Quest Resource (NASDAQ:QRHC – Get Free Report) announced its earnings results on Thursday. The business services provider reported ($0.02) earnings per share for the quarter, FiscalAI reports. The business had revenue of $63.78 million for the quarter, compared to analyst estimates of $66.30 million. Quest Resource had a negative return on equity of 14.75% and a negative net margin of 7.07%.
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 Price Performance
Quest Resource stock traded up $0.08 during trading hours on Friday, reaching $1.12. 31,018 shares of the stock were exchanged, compared to its average volume of 27,186. The company has a quick ratio of 1.18, a current ratio of 1.18 and a debt-to-equity ratio of 2.22. Quest Resource has a 52-week low of $0.81 and a 52-week high of $2.41. The firm’s 50 day moving average is $1.29 and its 200 day moving average is $1.38.
Analyst Ratings Changes
Separately, Weiss Ratings downgraded Quest Resource from a “sell (d-)” rating to a “sell (e+)” rating in a research note on Monday. One analyst has rated the stock with a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, Quest Resource currently has an average rating of “Reduce”.
Check Out Our Latest Stock Report on Quest Resource
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.
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