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 nine month periods
ended September 30, 2013. The Company reported a profit of $817,840 ($0.033 per
basic share) for the three months ended September 30, 2013 compared to a profit
of $155,386 ($0.006 per basic share) for the same three-month period in the
prior year. Profit for the nine months ended September 30, 2013 was $1,869,101
($0.075 per basic share), 150 percent higher than profit of $742,264 ($0.030 per
basic share) for the nine months ended September 30, 2012.
FINANCIAL HIGHLIGHTS SUMMARY
(Stated in Canadian dollars except Shares outstanding)
Three months ended September 30
---------------------------------------------
Increase
For the 2013 2012 (decrease)
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Revenue 2,989,767 1,112,976 1,876,791
Gross profit(1) 1,336,609 590,994 745,615
EBITDA(1) 1,036,215 299,225 736,990
Profit and total comprehensive
income 817,840 155,386 662,454
Cost of sales as a percent of
revenue(1) 55.3% 46.9% 8.4
Cash generated from operations
before movements in non-cash
working capital(1) 1,032,556 374,491 658,065
Shares outstanding(2)
Basic 25,119,327 24,857,370 261,957
Diluted 25,917,239 25,452,830 464,409
Earnings per share - Basic 0.033 0.006 0.027
Earnings per share - Diluted 0.032 0.006 0.026
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Nine months ended September 30
---------------------------------------------
Increase
For the 2013 2012 (decrease)
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Revenue 6,973,090 4,531,855 2,441,235
Gross profit(1) 3,404,490 2,093,292 1,311,198
EBITDA(1) 2,490,024 1,226,329 1,263,695
Profit and total comprehensive
income 1,869,101 742,264 1,126,837
Cost of sales as a percent of
revenue(1) 51.2% 53.8% (2.6)
Cash generated from operations
before movements in non-cash
working capital(1) 2,573,968 1,327,966 1,246,002
Shares outstanding(2)
Basic 25,068,175 24,857,370 210,805
Diluted 25,772,662 25,189,409 583,253
Earnings per share - Basic 0.075 0.030 0.045
Earnings per share - Diluted 0.073 0.029 0.044
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As at September 30 Increase
2013 2012 (decrease)
----------------------------------------------------------------------------
Total assets 12,654,008 9,194,824 3,459,184
Non-current liabilities 250,902 234,829 16,073
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(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 and nine month periods ended September 30, 2013.
(2) Weighted average.
Questor's Profit and total comprehensive income in the third quarter of 2013
improved by over 400 percent compared to the same period of the prior year. The
volume of incinerator sales drove the improved performance, offset in part by
lower utilization of the rental fleet and lower revenues from combustion
services and higher administration expense in the quarter. Higher income tax
expense on the Company's improved before tax earnings also negatively affected
the current quarter's results. Combustion services revenue depends in part on
timing of unit sales and the associated commissioning work as well as the level
of services required for customers renting units. Higher administration expenses
were due in part to the addition of personnel to the team to assist in managing
Questor's growth, in part to spending on improvements in the Company's
information processing infrastructure and equipment and in part to higher
business development expenditures incurred to increase the Company's profile in
those markets where management believes the short and long term success will be.
Revenue for the first nine months of 2013 was 54% higher than the same period in
2012 driven by Questor's sales success in the second and third quarters of the
current year. The 150 percent increase to profitability in the first nine months
of 2013 over 2012 was due not only to continued improvements in margins, but
also to the fact that revenue has grown significantly with only modest growth in
G&A
"The economic and operational benefits of our technology are leading to greater
market penetration for our products and services. With larger fabrication
facilities, a network of fabricators who do excellent work for us and a strong
balance sheet, we are well positioned to take the next steps in our growth
strategy." said Audrey Mascarenhas, President and Chief Executive Officer. "Our
revenue in the first nine months of 2013 was $2.4 million higher than the same
period last year. On a comparative basis, gross profit improved by 63 percent
and earnings per basic share grew from $0.033 to $0.075, 150 percent higher than
it was in the corresponding period of last year. We currently have confirmed
incinerator sales orders for $9.6 million of which $5.8 million has been
recognized in the first nine months of the year. Third quarter revenue and
EBITDA growth over the 2nd quarter was 32% and 30%, respectively.
Clients who elect to utilize our technology are making statements to their
affected publics that they wish to employ a best available technology. In doing
so they are also enjoying economic benefits through reduced operating expenses
which Questor strives to make a significant part of every project.
In addition, challenging new emission standards in the United States and Europe
are creating additional demand for Questor's clean air solutions and we are
pursuing expansion of the Company's presence in those markets.
Canadian sales have also experienced growth as we continue to support our
customers in their quests for social licenses to operate." concluded Ms.
Mascarenhas.
In relation to the Company's market awareness and brand recognition initiatives,
Ms. Mascarenhas was invited to attend the SelectUSA Investment Summit in
Washington, DC on October 31, 2013. She also presented the Questor story at a
number of investor relations sessions in Toronto, Ontario during the third
quarter and into the current quarter. Ms. Mascarenhas was the keynote speaker at
the Society of Petroleum Engineers ("SPE") luncheon on the 21st of November in
Oklahoma City. She has been invited to travel to Mexico at the end of November
to present at the Pemex Technology Exchange Forum.
Questor's unaudited condensed financial statements and notes thereto and
management's discussion and analysis for the three and nine month periods ended
September 30, 2013 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. 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 at 99.99% efficiency which ensures regulatory
compliance, environmental protection, public confidence and reduced operating
costs for customers. The technology creates an opportunity to utilize the heat
generated from efficient combustion. 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.
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.
QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION
Stated in Canadian dollars
Unaudited
September 30 December 31
As at Notes 2013 2012
----------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents 3 $ 7,177,085 $ 4,405,624
Trade and other receivables 2,453,430 2,304,478
Inventories 4 1,460,366 670,959
Prepaid expenses and deposits 176,269 88,378
Current tax assets 51,853 25,158
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Total current assets 11,319,003 7,494,597
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Non-current assets
Property and equipment 5,9 1,327,596 2,295,529
Intangible assets 7,409 8,323
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Total non-current assets 1,335,005 2,303,852
----------------------------------------------------------------------------
Total assets $ 12,654,008 $ 9,798,449
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Current liabilities
Trade payables, accrued liabilities
and provisions $ 1,385,602 $ 894,206
Deferred revenue and deposits 52,276 2,205
Current tax liabilities 516,318 171,907
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Total current liabilities 1,954,196 1,068,318
----------------------------------------------------------------------------
Non-current liabilities
Deferred tax liabilities 64,947 97,319
Lease inducement 185,955 152,746
----------------------------------------------------------------------------
Total non-current liabilities 250,902 250,065
----------------------------------------------------------------------------
Total liabilities 2,205,098 1,318,383
----------------------------------------------------------------------------
Capital and reserves
Issued capital 6 5,596,842 5,521,001
Reserves 700,736 676,834
Retained earnings 4,151,332 2,282,231
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Total equity 10,448,910 8,480,066
----------------------------------------------------------------------------
Total liabilities and equity $ 12,654,008 $ 9,798,449
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the unaudited condensed financial statements.
QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
Stated in Canadian dollars except per share data
Unaudited
For the three months For the nine months
ended ended
September 30 September 30
----------------------------------------------------------------------------
Notes 2013 2012 2013 2012
----------------------------------------------------------------------------
Revenue 7,9 $ 2,989,767 $ 1,112,976 $ 6,973,090 $ 4,531,855
Cost of sales (1,653,158) (521,982) (3,568,600) (2,438,563)
----------------------------------------------------------------------------
Gross profit 1,336,609 590,994 3,404,490 2,093,292
Administration
expenses (349,741) (328,410) (1,200,948) (1,046,071)
Net foreign exchange
gains (16,167) (21,568) 76,267 (4,232)
Depreciation of
property and
equipment 5 (10,459) (10,340) (30,998) (31,125)
Amortization of
intangible assets (305) (305) (914) (914)
Loss on disposal of
property and
equipment 5 - (18,871) (347) (27,865)
Other income 898 9,377 7,870 21,290
----------------------------------------------------------------------------
Profit before tax 960,835 220,877 2,255,420 1,004,375
Income tax (expense)
income
Current (164,458) (47,705) (418,691) (252,051)
Deferred 21,463 (17,786) 32,372 (10,060)
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Profit and
comprehensive income $ 817,840 $ 155,386 $ 1,869,101 $ 742,264
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Earnings per share
Basic $ 0.033 $ 0.006 $ 0.075 $ 0.030
Diluted $ 0.032 $ 0.006 $ 0.073 $ 0.029
----------------------------------------------------------------------------
See accompanying notes to the unaudited condensed financial statements.
QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF CHANGES IN EQUITY
Stated in Canadian dollars
Unaudited
Issued Retained
capital Reserves earnings Total equity
----------------------------------------------------------------------------
Balance at January 1, 2013 $ 5,521,001 $ 676,834 $ 2,282,231 $ 8,480,066
Profit and total
comprehensive income - - 1,869,101 1,869,101
Recognition of share-based
payments - 54,993 - 54,993
Issue of ordinary shares
under employee share
option plan 75,841 (31,091) - 44,750
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Balance at September 30,
2013 $ 5,596,842 $ 700,736 $ 4,151,332 $ 10,448,910
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance at January 1, 2012 $ 5,458,215 $ 622,226 $ 1,241,875 $ 7,322,316
Profit and total
comprehensive income - - 742,264 742,264
Recognition of share-based
payments - 56,244 - 56,244
Issue of ordinary shares
under employee share
option plan - - - -
----------------------------------------------------------------------------
Balance at September 30,
2012 $ 5,458,215 $ 678,470 $ 1,984,139 $ 8,120,824
----------------------------------------------------------------------------
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See accompanying notes to the unaudited condensed financial statements.
QUESTOR TECHNOLOGY INC.
CONDENSED STATEMENTS OF CASH FLOWS
Stated in Canadian dollars
Unaudited
For the nine months ended
September 30 Notes 2013 2012
----------------------------------------------------------------------------
Cash flows provided by operating
activities
Profit and total comprehensive
income $ 1,869,101 $ 742,264
Adjustments for:
Income tax expense 386,319 262,111
Loss on disposal of property
and equipment 5 347 27,865
Depreciation of property and
equipment 5 233,690 221,040
Amortization of intangible
assets 914 914
Net unrealized foreign
exchange losses 28,604 16,307
Expense recognized in respect
of equity-settled share-based
payments 6 54,993 56,244
Write-downs of inventories to
net realizable value 4 - 1,221
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2,573,968 1,327,966
Movements in non-cash working
capital 10 329,058 2,411,569
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Cash provided by operations 2,903,026 3,739,535
Income taxes paid (26,639) (383,793)
----------------------------------------------------------------------------
Net cash provided by operating
activities 2,876,387 3,355,742
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Cash flows (used in) provided by
investing activities
Payments for property and
equipment 5 (120,067) (750,510)
Proceeds from disposal of
property and equipment 5,000 -
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Net cash used in investing
activities (115,067) (750,510)
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Cash flows provided by financing
activities
Proceeds from issue of ordinary
shares under employee share
option plan 6 44,750 -
----------------------------------------------------------------------------
Net cash provided by financing
activities 44,750 -
----------------------------------------------------------------------------
Net increase in cash 2,806,070 2,605,232
Cash and cash equivalents at
beginning of the period 4,405,624 2,166,301
Effects of exchange rate changes
on the balance of cash held in
foreign currencies (34,609) (10,631)
----------------------------------------------------------------------------
Cash and cash equivalents at end
of the period $ 7,177,085 $ 4,760,902
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the unaudited condensed financial statements.
FOR FURTHER INFORMATION PLEASE CONTACT:
Questor Technology Inc.
Audrey Mascarenhas
President and Chief Executive Officer
(403) 571-1530
(403) 571-1539 (FAX)
amascarenhas@questortech.com
www.questortech.com
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