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 and nine month periods
ended September 30, 2011. The Company's unaudited condensed financial statements
have been prepared in accordance with International Financial Reporting
Standards ("IFRS"), including restatement of prior year results for comparative
purposes.
The Company reported a profit of $304,596 ($0.012 per basic share) for the three
months ended September 30, 2011 compared to a profit of $66,015 ($0.003 per
basic share) for the same three-month period last year. Profit for the nine
months ended September 30, 2011 was $394,057 ($0.016 per basic share) compared
to a profit of $74,403 for the nine months ended September 30, 2010.
On a comparative basis, profit improved in each of the three and nine month
periods ended September 30, 2011 due to higher margins resulting from the sales
and services mix achieved, partially offset by higher income tax expense and
administration expenses. Profit for the three months ended September 30, 2011
further benefited from the net foreign exchange gains recorded compared to the
net foreign exchange losses in the same period of 2010. Other non-recurring
revenue arising in second quarter 2011 further contributed to the positive
profit variance for the nine months ended September 30, 2011.
Financial Highlights Summary
(Stated in Canadian dollars except per share amounts)
For the three months ended September 30
-----------------------------------------------
Increase
2011 2010 (decrease)
----------------------------------------------------------------------------
Revenue(1) 1,583,571 1,987,106 (403,535)
Gross profit(2) 802,243 422,512 379,731
EBITDA(2) 605,795 162,209 443,586
Profit 304,596 66,015 238,581
Cash generated from
operations before
movements in working
capital(2) 412,240 198,143 214,097
Total assets 7,818,476 7,388,720 429,756
Non-current liabilities 226,539 108,287 118,252
Shares outstanding(3)
Basic 24,712,261 24,331,283 380,978
Diluted 24,812,335 24,461,645 350,690
Earnings per share - Basic
and diluted 0.012 0.003 0.009
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For the nine months ended September 30
--------------------------------------------------
Increase
2011 2010 (decrease)
----------------------------------------------------------------------------
Revenue(1) 3,780,828 3,637,937 142,891
Gross profit(2) 1,338,413 1,039,092 299,321
EBITDA(2) 808,730 288,299 520,431
Profit 394,057 74,403 319,654
Cash generated from
operations before
movements in working
capital(2) 352,283 237,991 114,292
Total assets 7,818,476 7,388,720 429,756
Non-current liabilities 226,539 108,287 118,252
Shares outstanding(3)
Basic 24,709,018 24,137,223 571,795
Diluted 24,753,921 24,359,365 394,556
Earnings per share - Basic
and diluted 0.016 0.003 0.013
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1. Includes net gain (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 the Company's Management's Discussion and
Analysis for the three and six month periods ended September 30, 2011.
3. Weighted average.
"Profit increased by $319,654, or over 400 percent, in the first nine months of
2011 compared to the same period last year," said Audrey Mascarenhas, President
and Chief Executive Officer. "A key contributor to these favourable results is
the marked increase in rental incinerator revenue and related services due to
higher utilization of the existing fleet and deployment of $431,297 of new
equipment added to the fleet in the second and third quarters of 2011.
Approximately 80 percent of Questor's rental incinerator fleet is committed
under term contracts to the end of the year and, of that, approximately 40
percent of our fleet is operating in the United States primarily to assist with
well testing in shale plays."
"Questor currently has confirmed incinerator sales orders of $1.9 million for
which the revenue will be recognized when the product is delivered. Based on the
current customer-specified schedule, approximately $1.6 million of this revenue
will be recorded in fourth quarter 2011 and the balance in the first quarter
2012. The majority of these sales orders are destined for the United States
where the oil and gas industry is preparing for compliance with new air
emissions regulation effective 2012. Questor's clean combustion technology is
recognized as a cost effective solution to meet the new regulations. To enhance
our ability to capture these opportunities, we are currently evaluating an
increased presence in the United States and the viability of fabrication closer
to these markets," concluded Ms. Mascarenhas.
In relation to the Company's market awareness and brand recognition initiatives,
Ms. Mascarenhas presented at the following events in recent weeks:
-- Global Methane Initiative All-Partnership Meeting in Krakow, Poland on
October 13, 2011 on the topic of "Heat to Power";
-- Global Clean Energy Congress in Calgary, Alberta, Canada on November 2,
2011 on the topic of "Solutions Powered by Clean Combustion";
-- Canadian Launch Pad in Denver, Colorado, USA on November 7, 2011 on the
topic of "Clearing the Air! Safely, Economically and Efficiently"; and
-- Canadian Unconventional Resources Conference in Calgary, Alberta, Canada
on November 15, 2011 on the topic of "Community Engagement" in relation
to its importance to the success of unconventional reserves development.
Copies of these presentations are available on the Company's website.
The Company is pleased to announce that Ms. Mascarenhas was the recipient of the
Ernst & Young Entrepreneur Of The Year 2011 Prairies Award for the Cleantech and
Environmental Services category. She was also selected by the national judging
panel to receive a special citation in honour of Values-Based Innovation.
Entrepreneur Of The Year recognizes the spirit and contribution of entrepreneurs
here and around the world. The Canadian program is in its 18th year of honouring
the country's most impressive entrepreneurs from all areas of business who drive
growth, build communities and transform industries.
Questor's unaudited condensed financial statements and notes thereto and
management's discussion and analysis for the three and nine month periods ended
September 30, 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 INCOME
Stated in Canadian dollars except per share data
(unaudited)
For the three months ended For the nine months ended
September 30 September 30
-------------------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
Revenue $ 1,580,395 $ 1,955,081 $ 3,297,752 $ 3,603,768
Cost of sales (778,152) (1,532,569) (1,959,339) (2,564,676)
----------------------------------------------------------------------------
Gross profit 802,243 422,512 1,338,413 1,039,092
Administration
expenses (354,330) (280,670) (1,143,448) (892,074)
Net foreign exchange
gains (losses) 102,755 (38,434) 23,723 12,495
Research and
development costs 2,887 (17,392) (28,810) (37,607)
Depreciation of
property and
equipment (10,922) (3,359) (21,958) (9,680)
Amortization of
intangible assets (305) (305) (914) (4,619)
Net gain (loss) on
disposal of
property and
equipment (13,340) - 188,199 -
Finance costs - (4) - (1,012)
Other revenue 16,516 32,025 294,877 34,169
----------------------------------------------------------------------------
Profit before tax 545,504 114,373 650,082 140,764
Income tax expense (240,908) (48,358) (256,025) (66,361)
----------------------------------------------------------------------------
Profit and
comprehensive
income $ 304,596 $ 66,015 $ 394,057 $ 74,403
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings per share
Basic and diluted $ 0.012 $ 0.003 $ 0.016 $ 0.003
----------------------------------------------------------------------------
QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENT OF FINANCIAL POSITION
Stated in Canadian dollars
(unaudited)
September 30 December 31
As at 2011 2010
----------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 3,156,806 $ 3,995,669
Trade and other receivables 1,947,954 1,873,636
Current tax assets 10,178 362
Inventories 539,239 313,567
Prepaid expenses and deposits 116,485 107,467
----------------------------------------------------------------------------
Total current assets 5,770,662 6,290,701
----------------------------------------------------------------------------
Non-current assets
Property and equipment 1,990,986 1,037,565
Intangible assets 9,845 10,759
Deferred tax assets 46,983 49,695
----------------------------------------------------------------------------
Total non-current assets 2,047,814 1,098,019
----------------------------------------------------------------------------
Total assets $ 7,818,476 $ 7,388,720
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Current liabilities
Trade payables, accrued liabilities and
provisions $ 774,138 $ 852,821
Current tax liabilities 79,898 230,746
Deferred revenue and deposits 221,361 146,485
----------------------------------------------------------------------------
Total current liabilities 1,075,397 1,230,052
----------------------------------------------------------------------------
Non-current liabilities
Deferred tax liabilities 188,352 108,287
Other non-current liabilities 38,187 -
----------------------------------------------------------------------------
Total non-current liabilities 226,539 108,287
----------------------------------------------------------------------------
Total liabilities 1,301,936 1,338,339
----------------------------------------------------------------------------
Capital and reserves
Issued capital 5,458,215 5,404,966
Reserves 612,797 593,944
Retained earnings 445,528 51,471
----------------------------------------------------------------------------
Total equity 6,516,540 6,050,381
----------------------------------------------------------------------------
Total liabilities and equity $ 7,818,476 $ 7,388,720
----------------------------------------------------------------------------
----------------------------------------------------------------------------
QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENT OF CHANGES IN EQUITY
Stated in Canadian dollars
(unaudited)
Retained
Issued earnings
capital Reserves (deficit) Total equity
----------------------------------------------------------------------------
Balance at January
1, 2010 $ 5,265,736 $ 573,349 $ (393,589) $ 5,445,496
Profit - - 74,403 74,403
Recognition of
share-based
payments - 73,860 - 73,860
Issue of ordinary
shares under
employee share
option plan 124,312 (61,813) - 62,499
----------------------------------------------------------------------------
Balance at September
30, 2010 5,390,048 585,396 (319,186) 5,656,258
----------------------------------------------------------------------------
Profit - - 370,657 370,657
Recognition of
share-based
payments - 15,965 - 15,965
Issue of ordinary
shares under
employee share
option plan 14,918 (7,417) - 7,501
----------------------------------------------------------------------------
Balance at December
31, 2010 5,404,966 593,944 51,471 6,050,381
----------------------------------------------------------------------------
Profit - - 394,057 394,057
Recognition of
share-based
payments - 45,102 - 45,102
Issue of ordinary
shares under
employee share
option plan 53,249 (26,249) - 27,000
----------------------------------------------------------------------------
Balance at September
30, 2011 $ 5,458,215 $ 612,797 $ 445,528 $ 6,516,540
----------------------------------------------------------------------------
----------------------------------------------------------------------------
QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENT OF CASH FLOWS
Stated in Canadian dollars
(unaudited)
For the nine months ended September 30 2011 2010
----------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period $ 394,057 $ 74,403
Adjustments for:
Income tax expense recognized in profit 82,777 64,391
Finance costs recognized in profit - 1,012
Net gain on disposal of property and equipment (188,199) -
Depreciation of property and equipment 157,734 141,904
Amortization of intangible assets 914 4,619
Net foreign exchange gain (181,119) (124,203)
Expense recognized in respect of equity-
settled share-based payments 45,102 73,859
Office lease incentive 38,187 -
Write-downs of inventories to net realizable
value 2,830 2,006
----------------------------------------------------------------------------
352,283 237,991
Movements in working capital (182,015) 266,050
----------------------------------------------------------------------------
Cash generated from operations 170,268 504,041
Income taxes refunded (paid) (242,523) 37,453
----------------------------------------------------------------------------
Net cash generated from (used in) operating
activities (72,255) 541,494
----------------------------------------------------------------------------
Cash flows from investing activities
Movements in working capital (33,420) (1,972)
Payments for property and equipment (1,279,454) (41,802)
Proceeds from disposal of property and
equipment 389,918 -
Interest paid - (1,012)
----------------------------------------------------------------------------
Net cash used in investing activities (922,956) (44,786)
----------------------------------------------------------------------------
Cash flows from financing activities
Repayment of borrowings - (15,232)
Proceeds from issue of ordinary shares under
employee share option plan 27,000 62,500
----------------------------------------------------------------------------
Net cash provided by financing activities 27,000 47,268
----------------------------------------------------------------------------
Net increase (decrease) in cash and cash
equivalents (968,211) 543,976
Cash and cash equivalents at beginning of period 3,995,669 3,080,997
Effects of exchange rate changes on the balance
of cash held in foreign currencies 129,348 125,731
----------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 3,156,806 $ 3,750,704
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