• Quest Resource Holding Corporation Reports Second Quarter 2023 Financial Results

    المصدر: Nasdaq GlobeNewswire / 14 أغسطس 2023 15:00:00   America/Chicago

    THE COLONY, Texas, Aug. 14, 2023 (GLOBE NEWSWIRE) -- Quest Resource Holding Corporation (NASDAQ: QRHC) ("Quest"), a national leader in environmental waste and recycling services, today announced financial results for the second quarter ended June 30, 2023.

    Second Quarter 2023 Highlights

    • Revenue was $74.5 million, a 3.1% decrease compared with the second quarter of 2022.
    • Gross profit was $13.5 million, a 7.9% decrease compared with the second quarter of 2022 and a 6.9% sequential increase compared with the first quarter of 2023.
    • Gross margin was 18.1% of revenue compared with 19.1% for the second quarter of 2022.
    • GAAP net loss per diluted share attributable to common stockholders was $(0.04), compared with net income of $0.05 per diluted share for the second quarter of 2022.
    • Adjusted EBITDA was $5.0 million, compared with $6.6 million during the second quarter of 2022, and a 26.2% sequential increase compared to the first quarter of 2023.
    • Adjusted net income per diluted share was $0.07 compared with adjusted net income of $0.19 per diluted share during the second quarter of 2022.

    Year-to-Date 2023 Highlights (June 30, 2023)  

    • Revenue was $148.6 million, a 0.1% increase compared with the same period of 2022.  
    • Gross profit was $26.1 million, a 0.8% increase compared with the same period of 2022.  
    • Gross margin was 17.6% of revenue compared with 17.5% during the same period of 2022.
    • GAAP net loss per diluted share attributable to common stockholders was $(0.15), compared with $(0.05) during the same period of 2022.   
    • Year-to-date Adjusted EBITDA was $9.0 million, compared to $10.3 million during the same period of 2022.  
    • Adjusted net income per diluted share was $0.10, compared with $0.25 per diluted share during the same period of 2022.  

    “Our team delivered another strong quarter with positive momentum. We added new business, improved efficiencies, and made significant progress with acquisition integration, leading to a 7% sequential increase in gross profit and a 26% sequential increase in Adjusted EBITDA. At the same time, we posted strong operating cash flow, averaging $2.5 million per quarter during the past three quarters, and further reducing our long-term debt. Subsequent to the end of the second quarter, we have paid down an additional $2 million of our Monroe Capital facility, for a total of $7 million reduction for the year,” said S. Ray Hatch, President and Chief Executive Officer of the Company.  

    “We expect momentum to continue through the second half of the year and we remain on track to deliver double-digit gross profit growth for the year 2023. At least part of that sequential improvement will come from a recent win with a significant new customer in a new industry vertical,” continued Hatch. “In the coming quarters, we expect the growth rates of adjusted EBITDA to outpace the growth rates of gross profit dollars, as we see the benefit of investments to improve efficiencies and operating leverage.”  

    Second Quarter 2023 Earnings Conference Call and Webcast

    Quest will conduct a conference call on Monday, August 14, 2023, at 5:00 PM ET, to review the financial results for the second quarter ended June 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 Income (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 second half of the year and that we remain on track to deliver double-digit gross profit growth for the year 2023; our belief that sequential improvement will come from a recent win with a significant new customer in a new industry vertical; and our expectation that in the coming quarters, the growth rates of adjusted EBITDA to outpace the growth rates of gross profit dollars, as we see the benefit of investments to improve efficiencies and operating leverage. 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, LLC
    Joe 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
     Six Months Ended
      June 30,
     June 30,
      2023
     2022
     2023 2022
      (Unaudited) (Unaudited)
    Revenue $74,497  $76,905  $148,611  $148,427 
    Cost of revenue  60,992   62,236   122,476   122,510 
    Gross profit  13,505   14,669   26,135   25,917 
    Selling, general, and administrative  9,213   9,299   18,630   18,643 
    Depreciation and amortization  2,452   2,470   4,877   4,835 
    Total operating expenses  11,665   11,769   23,507   23,478 
    Operating income  1,840   2,900   2,628   2,439 
    Interest expense  (2,556)  (1,590)  (4,999)  (3,146)
    Income (loss) before taxes  (716)  1,310   (2,371)  (707)
    Income tax expense  171   160   540   327 
    Net income (loss) $(887) $1,150  $(2,911) $(1,034)
                     
                     
    Net income (loss) applicable to common stockholders $(887) $1,150  $(2,911) $(1,034)
    Net income (loss) per common share:                
    Basic $(0.04) $0.06  $(0.15) $(0.05)
    Diluted $(0.04) $0.05  $(0.15) $(0.05)
                     
    Weighted average number of common shares outstanding:                
    Basic  19,962   19,279   19,947   19,262 
    Diluted  19,962   21,349   19,947   19,262 


     
    RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
    (Unaudited)
    (In thousands)
     
      Three Months Ended Six Months Ended     
      June 30, June 30,     
      2023 2022 2023 2022
    Net income (loss) $(887) $1,150  $(2,911) $(1,034)
    Depreciation and amortization  2,539   2,550   5,048   4,987 
    Interest expense  2,556   1,590   4,999   3,146 
    Stock-based compensation expense  363   326   661   585 
    Acquisition, integration, and related costs  174   668   652   1,974 
    Other adjustments  117   113   31   309 
    Income tax expense  171   160   540   327 
    Adjusted EBITDA $5,033  $6,557  $9,020  $10,294 


     
    ADJUSTED NET INCOME (LOSS) PER SHARE
    (Unaudited)
    (In thousands)
     
      Three Months Ended
     Six Months Ended
      June 30,
     June 30,
      2023
     2022
     2023 2022
    Reported net income (loss) (1) $(887) $1,150  $(2,911) $(1,034)
    Amortization of intangibles (2)  2,223   2,221   4,444   4,396 
    Acquisition, integration, and related costs (3)  174   668   652   1,974 
    Other adjustments (4)        (76)   
    Adjusted net income $1,510  $4,039  $2,109  $5,336 
                     
    Diluted earnings per share:                
    Reported net income (loss) $(0.04) $0.05  $(0.15) $(0.05)
    Adjusted net income $0.07  $0.19  $0.10  $0.25 
                     
    Weighted average number of common shares outstanding: Diluted (5)  22,037   21,349   22,101   21,541 
                     
    (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)
     
      June 30, December 31,
      2023 2022
      (Unaudited)    
    ASSETS        
    Current assets:        
    Cash and cash equivalents $2,980  $9,564 
    Accounts receivable, less allowance for doubtful accounts of $2,096
    and $2,176 as of June 30, 2023 and December 31, 2022, respectively
      45,477   45,891 
    Prepaid expenses and other current assets  3,153   2,310 
    Total current assets  51,610   57,765 
             
    Goodwill  84,258   84,258 
    Intangible assets, net  29,673   33,557 
    Property and equipment, net, and other assets  5,090   5,911 
    Total assets $170,631  $181,491 
             
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities:        
    Accounts payable and accrued liabilities $36,609  $32,207 
    Other current liabilities  3,362   4,689 
    Current portion of notes payable  1,159   1,159 
    Total current liabilities  41,130   38,055 
             
    Notes payable, net  58,867   70,573 
    Other long-term liabilities  1,522   1,724 
    Total liabilities  101,519   110,352 
             
    Commitments and contingencies        
             
    Stockholders’ equity:        
    Preferred stock, $0.001 par value, 10,000 shares authorized, no        
    shares issued and outstanding as of June 30, 2023 and December 31, 2022      
    Common stock, $0.001 par value, 200,000 shares authorized,        
    19,782 and 19,696 shares issued and outstanding as
    of June 30, 2023 and December 31, 2022, respectively
      20   20 
    Additional paid-in capital  174,759   173,876 
    Accumulated deficit  (105,667)  (102,757)
    Total stockholders’ equity  69,112   71,139 
    Total liabilities and stockholders’ equity $170,631  $181,491 

    Primary Logo

شارك على،