Questor Technology Inc.
TSX VENTURE : QST

Questor Technology Inc.

August 25, 2011 09:28 ET

Questor Technology Inc. Announces Second Quarter 2011 Financial Results

CALGARY, ALBERTA--(Marketwire - Aug. 25, 2011) -

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, 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 $209,002 ($0.008 per basic share) for the three months ended June 30, 2011 compared to a profit of $171,836 ($0.007 per basic share) for the same three-month period last year. Profit for the six months ended June 30, 2011 was $89,461 ($0.004 per basic share) compared to a profit of $8,388 for the six months ended June 30, 2010.

On a comparative basis, profit improved in each of the three and six month periods ended June 30, 2011 as a result of increased revenues and lower income tax expense, partially offset by higher administration expenses and research and development costs and by foreign exchange losses recorded in the first half of 2011 compared to foreign exchange gains in the same period of 2010. The cost of sales also impacted each of the periods as it was lower in second quarter 2011 but higher on a year-to-date 2011 basis relative to the comparative periods of 2010.


Financial Highlights Summary                                                

(Stated in Canadian dollars except per share amounts)                       

                       For the three months              For the six months 
                              ended June 30                   ended June 30 
            ----------------------------------------------------------------
                                   Increase                        Increase 
                                     (decr-                          (decr- 
                  2011       2010     ease)       2011       2010     ease) 
----------------------------------------------------------------------------

Revenue(1)   1,297,277  1,161,202   136,075  2,197,257  1,650,831   546,426 
Gross                                                                       
 profit(2)     238,558    466,171  (227,613)   536,170    616,580   (80,410)
EBITDA(2)      303,411    291,135    12,276    202,935    126,090    76,845 
Profit         209,002    171,836    37,166     89,461      8,388    81,073 
Cash                                                                        
 provided by                                                                
 (used in)                                                                  
 operations                                                                 
 before                                                                     
 movements                                                                  
 in working                                                                 
 capital(2)    (59,957)    39,848   (99,805)   (59,957)    39,848   (99,805)
Total assets 7,620,230  6,729,756   890,474  7,620,230  6,729,756   890,474 
Non-current                                                                 
 liabilities   133,060     78,106    54,954    133,060     78,106    54,954 
Shares                                                                      
 outstanding                                                                
 (3)                                                                        
 Basic      24,707,370 24,069,457   637,913 24,707,370 24,038,585   668,785 
 Diluted    24,844,360 24,606,500   237,860 24,856,292 25,187,525  (331,233)
Earnings per                                                                
 share -                                                                    
 Basic and                                                                  
 diluted         0.008      0.007     0.001      0.004      0.000     0.004 
----------------------------------------------------------------------------

  (1)  Includes net gain 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 June 30,     
       2011.                                                               
  (3)  Weighted average.                                                   

"Revenue increased by 33 percent in the first six months of this year compared to the same period last year," said Audrey Mascarenhas, President and Chief Executive Officer. "Tougher emission regulations, particularly in the United States, coupled with the market's growing understanding of the economic benefits of Questor's clean combustion technology is creating opportunities worldwide for us. We recently deployed rental incinerator units, including the new equipment added to the incinerator rental fleet at the beginning of July, to Europe and the United States to assist customers with the active development of shale gas plays."

"Building on the successful operations of our technology in oil sands applications, our expertise in efficient combustion and our proficiency in H2S destruction, discussions continue with prospective customers for onshore and offshore projects. Questor currently has confirmed incinerator sales orders of $1.5 million, the revenue for which will be recognized when the product is delivered. Based on the current customer-specified schedule, approximately $1.1 million of revenue will be recorded in third quarter 2011 and the balance in fourth quarter 2011," concluded Ms. Mascarenhas.

In relation to the Company's market awareness initiatives, Ms. Mascarenhas will make a presentation on the topic of "Community Engagement" at the 2011 Canadian Society for Unconventional Gas / Society of Petroleum Engineers (CSUG/SPE) Unconventional Resources Conference to be held November 15 - 17, 2011 in Calgary, Alberta, Canada. A copy of this presentation will be made available on the Company's website at that time.

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, 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 six months ended 
                                June 30                    June 30          
                      ------------------------------------------------------
                               2011          2010         2011         2010 
----------------------------------------------------------------------------

Revenue                $    819,481  $  1,160,570  $ 1,717,357  $ 1,648,687 
Cost of sales              (580,923)     (694,399)  (1,181,187)  (1,032,107)
----------------------------------------------------------------------------

Gross profit                238,558       466,171      536,170      616,580 

Administration                                                              
 expenses                  (404,849)     (314,079)    (789,118)    (611,403)
Net foreign exchange                                                        
 gains (losses)             (40,745)       98,224      (79,032)      50,929 
Research and                                                                
 development costs          (10,729)       (3,517)     (31,697)     (20,215)
Depreciation of                                                             
 property and                                                               
 equipment                   (8,148)       (3,400)     (11,036)      (6,321)
Amortization of                                                             
 intangible assets             (304)         (305)        (609)      (4,315)
Net gain on disposal                                                        
 of property and                                                            
 equipment                  203,152             -      201,539            - 
Finance costs                     -          (504)           -       (1,008)
Other revenue               274,644           632      278,361        2,144 
----------------------------------------------------------------------------

Profit before tax           251,579       243,222      104,578       26,391 
Income tax expense          (42,577)      (71,386)     (15,117)     (18,003)
----------------------------------------------------------------------------

Profit and                                                                  
 comprehensive income  $    209,002  $    171,836  $    89,461  $     8,388 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Earnings per share                                                          

  Basic                $      0.008  $      0.007  $     0.004  $     0.000 
----------------------------------------------------------------------------

  Diluted              $      0.008  $      0.007  $     0.004  $     0.000 
----------------------------------------------------------------------------



                           QUESTOR TECHNOLOGY INC.                          
                  CONDENSED STATEMENT OF FINANCIAL POSITION                 
                         Stated in Canadian dollars                         
                                 (unaudited)                                
                                                   June 30       December 31
As at                                                 2011              2010
----------------------------------------------------------------------------

ASSETS                                                                      
Current assets                                                              
  Cash and cash equivalents              $       3,353,671 $       3,995,669
  Trade and other receivables                    1,683,356         1,873,636
  Current tax assets                               140,428               362
  Inventories                                      528,729           313,567
  Prepaid expenses and deposits                     53,577           107,467
----------------------------------------------------------------------------
  Total current assets                           5,759,761         6,290,701
----------------------------------------------------------------------------

Non-current assets                                                          
  Property and equipment                         1,802,499         1,037,565
  Intangible assets                                 10,150            10,759
  Deferred tax assets                               47,820            49,695
----------------------------------------------------------------------------
  Total non-current assets                       1,860,469         1,098,019
----------------------------------------------------------------------------

Total assets                             $       7,620,230 $       7,388,720
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES AND EQUITY                                                      
Current liabilities                                                         
  Trade payables, accrued liabilities                                       
   and provisions                        $       1,279,620 $         852,821
  Current tax liabilities                           11,777           230,746
  Deferred revenue and deposits                     24,001           146,485
----------------------------------------------------------------------------
  Total current liabilities                      1,315,398         1,230,052
----------------------------------------------------------------------------

Non-current liabilities                                                     
  Deferred tax liabilities                         117,382           108,287
  Other non-current liabilities                     15,678                 -
----------------------------------------------------------------------------
  Total non-current liabilities                    133,060           108,287
----------------------------------------------------------------------------
  Total liabilities                              1,448,458         1,338,339
----------------------------------------------------------------------------

Capital and reserves                                                        
  Issued capital                                 5,404,966         5,404,966
  Reserves                                         625,874           593,944
  Retained earnings                                140,932            51,471
----------------------------------------------------------------------------
  Total equity                                   6,171,772         6,050,381
----------------------------------------------------------------------------

Total liabilities and equity             $       7,620,230 $       7,388,720
----------------------------------------------------------------------------
----------------------------------------------------------------------------



                           QUESTOR TECHNOLOGY INC.                          
                  CONDENSED STATEMENT OF CHANGES IN EQUITY                  
                         Stated in Canadian dollars                         
                                 (unaudited)                                
                                                       Retained             
                                Issued                 earnings        Total
                               capital    Reserves    (deficit)       equity
----------------------------------------------------------------------------

Balance at January 1, 2010 $ 5,265,736 $   573,349  $  (393,589) $ 5,445,496
Profit                               -           -        8,388        8,388
Recognition of share-based                                                  
 payments                            -      54,035            -       54,035
Issue of ordinary shares                                                    
 under employee share                                                       
 option plan                    34,808     (17,308)           -       17,500
----------------------------------------------------------------------------

Balance at June 30, 2010     5,300,544     610,076     (385,201)   5,525,419
----------------------------------------------------------------------------
Profit                               -           -      436,672      436,672
Recognition of share-based                                                  
 payments                            -      35,790            -       35,790
Issue of ordinary shares                                                    
 under employee share                                                       
 option plan                   104,422     (51,922)           -       52,500
----------------------------------------------------------------------------

Balance at December 31,                                                     
 2010                        5,404,966     593,944       51,471    6,050,381
----------------------------------------------------------------------------
Profit                               -           -       89,461       89,461
Recognition of share-based                                                  
 payments                            -      31,930            -       31,930
Issue of ordinary shares                                                    
 under employee share                                                       
 option plan                         -           -            -            -
----------------------------------------------------------------------------

Balance at June 30, 2011   $ 5,404,966 $   625,874  $   140,932  $ 6,171,772
----------------------------------------------------------------------------
----------------------------------------------------------------------------



                          QUESTOR TECHNOLOGY INC.                           
                     CONDENSED STATEMENT OF CASH FLOWS                      
                         Stated in Canadian dollars                         
                                (unaudited)                                 
For the six months ended June 30                           2011        2010 
----------------------------------------------------------------------------

Cash flows from operating activities                                        
 Profit for the period                              $    89,461 $     8,388 
 Adjustments for:                                                           
  Income tax expense recognized in profit                10,970       7,465 
  Finance costs recognized in profit                          -       1,008 
  Net gain on disposal of property and equipment       (201,539)          - 
  Depreciation of property and equipment                 97,748      94,376 
  Amortization of intangible assets                         609       4,314 
  Net foreign exchange gain                            (105,845)   (131,681)
  Expense recognized in respect of equity-settled                           
   share-based payments                                  31,930      54,035 
  Office lease incentive                                 15,678           - 
  Write-downs of inventories to net realizable value      1,031       1,943 
----------------------------------------------------------------------------
                                                        (59,957)     39,848 
 Movements in working capital                           176,961    (172,365)
----------------------------------------------------------------------------
 Cash generated from (used in) operations               117,004    (132,517)
 Income taxes paid                                     (215,000)          - 
----------------------------------------------------------------------------
 Net cash used in operating activities                  (97,996)   (132,517)
----------------------------------------------------------------------------

Cash flows from investing activities                                        
 Movements in working capital                          (615,523)     (1,117)
 Payments for property and equipment                   (435,539)    (28,360)
 Proceeds from disposal of property and equipment       389,918           - 
----------------------------------------------------------------------------
 Net cash used in investing activities                 (661,144)    (29,477)
----------------------------------------------------------------------------

Cash flows from financing activities                                        
 Repayment of borrowings                                      -     (10,155)
 Proceeds from issue of ordinary shares under                               
  employee share option plan                                  -      17,500 
 Interest paid                                                -      (1,008)
----------------------------------------------------------------------------
 Net cash generated from financing activities                 -       6,337 
----------------------------------------------------------------------------

Net decrease in cash and cash equivalents              (759,140)   (155,657)
 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                       117,142     131,100 
----------------------------------------------------------------------------
Cash and cash equivalents at end of period          $ 3,353,671 $ 3,056,440 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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.

Contact Information

  • Questor Technology Inc.
    Audrey Mascarenhas
    President and Chief Executive Officer
    (403) 571-1530
    (403) 571-1539 (FAX)
    amascarenhas@questortech.com