QRHC Quest Resource Holding Corporation

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934   Date of report (Date of earliest event reported): May 9, 2024   QUEST RESOURCE HOLDING CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada		001-36451		51-0665952
(State or other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

 

3481 Plano Parkway, The Colony, Texas		75056
(Address of Principal Executive Offices)		(Zip Code)

 

 

Registrant’s telephone number, including area code: (972) 464-0004

 

(Former name or former address if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the follow provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	QRHC	The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02. Results of Operations and Financial Condition.

We are furnishing this Current Report on Form 8-K in connection with the disclosure of information, in the form of the textual information from a press release released on May 9, 2024.

The information in this Current Report on Form 8-K (including the exhibit) is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

We do not have, and expressly disclaim, any obligation to release publicly any updates or any changes in our expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based.

The text included with this Current Report on Form 8-K is available on our website located at http://investors.qrhc.com/, although we reserve the right to discontinue that availability at any time.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release from Quest Resource Holding Corporation, dated May 9, 2024, entitled “Quest Resource Holding Corporation Reports First Quarter 2024 Financial Results”
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	QUEST RESOURCE HOLDING CORPORATION
Dated: May 9, 2024	By:	/s/ S. Ray Hatch
		Name:	S. Ray Hatch
		Title:	President and Chief Executive Officer

 

 

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Exhibit 99.1

Quest Resource Holding Corporation Reports First Quarter 2024 Financial Results

Double-Digit Growth in Gross Profit Resulting from Business Expansion and Efficiency Gains

Significant New Business Wins and Pipeline Growth Reflect Company’s Strong Value Proposition and Momentum

Investor Conference Call & Webcast to be held at 5pm ET on Thursday, May 9, 2024

THE COLONY, TX – May 9, 2024 – Quest Resource Holding Corporation (Nasdaq: QRHC) (“Quest”), a national leader in environmental waste and recycling services, today announced financial results for the first quarter ended March 31, 2024.

First Quarter 2024 Financial Highlights:

Operational Highlights

 

“During the first quarter, we achieved record levels of new client wins, reached double-digit growth in gross profit, and recorded adjusted EBITDA over $5.0 million for the third time in our history, reflecting our strategic business expansion and ongoing efficiency gains,” said S. Ray Hatch, President and Chief Executive Officer of Quest. “More than ever, Quest’s differentiated value proposition is resonating among current and potential clients, and the go-to-market strategies we’ve put in place are yielding the strong results we expected. Our platform continues to build momentum with yet another significant client win early in the second quarter, and we are encouraged by an increasingly robust pipeline and by our ability to add to the platform efficiently and expand operating margins, all of which should position us well for the future.”

 

“We are benefiting from our efforts to deepen client relationships, add valuable services and solutions, and invest in our business and people, resulting in long term client engagements that have typically expanded over time. This is a result of the broad and diverse services we provide and the dedication of our team in meeting our clients’ needs across industries. We will continue to take steps to distinguish Quest from the competition and to solidify our position as the environmental waste and recycling services provider of choice,” Mr. Hatch continued.

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First Quarter 2024 Earnings Conference Call and Webcast:

Quest will host a conference call on Thursday, May 9, 2024, at 5:00 PM ET, to review the financial results for the first quarter ended March 31, 2024. To participate, dial 1-800-579-2543 or 1-785-424-1789, and reference conference ID: QUEST. 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.

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.

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 it 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 Income (Loss) to Adjusted EBITDA” and “Adjusted Net Income Per Share”).

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 our differentiated value proposition is resonating among current and potential clients; our expectation that two of the largest new clients will produce eight figures of annual revenue and offer incremental growth opportunities; and our belief that our increasingly robust pipeline and our ability to add to the platform efficiently and expand operating margins should position us well for the future. 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, extended shut down of businesses, and other factors discussed in greater detail in our filings with the Securities and Exchange Commission (“SEC”), including in 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, LLC

Joe Noyons

817.778.8424

 

 

Financial Tables Follow

 

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Quest Resource Holding Corporation and Subsidiaries

STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

 

		Three Months Ended March 31,
		2024				2023
Revenue		$	72,651			$	74,114
Cost of revenue			58,615				61,484
Gross profit			14,036				12,630
Selling, general, and administrative			9,798				9,417
Depreciation and amortization			2,362				2,425
Total operating expenses			12,160				11,842
Operating income			1,876				788
Interest expense			(2,472	)			(2,443	)
Loss before taxes			(596	)			(1,655	)
Income tax expense			59				369
Net loss		$	(655	)		$	(2,024	)
Net loss applicable to common stockholders		$	(655	)		$	(2,024	)
Net loss per common share:
Basic		$	(0.03	)		$	(0.10	)
Diluted		$	(0.03	)		$	(0.10	)
Weighted average number of common shares outstanding:
Basic			20,380				19,932
Diluted			20,380				19,932

 

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RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA

(Unaudited)

(In thousands)

		Three Months Ended March 31,
		2024				2023
Net loss		$	(655	)		$	(2,024	)
Depreciation and amortization			2,496				2,509
Interest expense			2,472				2,443
Stock-based compensation expense			357				298
Acquisition, integration, and related costs			42				478
Other adjustments			349				(86	)
Income tax expense			59				369
Adjusted EBITDA		$	5,120			$	3,987

 

ADJUSTED NET INCOME (LOSS) PER SHARE

(Unaudited)

(In thousands)

		Three Months Ended March 31,
		2024				2023
Reported net loss (1)		$	(655	)		$	(2,024	)
Amortization of intangibles (2)			2,322				2,221
Acquisition, integration, and related costs (3)			42				478
Other adjustments (4)			—				(76	)
Adjusted net income		$	1,709			$	599
Diluted earnings (loss) per share:
Reported net loss		$	(0.03	)		$	(0.10	)
Adjusted net income		$	0.08			$	0.03
Weighted average number of common shares outstanding:
Diluted (5)			22,550				22,158

 

(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

 

 

 

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BALANCE SHEETS

(In thousands, except per share amounts)

		March 31,				December 31,
		2024				2023
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	581			$	324
Accounts receivable, less allowance for doubtful accounts of $1,958    and $1,582 as of March 31, 2024 and December 31, 2023, respectively			60,435				58,147
Prepaid expenses and other current assets			1,843				2,142
Total current assets			62,859				60,613
Goodwill			85,828				85,828
Intangible assets, net			24,069				26,052
Property and equipment, net, and other assets			6,216				4,626
Total assets		$	178,972			$	177,119
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	39,852			$	41,296
Other current liabilities			2,017				2,470
Current portion of notes payable			1,159				1,159
Total current liabilities			43,028				44,925
Notes payable, net			68,467				64,638
Other long-term liabilities			1,166				1,275
Total liabilities			112,661				110,838
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized, no shares    issued and outstanding as of March 31, 2024 and December 31, 2023			—				—
Common stock, $0.001 par value, 200,000 shares authorized,    20,230 and 20,161 shares issued and outstanding as    of March 31, 2024 and December 31, 2023, respectively			20				20
Additional paid-in capital			176,994				176,309
Accumulated deficit			(110,703	)			(110,048	)
Total stockholders’ equity			66,311				66,281
Total liabilities and stockholders’ equity		$	178,972			$	177,119

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v3.24.1.u1

Cover	May 09, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 09, 2024
Entity File Number	001-36451
Entity Registrant Name	QUEST RESOURCE HOLDING CORPORATION
Entity Central Index Key	0001442236
Entity Tax Identification Number	51-0665952
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	3481 Plano Parkway
Entity Address, City or Town	The Colony
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75056
City Area Code	(972)
Local Phone Number	464-0004
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	QRHC
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Information, Former Legal or Registered Name	(Former name or former address if changed since last report)

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