impact of the described risks and uncertainties; (xii) intentions with respect to the payment of dividends; (xiii) the management of the Company’s liquidity risks in light of the prevailing economic conditions; (xiv) the Company’s cost reduction plan; (xv) the search for additional financing over the next months; (xvi) statements regarding the merits of the class action complaints filed against the Company; (xvii) that the expected delivery of second generation Biostream systems in 2022; (xviii) expectation that increased quotes could lead to more orders for the Company; and (xix) the Company’s plan to become a go-to service market leader;

These statements are neither promises nor guarantees but involve known and unknown risks and uncertainties that may cause the Company’s actual results, level of activity or performance to be materially different from any future results, levels of activity or performance expressed in or implied by these forward-looking statements. These risks include, generally, risks related to revenue growth, operating results, industry and products, technology, competition, the economy, the sufficiency of insurance and other factors which are discussed in greater details in this press release and in the Annual Information Form of the Corporation filed on SEDAR at www.sedar.com.

Forward-looking statements contained herein are based on a number of assumptions believed by the Corporation to be reasonable as at the date of this press release, including, without limitations, assumptions about trends in certain market segments, the economic climate generally, the pace and outcome of technological development, the identity and expected actions of competitors and customers, assumptions relating to the merits of the class action complaints filed against the Company and their impact, the value of the Canadian dollar and of foreign currency fluctuations, interest rates, working capital requirements, the anticipated margins under new contracts awards, the state of the Corporation’s current backlog, the regulatory environment, the sufficiency of internal and disclosure controls, the ability of the Corporation to successfully integrated acquired business, and the acquisition and integration of businesses in the future. Other assumptions, if any, are set out throughout this press release. If these assumptions prove to be inaccurate, the Corporation’s actual results may differ materially from those expressed or implied in the forward-looking statements. The forward-looking statements contained herein are made as of the date of this press release and are expressly qualified in their entirety by this cautionary statement. Except to the extent required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements contained herein. Readers should not place undue reliance on forward looking statements.

Non-IFRS Measures

This press release refers to financial measures that are not recognized under International Financial Reporting Standard (“IFRS”). A non-IFRS financial measure is a numerical indicator of a company’s performance, financial position or cash flow that excludes or includes amounts or is subject to adjustments that have the effect of excluding or including amounts that are included or excluded in most directly comparable measures calculated and presented in accordance with IFRS. Non-IFRS measures do not have any standardized meaning under IFRS and therefore are unlikely to be comparable to similar measures presented by other companies having the same or similar businesses.

The Corporation believes these measures are useful supplemental information. The following non-IFRS measures are used by the Corporation in this press release: EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, backlog of Xebec.

Please find below definitions of non-IFRS financial measures used by herein:

“EBITDA” means the earnings before interest, income taxes, depreciation and amortization, where interest is defined as net finance costs as per the consolidated statement of comprehensive income.

“EBITDA margin” being EBITDA as a percentage of revenues.

“Adjusted EBITDA” starts with EBITDA and adjusts for Stock-based compensation expenses, impairment of inventories, exchange gain/loss on the obligation arising from non-controlling interest participation in a subsidiary, foreign exchange loss (gain), accretion of debt, impairment charge of tangible assets, remeasurement of investments, M&A transaction fees, and one-time payments arising from the prior departure of employees and legal costs.

“Adjusted EBITDA margin” being Adjusted EBITDA as a percentage of revenues.

“Backlog” means contracts that have been received and are considered as firm orders.


For more information:
Xebec Adsorption Inc.

Brandon Chow, Director, Investor Relations

+1 450.979.8700 ext 5762