Questor Technology Inc. Announces 266 Per Cent Increase in Third Quarter Rental and Services Revenues

CALGARY, ALBERTA--(Marketwired - Nov. 28, 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 third quarter of 2014. Earnings per share for the nine month period ending September 30^th, 2014 increased by 60% to $0.121 from $0.075 for the same period of the prior year. Questor's third quarter results benefited from a substantial increase in rental and combustion services revenues in both Canada and the U.S. This trend is expected to continue as "first mover" states adopt more stringent policies regarding emissions. Revenue this quarter was $3.1 million, 5 per cent higher than the third quarter of 2013. The gains in rental and combustion services revenues were partially offset by lower revenues from the sale of units. The Company reported a 6 per cent improvement in profit at $867,856⁽²⁾ ($0.034 per basic share) for the three months ended September 30, 2014 compared to a profit of $817,840 ($0.033 per basic share) for the same three month period of the prior year. Cost of sales as a percent of revenue was lower in the current quarter, due to the growth in rental revenue, contributing to the increase in profitability while higher administrative costs and higher income tax expense acted to moderate the impact of the gross margin gains on profit for the period. Overall, revenue generated in the first nine months of 2014 was 13% higher than revenue generated in full year 2013.

FINANCIAL HIGHLIGHTS SUMMARY

(Stated in Canadian dollars except shares outstanding)

		Three months ended September 30						Nine months ended September 30
For the		2014		2013		Increase (decrease)		2014		2013		Increase (decrease)
Revenue		3,127,213		2,989,767		137,446		10,845,301		6,973,090		3,872,211
Gross profit(1)		1,618,863		1,336,609		282,254		5,606,556		3,404,490		2,202,066
EBITDA(1)		1,358,819		1,036,215		322,604		4,483,249		2,490,024		1,993,225
Profit for the period(2)		867,856		817,840		50,016		3,063,929		1,869,101		1,194,828
Cost of sales as a percent of revenue(1)		48.2	%	55.3	%	(7.1	%)	48.3	%	51.2	%	(2.9	%)
Cash generated from operations before movements in non-cash working capital(1)		1,332,126		1,032,556		299,570		4,674,394		2,573,968		2,100,426
Shares outstanding(2)
	Basic	25,714,761		25,119,327		595,434		25,492,507		25,068,175		424,332
	Diluted	26,498,220		25,917,239		580,981		26,284,681		25,772,662		512,019
Earnings per share
	Basic	0.034		0.033		0.001		0.121		0.075		0.046
	Diluted	0.033		0.032		0.001		0.117		0.073		0.044
As at								September 30, 2014		December 31, 2013		Increase (decrease)
Total assets								17,338,114		14,029,829		3,308,284
Non-current liabilities								173,404		175,130		(1,726	)

(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 three and six months ended September 30, 2014.

(2) Before Other comprehensive income

(3) Weighted average.

"The heightened environmental focus on emissions from flaring, climate change and the health concerns arising from the impacts of poor air quality have created a significant market opportunity for Questor 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. "We are working with key individuals in business and government in the first mover states in the U.S. as they apply air quality rules, as stringently or more so than what has been laid down by the EPA. Demand for our products is expected to grow quickly 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."

Management continues to develop strategic relationships with organizations in various regions. The US continues to be a focal point for Questor and, in particular, in Colorado where technology such as Questor's, including minor modifications made to its large well test incinerators, will allow industry to conduct its operations in compliance with new regulations requiring enclosed combustion resulting in "closed loop flow backs".

In addition to this Questor has responded to a large industry demand for water management. This technology will reduce water waste at the well site by over 95% and this will be commercialized in 2015. Both the waste heat to power and water vapourization technologies will serve the same markets that Questor is currently pursuing and are complementary to both completion flow backs as well as continued production operations.

Questor acquired ClearPower Systems Inc. ("ClearPower") early in the year, which company has developed technology that will tranform 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 current and future customers. Ms Mascarenhas continued, "We are evaluating the waste heat market to which the ClearPower technology can be directly applied. We believe the market to be substantial and we anticipate revenue generation from this business segment in mid 2015. We have opened up a facility in Florida to assemble our units."

Ms Mascarenhas was invited to interview on July 9, 2014 on the subject of Questor's solutions on Business News Network (BNN). Here is a link to view the interview: http://www.bnn.ca/Video/player.aspx?vid=395152.

Ms Mascarenhas presented to the Oilmen's Forum in Banff, Alberta on August 20, 2014 as part of a panel addressing the topic of Innovation, Economy and Environment which resulted in some key contacts in new markets for the Company's incinerators and waste heat to power generators.

She presented at joint workshops to address gas flaring, stranded gas and emissions reduction by utilizing novel technologies to monetize gas at the wellhead in Houston, Denver and West Virginia, managed by the Petroleum Technology Transfer Council (PTTC) and the Environmentally Friendly Drilling (EFD) program, managed by the Houston Advanced Research Center (HARC).

Ms. Mascarenhas recently presented at an SPE webinar/luncheon in Houston for the Gulf coast HSSE group on the EPA Subpart Quad O - Opportunities, Technologies and Solutions for Vent Gas Management in Upstream Oil and Gas Operations on October 23^rd, 2014.

She also participated at in French Community Business Program - Sunday, November 2, 2014 in Banff during the French President's visit to Alberta.

Questor's unaudited condensed consolidated financial statements and notes thereto and management's discussion and analysis for the three and six months ended September 30, 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 combustion 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, the Company's combustion 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 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Stated in Canadian dollars

Unaudited

As at		September 30 2014			December 31 2013
ASSETS
Current assets
	Cash and cash equivalents	$	5,515,185		$	7,323,303
	Trade and other receivables		4,889,644			2,863,257
	Inventories		2,131,253			2,359,276
	Prepaid expenses and deposits		253,599			124,163
	Current tax assets		-			77,849
	Total current assets		12,789,681			12,747,848
Non-current assets
	Property and equipment		3,184,960			1,256,066
	Intangible assets		676,075			25,915
	Goodwill		687,398			-
	Total non-current assets		4,548,433			1,281,981
Total assets		$	17,338,114		$	14,029,829
LIABILITIES AND EQUITY
Current liabilities
	Trade payables, accrued liabilities, provisions	$	1,498,509		$	1,746,259
	Deferred revenue and deposits		-			252,356
	Current portion of lease inducement		52,002			52,002
	Current tax liabilities		1,025,298			638,527
	Total current liabilities		2,575,809			2,689,144
Non-current liabilities
	Deferred tax liabilities		91,068			53,793
	Lease inducement		82,336			121,337
	Total non-current liabilities		173,404			175,130
	Total liabilities		2,749,213			2,864,274
Capital and reserves
	Issued capital		5,925,105			5,636,119
	Reserves		781,415			703,156
	Retained earnings		7,890,209			4,826,280
	Cumulative translation adjustment		(7,828	)		-
	Total equity		14,588,901			11,165,555
Total liabilities and equity		$	17,338,114		$	14,029,829

QUESTOR TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Stated in Canadian dollars

Unaudited

					For the three months ended September 30						For the nine months ended September 30
		2014			2013			2014			2013
Revenue		$	3,127,213		$	2,989,767		$	10,845,301		$	6,973,090
Cost of sales			( 1,508,350	)		(1,653,158	)		(5,238,745	)		(3,568,600	)
Gross profit			1,618,863			1,336,609			5,606,556			3,404,490
Administration expenses			(629,418	)		(349,741	)		(1,722,298	)		(1,200,948	)
Net foreign exchange (losses)/gains			259,127			(16,167	)		368,234			76,267
Depreciation of property and equipment			(14,052	)		(10,459	)		(39,989	)		(30,998	)
Amortization of intangible assets			(905	)		(305	)		(2,542	)		(914	)
Loss on disposal of property and equipment			-			-			-			(347	)
Other income			23,054			898			36,932			7,870
Profit before tax			1,256,669			960,835			4,246,893			2,255,420
Income tax expense
	Current		(347,312	)		(164,458	)		(1,145,688	)		(418,691	)
	Deferred		(41,501	)		21,463			(37,276	)		32,372
Profit for the period		$	867,856		$	817,840		$	3,063,929		$	1,869,101
Other comprehensive income, net of income taxExchange differences on translating foreign operations			(14,413	)		-			(7,828	)		-
Total comprehensive income		$	853,443		$	817,840		$	3,056,101		$	1,869,101

Earnings per share - Profit for the period
Basic	$	0.034	$	0.033	$	0.121	$	0.075
Diluted	$	0.033	$	0.032	$	0.117	$	0.073

QUESTOR TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Stated in Canadian dollars

Unaudited

	Issued Capital		Reserves			Retained Earnings		Cumulative Translation Adjustment			Total Equity
Balance at January 1, 2014	$	5,636,119	$	703,156		$	4,826,280	$	-		$	11,165,555
Profit for the period		-		-			3,063,929		-			3,063,929
Recognition of share-based payments		-		191,145			-		-			191,145
Issue of ordinary shares under employee share option plan		288,986		(112,886	)		-		-			176,100
Translation of foreign operations		-		-			-		(7,828	)		(7,828	)
Balance at September 30, 2014	$	5,925,105	$	781,415		$	7,890,209	$	(7,828	)	$	14,588,901

	Issued Capital		Reserves			Retained Earnings		Cumulative Translation Adjustment		Total Equity
Balance at January 1, 2013	$	5,521,001	$	676,834		$	2,282,231	$	-	$	8,480,066
Profit for the period		-		-			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

QUESTOR TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Stated in Canadian dollars

Unaudited

For the nine months ended September 30			2014			2013
Cash flows from operating activities
	Profit for the period		$	3,063,929		$	1,869,101
	Adjustments for:
		Income tax expense		1,182,964			386,319
		Loss on disposal of property and equipment		-			347
		Depreciation of property and equipment		233,814			233,690
		Amortization of intangible assets		2,542			914
		Net unrealized foreign exchange losses		328,054			28,604
		Expense recognized in respect of equity-settled share-based payments		191,145			54,993
				5,002,448			2,573,968
	Movements in non-cash working capital			(4,480,698	)		329,058
	Cash generated from operations			521,750			2,903,026
	Income taxes paid			(816,994	)		(26,639	)
Net cash (used in) generated from operating activities				(295,244	)		2,876,387
Cash flows used in investing activities
	Payments for property and equipment			(181,778	)		(120,067	)
	Proceeds from disposal of property and equipment			-			5,000
	Payments for intangible assets			(498,658	)		-
	Acquisition of a business			(1,000,710	)		-
Net cash used in investing activities				(1,681,146	)		(115,067	)
Cash flows from financing activities
	Proceeds from issue of ordinary shares under employee share option plan			176,100			44,750
Net cash generated from financing activities				176,100			44,750
Net (decrease) increase in cash				(1,800,290	)		2,806,070
Cash and cash equivalents at beginning of the period				7,323,303			4,405,624
Effects of translation of foreign operations				(7,828	)		(34,609	)
Cash and cash equivalents at end of the period			$	5,515,185 5,515		$	7,177,085