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 year ended December 31, 2021.
Fourth Quarter 2021 Highlights
Year Ended December 31, 2021 Highlights
“During 2021, we delivered our strongest financial performance to date, posting 51% growth in gross profit dollars and 144% growth in Adjusted EBITDA. We are executing well with our strategies to drive both organic and acquisition related growth,” said S. Ray Hatch, President and Chief Executive Officer. “Demand for cost effective sustainability solutions to divert waste from landfill is as strong as ever among target clients. Our value position, which includes a national footprint, broad service offering, and uniform data reporting on waste streams, is clearly resonating among prospective customers. With these factors working in our favor, we expect continued momentum in 2022 and the next several years from both organic and acquisitive sources.”
Fourth Quarter 2021 Earnings Conference Call and Webcast
The Company is scheduled to release the full results for its fourth quarter and year ended December 31, 2021, on Thursday, March 17, 2022, at 5:00 PM ET, to review the Company's financial results and business outlook. Investors interested in participating on the live call can dial 1-800-239-9838 within the U.S. or 1-323-794-2551 from abroad, referencing conference ID: 5479645. Investors can also access the call online through a listen-only webcast on the investor relations section of Quest’s website at /overview/default.aspx.
The earnings webcast, which may include forward-looking information, will be archived on the Quest investor relations website for at least 90 days and a telephonic playback of the conference call will be available by calling 1-844-512-2921 within the U.S. and 1-412-317-6671 from abroad. The replay passcode is 5479645. The telephonic playback will be available beginning at 8:00 PM ET on Thursday, March 17, 2022, and continuing through 11:59 PM ET on Thursday, March 31, 2022. For more information on Quest Resource Holding Corporation, visit http://investors.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,” 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 this adjusted financial measure 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 of continued momentum in 2022 and the next several years from both organic and acquisitive sources. 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, 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 | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| (Unaudited) | |||||||||||||||
| Revenue | $ | 46,389 | $ | 27,658 | $ | 155,715 | $ | 98,660 | |||||||
| Cost of revenue | 37,670 | 22,077 | 126,894 | 79,605 | |||||||||||
| Gross profit | 8,719 | 5,581 | 28,821 | 19,055 | |||||||||||
| Selling, general, and administrative | 7,099 | 4,463 | 21,729 | 17,141 | |||||||||||
| Depreciation and amortization | 1,145 | 346 | 2,469 | 1,164 | |||||||||||
| Total operating expenses | 8,244 | 4,809 | 24,198 | 18,305 | |||||||||||
| Operating income | 475 | 772 | 4,623 | 750 | |||||||||||
| Other income (expense) | (116 | ) | — | (116 | ) | 1,408 | |||||||||
| Interest expense | (841 | ) | (458 | ) | (2,495 | ) | (702 | ) | |||||||
| Loss on extinguishment of debt | — | — | — | (168 | ) | ||||||||||
| Income (loss) before taxes | (482 | ) | 314 | 2,012 | 1,288 | ||||||||||
| Income tax expense | 59 | 190 | 321 | 254 | |||||||||||
| Net income (loss) | $ | (541 | ) | $ | 124 | $ | 1,691 | $ | 1,034 | ||||||
Deemed dividend for warrant down round feature | — | — | — | (205 | ) | ||||||||||
| Net income (loss) applicable to common stockholders | $ | (541 | ) | $ | 124 | $ | 1,691 | $ | 829 | ||||||
| Net income (loss) per common share: | |||||||||||||||
| Basic | $ | (0.03 | ) | $ | 0.01 | $ | 0.09 | $ | 0.05 | ||||||
| Diluted | $ | (0.03 | ) | $ | 0.01 | $ | 0.08 | $ | 0.05 | ||||||
| Weighted average number of common shares outstanding: | |||||||||||||||
| Basic | 19,185 | 18,467 | 18,886 | 16,661 | |||||||||||
| Diluted | 19,185 | 18,801 | 20,735 | 16,756 | |||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(Unaudited)
(In thousands)
| Three Months Ended | Year Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||
| Net income (loss) | $ | (541 | ) | $ | 124 | $ | 1,691 | $ | 1,034 | |||||
| Depreciation and amortization | 1,225 | 404 | 2,764 | 1,277 | ||||||||||
| Interest expense | 841 | 458 | 2,495 | 702 | ||||||||||
| Stock-based compensation expense | 240 | 387 | 1,382 | 1,488 | ||||||||||
| Acquisition, integration, and related costs | 1,244 | 207 | 1,844 | 743 | ||||||||||
| Other adjustments | 216 | 17 | 376 | (1,048 | ) | |||||||||
| Income tax expense | 59 | 190 | 321 | 254 | ||||||||||
| Adjusted EBITDA | $ | 3,284 | $ | 1,787 | $ | 10,873 | $ | 4,450 | ||||||
ADJUSTED NET INCOME PER SHARE
(Unaudited)
(In thousands)
| Three Months Ended | Year Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||
| Reported net income (loss) (1) | $ | (541 | ) | $ | 124 | $ | 1,691 | $ | 829 | ||||
| Amortization of intangibles (2) | 988 | 231 | 1,952 | 232 | |||||||||
| Acquisition, integration, and related costs (2) | 1,244 | 207 | 1,844 | 743 | |||||||||
| Other adjustments | 116 | — | 116 | (1,408 | ) | ||||||||
| Loss on extinguishment of debt | — | — | — | 168 | |||||||||
| Deemed dividend | — | — | — | 205 | |||||||||
| Adjusted net income | $ | 1,807 | $ | 562 | $ | 5,603 | $ | 769 | |||||
| Diluted earnings per share: | |||||||||||||
| Reported net income (loss) | $ | (0.03 | ) | $ | 0.01 | $ | 0.08 | $ | 0.05 | ||||
| Adjusted net income | $ | 0.08 | $ | 0.03 | $ | 0.27 | $ | 0.05 | |||||
| (1) applicable to common stockholders | |||||||||||||
| (2) related to acquisitions | |||||||||||||
BALANCE SHEETS
(In thousands, except per share amounts)
| December 31, | December 31, | ||||||
| 2021 | 2020 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 8,428 | $ | 7,516 | |||
| Accounts receivable, less allowance for doubtful accounts of $841 and $935 as of December 31, 2021 and December 31, 2020, respectively | 39,949 | 17,421 | |||||
| Prepaid expenses and other current assets | 1,952 | 1,069 | |||||
| Total current assets | 50,329 | 26,006 | |||||
| Goodwill | 80,622 | 66,310 | |||||
| Intangible assets, net | 39,119 | 6,529 | |||||
| Property and equipment, net, and other assets | 5,596 | 3,384 | |||||
| Total assets | $ | 175,666 | $ | 102,229 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued liabilities | $ | 30,196 | $ | 15,247 | |||
| Other current liabilities | 6,195 | 1,393 | |||||
| Current portion of notes payable | 1,329 | 624 | |||||
| Total current liabilities | 37,720 | 17,264 | |||||
| Notes payable, net | 62,409 | 14,948 | |||||
| Other long-term liabilities, net | 1,909 | 1,974 | |||||
| Total liabilities | 102,038 | 34,186 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity: | |||||||
| Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued or outstanding as of December 31, 2021 and December 31, 2020 | — | — | |||||
| Common stock, $0.001 par value, 200,000 shares authorized, 19,046 and 18,413 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 19 | 18 | |||||
| Additional paid-in capital | 170,318 | 166,425 | |||||
| Accumulated deficit | (96,709 | ) | (98,400 | ) | |||
| Total stockholders’ equity | 73,628 | 68,043 | |||||
| Total liabilities and stockholders’ equity | $ | 175,666 | $ | 102,229 | |||
| Last Trade: | US$7.04 |
| Daily Change: | 0.10 1.44 |
| Daily Volume: | 7,197 |
| Market Cap: | US$143.480M |
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