EX-99.1 5 qrhc-ex99_1.htm EX-99.1 EX-99.1

img135785737_0.jpg

Exhibit 99.1

Quest Resource Holding Corporation Reports Fourth Quarter and Fiscal Year 2024 Financial Results

Added record eight new customers in 2024, reflecting strong value proposition

Refinanced debt in Q4, lowering interest expense by approximately $1 million annually, reducing blended interest rate by approximately 150 basis points

Reducing headcount by 15% and SG&A by $3.0 million annually as result of ongoing operational efficiency gains and the anticipated exit of a non-core business line

Named Perry Moss CEO and Nick Ober SVP of Operations

THE COLONY, TX – March 12, 2025 – Quest Resource Holding Corporation (Nasdaq: QRHC) (“Quest” or the “Company”), a national leader in environmental waste and recycling services, today announced financial results for the fourth quarter and fiscal year ended December 31, 2024.

Fourth Quarter 2024 Financial Highlights

•
Revenue was $70.0 million, a 0.9% increase compared with the fourth quarter of 2023.
•
Gross profit was $10.7 million, a 6.7% decrease compared with the fourth quarter of 2023.
•
Gross margin was 15.3% of revenue compared with 16.6% during the fourth quarter of 2023.
•
GAAP net loss per diluted share attributable to common stockholders was $(0.46), compared with $(0.11) per diluted share during the fourth quarter of 2023.
•
Recognized a non-cash impairment loss of $5.5 million, or $(0.26) per diluted share, related to the anticipated sale of the tenant-direct mall portion of RWS.
•
Adjusted EBITDA was $1.7 million, compared with $3.5 million during the fourth quarter of 2023. Excluding a non-cash cost of revenue adjustment of approximately $1.0 million and a $0.5 million bad debt adjustment for receivables related to the business exit, adjusted EBITDA during the fourth quarter of 2024 would have been approximately $3.2 million.
•
Adjusted net loss per diluted share was $(0.09), compared with adjusted net income of $0.03 per diluted share during the fourth quarter of 2023.

Fiscal Year 2024 Financial Highlights

•
Revenue was $288.5 million, a 0.1% increase compared with 2023. 
•
Gross profit was $50.0 million, a 0.1% decrease compared with 2023. 
•
Gross margin was 17.3% of revenue compared to 17.4% during 2023.
•
GAAP net loss per diluted share attributable to common stockholders was $(0.73), compared with $(0.36) during 2023. 
•
Adjusted EBITDA was $14.5 million, compared to $16.2 million during 2023. 
•
Adjusted net loss per diluted share was $(0.03), compared with adjusted net income of $0.15 per diluted share during 2023.

During 2024, Quest achieved several milestones

•
Successfully completed debt refinancing with existing lenders, reducing annual interest expense by approximately $1 million, while increasing credit line, improving terms, and extending maturities.
•
Secured eight new client wins expected to generate at least seven figures of annual revenue each, the greatest number of new client wins in one year in the history of the Company.

 

 

•
Secured five expansion service agreements with some of our largest existing clients, including one during the fourth quarter.
•
Added more than 1,200 vendors onto the Company’s service platform, adding to our ability to serve clients broadly.

 

“In 2024, we made meaningful progress executing against our key strategic priorities,” said Dan M. Friedberg, Chairman of the Company’s Board of Directors. “We added, and are in the process of onboarding eight new customers and have expanded agreements with five of some of our largest customers, representing a record amount of new customer activity for the Company in a year. Further, the Company successfully refinanced its long-term debt with our existing lenders, reflecting their continued confidence in the business.”

Friedberg added, “Despite our success in growing the customer base and the substantial activity underway to solidify operations and efficiencies, we clearly recognize more needs to be done to address our execution issues. Our performance was affected by several factors: temporary cost increases from onboarding new clients, expenses for implementing our new vendor management system, client attrition, and weakness in our industrial client end markets. We believe the actions we have taken and the initiatives now underway will normalize operations in the coming quarters and help position Quest to drive long term results.”

 

Specific actions include

•
Announced today in a separate news release that Perry Moss has been named Chief Executive Officer. Moss previously served as Quest’s Chief Revenue Officer, and previously held senior leadership roles at Rubicon Technologies, Inc., Oakleaf Holdings, and Smurfit-Stone’s Waste Reduction Services’ business unit. Ray Hatch is retiring as CEO and will remain on the Board of Directors.
•
Announced that Nick Ober has joined the Company as Senior Vice President of Operations. Ober most recently served as Vice President of Freight Brokerage Solutions & Strategy for RXO, Inc., the tech-enabled brokered transportation platform, a spin-off from XPO, Inc., where he led carrier operations for a $3 billion asset light business unit. He also has deep industry experience, having been Director of Operations for a $400 million region for Republic Services, Inc. Ober will work closely with Dave Sweitzer, Quest’s Chief Operating Officer, will oversee the Vendor Management Group, and will also lead the newly created Operations Excellence Initiative.
•
Entered into an understanding to sell the non-core tenant-direct mall portion of RWS, the Company’s mall business subject to execution of a definitive agreement.
•
Implementing a reduction of headcount by 15%, which, combined, with the partial sale of RWS and ongoing efficiency improvement gains, should reduce SG&A by approximately $3.0 million on an annualized basis.
•
Established an Operational Excellence Initiative, which will benchmark, measure and target improvement levels across the entire workflow. This fully integrated effort will look to drive process improvements, enhance employee experience, increase customer value added, expand margins and accelerate the achievement of scale benefits.

Perry Moss, Quest’s Chief Executive Officer, stated, “I believe strongly in Quest’s value proposition and in the power of our platform. We have a tremendous roster of clients, and a highly capable organization focused on generating value for our stakeholders. Importantly, we have a robust pipeline of potential new business, and we expect to continue to deepen client relationships, add valuable services and solutions, invest in our business and people, and improve profitability.”

Mr. Friedberg concluded, “The board and management team are committed to driving change and enhancing shareholder value. We have a strong platform and are focused on operational excellence. We have implemented performance-focused actions and will continue pursuing initiatives to drive value for all stakeholders.”

Fourth Quarter and Fiscal Year 2024 Earnings Conference Call and Webcast

Quest will conduct a conference call Wednesday, March 12, 2025, at 5:00 PM ET, to review the financial results for the fourth quarter and year ended December 31, 2024. Investors interested in participating on the live call can dial 1-800-717-1738 or 1-646-307-1865. 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 (Loss)” 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 Loss to Adjusted EBITDA” and “Adjusted Net Income (Loss) 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 expectation that we will continue to deepen client relationships, add valuable services and solutions, and invest in our business and people, resulting in long-term, continuously expanding client relationships; and our belief that the implementation of a reduction of headcount by 15%, combined with the partial sale of RWS and ongoing efficiency improvement gains, should reduce SG&A by approximately $3.0 million on an annualized basis. 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, 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, 2024. 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
December 31,

 

 

Year Ended
December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

(unaudited)

 

 

 

 

 

 

 

Revenue

 

$

69,970

 

 

$

69,342

 

 

$

288,532

 

 

$

288,378

 

Cost of revenue

 

 

59,243

 

 

 

57,842

 

 

 

238,537

 

 

 

238,313

 

Gross profit

 

 

10,727

 

 

 

11,500

 

 

 

49,995

 

 

 

50,065

 

Selling, general, and administrative

 

 

10,086

 

 

 

9,419

 

 

 

39,543

 

 

 

37,669

 

Depreciation and amortization

 

 

2,307

 

 

 

2,352

 

 

 

9,401

 

 

 

9,571

 

Impairment loss

 

 

5,511

 

 

 

—

 

 

 

5,511

 

 

 

—

 

Total operating expenses

 

 

17,904

 

 

 

11,771

 

 

 

54,455

 

 

 

47,240

 

Operating income (loss)

 

 

(7,177

)

 

 

(271

)

 

 

(4,460

)

 

 

2,825

 

Interest expense

 

 

(2,505

)

 

 

(2,322

)

 

 

(10,312

)

 

 

(9,729

)

Loss before taxes

 

 

(9,682

)

 

 

(2,593

)

 

 

(14,772

)

 

 

(6,904

)

Income tax expense (benefit)

 

 

(174

)

 

 

(263

)

 

 

291

 

 

 

387

 

Net loss

 

$

(9,508

)

 

$

(2,330

)

 

$

(15,063

)

 

$

(7,291

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss applicable to common stockholders

 

$

(9,508

)

 

$

(2,330

)

 

$

(15,063

)

 

$

(7,291

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.46

)

 

$

(0.11

)

 

$

(0.73

)

 

$

(0.36

)

Diluted

 

$

(0.46

)

 

$

(0.11

)

 

$

(0.73

)

 

$

(0.36

)

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,837

 

 

 

20,264

 

 

 

20,617

 

 

 

20,123

 

Diluted

 

 

20,837

 

 

 

20,264

 

 

 

20,617

 

 

 

20,123

 

 

 

 

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA

(Unaudited)

(In thousands)

 

 

Three Months Ended
December 31,

 

 

Year Ended
December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net loss

 

$

(9,508

)

 

$

(2,330

)

 

$

(15,063

)

 

$

(7,291

)

Depreciation and amortization

 

 

2,558

 

 

 

2,462

 

 

 

10,272

 

 

 

9,948

 

Interest expense

 

 

2,505

 

 

 

2,322

 

 

 

10,312

 

 

 

9,729

 

Stock-based compensation expense

 

 

272

 

 

 

362

 

 

 

1,563

 

 

 

1,312

 

Acquisition, integration, and related costs

 

 

21

 

 

 

598

 

 

 

112

 

 

 

1,624

 

Impairment loss

 

 

5,511

 

 

 

—

 

 

 

5,511

 

 

 

—

 

Other adjustments

 

 

491

 

 

 

329

 

 

 

1,471

 

 

 

501

 

Income tax expense (benefit)

 

 

(174

)

 

 

(263

)

 

 

291

 

 

 

387

 

Adjusted EBITDA

 

$

1,676

 

 

$

3,480

 

 

$

14,469

 

 

$

16,210

 

 

ADJUSTED NET INCOME (LOSS) PER SHARE

(Unaudited)

(In thousands)

 

 

Three Months Ended
December 31,

 

 

Year Ended
December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Reported net loss (1)

 

$

(9,508

)

 

$

(2,330

)

 

$

(15,063

)

 

$

(7,291

)

Amortization of intangibles (2)

 

 

2,137

 

 

 

2,196

 

 

 

8,787

 

 

 

8,864

 

Acquisition, integration, and related costs (3)

 

 

21

 

 

 

598

 

 

 

112

 

 

 

1,624

 

Impairment loss

 

 

5,511

 

 

 

—

 

 

 

5,511

 

 

 

—

 

Other adjustments (4)

 

 

—

 

 

 

280

 

 

 

—

 

 

 

205

 

Adjusted net income (loss)

 

$

(1,839

)

 

$

744

 

 

$

(653

)

 

$

3,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

       Reported net loss

 

$

(0.46

)

 

$

(0.11

)

 

$

(0.73

)

 

$

(0.36

)

       Adjusted net income (loss)

 

$

(0.09

)

 

$

0.03

 

 

$

(0.03

)

 

$

0.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (5)

 

 

20,837

 

 

 

22,502

 

 

 

20,617

 

 

 

22,362

 

 

(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)

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

ASSETS

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

396

 

 

$

324

 

Accounts receivable, less allowance for doubtful accounts of $831
   and $1,582 as of December 31, 2024 and 2023, respectively

 

 

62,252

 

 

 

58,147

 

Prepaid expenses and other current assets

 

 

2,601

 

 

 

2,142

 

Assets held for sale

 

 

9,890

 

 

 

—

 

Total current assets

 

 

75,139

 

 

 

60,613

 

 

 

 

 

 

 

 

Goodwill

 

 

81,065

 

 

 

85,828

 

Intangible assets, net

 

 

12,946

 

 

 

26,052

 

Property and equipment, net, and other assets

 

 

6,495

 

 

 

4,626

 

Total assets

 

$

175,645

 

 

$

177,119

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

39,899

 

 

$

41,296

 

Other current liabilities

 

 

1,001

 

 

 

2,470

 

Current portion of notes payable

 

 

1,651

 

 

 

1,159

 

Liabilities held for sale

 

 

1,840

 

 

 

—

 

Total current liabilities

 

 

44,391

 

 

 

44,925

 

 

 

 

 

 

 

 

Notes payable, net

 

 

76,265

 

 

 

64,638

 

Other long-term liabilities

 

 

833

 

 

 

1,275

 

Total liabilities

 

 

121,489

 

 

 

110,838

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value, 10,000 shares authorized, no shares
   issued and outstanding as of December 31, 2024 and 2023

 

 

—

 

 

 

—

 

Common stock, $0.001 par value, 200,000 shares authorized,
   20,606 and 20,161 shares issued and outstanding as
   of December 31, 2024 and 2023, respectively

 

 

21

 

 

 

20

 

Additional paid-in capital

 

 

179,246

 

 

 

176,309

 

Accumulated deficit

 

 

(125,111

)

 

 

(110,048

)

Total stockholders’ equity

 

 

54,156

 

 

 

66,281

 

Total liabilities and stockholders’ equity

 

$

175,645

 

 

$

177,119

 

# # #