qrhc-ex991

THE COLONY, TX – August 14, 2018 -- Quest Resource Holding Corporation (NASDAQ: QRHC) ("Quest"), a national leader in environmental reuse, recycling, and disposal services, today announced financial results for the second quarter ended June 30, 2018.

"Our focus on the right business with the right customers in the right markets delivered sustainable improvements in profitability for the second quarter. Second quarter financial results also illustrate the earnings leverage in our business, as 13% sequential growth in revenue generated 25% growth in gross profitability,” said S. Ray Hatch, President and Chief Executive Officer. “By demonstrating the value of our services, our existing customers are trusting us to do more to help them reach their sustainability goals. In addition, we have built a significant pipeline of new business that we expect will lead to significant incremental growth during the second half of the year. Based on the continuing ramp of business with existing customers, our expanding pipeline of new business, and the earnings leverage in our business, we believe that we are on target to reach $4 million in Adjusted EBITDA for 2018.”

Quest will conduct a conference call on Tuesday, August 14, 2018, at 4:00 p.m. Central Time, to review the financial results for the second quarter ended June 30, 2018. Investors interested in participating on the live call can dial 1-800-289-0438 within the United States., or 1-323-794-2423 from abroad. The conference call, which may include forward-looking statements, is also being webcast and is available via the investor relations section of Quest’s website at www.qrhc.com. A replay of the webcast will be archived on Quest’s investor relations website for 90 days.

In this press release, a non-GAAP financial measure, "Adjusted EBITDA," is presented. From time-to-time, Quest considers and uses this supplemental measure of operating performance in order to provide an improved understanding of underlying performance trends. Quest believes it is useful to review, as applicable, both (1) GAAP measures that include (i) depreciation and amortization, (ii) interest expense, (iii) stock-based compensation expense, (iv) income tax expense, and (v) certain other adjustments, and (2) non-GAAP measures that exclude such items. Quest presents this non-GAAP measure because it considers it an important supplemental measure of Quest's performance. Quest's definition of this adjusted financial measure may differ from similarly named measures used by

others. Quest believes this measure facilitates operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. This non-GAAP measure has limitations as an analytical tool and should not be considered in isolation or as a substitute for the Company's GAAP measures. (See attached table "Reconciliation of Net Loss to Adjusted EBITDA.")

Quest is a national provider of reuse, recycling, and disposal services that enable our customers to achieve their environmental and sustainability goals and responsibilities. Quest provides businesses across multiple industry sectors with single source solutions for the reuse, recycling, and disposal of a wide variety of waste streams and recyclables generated by their operations. Quest’s customers typically are multi-location businesses for which we create, implement, and manage customer-specific programs for the collection, processing, recycling, disposal, and tracking of waste streams and recyclables. Quest also provides information and data that tracks and reports the environmental results of Quest’s services, provides actionable data to improve business operations, and enables Quest’s customers to achieve their environmental and sustainability goals and responsibilities. For more information, visit www.QRHC.com.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which provides a "safe harbor" for such statements in certain circumstances. The forward-looking statements include our focus on the right business with the right customers in the right markets; our belief that by demonstrating the value of our services, our existing customers are trusting us to do more to help them reach their sustainability goals; our belief that we have built a significant pipeline of new business that we expect will lead to significant incremental growth during the second half of the year; and our expectation for EBITDA for 2018. These statements are based on our current expectations, estimates, projections, beliefs, and assumptions. Such statements involve significant risks and uncertainties. Actual events or results could differ materially from those discussed in the forward-looking statements as a result of various factors, including, but not limited to, competition in the environmental services industry, the impact of the current economic environment, and other factors discussed in greater detail in our filings with the Securities and Exchange Commission (SEC), including our Report on Form 10-K for the year ended December 31, 2017. You are cautioned not to place undue reliance on such statements and to consult our SEC filings for additional risks and uncertainties that may apply to our business and the ownership of our securities. Our forward-looking statements are presented as of the date made, and we disclaim any duty to update such statements unless required by law to do so.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Revenue	$	27,929		$	41,370		$	52,625		$	83,910
Cost of revenue		23,501			36,922			44,649			75,276
Gross profit		4,428			4,448			7,976			8,634
Selling, general, and administrative		3,879			4,582			7,631			9,562
Depreciation and amortization		982			996			1,966			1,997
Total operating expenses		4,861			5,578			9,597			11,559
Operating loss		(433	)		(1,130	)		(1,621	)		(2,925	)
Interest expense		(106	)		(121	)		(230	)		(235	)
Income tax expense		—			—			—			—
Net loss	$	(539	)	$	(1,251	)	$	(1,851	)	$	(3,160	)
Net loss applicable to common stockholders	$	(539	)	$	(1,251	)	$	(1,851	)	$	(3,160	)
Net loss per common share:
Basic and diluted	$	(0.04	)	$	(0.08	)	$	(0.12	)	$	(0.21	)

Weighted average number of common shares outstanding:
Basic and diluted		15,308			15,276			15,305			15,274

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Net loss	$	(539	)	$	(1,251	)	$	(1,851	)	$	(3,160	)
Depreciation and amortization		1,027			1,038			2,057			2,080
Interest expense		106			121			230			235
Stock-based compensation expense		183			570			407			1,184
Other adjustments		3			—			51			244
Income tax expense		—			—			—			—
Adjusted EBITDA	$	780		$	478		$	894		$	583

	June 30,			December 31,
	2018			2017
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,081		$	1,055
Accounts receivable, less allowance for doubtful accounts of $562 and $699 as of June 30, 2018 and December 31, 2017, respectively		17,878			16,264
Prepaid expenses and other current assets		1,788			1,508
Total current assets		20,747			18,827

Goodwill		58,209			58,337
Intangible assets, net		3,166			5,032
Property and equipment, net, and other assets		1,146			1,320
Total assets	$	83,268		$	83,516

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	17,494		$	14,254
Deferred revenue and other current liabilities		126			329
Total current liabilities		17,620			14,583

Revolving credit facility, net		4,924			6,763
Other long-term liabilities		2			22
Total liabilities		22,546			21,368

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued or outstanding as of June 30,2018 and December 31, 2017		—			—
Common stock, $0.001 par value, 200,000 shares authorized, 15,313 and 15,302 shares issued and outstanding as of June 30, 2018 and December 31, 2017		15			15
Additional paid-in capital		159,293			158,868
Accumulated deficit		(98,586	)		(96,735	)
Total stockholders’ equity		60,722			62,148
Total liabilities and stockholders’ equity	$	83,268		$	83,516