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, 2013.
The Company's audited annual financial statements have been prepared in
accordance with International Financial Reporting Standards ("IFRS").
The Company reported the highest profit in its history of $2,544,049 ($0.101 per
basic share) 145 percent higher than profit of $1,040,356 ($0.042 per basic
share) for the year ended December 31, 2012. The increase in profit was due to
increased incinerator sales during the year, partially offset by lower rental
and combustion services revenues and increased administration costs.
FINANCIAL HIGHLIGHTS SUMMARY
(Stated in Canadian dollars except shares outstanding)
Increase
For the years ended December 31 2013 2012 (decrease)
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Revenue 9,574,950 6,684,475 2,890,475
Gross profit(1) 4,725,576 3,078,180 1,647,396
EBITDA(1) 3,454,374 1,723,363 1,731,011
Profit and total comprehensive
income 2,544,049 1,040,356 1,503,693
Cost of sales as a percent of
revenue(1) 50.6% 53.9% (3.3%)
Funds flow from operations
before movements in non-cash
working capital(1) 3,543,893 1,826,443 1,717,450
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As at December 31 Increase
2013 2012 (decrease)
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Total assets 14,029,829 9,798,449 4,231,380
Non-current liabilities 175,130 223,295 (48,165)
Shares outstanding(2)
Basic 25,102,165 24,869,255 232,910
Diluted 25,939,888 25,144,794 795,094
Earnings per share - Basic 0.101 0.042 0.059
- Diluted 0.098 0.041 0.057
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(1) Non-IFRS financial measure. Please see discussion in the Non-IFRS
Financial Measures section of Questor's Management's Discussion and
Analysis for the year ended December 31, 2013.
(2) Weighted average.
"We continued to penetrate the U.S. market moving from 47% of total unit sales
revenue last year to 52% this year. In addition, with a second unit going to
Russia in 2013 and two into Europe our exposure in those markets continues to
grow. While the number of units we sold in 2013 was more than double the prior
year, current year sales were muted by the deferral of the anticipated fourth
quarter delivery of eight units to a Canadian oilsands operator. Those units
were delivered in the first quarter of 2014" said Audrey Mascarenhas, President
and Chief Executive Officer. "In 2013 we sold five units from our rental fleet
to customers with short delivery times frames and have more units in fabrication
than we have ever had in the past to meet upcoming sale and rental commitments,
using cash generated from operations. We expect demand for our incinerators to
intensify, particularly in the U.S. as the effective date for the new EPA
regulations draws nearer."
"Questor's product quality and combustion expertise are becoming more recognized
on a daily basis globally" she continued. "Our incineration technology is unique
in its ability to allay public concerns regarding air quality and is capable of
meeting emissions standards across a wide range of applications. Emissions
legislation introduced in the United States and Europe are expected to continue
to increase interest in our incinerators as companies look for solutions to
flaring and emissions control."
"We are well positioned to pursue growth opportunities in North America and
Europe in the coming year," concluded Ms. Mascarenhas.
2013 OPERATIONAL HIGHLIGHTS
Relative to the Company's strategic priorities, the following selected events
and achievements demonstrate Questor's progression in 2013:
-- Generated revenue of $9,574,950, the highest in the Company's history,
up 43% from the prior year.
-- Demonstrated the Company's technical expertise and competence in the
destruction of low heat content gases through the deployment of
incineration equipment and related technology to shale gas and oil sands
developments and to amine, dehydration and other crude oil and natural
gas processing applications. As a result, certain customers have
identified Questor's technology as best practice and specify the use of
the Company's solutions in their tenders to third parties for field
equipment.
-- Exploited the growing demand arising from the industry's focus on shale
gas opportunities investing $4.4 million in 2013 in the fabrication of
units for rental fleet additions or for sale to customers with short
lead times.
-- Delivered in second quarter 2013 the second of the Company's
incineration units into Russia. The Russian market holds strong
potential for Questor as that country focuses on opportunities to reduce
waste gas flaring. Additional orders for sale or rental units in Russia
are expected to be received in 2014.
-- Advanced the development and commercialization of a process to recover
waste heat from incineration and convert the heat to power, purchasing
in early 2014 all of the outstanding shares of ClearPower Systems Inc.,
which has prototype technology to deliver 50kW of power from waste heat.
-- Engaged in discussions with fabricators in Europe with respect to the
potential to have incinerators for sale or rent in European markets
fabricated in closer proximity to the customer.
-- Built market awareness and recognition for Questor's expertise in
matters relating to air quality through presentations made by invitation
at several events worldwide including:
-- Ms. Mascarenhas made a presentation called "Clearing the Air" in
February 2013 as part of an Alberta Oil and Gas Mission to Poland
and again in mid-May at the ACI Tight and Shale Gas Summit in
Istanbul, Turkey.
-- She also presented, along with the Company's Chief Operating Officer
to senior executives at several major U.S. oil and gas companies in
Houston in late April of 2013 regarding capabilities of the
Company's incinerators/thermal oxidizers.
-- On May 10th, 2013 Ms Mascarenhas made a presentation at the Western
Energy Summit entitled "Climbing to New Heights with Clean Air
Solutions".
-- A further mission took Ms. Mascarenhas in late May of 2013 to
Bahrain, Abu Dhabi and Oman, where she participated in the latter
country in workshops focused on clean air solutions and attended
meetings with corporate and government individuals who had expressed
interest in Questor's technology.
-- Ms. Mascarenhas attended at the SelectUSA Investment Summit in
Washington, DC on October 31, 2013
-- She was keynote speaker at the Society of Petroleum Engineers
("SPE") luncheon on the 21st of November in Oklahoma City.
-- She travelled to Mexico at the end of November to present at the
Pemex Technology Exchange Forum.
-- Copies of these presentations are available on the Company's website.
SUBSEQUENT TO DECEMBER 31, 2013
At December 31, 2013, the Company had confirmed incinerator sales orders of $4.0
million. Since the beginning of 2014, confirmed incinerator sales orders for an
additional $2.6 million have been received. Of the $6.6 million of associated
revenue to be recorded in relation to these orders, $2.8 million is expected to
be recognized in first quarter 2014 based on customer delivery schedules and
$3.8 million in second quarter 2014. In addition, long term rental contracts
have been signed with four new customers, three of which will be using the
Company's larger units for extended periods.
Questor Technology Inc. was selected to the 2014 TSX Venture 50, first out of 10
in its category of Clean Technology. This is the second year in a row the
Company has earned the honor which is a ranking of strong performers on TSX
Venture Exchange. It is comprised of ten companies from each of the following
five sectors: Mining, Oil & Gas, Diversified Industries, Clean Technology and
Technology & Life Sciences.
Shareholders are invited to attend the Company's Annual General Meeting to be
held on Tuesday, June 24, 2014 at 3:00 p.m. MDT in the Company's Corporate
Offices at 1121, 940 - 6th 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, 2013 and first quarter ended
March 31, 2014 and discussing the Company's strategic initiatives for 2014.
Questor's audited financial statements and notes thereto and management's
discussion and analysis for the year ended December 31, 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, 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 enabling 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 crude oil and
natural 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.
STATEMENTS OF FINANCIAL POSITION
Stated in Canadian dollars
December 31 December 31
As at Notes 2013 2012
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ASSETS
Current assets
Cash and cash equivalents $ 7,323,303 $ 4,405,624
Trade and other receivables 2,863,257 2,304,478
Inventories 2,359,276 670,959
Prepaid expenses and deposits 124,163 88,378
Current tax assets 77,849 25,158
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Total current assets $ 12,747,848 7,494,597
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Non-current assets
Property and equipment 1,256,066 2,295,529
Intangible assets 25,915 8,323
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Total non-current assets 1,281,981 2,303,852
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Total assets $ 14,029,829 $ 9,798,449
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LIABILITIES AND EQUITY
Current liabilities
Trade payables, accrued liabilities
and provisions $ 1,746,259 $ 894,206
Deferred revenue and deposits 252,356 2,205
Current portion of lease inducement 52,002 26,770
Current tax liabilities 638,527 171,907
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Total current liabilities $ 2,689,143 $ 1,095,088
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Non-current liabilities
Deferred tax liabilities 53,793 97,319
Lease inducement 121,337 125,976
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Total non-current liabilities 175,130 223,295
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Total liabilities 2,864,274 1,318,383
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Capital and reserves
Issued capital 5,636,119 5,521,001
Reserves 703,156 676,834
Retained earnings 4,826,280 2,282,231
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Total equity 11,165,555 8,480,066
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Total liabilities and equity $ 14,029,829 $ 9,798,449
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Approved by the Board of Directors:
(signed ) "James Inkster" (signed) "Audrey Mascarenhas"
James Inkster, Director Audrey Mascarenhas, Director
QUESTOR TECHNOLOGY INC.
STATEMENTS OF COMPREHENSIVE INCOME
Stated in Canadian dollars except per share data
For the years ended December 31 2013 2012
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Revenue $ 9,574,950 $ 6,684,475
Cost of sales (4,849,374) (3,606,295)
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Gross profit 4,725,576 3,078,180
Administration expenses (1,645,923) (1,621,055)
Gain/(loss) on disposal of property and
equipment 14,457 (27,865)
Depreciation of property and equipment (41,261) (41,316)
Amortization of intangible assets (1,218) (1,218)
Net foreign exchange gains 91,363 10,603
Other income 9,689 23,997
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Profit before tax 3,152,683 1,421,326
Income tax expense (608,634) (380,970)
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Profit and total comprehensive income $ 2,544,049 $ 1,040,356
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Earnings per share
Basic $ 0.101 $ 0.042
Diluted $ 0.098 $ 0.041
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QUESTOR TECHNOLOGY INC.
STATEMENTS OF CHANGES IN EQUITY
Stated in Canadian dollars
Issued Retained
capital Reserves earnings Total equity
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Balance at January 1,
2012 $ 5,458,215 $ 622,226 $ 1,241,875 $ 7,322,316
Profit and total
comprehensive income - - 1,040,356 1,040,356
Recognition of share-
based payments - 79,520 - 79,520
Issue of ordinary shares
under employee share
option plan 62,786 (24,912) - 37,874
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Balance at January 1,
2013 $ 5,521,001 $ 676,834 $ 2,282,231 $ 8,480,066
Profit and total
comprehensive income 2,544,049 2,544,049
Recognition of share-
based payments 76,814 76,814
Issue of ordinary shares
under employee share
option plan 115,118 (46,492) 68,626
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Balance at December 31,
2013 $ 5,636,119 $ 703,156 $ 4,826,280 $ 11,165,555
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QUESTOR TECHNOLOGY INC.
STATEMENTS OF CASH FLOWS
Stated in Canadian dollars
For the years ended December 31 2013 2012
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Cash flows from (used in) operating activities
Profit and total comprehensive income for
the year $ 2,544,049 $ 1,040,356
Adjustments for:
Income tax expense 608,634 380,970
Loss/(gain) on disposal of property and
equipment (14,457) 27,865
Depreciation of property and equipment 300,473 300,819
Amortization of intangible assets 1,218 1,218
Net unrealized foreign exchange gains 31,162 (5,775)
Expense recognized in respect of equity-
settled share-based payments 72,814 79,520
Write-downs of inventories to net
realizable value - 1,470
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Funds flow from operations 3,543,893 1,826,443
Movements in non-cash working capital (391,512) 1,609,381
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Cash generated from operations 3,152,381 3,435,824
Income taxes paid (100,111) (461,059)
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Net cash generated from operating activities 3,052,270 2,974,765
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Cash flows (used in) from investing activities
Payments for property and equipment (206,491) (770,781)
Proceeds from disposal of property and
equipment 28,550 -
Additions to intangibles (18,810) -
Interest paid - -
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Net cash used in investing activities (196,751) (770,781)
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Cash flows from financing activities
Proceeds from issue of ordinary shares under
employee share option plan 68,625 37,874
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Net cash from financing activities 68,625 37,874
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Net increase in cash 2,924,144 2,241,858
Cash at beginning of the year 4,405,624 2,166,301
Effects of exchange rate changes on the
balance of cash held in foreign currencies (6,465) (2,535)
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Cash at end of the year 7,323,303 $ 4,405,624
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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
Questor Technology (TSXV:QST)
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