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 year ended December 31, 2009.
The Company reported a net loss of $101,963 ($0.004 per basic share) compared to
net income of $628,056 ($0.026 per basic share) for the year ended December 31,
2008. The decrease in net income of $730,019 is primarily attributable to the
difference in foreign exchange gains and losses experienced in each of the two
years. Partially mitigating this impact is the positive net effect of higher
revenue from rental incinerator services and lower income tax expense, offset by
lower incinerator sales and other revenues.
"2009 was a challenging year for the oilfield services industry. The economic
downturn, coupled with reduced demand for oil and gas, led to a curtailment of
drilling activities and delays to capital expenditure decisions by Questor's
customers. As a result, Questor's revenues were impacted, down by 11 percent
from 2008. Despite the economic downturn, the Company has continued to
experience a high level of interest in its technology solutions and currently
has close to $40 million of bids outstanding with prospective customers all over
the world. The Company's confirmed sales order backlog is currently $1.9
million," said Audrey Mascarenhas, President and Chief Executive Officer.
"The Company relied on the strength of its balance sheet to provide the
financial capacity to focus on research and development activities in the areas
of product development and waste heat to power solutions. To capitalize on
society's heightened focus on sustainability and social responsibility, efforts
continued in raising market awareness of the technological solutions available
to address zero flaring policies and regulations emerging in many jurisdictions,
both international and local. With over 14.5 billion cubic feet of gas flared
daily worldwide, the market potential for Questor's technology is significant.
In the North American oil and gas sector alone there are currently more than
10,800 solution gas flares in Alberta and over 30,000 in the United States.
Converting only 10 percent of the flares to incineration would generate in
excess of $400 million of sales revenue.
The Company's incineration technology is increasingly seen as one of the viable
solutions to achieve zero flaring. Questor is positioning to take advantage of
the market opportunities this trend presents." Ms. Mascarenhas added, "The
Company remains focused on managing the business and we are optimistic about the
Company's future given the global attitudes evolving towards air quality,
minimization of carbon emissions, energy efficiency, corporate responsibility
and sustainability."
2009 OPERATIONAL HIGHLIGHTS
Relative to the strategic priorities, the following selected events and
achievements demonstrate Questor's progression in 2009:
-- Awarded its first international contract of some significance since
2007. Questor entered into a USD $950,000 incinerator sales contract
with a large U.S.-based global integrated energy company for a project
located in Indonesia and for which delivery is anticipated to occur in
third quarter 2010.
-- Provided waste gas incinerator equipment on a long-term rental basis to
its first heavy oil in situ combustion application. Questor's
incinerator technology has been deployed to handle low heat content sour
waste gases with high flow rates at a heavy oil operation located in
southwest Saskatchewan. This project's success establishes the
prospective application of Questor's products in oil sands development.
-- Installed an incinerator on a long-term rental basis to combust the
fugitive vapours at a loading/offloading facility in Fort Saskatchewan,
Alberta. This application demonstrates a viable technology to handle
vapours generated during shipping operations.
-- Developed and tested a scaled-down version of its successful, larger
incinerators to address the growing market for efficient combustion of
waste gases characterized by low flow and atmospheric pressure. This
unit has applicability particularly for the combustion of casing head
gas that is currently vented and hence generating carbon equivalent
greenhouse gas emissions.
-- Advanced the development of a process to convert waste gas to heat
and/or power. Questor completed its first design of a heat recovery
module to operate in tandem with Questor's incinerator products.
Construction of the prototype commenced in late 2009 and was completed
in first quarter 2010. Testing is expected to conclude in second quarter
2010.
-- Built market awareness and recognition for Questor's expertise in
matters relating to air quality as demonstrated by invitations to
present at several events worldwide:
-- Canadian Prairie Air & Waste Management and Northern Section (CPANS)
2009 Conference in Edmonton, Alberta, Canada in April 2009 on the
topic of "Embracing Climate Change";
-- Global Gas Flaring: A Burning Concern Summit in New Delhi, India in
September 2009 on the topic of "Curbing Climate Change: A Simple and
Sustainable Solution" during the "Emerging Gas Utilization
Technologies: Possibilities and Barriers" portion of the international
Summit;
-- 2009 Northeast BC Energy Conference in Dawson Creek, British Columbia,
Canada in September 2009 on the topic of "Waste Gas Combustion:
Economic, Efficient and Effective";
-- U.S. Environmental Protection Agency sponsored "Natural Gas STAR 2009
Annual Implementation Workshop" in San Antonio, Texas, USA in October
2009;
-- Acid Gas Injection Symposium in Calgary, Alberta, Canada in October
2009 on the topic of "Acid Gas: When to Inject and When to
Incinerate"; and
-- Managing Total Emissions Conference in Calgary, Alberta, Canada in
November 2009 on the topic of "Best Practices for the Combustion and
Conservation of Solution and Waste Gas".
-- Achieved recognition of Questor's growth when the Company was selected
for Alberta Venture's 2010 Fast Growth 50 list, an annual ranking
honoring fifty of the fastest growing companies in Alberta. Questor
ranked 17th in the top 25 fastest growing companies with revenue under
$20 million. This is the second year in succession that Questor has been
selected for the Fast Growth 50 list.
Audrey Mascarenhas has been invited to serve as a Society of Petroleum Engineers
("SPE") Distinguished Lecturer for the 2010-2011 lecture season. Drawing on her
technical expertise and experiences with Questor's waste gas combustion
technology, Ms. Mascarenhas will be speaking on the topics of sustainable
development and the environment. SPE is a key resource to its membership
worldwide for technical information and practices in the oil and gas industry.
SUBSEQUENT TO DECEMBER 31, 2009
More recently, Ms. Mascarenhas presented at the 2010 EnviroArabia Conference
held in the Kingdom of Bahrain on the topic of "Clearing the Air - Safely and
Efficiently". A copy of this presentation is available on the Company's website.
On May 6, 2010, Ms. Mascarenhas will present a paper entitled "Platform Waste
Gas Combustion: Efficiently, Safely, Reliably and Economically" at the Society
of Petroleum Engineers Offshore Technology Conference to be held in Houston,
Texas, USA.
The Company is pleased to announce that RB Milestone Group, LLC ("RBMG") has
invited Questor onto their Portal Network(TM) platform. RBMG is an equity
research firm that provides a variety of cutting-edge equity research and
investor relations solutions through its proprietary platform The Portal
Network(TM). This web-based platform is an interactive research and investor
relations hub and is host to a vast range of novel product offerings. As a
result of this relationship, RBMG will be creating an interactive Portal page
for the Company, which will assist the Company with its day-to-day investor
relations functions amongst its existing shareholders and appropriate Portal
members. The Company encourages all of its existing shareholders and company
followers to access Questor's Portal page on The Portal Network(TM) by
navigating to the following link, http://www.rbmilestone.com/register, to sign
up.
The Company also announced today that effective April 26, 2010, subject to
regulatory approval, the grant of share options to select officers and employees
entitling the purchase of up to 300,000 common shares at $0.27 per share,
exercisable for a period of five years and vesting in accordance with the
provisions of the Company's share option plan.
Questor's audited financial statements and Management's Discussion and Analysis
for the years ended December 31, 2009 and 2008 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.
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QUESTOR TECHNOLOGY INC.
BALANCE SHEETS
As at December 31 2009 2008
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ASSETS
Current assets
Cash and cash equivalents $ 3,080,997 $ 3,259,037
Accounts receivable 864,260 1,761,597
Income and other taxes receivable 306,850 6,226
Inventory 433,145 384,914
Prepaid expenses and deposits 101,072 80,340
Deferred expenses 2,356 29,160
Future income tax asset 50,113 -
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4,838,793 5,521,274
Property and equipment 1,418,524 1,176,529
Intangibles 15,682 44,680
Deferred expenses - 30,575
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$ 6,272,999 $ 6,773,058
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 348,150 $ 667,792
Current portion of long-term debt 15,232 37,498
Income and other taxes payable 19,034 285,795
Deferred revenue and deposits 198,641 146,707
Future income tax liability 2,281 9,281
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583,338 1,147,073
Long-term debt - 15,232
Other long-term liabilities - 30,575
Future income tax liability 74,057 26,710
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657,395 1,219,590
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Shareholders' equity
Share capital 5,265,736 5,265,736
Contributed surplus 447,651 283,552
Retained earnings (deficit) (97,783) 4,180
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5,615,604 5,553,468
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$ 6,272,999 $ 6,773,058
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QUESTOR TECHNOLOGY INC.
STATEMENTS OF INCOME (LOSS), COMPREHENSIVE INCOME (LOSS)
AND RETAINED EARNINGS (DEFICIT)
For the years ended December 31 2009 2008
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Revenue
Incinerator sales and services $ 2,277,762 $ 2,583,199
Incinerator rentals and services 1,098,385 954,396
Combustion services 478,419 678,660
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3,854,566 4,216,255
Less: Direct costs 2,537,337 2,818,502
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1,317,229 1,397,753
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Other revenue 102,608 254,896
Expenses
General and administrative 1,374,672 1,328,469
Foreign exchange loss (gain) 100,205 (707,664)
Depreciation and amortization 41,090 40,459
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1,515,967 661,264
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Income (loss) before interest expense and
income tax expense (96,130) 991,385
Interest expense
Short-term debt 1,456 5,196
Long-term debt 2,016 2,016
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Income (loss) before income tax expense (99,602) 984,173
Income tax expense (recovery)
Current income tax 12,127 391,328
Future income tax (9,766) (35,211)
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Net income (loss) and comprehensive income
(loss) (101,963) 628,056
Retained earnings (deficit), beginning of year 4,180 (623,876)
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Retained earnings (deficit), end of year $ (97,783) $ 4,180
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Net income (loss) per share
Basic and diluted $ (0.004) $ 0.026
Weighted average number of shares
outstanding
Basic 24,007,370 23,830,287
Diluted 24,007,370 24,491,573
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QUESTOR TECHNOLOGY INC.
STATEMENTS OF CASH FLOWS
For the years ended December 31 2009 2008
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Operating activities
Net income (loss) $ (101,963) $ 628,056
Items not involving cash:
Depreciation 133,174 122,122
Amortization 28,998 28,998
Unrealized foreign exchange loss (gain) 178,974 (295,204)
Future income tax (9,766) (35,211)
Share-based compensation 164,099 152,011
Gain on disposition of assets - (98,269)
Write-down of inventory 12,660 38,912
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406,176 541,415
Net change in non-cash working capital (21,022) (190,352)
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385,154 351,063
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Investing activities
Additions of property and equipment (372,373) (51,663)
Dispositions of property and equipment - 139,733
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(372,373) 88,070
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Financing activities
Repayment of short-term debt - (191,186)
Repayment of long-term debt (37,498) (60,659)
Net proceeds from issuance of common shares - 21,250
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(37,498) (230,595)
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Effect of exchange rates on cash (153,323) 296,502
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Increase (decrease) in cash and cash equivalents (178,040) 505,040
Cash and cash equivalents, beginning of year 3,259,037 2,753,997
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Cash and cash equivalents, end of year $ 3,080,997 $ 3,259,037
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