NASDAQ: QRHC (Common Stock)

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September 18, 2019 04:00 PM Minimum 20 minute delay

Press Release Details

Quest Resource Holding Reports 2018 Financial Results

March 14, 2019

THE COLONY, TX – March 14, 2019 -- Quest Resource Holding Corporation (NASDAQ: QRHC) ("Quest"), a national leader in environmental reuse, recycling, and waste disposal services, today announced financial results for the quarter and year ended December 31, 2018.

Fourth Quarter and 2018 Financial Highlights

  • Fourth quarter revenue was $25.3 million, a 12.2% increase over the $22.5 million for the comparable quarter in 2017
  • Fourth quarter gross profit was $4.4 million and 17.5% compared with $3.1 million and 13.6% for the comparable quarter in 2017
  • Fourth quarter net income per share was $0.01 compared with a net loss per share of $(0.10) for the comparable quarter in 2017
  • Fourth quarter adjusted EBITDA improved by $1.0 million to $771,000 compared with an adjusted EBITDA loss of $(273,000) for the comparable quarter in 2017
  • Annual 2018 revenue was $103.8 million compared with $138.3 million for 2017
  • Annual 2018 gross profit was $16.9 million and 16.2% compared with $15.7 million and 11.4% for 2017
  • Annual 2018 net loss per share improved by $0.22 to $(0.16) compared with $(0.38) for 2017
  • Annual 2018 adjusted EBITDA improved by $1.5 million to $2.3 million compared with $823,000 for 2017
  • During 2018, Quest generated $3.0 million in cash flow from operations, which was used primarily to reduce borrowings by $1.7 million and bolster the cash balance to $2.1 million.

“Over the last two years, we have successfully executed on our strategic plan. We believe we now target the right markets with the right services.  We also believe we have operations firmly in place to sustainably support profitability while consistently providing excellent customer service.  During 2018, we restructured our sales force, which we believe has reignited our revenue growth engine.  As a result of our efforts, we have significantly improved profitability, posted the first quarterly GAAP net income in our history, and generated meaningful cash flow from operations.  We believe that our efforts have positioned us well to grow sales at our targeted rate of 10% to 15% per year.  At our current business levels, coupled with the operating leverage inherent in our business model, we expect profitability to continue to grow at an even faster pace,” said S. Ray Hatch, President and Chief Executive Officer.

2018 Earnings Conference Call and Webcast

Quest will conduct a conference call on Thursday, March 14, 2019, at 5:00 p.m. Eastern Time, to review the financial results for the fourth quarter and fiscal year ended December 31, 2018. Investors interested in participating on the live call can dial 1-888-394-8218 within the U.S. or 1-323-701-0225 from abroad. The conference call, which may include forward-looking statements, is also being webcast and will be available via the investor relations section of Quest’s website at www.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, a non-GAAP financial measure, "Adjusted EBITDA," is presented. From time-to-time, Quest considers and uses this supplemental measure 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 this non-GAAP measure because it considers it an important supplemental measure of Quest's performance. Quest's definition of this adjusted financial measure may differ from similarly named measures used by others. Quest believes this measure facilitates 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. This non-GAAP measure has limitations as an analytical tool and should not be considered in isolation or as a substitute for the company's GAAP measures. (See attached table "Reconciliation of Net Loss to Adjusted EBITDA").

About Quest Resource Holding Corporation

Quest is a national provider of reuse, recycling, and disposal services that enable our customers to achieve their environmental and sustainability goals and responsibilities.  Quest provides businesses across multiple industry sectors with single source solutions for the reuse, recycling, and disposal of a wide variety of waste streams and recyclables generated by their operations.  Quest also provides information and data that tracks and reports the environmental results of Quest’s services, provides actionable data to improve business operations, and enables Quest’s customers to achieve their environmental and sustainability goals and 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 we now target the right markets with the right services; our belief we have operations firmly in place to sustainably support profitability while consistently providing excellent customer service; our belief that our restructured sales force has reignited our revenue growth engine; our belief that our efforts have positioned us well to grow sales at our targeted rate of 10% to 15% per year; our expectation profitability will continue to grow at an even faster pace, at our current business levels, coupled with the operating leverage inherent in our business model; our belief 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; our belief that our definition of an adjusted financial measure facilitates 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 statements are based on our current expectations, estimates, projections, beliefs, and assumptions.  Such statements involve significant risks and uncertainties.  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 other factors discussed in greater detail in our filings with the Securities and Exchange Commission (SEC), including our Report on Form 10-K for the year ended December 31, 2018.  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

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

Revenue

 

$

25,261

 

 

$

22,505

 

 

$

103,806

 

 

$

138,346

 

Cost of revenue

 

 

20,844

 

 

 

19,452

 

 

 

86,943

 

 

 

122,633

 

Gross profit

 

 

4,417

 

 

 

3,053

 

 

 

16,863

 

 

 

15,713

 

Selling, general, and administrative

 

 

3,894

 

 

 

3,539

 

 

 

16,163

 

 

 

17,078

 

Depreciation and amortization

 

 

328

 

 

 

987

 

 

 

2,701

 

 

 

3,987

 

Total operating expenses

 

 

4,222

 

 

 

4,526

 

 

 

18,864

 

 

 

21,065

 

Operating income (loss)

 

 

195

 

 

 

(1,473)

 

 

 

(2,001

)

 

 

(5,352)

 

Interest expense

 

 

(102

)

 

 

(107)

 

 

 

(438

)

 

 

(468)

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

93

 

 

$

(1,580)

 

 

$

(2,439

)

 

$

(5,820)

 

 

 

Net income (loss) applicable to common    stockholders

 

$

93

 

 

$

(1,580)

 

 

 

 

 

$

(2,439

)

 

 

 

 

$

(5,820)

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.01

 

 

$

(0.10)

 

 

$

(0.16

)

 

$

(0.38)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

15,321

 

 

 

15,292

 

 

 

15,311

 

 

 

15,281

 

 

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Net income (loss)

 

$

93

 

 

$

(1,580

)

 

$

(2,439

)

 

$

(5,820

)

Depreciation and amortization

 

 

376

 

 

 

1,031

 

 

 

2,885

 

 

 

4,157

 

Interest expense

 

 

102

 

 

 

107

 

 

 

438

 

 

 

468

 

Stock-based compensation expense

 

 

200

 

 

 

169

 

 

 

794

 

 

 

1,710

 

Other adjustments

 

 

 

 

 

 

 

 

662

 

 

 

308

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

771

 

 

$

(273

)

 

$

2,340

 

 

$

823

 

 

BALANCE SHEETS

(In thousands, except per share amounts)

 

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,122

 

 

$

1,055

 

Accounts receivable, less allowance for doubtful accounts of $929

and $699 as of December 31, 2018 and 2017, respectively

 

 

16,712

 

 

 

16,264

 

Prepaid expenses and other current assets

 

 

966

 

 

 

1,508

 

Total current assets

 

 

19,800

 

 

 

18,827

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

58,208

 

 

 

58,337

 

Intangible assets, net

 

 

2,611

 

 

 

5,032

 

Property and equipment, net, and other assets

 

 

968

 

 

 

1,320

 

Total assets

 

$

81,587

 

 

$

83,516

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

15,778

 

 

$

14,254

 

Deferred revenue and other current liabilities

 

 

72

 

 

 

329

 

Total current liabilities

 

 

15,850

 

 

 

14,583

 

 

 

 

 

 

 

 

 

 

Revolving credit facility, net

 

 

5,194

 

 

 

6,763

 

Other long-term liabilities

 

 

 

 

 

22

 

Total liabilities

 

 

21,044

 

 

 

21,368

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares authorized, no

shares issued or outstanding as of December 31, 2018 and 2017

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized,

15,328,870 and 15,302,455 shares issued and outstanding as

of December 31, 2018 and 2017, respectively

 

 

15

 

 

 

15

 

Additional paid-in capital

 

 

159,702

 

 

 

158,868

 

Accumulated deficit

 

 

(99,174

)

 

 

(96,735

)

Total stockholders’ equity

 

 

60,543

 

 

 

62,148

 

Total liabilities and stockholders’ equity

 

$

81,587

 

 

$

83,516

 


IR Contact

Three Part Advisors, LLC
Joe Noyons
817.778.8424