Quest Resource (US:QRHC)2025-05-12 22:02Financial Data and Key Metrics Changes - Revenue for the first quarter was $68.4 million, a decrease of 6% year-over-year and down 2% sequentially from the fourth quarter [11] - Gross profit dollars were $10.9 million, a 22% decrease from last year but a 2% increase sequentially from the fourth quarter [13] - SG&A expenses were $11.4 million, an increase of $1.6 million year-over-year and $1.3 million sequentially [16] Business Line Data and Key Metrics Changes - The decrease in revenue was attributed to lower volumes due to client attrition and lower volumes at select larger clients, with client attrition contributing approximately $7 million to the decline [12] - New clients secured during 2024 finished the first quarter at approximately 80% of their anticipated run rate, expected to provide incremental growth in revenue and gross profit [13] Market Data and Key Metrics Changes - The industrial sector showed some weakness, impacting volumes, but other end markets did not exhibit significant changes [53] - The company is seeing increased demand for its services, particularly from prospects that have never used its model before, indicating a robust pipeline [44] Company Strategy and Development Direction - The company is focused on generating cash, improving profitability, lowering debt, and increasing operating efficiency [9] - A cultural shift towards operational excellence is being implemented, emphasizing performance and accountability across the organization [20] - The company aims to improve EBITDA, cash generation, and pay down debt through various initiatives [20] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the company's ability to execute operational improvements and expects steady improvement throughout the year [26] - The company anticipates both top and bottom line growth for 2025, with more meaningful growth expected as the year progresses [27] Other Important Information - The company completed the sale of a non-core part of the RWS business, generating $5 million in cash used to reduce debt [8] - Cash at the end of the first quarter was $1.4 million, with approximately $21 million of available borrowing capacity [17] Q&A Session Summary Question: Any notable KPIs to highlight as you focus on execution moving forward? - Management has started to baseline all processes and identified weaknesses, implementing changes to address these gaps [31] Question: Are you seeing any increase in weakness in your market? - No significant change in market weakness has been observed, but there is hope for strength returning [38] Question: How do you plan to bring down DSO? - Strategies include improving billing efficiency and having ongoing conversations with larger clients to accelerate collections [46][48] Question: What is the timetable to evaluate the initiatives being put in place? - A year from now, the company expects to look very different, with results beginning in Q2 and largely in Q3 and Q4 [70] Question: What caused customer attrition? - Attrition has been mostly related to customers being acquired with different programs in place, with some isolated attrition noted [56] Question: How do bonuses work for employees? - Bonuses are built over an annualized forecast and will be adjusted based on the company's performance throughout the year [60]