CALGARY, ALBERTA--(Marketwired - Nov. 27, 2013) -
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 | Nine months ended September 30 | ||||||||||||
| For the | 2013 | 2012 | Increase (decrease |
) | 2013 | 2012 | Increase (decrease |
) | |||||
| Revenue | 2,989,767 | 1,112,976 | 1,876,791 | 6,973,090 | 4,531,855 | 2,441,235 | |||||||
| Gross profit(1) | 1,336,609 | 590,994 | 745,615 | 3,404,490 | 2,093,292 | 1,311,198 | |||||||
| EBITDA(1) | 1,036,215 | 299,225 | 736,990 | 2,490,024 | 1,226,329 | 1,263,695 | |||||||
| Profit and total comprehensive income | 817,840 | 155,386 | 662,454 | 1,869,101 | 742,264 | 1,126,837 | |||||||
| Cost of sales as a percent of revenue(1) | 55.3 | % | 46.9 | % | 8.4 | 51.2 | % | 53.8 | % | (2.6 | ) | ||
| Cash generated from operations before movements in non-cash working capital(1) | 1,032,556 | 374,491 | 658,065 | 2,573,968 | 1,327,966 | 1,246,002 | |||||||
| Shares outstanding(2) | |||||||||||||
| Basic | 25,119,327 | 24,857,370 | 261,957 | 25,068,175 | 24,857,370 | 210,805 | |||||||
| Diluted | 25,917,239 | 25,452,830 | 464,409 | 25,772,662 | 25,189,409 | 583,253 | |||||||
| Earnings per share - Basic | 0.033 | 0.006 | 0.027 | 0.075 | 0.030 | 0.045 | |||||||
| Earnings per share - Diluted | 0.032 | 0.006 | 0.026 | 0.073 | 0.029 | 0.044 | |||||||
| As at September 30 | 2013 | 2012 | Increase (decrease |
) |
| Total assets | 12,654,008 | 9,194,824 | 3,459,184 | |
| Non-current liabilities | 250,902 | 234,829 | 16,073 |
| (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 |
| As at | Notes | September 30 2013 |
December 31 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 | ||
| Total current assets | 11,319,003 | 7,494,597 | ||
| Non-current assets | ||||
| Property and equipment | 5,9 | 1,327,596 | 2,295,529 | |
| Intangible assets | 7,409 | 8,323 | ||
| 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 | ||
| 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 | ||
| 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 ended September 30 |
For the nine months ended 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 | ) | ||||
| 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 capital | Reserves | Retained 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 | |
| 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 |
| 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 | ||||
| 2,573,968 | 1,327,966 | ||||||
| Movements in non-cash working capital | 10 | 329,058 | 2,411,569 | ||||
| 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 | |||||
| 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 | - | |||||
| Net cash used in investing activities | (115,067 | ) | (750,510 | ) | |||
| 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. |
Contact Information:
Audrey Mascarenhas
President and Chief Executive Officer
(403) 571-1530
(403) 571-1539 (FAX)
amascarenhas@questortech.com
www.questortech.com