/THIS DOCUMENT IS NOT INTENDED FOR DISSEMINATION OR DISTRIBUTION IN
THE UNITED STATES/
Announces Record Quarterly Net Income of $1.9 Million
CALGARY, November 29 /CNW/ - Questor Technology Inc. ("Questor" or the "Company") (TSX-V: QST) is pleased to release its financial and operating results for third quarter 2007. The Company today announced a net income of $1,883,793 ($0.08 per share) for the third quarter of 2007 and a net income of $1,870,992 ($0.08 per share) for the nine months ended September 30, 2007 compared to net income of $106,879 ($0.005 per share) for the third quarter of 2006 and net income of $495,414 ($0.02 per share) for the nine months ended September 30, 2006. The net income was primarily attributable to the successful delivery of well testing incinerators to China Petrochemical International Company Ltd. ("SINOPEC") in July 2007 pursuant to the previously announced US$6.6 million contract.
"The third quarter results have positioned the Company for significant growth, affording us the flexibility to build our team and infrastructure, expand the rental fleet and pursue larger international opportunities. It also provides us with the opportunity to further develop our technology to recover the waste heat generated by the incinerators and convert it into power. Our strategy for growth is well underway," said Audrey Mascarenhas, President and Chief Executive Officer. "The heightened environmental focus on global warming and 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."
PERFORMANCE HIGHLIGHTS(1)
- Total revenue for this quarter was $6,925,555 compared to $824,531 in
the same quarter in 2006. Total revenue for the first nine months of
2007 was $8,211,967 up from $2,559,561 in the first nine months of
2006. The record revenue results for this quarter are principally the
reflection of the SINOPEC sales contract.
- Gross margin for the third quarter and first nine months of 2007 were
$3,325,802 and $3,766,089, respectively. Gross margin was higher than
third quarter 2006 by $3,140,342 and by $2,772,919 compared to the
first nine months of 2006 for much the same reason described in the
revenue discussion above.
- Earnings before interest, taxes, depreciation and amortization were
$2,880,572 this quarter compared to $150,250 in the same quarter in
2006. Earnings before interest, taxes, depreciation and amortization
for the first nine months of 2007 were $2,959,186, up from $632,803
in the same period of 2006.
- Operating income in the first nine months was $2,851,892. After
interest expense of $19,674 and current and future income tax expense
of $961,226, the net income for the first nine months of the year was
$1,870,992.
- Cash provided by operating activities was $3,012,649 for third
quarter 2007 compared to cash used in operating activities of
$335,368 for the same period in 2006. Cash provided by operating
activities for the first nine months of 2007 was $3,585,621, up from
$105,351 in the first nine months of 2006.
- Funds generated from operations were $2,748,736 for third quarter
2007 compared to $52,172 for the same period in 2006. Funds generated
from operations for the first nine months of 2007 were $2,834,704, up
from $529,199 in the first nine months of 2006.
- Total debt was $134,229 at September 30, 2007 compared to $567,090 at
December 31, 2006. The Company's debt-to-total capitalization ratio
was 2.8 percent, versus 17.5 percent at the end of 2006.
(1) Includes non-GAAP financial measures. Please see discussion in the
Non-GAAP Financial Measures section of the Company's third quarter
Management's Discussion and Analysis.
Questor's unaudited interim financial statements and notes thereto and Management's Discussion and Analysis for the three and nine months ended September 30, 2007 and 2006 is available at 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 focused on clean air technologies with operations 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 provides field burner 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 clients. Questor is recognized for its particular expertise in the combustion of sour gas (H(2)S). While the Company's current client base is primarily in the oil and gas industry, this technology is applicable to other industries such as water and sewage treatment, landfills, 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.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
QUESTOR TECHNOLOGY INC.
BALANCE SHEETS
(unaudited)
September 30 December 31
2007 2006
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ASSETS
Current assets
Cash and cash equivalents $ 3,014,907 $ 29,186
Accounts receivable 524,184 947,993
Inventory 360,802 263,015
Prepaid expenses and deposits 114,406 90,074
Income and other taxes receivable 81,007 -
Future income tax asset - 583,506
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4,095,306 1,913,774
Property and equipment 1,368,694 1,266,758
Intangibles 80,010 101,700
Future income tax asset 50,443 232,977
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$ 5,594,453 $ 3,515,209
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 666,476 $ 271,881
Short-term debt - 461,297
Current portion of long-term debt 64,925 48,674
Income and other taxes payable 182,772 7,011
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914,175 788,863
Long-term debt 69,304 57,119
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983,477 845,982
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Shareholders' equity
Share capital 5,210,274 5,188,774
Contributed surplus 130,969 81,712
Retained earnings (deficit) (730,267) (2,601,259)
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4,610,976 2,669,227
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$ 5,594,453 $ 3,515,209
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QUESTOR TECHNOLOGY INC.
STATEMENTS OF INCOME, COMPREHENSIVE INCOME AND DEFICIT
(unaudited)
Three months ended Nine months ended
September 30 September 30
2007 2006 2007 2006
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Revenue $ 6,897,295 $ 725,025 $ 8,163,398 $ 2,459,257
Less: Direct costs 3,571,493 539,565 4,397,309 1,466,097
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Gross margin 3,325,802 185,460 3,766,089 993,170
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Other revenue 28,260 99,506 48,569 100,304
Expenses
General and
administrative 291,958 162,282 754,925 546,581
Foreign exchange
loss (gain) 208,704 (2,187) 180,534 (8,438)
Depreciation and
amortization 9,078 10,028 27,307 29,764
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509,740 170,123 962,766 567,907
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Operating income 2,844,322 114,843 2,851,892 525,567
Interest expense
Short-term debt 4,703 7,964 19,674 17,769
Long-term debt - - - 12,384
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Income before income
taxes 2,839,619 106,879 2,832,218 495,414
Income tax expense
Current income
tax 155,065 - 155,065 -
Future income tax 800,761 - 806,161 -
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Net income and
comprehensive
income 1,883,793 106,879 1,870,992 495,414
Deficit, beginning
of period (2,614,060) (3,408,338) (2,601,259) (3,796,873)
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Deficit, end of
period $ (730,267) $(3,301,459) $ (730,267) $(3,301,459)
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Net income per
share
Basic $ 0.079 $ 0.005 $ 0.079 $ 0.021
Diluted $ 0.076 $ 0.004 $ 0.075 $ 0.021
Weighted average
number of shares
outstanding
Basic 23,757,370 23,542,370 23,724,678 23,542,370
Diluted 24,892,051 24,373,322 25,066,020 24,045,393
QUESTOR TECHNOLOGY INC.
STATEMENTS OF CASH FLOWS
(unaudited)
Three months ended Nine months ended
September 30 September 30
2007 2006 2007 2006
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Operating activities
Net income $ 1,883,793 $ 106,879 $ 1,870,992 $ 495,414
Items not
involving cash:
Depreciation and
amortization 36,250 35,407 107,294 107,236
Future income
taxes 800,761 - 806,161 -
Share-based
compensation 27,932 9,288 50,257 25,951
Gain on sale of
rental
incinerator - (99,402) - (99,402)
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Funds generated
from
operations 2,748,736 52,172 2,834,704 529,199
Net change in
non-cash working
capital 263,913 387,540 750,917 (423,848)
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Net cash provided
by/(used in)
operating
activities 3,012,649 (335,368) 3,585,621 105,351
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Investing activities
Additions to
property and
equipment (183,908) (3,999) (188,955) (6,539)
Disposition of
property and
equipment - 124,956 1,415 124,956
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Net cash used in
investing
activities (183,908) 120,957 (187,540) 118,417
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Financing activities
Decrease in notes
payable - - - (300,000)
Decrease in short-
term debt (687,266) (139,170) (461,297) (68,829)
Increase/(decrease)
in long-term debt 54,809 (7,484) 28,437 (22,445)
Net proceeds from
issuance of common
shares - - 20,500 -
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Net cash used in
financing
activities (632,457) (146,654) (412,360) (391,274)
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Change in cash and
cash equivalents 2,196,284 (361,065) 2,985,721 (167,506)
Change in cash and
cash equivalents,
beginning of period 818,623 370,786 29,186 177,227
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Cash and cash
equivalents,
end of period $ 3,014,907 $ 9,721 $ 3,014,907 $ 9,721
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