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 period ended March
31, 2010. The Company reported a net loss of $165,020 ($0.007 per basic share)
compared to net income of $82,689 ($0.003 per basic share) for the three months
ended March 31, 2009. The decrease in net income of $247,709 is attributable to
lower incinerator sales revenue, utilization and rate differences in the
incinerator rentals and services mix and differences in foreign exchange gains
and losses experienced in each of the two periods. The value of the sales orders
backlog at the beginning of each of 2010 and 2009 was similar, as was the value
of new sales orders received during the first quarter of each year. However, the
delivery timing for 2010-related orders will occur later in the year compared to
the 2009-related orders, consequently resulting in fewer incinerator sales
during first quarter 2010. Partially offsetting these impacts is the effect of
lower general and administrative expense and income tax expense in first quarter
2010.
Financial Results Summary
($ unless otherwise noted)
For the three months ended March 31 2010 2009
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Total revenue 489,628 1,163,196
Gross margin(1) 160,542 443,975
EBITDA(1) (177,125) 155,159
Income (loss) before interest
expense and income tax expense(1) (216,327) 116,758
Net income (loss) (165,020) 82,689
Funds generated from operations(1) (91,985) 205,840
Total assets 6,261,906 6,627,142
Long-term liabilities 60,554 45,262
Shares outstanding (thousands)(2)
Basic 24,007 24,007
Diluted 24,007 24,385
Net income (loss) per share - Basic
and diluted $ (0.007) $ 0.003
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 months ended March 31, 2010.
2. Weighted average.
"To date, Questor has confirmed incinerator sales orders of $2.0 million, all of
which are scheduled for delivery this year. These orders are not reflected in
our first quarter 2010 results as the Company recognizes revenue once delivery
has occurred. These incinerator units are destined for customers in Canada, as
well as the United States and Asia, reflecting our growing domestic and
international reputation for providing cost effective green solutions to the oil
and gas industry. Drilling activities worldwide appear to be increasing but
there is typically a lag of five to six months for facility construction once
drilling is completed. We are actively engaged in bidding for this work and
currently have proposals outstanding in excess of $41 million which is
approximately $10 million more than the bids outstanding at this time last
year," said Audrey Mascarenhas, President and Chief Executive Officer.
The Company is pleased to announce that it has established a marketing
arrangement with Homer's Oilfield Services Ltd., an oilfield safety services
company headquartered in Dawson Creek, British Columbia, Canada, to increase
penetration of Questor's incinerator rental services in the Peace River region
of British Columbia and the Alberta Peace Country area. The companies jointly
showcased Questor's incineration solutions at the 35th Annual Kiwanis Club of
Dawson Creek Trade Show held April 23 - 25, 2010.
The Company continues to build market awareness and brand recognition for its
clean air technologies. At the invitation of the Texas Commission on
Environmental Quality ("TCEQ"), the lead environmental agency for the state of
Texas, Ms. Mascarenhas made a presentation to the organization on March 26, 2010
regarding Questor's incineration technology as an alternative solution to
flaring. On April 19, 2010, Ms. Mascarenhas presented on the topic of "Clearing
the Air - Safely and Efficiently" at the 2010 EnviroArabia Conference held in
the Kingdom of Bahrain. On May 6, 2010, Ms. Mascarenhas presented a paper
entitled "Platform Waste Gas Combustion: Efficiently, Safely, Reliably and
Economically" at the Society of Petroleum Engineers Offshore Technology
Conference held in Houston, Texas, USA. Copies of these latter two presentations
are available on the Company's website. On May 27, 2010, Ms. Mascarenhas is one
of the panellists during the discussion of "Going Global: Leading Your Company
to New Markets" at the Women's Executive Network luncheon to be held in Calgary,
Alberta, Canada.
Shareholders are invited to attend the Company's Annual General Meeting to be
held on Tuesday, June 8, 2010 at 4:00 p.m. (local time) 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, 2009 and
for the three months ended March 31, 2010 and discussing the Company's strategy
for the future.
Questor's first quarter 2010 financial statements and notes thereto and
Management's Discussion and Analysis for the three months ended March 31, 2010
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 services 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.
BALANCE SHEETS
(unaudited)
December 31
As at March 31 2010 2009
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ASSETS
Current assets
Cash and cash equivalents $ 3,228,423 $ 3,080,997
Accounts receivable 654,958 864,260
Income and other taxes receivable 269,761 306,850
Inventory 547,391 433,145
Prepaid expenses and deposits 74,233 101,072
Deferred expenses - 2,356
Future income tax asset 88,421 50,113
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4,863,187 4,838,793
Property and equipment 1,387,047 1,418,524
Intangibles 11,672 15,682
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$ 6,261,906 $ 6,272,999
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $ 376,863 $ 348,150
Current portion of long-term debt 10,155 15,232
Income and other taxes payable 15,840 19,034
Deferred revenue and deposits 307,242 198,641
Future income tax liability 2,281 2,281
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712,381 583,338
Future income tax liability 60,554 74,057
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772,935 657,395
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Shareholders' equity
Share capital 5,265,736 5,265,736
Contributed surplus 486,038 447,651
Retained earnings (262,803) (97,783)
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5,488,971 5,615,604
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$ 6,261,906 $ 6,272,999
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QUESTOR TECHNOLOGY INC.
STATEMENTS OF INCOME (LOSS), COMPREHENSIVE INCOME (LOSS)
AND RETAINED EARNINGS (DEFICIT)
(unaudited)
For the three months ended March 31 2010 2009
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Revenue
Incinerator sales and services $ 89,326 $ 572,592
Incinerator rentals and services 245,626 439,270
Combustion services 153,165 146,006
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488,117 1,157,868
Less: Direct costs 327,575 713,893
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160,542 443,975
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Other revenue 1,511 5,328
Expenses
General and administrative 324,155 364,627
Foreign exchange loss (gain) 47,295 (42,339)
Depreciation and amortization 6,930 10,257
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378,380 332,545
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Income (loss) before interest
expense and income tax expense (216,327) 116,758
Interest expense 504 826
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Income (loss) before income tax
expense (216,831) 115,932
Income tax expense (recovery)
Current income tax - 28,579
Future income tax (51,811) 4,664
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Net income (loss) and comprehensive
income (loss) (165,020) 82,689
Retained earnings (deficit),
beginning of period (97,783) 4,180
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Retained earnings (deficit), end of
period $ (262,803) $ 86,869
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Net income (loss) per share
Basic and diluted $ (0.007) $ 0.003
Weighted average number of shares
outstanding
Basic 24,007,370 24,007,370
Diluted 24,007,370 24,384,818
QUESTOR TECHNOLOGY INC.
STATEMENTS OF CASH FLOWS
(unaudited)
For the three months ended March 31 2010 2009
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Operating activities
Net income (loss) $ (165,020) $ 82,689
Items not involving cash:
Depreciation 35,192 31,152
Amortization 4,010 7,250
Unrealized foreign exchange loss 47,257 41,885
Future income tax (51,811) 4,664
Share-based compensation 38,387 38,200
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(91,985) 205,840
Net change in non-cash working capital 292,862 (140,058)
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200,877 65,782
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Investing activities
Additions of property and equipment (3,439) (70,520)
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(3,439) (70,520)
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Financing activities
Repayment of long-term debt (5,077) (9,883)
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(5,077) (9,883)
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Effect of exchange rates on cash (44,935) (43,323)
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Increase (decrease) in cash and cash
equivalents 147,426 (57,944)
Cash and cash equivalents, beginning of
period 3,080,997 3,259,037
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Cash and cash equivalents, end of period $ 3,228,423 $ 3,201,093
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