CALGARY, ALBERTA--(Marketwire - April 25, 2012) -
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, 2011. The Company's audited annual financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), including restatement of prior year results for comparative purposes. 2011 earnings per share was the third highest in the Company's history and nearly equivalent to the second highest earnings per basic share of $0.051 which occurred in 2006.
The Company reported a profit of $1,190,404 ($0.048 per basic share) compared to a profit of $445,060 ($0.018 per basic share) for the year ended December 31, 2010. 2011 earnings per share was the third highest in the Company's history and nearly equivalent to the second highest earnings per basic share of $0.051 which occurred in 2006.
This substantial increase in profit was primarily due to differences in the sales and services mix in each year and the higher margins achieved in 2011. Other non-recurring income arising in second quarter 2011 and comparatively lower net foreign exchange losses further contributed to the positive profit variance for the year ended December 31, 2011. Partially offsetting this favourable result were higher administration expenses, income tax expense and depreciation as well as losses on property and equipment disposals in 2011.
| FINANCIAL HIGHLIGHTS SUMMARY | |||||||
| (Stated in Canadian dollars except per share amounts) | |||||||
| For the years ended December 31 | 2011 | 2010 | Increase (decrease |
) | |||
| Revenue | 6,093,189 | 5,787,529 | 305,660 | ||||
| Gross profit(1) | 2,883,387 | 2,001,900 | 881,487 | ||||
| EBITDA(1) | 1,797,030 | 859,598 | 937,432 | ||||
| Profit and total comprehensive income | 1,190,404 | 445,060 | 745,344 | ||||
| Cost of sales as a percent of revenue(1) | 52.7 | % | 65.4 | % | (12.7 | )% | |
| Cash generated from operations before movements in non-cash working capital(1) | 1,793,638 | 904,113 | 889,525 | ||||
| Total assets | 9,025,953 | 7,339,025 | 1,686,928 | ||||
| Non-current liabilities | 156,034 | 58,592 | 97,442 | ||||
| Shares outstanding(2) | |||||||
| Basic | 24,746,411 | 24,275,589 | 470,822 | ||||
| Diluted | 24,796,499 | 24,387,275 | 409,224 | ||||
| Earnings per share - Basic and diluted | 0.048 | 0.018 | 0.030 | ||||
- 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 year ended December 31, 2011.
- Weighted average.
"The Questor team delivered strong results in 2011 leading to a significant increase to earnings per share relative to each of the last three years. The Company generated the second highest annual revenue in the Company's history and increased gross profit by 44 percent to achieve earnings of $0.048 per share," said Audrey Mascarenhas, President and Chief Executive Officer. "The market's understanding of the economic value and operational benefits Questor's clean air solutions offer is evolving as recognition of the Company's expertise and products continue to grow. The superior performance of our incineration equipment and its contributions to allaying public concerns regarding air quality has been acknowledged as a best practice by certain of our customers. During 2011 and into 2012, we experienced a substantial increase in demand for our technology in the United States. Recent emissions legislation introduced in the United States has created further opportunities for growth as Questor's technology is capable of meeting the standards across a wide range of applications, including shale gas development, natural gas sweetening and dehydration, in situ oil sands combustion and steam assisted gravity drainage ("SAGD") operations.
We are well positioned to pursue growth opportunities in North America and Europe in the coming year," concluded Ms. Mascarenhas.
2011 OPERATIONAL HIGHLIGHTS
Relative to the strategic priorities, the following selected events and achievements exemplify Questor's progression in 2011:
- Demonstrated the Company's technical expertise and competence in the destruction of low heat content gases through the deployment of the incineration equipment and related technology to shale gas and oil sands developments and to amine, dehydration and other oil and 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.
- Advanced the Company's United States market penetration in both the sale of incinerators and use of incineration equipment on a rental basis. Revenue from United States sources increased from $669,556 in 2010 to $3,738,220 in 2011.
- Increased incinerator rental revenue by 58.1 percent year over year by deploying incineration equipment to the United States and Germany in addition to the traditional Western Canada market and by securing longer-term rental arrangements for approximately 75 percent of the rental incinerator fleet over the course of the year. To exploit the growing demand for non-permanent applications arising from the oil and gas industry's focus on shale gas opportunities, the Company invested $1.4 million in rental incinerator fleet modifications and additions.
- Awarded its first sales order to supply incineration equipment for a project located in Russia and delivered that equipment in first quarter 2012. The Russian market holds strong potential for Questor as the country focuses on opportunities to reduce gas flaring.
- Continued to advance the development and commercialization of a process to recover waste heat from incineration and convert the heat to power. The Company experimented with a variety of designs at its test facility in Grande Prairie, Alberta. The first such application was installed in third quarter 2011 and has been the basis for the development of customized designs for demonstration projects with other potential customers.
- 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 including:
- The 11th China International Petroleum and Petrochemical Technology and Equipment Exhibition (CIPPE 2011) held March 22 - 24, 2011 in Beijing, China on the topic of "Clearing the Air! Effective, Efficient, Safe and Sustainable";
- 2011 North America Gas and Oil Expo and Conference held June 9, 2011 in Calgary, Alberta, Canada, on the topic "Emission Reduction: Effective, Efficient, Safe and Sustainable";
- Regional Forum on Flaring Reduction and Gas Utilization held June 17, 2011 in Baku, Azerbaijan, an event organized by the World Bank led Global Gas Flaring Reduction (GGFR) partnership and SOCAR, Azerbaijan's national oil company;
- Global Methane Initiative All-Partnership Meeting in Krakow, Poland on October 13, 2011 on the topic of "Heat to Power";
- Global Clean Energy Congress in Calgary, Alberta, Canada on November 2, 2011 on the topic of "Solutions Powered by Clean Combustion"; and
- Canadian Unconventional Resources Conference in Calgary, Alberta, Canada on November 15, 2011 on the topic of "Community Engagement" in relation to its importance to the success of unconventional reserves development.
- The Company was selected for Alberta Venture's 2011 Fast Growth 50 list, an annual ranking honouring fifty of the fastest growing companies in Alberta. This was the third year in succession that Questor was selected.
- Questor's President and Chief Executive Officer, Audrey Mascarenhas, was the recipient of the Ernst & Young Entrepreneur Of The Year 2011 Prairies Award for the Cleantech and Environmental Services category. She was also selected by the national judging panel to receive a special citation in honour of Values-Based Innovation.
SUBSEQUENT TO DECEMBER 31, 2011
At December 31, 2011, the Company had confirmed incinerator sales orders of $1.0 million. Since the beginning of 2012, confirmed incinerator sales orders for an additional $1.1 million have been received. Of the $2.1 million of associated revenue to be recorded in relation to these orders, $1.7 million will be recognized in first quarter 2012 and $0.4 million in second quarter 2012.
The Company is pleased to announce that it is establishing a marketing arrangement with Global Industrial Dynamics B.V. ("GI Dynamics") to jointly market Questor's incineration equipment in Europe, Russia, China and Australia. GI Dynamics is a technology and service provider focused on industrial projects in gas processing, waste handling and renewable technologies. The company is headquartered in The Netherlands with representation offices in China and Australia. The Managing Director of GI Dynamics will be making a presentation regarding Questor's clean air technologies at the Gas Processors Association (GPA) Europe Annual Conference 2012 in Berlin, Germany on May 24, 2012.
Ms. Mascarenhas presented at the ACAMP (Alberta Centre for Advanced MNT Products) Cleantech Technology Seminar 2012 in Calgary, Alberta on March 8, 2012 on the topic of "Clearing the Air! Safely, Economically and Efficiently". She also made a presentation at the CERBA (Canada Eurasia Russian Business Association) International Conference on Canada-Eurasia-Russia Cooperation on Energy Efficiency and Sustainable Development of the Regions in Vancouver, British Columbia on March 14, 2012 on the topic of "Innovative Technologies in Energy Efficiency and Environment Protection". Copies of these presentations are available on the Company's website. On May 9, 2012, Ms. Mascarenhas will present on the topic of "New Technological and Regulatory Approaches to Addressing Environmental Challenges around Northern Development in Alberta" at the Country Special Canada Forum on the Far North: Economic Opportunities, Environmental Challenges and Scientific Exploration held in conjunction with the IFAT ENTSORGA Trade Show and Conference in Munich, Germany. A copy of this presentation will be posted to the Company's website in due course.
The Company also announced today that effective April 25, 2011, subject to regulatory approval, the grant of share options to select officers, employees and contractors entitling the purchase of up to 900,000 common shares at $0.28 per share, exercisable for a period of five years and vesting in accordance with the provisions of the Company's share option plan.
Shareholders are invited to attend the Company's Annual General Meeting to be held on Tuesday, June 5, 2012 at 3:00 p.m. MDT in the Cardium Room of the Calgary Petroleum Club, located at 319 - 5th 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, 2011 and first quarter ended March 31, 2012 and discussing the Company's strategic initiatives for 2012.
Questor's audited financial statements and notes thereto and management's discussion and analysis for the year ended December 31, 2011 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. | ||||||||
| STATEMENTS OF FINANCIAL POSITION | ||||||||
| Stated in Canadian dollars | ||||||||
| As at | December 31 2011 |
December 31 2010 |
January 1 2010 |
|||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 2,166,301 | $ | 3,995,669 | $ | 3,080,997 | ||
| Short-term investment | 1,007,896 | - | - | |||||
| Trade and other receivables | 2,852,578 | 1,873,636 | 864,260 | |||||
| Inventories | 766,028 | 313,567 | 433,145 | |||||
| Prepaid expenses and deposits | 96,296 | 107,467 | 103,428 | |||||
| Current tax assets | 73,341 | 362 | 306,850 | |||||
| Total current assets | 6,962,440 | 6,290,701 | 4,788,680 | |||||
| Non-current assets | ||||||||
| Property and equipment | 2,053,972 | 1,037,565 | 1,188,814 | |||||
| Intangible assets | 9,541 | 10,759 | 15,682 | |||||
| Deferred tax assets | - | - | 33,377 | |||||
| Total non-current assets | 2,063,513 | 1,048,324 | 1,237,873 | |||||
| Total assets | $ | 9,025,953 | $ | 7,339,025 | $ | 6,026,553 | ||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Trade payables, accrued liabilities and provisions | $ | 1,070,989 | $ | 852,821 | $ | 348,150 | ||
| Current portion of borrowings | - | - | 15,232 | |||||
| Deferred revenue and deposits | 280,042 | 146,485 | 198,641 | |||||
| Current tax liabilities | 196,572 | 230,746 | 19,034 | |||||
| Total current liabilities | 1,547,603 | 1,230,052 | 581,057 | |||||
| Non-current liabilities | ||||||||
| Deferred tax liabilities | 94,935 | 58,592 | - | |||||
| Lease inducement | 61,099 | - | - | |||||
| Total non-current liabilities | 156,034 | 58,592 | - | |||||
| Total liabilities | 1,703,637 | 1,288,644 | 581,057 | |||||
| Capital and reserves | ||||||||
| Issued capital | 5,458,215 | 5,404,966 | 5,265,736 | |||||
| Reserves | 622,226 | 593,944 | 573,349 | |||||
| Retained earnings (deficit) | 1,241,875 | 51,471 | (393,589 | ) | ||||
| Total equity | 7,322,316 | 6,050,381 | 5,445,496 | |||||
| Total liabilities and equity | $ | 9,025,953 | $ | 7,339,025 | $ | 6,026,553 | ||
| QUESTOR TECHNOLOGY INC. | |||||||
| STATEMENTS OF COMPREHENSIVE INCOME | |||||||
| Stated in Canadian dollars except per share data | |||||||
| For the years ended December 31 | 2011 | 2010 | |||||
| Revenue | $ | 6,093,189 | $ | 5,787,529 | |||
| Cost of sales | (3,209,802 | ) | (3,785,629 | ) | |||
| Gross profit | 2,883,387 | 2,001,900 | |||||
| Administration expenses | (1,548,813 | ) | (1,322,834 | ) | |||
| Write-off of property and equipment | (39,437 | ) | - | ||||
| Depreciation of property and equipment | (31,342 | ) | (11,641 | ) | |||
| Amortization of intangible assets | (1,218 | ) | (4,923 | ) | |||
| Net foreign exchange losses | (18,392 | ) | (50,551 | ) | |||
| Finance costs | - | (1,012 | ) | ||||
| Other income | 324,593 | 55,036 | |||||
| Profit before tax | 1,568,778 | 665,975 | |||||
| Income tax expense | (378,374 | ) | (220,915 | ) | |||
| Profit and total comprehensive income | $ | 1,190,404 | $ | 445,060 | |||
| Earnings per share | |||||||
| Basic | $ | 0.048 | $ | 0.018 | |||
| Diluted | $ | 0.048 | $ | 0.018 | |||
| QUESTOR TECHNOLOGY INC. | ||||||||||
| STATEMENTS OF CHANGES IN EQUITY | ||||||||||
| Stated in Canadian dollars | ||||||||||
| Retained | ||||||||||
| Issued | (deficit | ) | ||||||||
| capital | Reserves | earnings | Total equity | |||||||
| Balance at January 1, 2010 | $ | 5,265,736 | $ | 573,349 | $ | (393,589 | ) | $ | 5,445,496 | |
| Profit and total comprehensive income | - | - | 445,060 | 445,060 | ||||||
| Recognition of share-based payments | - | 89,825 | - | 89,825 | ||||||
| Issue of ordinary shares under employee share option plan | 139,230 | (69,230 | ) | - | 70,000 | |||||
| Balance at December 31, 2010 | 5,404,966 | 593,944 | 51,471 | 6,050,381 | ||||||
| Profit and total comprehensive income | - | - | 1,190,404 | 1,190,404 | ||||||
| Recognition of share-based payments | - | 54,531 | - | 54,531 | ||||||
| Issue of ordinary shares under employee share option plan | 53,249 | (26,249 | ) | - | 27,000 | |||||
| Balance at December 31, 2011 | $ | 5,458,215 | $ | 622,226 | $ | 1,241,875 | $ | 7,322,316 | ||
| QUESTOR TECHNOLOGY INC. | ||||||||
| STATEMENTS OF CASH FLOWS | ||||||||
| Stated in Canadian dollars | ||||||||
| For the years ended December 31 | 2011 | 2010 | ||||||
| Cash flows (used in) from operating activities | ||||||||
| Profit and total comprehensive income for the year | $ | 1,190,404 | $ | 445,060 | ||||
| Adjustments for: | ||||||||
| Income tax expense | 378,374 | 220,915 | ||||||
| Finance costs | - | 1,012 | ||||||
| Write-off of property and equipment | 39,437 | - | ||||||
| Depreciation of property and equipment | 227,034 | 187,688 | ||||||
| Amortization of intangible assets | 1,218 | 4,923 | ||||||
| Net unrealized foreign exchange gains | (102,361 | ) | (61,316 | ) | ||||
| Expense recognized in respect of equity-settled share-based payments | 54,531 | 89,825 | ||||||
| Write-downs of inventories to net realizable value | 5,001 | 16,006 | ||||||
| 1,793,638 | 904,113 | |||||||
| Movements in non-cash working capital | (2,076,211 | ) | (342,263 | ) | ||||
| Cash (used in) generated from operations | (282,573 | ) | 561,850 | |||||
| Income taxes (paid) refunded | (278,710 | ) | 264,331 | |||||
| Net cash (used in) generated from operating activities | (561,283 | ) | 826,181 | |||||
| Cash flows (used in) from investing activities | ||||||||
| Payments for property and equipment | (1,411,014 | ) | (36,439 | ) | ||||
| Proceeds from disposal of property and equipment | 3,200 | - | ||||||
| Interest paid | - | (1,012 | ) | |||||
| Net cash used in investing activities | (1,407,814 | ) | (37,451 | ) | ||||
| Cash flows from financing activities | ||||||||
| Repayment of borrowings | - | (15,232 | ) | |||||
| Proceeds from issue of ordinary shares under employee share option plan | 27,000 | 70,000 | ||||||
| Net cash from financing activities | 27,000 | 54,768 | ||||||
| Net (decrease) increase in cash | (1,942,097 | ) | 843,498 | |||||
| Cash at beginning of the year | 3,995,669 | 3,080,997 | ||||||
| Effects of exchange rate changes on the balance of cash held in foreign currencies | 112,729 | 71,174 | ||||||
| Cash at end of the year | $ | 2,166,301 | $ | 3,995,669 | ||||
