Quest Resource Holding Corporation Reports Third Quarter 2023 Financial Results
14 Noviembre 2023 - 3:00PM
Quest Resource Holding Corporation (NASDAQ: QRHC)
("Quest"), a national leader in environmental waste and
recycling services, today announced financial results for the third
quarter ended September 30, 2023.
Third Quarter 2023 Highlights
- Revenue was $70.4 million, a 4.0% decrease compared with the
third quarter of 2022.
- Gross profit was $12.4 million, a 2.0% increase compared with
the third quarter of 2022.
- Gross margin was 17.7% of revenue compared with 16.6% during
the third quarter of 2022.
- GAAP net loss per diluted share attributable to common
stockholders was $(0.10), compared with $(0.09) per diluted share
during the third quarter of 2022.
- Adjusted EBITDA was $3.7 million, compared with $3.8 million
during the third quarter of 2022.
- Adjusted net income per diluted share was $0.02 compared with
adjusted net income of $0.04 per diluted share during the third
quarter of 2022.
Year-to-Date 2023 Highlights (September 30,
2023)
- Revenue was $219.0 million, a 1.2%
decrease compared with the same period of 2022.
- Gross profit was $38.6 million, a 1.2% increase compared with
the same period of 2022.
- Gross margin was 17.6% of revenue compared to 17.2% during the
same period of 2022.
- GAAP net loss per diluted share attributable to common
stockholders was $(0.25), compared with $(0.14) during the same
period of 2022.
- Year-to-date Adjusted EBITDA was $12.7 million, compared to
$14.1 million during the same period of 2022.
- Adjusted net income per diluted share was $0.12, compared with
$0.29 per diluted share during the same period of
2022.
“Gross profit dollars for the third quarter increased slightly
in comparison with the prior year but were below our expectations
for sequential growth. We estimate that gross profit dollar
contribution from RWS was approximately $800,000 below our
expectations. This included approximately $500,000 of unfavorable
adjustments to costs of sales, which were identified during the
process of completing the systems integration of RWS. In addition,
we had a billing adjustment of approximately $400,000 for a large,
quickly-ramping customer. Excluding these adjustments, our business
performed well and was in line with results from the second
quarter. We’ve taken action to improve the efficiencies of RWS and
estimate $1.7 million in annualized cost savings beginning in the
fourth quarter of this year,” said S. Ray Hatch, President and
Chief Executive Officer of the Company.
“While the pace of adding new business has been slower than we
would have liked, we are encouraged by recent progress and expect
sequential growth in gross profit dollars for the fourth quarter.
Additionally, in recent months we have seen a noticeable uptick in
the number and size of opportunities in our pipeline. Due to our
initiatives, we expect to end the year strong, as a ramp of new
business from both new and existing customers offsets what is
normally a seasonally weaker quarter. In addition, we continue to
build our operating platform, investing in capabilities, which will
enable us to drive operating efficiencies and to continually
enhance our customer service. Importantly, our outlook for
profitable growth in fourth quarter and 2024 remains positive.”
Third Quarter 2023 Earnings Conference Call and
Webcast
Quest will conduct a conference call on Tuesday, November 14,
2023, at 5:00 PM ET, to review the financial results for the third
quarter ended September 30, 2023. Investors interested in
participating on the live call can dial 1-855-327-6837 or
1-631-891-4304. The conference call, which may include
forward-looking statements, is also being webcast and is available
via the investor relations section of Quest’s website at
https://investors.qrhc.com/investors. A replay of the webcast will
be archived on Quest’s investor relations website for 90 days.
Reconciliation of U.S. GAAP to Non-GAAP Financial
Measures
In this press release, non-GAAP financial measures, "Adjusted
EBITDA," and “Adjusted Net Income” are presented. From
time-to-time, Quest considers and uses these supplemental measures
of operating performance in order to provide an improved
understanding of underlying performance trends. Quest believes it
is useful to review, as applicable, both (1) GAAP measures that
include (i) depreciation and amortization, (ii) interest expense,
(iii) stock-based compensation expense, (iv) income tax expense,
and (v) certain other adjustments, and (2) non-GAAP measures that
exclude such items. Quest presents these non-GAAP measures because
it considers them an important supplemental measure of Quest's
performance. Quest's definition of these adjusted financial
measures may differ from similarly named measures used by others.
Quest believes these measures facilitate operating performance
comparisons from period to period by eliminating potential
differences caused by the existence and timing of certain expense
items that would not otherwise be apparent on a GAAP basis. These
non-GAAP measures have limitations as an analytical tool and should
not be considered in isolation or as a substitute for the Company's
GAAP measures. (See attached tables "Reconciliation of Net Loss to
Adjusted EBITDA" and “Adjusted Net Income Per Share”).
About Quest Resource Holding Corporation
Quest is a national provider of waste and recycling services
that enable larger businesses to excel in achieving their
environmental and sustainability goals and responsibilities. Quest
delivers focused expertise across multiple industry sectors to
build single-source, client-specific solutions that generate
quantifiable business and sustainability results. Addressing a wide
variety of waste streams and recyclables, Quest provides
information and data that tracks and reports the environmental
results of Quest’s services, gives actionable data to improve
business operations, and enables Quest’s clients to excel in their
business and sustainability responsibilities. For more information,
visit www.qrhc.com. Safe Harbor Statement
This press release contains forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, which provides a "safe harbor"
for such statements in certain circumstances. The forward-looking
statements include, but are not limited to, our expectation that
our momentum will continue through the rest of the year, our belief
that we are well positioned to continue to weather a challenging
economic environment, execute our growth strategies and our
positive outlook for profitable growth during 2023 and the next
year. Actual events or results could differ materially from those
discussed in the forward-looking statements as a result of various
factors, including, but not limited to, competition in the
environmental services industry, the impact of the current economic
environment, the spread of major epidemics (including Coronavirus)
and other related uncertainties such as government-imposed travel
restrictions, interruptions to supply chains, commodity price
fluctuations, and extended shut down of businesses, and other
factors discussed in greater detail in our filings with the
Securities and Exchange Commission (“SEC”), including our Annual
Report on Form 10-K for the year ended December 31, 2022. You are
cautioned not to place undue reliance on such statements and to
consult our SEC filings for additional risks and uncertainties that
may apply to our business and the ownership of our securities. Our
forward-looking statements are presented as of the date made, and
we disclaim any duty to update such statements unless required by
law to do so.
Investor Relations Contact:
Three Part Advisors, LLCJoe Noyons
817.778.8424
Financial Tables Follow
|
|
Quest Resource Holding Corporation and
SubsidiariesSTATEMENTS OF
OPERATIONS(Unaudited)(In thousands, except per share
amounts) |
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
$ |
70,425 |
|
|
$ |
73,358 |
|
|
$ |
219,036 |
|
|
$ |
221,785 |
|
Cost of revenue |
|
|
57,995 |
|
|
|
61,175 |
|
|
|
180,471 |
|
|
|
183,685 |
|
Gross profit |
|
|
12,430 |
|
|
|
12,183 |
|
|
|
38,565 |
|
|
|
38,100 |
|
Selling, general, and administrative |
|
|
9,620 |
|
|
|
9,333 |
|
|
|
28,250 |
|
|
|
27,976 |
|
Depreciation and amortization |
|
|
2,342 |
|
|
|
2,473 |
|
|
|
7,219 |
|
|
|
7,308 |
|
Total operating expenses |
|
|
11,962 |
|
|
|
11,806 |
|
|
|
35,469 |
|
|
|
35,284 |
|
Operating income |
|
|
468 |
|
|
|
377 |
|
|
|
3,096 |
|
|
|
2,816 |
|
Interest expense |
|
|
(2,408 |
) |
|
|
(1,911 |
) |
|
|
(7,407 |
) |
|
|
(5,057 |
) |
Loss before taxes |
|
|
(1,940 |
) |
|
|
(1,534 |
) |
|
|
(4,311 |
) |
|
|
(2,241 |
) |
Income tax expense |
|
|
111 |
|
|
|
152 |
|
|
|
650 |
|
|
|
479 |
|
Net loss |
|
$ |
(2,051 |
) |
|
$ |
(1,686 |
) |
|
$ |
(4,961 |
) |
|
$ |
(2,720 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss applicable to common
stockholders |
|
$ |
(2,051 |
) |
|
$ |
(1,686 |
) |
|
$ |
(4,961 |
) |
|
$ |
(2,720 |
) |
Net loss per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.10 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.14 |
) |
Diluted |
|
$ |
(0.10 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
20,060 |
|
|
|
19,368 |
|
|
|
19,985 |
|
|
|
19,298 |
|
Diluted |
|
|
20,060 |
|
|
|
19,368 |
|
|
|
19,985 |
|
|
|
19,298 |
|
|
|
RECONCILIATION OF NET LOSS TO ADJUSTED
EBITDA(Unaudited)(In thousands) |
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
2023 |
|
|
|
2022 |
Net loss |
|
$ |
(2,051 |
) |
|
$ |
(1,686 |
) |
|
$ |
(4,961 |
) |
|
$ |
(2,720 |
) |
Depreciation and
amortization |
|
|
2,438 |
|
|
|
2,554 |
|
|
|
7,486 |
|
|
|
7,541 |
|
Interest expense |
|
|
2,408 |
|
|
|
1,911 |
|
|
|
7,407 |
|
|
|
5,057 |
|
Stock-based compensation
expense |
|
|
289 |
|
|
|
413 |
|
|
|
950 |
|
|
|
998 |
|
Acquisition, integration, and
related costs |
|
|
374 |
|
|
|
327 |
|
|
|
1,026 |
|
|
|
2,301 |
|
Other adjustments |
|
|
141 |
|
|
|
176 |
|
|
|
172 |
|
|
|
485 |
|
Income tax expense |
|
|
111 |
|
|
|
152 |
|
|
|
650 |
|
|
|
479 |
|
Adjusted EBITDA |
|
$ |
3,710 |
|
|
$ |
3,847 |
|
|
$ |
12,730 |
|
|
$ |
14,141 |
|
|
|
ADJUSTED NET INCOME PER SHARE(Unaudited)(In
thousands) |
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September,30, |
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Reported net loss (1) |
|
$ |
(2,051 |
) |
|
$ |
(1,686 |
) |
|
$ |
(4,961 |
) |
|
$ |
(2,720 |
) |
Amortization of intangibles
(2) |
|
|
2,224 |
|
|
|
2,222 |
|
|
|
6,668 |
|
|
|
6,617 |
|
Acquisition, integration, and
related costs (3) |
|
|
374 |
|
|
|
327 |
|
|
|
1,026 |
|
|
|
2,301 |
|
Other adjustments (4) |
|
|
2 |
|
|
|
— |
|
|
|
(75 |
) |
|
|
— |
|
Adjusted net income |
|
$ |
549 |
|
|
$ |
863 |
|
|
$ |
2,658 |
|
|
$ |
6,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net loss |
|
$ |
(0.10 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.14 |
) |
Adjusted net income |
|
$ |
0.02 |
|
|
$ |
0.04 |
|
|
$ |
0.12 |
|
|
$ |
0.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding: Diluted (5) |
|
|
22,425 |
|
|
|
21,642 |
|
|
|
22,218 |
|
|
|
21,575 |
|
(1) Applicable to common
stockholders (2) Reflects the
elimination of non-cash amortization of acquisition-related
intangible assets (3) Reflects the
add back of acquisition/integration related transaction costs
(4) Reflects adjustments to earn-out fair
value (5) Reflects adjustment for
dilution when adjusted net income is positive
|
|
BALANCE SHEETS(In thousands, except per share
amounts) |
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
870 |
|
|
$ |
9,564 |
|
Accounts receivable, less
allowance for doubtful accounts of $2,357and $2,176 as of September
30, 2023 and December 31, 2022, respectively |
|
|
49,932 |
|
|
|
45,891 |
|
Prepaid expenses and other
current assets |
|
|
2,746 |
|
|
|
2,310 |
|
Total current assets |
|
|
53,548 |
|
|
|
57,765 |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
84,258 |
|
|
|
84,258 |
|
Intangible assets, net |
|
|
27,768 |
|
|
|
33,557 |
|
Property and equipment, net,
and other assets |
|
|
4,866 |
|
|
|
5,911 |
|
Total assets |
|
$ |
170,440 |
|
|
$ |
181,491 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
40,916 |
|
|
$ |
32,207 |
|
Other current liabilities |
|
|
2,498 |
|
|
|
4,689 |
|
Current portion of notes
payable |
|
|
1,159 |
|
|
|
1,159 |
|
Total current liabilities |
|
|
44,573 |
|
|
|
38,055 |
|
|
|
|
|
|
|
|
|
|
Notes payable, net |
|
|
56,786 |
|
|
|
70,573 |
|
Other long-term
liabilities |
|
|
1,396 |
|
|
|
1,724 |
|
Total liabilities |
|
|
102,755 |
|
|
|
110,352 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par
value, 10,000 shares authorized, noshares issued and outstanding as
of September 30, 2023 and December 31, 2022 |
|
|
— |
|
|
|
— |
|
Common stock, $0.001 par
value, 200,000 shares authorized,19,960 and 19,696 shares issued
and outstanding asof September 30, 2023 and December 31, 2022,
respectively |
|
|
20 |
|
|
|
20 |
|
Additional paid-in
capital |
|
|
175,383 |
|
|
|
173,876 |
|
Accumulated deficit |
|
|
(107,718 |
) |
|
|
(102,757 |
) |
Total stockholders’ equity |
|
|
67,685 |
|
|
|
71,139 |
|
Total liabilities and stockholders’ equity |
|
$ |
170,440 |
|
|
$ |
181,491 |
|
Quest Resource (NASDAQ:QRHC)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Quest Resource (NASDAQ:QRHC)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024