Quest Resource (US:QRHC)2022-11-14 21:11Revenue and Profit - For the quarter ended September 30, 2022, revenue was $73.4 million, an increase of $36.0 million, or 96%, compared to $37.4 million for the same quarter in 2021[91]. - For the nine months ended September 30, 2022, revenue was $221.8 million, an increase of $112.5 million, or 103%, compared to $109.3 million for the same period in 2021[92]. - Gross profit for the quarter ended September 30, 2022 was $12.2 million, an increase of $5.3 million compared to $6.9 million for the same quarter in 2021, with a gross profit margin of 16.6%[94]. - Gross profit for the nine months ended September 30, 2022 was $38.1 million, an increase of $18.0 million compared to $20.1 million for the same period in 2021, with a gross profit margin of 17.2%[94]. - Adjusted EBITDA increased by 57% to $3.8 million for the quarter ended September 30, 2022, compared to $2.5 million for the same period in 2021[106]. Expenses - Operating expenses for the quarter ended September 30, 2022 were approximately $11.8 million, an increase of $6.0 million compared to $5.8 million for the same quarter in 2021[96]. - Selling, general, and administrative expenses for the quarter ended September 30, 2022 were $9.3 million, an increase of approximately $4.0 million compared to $5.3 million for the same quarter in 2021[97]. - Cost of revenue for the quarter ended September 30, 2022 was $61.2 million, an increase of $30.7 million compared to $30.5 million for the same quarter in 2021[93]. - Operating expenses for the quarter ended September 30, 2022, increased by approximately $2.0 million to $2.5 million, primarily due to acquired business operations[98]. - Interest expense rose to $1.9 million for the quarter ended September 30, 2022, an increase of approximately $1.4 million compared to $543,000 in the same quarter of 2021[99]. Net Income and Loss - Net loss for the quarter ended September 30, 2022, was $(1.7) million, compared to net income of $386,000 for the same quarter in 2021[102]. - Adjusted net income for the quarter ended September 30, 2022, was $863,000, down from $1.2 million for the same quarter in 2021[110]. - Net loss for the nine months ended September 30, 2022, was $(2.7) million, with non-cash items of $10.7 million primarily related to depreciation and stock-based compensation[119]. - Net income for the same period in 2021 was $2.2 million, with non-cash items of $3.3 million[119]. Cash Flow and Investments - Cash used in investing activities for the nine months ended September 30, 2022, was $4.4 million, primarily due to the $3.1 million net purchase of assets from an independent environmental services company[117]. - Net cash provided by financing activities for the nine months ended September 30, 2022, was $7.4 million, compared to $1.1 million for the same period in 2021[118]. - As of September 30, 2022, the company had $7.1 million in cash and cash equivalents, down from $8.4 million as of December 31, 2021[111]. - Net cash used in the change in operating assets and liabilities was $(12.3) million for 2022, primarily due to changes in accounts receivable and accounts payable[119]. Economic and Operational Factors - The increase in revenue for the quarter was primarily due to heightened customer production levels and revenue of $26.5 million from the acquired customer base related to business acquisitions[91]. - The impact of the COVID-19 pandemic and global economic trends has created uncertainty regarding future operational and financial performance[87]. - The company experienced an increase in costs due to inflation and related increases in interest rates, which could adversely affect business results[90]. - There is uncertainty regarding future inflation and interest rate increases that may affect the company[120]. Accounting and Financial Policies - The company has flexible pricing structures to address inflationary cost increases, allowing recovery of certain costs from customers[120]. - There have been no changes in critical accounting policies during the first nine months of 2022[121]. - The company has no off-balance sheet debt or similar obligations[123]. - The company does not guarantee any third-party debt[123]. - The company evaluates estimates related to accounts receivable and intangible assets, which may significantly differ from actual amounts[121]. - No quantitative and qualitative disclosures about market risk are applicable[124].