Quest Resource Holding Corporation (NASDAQ: QRHC) (“Quest”), a
national leader in environmental waste and recycling services,
today announced financial results for the fourth quarter and fiscal
year ended December 31, 2023.
“I am proud of the considerable progress Quest has made over the
prior year and believe we are in an exceptionally strong position
to grow our business in 2024 and beyond,” said S. Ray Hatch,
President and Chief Executive Officer of Quest. “Over the course of
2023, we achieved notable client renewals, high new business
volume, and have substantial additional runway given our robust
pipeline and strong competitive position. Moreover, we completed
the integration of prior acquisitions, enhanced our IT systems
leading to greater operational efficiency system-wide, and
continued to meaningfully add proven and experienced talent
throughout the organization.”
Fourth Quarter 2023
Highlights:
- Revenue was $69.3 million, an 11.4% increase compared with the
fourth quarter of 2022.
- Gross profit was $11.5 million, a 6.9% increase compared with
the fourth quarter of 2022.
- Gross margin was 16.6% of revenue compared with 17.3% during
the fourth quarter of 2022.
- GAAP net loss per diluted share attributable to common
stockholders was $(0.11), compared with $(0.17) per diluted share
during the fourth quarter of 2022.
- Adjusted EBITDA was $3.5 million, compared with $2.3 million
during the fourth quarter of 2022. Excluding a cost of revenue
adjustment of approximately $1.2 million related to RWS, adjusted
EBITDA during the fourth quarter of 2023 would have been
approximately $4.6 million.
- Adjusted net income per diluted share was $0.03 compared with
adjusted net loss of $(0.02) per diluted share during the fourth
quarter of 2022.
Fiscal Year 2023 Highlights:
- Revenue was $288.4 million, a 1.5% increase compared with
2022.
- Gross profit was $50.1 million, a 1.3% increase compared with
2022.
- Gross margin was 17.4% of revenue compared to 17.2% during
2022.
- GAAP net loss per diluted share attributable to common
stockholders was $(0.36), compared with $(0.31) during 2022.
- Adjusted EBITDA was $16.2 million, compared to $16.4 million
during 2022. Excluding the cost of revenue adjustment for the
fourth quarter, adjusted EBITDA during 2023 would have been
approximately $17.4 million.
- Adjusted net income per diluted share was $0.15, compared with
$0.26 per diluted share during 2022.
During 2023, Quest achieved numerous milestones:
- Completed integrations of all previously announced
acquisitions, and all clients are now fully onboarded onto Quest’s
platform.
- Conducted a detailed evaluation of controls and processes with
the support of an outside accounting firm, successfully becoming an
SEC “accelerated filer.”
- Added more than 400 new vendors and seven new service lines,
all adding to our ability to serve clients broadly.
- Secured a large new client win in a new end market vertical,
positioning us to pursue other new clients in this vertical.
- Began next phase of technology and efficiency programs to
improve client experience, increase efficiencies, and grow margins.
Programs will enhance vendor onboarding and billing, client
invoicing and processing, and client service.
- Received a U.S. patent for Quest Proganics®, a food waste
recycling service that can help grocers deliver as much as 96%
diversion of organic waste from the landfill.
- Continued investment in business development leading to a very
strong start in 2024 with six new client wins, three of which are
expected to produce 7-figures in annual revenue and one of which is
expected to produce 8-figures with a Fortune 200 company in a new
end market vertical.
“We achieved solid progress in the fourth quarter, driven by
positive momentum across our business that has continued into the
early part of 2024,” added Mr. Hatch. “We expect significant
additional efficiencies to come from investments in our technology
platform, which are in addition to savings from the previously
announced $1.7 million in annualized cost efficiencies from the
integrations of acquisitions. Quest is poised for sustained organic
growth as we pursue numerous opportunities to accelerate our
momentum with new client wins and expand our relationships with
current ones, and we look forward to capitalizing on the wide range
of attractive opportunities in both our existing markets and
beyond.”
Focus on Balance Sheet and Debt Reduction
The Board of Directors, along with management, has formed a
committee that will evaluate alternative long-term debt structures
to lower our long-term cost of capital and to support long-term
growth. The committee is in the process of retaining an independent
financial advisor to assist in the process.
Additionally, the Board is adding current director Glenn
Culpepper, former Chief Financial Officer of Republic Services,
Inc., to the Audit Committee as Chairman.
Daniel Friedberg, Quest’s Chairman of the Board, added, “These
actions reflect the Quest Board’s ongoing commitment to positioning
the Company for long-term success and driving value for all
shareholders. To that end, we are evaluating how we can best manage
our debt and continue to identify ways to drive operating
efficiencies, increase profitability, generate cashflow, and
maximize long-term shareholder value.”
Fourth Quarter and Fiscal Year 2023 Earnings Conference
Call and Webcast
Quest will conduct a conference call Tuesday, March 12, 2024, at
5:00 PM ET, to review the financial results for the fourth quarter
and year ended December 31, 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. 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 (Loss)” 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 (Loss) 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 belief that we are
in an exceptionally strong position to grow our business in 2024
and beyond; our expectation that significant additional
efficiencies and savings will come from investments in our
technology platform and the integrations of previously announced
acquisitions; and our belief that we are poised for sustained
organic growth. 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, 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, 2023. 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
Subsidiaries |
STATEMENTS OF OPERATIONS |
(In thousands, except per share amounts) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
(Unaudited) |
|
|
|
|
Revenue |
|
$ |
69,342 |
|
|
$ |
62,253 |
|
|
$ |
288,378 |
|
|
$ |
284,038 |
|
Cost of revenue |
|
|
57,842 |
|
|
|
51,497 |
|
|
|
238,313 |
|
|
|
235,182 |
|
Gross profit |
|
|
11,500 |
|
|
|
10,756 |
|
|
|
50,065 |
|
|
|
48,856 |
|
Selling, general, and administrative |
|
|
9,419 |
|
|
|
9,824 |
|
|
|
37,669 |
|
|
|
37,800 |
|
Depreciation and amortization |
|
|
2,352 |
|
|
|
2,342 |
|
|
|
9,571 |
|
|
|
9,650 |
|
Total operating expenses |
|
|
11,771 |
|
|
|
12,166 |
|
|
|
47,240 |
|
|
|
47,450 |
|
Operating income (loss) |
|
|
(271 |
) |
|
|
(1,410 |
) |
|
|
2,825 |
|
|
|
1,406 |
|
Interest expense |
|
|
(2,322 |
) |
|
|
(2,224 |
) |
|
|
(9,729 |
) |
|
|
(7,281 |
) |
Loss before taxes |
|
|
(2,593 |
) |
|
|
(3,634 |
) |
|
|
(6,904 |
) |
|
|
(5,875 |
) |
Income tax expense
(benefit) |
|
|
(263 |
) |
|
|
(306 |
) |
|
|
387 |
|
|
|
173 |
|
Net loss |
|
$ |
(2,330 |
) |
|
$ |
(3,328 |
) |
|
$ |
(7,291 |
) |
|
$ |
(6,048 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss applicable to common
stockholders |
|
$ |
(2,330 |
) |
|
$ |
(3,328 |
) |
|
$ |
(7,291 |
) |
|
$ |
(6,048 |
) |
Net loss per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.11 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.36 |
) |
|
$ |
(0.31 |
) |
Diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.36 |
) |
|
$ |
(0.31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
20,264 |
|
|
|
19,922 |
|
|
|
20,123 |
|
|
|
19,474 |
|
Diluted |
|
|
20,264 |
|
|
|
19,922 |
|
|
|
20,123 |
|
|
|
19,474 |
|
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA |
(Unaudited) |
(In thousands) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net loss |
|
$ |
(2,330 |
) |
|
$ |
(3,328 |
) |
|
$ |
(7,291 |
) |
|
$ |
(6,048 |
) |
Depreciation and
amortization |
|
|
2,462 |
|
|
|
2,425 |
|
|
|
9,948 |
|
|
|
9,966 |
|
Interest expense |
|
|
2,322 |
|
|
|
2,224 |
|
|
|
9,729 |
|
|
|
7,281 |
|
Stock-based compensation
expense |
|
|
362 |
|
|
|
285 |
|
|
|
1,312 |
|
|
|
1,283 |
|
Acquisition, integration, and
related costs |
|
|
598 |
|
|
|
773 |
|
|
|
1,624 |
|
|
|
3,074 |
|
Other adjustments |
|
|
329 |
|
|
|
225 |
|
|
|
501 |
|
|
|
710 |
|
Income tax expense
(benefit) |
|
|
(263 |
) |
|
|
(306 |
) |
|
|
387 |
|
|
|
173 |
|
Adjusted EBITDA |
|
$ |
3,480 |
|
|
$ |
2,298 |
|
|
$ |
16,210 |
|
|
$ |
16,439 |
|
ADJUSTED NET INCOME (LOSS) PER SHARE |
(Unaudited) |
(In thousands) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Reported net loss (1) |
|
$ |
(2,330 |
) |
|
$ |
(3,328 |
) |
|
$ |
(7,291 |
) |
|
$ |
(6,048 |
) |
Amortization of intangibles
(2) |
|
|
2,196 |
|
|
|
2,222 |
|
|
|
8,864 |
|
|
|
8,839 |
|
Acquisition, integration, and
related costs (3) |
|
|
598 |
|
|
|
773 |
|
|
|
1,624 |
|
|
|
3,074 |
|
Other adjustments (4) |
|
|
280 |
|
|
|
(114 |
) |
|
|
205 |
|
|
|
(114 |
) |
Adjusted net income
(loss) |
|
$ |
744 |
|
|
$ |
(447 |
) |
|
$ |
3,402 |
|
|
$ |
5,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net income
(loss) |
|
$ |
(0.11 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.36 |
) |
|
$ |
(0.31 |
) |
Adjusted net income
(loss) |
|
$ |
0.03 |
|
|
$ |
(0.02 |
) |
|
$ |
0.15 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding: Diluted (5) |
|
|
22,502 |
|
|
|
19,922 |
|
|
|
22,362 |
|
|
|
21,818 |
|
|
(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) |
|
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
324 |
|
|
$ |
9,564 |
|
Accounts receivable, less
allowance for doubtful accounts of $1,582 and $2,176 as of December
31, 2023 and 2022, respectively |
|
|
58,147 |
|
|
|
45,891 |
|
Prepaid expenses and other
current assets |
|
|
2,142 |
|
|
|
2,310 |
|
Total current assets |
|
|
60,613 |
|
|
|
57,765 |
|
|
|
|
|
|
|
|
Goodwill |
|
|
85,828 |
|
|
|
84,258 |
|
Intangible assets, net |
|
|
26,052 |
|
|
|
33,557 |
|
Property and equipment, net,
and other assets |
|
|
4,626 |
|
|
|
5,911 |
|
Total assets |
|
$ |
177,119 |
|
|
$ |
181,491 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
41,296 |
|
|
$ |
32,207 |
|
Other current liabilities |
|
|
2,470 |
|
|
|
4,689 |
|
Current portion of notes
payable |
|
|
1,159 |
|
|
|
1,159 |
|
Total current liabilities |
|
|
44,925 |
|
|
|
38,055 |
|
|
|
|
|
|
|
|
Notes payable, net |
|
|
64,638 |
|
|
|
70,573 |
|
Other long-term
liabilities |
|
|
1,275 |
|
|
|
1,724 |
|
Total liabilities |
|
|
110,838 |
|
|
|
110,352 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock, $0.001 par
value, 10,000 shares authorized, no shares issued or outstanding as
of December 31, 2023 and 2022 |
|
|
— |
|
|
|
— |
|
Common stock, $0.001 par
value, 200,000 shares authorized, 20,161 and 19,696 shares issued
and outstanding as of December 31, 2023 and 2022, respectively |
|
|
20 |
|
|
|
20 |
|
Additional paid-in
capital |
|
|
176,309 |
|
|
|
173,876 |
|
Accumulated deficit |
|
|
(110,048 |
) |
|
|
(102,757 |
) |
Total stockholders’ equity |
|
|
66,281 |
|
|
|
71,139 |
|
Total liabilities and stockholders’ equity |
|
$ |
177,119 |
|
|
$ |
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