Quest Resource (QRHC) - 2024 Q4 - Annual Report

Revenue and Customer Growth - Revenue for the year ended December 31, 2024, was $288.5 million, an increase of$0.1 million, or 0.1%, compared to $288.4 million in 2023[140] - Newly added customers contributed$18.6 million in additional revenue, with overall demand contributing an additional $25.6 million, an increase of almost 13$238.5 million in 2024 from $238.3 million in 2023, with gross profit decreasing to$50.0 million from $50.1 million[142][143] - Gross profit margin was 17.3$54.5 million in 2024 from $47.2 million in 2023, with selling, general, and administrative expenses rising to$39.5 million[145][146] - A $5.5 million impairment charge was recorded for the year ended December 31, 2024, associated with an asset group classified as held for sale[147] Financial Performance - Net loss for the year ended December 31, 2024, was$(15.1) million, compared to a net loss of $(7.3) million in 2023[152] - Adjusted EBITDA decreased by 10.7$14.5 million in 2024 from $16.2 million in 2023[155] - Adjusted net income (loss) for 2024 was$(0.7) million compared to $3.4 million in 2023[158] - Reported net loss for 2024 was$(15.1) million, compared to a net loss of $(7.3) million in 2023, reflecting a significant increase in losses[159] - Adjusted net income (loss) for 2024 was$(0.03) per diluted share, down from $0.15 per diluted share in 2023[159] Cash Flow and Working Capital - Working capital increased to$30.7 million in 2024 from $15.7 million in 2023, with cash and cash equivalents rising to$0.4 million from $0.3 million[160] - Net cash used in operating activities was$(6.1) million in 2024, compared to $(1.4) million in 2023, indicating increased cash outflow[168] - Cash used in investing activities rose to$(6.0) million in 2024 from $(1.9) million in 2023, primarily for the purchase of equipment[169] - Net cash provided by financing activities was$12.1 million in 2024, driven by $9.9 million in borrowings on the ABL Facility[170] Debt and Financing - The company has a senior secured term loan facility of$54.0 million, maturing on June 28, 2030, with a 1.00% annual amortization[163] - As of December 31, 2024, the company had a full valuation allowance for all deferred tax assets, indicating no anticipated recovery of these assets[182] - The company recorded a non-cash impairment loss of $5.5 million in 2024, contributing to the overall net loss[172] - The company expects existing cash and cash equivalents, along with borrowing availability, to be sufficient to fund operations for the next 12 months[162] Acquisitions and Financial Instruments - Acquisitions are accounted for under ASC Topic 805, with identifiable assets recognized at estimated fair values and any remaining purchase price recorded as goodwill[184] - All acquisition-related costs are expensed as incurred in selling, general and administrative expenses[185] - Financial instruments include cash and cash equivalents, accounts receivable, and accounts payable, with no significant currency or credit risks identified[186] - Variable rate indebtedness exposes the company to interest rate risk, as borrowings under senior secured credit facilities bear interest at variable rates[186] - The fair values of financial instruments approximate their carrying values, based on short maturities or current borrowing rates for similar loans[186] Risk and Obligations - The company has no off-balance sheet debt or obligations, nor any undisclosed transactions with related parties[188] - There are no guarantees of third-party debt by the company[188] - There are no applicable quantitative and qualitative disclosures about market risk[189]