UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT<br><br>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934<br><br><br><br>Date of report (Date of earliest event reported): August 15, 2022<br><br><br><br>QUEST RESOURCE HOLDING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Nevada	001-36451	51-0665952
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(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
3481 Plano Parkway, The Colony, Texas	75056
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(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (972) 464-0004

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the follow provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	QRHC	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

We are furnishing this Current Report on Form 8-K in connection with the disclosure of information, in the form of the textual information from a press release released on August 15, 2022.

The information in this Current Report on Form 8-K (including the exhibit) is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

We do not have, and expressly disclaim, any obligation to release publicly any updates or any changes in our expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based.

The text included with this Current Report on Form 8-K is available on our website located at http://investors.qrhc.com/, although we reserve the right to discontinue that availability at any time.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release from Quest Resource Holding Corporation, dated August 15, 2022, entitled “Quest Resource Holding Corporation Reports Second Quarter 2022 Financial Results”
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	QUEST RESOURCE HOLDING CORPORATION
Dated: August 15, 2022	By:	/s/ S. Ray Hatch
		Name:	S. Ray Hatch
		Title:	President and Chief Executive Officer

EX-99.1

Exhibit 99.1

Quest Resource Holding Corporation Reports Second Quarter 2022 Financial Results

THE COLONY, TX – August 15, 2022 – 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, 2022.

Second Quarter 2022 Highlights

• Revenue was $76.9 million, a 108.7% increase compared with the second quarter of 2021.

• Gross profit was $14.7 million, a 115.4% increase compared with the second quarter of 2021.

• GAAP net income per diluted share attributable to common stockholders was $0.05, compared with $0.03 per share during the second quarter of 2021.

• Adjusted EBITDA was $6.6 million, a 161.3% increase compared with the second quarter of 2021.

• Adjusted net income per diluted share was $0.19 compared with $0.05 per diluted share during the second quarter of 2021.

Year-to-Date 2022 Highlights (June 30, 2022)

• Revenue was $148.4 million, a 106.3% increase compared with the same period of 2021.

• Gross profit was $25.9 million, a 95.6% increase compared with the same period of 2021.

• GAAP net loss per diluted share attributable to common stockholders was $(0.05), compared with net income per share of $0.09 during the same period of 2021.

• Year-to-date Adjusted EBITDA was $10.3 million, a 100.4% increase compared with the same period of 2021.

• Adjusted net income per diluted share was $0.25, compared with $0.13 per diluted share during the same period of 2021.

"Second quarter results demonstrate the capability of our business model to deliver strong financial performance in a difficult economic environment. We continue to see strength in the activity levels and waste volumes generated across our end markets. And, by driving operational efficiencies and the flexibility of our agreements, we were able to offset inflationary and other cost pressures. In addition, we continue to generate profitable growth from: new customers, expansion with existing customers, and recent acquisitions,” said S. Ray Hatch, President and Chief Executive Officer. “We are making progress to optimize recent acquisitions and expect to continue to enhance the margin profile and contribution from these businesses. Overall, we are on track with our growth plans and expect continued profitable growth for 2022 and over the next several years from both organic and acquisitive sources.”

Second Quarter 2022 Earnings Conference Call and Webcast

Quest will conduct a conference call Monday, August 15, 2022, at 5:00 PM ET, to review the financial results for the second quarter ended June 30, 2022. Investors interested in participating on the live call can dial 1-888-394-8218 within the U.S. or 1-323-701-0225 from abroad, referencing conference ID: 7664116. 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.

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

In this press release, non-GAAP financial measures, "Adjusted EBITDA," and “Adjusted Net Income” are presented. From time-to-time, Quest considers and uses these supplemental measures 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 these non-GAAP measures because it considers it an important supplemental measure of Quest's performance. Quest's definition of these adjusted financial measures may differ from similarly named measures used by others. Quest believes these measures facilitate 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. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for the Company's GAAP measures. (See attached tables "Reconciliation of Net Income (Loss) to Adjusted EBITDA" and “Adjusted Net Income Per Share”).

About Quest Resource Holding Corporation

Quest is a national provider of waste and recycling services that enable 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.

Safe Harbor Statement

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 expectation to continue to enhance the margin profile and contribution from recent acquisitions and our expectation of continued momentum in 2022 and the next several years from both organic and acquisitive sources. 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 the potential effect of inflationary pressures and increased interest rates on our costs of doing business, 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, 2021. 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.

Investor Relations Contact:

Three Part Advisors, LLC

Joe Noyons

817.778.8424

Financial Tables Follow

Quest Resource Holding Corporation and Subsidiaries

STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	(Unaudited)
Revenue	$	76,905		$	36,858		$	148,427		$	71,960
Cost of revenue		62,236			30,048			122,510			58,710
Gross profit		14,669			6,810			25,917			13,250
Selling, general, and administrative		9,299			5,060			18,643			9,323
Depreciation and amortization		2,470			409			4,835			816
Total operating expenses		11,769			5,469			23,478			10,139
Operating income		2,900			1,341			2,439			3,111
Interest expense		(1,590	)		(550	)		(3,146	)		(1,111	)
Income (loss) before taxes		1,310			791			(707	)		2,000
Income tax expense		160			92			327			154
Net income (loss)	$	1,150		$	699		$	(1,034	)	$	1,846
Net income (loss) applicable to common stockholders	$	1,150		$	699		$	(1,034	)	$	1,846
Net income (loss) per common share:
Basic	$	0.06		$	0.04		$	(0.05	)	$	0.10
Diluted	$	0.05		$	0.03		$	(0.05	)	$	0.09
Weighted average number of common shares outstanding:
Basic		19,279			18,823			19,262			18,665
Diluted		21,349			20,501			19,262			20,045

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(Unaudited)

(In thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022			2021
Net income (loss)	$	1,150	$	699	$	(1,034	)	$	1,846
Depreciation and amortization		2,550		481		4,987			957
Interest expense		1,590		550		3,146			1,111
Stock-based compensation expense		326		506		585			816
Acquisition, integration, and related costs		668		117		1,974			136
Other adjustments		113		64		309			117
Income tax expense		160		92		327			154
Adjusted EBITDA	$	6,557	$	2,509	$	10,294		$	5,137

ADJUSTED NET INCOME PER SHARE

(Unaudited)

(In thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022			2021
Reported net income (loss) (1)	$	1,150	$	699	$	(1,034	)	$	1,846
Amortization of intangibles (2)		2,221		289		4,396			578
Acquisition, integration, and related costs (3)		668		117		1,974			136
Adjusted net income	$	4,039	$	1,105	$	5,336		$	2,560
Diluted earnings per share:
Reported net income (loss)	$	0.05	$	0.03	$	(0.05	)	$	0.09
Adjusted net income	$	0.19	$	0.05	$	0.25		$	0.13
Weighted average number of common shares outstanding:
Diluted (4)		21,349		20,501		21,541			20,045

(1) Applicable to common stockholders

(2) Reflects the elimination of non-cash amortization of acquisition-related intangible assets

(3) Reflects the add back of acquisition/integration related transaction costs

(4) Reflects adjustment for dilution as adjusted net income is positive

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