qrhc-ex991

THE COLONY, TX – November 14, 2019 -- Quest Resource Holding Corporation (NASDAQ: QRHC) ("Quest"), a national leader in environmental reuse, recycling, and waste disposal services, today announced financial results for the third quarter ended September 30, 2019.

“We delivered record gross profit and 27% growth in Adjusted EBITDA during the quarter, reflecting our continued success in transitioning our business to focus on providing higher value-added solutions to our customers. As previously discussed and expected, our transition away from lower value-added solutions has resulted in challenging revenue comparisons relative to prior periods,” said S. Ray Hatch, President and Chief Executive Officer. “With solid year-to-date performance, we believe we are on track to meet our profitability goals for 2019, which include 10%+ growth in gross profit. We continue to find acceptance across multiple end markets, including the food service vertical where recent wins provide us with an opportunity to demonstrate our differentiated and compelling value proposition. We also have additional growth opportunities with our existing customers who value our flexible solution offerings and the service levels we provide.”

Quest will conduct a conference call Thursday, November 14, 2019, at 4:00 p.m. Central Time, to review the financial results for the third quarter ended September 30, 2019. Investors interested in participating on the live call can dial 1-800-289-0438 within the U.S. 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 Income (Loss) to Adjusted EBITDA.")

Quest is a national provider of reuse, recycling, and disposal services that enable our customers to achieve and satisfy their environmental and sustainability goals and responsibilities. Quest provides businesses across multiple industry sectors with single source, customer specific solutions to address a wide variety of waste streams and recyclables generated by their operations. 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 and satisfy 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, but are not limited to, our belief we now target the right markets with the right services; our belief we have operations in place to sustainably support profitability while consistently providing excellent customer service; our belief that our efforts have positioned us well to grow sales at our targeted rate of 10% to 15% per year; our expectation profitability will continue to grow at an even faster pace, at our current business levels, coupled with the operating leverage inherent in our business model; and our belief that the financial measures contained in this press release facilitate operating performance comparisons from period to period. Words such as “anticipate,” "estimate," "expect," "project," "intend," "plan," "predict," "believe" and similar words, expressions and variations of these words and expressions are intended to identify forward-looking statements. 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 Annual Report on Form 10-K for the year ended December 31, 2018, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. 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							Nine Months Ended
	September 30,							September 30,
	2019		2018					2019				2018
Revenue	$	23,926		$	25,920		$		76,020		$		78,545
Cost of revenue		19,154			21,450				61,956				66,099
Gross profit		4,772			4,470				14,064				12,446
Selling, general, and administrative		4,221			4,638				12,663				12,269
Depreciation and amortization		330			407				982				2,373
Total operating expenses		4,551			5,045				13,645				14,642
Operating income (loss)		221			(575	)			419				(2,196	)
Interest expense		119			106				344				336
Income (loss) before taxes		102			(681	)			75				(2,532	)
Income tax expense		55			—				165				—
Net income (loss)	$	47		$	(681	)	$		(90	)	$		(2,532	)

Net income (loss) applicable to common stockholders	$	47		$	(681	)	$		(90	)	$		(2,532	)
Net income (loss) per common share:
Basic	$	0.00		$	(0.04	)	$		(0.01	)	$		(0.17	)
Diluted	$	0.00		$	(0.04	)	$		(0.01	)	$		(0.17	)

Weighted average number of common shares outstanding:
Basic		15,350			15,313				15,340				15,308
Diluted		15,399			15,313				15,340				15,308

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2019		2018			2019			2018
Net income (loss)	$	47	$	(681	)	$	(90	)	$	(2,532	)
Depreciation and amortization		354		452			1,056			2,509
Interest expense		119		106			344			336
Stock-based compensation expense		285		188			758			594
Other adjustments		—		610			248			662
Income tax expense		55		—			165			—
Adjusted EBITDA	$	860	$	675		$	2,481		$	1,569

	September 30,			December 31,
	2019			2018
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,069		$	2,122
Accounts receivable, less allowance for doubtful accounts of $751 and $929 as of September 30, 2019 and December 31, 2018, respectively		14,237			16,712
Prepaid expenses and other current assets		1,239			966
Total current assets		17,545			19,800

Goodwill		58,208			58,208
Intangible assets, net		1,853			2,611
Property and equipment, net, and other assets		2,688			968
Total assets	$	80,294		$	81,587

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	13,514		$	15,778
Deferred revenue and other current liabilities		16			72
Total current liabilities		13,530			15,850

Revolving credit facility, net		4,228			5,194
Other long-term liabilities		1,295			—
Total liabilities		19,053			21,044

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued or outstanding as of September 30, 2019 and December 31, 2018		—			—
Common stock, $0.001 par value, 200,000 shares authorized, 15,350 and 15,329 shares issued and outstanding as of September 30, 2019 and December 31, 2018		15			15
Additional paid-in capital		160,490			159,702
Accumulated deficit		(99,264	)		(99,174	)
Total stockholders’ equity		61,241			60,543
Total liabilities and stockholders’ equity	$	80,294		$	81,587