QRHC - Earnings call transcript Q1 2024 | Quest Resource Holding Corporation

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Operator

Good day, everyone, and welcome to the Quest Resource Holding Corp.

First Quarter 2024 Earnings Call. [Operator Instructions] Please note today's call will be recorded and we will be standing by if you should need any assistance.It is now my pleasure to turn today's conference over to Dave Mossberg, Investor Relations.

Dave Mossberg

Thank you, David, and thank you, everyone for joining us on the call.

Before we begin, I'd like to remind everyone that this call may contain predictions, estimates, and other forward-looking statements regarding future events and future performance of Quest. anticipate, are expect, forward-looking intended like other believe statements. words expressions similar to of project, intend, estimate, and Use identify those the projections, Quest's in events factors, in or and Such current results of could Securities involve based various are from Quest filings statements significant beliefs those greater as materially estimates, result discussed certain uncertainties.Actual forward-looking discussed and forward-looking Commission. and detail which and on risk with are differ in assumptions the statements Exchange expectations, Quest's a

based cautioned not addition, in unless developments. and may we we statistical Quest's and of industry as market well are to required risks filings data industry to You views as on and other place by reports made statements data Quest's market uncertainties. such The to for disclaim research conditions do publications, so undue any and statements Quest's information by firms forward-looking sources. and and about SEC this call, presented date and and are reliance estimates, statements observations duty are independent on as government consult and publications law.In and other include to our the such information additional update

are to these the information sources non-GAAP used and will are of Management be strategic and of Quest management call reconciliations any measures the ongoing performance. measures the the the forecast has the discussed company's that this prospects that Although to these financial financial in Unless believes we is over it the measures I'll are now of data by non-GAAP measures and believes non-GAAP GAAP during release.With non-GAAP call assumed evaluate caution the independently future all the is information.Certain should are current turn reliable Officer. on understanding assessment or Hatch, reliability company's it financials discussed Chief These President investors' be said, call. decisions, core make accuracy today's and sources results and to the in non-GAAP earnings presentation stated, and verified accurate, otherwise for not this will Quest useful that Full of Executive financial be to a future. Ray basis. included of operations the

S. Hatch

Thank you joining on you, today's us Dave, and thank for call.

strong couple large have new second. year. per of clients. to our momentum area To highlight of last new across X wins been in new We achievements is discussed approximately perspective, in early we've new business previously One win past years, quarter. the in growth averaging and put start the X client client We quarter to organic win the those X

few increasing process clients success positioned having crossover bodes couple well as the will our clients the where and of is we growth investments additional make to to the during there client began in technology platform which to service with the as durable, ways. a continue showing We we've talk up I'll X adding operating efficiency strong a continue well well years.Besides significant momentum and this but add potential, our existing these a see added and and summarize, markets, scalability existing from I is improvements, and that pipeline quarter, benefits in This efficiencies. of our to within be seen number to in we're we further.We're in new expand past base. significant new has our new first in areas with the These client made bit have to base are also of of and note and even client having have services momentum seeing base. appears end later, growth services lines strong our also about markets, new opportunities quarters. of opportunities momentum existing for also to existing next uncover grown

and of our operating through new to efficiency costs the and in we vendor First And partners improvements of are as to own increase adding a business operating platform both overhead waste third, as which can We're our business we from accurately, and correlated which so in without increased pace form investments accelerated the are programs. the business well that scale customers existing new of beginning is lower quote down, benefits ability driving timely.Second the process completely our our more in more clients significantly is cost costs. deliver sales. and leverage, more

than at gross pace first the dollars. more For quarter, grew during of we profit the example, twice EBITDA

demonstrate leverage Brett Johnston. operating CFO, over We quarters.I'll more call our coming the turn that expect to in to and now more the of

Brett Johnston

ago, Ray, year-over-year and an quarter the calls, increase even quarter. faster X% and sequentially The acquired client pace. manages this and during a demonstrated a we was had that dollars been leverage with a decided which in the related customer our decrease company We the first from primarily double-digit XXXX.As profit results versus million acquired manage a afternoon, discussed at to same of decrease internally third bottom had our in year-over-year that way. fourth strong the million quarter gross waste client operating to is the previous Thanks, in disposal everyone. quarterly growth good was X% line year with and growing $XX.X $XX.X Revenue

began margins. activity that client accounts with had comparison wins was by these of addition, offset have more April new from a customers growth and onboarding overall existing lower levels partially typically In on couple with profiles. most accounts. will margin of lower The average, X. attractive year-over-year gross new the note produced we we On I

secured versus quarter profit revenue of business quarter, quarter dollars increase from the the wins optimization $XX and first increase of affect expanding existing So comparisons.During clients. first with did first this gross an during last new all not Almost client million, year. were program our came XX.X%

are XXXX, gross encouraged profit by mentioned of the second at the customer quarter earlier. new we of remainder Looking record and dollars number wins Ray for the

profit on profit second anticipate new the growth year-over-year dollar add to course growth of wins year during SG&A, quarter, from up last in existing expectations. sequential period the that fourth and the clients approximately throughout $X.X quarter $XXX,XXX during growth increasingly to line was the expect million client gross will and and with dollars with in the our which same We gross year.Moving our

Looking forward, we from platform costs our gain to process improvements. and efficiencies the expect lower we integration in made and investments through

to and will partially a savings expect initiatives, slower dollars. growth by from continued in pace SG&A We investment gains grow the be gross we other and expect profit than efficiency offset at

be balance sheet. in flows a the and result, million of will cash a we on the to SG&A expect about $XX As second review quarter.Moving

alternative attractive expect costs to structures. we debt year, Monroe have terms. XXXX, competitive and and and is availability. PNC on to until the gives process capacity until of That that which us liquidity we preserve financing of shape, increased April with the XXXX how the borrowing the added maturity runway our on we've this with maximize announced X, good attract continue momentum long-term extended ability Our us growth.Based we we lower to evaluating in our expect debt maturities to extended line and in On our and October borrowing to of pricing of April will our lenders with finish help had we had credit date

reduce have was interest by our the of We more optimizing that priced actively had million million competitively to expense to are size on loan of to at cash $XX.X capacity, looking nothing facility in end margin $X facility. already line willing submit borrowing lending million borrowing $XX.X minimizing to the $XX advisers million $XXX,XXX million more This the compares the sacrifice line balance and from to the we environment, $XX have increased rate beginning of to on with are hearing lenders increase cash also with on of up we prospective options.Regarding $X PNC loan drawn PNC the equipment million term management, we cash $XX term we added the Thus, less finance the and borrowing that lenders At our from drawn year.In end line purchases. first and operating borrowings of carrying the our line been at our million the and an drawn quarter, on of to incremental the this announced credit. quarter. equipment interest

of million final DSOs partially payment For the fund This operations, we end of payments At included to more the are slow call. that note days.During of end largest of resolved continued normalized which described in from quarter, expect to used $X.X that our to on with by I the of we elevated mid-XXs a the made increased end the return was that receivables second the earnout from average quarter and payment. remained quarter, transaction. at DSOs the XX happy Also, I temporary. range we the last to the quarter, the acquisition-related $X several subsequent the quarter. million customers the our quarter's progress levels will with am

have related We customers $X.X timing in will quarter more to we the onboarding million, the of new CapEx of to and is the normally comp the we slower-than-expected compactors collectability.Also possible additional adding quarter. payments end with spent this at an than clients, during not as see which opportunistically of was that million, able another relationships large the to is the spend we the quarter, that for the is we was these purchase great future, $X.X CapEx quarter-to-quarter. to million purchase. due in $X.X fluctuations DSOs it were price.Subsequent any have given to actors related of part first from attractive

that working the compactors, asset to but both the The summary, opportunity. versus But had more for few this to next compactors next of the -- financial million PNC a I'll we at cover instead relates primarily our renting reflects be perspective.At We beginning rationale capital $XX.X the the earlier.At looking another it not quarter in Ray. the spending on increase borrowing across and for notes will will remarks. call and anticipate quarters, his Ray in of the made million that in purchase significant to the in line we of $XX.X back these quarter, sense turn opportunistically this growth them, strategic and fund other unless I with time, from -- year. own end payable described do attractive run

S. Hatch

adding existing performance significant Brett. business in to strong Thank the QX year in from financial new you, and ramp both clients. had with and a We solid start

also we've our making to from off start technology process We have -- investments client new and covering see improvements.I'll made by platform the our in began some wins. been in benefits

years results our We We earnings lot our new work X call, those. of the team over last are a business the the last develop with so to go-to-market a more seeing I of our lot into during covering won't X of detail detail sales covered the efforts. hard wins go

began visibility color -- announced we more the the new up also competitive new client months, win of the figures we've effectiveness, the and reputation, second also ability in we give in number, of most onboard quarter that and see in and we you a in based earnings to secured size data the press you from opportunities second in with expected in is chosen noticeable provide on pipeline. will our client date a market were our cost when step and addition added the We little release platform.In is a to uptick profit to nice but We growth.I client sector April, the see several in our we only of dollar call. However, of goals we expect tell and for continued offer won customer the this I sequential refer late to beginning recent will sustainability opportunities. incremental and a deals the win alignment gross in closing in wins us to in to in these leader growth to annual early a not our X produce quarter. the announced on revenue This date grocery process, portal a when

reinvesting XXXX, our profit wins, comment including new accelerate investment the marketing business.I organic of the sales gains in growth success having we with plan to client growth to clients. want we Given initiatives, some and in the the generated from in existing on investments during are

last client existing our base, with long have existing has been said is job over stable our that business the there new a several of of for We great the years still very a which growth of good adding much is deal We've source clients, a and done case. opportunity company. with

we're to surface do However, what I just of clients. believe our we for can beginning the existing scratch

they national asking at and are interest, last us asking level directly and it of have to us auditable waste but our approach handled confirm greater shows as the local been seen several specifications. our corporate being we level, local, well not several During into according quarters demonstrated visibility the It's and allows proactive to we are customers do that level our that own only more.They've to that result their we've their us them plan rewarding that regulations regarded.As the a capabilities very spend also platform -- is the more for largest this regional of to well coming to clients data corporate give clients. are and to take how working of solutions, and to our coming a with value as

understand larger identify how dedicated work can with creating clients help them project we teams to our and are We help. to issues

large figures. that assets. more And highly changing we Brett a them We uncovered tens asset-light business Compactors anyone similar waste to projects of trucks, significant and all contractors range complementary look are in don't business. will own it For to are potential of I commentary than on a in an makes very help services of the by we're these are don't and away small his behind cover to at real mentioned hard of service offer They We have I sectors compactors.We much offering projects business rationale very improve our remain once the initial X number this model. like been of we customer competing management primarily take waste part thousands remarks. plan almost dollars projects XX and with recurring we compactors where There adjacent important landfills owning are projects and vendor retail that or partners in economics, the want not from have a can example, estate. our with owning number increasing and that of investing management. from we sense. when working a want that completed.Now the the large

quantities maintenance prior fact, buy compactors about owned purchase, place attractive regularly they location, margin a to high we capital. already meet needs. customer this customer to an recurring in attractive In lower compactors, a in moved, seldom XX% require high stream typically range.Compactors we return recent their is and and in XXX the Once and at are limited them revenue on produced utilization with

metrics, financial us create addition more relationships lasting clients. they In to help attractive with

million, already this under opportunistic of part As $X.X about contracts. added XXX purchase were compactors for that existing approximately we

size $X.X $X.X and quarter. Brett the business, quarter G&A.I all reveal to making attractive much was makes in As without said, paid a transaction, technology. more million that first this gain doubled the in now With and second fleet our add the million having we're more in scale we estimates of this the

enduring key The to relationships the will incremental client the we be a factor deciding a a value maintain wins Over platform and been built several years, that to us has scale of we've to larger for able the much enterprise. technology provide. helped platform size competitive has technology due

in technology calls, we past our actively to which processes.More the of tool, begun invoices. XXXX. utilizes intelligence solution introducing AP automation rolling recently, accelerate discussed vendor us We processing an the In is additional we've out have sourcing at that helping and automate quoting further improvements to vendor artificial are onboarding

which and my eliminate ensure invoice services want processing for conviction beyond. require exceptions. zero value, our of for to required cases, which touch. invoice delivered we cost, providing and new are along customer and hundreds Exceptions our degrade enhancements, invoices of automating vendor are touch payments no to and of cause with automation and invoices help XXXX half and the processing.Automating service to call the and processing, and outlook relationships. invoice scale, goal platform, what levels of As trajectory major some We every our to can interaction part manpower resolve of overall half being our hundreds company delays, processed in zero AP emphasize vendor are us helps is in enhancements approximately outlook, our year, I this can thousands our improving client us continuously we By margins.Regarding through to ability reach today, technology lowering on the -- human of provide and our other XXX% made expanding

tremendous several cost outlook to made for more expanding our feel have in improve in confident regulation, that the and ramping a with increasing a growth multiple years pressure they we for have growth during cost progress existing I our double-digit landfills, We that have services.We gross us, the in of been last business. front bar I large to growth. the we up to about of good of want lower of side sustainability, expanding have never continued drive organic all our continue very growth the organic to and new pipeline sources reiterate profit the on recent recycling hand. optimizing of opportunity clients adoption business by dollar wins to growing from have we have

on continued shareholders. years, foundation is last work margins. providing to our we've bring and our vendor service the dollars.In and same gross and our we improved revenue investments, in the value centered operating improving drives made growth have optimize our of done build valued building EBITDA the and multiple to of cost continued over onto on is by to efficiency performance sustainable that set service technology relations expanding we a our platform, ways management ability we clients. The profit way, success As several consistent business driving proven for utilizing through we've focused The have for procurement

forward look queue provide instructions updated the momentum our couldn't for our questions. keeping on to beyond, excited listeners how like this now can up more operator be Operator? and I I come. We what's progress.We'd carry year expect on to to to and about through you

Operator

from our question And we'll [Operator first Spychalla, Craig-Hallum. take Aaron Instructions]

Aaron Spychalla

Maybe now? the of and and too. nice in we've of you roll-out and it more and cost focus first, improvements on technology progress seen place those close improvements, having innings also we sense a to hunting closing pipeline, maybe the on of might all really Just there in effect just kind seeing still of customers, sales trying further reduce kind the of volumes that early process be really are and of helping but new leading get the to seems wins largely like flywheel then on on more that

just could be you that if great. So would elaborate that little a bit, on

Brett Johnston

I'll a lot We've of Aaron, this of piece. a the departments certainly is and initiatives organization. many different improvements on the that our have made take different in lot progress Brett. across we

As terms efficiencies that of you administrative, sales terms is But there us halfway has going side only date there.In AP we've the think mentioned, made little been be bit one procure bit the little to impactful on processing the of more impactful mentioned, we're Ray roll-outs process is I it's to do. and given on some we progress. operational the of and that some as more about automation I think allowed maybe us a most the expedite to a quicker bigger

the making about last a deliberate So we're But good touch see through much half XX% optimization. halfway really the you'll be the to to invoices We've trying about approach XX% and there, bit there groups. half the XX% take taking XX% little we and at of XX% we're not of system zero the near-term, about runway year.So on a the will very we're and as about to sure this, we're back gone that harder. only to overload we get have of through too got

We bit QX. there. talk a will of So little be a work up that did in SG&A lot

the to to where -- leverage critical start that the we'll of year that. get in So the to to numbers. and half see we'll seeing able able impacts We'll back much you'll operating that, we're demonstrate of mass QX, better get a past QX, be

Aaron Spychalla

the just you All that the of expand kind see touch of or any you're with bit, expand then little there? the a you services land and quantify dollars clients? seeing on of kind the Maybe existing to potential then right. And maybe strategy percentage, little bit maybe from could for kind that you whether of second, a just on talked that? growth way And some but

S. Hatch

speak Aaron. Ray. Thanks This I'll just to continued and the question, has really than land story it's accelerate. to The the expand grow it and isn't different for been, any is land.

we I clients guess. have natural. with, clients I think expand that's Considering to the more added, we've

service that Quest try they we DNA added come need it's basically, from.We its where already when adding we them it. develop out don't we've buy clients of at typically So a an us, typically as services problem-solving and new lot exactly something to that. our is clients. company, will that demand core, a pain go greenfield do client will we're add that's by We somebody that hope service lines And our address And existing and line to the a points. within bring there's

the do to with I those -- think And why able they kind really I know my report a large but them not because and is, so for that, that in growth I centrally that's goes, way. a point talked centrally -- on been And for the and as clients.And of advantages we back mid of and for we traditional percentage that really not pain done in side that have help the we're have being far of because of consistent make it's it's point pain the it's activities, execution typically, that's right, cleanings them percentage we and remarks, sure these mostly, stuff on they been do one have helpful.As ability we of the we it's stuff single-digits. that, think and to about past compliance these the lot get like some clients industrial a them gritty mentioned pond these a corporate mean, like stuff kind of waste, that's in

that least expansion on looks It at those But be runway the clients. basis. percentage, Aaron on a We're more. we hopeful. existing a that with could go-forward As pretty us good anticipate for

Operator

Gregg from our Kitt Pinnacle with Fund. take next We'll question

Gregg Kitt

good the congratulations Brett, quarter. and on Ray

and that you Was start on X onboarded it didn't first that the the in call are contribute but in Just will earnings QX announced now like they right? contributing on second sounds that the the wins all quarter, new quarter.

Brett Johnston

Brett. that. the wins Or QX QX clarify. is them mentioned, of We were you about one that have win being want subsequent until won't Yes, Gregg, to I'll -- this to onboarded sorry, most QX -- be talked of take the yes. them we QX. you

S. Hatch

and Yes, QX call. the

Gregg Kitt

Okay. Or Great. And was the of smaller figure -- one is X? X customer? customer, that that is one the

S. Hatch

This was one the smaller of X.

Gregg Kitt

customer think Okay. Great. as to then think And about -- announced win that onboarding? about customer you that the after the how we can other us QX earnings understand is call, help that you

S. Hatch

to is QX? of going That's -- beginning be the

Brett Johnston

Mid-QX.

S. Hatch

could that obligations a Mid-QX pretty takes news going start mean and taken on The while to it full one, is, is ramp care of the it's Gregg. much. a it be just news I bore. bad The so much it get is not that revenue. the good to all start generating

Gregg Kitt

confident you that and if about on you're customers your that -- onboarded are get are to Great. done really the that. provide in of you these get of of you But how one And to a investments service? ability all customers and how Maybe you're You in job me so confident the going great bringing all these onboarded? good talked you to thing is you've making think can why -- about understand some a these all some customers? help winning everybody are

S. Hatch

existing excellent more some implementation focused in to with on it's onboarding had an that answering might structurally investments you, have one I a And Yes, bringing experienced good so really difficult time programs it's will honest. a I'll of tell some is be take or We've and year ago, question. clients. made talent that, down I primarily very new and Gregg.

-- expansion technology systems an development. have we with of coincided in an coinciding internally it also our is some ability advance our it with our So then there.And and

when you a ago. than years of technology would onboard significant couple to human much, capital position a have better today clients to and we're the advancement, we much be able combine the been So in

best and handle it's has the the we're time the growth. timing at investment it's time the kind made been So of to And we're that's growing, good. we the -- equipped

that's of So where are. kind we

Gregg Kitt

My last question.

can lately. like be have me feel kind public what I Sometimes done of the for market you

win QX, where won what going days you you in so customer, -- X more are And like you one shortly. it's I X later, more to customers and XX guess win

onboarding I was you're unusual them amount of an think all of now. QX wins and

the and so, to QX of starting of year. over the then in fruit customer relationships And we see those the start rest should

the ability being about feel where also a about year pipeline about help today I is you year? size. pipeline number, in of close versus how talked maybe You quality understand strong, do How but rest us increase and additional customers the the the heard to think you ago? your new over

S. Hatch

company cycle All that I'm appreciate companies. sales a your space. large to this remarks, a in to that. I And We're going typically right. the still first about because is good Thanks. address small really on I sells sales cycle. talked it's feel it. target. We've this long a lot about

the new anybody hires, or just the So, hour or if not day that's is week the the account month way the calculate. or on to extrapolating by probably

that So I appreciate recognition.

to what that the it take fast can and move down we we pipeline really, do is, we try funnel. as as So

in new So with guys been you us inherent onboard.I bringing have accounts there's I that lumpiness an understand while know that.

pipeline the goes as X the goes, than far As significantly year a it's I think larger ways. it And ago. today was quality

how a that the it's guess I lot is got companies size.So a There's quality of sides. two our strong. in aligned those want they -- somebody goals is close on it of a of themselves well, there want our client is out is both think I the is One are They're guys. in We've of high people more customer clients, is Two very think on lot quality. in not customer they're them. a aspects -- -- and we valuable about is hoping said this important. with targets. aligned And type that's the are how the alignment. and that as they of how Gregg, quality and call itself, X of to comparison, them, in just kind I feel So and really I think, thing size And will are I larger

like clients competition able we there's today to win So those. those and feel than lot And of be for the needs a have in past. meet equipped those to I we're better been

Gregg Kitt

If one sneak I in. more can

that disclose win customer? an as to UNFI grocery recent over You Can opportunity for sounds with that immediate an And able there that's kind this win. were Or understand, help most customer correctly. new opportunity a UNFI customer discuss heard I is Proganics us to like if that you it a time? was -- of is you then similar

S. Hatch

what There's a program existing an traditional that with on we call customer. more would food waste going existing,

opportunity implement the in program. for it and is to existing the organization expand So that Proganics

So what the really don't of of they be relative think but a is that What saying be diversion, for them they're and a volume on going an improvement other it's have really won't a bringing advantage basis.And sorry. enhancement your helpful in, was of very, the to go-forward We that? program. food I'm or very question already I'm to in program. company strong by there growth but revenue

Gregg Kitt

longer-term you opportunity? is it turn -- that a or is just I going I think to Proganics the answered it. and So for think around was more opportunity of on now

S. Hatch

an business. will what already make to existing an to to would I'm sure was enhancement start we're is, enhance all waste is we're them. want that an it's I implementation I that guess existing an food Proganics for with be going I clear with Yes, UNFI, that program that saying that one. --

Operator

question We'll Wynnefield with take from Capital. Nelson Obus next our

Nelson Obus

as move purposes? of can normal the percentage forward? in you're something clients this I'm part? the exactly have is Is use so terms client adding just how curious, you what you for itemization is that we ESG Or the recycle, that of

S. Hatch

When what itemization, the them, saying? for you're mean reporting you say data is you that

Nelson Obus

where data the they waste can wound that up exactly they're Yes, utilize.

of or that of contract the In terms normal a sustainability, is part the add-on? an

S. Hatch

part I share to it's It's pitch know a our of don't prospects be us. it's we sales because of our think with honest for differentiator with think clients lot and available it we a even Nelson, you, them. And until

enhancement, differentiator. offer it it's a time So it's and an we because every

more is find so a we So the that of every year we And clients, for it before. the demand than lot have was year on it new usage. we bring as

Nelson Obus

Okay.

it's So basically. trending

S. Hatch

trending yes. up, it's sure, for Yes,

Nelson Obus

seems with now something a of of confused that you and compactors. is Or separate compactor it this in customers? signed the be stream? the a contract revenue number individual is world, to parcel little got I'm that a that you've growing the part Is what

S. Hatch

separate to a longer-term go revenue Typically, has stream, contract the you're and the on Nelson, do because ground terms. different It's putting a it's asset capital the that.

agreement -- the They're is the the are multiple things traditional rates So part contract, the renewal these a economics for when X extremely terms hit these. typically a retained on renewals that's year economics, longevity, for of high.

So that's in itself. from contract the and waste separate of

Nelson Obus

like seems terms at you're it P&L? XXX it point approaching So a be the of compactors, differentiator in mean, what I will

S. Hatch

We actually point. this good recent really of most just middle -- doesn't a of at that's question. this well, And acquired it's acquisition impacting QX, think, QX. really to Well, closer I middle XXX, doesn't start take, until,

year the QX half back a as differentiator, we see of And it based the when seeing on in it. So you implemented QX and start mostly, you'll should it.

Nelson Obus

that have of about look that? in build your there And -- No, are bad a are go But you what with month it beyond the that. the a come you meaningfully they just sure was debt DSOs that make you quarter. across what people thoughts people how forward flags owe? -- to advance, but up expense, in know I I'm but don't lot

Brett Johnston

of that reserving little couple one. things year-over-year. to we're is it take for, Yes, Nelson, was Most debt formulaic. do is just this I'll significant. have up a nothing related up, was but We of bit mostly Brett. AR just the more a that bad fact

enhanced visibility And unfortunately, QX.But of we've made mentioned in focus on more we to strongly We've quite accountability lot general, didn't would materialize. there. realign done as quarter we finish liked. we the or portion, the a in prepared where call it didn't as have we're in about organizational I'm at DSOs early into reporting, changes the as the increased terms just month In year. some some already a some excited driving We've there.

But I'm to about we're we've the So excited It in progress I quite show think about I'm what to QX really excited made. going be up didn't QX. produce the numbers. in able

Nelson Obus

a flow SG&A SG&A IT quantified move In not enhancement. as of that Last and you this we capitalized you've some But of it how just is bit, I of lot. a is -- is curious, past, question. savings little much how Fine. up from much the mean, I'm moving mean the would do I forward? expense

Brett Johnston

IT In spend? the of terms

Nelson Obus

Yes.

Brett Johnston

Yes.

and forward, As less have we'll we go will be kind of less capitalized. just It ongoing maintenance.

we've stuff a close ramped fully of having to this So pretty talked up. -- we're lot

we'll a the in wins. and talk to savings bit mentioned, as So we've we expenses of the when some expecting. certainly the to build SG&A about those we're expecting excited be that portion. a QX, as about support increased And into got growth, additional little that new get you expenses We're position QX, yes, will coming to we're better QX be down. But

Nelson Obus

And the grow. any, will of I fiscal change on rate by depending Is fair? be how assume lower, would if you 'XX, that

Brett Johnston

through these especially rates year absolutely all a into initiatives of through continue In our terms improve, flow got next we've rate, flow will full of as of to savings. year and

Operator

this the are the questions comments. will And closing further any call Hatch I to turn there at for time. on no Ray line

S. Hatch

Thank all Most I myself, know Quest I note call, and and to the I operator. story. as Quest interest I importantly, thanks the your you call. a you the the -- make to on on be time hear a to always, thank there want number out remind in are of you, taking team. to our

that service our piece excited And at word diligently team new plan together putting of execute pointing we what really them with we're in that, the initiatives new operative customers. I be building I'm in really and greatly more ability appreciative.The the I'm of have is just have do is tremendous ability the to point. inflection all And forward but at, it's along to it's existing these is work years mostly help over I It's show our to some watch us. starting clients, clients, with the to course to front the and much that the momentum and the been place shown folks guess, of supplier it's scalable us initiatives of the we've grow progress importantly, with great. traction. lines along All better to think with we've the grow a and continued to leverage now, we're are tremendous in these that

forward and to your keeping all of the to to just on So quarters I date faith thank in up you interest you look come. for And again, Quest.

Operator

program. you you conclude does today's for your participation, disconnect. may This Thank now and

Quest Resource Holding (QRHC) 9 May 242024 Q1 Earnings call transcript