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 three months ended March 31,
2011. The Company's unaudited condensed financial statements have been prepared
in accordance with International Financial Reporting Standards ("IFRS"),
including restatement of its prior year results for comparative purposes.
The Company reported a loss of $119,541 ($0.005 per basic share) for the three
months ended March 31, 2011 compared to a loss of $163,448 ($0.007 per basic
share) for the three months ended March 31, 2010. On a comparative basis, the
profit increase of $43,907 is primarily attributable to higher incinerator sales
and services revenues and lower net foreign exchange losses. Partially
offsetting these impacts is reduced incinerator rental revenue and combustion
services activity, a smaller income tax recovery and higher administration
expenses.
Financial Highlights Summary
(Stated in Canadian dollars except per share amounts)
Increase
For the three months ended March 31 2011 2010 (decrease)
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Revenue(1) 899,980 489,629 410,351
Gross profit(2) 297,612 150,409 147,203
EBITDA(2) (100,476) (165,045) 64,569
Loss 119,541 163,448 (43,907)
Loss per share - Basic and diluted $ 0.005 $ 0.007 $ (0.002)
Cash used in operations before
movements in working capital(2) 44,565 91,479 (46,914)
Total assets 6,718,502 6,073,528 644,974
Non-current liabilities 100,655 55,072 45,583
(1) Includes loss on disposal of property and equipment and other revenue.
(2) Non-IFRS financial measure. Please see discussion in the Non-IFRS
Financial Measures section of this MD&A.
"Revenue increased by nearly 84 percent in first quarter 2011 compared to the
same period last year. The economic and environmental value created by Questor's
clean air technologies is evident in the successful start-up of a large
incinerator at a heavy oil in situ combustion development in Saskatchewan and
the upcoming commissioning of our incineration and waste heat water vaporization
equipment for a carbon emissions reduction and energy efficiency demonstration
project in Colorado. Both of these projects have led to additional opportunities
for Questor and discussions are underway with prospective customers for both
onshore and offshore applications in the Middle East, Mexico, China, Russia and
Europe. In recent weeks, we have deployed rental incinerator units to the United
States and European markets to provide a solution which addresses community
concerns associated with shale gas well testing activities," said Audrey
Mascarenhas, President and Chief Executive Officer. "Finally, in collaboration
with a major Canadian university and a leading Organic Rankine Cycle generator
manufacturer, we are advancing the development of our waste heat to power
technology and hope to have a demonstration site operational by the end of the
year."
"We are focused on the profitability and long-term growth of the Company. The
market's understanding of the economic benefits of clean combustion is evolving
and the awareness of Questor's incineration products and technologies is
building. We continue to position our core products and to develop new air
quality solutions to capitalize on the emerging market opportunities," concluded
Ms. Mascarenhas.
As previously announced, 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. The May 2011 edition of Alberta Venture magazine featured the Company
and Audrey Mascarenhas in an article written by Steve Macleod entitled "Growing
Concern: Questor Technology Realized that Removing Waste Gas Doesn't Have to be
a Waste of Money".
On June 9, 2011, Ms. Mascarenhas presented at a paper entitled "Emission
Reduction: Effective, Efficient, Safe and Sustainable" at the 2011 North America
Gas and Oil Expo and Conference held in Calgary, Alberta, Canada. Ms.
Mascarenhas also spoke at the Regional Forum on Flaring Reduction and Gas
Utilization held June 17, 2011 in Baku, Azerbaijan, an event organized by the
World Bank led Global Gas Flaring Reduction (GGFR) partnership and SOCAR,
Azerbaijan's national oil company. Copies of these presentations are available
on the Company's website.
Questor's unaudited condensed financial statements and notes thereto and
management's discussion and analysis for the three months ended March 31, 2011
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.
CONDENSED STATEMENT OF COMPREHENSIVE LOSS
Stated in Canadian dollars
(unaudited)
For the three months ended March 31 2011 2010
----------------------------------------------------------------------------
Revenue $ 897,876 $ 488,117
Cost of sales (600,264) (337,708)
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Gross profit 297,612 150,409
Administration expenses (384,269) (297,324)
Net foreign exchange losses (38,287) (47,295)
Research and development costs (20,968) (16,698)
Depreciation of property and equipment (2,888) (2,921)
Amortization of intangible assets (305) (4,010)
Loss on disposal of property and equipment (1,613) -
Finance costs - (504)
Other revenue 3,717 1,512
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Loss before tax (147,001) (216,831)
Income tax income 27,460 53,383
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Loss and comprehensive loss $ (119,541) $ (163,448)
----------------------------------------------------------------------------
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Loss per share - Basic and diluted $ (0.005) $ (0.007)
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QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENT OF FINANCIAL POSITION
Stated in Canadian dollars
(unaudited)
March 31 December 31
As at 2011 2010
----------------------------------------------------------------------------
ASSETS
Current assets
Cash $ 3,950,136 $ 3,995,669
Trade and other receivables 1,020,352 1,873,636
Current tax assets 110,444 362
Inventories 398,698 313,567
Prepaid expenses and deposits 60,861 107,467
----------------------------------------------------------------------------
Total current assets 5,540,491 6,290,701
----------------------------------------------------------------------------
Non-current assets
Property and equipment 1,098,034 1,037,565
Intangible assets 10,454 10,759
Deferred tax assets 69,523 49,695
----------------------------------------------------------------------------
Total non-current assets 1,178,011 1,098,019
----------------------------------------------------------------------------
Total assets $ 6,718,502 $ 7,388,720
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Current liabilities
Trade payables, accrued liabilities and
provisions $ 625,381 $ 852,821
Current tax liabilities 13,408 230,746
Deferred revenue and deposits 31,944 146,485
----------------------------------------------------------------------------
Total current liabilities 670,733 1,230,052
----------------------------------------------------------------------------
Non-current liabilities
Deferred tax liabilities 100,655 108,287
----------------------------------------------------------------------------
Total liabilities 771,388 1,338,339
----------------------------------------------------------------------------
Capital and reserves
Issued capital 5,404,966 5,404,966
Reserves 610,218 593,944
(Deficit) retained earnings (68,070) 51,471
----------------------------------------------------------------------------
Total equity 5,947,114 6,050,381
----------------------------------------------------------------------------
Total liabilities and equity $ 6,718,502 $ 7,388,720
----------------------------------------------------------------------------
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QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENT OF CHANGES IN EQUITY
Stated in Canadian dollars
(unaudited)
(Deficit)
Issued retained Total
capital Reserves earnings equity
----------------------------------------------------------------------------
Balance at January 1,
2010 $ 5,265,736 $ 573,349 $ (393,589) $ 5,445,496
Loss - - (163,448) (163,448)
Recognition of share-
based payments - 26,308 - 26,308
Issue of ordinary shares
under employee share
option plan - - - -
----------------------------------------------------------------------------
Balance at March 31, 2010 5,265,736 599,657 (557,037) 5,308,356
----------------------------------------------------------------------------
Profit - - 608,508 608,508
Recognition of share-
based payments - 63,517 - 63,517
Issue of ordinary shares
under employee share
option plan 139,230 (69,230) - 70,000
----------------------------------------------------------------------------
Balance at December 31,
2010 5,404,966 593,944 51,471 6,050,381
----------------------------------------------------------------------------
Loss - (119,541) (119,541)
Recognition of share-
based payments - 16,274 - 16,274
Issue of ordinary shares
under employee share
option plan - - - -
----------------------------------------------------------------------------
Balance at March 31, 2011 $ 5,404,966 $ 610,218 $ (68,070) $ 5,947,114
----------------------------------------------------------------------------
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QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENT OF CASH FLOWS
Stated in Canadian dollars
(unaudited)
For the three months ended March 31 2011 2010
------------------------------------------------------------------------
Cash flows from operating activities
Loss $ (119,541) $ (163,448)
Adjustments for:
Income tax income recognized in loss (27,460) (53,383)
Finance costs recognized in loss - 504
Loss on disposal of property and
equipment 1,613 -
Depreciation of property and equipment 46,220 47,272
Amortization of intangible assets 305 4,010
Net foreign exchange loss 38,024 47,258
Expense recognized in respect of equity-
settled share-based payments 16,274 26,308
------------------------------------------------------------------------
(44,565) (91,479)
Movements in working capital 350,983 293,135
------------------------------------------------------------------------
Cash generated from operations 306,418 201,656
Income taxes paid (215,000) -
------------------------------------------------------------------------
Net cash generated by operating activities 91,418 201,656
------------------------------------------------------------------------
Cash flows from investing activities
Movements in working capital (28,984) (275)
Payments for property and equipment (82,518) (3,439)
Proceeds from disposal of property and
equipment 3,200 -
------------------------------------------------------------------------
Net cash used in investing activities (108,302) (3,714)
------------------------------------------------------------------------
Cash flows from financing activities
Repayment of borrowings - (5,077)
Interest paid - (504)
------------------------------------------------------------------------
Net cash used in financing activities - (5,581)
------------------------------------------------------------------------
Net increase (decrease) in cash (16,884) 192,361
Cash at beginning of period 3,995,669 3,080,997
Effects of exchange rate changes on the
balance of cash held in foreign currencies (28,649) (44,935)
------------------------------------------------------------------------
Cash at end of period $ 3,950,136 $ 3,228,423
------------------------------------------------------------------------
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