New IFRS 15 Standard Causes Xebec to Update Guidance
April 11 2019 - 8:30AM
Xebec Adsorption Inc. (TSXV: XBC) (OTC: XEBEF) (FRANKFURT:
XB6) (“Xebec”), a global provider of clean energy
solutions announced today that revenue and earnings guidance
previously given for the 2018 and 2019 calendar years must be
updated as a result of the application of new IFRS 15 accounting
standard.
Under IFRS 15, revenue recognition as a percent
of completion requires a cancellation clause that stipulates that
the company is entitled to cost, margin and profit.
This clause is present in Xebec’s North American
and European contracts but a recent audit review of seven (7)
contracts in China revealed that the contract language did not meet
the updated cancellation clause requirements of IFRS 15. While the
underlying projects are progressing in line with expectations, the
company will need to complete the projects before it recognizes
revenue. Completion for all 7 projects will occur within the first
three quarters of 2019.
On November 8th, 2018, consolidated revenue
guidance for 2018 was in a range of CDN$22 to $25M. Xebec would
have exceeded the higher end of the guidance but the revenue from
these seven contracts worth approximately CDN$5.5M will now shift
to 2019. As a result, Xebec has adjusted its 2018 revenue guidance
to CDN$20M. Its earnings guidance of $0.01 per share will change to
a loss of $0.07.
Xebec will increase 2019 revenue guidance from
CDN$40M to $45.5M; earnings guidance will increase from a range of
$0.05 to $0.07 to a range of $0.10 to $0.13 per share; gross
margins will be in the range of 28% to 32%; and SG&A costs are
expected to be between CDN$9 to $10 million.
Xebec will publish its full financial results
for calendar year end 2018 on April 17th, 2019.
“While we have to revise our 2018 and 2019
estimates and numbers, the changes to the seven contracts will have
no impact on our operations, cash flow and, most importantly, our
continuing rapid growth.”- Kurt Sorschak, President and
CEO of Xebec Adsorption Inc.
For more information:Xebec
Adsorption Inc.Sandi Murphy, Director, Investor Relations and
Communications+1 450.979.8718 smurphy@xebecinc.com
Kurt Sorschak, President and Chief Executive
Officer+1 450.979.8701 ksorschak@xebecinc.com
About Xebec Adsorption
Inc.Xebec Adsorption Inc. is a global provider of gas
generation, purification and filtration solutions for the
industrial, energy and renewables marketplace. Its customers range
from small to multi-national corporations and governments looking
to reduce their carbon footprints. Headquartered in Montreal (QC),
Xebec designs, engineers and manufactures innovative and
transformative products, and has more than 1,500 customers
worldwide. With two manufacturing facilities in Montreal and
Shanghai, as well as a sales and distribution network in North
America, Europe, and Asia, Xebec trades on the TSX Venture Exchange
under the symbol XBC. For additional information on the company,
its products and services, visit Xebec at xebecinc.com.
Cautionary Statement Neither
TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release. This news release contains forward-looking statements and
forward-looking information (together, “forward-looking
statements”) within the meaning of applicable securities laws. All
statements, other than statements of historical facts, are
forward-looking statements, and subject to risks and uncertainties.
Generally, forward-looking statements can be identified by the use
of terminology such as “plans”, “seeks”, “expects”, “estimates”,
“intends”, “anticipates”, “believes”, “could”, “might”, “likely” or
variations of such words, or statements that certain actions,
events or results “may”, “will”, “could”, “would”, “might”, “will
be taken”, “occur”, “be achieved” or other similar expressions.
Forward-looking statements, including statements concerning future
capital expenditures, revenues, expenses, earnings, economic
performance, indebtedness, financial condition, losses and future
prospects as well as the expectations of management of Xebec with
respect to information regarding the business and the expansion and
growth of Xebec operations, involve risks, uncertainties and other
factors that could cause actual results, performance, prospects and
opportunities to differ materially from those expressed or implied
by such forward-looking statements. Forward-looking statements are
subject to business and economic factors and uncertainties, and
other factors that could cause actual results to differ materially
from these forward-looking statements, including the relevant
assumptions and risks factors set out in Xebec's public documents,
including in the most recent annual management discussion and
analysis and annual information form, filed on SEDAR at
www.sedar.com. Furthermore, should one or more of the risks,
uncertainties or other factors materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in forward-looking statements or information.
These risks, uncertainties and other factors include, among others,
the uncertain and unpredictable condition of global economy,
Xebec’s capacity to generate revenue growth, limited number of
customers, and other factors. Although Xebec believes that the
assumptions and factors used in preparing the forward-looking
statements are reasonable, undue reliance should not be placed on
these statements, which only apply as of the date of this news
release, and no assurance can be given that such events will occur
in the disclosed times frames or at all. Except where required by
applicable law, Xebec disclaims any intention or obligation to
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise.
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