Questor Technology Inc.
TSX VENTURE : QST

Questor Technology Inc.

May 24, 2012 22:54 ET

Questor Technology Inc. Announces First Quarter 2012 Financial Results

CALGARY, ALBERTA--(Marketwire - May 24, 2012) -

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 first quarter of 2012. The Company reported a profit of $487,438 ($0.020 per basic share) for the three months ended March 31, 2012 compared to a loss of $119,541 ($0.005 per basic share) for the same three-month period last year.

This substantial increase in profit was due primarily to higher revenue arising from differences in the volume and mix of incinerator sales in each quarter and to the stronger margins achieved in 2012. Higher utilization of the rental incinerator fleet and lower administration expenses in first quarter 2012 further contributed to the positive profit variance for the three months ended March 31, 2012. Partially offsetting this favourable result was higher income tax expense.

FINANCIAL HIGHLIGHTS SUMMARY
(Stated in Canadian dollars except per share amounts)
For the three months ended March 31 2012 2011 Increase
(decrease
)
Revenue 2,230,875 897,876 1,332,999
Gross profit(1) 1,053,700 297,612 756,088
EBITDA(1) 727,329 (100,476 ) 827,805
Profit (loss) and total comprehensive income (loss) 487,438 (119,541 ) 606,979
Cost of sales as a percent of revenue(1) 52.8 % 66.9 % (14.1 )%
Cash generated from (used in) operations before movements in non-cash working capital(1) 774,985 (44,565 ) 819,550
Total assets 9,090,567 6,718,502 2,372,065
Non-current liabilities 174,703 100,655 74,048
Shares outstanding(2)
Basic 24,857,370 24,707,370 150,000
Diluted 25,013,349 24,707,370 305,979
Earnings per share - Basic 0.020 (0.005 ) 0.025
Earnings per share - Diluted 0.019 (0.005 ) 0.024
(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 months ended March 31, 2012.
(2) Weighted average.

"We have had a strong, profitable start to the year," said Audrey Mascarenhas, President and Chief Executive Officer. "The new emission standards for hazardous air pollutants ("NESHAP") introduced in April 2012 by the Environmental Protection Agency in the United States has heightened demand for our incineration technology. In addition, regulation in Europe is becoming increasingly focused on emissions and some countries have begun to disallow open flaring, thereby creating an opportunity for Questor. In the coming year, we will pursue expansion of the Company's presence in the United States and European markets.

We are looking forward to the Company's continued growth as the marketplace recognizes the economic and operational benefits Questor's clean air solutions offer," concluded Ms. Mascarenhas.

Shareholders are invited to attend the Company's Annual General Meeting to be held on Tuesday, June 5, 2012 at 3:00 p.m. MDT in the Cardium Room of the Calgary Petroleum Club, located at 319 - 5th Avenue S.W., Calgary, Alberta. In addition to the formal business items, management will be presenting an overview of Questor's results for the financial year ended December 31, 2011 and first quarter ended March 31, 2012 and discussing the Company's strategic initiatives for 2012.

Questor's unaudited condensed financial statements and notes thereto and management's discussion and analysis for the three months ended March 31, 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.

QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION
Stated in Canadian dollars
Unaudited
As at March 31
2012
December 31
2011
ASSETS
Current assets
Cash and cash equivalents $ 3,891,754 $ 2,166,301
Short-term investment - 1,007,896
Trade and other receivables 2,496,977 2,852,578
Inventories 670,437 766,028
Prepaid expenses and deposits 75,318 96,296
Current tax assets 13,549 73,341
Total current assets 7,148,035 6,962,440
Non-current assets
Property and equipment 1,933,296 2,053,972
Intangible assets 9,236 9,541
Total non-current assets 1,942,532 2,063,513
Total assets $ 9,090,567 $ 9,025,953
LIABILITIES AND EQUITY
Current liabilities
Trade payables, accrued liabilities and provisions $ 905,560 $ 1,070,989
Deferred revenue and deposits 113,039 280,042
Current tax liabilities 78,230 196,572
Total current liabilities 1,096,829 1,547,603
Non-current liabilities
Deferred tax liabilities 90,692 94,935
Lease inducement 84,011 61,099
Total non-current liabilities 174,703 156,034
Total liabilities 1,271,532 1,703,637
Capital and reserves
Issued capital 5,458,215 5,458,215
Reserves 631,507 622,226
Retained earnings 1,729,313 1,241,875
Total equity 7,819,035 7,322,316
Total liabilities and equity $ 9,090,567 $ 9,025,953
QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Stated in Canadian dollars except per share data
Unaudited
For the three months ended March 31 2012 2011
Revenue $ 2,230,875 $ 897,876
Cost of sales (1,177,175 ) (600,264 )
Gross profit 1,053,700 297,612
Administration expenses (353,444 ) (405,237 )
Net foreign exchange losses (34,413 ) (38,287 )
Depreciation of property and equipment (10,322 ) (2,888 )
Amortization of intangible assets (305 ) (305 )
Write-off of property and equipment (2,768 ) (1,613 )
Other income 4,705 3,717
Profit (loss) before tax 657,153 (147,001 )
Income tax (expense) income (169,715 ) 27,460
Profit (loss) and total comprehensive income (loss) $ 487,438 $ (119,541 )
Earnings (loss) per share
Basic $ 0.020 $ (0.005 )
Diluted $ 0.019 $ (0.005 )
QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF CHANGES IN EQUITY
Stated in Canadian dollars
Unaudited
Issued capital Reserves Retained earnings (deficit ) Total equity
Balance at January 1, 2012 $ 5,458,215 $ 622,226 $ 1,241,875 $ 7,322,316
Profit and total comprehensive income - - 487,438 487,438
Recognition of share-based payments - 9,281 - 9,281
Issue of ordinary shares under employee share option plan - - - -
Balance at March 31, 2012 $ 5,458,215 $ 631,507 $ 1,729,313 $ 7,819,035
Balance at January 1, 2011 $ 5,404,966 $ 593,944 $ 51,471 $ 6,050,381
Loss and total comprehensive 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
QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF CASH FLOWS
Stated in Canadian dollars
Unaudited
For the three months ended March 31 2012 2011
Cash flows from operating activities
Profit (loss) and total comprehensive income (loss) $ 487,438 $ (119,541 )
Adjustments for:
Income tax expense (income) 169,715 (27,460 )
Write-off of property and equipment 2,768 1,613
Depreciation of property and equipment 69,871 46,220
Amortization of intangible assets 305 305
Net unrealized foreign exchange losses 35,607 38,024
Expense recognized in respect of equity-settled share-based payments 9,281 16,274
774,985 (44,565 )
Movements in non-cash working capital 1,414,553 354,585
Cash generated from operations 2,189,538 310,020
Income taxes paid (280,061 ) (215,000 )
Net cash generated from operating activities 1,909,477 95,020
Cash flows (used in) from investing activities
Payments for property and equipment (152,502 ) (111,502 )
Proceeds from disposal of property and equipment - 3,200
Net cash used in investing activities (152,502 ) (108,302 )
Cash flows from financing activities - -
Net increase (decrease) in cash 1,756,975 (13,282 )
Cash 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 (31,522 ) (32,251 )
Cash at end of the period $ 3,891,754 $ 3,950,136

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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