QuestAir Technologies Inc. reported its unaudited financial and operational results for the second quarter of fiscal 2008, ended 31st March 2008, pointing to a number of encouraging highlights to have emerged from the period.
Revenue was $2.298m for the quarter, increasing by $1.425m or 163% from same period in fiscal 2007. Revenue for the half year was $3.866m, increasing by an equally healthy $1.350m or 54% from $2.516m for the same period last year.
QuestAir ended the second quarter with its highest sales order backlog since its inception, with a sales order backlog of $16.022m increased by $5.881m or 58% from $10.140m as of 31st December 2007.
Among the many highlights to emerge from the quarter, testing of the prototype H-6200 hydrogen purifier at an ExxonMobil refinery in France was successfully completed. The company believes that QuestAir and ExxonMobil Research &
Engineering (EMRE) has reached the stage that they can take the H-6200 hydrogen purifier to the refinery market.
In conjunction with the announcement of the new agreement with EMRE,
QuestAir announced revised financial guidance for fiscal 2008 and cost saving measures to better utilise its cash resources and to further improve its financial outlook. Recognised revenue for fiscal 2008 is now expected to be in the range of
$11m to $12m, compared to guidance of $9m to $10m provided by management on 12th December 2007. Cash used in operations and capital expenditures for fiscal 2008 is expected to be in the range of $6.5m to $7.5m, compared to prior guidance of less than $8m.
Jonathan Wilkinson, President and CEO of QuestAir, said, “We made notable progress on many fronts during the quarter. Field testing of the H-6200 prototype plant was successfully completed in March. The unit demonstrated its ability to effectively recover hydrogen from refinery gas streams and return purified hydrogen for plant applications. The operating performance and robustness of the prototype plant under various conditions bode well for future sales of the H-6200 hydrogen purifier.”
“Earlier this week, we announced the closing of an underwritten offering of subscription receipts, raising gross proceeds of $9m. The proceeds are currently being held in escrow pending receipt of shareholder and listing approval in accordance with regulatory requirements, and we expect to receive such approval on 16th June 2008. We are very pleased to have completed this offering under such challenging market conditions.”
Coincident with issuing its freshly revised guidance, QuestAir announced measures to reduce its operating expenses. The reorganisation, which included the elimination of 13 full time positions, has been completed and is expected to result in annualised savings of $1.25m.
During the quarter, the company announced that it had received an order valued at approximately $1m for an H-3100 hydrogen PSA system from Iwatani International Corporation, Japan’s leading supplier of merchant hydrogen.
Commenting on the outlook for the remainder of fiscal 2008, Wilkinson said, “Our priorities for the next few months include continuing to expand and grow our bio-methane gas processing business, working to secure the first commercial order of an H-6200 hydrogen purifier, and further reducing our operating costs and cash burn.”
“Now that the field test of the H-6200 hydrogen purifier has been completed, EMRE and QuestAir can use the data from the prototype test to market the H-6200 to both
ExxonMobil and third party refineries.”