• Quest Resource Holding Corporation Reports Third Quarter 2022 Financial Results

    ソース: Nasdaq GlobeNewswire / 14 11 2022 15:00:00   America/Chicago

    THE COLONY, Texas, Nov. 14, 2022 (GLOBE NEWSWIRE) -- 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, 2022.

    Third Quarter 2022 Highlights

    • Revenue was $73.4 million, a 96.3% increase compared with the third quarter of 2021.
    • Gross profit was $12.2 million, a 77.8% increase compared with the third quarter of 2021.
    • GAAP net loss was $(1.7) million, or $(.09) per basic and diluted share attributable to common stockholders, compared with net income of $386,000, or $0.02 per basic and diluted share, in the third quarter of 2021.
    • Adjusted EBITDA was $3.8 million, a 56.9% increase compared with the third quarter of 2021.
    • Adjusted net income per diluted share was $0.04 compared with $0.06 per diluted share during the third quarter of 2021.

    Year-to-Date 2022 Highlights (September 30, 2022) 

    • Revenue was $221.8 million, a 102.9% increase compared with the same period of 2021. 
    • Gross profit was $38.1 million, an 89.5% increase compared with the same period of 2021. 
    • GAAP net loss was $(2.7) million, or $(0.14) per basic and diluted share attributable to common stockholders, compared with net income of $2.2 million, or $0.12 per basic and $0.11 per diluted share, respectively, during the same period of 2021.
    • Year-to-date Adjusted EBITDA was $14.1 million, an 86.3% increase compared with the same period of 2021. 
    • Adjusted net income per diluted share was $0.29, compared with $0.18 per diluted share during the same period of 2021.

    “Third quarter results continued to reflect the strength of our business model and demonstrate how we can perform well in a challenging economic environment. We posted strong financial results, delivering 78% growth in gross profit dollars to $12.2 million and 57% growth in Adjusted EBITDA of $3.8 million. We are executing well with all our growth strategies, adding new customers, expanding services with existing customers, and optimizing efficiencies with our core business and acquired companies,” said S. Ray Hatch, President and Chief Executive Officer. “We continue to invest in the scalability and capabilities of our data platform, which is further enhancing our value proposition and competitive differentiation. Overall, our outlook remains positive, we expect a strong finish to what has been an exceptional year of growth and believe we are well positioned for profitable growth to continue during the next several years.”

    Third Quarter 2022 Earnings Conference Call and Webcast

    Quest will conduct a conference call Monday, November 14, 2022, at 5:00 PM ET, to review the financial results for the third quarter ended September 30, 2022. Investors interested in participating on the live call can dial 1-800-289-0438 within the U.S. or 1-323-794-2423 from abroad, referencing conference ID: 9182428. 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 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”).

    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 can perform well in a challenging economic environment, our belief that we continue to further enhance our value proposition and competitive differentiation, our expectation to have a strong finish to the year with continued growth, and our belief that we are well positioned for profitable growth during the next several years. 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 and the potential effect of inflationary pressures and increased interest rates on our costs of doing business, 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, 2021. 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  Nine Months Ended
     September 30,  September 30,
      2022
       2021
         2022
       2021 
      (Unaudited)   (Unaudited)
    Revenue$73,358  $37,367  $221,785  $109,327 
    Cost of revenue 61,175   30,514   183,685   89,224 
    Gross profit 12,183   6,853   38,100   20,103 
    Selling, general, and administrative 9,333   5,308   27,976   14,630 
    Depreciation and amortization 2,473   508   7,308   1,325 
    Total operating expenses 11,806   5,816   35,284   15,955 
    Operating income 377   

    1,037
       

    2,816
       

    4,148
     
    Interest expense (1,911)  (543)  (5,057)  (1,654)
    Income (loss) before taxes (1,534)  494   (2,241)  2,494 
    Income tax expense 152   108   479   262 
    Net income (loss)$(1,686) $386  $(2,720) $2,232 
                    
                    
    Net income (loss) applicable to common stockholders$(1,686) $386  $(2,720) $2,232 
    Net income (loss) per common share:               
    Basic$(0.09) $0.02  $(0.14) $0.12 
    Diluted$(0.09) $0.02  $(0.14) $0.11 
                    
    Weighted average number of common shares outstanding:               
    Basic 19,368   18,985   19,298   18,785 
    Diluted 19,368   21,308   19,298   20,704 


      
    RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
    (Unaudited)
    (In thousands)
                      
     Three Months Ended  Nine Months Ended
     September 30,  September 30,
      2022   2021   2022
       2021
     
    Net income (loss)$(1,686) $386  $(2,720) $2,232 
    Depreciation and amortization 2,554   582   7,541   1,539 
    Interest expense 1,911   543   5,057   1,654 
    Stock-based compensation expense 413   326   998   1,142 
    Acquisition, integration, and related costs 327   464   2,301   600 
    Other adjustments 176   42   485   160 
    Income tax expense 152   108   479   262 
    Adjusted EBITDA$3,847  $2,451  $14,141  $7,589 


      
    ADJUSTED NET INCOME PER SHARE
    (Unaudited)
    (In thousands)
                      
     Three Months Ended   Nine Months Ended 
     September 30,  September 30, 
      2022    2021     2022   2021 
    Reported net income (loss) (1)$(1,686) $386  $(2,720) $2,232 
    Amortization of intangibles (2) 2,222   386   6,617   964 
    Acquisition, integration, and related costs (3) 327   464   2,301   600 
    Adjusted net income$863  $1,236  $6,198  $3,796 
                    
    Diluted earnings per share:               
    Reported net income (loss)$(0.09) $0.02  $(0.14) $0.11 
    Adjusted net income$0.04  $0.06  $0.29  $0.18 
                    
    Weighted average number of common shares outstanding: Diluted (4) 21,642   21,308   21,575   20,704 

          (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 adjustment for dilution as adjusted net income is positive


       
    BALANCE SHEETS
    (In thousands, except per share amounts)
              
     September 30,  December 31, 
     2022  2021 
      (unaudited)     
    ASSETS       
    Current assets:       
    Cash and cash equivalents$7,094  $8,428 
    Accounts receivable, less allowance for doubtful accounts of $2,078 and $841 as of September 30, 2022 and December 31, 2021, respectively 52,062   39,949 
    Prepaid expenses and other current assets 3,066   1,952 
    Total current assets 62,222   50,329 
            
    Goodwill 82,479   80,622 
    Intangible assets, net 35,581   39,119 
    Property and equipment, net, and other assets 5,986   5,596 
    Total assets$186,268  $175,666 
            
    LIABILITIES AND STOCKHOLDERS’ EQUITY       
    Current liabilities:       
    Accounts payable and accrued liabilities$34,541  $30,196 
    Other current liabilities 5,791   6,195 
    Current portion of notes payable 1,159   1,329 
    Total current liabilities 41,491   37,720 
            
    Notes payable, net 70,315   62,409 
    Other long-term liabilities, net 2,079   1,909 
    Total liabilities 113,885   102,038 
            
    Commitments and contingencies       
            
    Stockholders’ equity:       
    Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued or outstanding as of September 30, 2022 and December 31, 2021     
    Common stock, $0.001 par value, 200,000 shares authorized, 19,291 and 19,046 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 19   19 
    Additional paid-in capital 171,793   170,318 
    Accumulated deficit (99,429)  (96,709)
    Total stockholders’ equity 72,383   73,628 
    Total liabilities and stockholders’ equity$186,268  $175,666 

     


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