Financial Data and Key Metrics Changes - Third quarter revenue was $37.4 million, an increase of 58% compared to the same period last year [6] - Gross profit dollars increased by 50.4% to $6.9 million, with organic growth contributing more than half of this increase [6][10] - Adjusted EBITDA for the quarter was $2.5 million, reflecting a 148% year-over-year increase [10] - Net income attributable to common stockholders was $0.02 per diluted share, compared to a net loss of $0.02 per diluted share for the same period last year [10] Business Line Data and Key Metrics Changes - Gross margin for the third quarter was 18.3% of revenue, which was 90 basis points lower than last year but within the targeted range [7] - SG&A expenses were $5.3 million, an increase of $1 million compared to the same period last year, primarily due to business recovery and acquisition-related costs [8][9] Market Data and Key Metrics Changes - The grocery market remained stable, while retail showed modest recovery, although foot traffic is still down significantly from pre-pandemic levels [13] - Demand for automotive repair and maintenance services improved, with miles driven flat compared to 2019 [13] - Industrial market activity levels normalized during the third quarter after a significant increase in the first half of 2021 [15] Company Strategy and Development Direction - The company continues to focus on managing the business to grow gross profit dollars, which is the key metric for success [4] - A disciplined M&A strategy contributed to growth, with expectations for acquisitions to be a meaningful part of growth in the coming years [18] - Investments in technology and personnel are being made to enhance capabilities and scalability [19] Management's Comments on Operating Environment and Future Outlook - Management expects year-over-year growth in gross profit dollars to continue into the fourth quarter and beyond [15][21] - Inflation is viewed as net neutral due to contract mechanisms that allow for adjustments [20] - The company is optimistic about strong growth and gross profit delivery in the upcoming quarters [21] Other Important Information - The company generated $3.4 million in operating cash flow for the nine months of 2021, with a cash balance of $9.1 million at the end of the quarter [11] - Debt levels remained relatively unchanged at $19 million [11] Q&A Session Summary Question: How does the new large industrial customer compare to previous large wins in terms of gross margin or gross profit dollar contribution? - Management does not comment on gross profit dollars per customer but expects this customer to contribute significantly [23] Question: Is the hiring of new employees the only factor driving SG&A up sequentially this year? - Acquisition activity and business growth are the two main drivers affecting SG&A costs [26][27] Question: Will the new acquisition contribute gross profit dollars similar to current margins? - The new acquisition is expected to have gross profit dollars similar to existing operations, with a contribution of approximately $400,000 to EBITDA [30][31]
Quest Resource (QRHC) - 2021 Q3 - Earnings Call Transcript