THIS DOCUMENT IS NOT INTENDED FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED
STATES.
Questor Technology Inc. ("Questor" or the "Company") (TSX VENTURE:QST) announced
today its financial and operating results for the year ended December 31, 2010.
The Company reported net income of $425,897 ($0.018 per basic share) for the
year ended December 31, 2010 compared to a net loss of $101,963 ($0.004 per
basic share) for the year ended December 31, 2009. The net income increase of
$527,860 is primarily attributable to higher incinerator sales and rental
revenues, lower foreign exchange losses and amortization expense. These impacts
are partially offset by higher income tax expense and lower other revenue.
"Questor delivered profitable results in 2010 despite the continuing uncertain
economic environment. Our total revenue for the year was $5.8 million, the
second highest achieved in the Company's history," said Audrey Mascarenhas,
President and Chief Executive Officer. "We are gaining momentum in the
marketplace as more and more customers recognize the operational flexibility,
reliability, exceptional performance and economic benefits of our technology.
Where historically much of the interest in the Company's products and services
was due to global attitudes toward the need for air quality improvements,
minimization of carbon emissions, greater energy efficiency and corporate
responsibility for sustainability, we are observing a growing understanding in
the marketplace of the business value drivers underlying the use of
incineration."
Ms. Mascarenhas added, "In the last year, we have demonstrated that when applied
to an oilsands play, Questor's incineration equipment provided a dependable,
cost effective solution that met stringent regulatory requirements. We are
currently working with a number of major producers who wish to leverage the
financial benefits of incineration solutions in both onshore and offshore field
applications. And the impending start-up of the waste heat capture pilot project
in Colorado has attracted significant attention and will lead to additional
opportunities for Questor. In this application, we are utilizing the waste heat
from our combustion incineration process to vaporize water that would otherwise
have been disposed at considerable cost."
"We remain focused on positioning Questor for success and are optimistic about
the Company's future in view of the economic and social benefits associated with
our existing incineration equipment and products under development," concluded
Ms. Mascarenhas.
2010 OPERATIONAL HIGHLIGHTS
Relative to the strategic priorities, the following selected events and
achievements demonstrate Questor's progression in 2010:
-- Generated the second highest total annual revenue in the Company's
history, $5,841,438, which is 48 percent higher than total revenue
attained in 2009.
-- Completed a substantial international incinerator sales contract with a
global, diversified, upstream oil and gas company for a large gas plant
complex located in Indonesia. This project is the first time the
Company's technology has been deployed to a low heat content tail gas
application. The incinerator equipment was successfully commissioned in
first quarter 2011. The revenue associated with the incinerator sale was
recorded in 2010 whereas the commissioning revenue will be reflected in
2011.
-- Completed a waste gas incineration equipment sales contract with a
Calgary-based oil and natural gas exploration and production company for
an oilsands in-situ combustion development in Saskatchewan. This sales
order was the direct result of having deployed Questor's rental
incinerator equipment to handle low heat content sour waste gases with
high flow rates at a heavy oil operation located in southwest
Saskatchewan. That application established the prospective use of
Questor's products in oilsands development and demonstrated the
considerable energy savings possible while providing an effective and
efficient means to destroy high nitrogen and carbon dioxide content sour
gas.
-- Established a dedicated test facility at the Company's Grande Prairie
location to advance the development of a process to convert waste gas to
heat and/or power which would operate in tandem with Questor's
incinerator products. The Company continued to progress this technology
by testing different heat recovery module prototypes. The purpose of
these tests was, and continues to be, to advance and optimize the design
which will then enable Questor to properly size commercial applications
for heat redistribution as well as provide accurate data in designing
for power generation projects.
-- Awarded its first commercial sales order to supply incineration and heat
recovery equipment to a carbon emissions reduction and energy efficiency
demonstration project in Colorado. The Company, in partnership with a
large oilfield compression company in the United States, is progressing
the use of waste heat generated from combustion of waste gases to
vaporize produced water thereby eliminating the current, expensive
practice of trucking the produced water to a disposal facility. The
application is targeted to commence in second quarter 2011 at which time
the associated revenue will be recognized.
-- Built market awareness and recognition for Questor's expertise in
matters relating to air quality as demonstrated by invitations to
present at several events worldwide:
-- The Texas Commission on Environmental Quality ("TCEQ"), the lead
environmental agency for the state of Texas, on March 26, 2010
regarding Questor's incineration technology as an alternative
solution to flaring.
-- 2010 EnviroArabia Conference held in the Kingdom of Bahrain on April
19, 2010 on the topic of "Clearing the Air - Safely and
Efficiently".
-- Society of Petroleum Engineers Offshore Technology Conference in
Houston, Texas, USA on May 6, 2010, on the topic of "Platform Waste
Gas Combustion: Efficiently, Safely, Reliably and Economically".
-- The Mechanical and Industrial Engineering Department at the
University of Toronto on September 10, 2010 in Toronto, Ontario,
Canada. on the topic of "Air Pollution: The Daily Spills That We
Ignore".
-- Canada-Russia Energy Forum in Montreal, Quebec, Canada on September
11, 2010 on the topic of "Clearing the Air! Safely, Economically and
Efficiently".
-- Achieved recognition of Questor's growth when the Company was selected
for Alberta Venture's 2011 Fast Growth 50 list, an annual ranking
honoring fifty of the fastest growing companies in Alberta. This is the
third year in succession that Questor has been selected for the Fast
Growth 50 list.
-- Questor's President and Chief Executive Officer, Audrey Mascarenhas,
served as a distinguished lecturer for the Society of Petroleum
Engineering ("SPE") during the 2010-2011 lecture season. In that
capacity she presented on the importance of clean air and the
technologies available to address the impacts to air quality from
flaring and venting.
SUBSEQUENT TO DECEMBER 31, 2010
Ms. Mascarenhas presented at the 11th China International Petroleum and
Petrochemical Technology and Equipment Exhibition (CIPPE 2011) held March 22 -
24, 2011 in Beijing, China on the topic of "Clearing the Air! Effective,
Efficient, Safe and Sustainable". A copy of this presentation is available on
the Company's website. More recently, Ms. Mascarenhas participated in a mission
to Yamal, Russia, a project supported by the National Research Council's
Industrial Research Assistance program. The purpose of the mission was to
identify solutions to eliminate gas flaring in the region. She will also join a
business-focused mission to Beijing and Shanghai, China from May 26- 31, 2011,
led by Calgary Economic Development, in conjunction with the Mayor of Calgary,
Naheed Nenshi, Tourism Calgary and the Calgary Airport Authority. On May 10,
2011, Ms. Mascarenhas will present at the Canadian Oilsands Network for Research
and Development ("CONRAD") Annual General Meeting to be held in Calgary,
Alberta, Canada. And on June 9, 2011, Ms. Mascarenhas will present a paper
entitled "Emission Reduction: Effective, Efficient, Safe and Sustainable" at the
2011 North America Gas and Oil Expo and Conference to be held in Calgary,
Alberta, Canada.
The Company also announced today that effective April 26, 2011, subject to
regulatory approval, the grant of share options to select officers entitling the
purchase of up to 200,000 common shares at $0.225 per share, exercisable for a
period of five years and vesting in accordance with the provisions of the
Company's share option plan.
Shareholders are invited to attend the Company's Annual General Meeting to be
held on Thursday, June 2, 2011 at 3:00 p.m. (local time) in the Trophy Room of
the Calgary Petroleum Club, located at 319 - 5th Avenue S.W., Calgary, Alberta.
In addition to the formal business items, management will be presenting an
overview of Questor's results for the financial year ended December 31, 2010 and
discussing the Company's strategic initiatives for 2011.
Questor's audited financial statements and Management's Discussion and Analysis
for the years ended December 31, 2010 and 2009 will be available shortly on the
Company's website at www.questortech.com and through SEDAR at www.sedar.com.
ABOUT QUESTOR TECHNOLOGY INC.
Questor is an international environmental oilfield service company founded in
late 1994 and headquartered in Calgary, Alberta, Canada with a field office
located in Grande Prairie, Alberta, Canada. The Company is focused on clean air
technologies with activities in Canada, the United States, Europe and Asia.
Questor designs and manufactures high efficiency waste gas incinerators for sale
or for use on a rental basis and also provides combustion-related oilfield
services. The Company's proprietary incinerator technology destroys noxious or
toxic hydrocarbon gases which ensures regulatory compliance, environmental
protection, public confidence and reduced operating costs for customers. Questor
is recognized for its particular expertise in the combustion of sour gas (H2S).
While the Company's current customer base is primarily in the oil and gas
industry, this technology is applicable to other industries such as landfills,
water and sewage treatment, tire recycling and agriculture.
Questor trades on the TSX Venture Exchange under the symbol "QST".
Certain information in this news release constitutes forward-looking statements.
When used in this news release, the words "may", "would", "could", "will",
"intend", "plan", "anticipate", "believe", "seek", "propose", "estimate",
"expect", and similar expressions, as they relate to the Company, are intended
to identify forward-looking statements. In particular, this news release
contains forward-looking statements with respect to, among other things,
business objectives, expected growth, results of operations, performance,
business projects and opportunities and financial results. These statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those anticipated in such
forward-looking statements. Such statements reflect the Company's current views
with respect to future events based on certain material factors and assumptions
and are subject to certain risks and uncertainties, including without
limitation, changes in market, competition, governmental or regulatory
developments, general economic conditions and other factors set out in the
Company's public disclosure documents. Many factors could cause the Company's
actual results, performance or achievements to vary from those described in this
news release, including without limitation those listed above. These factors
should not be construed as exhaustive. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying forward-looking
statements prove incorrect, actual results may vary materially from those
described in this news release and such forward-looking statements included in,
or incorporated by reference in this news release, should not be unduly relied
upon. Such statements speak only as of the date of this news release. The
Company does not intend, and does not assume any obligation, to update these
forward-looking statements. The forward-looking statements contained in this
news release are expressly qualified by this cautionary statement.
QUESTOR TECHNOLOGY INC.
BALANCE SHEETS
As at December 31 2010 2009
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ASSETS
Current assets
Cash $ 3,995,669 $ 3,080,997
Accounts receivable 1,872,509 864,260
Income and other taxes receivable 362 306,850
Inventory 313,567 433,145
Prepaid expenses and deposits 107,467 101,072
Deferred expenses - 2,356
Future income tax asset - 50,113
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6,289,574 4,838,793
Property and equipment 1,316,858 1,418,524
Intangible assets 10,759 15,682
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$ 7,617,191 $ 6,272,999
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 852,821 $ 348,150
Current portion of long-term debt - 15,232
Income and other taxes payable 230,431 19,034
Deferred revenue and deposits 146,485 198,641
Future income tax liability 18,706 2,281
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1,248,443 583,338
Future income tax liability 110,222 74,057
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1,358,665 657,395
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Shareholders' equity
Share capital 5,404,966 5,265,736
Contributed surplus 525,446 447,651
Retained earnings 328,114 (97,783)
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6,258,526 5,615,604
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$ 7,617,191 $ 6,272,999
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QUESTOR TECHNOLOGY INC.
STATEMENTS OF INCOME (LOSS), COMPREHENSIVE INCOME (LOSS)
AND RETAINED EARNINGS (DEFICIT)
For the years ended December 31 2010 2009
----------------------------------------------------------------------------
Revenue
Incinerator sales and services $ 4,127,358 $ 2,277,762
Incinerator rentals and services 1,245,060 1,098,385
Combustion services 413,984 478,419
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5,786,402 3,854,566
Direct costs 3,739,824 2,537,337
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2,046,578 1,317,229
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Other revenue 55,036 102,608
Expenses
General and administrative 1,376,256 1,374,672
Foreign exchange loss 50,551 100,205
Depreciation and amortization 16,564 41,090
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1,443,371 1,515,967
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Income (loss) before interest expense and
income tax expense 658,243 (96,130)
Interest expense 1,012 3,472
----------------------------------------------------------------------------
Income (loss) before income tax expense 657,231 (99,602)
Income tax expense 231,334 2,361
----------------------------------------------------------------------------
Net income (loss) and comprehensive income
(loss) 425,897 (101,963)
Retained earnings (deficit), beginning of
year (97,783) 4,180
----------------------------------------------------------------------------
Retained earnings (deficit), end of year $ 328,114 $ (97,783)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income (loss) per share
Basic $ 0.018 $ (0.004)
Diluted $ 0.017 $ (0.004)
Weighted average number of shares
outstanding
Basic 24,275,589 24,007,370
Diluted 24,387,275 24,007,370
QUESTOR TECHNOLOGY INC.
STATEMENTS OF CASH FLOWS
For the years ended December 31 2010 2009
----------------------------------------------------------------------------
Operating activities
Net income (loss) $ 425,897 $ (101,963)
Items not involving cash:
Depreciation 138,105 133,174
Amortization 4,923 28,998
Unrealized foreign exchange loss (gain) (61,316) 178,974
Future income tax 102,703 (9,766)
Share-based compensation 147,025 164,099
Write-down of inventory 16,006 12,660
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773,343 406,176
Net change in non-cash working capital 53,921 (21,022)
----------------------------------------------------------------------------
827,264 385,154
----------------------------------------------------------------------------
Investing activities
Additions of property and equipment (38,520) (372,373)
----------------------------------------------------------------------------
(38,520) (372,373)
----------------------------------------------------------------------------
Financing activities
Repayment of long-term debt (15,232) (37,498)
Exercise of share options 70,000 -
----------------------------------------------------------------------------
54,768 (37,498)
----------------------------------------------------------------------------
Effect of foreign exchange rate changes on
cash 71,160 (153,323)
----------------------------------------------------------------------------
Increase (decrease) in cash 914,672 (178,040)
Cash, beginning of year 3,080,997 3,259,037
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Cash, end of year $ 3,995,669 $ 3,080,997
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