Questor Technology Inc.
TSX VENTURE : QST

Questor Technology Inc.

November 25, 2009 09:26 ET

Questor Technology Inc. Announces Third Quarter 2009 Financial Results

CALGARY, ALBERTA--(Marketwire - Nov. 25, 2009) -

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-month and nine-month periods ended September 30, 2009. The Company reported a net loss of $139,211 ($0.006 per basic share) for the third quarter of 2009 and a net loss of $35,491 ($0.001 per basic share) for the nine months ended September 30, 2009 compared to net income of $286,313 ($0.012 per basic share) for the third quarter of 2008 and net income of $51,388 ($0.002 per basic share) for the nine months ended September 30, 2009.



Financial Results Summary

($ unless otherwise noted)

Three months ended Nine months ended
September 30 September 30
For the 2009 2008 2009 2008
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Total revenue 718,799 1,372,938 3,110,579 2,386,195
Gross margin(1) 235,564 530,385 1,049,402 606,260
EBITDA(1) (130,544) 418,384 119,147 232,646
Net income (loss) (139,211) 286,313 (35,491) 51,388
Funds generated from
(used in) operations(1) (82,041) 455,064 183,720 201,360
Total assets 6,196,446 5,993,848 6,196,446 5,993,848
Long-term liabilities 53,490 23,080 53,490 23,080

Shares outstanding
(thousands)(2)
Basic 24,007 23,804 24,007 23,798
Diluted 24,007 24,725 24,007 24,536
Net income (loss) per
share - Basic $ (0.006) $ 0.012 $ (0.001) $ 0.002
Net income (loss) per
share - Diluted $ (0.006) $ 0.012 $ (0.001) $ 0.002

(1) Non-GAAP financial measure. Please see discussion in the Non-GAAP
Financial Measures section of the Company's Management's Discussion
and Analysis for the three and nine months ended September 30, 2009.
(2) Weighted average.


"Low commodity prices, reduced capital spending and the curtailment of drilling activity impacted Questor's revenues in third quarter 2009. On a year-to-date basis, however, revenue has increased by 30% percent compared to the same period last year," said Audrey Mascarenhas, President and Chief Executive Officer. "Despite the economic downturn, the Company has continued to experience a high level of requests for proposals and has over $32 million of bids outstanding with prospective clients all over the world."

Ms. Mascarenhas added, "Questor was recently awarded a USD $950,000 incinerator sales contract by a large U.S.-based global integrated energy company to supply equipment to a project located in Indonesia for which delivery is anticipated in second quarter 2010. Including this contract, the Company's confirmed sales order backlog is currently $1.4 million."

"Questor remains focused on managing the business and are optimistic about the Company's future given the global attitude evolving towards the effect of climate change and the corresponding shift in corporate responsibility for sustainable development. Questor's incineration technology enables clients to reduce their carbon equivalent emissions economically, comply with stringent regulations and inspire public confidence. Once the process the Company is developing to convert waste gas to heat and/or power is introduced, the potential reduction to clients' operating costs and carbon footprint will be amplified," concluded Ms. Mascarenhas.

The Company continues to build brand awareness and recognition for its technical knowledge in matters relating to air quality and emissions as demonstrated by the following:

- As previously announced, the Company presented at the Global Gas Flaring: A Burning Concern Summit in New Delhi, India on September 18, 2009, the 2009 Northeast BC Energy Conference in Dawson Creek, British Columbia, Canada on September 24, 2009, the Acid Gas Injection Symposium in Calgary, Alberta, Canada on October 5, 2009 and the Managing Total Emissions Conference in Calgary, Alberta, Canada on November 19, 2009. Copies of these presentations have been made available on the Company's website.

- The Company participated in the U.S. Environmental Protection Agency sponsored "Natural Gas STAR 2009 Annual Implementation Workshop" in San Antonio, Texas from October 19 - 21, 2009.

- The Company and Ms. Mascarenhas were featured in the November 2009 issue of Alberta Venture magazine (page 22) in an article written by Fabrice Taylor entitled "No Flame-out"; and

- Ms. Mascarenhas will present a paper entitled "Platform Waste Gas Combustion: Efficiently, Safely, Reliably and Economically" at the Society of Petroleum Engineers Offshore Technology Conference to be held in Houston, Texas from May 3 - 6, 2010.

Audrey Mascarenhas has been invited to serve as a Society of Petroleum Engineers ("SPE") Distinguished Lecturer for the 2010-2011 lecture season. SPE is a key resource to its 88,000-plus members in 118 countries worldwide for recent developments in oil and gas industry technology and practices. The lecture series will provide Ms. Mascarenhas with the opportunity to draw on her expertise relating to climate change and the important role efficient combustion of waste gases plays in minimizing emissions, protecting human health, improving air quality and enabling sustainable development.

Questor's third quarter 2009 financial statements and notes thereto and Management's Discussion and Analysis for the three months and nine months ended September 30, 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 oil field 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 oil field 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 clients. Questor is recognized for its particular expertise in the combustion of sour gas (H2S). While the Company's current client 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
(unaudited)

September 30 December 31
As at 2009 2008
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ASSETS
Current assets
Cash and cash equivalents $ 3,150,743 $ 3,259,037
Accounts receivable 926,772 1,761,597
Income and other taxes receivable 176,680 6,226
Inventory 498,139 384,914
Prepaid expenses and deposits 128,011 80,340
Deferred expenses 16,701 29,160
Future income tax asset 39,742 -
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4,936,788 5,521,274
Property and equipment 1,236,727 1,176,529
Intangibles 22,931 44,680
Deferred expenses - 30,575
----------------------------------------------------------------------------
$ 6,196,446 $ 6,773,058
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 350,211 $ 667,792
Current portion of long-term debt 23,080 37,498
Income and other taxes payable 8,459 285,795
Deferred revenue and deposits 120,976 146,707
Future income tax liability - 9,281
----------------------------------------------------------------------------
502,726 1,147,073
Long-term debt - 15,232
Other long-term liabilities - 30,575
Future income tax liability 53,490 26,710
----------------------------------------------------------------------------
556,216 1,219,590
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Shareholders' equity
Share capital 5,265,736 5,265,736
Contributed surplus 405,805 283,552
Retained earnings (deficit) (31,311) 4,180
----------------------------------------------------------------------------
5,640,230 5,553,468
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$ 6,196,446 $ 6,773,058
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QUESTOR TECHNOLOGY INC.
STATEMENTS OF INCOME, COMPREHENSIVE INCOME
AND RETAINED EARNINGS (DEFICIT)
(unaudited)

Three months ended Nine months ended
September 30 September 30
For the 2009 2008 2009 2008
----------------------------------------------------------------------------
Revenue
Incinerator sales
and services $ 419,334 $ 731,660 $ 1,924,308 $ 1,026,024
Incinerator rentals
and services 205,001 320,346 776,295 673,729
Combustion services 92,477 241,828 353,652 399,938
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716,812 1,293,834 3,054,255 2,099,691
Less: Direct costs 481,248 763,449 2,004,853 1,493,431
----------------------------------------------------------------------------
235,564 530,385 1,049,402 606,260
----------------------------------------------------------------------------
Other revenue 1,987 79,104 56,324 286,504

Expenses
General and
administrative 313,733 321,563 1,011,952 948,499
Foreign exchange
loss (gain) 84,391 (103,489) 63,032 (204,383)
Depreciation and
amortization 10,170 11,348 30,796 31,281
----------------------------------------------------------------------------
408,294 229,422 1,105,780 775,397
----------------------------------------------------------------------------
Income (loss)
before interest
expense and income
tax expense (170,743) 380,067 (54) 117,367
Interest expense
Short-term debt 1,133 286 1,455 4,783
Long-term debt 504 504 1,512 1,512
----------------------------------------------------------------------------
Income (loss)
before income tax
expense (172,380) 379,277 (3,021) 111,072
Income tax expense
(recovery)
Current income tax (7,398) - 54,713 37,711
Future income tax (25,771) 92,964 (22,243) 21,973
----------------------------------------------------------------------------
Net income (loss) and
comprehensive
income (loss) (139,211) 286,313 (35,491) 51,388
Retained earnings
(deficit), beginning
of period 107,900 (858,801) 4,180 (623,876)
----------------------------------------------------------------------------
Deficit, end of
period $ (31,311) $ (572,488) $ (31,311) $ (572,488)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income
(loss) per share
Basic and diluted $ (0.006) $ 0.012 $ (0.001) $ 0.002

Weighted average
number of shares
outstanding
Basic 24,007,370 23,803,702 24,007,370 23,797,835
Diluted 24,007,370 24,724,844 24,007,370 24,536,448

QUESTOR TECHNOLOGY INC.
STATEMENTS OF CASH FLOWS
(unaudited)

Three months ended Nine months ended
September 30 September 30
For the 2009 2008 2009 2008
----------------------------------------------------------------------------

Operating activities
Net income (loss) $ (139,211) $ 286,313 $ (35,491) $ 51,388
Items not involving
cash:
Depreciation and
amortization 40,199 38,317 119,201 115,279
Future income tax (25,771) 92,964 (22,243) 21,973
Share-based
compensation 42,742 37,470 122,253 111,988
Gain on disposition
of assets - - - (99,268)
----------------------------------------------------------------------------
(82,041) 455,064 183,720 201,360
Net change in
non-cash working
capital 187,459 (441,858) (108,923) (691,231)
Foreign exchange
loss (gain) on
cash 83,130 (84,314) 113,279 (167,087)
----------------------------------------------------------------------------
188,548 (71,108) 188,076 (656,958)
----------------------------------------------------------------------------

Investing activities
Additions of
property and
equipment (52,619) (6,888) (153,442) (37,324)
Dispositions of
property and
equipment - - - 139,733
----------------------------------------------------------------------------
(52,619) (6,888) (153,442) 102,409
----------------------------------------------------------------------------

Financing activities
Decrease to
short-term debt - (410,746) - (191,186)
Repayment of
long-term debt (9,883) (15,068) (29,649) (47,319)
Net proceeds from
issuance of
common shares - 1,250 - 1,250
----------------------------------------------------------------------------
(9,883) (424,564) (29,649) (237,255)
----------------------------------------------------------------------------

Effect of exchange
rates on cash (83,130) 84,314 (113,279) 167,087
----------------------------------------------------------------------------

Increase (decrease) in
cash and cash
equivalents 42,916 (418,246) (108,294) (624,717)
Cash and cash
equivalents,
beginning of
period 3,107,827 2,547,526 3,259,037 2,753,997
----------------------------------------------------------------------------
Cash and cash
equivalents, end
of period $ 3,150,743 $ 2,129,280 $ 3,150,743 $ 2,129,280
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