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): November 14, 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 November 14, 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 November 14, 2022, entitled “Quest Resource Holding Corporation Reports Third 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: November 14, 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 Third Quarter 2022 Financial Results

THE COLONY, TX – November 14, 2022 – 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, 2022.

Third Quarter 2022 Highlights

• Revenue was $73.4 million, a 96.3% increase compared with the third quarter of 2021.

• Gross profit was $12.2 million, a 77.8% increase compared with the third quarter of 2021.

• GAAP net loss was $(1.7) million, or $(.09) per basic and diluted share attributable to common stockholders, compared with net income of $386,000, or $0.02 per basic and diluted share, in the third quarter of 2021.

• Adjusted EBITDA was $3.8 million, a 56.9% increase compared with the third quarter of 2021.

• Adjusted net income per diluted share was $0.04 compared with $0.06 per diluted share during the third quarter of 2021.

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

• Revenue was $221.8 million, a 102.9% increase compared with the same period of 2021.

• Gross profit was $38.1 million, an 89.5% increase compared with the same period of 2021.

• GAAP net loss was $(2.7) million, or $(0.14) per basic and diluted share attributable to common stockholders, compared with net income of $2.2 million, or $0.12 per basic and $0.11 per diluted share, respectively, during the same period of 2021.

• Year-to-date Adjusted EBITDA was $14.1 million, an 86.3% increase compared with the same period of 2021.

• Adjusted net income per diluted share was $0.29, compared with $0.18 per diluted share during the same period of 2021.

“Third quarter results continued to reflect the strength of our business model and demonstrate how we can perform well in a challenging economic environment. We posted strong financial results, delivering 78% growth in gross profit dollars to $12.2 million and 57% growth in Adjusted EBITDA of $3.8 million. We are executing well with all our growth strategies, adding new customers, expanding services with existing customers, and optimizing efficiencies with our core business and acquired companies,” said S. Ray Hatch, President and Chief Executive Officer. “We continue to invest in the scalability and capabilities of our data platform, which is further enhancing our value proposition and competitive differentiation. Overall, our outlook remains positive, we expect a strong finish to what has been an exceptional year of growth and believe we are well positioned for profitable growth to continue during the next several years.”

Third Quarter 2022 Earnings Conference Call and Webcast

Quest will conduct a conference call Monday, November 14, 2022, at 5:00 PM ET, to review the financial results for the third quarter ended September 30, 2022. 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: 9182428. 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 belief that we can perform well in a challenging economic environment, our belief that we continue to further enhance our value proposition and competitive differentiation, our expectation to have a strong finish to the year with continued growth, and our belief that we are well positioned for profitable growth during the next several years. 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 Annual 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 September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	(Unaudited)						(Unaudited)
Revenue	$	73,358		$	37,367		$	221,785		$	109,327
Cost of revenue		61,175			30,514			183,685			89,224
Gross profit		12,183			6,853			38,100			20,103
Selling, general, and administrative		9,333			5,308			27,976			14,630
Depreciation and amortization		2,473			508			7,308			1,325
Total operating expenses		11,806			5,816			35,284			15,955
Operating income		377			1,037			2,816			4,148
Interest expense		(1,911	)		(543	)		(5,057	)		(1,654	)
Income (loss) before taxes		(1,534	)		494			(2,241	)		2,494
Income tax expense		152			108			479			262
Net income (loss)	$	(1,686	)	$	386		$	(2,720	)	$	2,232
Net income (loss) applicable to common stockholders	$	(1,686	)	$	386		$	(2,720	)	$	2,232
Net income (loss) per common share:
Basic	$	(0.09	)	$	0.02		$	(0.14	)	$	0.12
Diluted	$	(0.09	)	$	0.02		$	(0.14	)	$	0.11
Weighted average number of common shares outstanding:
Basic		19,368			18,985			19,298			18,785
Diluted		19,368			21,308			19,298			20,704

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(Unaudited)

(In thousands)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Net income (loss)	$	(1,686	)	$	386	$	(2,720	)	$	2,232
Depreciation and amortization		2,554			582		7,541			1,539
Interest expense		1,911			543		5,057			1,654
Stock-based compensation expense		413			326		998			1,142
Acquisition, integration, and related costs		327			464		2,301			600
Other adjustments		176			42		485			160
Income tax expense		152			108		479			262
Adjusted EBITDA	$	3,847		$	2,451	$	14,141		$	7,589

ADJUSTED NET INCOME PER SHARE

(Unaudited)

(In thousands)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021
Reported net income (loss) (1)	$	(1,686	)	$	386	$	(2,720	)	$	2,232
Amortization of intangibles (2)		2,222			386		6,617			964
Acquisition, integration, and related costs (3)		327			464		2,301			600
Adjusted net income	$	863		$	1,236	$	6,198		$	3,796
Diluted earnings per share:
Reported net income (loss)	$	(0.09	)	$	0.02	$	(0.14	)	$	0.11
Adjusted net income	$	0.04		$	0.06	$	0.29		$	0.18
Weighted average number of common shares outstanding:
Diluted (4)		21,642			20,308		21,575			20,704

(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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