Year-Over-Year Adjusted EBITDA improved 32% for the quarter and 43% year to date

THE COLONY, Texas, Nov. 13, 2018 (GLOBE NEWSWIRE) — Quest Resource Holding Corporation (NASDAQ: QRHC) (“Quest”), a national leader in environmental reuse, recycling, and disposal services, today announced financial results for the third quarter ended September 30, 2018.

Third Quarter 2018 Highlights

• Revenue was $25.9 million compared with $31.9 million for the third quarter of 2017.
• Gross profit was $4.5 million, an increase of 11%, compared with $4.0 million for the third quarter of 2017.
• Gross margin was 17.2% of revenue, compared with 12.6% for the third quarter of 2017, an increase of 4.6 percentage points.
• Operating expenses were $5.0 million, which was relatively flat compared with the third quarter of 2017.  Included in operating expenses for the third quarter of 2018 was a charge of $610,000 to reserve for certain accounts receivable related to a customer’s recent Chapter 11 bankruptcy filing.
• Net loss was $681,000, a $399,000 improvement compared with the net loss for the third quarter of 2017. 
• Adjusted EBITDA was $675,000, a 32% increase, compared with $513,000 for the third quarter of 2017.
• Net loss per share improved to $(0.04) compared with $(0.07) for the third quarter of 2017. 

“Third quarter showed solid improvement in year-over-year financial performance, which continues to be driven by our business transformation,” said Ray Hatch, CEO of Quest Resource Holding Corporation. “I am very proud of the improvements our team has made to increase profitability.“

“With the transformation of our business substantially complete, we recently added new sales and marketing talent to reignite growth, which has resulted in a significant expansion of our pipeline,” said Hatch, “However, the outlook for the remainder of the fiscal year has softened, primarily reflecting delays in the start date for new opportunities, and we are adjusting our outlook accordingly. We now expect Adjusted EBITDA will be approximately $2.0 million to $2.5 million for the year 2018, which would represent a substantial increase of 150% to 200% over last year and set a new record for annual operating performance.  While the return to revenue growth will be at a slower pace than we anticipated, we remain confident that we have the right team and strategies in place to achieve meaningful top-line growth next year, which will drive continued growth in profitability, reflecting the earnings leverage in our operating model.”

Third Quarter 2018 Earnings Conference Call and Webcast

Quest will conduct a conference call on Tuesday, November 13, 2018, at 4:00 p.m. Central Time, to review the financial results for the third quarter ended September 30, 2018. Investors interested in participating on the live call can dial 1-800-239-9838 within the United States, or 1-323-794-2551 from abroad.  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 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’s customers typically are multi-location businesses for which we create, implement, and manage customer-specific programs for the collection, processing, recycling, disposal, and tracking of waste streams and recyclables.  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 our outlook for the remainder of the fiscal year, which has softened, primarily reflecting delays in the start date for new opportunities;  our expectation for Adjusted EBITDA for 2018; and our belief that while the return to revenue growth will be at a slower pace than anticipated, we remain confident that we have the right team and strategies in place to achieve meaningful top-line growth next year, which will drive continued growth in profitability, reflecting the earnings leverage in our operating model. 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, 2017. 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