Questor Technology Inc. Announces First Quarter 2014 Financial Results

Questor Technology Inc. Announces First Quarter 2014 Financial Results 
NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: Questor Technology Inc. 
TSX VENTURE SYMBOL:  QST 
MAY 30, 2014 
Questor Technology Inc. Announces First Quarter 2014 Financial Results 
CALGARY, ALBERTA--(Marketwired - May 30, 2014) -  
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 first
quarter of 2014. Revenue this quarter was $3.2 million, 87 per cent higher than
the first quarter of 2013, mainly due to higher sales activity in Canada. The
Company reported a 92 per cent improvement in profit at $801,750(2) ($0.032 per
basic share) for the three months ended March 31, 2014 compared to a profit of
$417,084 ($0.017 per basic share) for the same three-month period of the prior
year.  
The increase in profit was due primarily to higher revenues arising out of the
increased volume of incinerators sold. Also contributing to the increase were
higher revenues from Incinerator and combustion services while lower
Incinerator rental income, higher average cost of sales and administrative
expense and higher income tax expense partially offset the impact on earnings
of the increased sales revenues. Higher net foreign exchange gains recorded in
the first quarter of 2014 compared to the same period of 2013 also contributed
to the the Company's overall improved performance. 
/T/ 
FINANCIAL HIGHLIGHTS SUMMARY                                                
(Stated in Canadian dollars except shares outstanding)                       
Increase 
For the three months ended March 31          2014         2013   (decrease) 
---------------------------------------------------------------------------- 
Revenue                                 3,214,437    1,719,577    1,495,860 
Gross profit(1)                         1,442,541      890,441      552,100 
EBITDA(1)                               1,154,868      656,220      468,648 
Profit for the period(1)(2)               801,750      417,084      384,666 
Cost of sales as a percent of                                               
 revenue(1)                                  55.1%        48.2%         6.9% 
Funds flow from operations before                                           
 movements in non-cash working                                              
 capital(1)                             1,255,065      662,405      592,660  
Earnings per share                                                           
- Basic                                 0.032        0.017        0.015  
- Diluted                               0.031        0.017        0.014 
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March 31, December 31,     Increase 
As at                                        2014         2013   (decrease) 
---------------------------------------------------------------------------- 
Total assets                           14,794,863   14,029,829      765,034 
Non-current liabilities                   152,906      175,130      (22,224) 
Shares outstanding(3)                                                       
  Basic                                25,282,370   25,102,265      180,105 
  Diluted                              26,117,133   25,939,888      177,245 
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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)  Before Other comprehensive income (loss).                              
(3)  Weighted average.                                                       
/T/ 
The Company has received confirmed incinerator sales orders for $3.8 million
since the start of the year. The units are expected to be delivered in the
second and third quarter of 2014 and the associated revenue recorded at that
time. Management is in discussions with several companies in Canada and the
U.S. with respect to terms and conditions on additional incinerator orders, the
revenue for which will be recorded at the time the units are fabricated and
ready for delivery in the third and fourth quarters of 2014. For certain sizes
of units, the inventory that management built up over the latter half of 2013
will ensure that the Company is able to provide clients with short delivery
times on their orders.  
At present, Questor has approximately 90 percent of the available rental
incinerator capacity committed under term contracts and is operating in the
traditional Western Canada markets as well as new markets in the United States.
Management expects to continue to issue orders for fabrication of additional
units for completion in the third and fourth quarters to add to the rental
fleet.  
"The heightened environmental focus on emissions from flaring, climate
change and the health concerns arising from the impacts of poor air quality has
created a significant and growing market opportunity for Questor both
domestically and internationally. It has become essential for our clients to
address these issues to obtain approval for projects and the social license to
operate," said Ms. Audrey Mascarenhas, Questor's President and CEO.
"As the U.S. adopts the new EPA rules, the demand for our products
continues to develop in both the sales and rental businesses," she
continued. "We have an inventory of units available and have fabrication
partners with sufficient capacity to meet new orders." Questor's
product quality and combustion expertise are becoming more recognized on a
daily basis globally. Our incineration technology is unique in its ability to
allay public concerns regarding air quality and is capable of meeting emissions
standards across a broad range of applications. Emissions legislation
introduced in the United States and Europe is expected to continue to increase
interest in our technology as companies look for solutions to flaring and
emissions control." 
On January 31, 2014, Questor acquired 100% of the outstanding shares of
ClearPower Systems Inc., ("ClearPower") a company incorporated in
2010 under the laws of the state of Delaware. ClearPower has developed
technology that will translate waste heat from any source into power. The
integration of waste heat from Questor's incineration process with the
power generation capability of the ClearPower technology is expected to present
a valued solution for many of its customers. "We are planning to
commission a demonstration of this integration in the fourth quarter of 2014 at
an oil and gas facitlity in close proximity to Calgary," said Ms
Mascarenhas. "In addition we continue to evaluate the substantial waste
heat market that the ClearPower technology can be applied directly to. These
two large waste heat areas present opportunities that Questor continues to
prepare for and we anticipate revenue generation in 2015."  
"We are focused and committed to providing continued excellence in
combustion products and services while we select our next steps in respect of
introducing Clearpower as a complementary technology to the enormous waste heat
markets. Our planning around fabrication has us well positioned to pursue
growth opportunities in North America and Europe over the remainder of this
year and into 2015," concluded Ms. Mascarenhas.  
Ms. Mascarenhas was invited to join the Alberta Small Medium Enterprise
("SME") Export Council whose mission is to provide advice to the
provincial Minister of International and Intergovernmental relations on
measures to expand, encourage and facilitate access of Alberta SMEs to foreign
markets. The Council met for the first time in Edmonton on April 29, 2014. 
She also spoke as a member of the Society of Professional Engineers at their
Environmental Impact Workshop in Halifax, Nova Scotia on May 14, 2014 on the
topic of Economic Implications of Compliance.  
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 unaudited condensed consolidated financial statements and notes
thereto and management's discussion and analysis for the three months
ended March 31, 2014 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 provider 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 which enables 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). The technology creates an opportunity to utilize the heat
generated from efficient combustion which can be been used for water
vaporization, process heat and power generation, through ClearPower Solutions
(a subsidiary of Questor). While Questor's current customer base operates
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. 
/T/ 
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QUESTOR TECHNOLOGY INC.                           
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION           
Stated in Canadian dollars                          
Unaudited                                  
March 31     December 31
As at                                                   2014            2013
---------------------------------------------------------------------------- 
ASSETS                                                                      
Current assets                                                              
  Cash and cash equivalents                    $   6,023,026   $   7,323,303
  Trade and other receivables                      3,879,578       2,863,257
  Inventories                                      2,347,975       2,359,276
  Prepaid expenses and deposits                       93,048         124,163
  Current tax assets                                       -          77,849
----------------------------------------------------------------------------
  Total current assets                         $  12,343,627      12,747,848
---------------------------------------------------------------------------- 
Non-current assets                                                          
  Property and equipment                           1,533,329       1,256,066
  Intangible assets                                  230,509          25,915
  Goodwill                                           687,398               -
----------------------------------------------------------------------------
  Total non-current assets                         2,451,236       1,281,981
---------------------------------------------------------------------------- 
Total assets                                   $  14,794,863   $  14,029,829
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
LIABILITIES AND EQUITY                                                      
Current liabilities                                                         
  Trade payables, accrued liabilities,                                       
provisions                                  $   1,768,737   $   1,746,259
  Deferred revenue and deposits                      450,238         252,356
  Current portion of lease inducement                 52,002          52,002
  Current tax liabilities                            371,864         638,527
----------------------------------------------------------------------------
  Total current liabilities                        2,642,841   $   2,689,143
---------------------------------------------------------------------------- 
Non-current liabilities                                                     
  Deferred tax liabilities                            44,570          53,793
  Lease inducement                                   108,336         121,337
----------------------------------------------------------------------------
  Total non-current liabilities                      152,906         175,130
----------------------------------------------------------------------------
  Total liabilities                                2,795,747   $   2,864,274
---------------------------------------------------------------------------- 
Capital and reserves                                                        
  Issued capital                                   5,680,655       5,636,119
  Reserves                                           692,081         703,156
  Retained earnings                                5,628,030       4,826,280
  Cumulative translation adjustment                   (1,650)              -
----------------------------------------------------------------------------
  Total equity                                    11,999,116      11,165,555
---------------------------------------------------------------------------- 
Total liabilities and equity                   $  14,794,863   $  14,029,829
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
---------------------------------------------------------------------------- 
QUESTOR TECHNOLOGY INC.                            
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME           
Stated in Canadian dollars except per share data               
Unaudited                                   
For the three months ended March 31                    2014            2013 
---------------------------------------------------------------------------- 
Revenue                                       $   3,215,437   $   1,719,577 
Cost of sales                                    (1,772,896)       (829,136)
---------------------------------------------------------------------------- 
Gross profit                                      1,442,541         890,441  
Administration expenses                            (487,156)       (353,550)
Net foreign exchange gains (losses)                 143,153          44,997 
Depreciation of property and equipment              (11,965)        (10,740)
Amortization of intangible assets                      (305)           (305)
Other income                                          2,700           4,675 
---------------------------------------------------------------------------- 
Profit before tax                                 1,088,968         575,518 
Income tax expense                                 (287,218)       (158,434)
---------------------------------------------------------------------------- 
Profit for the period                         $     801,750   $     417,084 
----------------------------------------------------------------------------
Other comprehensive (loss) income, net of                                   
 income tax                                                                 
Exchange differences on translating foreign                                 
 operations                                          (1,650)              - 
----------------------------------------------------------------------------
Total comprehensive income for the period     $     800,100   $     417,084 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Earnings per share, Profit for the period                                    
Basic                                       $       0.032   $       0.017 
  Diluted                                     $       0.031   $       0.017 
---------------------------------------------------------------------------- 
---------------------------------------------------------------------------- 
QUESTOR TECHNOLOGY INC.                            
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY            
Stated in Canadian dollars                          
Unaudited                                   
Cumulative               
Issued              Retained Translation               
Capital  Reserves    Earnings  Adjustment Total Equity 
----------------------------------------------------------------------------
Balance at                                                                  
 January 1, 2014  $5,636,119 $ 703,156  $4,826,280 $         -  $11,165,555 
Profit for the                                                              
 period                    -         -    801, 750           -      801,750 
Recognition of                                                              
 share-based                                                                
 payments                  -    16,711           -           -       16,711 
Issue of ordinary                                                           
 shares under                                                               
 employee share                                                             
 option plan          44,536   (27,786)          -           -       16,750 
Translation of                                                              
 foreign                                                                    
 operations                -         -           -      (1,650)      (1,650) 
-----------------------------------------------------------
Balance at March                                                            
 31, 2014         $5,680,655 $ 692,081  $5,628,030 $    (1,650) $11,999,116  
----------------------------------------------------------- 
Cumulative               
Issued              Retained Translation        Total  
Capital  Reserves    Earnings  Adjustment       Equity 
----------------------------------------------------------------------------
Balance at                                                                  
 January 1, 2013  $5,521,001 $ 676,834  $2,282,231 $         -  $ 8,480,066 
Profit and total                                                            
 comprehensive                                                              
 income                    -               417,084           -      417,084 
Recognition of                                                              
 share-based                                                                
 payments                  -    18,796           -           -       18,796 
Issue of ordinary                                                           
 shares under                                                               
 employee share                                                             
 option plan               -         -           -                        -  
-----------------------------------------------------------
Balance at March                                                            
 31, 2013         $5,521,001 $ 695,630  $2,699,315 $         -  $ 8,915,946  
----------------------------------------------------------- 
The accompanying notes are an integral part of these unaudited condensed    
consolidated financial statements.                                           
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QUESTOR TECHNOLOGY INC.                            
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                
Stated in Canadian dollars                          
Unaudited                                   
For the three months ended March 31                    2014            2013 
---------------------------------------------------------------------------- 
Cash flows from operating activities                                        
  Profit and total comprehensive income       $     800,100   $     417,084 
  Adjustments for:                                                           
Income tax expense                              287,218         158,434  
Depreciation of property and equipment           65,596          80,397  
Amortization of intangible assets                   305             305  
Net unrealized foreign exchange (gains)                                  
losses                                          85,136         (12,611) 
Expense recognized in respect of equity-                                 
settled share-based payments                    16,711          18,796 
---------------------------------------------------------------------------- 
1,255,065         662,405 
  Movements in non-cash working capital            (891,550)       (156,651)
----------------------------------------------------------------------------
  Cash generated from operations                    363,515         505,754 
  Income taxes paid                                (583,871)              - 
----------------------------------------------------------------------------
Net cash (used in) generated from operating                                 
 activities                                        (220,356)        505,754 
---------------------------------------------------------------------------- 
Cash flows used in investing activities                                     
  Payments for property and equipment               (46,776)        (90,355)
  Payments for intangible assets                    (50,858)              - 
  Acquisition of a business                      (1,000,710)              - 
----------------------------------------------------------------------------
Net cash used in investing activities            (1,098,344)        (90,355)
---------------------------------------------------------------------------- 
Cash flows from financing activities                                        
  Proceeds from issue of ordinary shares                                     
under employee share option plan                  16,750               - 
----------------------------------------------------------------------------
Net cash generated from financing activities         16,750               - 
---------------------------------------------------------------------------- 
Net (decrease) increase in cash                  (1,301,950)        415,399 
Cash and cash equivalents at beginning of                                   
 the period                                       7,323,303       4,405,624 
Effects of translation of foreign currency                                  
 items                                                1,673           6,246 
----------------------------------------------------------------------------
Cash and cash equivalents at end of the                                     
 period                                       $   6,023,026   $   4,827,269 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
/T/ 
-30-
FOR FURTHER INFORMATION PLEASE CONTACT: 
Questor Technology Inc.
Audrey Mascarenhas
President and Chief Executive Officer
(403) 571-1530
(403) 571-1539
amascarenhas@questortech.com 
INDUSTRY:  Energy and Utilities - Equipment, Energy and Utilities - Oil and Gas 
SUBJECT:  ERN 
-0-
-0- May/30/2014 11:30 GMT
 
 
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