qrhc-ex991

THE COLONY, TX – August 13, 2020 -- Quest Resource Holding Corporation (NASDAQ: QRHC) ("Quest"), a national leader in environmental waste and recycling services, today announced financial results for the second quarter ended June 30, 2020.

“Our team adapted quickly to the difficult COVID-19 market environment working closely with customers to ensure high levels of service, all the while focusing on the health and safety of our employees. Our customer end markets that were the most affected in April recovered faster than anticipated through each month of the quarter. However, overall volume trends are negative year over year. Due to the flexible cost structure of our asset light model, as well as actions we took to reduce expenses, we showed a solid improvement in Adjusted EBITDA and generated positive cash flow,” said S. Ray Hatch, President and Chief Executive Officer. “Since the end of the quarter, we bolstered the balance sheet, updating our line of credit with more favorable terms, and raising equity capital to support our acquisition strategy.”

Mr. Hatch continued, “While the pace and extent of the recovery remains uncertain, our flexible business model, strong balance sheet, and the essential nature of our services, position us to continue to weather this challenging environment.”

Quest will conduct a conference call today, August 13, 2020, at 5:00 PM ET, to review the financial results for the second quarter ended June 30, 2020. Investors interested in participating on the live call can dial 1-800-263-0877 within the U.S. or 1-646-828-8143 from abroad, referencing conference ID: 8602356. 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 https://investors.qrhc.com/investors/events-and-presentations. 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 waste and recycling services to customers from across multiple industry sectors that are typically larger, multi-location businesses. In addition, Quest’s programs and services enable customers to address their environmental and sustainability goals and responsibilities. Quest provides information that tracks and reports the environmental results of Quest’s services, provides actionable data to improve business operations, and enables customers to address their environmental and sustainability goals and responsibilities. For more information, visit www.questrmg.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 that our flexible business model, balance sheet and the essential nature of our services position us to continue to weather the challenging COVID-19 environment, and our belief that the financial measures contained in this press release facilitate operating performance comparisons from period to period. These statements are based on our current expectations, estimates, projections, beliefs, and assumptions. Such statements involve significant risks and uncertainties. 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,
	2020			2019					2020				2019
Revenue	$	21,969			$	25,445		$		47,301		$		52,094
Cost of revenue		17,594				20,695				38,383				42,802
Gross profit		4,375				4,750				8,918				9,292
Selling, general, and administrative		3,978				4,227				8,387				8,441
Depreciation and amortization		334				327				668				653
Total operating expenses		4,312				4,554				9,055				9,094
Operating income (loss)		63				196				(137	)			198
Other income		1,258				–				1,258				–
Interest expense		(88	)			(114	)			(172	)			(225	)
Income (loss) before taxes		1,233				82				949				(27	)
Income tax expense (benefit)		24				55				(28	)			110
Net income (loss)	$	1,209			$	27		$		977		$		(137	)

Net income (loss) applicable to common stockholders	$	1,209			$	27		$		977		$		(137	)
Net income (loss) per common share:
Basic	$	0.08			$	0.00		$		0.06		$		(0.01	)
Diluted	$	0.08			$	0.00		$		0.06		$		(0.01	)

Weighted average number of common shares outstanding:
Basic		15,465				15,340				15,431				15,334
Diluted		15,468				15,362				15,441				15,334

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2020			2019		2020			2019
Net income (loss)	$	1,209		$	27	$	977		$	(137	)
Depreciation and amortization		348			343		696			702
Interest expense		88			114		172			225
Stock-based compensation expense		400			269		777			473
Other adjustments		(929	)		17		(920	)		248
Income tax expense (benefit)		24			55		(28	)		110
Adjusted EBITDA	$	1,140		$	825	$	1,674		$	1,621

	June 30,			December 31,
	2020			2019
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,964		$	3,411
Accounts receivable, less allowance for doubtful accounts of $840 and $767 as of June 30, 2020 and December 31, 2019, respectively		13,942			13,900
Prepaid expenses and other current assets		1,423			1,110
Total current assets		19,329			18,421

Goodwill		58,208			58,208
Intangible assets, net		1,016			1,591
Property and equipment, net, and other assets		2,294			2,436
Total assets	$	80,847		$	80,656

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	12,634		$	13,317
Deferred revenue and other current liabilities		171			19
Total current liabilities		12,805			13,336

Revolving credit facility, net		3,792			4,535
Other long-term liabilities		821			1,141
Total liabilities		17,418			19,012

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued or outstanding as of June 30, 2020 and December 31, 2019		—			—
Common stock, $0.001 par value, 200,000 shares authorized, 15,403 and 15,373 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		15			15
Additional paid-in capital		161,666			160,858
Accumulated deficit		(98,252	)		(99,229	)
Total stockholders’ equity		63,429			61,644
Total liabilities and stockholders’ equity	$	80,847		$	80,656