QuestAir Reports Third Quarter 2007 Results

QuestAir Technologies has reported its unaudited financial and operational results for the third quarter of fiscal 2007, ended June 30, 2007. All amounts are in Canadian dollars unless otherwise noted.

Highlights of the results include shipping the prototype H-6200 hydrogen purifier (¡§prototype plant¡¨) to an ExxonMobil refinery in France. The prototype plant will be installed and tested at this demonstration site in order to generate additional data to assist with the marketing of the H-6200 to other refineries. The prototype plant will be operated under typical refinery conditions throughout the test period, and will remain in on-going use in the refinery following successful completion of the field test.

QuestAir received an order for a large-scale methane purification system, valued at US$2.85 million, which will upgrade anaerobic digester gas generated from organic waste to pipeline-quality methane. ƒ¬p>The Company completed a reorganization of its operations during the third quarter to focus resources on commercial activities and reduce research and development expenses.

Revenue was $3,616,088 for the quarter, increased by $2,422,708, or 203% compared to the same period in fiscal 2006. Revenue for the nine months was $6,132,310, increased by $1,270,813, or 26% from the same period last year.

Sales order backlog at June 30, 2007 was $7,135,799, decreased by $377,027, or 5%, from March 31, 2007, but increased by $ 2,091,907, or 41% from September 30, 2006.

Cash used by operations and capital requirements was $2,263,565 for the quarter, increased by $387,414, or 21% compared to the same period in fiscal 2006. Cash used by operations and capital requirements for the nine months was $7,577,816, compared to $5,922,222 for the same period in fiscal 2006. At June 30, 2007, the Company had $12,207,557 in cash and short term investments, including restricted cash of $685,308.

Net loss was $2,238,859 ($0.04 per share) for the quarter, increased by $104,045 or 5% compared to the same period in fiscal 2006. Net loss for the nine months increased to $8,780,381 ($0.17 per share) from $7,538,338 ($0.19 per share) for the same period in 2006.

Jonathan Wilkinson, President and CEO of QuestAir, said: ¡§We are very pleased with our performance in the third quarter. Our quarterly revenues were the highest in the Company¡¦s history, and our sales order backlog remains strong. Our gross margins also recovered during the quarter, reflecting improved margins on sales of gas purification equipment. At the same time, we are seeing a change in the nature of our revenue base. The portion of our revenue generated from engineering service contracts has declined considerably compared to the prior year, as we continue to grow and diversify our sales of commercial products. Overall, the results in the third quarter demonstrate that we are making significant progress in our commercial business.¡¨

Source: Fuel Cell Today