CALGARY, ALBERTA--(Marketwired - March 29, 2017) -
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, 2016.
The Company's revenue for year-end December 31st, 2016 was $7,078,333, down by 13 percent from $8,112,913 for the
prior year. Revenues from the sale of incinerators decreased 18 percent from the prior year impacted by our clients reduced
activity and capital constraints, as a result of depressed oil and gas prices through 2016. The decline in sales revenue was
offset by a 5% growth in revenue from rentals over the previous year. Total comprehensive loss for year-end December
31st, 2016 was ($384,750), compared to total comprehensive loss of ($23,666) in the prior year. The total
comprehensive loss was impacted by the $1,034,580 decrease in revenue. Loss per share for 2016 increased to ($0.02) from
($0.00) when compared to the prior year.
FINANCIAL HIGHLIGHTS SUMMARY |
(Stated in Canadian dollars except shares outstanding |
For the years ended December 31 |
2016 |
|
2015 |
|
Increase
(decrease) |
|
|
|
|
|
|
|
|
Revenue |
7,078,333 |
|
8,112,913 |
|
(1,034,580 |
) |
Gross profit(1) |
2,680,775 |
|
3,352,444 |
|
(671,669 |
) |
ADJUSTED EBITDA (1) |
403,973 |
|
877,893 |
|
(473,920 |
) |
Total comprehensive loss |
(384,750 |
) |
(23,666 |
) |
(361,084 |
) |
Cost of sales as a percent of revenue(1) |
62.0 |
% |
59.0 |
% |
3 |
% |
Funds flow from operations before movements in non-cash working capital |
279,689 |
|
800,318 |
|
(520,629 |
) |
|
|
|
|
|
|
|
As at December 31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
16,346,546 |
|
16,280,884 |
|
65,662 |
|
Non-current liabilities |
- |
|
310,857 |
|
(310,857 |
) |
|
|
|
|
|
|
|
Shares outstanding(2) |
|
|
|
|
|
|
|
Basic |
26,138,665 |
|
25,922,747 |
|
215,918 |
|
|
Diluted |
26,138,665 |
|
25,922,747 |
|
215,918 |
|
Loss per share - Basic and Diluted |
(0.02 |
) |
(0.00 |
) |
(0.02 |
) |
(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, 2016. |
|
|
(2) |
Weighted average |
|
|
For the three months ended December 31 |
2016 |
|
2015 |
|
Increase
(decrease) |
|
|
|
|
|
|
|
|
Revenue |
2,482,679 |
|
2,327,658 |
|
155,021 |
|
Gross profit(1) |
1,104,536 |
|
999,300 |
|
105,236 |
|
ADJUSTED EBITDA (1) |
580,145 |
|
(482,532 |
) |
1,062,677 |
|
Total comprehensive income (loss) |
244,364 |
|
(505,795 |
) |
750,159 |
|
Cost of sales as a percent of revenue(1) |
56.0 |
% |
57.0 |
% |
(1 |
%) |
Funds flow from operations before movements in non-cash working capital |
586,533 |
|
(672,538 |
) |
1,259,071 |
|
|
|
|
|
|
|
|
(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, 2016. |
Revenue for this quarter was $2,482,679, an increase of 7% from the corresponding quarter in 2015. Gross profit increased to
$1,104,536, 11% higher than the prior year fourth quarter, as a result of increased incinerator sales.
The improvement to adjusted EBITDA of $1,062,677 and total comprehensive income of $750,159 was primarily the result of nil
($0) bad debts recorded in this fourth quarter versus the $706,929 of bad debts recorded in the fourth quarter of 2015.
The prolonged downturn in oil and gas prices continues to impact the activity levels and capital spending in the oil and gas
industry. There are early indications that oil and gas sector spending will increase in 2017, however, as activity is connected
to commodity prices, trends cannot be predicted with confidence. Our clients' capital constraints have caused us to focus on our
rental business. To that end we have increased investment in our rental fleet and in 2016 moved a significant portion of the
Canadian fleet to Colorado, a State with stringent air quality legislation. The transportation costs to move our fleet to the US
in the second quarter of 2016 had an impact on our profits but enabled us to grow our rental revenue in the latter part of the
year.
"While continuing to meet demand in Canada, the Company expects to continue to expand its presence in the United States.
Colorado has been a demonstrated leader in effecting a reduction in harmful emissions during the same period where industry has
increased drilling activity," said Ms. Audrey Mascarenhas, Questor's President and CEO. "The state legislator has mandated
the use of enclosed combustion which has resulted in producers more readily gaining approval for projects from state and local
authorities as well as earning support from neighboring residents," she added. "Questor has worked diligently at providing
top level service and a high-quality product that industry is increasingly requesting. Questor's commitment to opening an
office in Brighton, Colorado as well as hiring local technicians have been positive steps and contributing factors to our recent
successes and future growth."
Also critical to the success to-date is the introduction and implementation of Questor's "hybrid" incineration technology
which industry has embraced in 2016. Initial flow backs operations take place through a standard height
incinerator. The top portion is removed after the flow back period and the same incinerator, with reduced capacity due to
the reduced height, remains to serve the needs of the production facility. This consolidates emissions flow through one
stack and reduces equipment handling and costs. This solution is preferred over historical methods due to its increased
financial efficiency for clients as they only purchase the incinerator capacity that they require and rent the top portion during
the temporary well testing operation. This approach balances revenue between sales and rentals for Questor while providing an
innovative and efficient operation for our clients reducing their well pad site costs. Questor is proud to be recognized and
selected for its solutions and will continue its pursuit of earning the confidence and business of existing clients as well as
new customers. The Company looks to expand its presence in Colorado with the addition of a number of flow back incinerators and
technicians.
Texas has also emerged as an area of significant growth with estimates of it being as much as ten times the activity in
Colorado. This has resulted in a targeted effort to recruit Sales representatives in key regions such as these aimed at
expanding our services and equipment solutions. Questor will use the Colorado model to quickly set up its "hub" in the Texas
Permian and the Marcellus/Utica play. This would entail a hydraulic trailer and 4 large flow back units based out of a centrally
located shop and yard space with strong technical support.
"With clear requirements and expectations from both the Federal and State agencies the US industry can now select equipment
that serves their specific needs, including regulatory compliance, social acceptance, operating performance, reliability and
technical support," said Ms. Audrey Mascarenhas, Questor's President and CEO. "Questor will continue to commit capital to
grow its revenue in states where producers are looking for different technologies to manage their waste gases and fugitive
emissions," she added.
Questor's wholly owned subsidiary Clear Power Systems Inc. (CPS) has been aggressively marketing its waste heat to power
technology. Questor has previously provided guidance that the waste heat to power first-sales were anticipated to already have
occurred due to the considerable global market interest. CPS continues to pursue opportunities in North America including other
key marketing collaborations. Questor remains confident the technology will become a profitable and growing division that offers
an essential economic waste heat recovery to power solution.
In addition to the SDTC approved waste heat to power project that is aimed at commercializing the 77 kW system Alberta
Innovates has approved two demonstration projects: "Water "Vapourization" and "Optimized Process for Mitigation of Glycol
Dehydration Emissions". The equipment for the water vapourization project was assembled and initially tested in our Grande
Prairie facility during 2016. The Company is looking forward to the next level of testing which is expected to occur in the first
half of 2017.
The glycol dehydration emissions project has been approved for $465,000 and will demonstrate Questor's incineration technology
as both a best in class control device for emissions as well as a replacement technology for condensing, liquid storage, trucking
and deep-well disposal activities. This project kicks off in early Q2 2017. There are up to 4,900 operating glycol dehydrators in
Alberta, which could utilize this solution to eliminate benzene emissions, reduce operating costs and generate greenhouse gas
emission reductions at a cost of less than $1.40/tonne of carbon equivalent (CO2e). The greenhouse gas emission
reduction potential of this solution for Alberta is up to 36 Megatonnes, contributing significantly to the targets set by the
provincial and federal governments.
The Company remains committed to strategic and measurable technology diversification. Heat to power, water vaporization, and
glycol dehydration emissions are all synergistic diversification of clean technology products and services that will support
resource development over the long term. Recently, at the request and invitation of the Environment Agency in the United Kingdom,
Questor presented its suite of technologies to industry and government. The pursuit of shale reserves in the UK may create an
opportunity for the company to invest in a "hub" to service the UK market. Questor continues to explore areas where industry and
government are seeking changes to traditional practices as a means to grow its reputation and business profile.
The significant low global oil prices over the past two years has caused our customers to look for opportunities to reduce
costs, defer capital spending and refocus on areas that are more profitable. The solutions that Questor is providing enable our
customers to reduce costs, comply with regulations and improve the profitability of their operations. In the current economic
environment, the option to rent our equipment is attractive to both our clients and Questor. The Company has considerable
financial flexibility and remains well positioned to react to the opportunities in the market place.
Questor's audited consolidated financial statements and notes thereto and Management's Discussion and Analysis for the three
months ended December 31, 2016 and Year end 2016 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 a public, international environmental Cleantech company founded in late 1994 and headquartered in Calgary, Alberta,
with field offices located in; Grande Prairie, Alberta; Brighton, Colorado; and Brooksville, Florida. The company is active
in Canada, the United States, Europe and Asia and is focused on clean air technologies that safely and cost effectively improve
air quality, support energy efficiency and greenhouse gas emission reductions.
Questor designs, manufactures and services high efficiency waste gas combustion systems; as well as, power generation systems
and water treatment solutions utilizing waste heat. Our proprietary incinerator technology is utilized worldwide in the effective
management of Methane, Hydrogen Sulphide gas, Volatile Organic Hydrocarbons, Hazardous Air Pollutants and BTEX gases ensuring
sustainable development, community acceptance and regulatory compliance. Questor and its subsidiary, ClearPower Systems are
providing solutions for landfill biogas, syngas, waste engine exhaust, geothermal and solar, cement plant waste heat in addition
to a wide variety of oil and gas projects in Canada, throughout the United States, the Caribbean, Western Europe, Russia,
Thailand, Indonesia and China. With a focus on solid engineering design, our products enable our clients to operate cost
effectively in an environmentally responsible and sustainable manner.
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.