Quest Resource Holding Corporation

We're currently holding for the Quest Resource Holding Corporation third quarter 2022 earnings call. At this time, we're assembling our audience and we'll be underway shortly. We do thank you for your patience in holding and asking. Please remain on the line. Good day and welcome to the Quest Resource Holding Corporation third quarter 2022 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Dave Mossberg, Investor Relations Representative. Please go ahead, sir.

Thank you, Jenny, and thank you, everyone, for joining us on this call. Before we begin, I'd like to remind everyone that this conference call may contain predictions, estimates, and other forward-looking statements regarding future events or future performance of Quest. Use of words like anticipate, project, estimate, expect, intend, believe, and other similar expressions are intended to identify those forward-looking statements. Such forward-looking statements are based on Quest's current expectations, estimates, projections, beliefs, and assumptions and involve significant risks and uncertainties. Actual events or Quest results could differ materially from those discussed in the forward-looking statements as a result of various factors which are discussed in greater detail in Quest filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such statements and to consult our SEC filings for additional risks and uncertainties. Quest forward-looking statements are presented as of the date made and we disclaim any duty to update such statements unless required to do so by law. In addition, in this call we may include industry and market data and other statistical information, as well as Quest observations and views about industry conditions and developments. The data and information are based on Quest estimates, independent publications, government publications, and reports by market research firms and other sources. Although Quest believes these sources are reliable and the data and other information are accurate, we caution that Quest does not independently verify the reliability of the sources or the accuracy of the information. Certain non-GAAP financial measures will be discussed during this call. These non-GAAP measures are used by management to make strategic decisions, forecast future results, and evaluate the company's current performance. Management believes the presentation of these non-GAAP financial measures is useful to investors' understanding and the assessment of the company's ongoing core operations and prospects for the future. Unless it is otherwise noted, it should be assumed that any financials discussed in this call will be on a non-GAAP basis. Full reconciliation of non-GAAP to GAAP financial measures are included in today's earnings results release. With that said, I'll turn it over to Ray Hatch, President and Chief Executive Officer. Ray?

Thank you, Dave. And thanks, everyone, for your interest in Quest. We had another good quarter. We delivered a 78% increase in gross profit, a 57% growth in adjusted EBITDA. We generated $73.4 million in revenue, $12.2 million in gross profit, and $3.8 million in adjusted EBITDA. In the quarter, there was an adjustment of $850,000 for expenses related to one vendor at one of our recently acquired companies, which lowered our gross profit. Without that expense, adjusted EBITDA for the quarter would have been $4.7 million. Our outlook remains very positive. We are executing on all of our strategic initiatives and expect a strong finish to what has been an exceptional year of growth for Quest. Our results continue to demonstrate the strength of our business model and how we can perform well in a market environment that's been challenging for others. We're able to offset inflationary cost pressure with flexible pricing and cost recovery fees. And due to the nature of our pricing structure, gross profit dollars were not materially impacted by commodity price fluctuations. In addition, we continue to make positive progress optimizing recent acquisitions. We're moving new opportunities through the pipeline, which I'll explain more in detail later, and we see relatively stable economic activity across our customer base, all of which positions us well for continued profitable growth during the fourth quarter and next year. Before I get into more detail, I want to welcome our new CFO, Brett Johnson, to his first earnings call with Quest Resource. Brett is a great addition to our team, and with extensive financial leadership experience, and I'm happy to have him on board. I'll turn it over to Brett now to cover the financial overview.