qrhc-ex991

THE COLONY, TX – November 15, 2021 – Quest Resource Holding Corporation (NASDAQ: QRHC) ("Quest"), a national leader in environmental waste and recycling services, today announced financial results for the third quarter ended September 30, 2021.

“The execution of our strategic initiatives resulted in another quarter of exceptional financial performance. During the third quarter, growth came from multiple sources including onboarding new customers, expansion of our services and locations with existing customers, continued economic recovery, as well as from contribution from acquisitions. Adjusted EBITDA growth for the quarter and year-to-date period outpaced growth in gross profit dollars, an ongoing demonstration of the earnings leverage in our business,” said S. Ray Hatch, President and Chief Executive Officer. “Although supply chain and labor issues may cause some volatility in certain end markets, we believe any impact from these conditions will be temporary. We believe that we remain well positioned on our path for growth with organic growth from new and established customers, along with expansion from acquisitions.”

Quest will conduct a conference call Monday, November 15, 2021, at 5:00 PM ET, to review the financial results for the third quarter ended September 30, 2021. 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, referencing conference ID: 4764520. 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. 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 that empower larger businesses to excel in achieving their environmental and sustainability goals and responsibilities. Quest delivers focused expertise across multiple industry sectors to build single-source, client-specific solutions that generate quantifiable business and sustainability results. Addressing a wide variety of waste streams and recyclables, Quest provides information and data that tracks and reports the environmental results of Quest’s services, gives actionable data to improve business operations, and enables Quest’s clients to excel in their business and sustainability 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 that any impact from the volatility in certain end markets as a result of supply chain and labor issues will be temporary and our believe that we remain well positioned on our path for growth with organic growth from new and established customers, along with expansion from acquisitions. 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, the spread of major epidemics (including Coronavirus) and other related uncertainties such as government-imposed travel restrictions, interruptions to supply chains, commodity price fluctuations, and extended shut down of businesses, 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, 2020. 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,
	2021			2020					2021				2020
Revenue	$	37,367			$	23,701		$		109,327		$		71,002
Cost of revenue		30,514				19,144				89,224				57,527
Gross profit		6,853				4,557				20,103				13,475
Selling, general, and administrative		5,308				4,291				14,630				12,678
Depreciation and amortization		508				150				1,325				818
Total operating expenses		5,816				4,441				15,955				13,496
Operating income (loss)		1,037				116				4,148				(21	)
Other income		—				150				—				1,408
Interest expense		(543	)			(73	)			(1,654	)			(244	)
Loss on extinguishment of debt		—				(168	)			—				(168	)
Income before taxes		494			,	25				2,494				975
Income tax expense		108				92				262				64
Net income (loss)	$	386			$	(67	)	$		2,232		$		911

Deemed dividend for warrant down round feature		—				(205	)			—				(205	)
Net income applicable to common stockholders	$	386			$	(272	)	$		2,232		$		706
Net income (loss) per common share:
Basic	$	0.02			$	(0.02	)	$		0.12		$		0.04
Diluted	$	0.02			$	(0.02	)	$		0.11		$		0.04

Weighted average number of common shares outstanding:
Basic		18,985				17,290				18,785				16,055
Diluted		21,308				17,290				20,704				16,070

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net income (loss)	$	386	$	(67)	$	2,232	$	911
Depreciation and amortization		582		176		1,539		872
Interest expense		543		73		1,654		244
Stock-based compensation expense		326		324		1,142		1,101
Acquisition, integration, and related costs		464		354		600		537
Other adjustments		42		37		160		(1,065	)
Income tax expense		108		92		262		64
Adjusted EBITDA	$	2,451	$	989	$	7,589	$	2,664

	September 30,			December 31,
	2021			2020
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	9,100		$	7,516
Accounts receivable, less allowance for doubtful accounts of $968 and $935 as of September 30, 2021 and December 31, 2020, respectively		25,919			17,421
Prepaid expenses and other current assets		1,463			1,069
Total current assets		36,482			26,006

Goodwill		66,795			66,310
Intangible assets, net		7,263			6,529
Property and equipment, net, and other assets		3,364			3,384
Total assets	$	113,904		$	102,229

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	22,106		$	15,247
Other current liabilities		1,678			1,393
Current portion of notes payable		652			624
Total current liabilities		24,436			17,264

Notes payable, net		15,878			14,948
Other long-term liabilities, net		1,608			1,974
Total liabilities		41,922			34,186

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued or outstanding as of September 30, 2021 and December 31, 2020		—			—
Common stock, $0.001 par value, 200,000 shares authorized, 18,802 and 18,413 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		19			18
Additional paid-in capital		168,131			166,425
Accumulated deficit		(96,168	)		(98,400	)
Total stockholders’ equity		71,982			68,043
Total liabilities and stockholders’ equity	$	113,904		$	102,229