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 six month periods
ended June 30, 2012. The Company reported a profit of $99,440 ($0.004 per basic
share) for the three months ended June 30, 2012 compared to a profit of $209,002
($0.008 per basic share) for the same three-month period last year. Profit for
the six months ended June 30, 2012 was $586,878 ($0.024 per basic share)
compared to a profit of $89,461 ($0.004 per basic share) for the six months
ended June 30, 2011.
FINANCIAL HIGHLIGHTS SUMMARY
(Stated in Canadian dollars except per share amounts)
Three months ended June 30, 2012
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Increase
2012 2011 (decrease)
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Revenue 1,188,004 1,206,199 (18,195)
Gross profit(1) 448,598 458,555 (9,957)
EBITDA(1) 199,775 303,411 (103,636)
Profit and total comprehensive
income 99,440 209,002 (109,562)
Cost of sales as a percent of
revenue(1) 62.2% 62.0% 0.2%
Cash generated from operations
before movements in non-cash
working capital(1) 178,490 193,074 (14,584)
Total assets 8,727,857 7,572,410 1,155,447
Non-current liabilities 194,131 85,240 108,891
Shares outstanding(2)
Basic 24,857,370 24,707,370 150,000
Diluted 25,253,889 24,844,360 409,529
Earnings per share - Basic 0.004 0.008 (0.004)
Earnings per share - Diluted 0.004 0.008 (0.004)
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FINANCIAL HIGHLIGHTS SUMMARY
(Stated in Canadian dollars except per share amounts)
Six months ended June 30, 2012
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Increase
2012 2011 (decrease)
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Revenue 3,418,879 2,104,075 1,314,804
Gross profit(1) 1,502,298 756,167 746,131
EBITDA(1) 927,104 202,935 724,169
Profit and total comprehensive
income 586,878 89,461 497,417
Cost of sales as a percent of
revenue(1) 56.1% 64.1% (8.0)%
Cash generated from operations
before movements in non-cash
working capital(1) 953,475 148,509 804,966
Total assets 8,727,857 7,572,410 1,155,447
Non-current liabilities 194,131 85,240 108,891
Shares outstanding(2)
Basic 24,857,370 24,707,370 150,000
Diluted 25,179,460 24,782,243 397,217
Earnings per share - Basic 0.024 0.004 0.020
Earnings per share - Diluted 0.023 0.004 0.019
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(1) 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 June 30, 2012.
(2) Weighted average.
The Company's operating performance in the second quarter of each year was
reasonably comparable although administration expenses were lower in second
quarter 2012 and net foreign exchange gains were recorded in the period compared
to net foreign exchange losses in the same period of 2011. The variance was the
result of a one-time recovery of fabrication costs for an incinerator order that
was cancelled by the customer in second quarter 2011. In the absence of this
non-recurring revenue, second quarter 2012 results are favourable relative to
2011 results for the same quarter.
The substantial increase to profitability in the first half of 2012 is due to
higher revenues arising from differences in the volume and mix of incinerator
sales in each period and to the stronger margins achieved in 2012. Higher
utilization of the rental incinerator fleet and lower administration expenses in
the first half of 2012 also contributed to the positive profit variance. Profit
further benefited from the net foreign exchange gains recorded compared to the
net foreign exchange losses in the same period of 2011. Partially offsetting
this favourable result was higher income tax expense for the six months ended
June 30, 2012 and the aforementioned non-recurring other income recorded in
second quarter 2011.
"We are continuing to deliver strong, profitable results," said Audrey
Mascarenhas, President and Chief Executive Officer. "Our revenue in the first
six months of 2012 is $1.3 million higher than the same period last year, an
increase of 62.5 per cent. On a comparative basis, gross profit has nearly
doubled and earnings per basic share is six times higher than it was in the
corresponding period of last year. This is particularly noteworthy because
second quarter 2011 earnings reflect a $0.3 million non-recurring revenue
amount. We currently have confirmed incinerator sales orders which, when
combined with incinerator sales revenue achieved to date, are equivalent to the
total incinerator sales revenue reported for 2011.
Tough new emission standards in the United States and Europe is creating demand
for Questor's clean air solutions and we are pursuing expansion of the Company's
presence in those markets. We anticipate the economic and operational benefits
of our technology will lead to greater market penetration of our products and
services," concluded Ms. Mascarenhas.
In relation to the Company's market awareness and brand recognition initiatives,
Ms. Mascarenhas presented on the topic of "Clearing the Air" at the European
Union-Canada Business Forum on Energy held during the Global Petroleum Show in
Calgary, Alberta on June 13, 2012. She also participated in a Calgary Economic
Development led investment mission of Calgary companies to Hong Kong in June
2012. In the coming weeks, Ms. Mascarenhas will make a presentation at the 5th
International Petroleum and Petrochemical Leadership and Innovation Summit to be
held in Dongying, Shandong Province, China from September 17 - 19, 2012 and at
the Canadian Society for Unconventional Resources 14th Annual Unconventional
Resources Conference in Calgary, Alberta on October 4, 2012. A copy of each
presentation is or will be made available on the Company's website.
Questor's unaudited condensed financial statements and notes thereto and
management's discussion and analysis for the three and six month periods ended
June 30, 2012 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.
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QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION
Stated in Canadian dollars
Unaudited
June 30 December 31
As at 2012 2011
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ASSETS
Current assets
Cash and cash equivalents $ 5,039,438 $ 2,166,301
Short-term investment - 1,007,896
Trade and other receivables 1,075,952 2,852,578
Inventories 454,397 766,028
Prepaid expenses and deposits 52,978 96,296
Current tax assets 18,929 73,341
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Total current assets 6,641,694 6,962,440
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Non-current assets
Property and equipment 2,077,231 2,053,972
Intangible assets 8,932 9,541
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Total non-current assets 2,086,163 2,063,513
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Total assets $ 8,727,857 $ 9,025,953
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LIABILITIES AND EQUITY
Current liabilities
Trade payables, accrued liabilities and
provisions $ 577,309 $ 1,070,989
Deferred revenue and deposits - 280,042
Current tax liabilities 16,716 196,572
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Total current liabilities 594,025 1,547,603
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Non-current liabilities
Deferred tax liabilities 87,209 94,935
Lease inducement 106,922 61,099
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Total non-current liabilities 194,131 156,034
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Total liabilities 788,156 1,703,637
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Capital and reserves
Issued capital 5,458,215 5,458,215
Reserves 652,733 622,226
Retained earnings 1,828,753 1,241,875
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Total equity 7,939,701 7,322,316
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Total liabilities and equity $ 8,727,857 $ 9,025,953
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QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Stated in Canadian dollars except per share data
Unaudited
For the three months ended For the six months ended
June 30 June 30
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2012 2011 2012 2011
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Revenue $ 1,188,004 $ 1,206,199 $ 3,418,879 $ 2,104,075
Cost of sales (739,406) (747,644) (1,916,581) (1,347,908)
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Gross profit 448,598 458,555 1,502,298 756,167
Administration
expenses (364,217) (415,578) (717,661) (820,815)
Net foreign exchange
gains (losses) 51,749 (40,745) 17,336 (79,032)
Depreciation of
property and
equipment (10,463) (8,148) (20,785) (11,036)
Amortization of
intangible assets (304) (304) (609) (609)
Write-off of
property and
equipment (6,226) (16,845) (8,994) (18,458)
Other income 7,208 274,644 11,913 278,361
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Profit before tax 126,345 251,579 783,498 104,578
Income tax (expense)
income
Current (30,389) (4,147) (204,346) (4,147)
Deferred 3,484 (38,430) 7,726 (10,970)
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Profit and
comprehensive
income $ 99,440 $ 209,002 $ 586,878 $ 89,461
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Earnings per share
Basic $ 0.004 $ 0.008 $ 0.024 $ 0.004
Diluted $ 0.004 $ 0.008 $ 0.023 $ 0.004
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QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF CHANGES IN EQUITY
Stated in Canadian dollars
Unaudited
Issued Retained
capital Reserves earnings Total equity
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Balance at January 1,
2012 $ 5,458,215 $ 622,226 $ 1,241,875 $ 7,322,316
Profit and total
comprehensive income - - 586,878 586,878
Recognition of share-
based payments - 30,507 - 30,507
Issue of ordinary
shares under employee
share option plan - - - -
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Balance at June 30,
2012 $ 5,458,215 $ 652,733 $ 1,828,753 $ 7,939,701
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Balance at January 1,
2011 $ 5,404,966 $ 593,944 $ 51,471 $ 6,050,381
Loss and total
comprehensive loss - - 89,461 89,461
Recognition of share-
based payments - 31,930 - 31,930
Issue of ordinary
shares under employee
share option plan - - - -
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Balance at June 30,
2011 $ 5,404,966 $ 625,874 $ 140,932 $ 6,171,772
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QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF CASH FLOWS
Stated in Canadian dollars
Unaudited
For the six months ended June 30 2012 2011
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Cash flows from (used in) operating activities
Profit and total comprehensive income $ 586,878 $ 89,461
Adjustments for:
Income tax expense 196,620 15,117
Write-off of property and equipment 8,994 18,458
Depreciation of property and equipment 142,997 97,748
Amortization of intangible assets 609 609
Net unrealized foreign exchange gains (13,685) (105,845)
Expense recognized in respect of equity-
settled share-based payments 30,507 31,930
Write-downs of inventories to net realizable
value 555 1,031
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953,475 148,509
Movements in non-cash working capital 2,688,931 (738,354)
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Cash generated from (used in) operations 3,642,406 (589,845)
Income taxes paid (371,549) (215,000)
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Net cash generated from (used in) operating
activities 3,270,857 (804,845)
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Cash flows (used in) from investing activities
Payments for property and equipment (408,549) (958,786)
Proceeds from disposal of property and
equipment - 3,200
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Net cash used in investing activities (408,549) (955,586)
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Cash flows from financing activities - -
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Net increase (decrease) in cash 2,862,308 (1,760,431)
Cash and cash equivalents at beginning of the
period 2,166,301 3,995,669
Effects of exchange rate changes on the balance
of cash held in foreign currencies 10,829 117,141
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Cash and cash equivalents at end of the period $ 5,039,438 $ 2,352,379
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