Questor Technologies Quick Update - $QST.v
Quick update after Q2 2023
QST reported Q2 2023. Results were behind of my expectations and though some shares traded today, the price is down only about 1%.
QST is my smallest position in the OFS basket. And it’s been painful to own as I’m down on the position 20% or so. Ugh.
Here is a 1yr chart.
The 5yr chart looks ugly.
Quarter Recap
Rev was down to 2.2 mil from 2.4 mil.
This was due to lower equipment sales which were 1.0 mil vs 1.6 mil last year.
Rental revenue (which is what I’m banking on) was up 28% to 851k.
Service revenue was up 91% to 320k.
Gross profit 807k and 36.4% vs 432k and 17.6% last year.
EBITDA was up to 130k (including SBC) from a loss last year.
Date (Dec 12 & 13) set for their application of contempt for Emissions Rx and the defendants.
More importantly than the reported numbers was the CEO resignation from her position and the board on August 23, 2023. I view this as positive. As well in the MD&A they stated that they executed on several other key hires to execute the strategic plan.
Closing Thoughts
I think the CEO resignation will eventually be positive for QST. I have a feeling that the company was meandering a bit without a ton of direction. I think there is the potential to increase their presence internationally. I would like to see the focus on a strong sales team.
A risk in the short term is the prior CEO owns over 17% of the common. Given the liquidity, this could hurt the share price if she is looking to liquidate some or all of her position.
Overall I was happy to see the rental and service revenue grow despite the activity levels in the US moderating vs last year. The equipment sales were down but the MD&A indicated that they have 1.1 mil committed in H2 2023. They sold 1.3 in total in H2 2022.
The balance sheet is solid with over 12 mil in net cash or $0.45/share. I think this gives some optionality to increase spend on equipment if they see demand for it or return some cash to shareholders.
Given the small position, I’m going to hold and monitor.
Thanks for reading.
Dean
* long QST.v