Quest Resource (US:QRHC)2025-03-13 03:19Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $70 million, up 1% year-over-year but down 4% sequentially from Q3 2024 [27] - Gross profit dollars decreased by 6.7% year-over-year and 8.3% sequentially, totaling $10.7 million [33] - Adjusted EBITDA for Q4 2024 would have been approximately $3.2 million, excluding non-cash adjustments [38] Business Line Data and Key Metrics Changes - New clients secured during 2024 generated approximately two-thirds of their anticipated quarterly revenue run rate during Q4 2024 [29] - Client attrition was primarily related to the mall and shopping center sector, which the company has decided to exit [31] - The company expects to realize $15 million in net incremental revenue from new client wins achieved during 2024 [32] Market Data and Key Metrics Changes - Weak market conditions in the industrial end markets are expected to continue impacting volumes for at least the next two quarters [30] - The company has experienced uncharacteristic client attrition, with a third related to the mall business [31][58] Company Strategy and Development Direction - The company is focused on reducing costs, implementing process improvements, and increasing accountability to enhance performance [12] - A new operational leadership team has been established to drive operational excellence and efficiency [61] - The company is committed to maintaining a solid balance sheet and prioritizing capital allocation towards debt repayment [64] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that performance over the last couple of years has been unacceptable and is committed to achieving operational excellence [50][58] - The company expects to show both top and bottom-line growth in 2025, with improvements anticipated in the second half of the year [65] - Management is optimistic about the future, citing a robust pipeline and strong client referrals [9][64] Other Important Information - The company has refinanced its debt, reducing interest expenses by approximately $1 million annually [45] - An impairment loss of $5.5 million was recognized related to the sale of client contracts for the mall business [43] Q&A Session Summary Question: Can you talk about the vendor management system and its rollout? - The vendor management program is substantially complete, with ongoing improvements and expected cost reductions in Q1 [71][72] Question: Is the attrition stabilizing? - Yes, most attrition was related to the mall business and M&A activity, and the company is seeing signs of stabilization [80] Question: What is the outlook for the industrial market? - The industrial market is expected to face challenges for the next couple of quarters, but there are signs of potential recovery in the second half of the year [78] Question: How is the sales pipeline looking? - The sales pipeline has grown significantly, and the company remains optimistic about future deal flow [84] Question: What are the expectations regarding the sale of the RWS tenant billing business? - The sale is expected to close soon, and it is not anticipated to have a material impact on the bottom line [88] Question: How does the company view M&A in the near term? - The focus is currently on operational improvements and debt repayment, with M&A not being a priority at this time [126] Question: What are the expectations for top and bottom-line growth in 2025? - The company expects growth in both revenue and EBITDA, with improvements anticipated as operational initiatives take effect [135][137]