NASDAQ: QRHC (Common Stock)

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Press Release Details

Quest Resource Holding Reports First Quarter 2020 Financial Results

May 14, 2020

THE COLONY, Texas, May 14, 2020 (GLOBE NEWSWIRE) -- 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, 2020.

First Quarter 2020 Highlights

  • Revenue was $25.3 million, a 4.9% decrease compared with the first quarter of 2019.
  • Gross profit was $4.5 million, unchanged compared with the first quarter of 2019.
  • Gross margin increased 90 basis points to 17.9% of revenue, compared with 17.0% for the first quarter of 2019.
  • Net loss per share was $(0.02), compared with $(0.01) during the first quarter of 2019. 
  • Adjusted EBITDA was $534,000, compared with $796,000 for the first quarter of 2019.

“First quarter’s revenue comparison was impacted by low levels of production in a commodity waste stream at one of our largest industrial customers.  This had negligible impact on gross profit.  Late in the first quarter, we also began to feel the effects of COVID-19.  Thankfully, we maintain strong ongoing relationships with our customers, the bulk of which are considered essential businesses who continue to operate,” said S. Ray Hatch, President and Chief Executive Officer.  “I am proud of how our employees have worked to continue to deliver exceptional customer service and support, given the many challenges created by COVID-19.  We moved nearly all our employees to a virtual environment, worked with customers and subcontractors to adapt to new handling frequency, and took immediate action to protect our balance sheet and liquidity.  While it is impossible to predict how long the weakened demand will continue, we believe our asset-light business model, our strong balance sheet, and the essential nature of our services positions us well to weather this challenging environment.”

Mr. Hatch added, “I would like to extend my best wishes to all that have been negatively impacted in the recent months due to COVID-19. I would also like to thank our employees, customers and subcontractors for their unhesitating and ongoing collaboration as we navigate these challenging times.”

First Quarter 2020 Earnings Conference Call and Webcast

Quest will conduct a conference call today, May 14, 2020, at 5:00 PM ET, to review the financial results for the first quarter ended March 31, 2020. Investors interested in participating on the live call can dial 1-800-954-0585 within the U.S. or 1-212-231-2908 from abroad, referencing conference ID: 21962384.  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/default.aspx.  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 waste and recycling services to customers from across multiple industry sectors that are typically larger, multi-location businesses.  In addition, Quest’s programs and services enable customers to address their environmental and sustainability goals and responsibilities. Quest provides information that tracks and reports the environmental results of Quest’s services, provides actionable data to improve business operations, and enables customers to address their environmental and sustainability goals and responsibilities. For more information, visit www.questrmg.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 have operations in place to sustainably support profitability while consistently providing excellent customer service;  our belief that our asset-light business model and the essential nature of our services positions us to weather the challenging COVID-19 environment; and our belief that the financial measures contained in this press release facilitate operating performance comparisons from period to period.  These statements are based on our current expectations, estimates, projections, beliefs, and assumptions.  Such statements involve significant risks and uncertainties. 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
(Unaudited)
(In thousands, except per share amounts)

  Three Months Ended  
  March 31,  
  2020     2019  
Revenue $ 25,332     $ 26,649  
Cost of revenue   20,789       22,106  
Gross profit   4,543       4,543  
Selling, general, and administrative   4,409       4,214  
Depreciation and amortization   334       326  
Total operating expenses   4,743       4,540  
Operating income (loss)   (200 )     3  
Interest expense   84       112  
Loss before taxes   (284 )     (109 )
Income tax expense (benefit)   (52 )     55  
Net loss $ (232 )   $ (164 )
               
               
Net loss applicable to common stockholders $ (232 )   $ (164 )
Net loss per common share:              
Basic and diluted $ (0.02 )   $ (0.01 )
               
Weighted average number of common shares outstanding:              
Basic and diluted   15,397       15,329  


RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(Unaudited)
(In thousands)

  Three Months Ended  
  March 31,  
  2020     2019  
Net loss $ (232 )   $ (164 )
Depreciation and amortization   348       359  
Interest expense   84       112  
Stock-based compensation expense   377       204  
Other adjustments   9       230  
Income tax expense (benefit)   (52 )     55  
Adjusted EBITDA $ 534     $ 796  


BALANCE SHEETS
(In thousands, except per share amounts)

  March 31,     December 31,
  2020     2019  
    (unaudited)        
ASSETS            
Current assets:            
Cash and cash equivalents $ 3,350     $ 3,411  
Accounts receivable, less allowance for doubtful accounts of $797 and $767 as of March 31, 2020 and December 31, 2019, respectively   15,185       13,900  
Prepaid expenses and other current assets   1,375       1,110  
Total current assets   19,910       18,421  
             
Goodwill   58,208       58,208  
Intangible assets, net   1,304       1,591  
Property and equipment, net, and other assets   2,261       2,436  
Total assets $ 81,683     $ 80,656  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Current liabilities:            
Accounts payable and accrued liabilities $ 14,336     $ 13,317  
Deferred revenue and other current liabilities   23       19  
Total current liabilities   14,359       13,336  
             
Revolving credit facility, net   4,553       4,535  
Other long-term liabilities   981       1,141  
Total liabilities   19,893       19,012  
             
Commitments and contingencies            
             
Stockholders’ equity:            
Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued or outstanding as of March 31, 2020 and December 31, 2019          
Common stock, $0.001 par value, 200,000 shares authorized, 15,373 shares issued and outstanding as of March 31, 2020 and December 31, 2019   15       15  
Additional paid-in capital   161,236       160,858  
Accumulated deficit   (99,461 )     (99,229 )
Total stockholders’ equity   61,790       61,644  
Total liabilities and stockholders’ equity $ 81,683     $ 80,656  

QRHC logo and tag line-1-01.png

Source: Quest Resource Holding Corporation

IR Contact

Three Part Advisors, LLC
Joe Noyons
817.778.8424