Quest Resource (QRHC) - 2025 Q1 - Quarterly Results

Financial & Operational Highlights Quest's Q1 2025 results showed revenue and profit declines, with strategic actions including a $5 million asset sale and $3 million in cost savings aimed at improving performance and cash generation Q1 2025 Key Financial Metrics (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $68.4 million | $72.7 million | -5.8% | | Gross Profit | $10.9 million | $14.0 million | -22.1% | | Gross Margin | 16.0% | 19.3% | -3.3 p.p. | | GAAP Net Loss per Share | $(0.50) | $(0.03) | - | | Adjusted EBITDA | $1.6 million | $5.1 million | -67.8% | | Adjusted Net (Loss)/Income per Share | $(0.14) | $0.08 | - | - Completed the sale of a non-core portion of the RWS business, generating $5 million in cash proceeds which were used to pay down debt[1][5] - Implemented cost reductions, including a reduction in headcount, which are expected to save approximately $3 million in SG&A on an annualized basis[1][5] - Amended agreements with existing lenders to provide additional financial flexibility[1][5] - Management is focused on developing short-term initiatives and long-term efficiency programs to increase earnings, generate cash, and improve operating efficiencies[1][7] Financial Statements This section presents Quest's unaudited consolidated financial statements, including Statements of Operations and Balance Sheets, for Q1 2025 Statements of Operations In Q1 2025, revenue decreased 5.8% to $68.4 million, resulting in an $8.2 million operating loss and a widened net loss of $10.4 million, or $(0.50) per share, primarily due to asset sale and impairment losses Statements of Operations (In thousands, except per share amounts) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | 2025 | 2024 | | Revenue | $68,430 | $72,651 | | Cost of revenue | $57,499 | $58,615 | | Gross profit | $10,931 | $14,036 | | Selling, general, and administrative | $11,412 | $9,798 | | Depreciation and amortization | $1,543 | $2,362 | | Loss on sale of assets | $4,430 | $— | | Impairment loss | $1,707 | $— | | Total operating expenses | $19,092 | $12,160 | | Operating income (loss) | $(8,161) | $1,876 | | Interest expense | $(2,267) | $(2,472) | | Net loss | $(10,406) | $(655) | | Net loss per share (Basic and diluted) | $(0.50) | $(0.03) | | Weighted average shares outstanding | 20,859 | 20,380 | Balance Sheets As of March 31, 2025, total assets decreased to $165.7 million from $175.6 million, primarily due to asset disposition, leading to a reduction in stockholders' equity to $44.4 million Balance Sheet Highlights (In thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $68,015 | $75,139 | | Total assets | $165,659 | $175,645 | | Total current liabilities | $46,465 | $44,391 | | Total liabilities | $121,297 | $121,489 | | Total stockholders' equity | $44,362 | $54,156 | | Total liabilities and stockholders' equity | $165,659 | $175,645 | Non-GAAP Financial Measures This section reconciles U.S. GAAP results to non-GAAP financial measures, including Adjusted EBITDA and Adjusted Net Income (Loss), for a more comprehensive performance analysis - The company uses non-GAAP measures like Adjusted EBITDA and Adjusted Net Income (Loss) to supplement GAAP results, believing they facilitate period-to-period performance comparisons by excluding certain non-cash or non-recurring items[10] Reconciliation of Net Loss to Adjusted EBITDA Adjusted EBITDA for Q1 2025 declined significantly to $1.6 million from $5.1 million in Q1 2024, primarily due to substantial add-backs for asset sale and impairment losses Reconciliation of Net Loss to Adjusted EBITDA (In thousands) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | 2025 | 2024 | | Net loss | $(10,406) | $(655) | | Depreciation and amortization | $1,746 | $2,496 | | Interest expense | $2,267 | $2,472 | | Stock-based compensation expense | $662 | $357 | | Loss on sale of assets | $4,430 | $— | | Impairment loss | $1,707 | $— | | Other adjustments | $1,171 | $349 | | Income tax expense (benefit) | $(22) | $59 | | Adjusted EBITDA | $1,555 | $5,120 | Adjusted Net Income (Loss) Per Share For Q1 2025, the company reported an adjusted net loss of $2.9 million, or $(0.14) per diluted share, a significant decline from the prior year's adjusted net income, mainly due to non-cash charge exclusions Adjusted Net Income (Loss) Per Share (In thousands, except per share amounts) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | 2025 | 2024 | | Reported net loss | $(10,406) | $(655) | | Amortization of intangibles | $1,364 | $2,322 | | Loss on sale of assets | $4,430 | $— | | Impairment loss | $1,707 | $— | | Adjusted net income (loss) | $(2,905) | $1,709 | | Adjusted net income (loss) per share | $(0.14) | $0.08 |