Quest Resource (NASDAQ:QRHC) Announces Earnings Results

by · The Cerbat Gem

Quest Resource (NASDAQ:QRHC – Get Free Report) posted its quarterly earnings results on Thursday. The business services provider reported ($0.02) EPS for the quarter, FiscalAI reports. The business had revenue of $63.78 million during the quarter, compared to the consensus estimate of $66.30 million. Quest Resource had a negative net margin of 7.07% and a negative return on equity of 14.75%.

Here are the key takeaways from Quest Resource’s conference call:

  • Third-quarter revenue was $63.8 million, up about 1% year over year and essentially flat sequentially. Growth in non-industrial markets and new business was offset by softer industrial volumes.
  • Gross margin improved to 17.8% from 16.3% in the second quarter, and Adjusted EBITDA rose to $3.4 million from $2.8 million sequentially and $2.9 million a year earlier. Management attributed the gains to pricing, service-network optimization, and improving margins at newer accounts.
  • Cost reductions continued to support profitability: SG&A fell 8% year over year in Q3 and 16% year to date, or nearly $5 million. The company expects to reinvest in sales and technology next year, while aiming to offset much of the added expense with efficiencies and new business.
  • Management expects the usual Q4 seasonal decline in revenue and gross profit sequentially, particularly from industrial customers, but forecasts gross profit and margin above the prior-year quarter. It cited late-stage discussions with large national brands in non-industrial markets, while cautioning that deal timing is uncertain.
  • Quest used $0.3 million in operating cash during Q3 and ended the quarter with about $1 million in cash, though it had $17.4 million available on its ABL facility. Temporary collection delays were resolved; year-to-date operating cash flow was $4.4 million and was used to reduce higher-interest debt, while DSO remained at 71 days versus a mid-60s target.

Quest Resource Trading Up 7.7%

Shares of NASDAQ QRHC traded up $0.08 during mid-day trading on Friday, reaching $1.12. The company had a trading volume of 31,018 shares, compared to its average volume of 27,186. The company has a current ratio of 1.18, a quick ratio of 1.18 and a debt-to-equity ratio of 2.22. The firm has a 50 day simple moving average of $1.29 and a two-hundred day simple moving average of $1.38. Quest Resource has a 52-week low of $0.81 and a 52-week high of $2.41.

Wall Street Analyst Weigh In

Separately, Weiss Ratings downgraded Quest Resource from a “sell (d-)” rating to a “sell (e+)” rating in a research note on Monday. One research analyst has rated the stock with a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the stock has an average rating of “Reduce”.

Read Our Latest Analysis on QRHC

About Quest Resource

(Get Free Report)

Quest Resource Holding Corp. (NASDAQ: QRHC) provides waste and recycling management services for commercial, industrial, and multi-location customers. The company helps organizations manage material collection, transportation, processing, recycling, reuse, and disposal through a network of third-party service providers.

Quest’s offerings are designed to help customers improve waste diversion, reduce landfill use, enhance operational efficiency, and support sustainability and regulatory objectives.

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