Questor Technology Inc.
TSX VENTURE : QST

Questor Technology Inc.

April 25, 2008 20:45 ET

CORRECTION FROM SOURCE: Questor Technology Inc. Releases Year-End 2007 Financial and Operating Results

Announces Record Annual Net Income of CDN $2.0 Million

CALGARY, ALBERTA--(Marketwire - April 25, 2008) - A correction from source is issued with respect to the release disseminated Apr 25, 2008 at 4:30 pm EST. There were four incorrect numbers in the STATEMENTS OF INCOME, COMPREHENSIVE INCOME AND DEFICIT table. Under Depreciation and amortization for 2006, the figure of 35,839 occurred when it should have read 37,731. Under Income before interest expense and income taxes for 2006, the figure of 3,000,325 occurred when it should have read 504,706. Under Net income and comprehensive income for 2006, the figure of 1,977,383 occurred when it should have read 1,195,614. And under Net income and comprehensive income for 2007, the figure of 2,016,383 occurred when it should have read 1,977,383. The correct and complete version follows:

THIS DOCUMENT IS NOT INTENDED FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES.

Questor Technology Inc. ("Questor" or the "Company") (TSX VENTURE:QST) is pleased to release its financial and operating results for the year ended December 31, 2007. The Company today announced an annual net income of $1,977,383 ($0.08 per basic share) compared to net income of $1,195,614 ($0.05 per basic share) for the year ended December 31, 2006. The increase to net income was primarily attributable to a significant sale pursuant to the previously announced USD $6.6 million contract.

"Completion of this contract demonstrated our ability to deliver a quality product," said Audrey Mascarenhas, President and Chief Executive Officer. "The heightened environmental focus on air quality, global warming, greenhouse gas emissions and climate change is converging with political, social and regulatory pressures to create significant changes which will result in positive business opportunities for which Questor's technology is well positioned."

2007 FINANCIAL PERFORMANCE HIGHLIGHTS(1)

- Total revenue for 2007 was $9,228,982, up from $3,223,454 in 2006. Revenue was substantially increased due to the aforementioned sales contract and, to a lesser extent, higher field burner service revenues and interest income on a year-to-date basis, all of which was partially offset by lower incinerator rental revenues and the impact of a different incinerator sales mix in 2007 compared to 2006.

- Gross margin for 2007 was $4,200,017 compared to $1,115,533 for 2006. Direct costs of $4,942,199 in 2007 were up by $2,956,093 compared to 2006. This difference is primarily due to the direct costs associated with the significant sales contract and the impact of differences in the incinerator sales and rentals mix in 2007 compared to 2006.

- Earnings before interest, taxes, depreciation and amortization for 2007 were $3,152,650, up from $638,387 in 2006.

- Income before interest expense and income taxes for 2007 was $3,000,325. After interest expense of $22,755 and current and future income tax expense of $1,000,187, the net income for the year was $1,977,383.

- Cash provided by operating activities was $3,171,697 for 2007 compared to cash used in operating activities of $129,121 for 2006. The increase was primarily attributable to higher operating results and a working capital surplus of $29,388 during 2007 compared to a working capital deficit of $598,830 during 2006.

- Funds generated from operations for 2007 were $3,142,309, up from $469,709 in 2006.

- Total debt was $304,575 at December 31, 2007 compared to $567,090 at December 31, 2006. The Company's debt-to-total capitalization ratio was 6.0 percent, versus 17.5 percent at the end of 2006.

(1) Includes non-GAAP financial measures. Please see discussion in the Non-GAAP Financial Measures section of the Company's Management's Discussion and Analysis for the year ended December 31, 2007.

2007 OPERATING PERFORMANCE HIGHLIGHTS

2007 marked a pivotal point in the Company's history with the following significant events:

- The successful delivery of well testing incinerators to China Petrochemical International Company Ltd. ("SINOPEC") in July 2007 pursuant to the previously announced USD $6.6 million contract;

- Completion of the Company's first incinerator rental contract in the United States;

- Growing status as a preferred provider of combustion services in the Grande Prairie, Alberta, Canada region;

- Growing recognition of Questor's expertise and environmental perspectives relating to air quality demonstrated by numerous invitations to present at conferences worldwide, among them:

-- "5th Annual Energy and Clean Technology Forum" hosted by Rice Alliance at Rice University in Houston, Texas, USA;

-- Canadian Institute "Western Canadian Sour Gas Operations" Conference in Calgary, Alberta, Canada;

-- Eco Expo Asia Conference in Hong Kong, China;

-- "Environmental Challenges and Innovations Conference" sponsored by the Texas Association of Environmental Professionals in Houston, Texas, USA;

-- China National Science and Technology Sulphur Forum in Dazhou, China; and

-- Canada Eurasia Russia Business Association Global Energy Matters Conference 2008 in conjunction with the Global Petroleum Show 2008 in Calgary, Alberta, Canada.

- Initiation of numerous strategic arrangements which were formalized in the early part of 2008:

-- an agreement with Terra Verde Emissions Credits Inc. to develop the protocol methodology and sale of the greenhouse gas credits/offsets in Alberta generated from the use of Questor's proprietary incinerator technology;

-- a strategic arrangement with Natco Group Inc. to market and fabricate our products for the United States market. Natco is headquartered in Houston, Texas with sales offices in the United States, Latin America, Southeast Asia, Japan, the United Kingdom, Scandinavia and Russia.

-- marketing arrangements with Ramsay Machine Works Ltd. and EMCS Industries Ltd., both headquartered in Sidney, British Columbia, for the purpose of targeting industries such as the oil sands, offshore oil and gas platforms, solid waste treatment, waste water treatment and landfills, all of whom would benefit from our technology; and

-- a collaborative effort with CrystaTech, Inc., to explore opportunities to provide a cost effective solution to recover sulphur and address sour gas emissions from the oil sands.

Questor's audited annual financial statements and notes thereto and Management's Discussion and Analysis for the years ended December 31, 2007 and 2006 is available at 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 field burner 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 water and sewage treatment, landfills, 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 2007 2006
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ASSETS
Current assets
Cash $ 2,753,997 $ 29,186
Accounts receivable 1,062,716 947,993
Inventory 526,401 263,015
Prepaid expenses and deposits 98,609 90,074
Future income tax asset - 583,506
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4,441,723 1,913,774
Property and equipment 1,299,677 1,266,758
Intangibles 73,678 101,700
Future income tax asset 31,480 232,977
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$ 5,846,558 $ 3,515,209
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 501,314 $ 271,881
Short-term debt 191,186 461,297
Current portion of long-term debt 60,183 48,674
Income and other taxes payable 115,707 7,011
Deferred revenue and deposits 70,129 -
Future income tax liability 102,682 -
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1,041,201 788,863
Long-term debt 53,206 57,119
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1,094,407 845,982
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Shareholders' equity
Share capital 5,235,677 5,188,774
Contributed surplus 140,350 81,712
Deficit (623,876) (2,601,259)
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4,752,151 2,669,227
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$ 5,846,558 $ 3,515,209
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QUESTOR TECHNOLOGY INC.
STATEMENTS OF INCOME, COMPREHENSIVE INCOME AND DEFICIT

For the years ended December 31 2007 2006
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Revenue
Sales $ 7,550,986 $ 1,468,877
Rentals 1,151,883 1,219,932
Service 439,347 412,830
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9,142,216 3,101,639
Less: Direct costs 4,942,199 1,986,106
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Gross margin 4,200,017 1,115,533
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Other revenue 86,766 121,815

Expenses
General and administrative 1,038,910 722,147
Foreign exchange loss (gain) 211,709 (27,236)
Depreciation and amortization 35,839 37,731
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1,286,458 732,642
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Income before interest expense and income taxes 3,000,325 504,706
Interest expense
Short-term debt 19,796 21,191
Long-term debt 2,959 12,384
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Income before income taxes 2,977,570 471,131
Income tax expense
Current income tax 131,502 -
Future income tax 868,685 (724,483)
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Net income and comprehensive income 1,977,383 1,195,614
Deficit, beginning of year (2,601,259) (3,796,873)
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Deficit, end of year $ (623,876) $ (2,601,259)
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Net income per share
Basic $ 0.08 $ 0.05
Diluted $ 0.08 $ 0.05

Weighted average number of shares outstanding
Basic 23,739,767 23,544,452
Diluted 25,071,979 24,168,211


QUESTOR TECHNOLOGY INC.
STATEMENTS OF CASH FLOWS

For the years ended December 31 2007 2006
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Operating activities
Net income $ 1,977,383 $ 1,195,614
Items not involving cash:
Depreciation and amortization 152,325 133,681
Future income taxes 868,685 (724,483)
Unrealized foreign exchange loss (gain) 62,625 (47,570)
Share-based compensation 81,291 33,348
Write-off of assets - 2,656
Gain on sale of rental incinerator - (123,537)
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Funds generated from operations 3,142,309 469,709
Net change in non-cash working capital 29,388 (598,830)
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Net cash provided by / (used in) operating
activities 3,171,697 (129,121)
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Investing activities
Additions to property and equipment (88,857) (62,808)
Dispositions of property and equipment - 179,700
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Net cash provided by / (used in) investing
activities (88,857) 116,892
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Financing activities
Decrease in notes payable - (300,000)
Increase / (decrease) in short-term debt (270,111) 86,299
Increase / (decrease) in long-term debt (49,543) 26,319
Net proceeds from issuance of common shares 24,250 4,000
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Net cash used in financing activities (295,404) (183,382)
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Change in cash 2,787,436 (195,611)
Cash, beginning of year 29,186 177,227
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Effective exchange rates on cash (62,625) 47,570
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Cash, end of year $ 2,753,997 $ 29,186
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