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, 2010
The Company reported net income of $167,156 ($0.007 per basic share) for the
second quarter of 2010 compared to net income of $21,031 ($0.001 per basic
share) for the same quarter of 2009. The net income increase of $146,125 is
primarily attributable to the higher margin sales and services revenue mix
occurring in the three months ended June 30, 2010 and the foreign exchange gain
recorded in second quarter 2010 compared to the foreign exchange loss recognized
in the same period of 2009. Partially offsetting these impacts are higher income
tax expense and lower other revenue in second quarter 2010.
Net income for the six months ended June 30, 2010 is $2,136 ($0.000 per basic
share) compared to net income of $103,720 ($0.004 per basic share) for the six
months ended June 30, 2009. The decrease in net income of $101,584 is
attributable to lower incinerator sales and other revenues, partially offset by
higher foreign exchange gains and incinerator rentals and services margins and
by lower general and administrative and income tax expenses in the first half of
2010.
Financial Results Summary
($ unless otherwise noted)
Three months ended Six months ended June
June 30 June 30
For the 2010 2009 2010 2009
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Total revenue 1,161,202 1,228,584 1,650,830 2,391,780
Gross margin(1) 475,812 369,863 636,354 813,838
EBITDA(1) 277,413 94,532 100,288 249,692
Net income 167,156 21,031 2,136 103,720
Funds generated from
operations(1) 128,881 122,761 36,896 328,601
Total assets 6,929,694 6,434,159 6,929,694 6,434,159
Long-term liabilities 87,698 44,596 87,698 44,596
Shares outstanding
(thousands)(2)
Basic 24,067 24,007 24,037 24,007
Diluted 24,603 24,710 24,615 24,554
Net income per share -
Basic and diluted $ 0.007 $ 0.001 $ 0.000 $ 0.004
(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 and six months ended June 30, 2010.
(2) Weighted average.
"Questor has confirmed incinerator sales orders of $2.4 million of which
approximately $1.6 million will be delivered in third quarter 2010 and the
balance in fourth quarter 2010 in accordance with the current customer-specified
schedule," said Audrey Mascarenhas, President and Chief Executive Officer. "The
combined value of the confirmed incinerator sales orders and total revenue
generated in the first half of the year means we are already on track to achieve
total revenue in 2010 that is slightly ahead of 2009 total revenue results. We
continue to actively pursue new business opportunities and currently have
proposals outstanding in excess of $41 million which is approximately $9 million
more than the bids outstanding at this time last year."
"The heightened focus on the environment continues to hold promise for Questor's
technology solutions and services," concluded Ms. Mascarenhas.
The Company continues to build market awareness for its expertise in matters
relating to clean air technologies. Ms. Mascarenhas has been invited to lecture
as part of the Departmental Seminars in Mechanical and Industrial Engineering at
the University of Toronto. She will present on the topic of "Air Pollution: The
Daily Spills That We Ignore" on September 10, 2010 at 2:10 p.m. in Toronto,
Ontario, Canada. As previously announced, Ms. Mascarenhas is serving as a
Society of Petroleum Engineering ("SPE") Distinguished Lecturer for the
2010-2011 lecture season. In that capacity she will be presenting on the topic
of "A Sustainable Solution to the Climate Change Dilemma: Eliminate the Flare"
to audiences in Santa Clara, California, USA, Rock Springs, Wyoming, USA and
Salt Lake City, Utah, USA on September 13, 15 and 16, 2010, respectively.
Questor's second quarter 2010 financial statements and notes thereto and
Management's Discussion and Analysis for the three and six months ended June 30,
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 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.
BALANCE SHEETS
(unaudited)
June 30 December 31
As at 2010 2009
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ASSETS
Current assets
Cash $ 3,056,440 $ 3,080,997
Accounts receivable 968,580 864,260
Income and other taxes receivable 291,091 306,850
Inventory 1,036,708 433,145
Prepaid expenses and deposits 137,633 101,072
Deferred expenses - 2,356
Future income tax asset 50,113 50,113
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5,540,565 4,838,793
Property and equipment 1,377,761 1,418,524
Intangibles 11,368 15,682
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$ 6,929,694 $ 6,272,999
----------------------------------------------------------------------------
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 613,712 $ 348,150
Current portion of long-term debt 5,077 15,232
Income and other taxes payable 21,822 19,034
Deferred revenue and deposits 485,618 198,641
Future income tax liability 691 2,281
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1,126,920 583,338
Future income tax liability 87,698 74,057
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1,214,618 657,395
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Shareholders' equity
Share capital 5,300,544 5,265,736
Contributed surplus 510,179 447,651
Retained earnings (deficit) (95,647) (97,783)
----------------------------------------------------------------------------
5,715,076 5,615,604
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$ 6,929,694 $ 6,272,999
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QUESTOR TECHNOLOGY INC.
STATEMENTS OF INCOME (LOSS), COMPREHENSIVE INCOME (LOSS) AND RETAINED
EARNINGS (DEFICIT)
(unaudited)
Three months ended Six months ended
June 30 June 30
For the 2010 2009 2010 2009
----------------------------------------------------------------------------
Revenue
Incinerator sales and
services $ 761,998 $ 932,382 $ 851,324 $ 1,504,974
Incinerator rentals
and services 302,265 132,024 547,891 571,294
Combustion services 96,307 115,169 249,472 261,175
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1,160,570 1,179,575 1,648,687 2,337,443
Less: Direct costs 684,758 809,712 1,012,333 1,523,605
----------------------------------------------------------------------------
475,812 369,863 636,354 813,838
----------------------------------------------------------------------------
Other revenue 632 49,009 2,143 54,337
Expenses
General and
administrative 328,903 333,592 653,058 698,219
Foreign exchange loss
(gain) (98,224) 20,980 (50,929) (21,359)
Depreciation and
amortization 3,704 10,369 10,634 20,626
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234,383 364,941 612,763 697,486
----------------------------------------------------------------------------
Income before interest
expense and
income tax expense 242,061 53,931 25,734 170,689
Interest expense 504 504 1,008 1,330
----------------------------------------------------------------------------
Income before income
tax expense 241,557 53,427 24,726 169,359
Income tax expense
(recovery)
Current income tax 10,539 33,532 10,539 62,111
Future income tax 63,862 (1,136) 12,051 3,528
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Net income and
comprehensive income 167,156 21,031 2,136 103,720
Retained earnings
(deficit), beginning
of period (262,803) 86,869 (97,783) 4,180
----------------------------------------------------------------------------
Retained earnings
(deficit), end of
period $ (95,647) $ 107,900 $ (95,647) $ 107,900
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income per share
Basic and diluted $ 0.007 $ 0.001 $ 0.000 $ 0.004
Weighted average number
of shares outstanding
Basic 24,067,260 24,007,370 24,037,480 24,007,370
Diluted 24,603,163 24,709,526 24,614,993 24,553,537
QUESTOR TECHNOLOGY INC.
STATEMENTS OF CASH FLOWS
(unaudited)
Three months ended Six months ended
June 30 June 30
For the 2010 2009 2010 2009
----------------------------------------------------------------------------
Operating activities
Net income $ 167,156 $ 21,031 $ 2,136 $ 103,720
Items not affecting
cash:
Depreciation 35,048 33,351 70,240 64,503
Amortization 304 7,250 4,314 14,500
Unrealized foreign
exchange loss (gain) (178,938) 20,954 (131,681) 62,839
Future income tax
(recovery) 63,862 (1,136) 12,051 3,528
Share-based
compensation 41,449 41,311 79,836 79,511
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128,881 122,761 36,896 328,601
Net change in non-cash
working capital (464,400) (150,896) (171,538) (290,954)
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(335,519) (28,135) (134,642) 37,647
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Investing activities
Additions of property
and equipment (24,921) (30,303) (28,360) (100,823)
----------------------------------------------------------------------------
(24,921) (30,303) (28,360) (100,823)
----------------------------------------------------------------------------
Financing activities
Repayment of long-term
debt (5,078) (9,883) (10,155) (19,766)
Exercise of share
options 17,500 - 17,500 -
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12,422 (9,883) 7,345 (19,766)
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Effect of exchange
rates on cash 176,035 (24,945) 131,100 (68,268)
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Decrease in cash (171,983) (93,266) (24,557) (151,210)
Cash, beginning of
period 3,228,423 3,201,093 3,080,997 3,259,037
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Cash, end of period $ 3,056,440 $ 3,107,827 $ 3,056,440 $ 3,107,827
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