THE
Third Quarter 2023 Highlights
- Revenue was
$70.4 million , a 4.0% decrease compared with the third quarter of 2022. - Gross profit was
$12.4 million , a 2.0% increase compared with the third quarter of 2022. - Gross margin was 17.7% of revenue compared with 16.6% during the third quarter of 2022.
- GAAP net loss per diluted share attributable to common stockholders was
$(0.10) , compared with$(0.09) per diluted share during the third quarter of 2022. - Adjusted EBITDA was
$3.7 million , compared with$3.8 million during the third quarter of 2022. - Adjusted net income per diluted share was
$0.02 compared with adjusted net income of$0.04 per diluted share during the third quarter of 2022.
Year-to-Date 2023 Highlights (
- Revenue was
$219 .0 million, a 1.2% decrease compared with the same period of 2022. - Gross profit was
$38 .6 million, a 1.2% increase compared with the same period of 2022. - Gross margin was 17.6% of revenue compared to 17.2% during the same period of 2022.
- GAAP net loss per diluted share attributable to common stockholders was
$(0.25) , compared with $(0.14) during the same period of 2022. - Year-to-date Adjusted EBITDA was
$12.7 million , compared to$14.1 million during the same period of 2022. - Adjusted net income per diluted share was
$0.12 , compared with$0.29 per diluted share during the same period of 2022.
“Gross profit dollars for the third quarter increased slightly in comparison with the prior year but were below our expectations for sequential growth. We estimate that gross profit dollar contribution from RWS was approximately
“While the pace of adding new business has been slower than we would have liked, we are encouraged by recent progress and expect sequential growth in gross profit dollars for the fourth quarter. Additionally, in recent months we have seen a noticeable uptick in the number and size of opportunities in our pipeline. Due to our initiatives, we expect to end the year strong, as a ramp of new business from both new and existing customers offsets what is normally a seasonally weaker quarter. In addition, we continue to build our operating platform, investing in capabilities, which will enable us to drive operating efficiencies and to continually enhance our customer service. Importantly, our outlook for profitable growth in fourth quarter and 2024 remains positive.”
Third Quarter 2023 Earnings Conference Call and Webcast
Quest will conduct a conference call on
Reconciliation of
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 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 Per Share”).
About
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 that our momentum will continue through the rest of the year, our belief that we are well positioned to continue to weather a challenging economic environment, execute our growth strategies and our positive outlook for profitable growth during 2023 and the next year. 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
Investor Relations Contact:
Three
817.778.8424
Financial Tables Follow
STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||
Revenue | $ | 70,425 | $ | 73,358 | $ | 219,036 | $ | 221,785 | |||||||||||
Cost of revenue | 57,995 | 61,175 | 180,471 | 183,685 | |||||||||||||||
Gross profit | 12,430 | 12,183 | 38,565 | 38,100 | |||||||||||||||
Selling, general, and administrative | 9,620 | 9,333 | 28,250 | 27,976 | |||||||||||||||
Depreciation and amortization | 2,342 | 2,473 | 7,219 | 7,308 | |||||||||||||||
Total operating expenses | 11,962 | 11,806 | 35,469 | 35,284 | |||||||||||||||
Operating income | 468 | 377 | 3,096 | 2,816 | |||||||||||||||
Interest expense | (2,408 | ) | (1,911 | ) | (7,407 | ) | (5,057 | ) | |||||||||||
Loss before taxes | (1,940 | ) | (1,534 | ) | (4,311 | ) | (2,241 | ) | |||||||||||
Income tax expense | 111 | 152 | 650 | 479 | |||||||||||||||
Net loss | $ | (2,051 | ) | $ | (1,686 | ) | $ | (4,961 | ) | $ | (2,720 | ) | |||||||
Net loss applicable to common stockholders | $ | (2,051 | ) | $ | (1,686 | ) | $ | (4,961 | ) | $ | (2,720 | ) | |||||||
Net loss per common share: | |||||||||||||||||||
Basic | $ | (0.10 | ) | $ | (0.09 | ) | $ | (0.25 | ) | $ | (0.14 | ) | |||||||
Diluted | $ | (0.10 | ) | $ | (0.09 | ) | $ | (0.25 | ) | $ | (0.14 | ) | |||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||
Basic | 20,060 | 19,368 | 19,985 | 19,298 | |||||||||||||||
Diluted | 20,060 | 19,368 | 19,985 | 19,298 |
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (Unaudited) (In thousands) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Net loss | $ | (2,051 | ) | $ | (1,686 | ) | $ | (4,961 | ) | $ | (2,720 | ) | |||||||||
Depreciation and amortization | 2,438 | 2,554 | 7,486 | 7,541 | |||||||||||||||||
Interest expense | 2,408 | 1,911 | 7,407 | 5,057 | |||||||||||||||||
Stock-based compensation expense | 289 | 413 | 950 | 998 | |||||||||||||||||
Acquisition, integration, and related costs | 374 | 327 | 1,026 | 2,301 | |||||||||||||||||
Other adjustments | 141 | 176 | 172 | 485 | |||||||||||||||||
Income tax expense | 111 | 152 | 650 | 479 | |||||||||||||||||
Adjusted EBITDA | $ | 3,710 | $ | 3,847 | $ | 12,730 | $ | 14,141 |
ADJUSTED NET INCOME PER SHARE (Unaudited) (In thousands) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September,30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Reported net loss (1) | $ | (2,051 | ) | $ | (1,686 | ) | $ | (4,961 | ) | $ | (2,720 | ) | ||||||||||
Amortization of intangibles (2) | 2,224 | 2,222 | 6,668 | 6,617 | ||||||||||||||||||
Acquisition, integration, and related costs (3) | 374 | 327 | 1,026 | 2,301 | ||||||||||||||||||
Other adjustments (4) | 2 | — | (75 | ) | — | |||||||||||||||||
Adjusted net income | $ | 549 | $ | 863 | $ | 2,658 | $ | 6,198 | ||||||||||||||
Diluted earnings per share: | ||||||||||||||||||||||
Reported net loss | $ | (0.10 | ) | $ | (0.09 | ) | $ | (0.25 | ) | $ | (0.14 | ) | ||||||||||
Adjusted net income | $ | 0.02 | $ | 0.04 | $ | 0.12 | $ | 0.29 | ||||||||||||||
Weighted average number of common shares outstanding: Diluted (5) | 22,425 | 21,642 | 22,218 | 21,575 |
(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) | ||||||||
2023 | 2022 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 870 | $ | 9,564 | ||||
Accounts receivable, less allowance for doubtful accounts of and | 49,932 | 45,891 | ||||||
Prepaid expenses and other current assets | 2,746 | 2,310 | ||||||
Total current assets | 53,548 | 57,765 | ||||||
84,258 | 84,258 | |||||||
Intangible assets, net | 27,768 | 33,557 | ||||||
Property and equipment, net, and other assets | 4,866 | 5,911 | ||||||
Total assets | $ | 170,440 | $ | 181,491 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 40,916 | $ | 32,207 | ||||
Other current liabilities | 2,498 | 4,689 | ||||||
Current portion of notes payable | 1,159 | 1,159 | ||||||
Total current liabilities | 44,573 | 38,055 | ||||||
Notes payable, net | 56,786 | 70,573 | ||||||
Other long-term liabilities | 1,396 | 1,724 | ||||||
Total liabilities | 102,755 | 110,352 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, shares issued and outstanding as of | — | — | ||||||
Common stock, 19,960 and 19,696 shares issued and outstanding as of | 20 | 20 | ||||||
Additional paid-in capital | 175,383 | 173,876 | ||||||
Accumulated deficit | (107,718 | ) | (102,757 | ) | ||||
Total stockholders’ equity | 67,685 | 71,139 | ||||||
Total liabilities and stockholders’ equity | $ | 170,440 | $ | 181,491 |
Source:
2023 GlobeNewswire, Inc., source