Quest Resource (NASDAQ:QRHC) Issues Quarterly Earnings Results

Quest Resource (NASDAQ:QRHC) issued its earnings results on Thursday. The business services provider reported ($0.02) earnings per share (EPS) for the quarter, FiscalAI reports. Quest Resource had a negative net margin of 7.07% and a negative return on equity of 14.75%. The company had revenue of $63.78 million during the quarter, compared to analysts’ expectations of $66.30 million.

Here are the key takeaways from Quest Resource’s conference call:

• Third-quarter revenue was $63.8 million, up about 1% year over year and essentially flat sequentially. Growth in non-industrial markets and new business was offset by softer industrial volumes.
• Gross margin improved to 17.8% from 16.3% in the second quarter, and Adjusted EBITDA rose to $3.4 million from $2.8 million sequentially and $2.9 million a year earlier. Management attributed the gains to pricing, service-network optimization, and improving margins at newer accounts.
• Cost reductions continued to support profitability: SG&A fell 8% year over year in Q3 and 16% year to date, or nearly $5 million. The company expects to reinvest in sales and technology next year, while aiming to offset much of the added expense with efficiencies and new business.
• Management expects the usual Q4 seasonal decline in revenue and gross profit sequentially, particularly from industrial customers, but forecasts gross profit and margin above the prior-year quarter. It cited late-stage discussions with large national brands in non-industrial markets, while cautioning that deal timing is uncertain.
• Quest used $0.3 million in operating cash during Q3 and ended the quarter with about $1 million in cash, though it had $17.4 million available on its ABL facility. Temporary collection delays were resolved; year-to-date operating cash flow was $4.4 million and was used to reduce higher-interest debt, while DSO remained at 71 days versus a mid-60s target.

Quest Resource Stock Performance

Shares of NASDAQ:QRHC traded up $0.08 during midday trading on Friday, hitting $1.12. 31,018 shares of the stock were exchanged, compared to its average volume of 27,186. The company has a current ratio of 1.18, a quick ratio of 1.18 and a debt-to-equity ratio of 2.22. Quest Resource has a twelve month low of $0.81 and a twelve month high of $2.41. The company has a 50 day moving average price of $1.29 and a 200-day moving average price of $1.38.

Wall Street Analyst Weigh In

Separately, Weiss Ratings lowered Quest Resource from a “sell (d-)” rating to a “sell (e+)” rating in a research note on Monday. One equities research analyst has rated the stock with a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of “Reduce”.

Quest Resource Company Profile

Quest Resource Holding Corp. (NASDAQ: QRHC) provides waste and recycling management services for commercial, industrial, and multi-location customers. The company helps organizations manage material collection, transportation, processing, recycling, reuse, and disposal through a network of third-party service providers.

Quest’s offerings are designed to help customers improve waste diversion, reduce landfill use, enhance operational efficiency, and support sustainability and regulatory objectives.