Quest Resource Holding (QRHC) 12 Mar 242023 Q4 Earnings call transcript

Thank you for standing by. This is the conference operator. Welcome to the Quest Resource Holding Corp. Fourth Quarter and Full Year 2023 Earnings Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded.[Operator Instructions] I would now like to turn the conference over to Dave Mossberg, Investor Relations representative. sir. ahead, go Please

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

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

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

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

the Dave, sales made in Thank considerable on for both us begun made you Quest the incredibly to-date; to in to see taken significant number us increase in ability these actions and of and and improving have efforts profits. well. investments business We those call. we've you, today's our adding operations. and ability The XXXX joining clients, have results processes, at progress and scale the broadening the in we've thank positioned serve to our operating a technology our to in investing of improving team, our our All sales verticals, business,

efficiency growth-focused we to robust expect XXXX.Simply, this position, and into continue competitive our implementation customer program pipeline, our Given are strong focus, momentum working. strategies

bottom business, line. on encouraged both We we're the and in by are top the extremely seeing what the

fully wins as incorporating Quest as the operational of nearly business. renewals, our well year, into customer experienced including the new opportunities improvement.We've acquired completed business pipeline them in we notable volume quality and made all the strides meaningful our platform. and facets We During businesses, efficiency across integration growing of of RWS,

margins Republic in additional Chief Officer Quest will we initiatives savings generate and that of operating million $X.X expand Director want deliver former also current point annual in to previously, mentioned related expect Financial XXXX.I that our efficiency and to Services, will our to function, we As the grateful we're Glenn about was assuming cost join expect excited efficiencies out I've RWS as Culpepper, perspective Audit quarter, he's said foundation business. new any this the This than of Committee Chairman. recent years. role.Last more I Glenn underlying critical within new I'm leadership in provide bullish and our strength than made will and ever more and statement the and other

largest a call accounts. customers evidence outlook and XXXX Johnston. details as over sharing enthusiasm after I'm financial to our has to such, X We've new look of X borne of later, this months in review.I'll We've alone, more in Just forward few and out. renewed more the CFO, our signed even the confident our turn Brett

lower strong existing by the and offset prices The from good customers. did fourth increase improvement recyclable dollars. had revenue profitability. materials and with We growth to for related during fundamental million. afternoon, year-over-year Ray, offset increased prices and new recyclables recyclable both during strong increase revenue primarily quarter was from in fourth XX.X% profit quarter, not revenue everyone. it services in dollars did the performance quarter certain profit $XX.X demand revenue, material The the Revenue gross to was gross non-recyclable commodity for materials.While somewhat fourth during Thanks, realized and partially affect

agreements volumes recyclable to produce gross are on from materials price tied based fluctuations. commodity that customer consistent Our not dollars profit

we new key gross to be story, you is profit dollar gross to measure use performance.Moving this as to may metric the reason on For dollars comparisons. who those profit financial of a our

process to needed XXXX.While mind that RWS the of million XXXX, had profit items volume in to we of this business that quickly fourth keep in of important we all gross quarter non-cash effect the to we found payable quarter, XXXX have year-over-year. made the reconciling not it liked, related dollars, increase Any acquisitions were to the revenue slower and integrated will substantially inherited the of earlier. to that be accounts Fourth XXXX During is given that periods worked gross prior prior adjustments systems a to cost year during of we to and avoid future.I through, invoices the some RWS the been integration a or on be expensed at with the In RWS point and complete, RWS for the of all periods. properly were processes platform are integration would want than RWS other and the million X.X% in that profit with the through includes acquisitions organically related same adjustment $XX.X reported of acquired of acquisitions, same the also clients, and the running all our out to $X.X controls.

controls and confident that that and end filer across all Additionally, of hundreds of handle through thousands to our processes.We the at of of outside vendors evaluate had we and tens business. our are systems our our become growing accelerated an an XXXX, process firm current work transactions can test

have We past the had types core adjustments these with our operations. of not in

a really Excluding was the and adjustments, growth we performance fourth dollars profit had quarter a strong end the strong in year. year-over-year.It in to good gross

Looking in were earlier to XXXX, down the expect that the period to year during profit line of expect SG&A the and our to we with $X.X fourth from $X.X number Ray expenses, during growth million and same strong new expectations. continue million year.Moving sequential the wins quarter, the and last growth which year-over-year through on quarter first and and dollars mentioned by gross customer are encouraged record in

line, efficiencies the and to plan Looking and our to bottom in from investments value platform. continue our clients. increase our to we forward, We grow made to we continuing pay savings ability efficiency into expect to and the down lower to growth initiatives, reinvest gain continue integration costs bring debt to

expenses will improving to be and SG&A efficiency expect expenses a expect in the quarters from to about come. we initiatives, continue new As deliver support to expand the result, leverage growth to quarter.As first million offset in to operating are other and by we $XX efficiencies margins gains

sheet. the and During review $X.X cash relatively the the million, flat balance year.Moving to with which depreciation amortization was prior flow and a on fourth compared quarter, was of

Our shape. rate been this borrowings cash minimizing of optimizing expense management, In carrying to on actively environment, looking the liquidity less credit. is cash and interest good we by have high line reduce in interest

$XXX,XXX interest cash we working in $X term in quarter was part $XX.X the of million in excess and year. of balance our prepayments at paid million voluntary increasing of debt the rates, to utilizing XXXX, This million management of operating borrowing our line. at cash.Our had compares our we on drawn million beginning and toward $XX the $XX.X fourth As the light capital end

discussing retaining year.For year, of capital Quest adjusted its Our will the the capital to in dropped an X.Xx debt leverage We assist senior has financial to maximize Board this over ratio evaluate to process. XXXX, along The QX growth. forward course its working demands fund end, was look the the position, -term from structures used in debt to ability lower has management, of is this to with advisor EBITDA that the XXXX QX the Quest's to cost year. committee with Directors formed company committee of process the at to of that, operations, of fund can million you primarily end which financial X.Xx long-term $X.X to ensure to adjustments.To in independent and further we long alternative strengthen excluding preserve a in

had end the notes reduction by several AR, an During towards the of At payments and end the The largest XXXX.AR increase not This last the in principal for million prepayments, the increase end in average they several which offset million to were the by return pay year, is payable our slow payments borrowing that beginning the Through of their normal voluntary management at $XX.X and partially had million $X.X term back base to PNC. customers, temporary the XX the the reduction the is asset versus at during at slow loan increase our will of $XX.X accounts the it from our line continue DSOs expect we in more we but reflects have year, year. years. our an low we in annualized case in to of efforts call this a quarter, I'll to reduce a on in XXs expense the Ray. largest to $X turn receivable. of fourth with we and end basis.At the of uncommon experienced resulting borrowings, on million customers interest quarter, days time, we expect the than was cash in

today, you to initiatives. growth is with the a the lot Thank momentum you, our most I Brett. highlights positive organic of which of of exciting share have

business the end start to XXXX. in has picked continued pace the of I'll of The and gain have we off significantly, of out year up the signing So there. beginning new of coming momentum

pace. new team develop work client last X the accelerated wins; by We've wins to We're talk X X about customer many the sales them seeing over go-to-market existing years ever to call new the another the of client an and history.We're relationships wins of We results client on recorded an and recent have are than win. producing digit one efforts. more expanding in record is hard this meaningfully X-digit of our at X

large the end expanded X-month client we integrated in cost smaller market digits expanded client on days. vertical with the was was food unprecedented national We this that's is my we've our quickly XXX X platform.The retailers. working revenue of these of of one customer during we through reputation, for to over solid companies we'll locations the services next our [ All opportunity effectiveness, Fortune for to with provider. one with period. new in opportunity beginning competitive diverting be future.The this to In of and to wins, vertically the the including the their footprint. a company secure this more the begin anticipate over it in is annual sector, a and excited these wins national win greater of of a portion figures had to second addition, them know industrial initial to new actively waste ], ramp with a industrial weeks, client. account X The able service automotive U.S. began This a of provide With customers. and addition, X entire for from quarter company, of were over we'll us portal their with exists one a growth data service from these our and are their food to we'll largest distribution visibility and won commitment and and based begin new clients X rate engagement, process, and and the in servicing all are servicing the Quest, and we all of several distributors say us the we're grow food of the X-figure from dozen hundred landfills footprints. X with large quarter, few This one the that our smaller X X-figure handling is waste customer I and aligned have largest added the to customers. this in a We servicing second retailers the X one expand renewed Previously, about well X time.In ability significantly of the With lines they'll a believe for

and in about time during and addition but we to as call, spoke closing organic on growth sales their using cycle in to spend around the allow with turn client we're new quickly. sales contracts recent last will to noticeable functions operations success a on our to including our in pipeline.With addition, our in On leadership tool sales investments less new initiatives, our continued of see generation.In number we in In lead closing opportunities sourcing not deals we've more such investments months, shortening more and marketing several uptick having simplifying our XXXX. proposals investment that proposals and size more and the wins, sales only accelerate to new the by our plan folks the in administrative time sales we're

optimal create to allows us the are our tool to data. to for our look for in in the it our into that add staff our nature. time direct takes days are These That sales from going a helping converting award with The on business. of shorten minutes. tool sourcing focus and a entire recently cycle additional footprint pipeline, our long-term sales It investments renewals, our and staff qualification grow Our pricing and client across result vendors signed not reduces as and clients relationships X better our engagement largest yield transactional solutions find value forward.Regarding when a our agreements in have we relationships multiyear clients. renewals lot of says strategic expanded comes you of about having proposals

is Importantly, our also success driven our by people.

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solid existing to last our for X Our land technology. and the we're client existing clients we feel in growth and will base investments our expand there strategy years multiple in has ample consistently years, from now review delivered are opportunities the come.I from continued for making growth

scale additional maintain our ahead investments we can enduring Over wins that our and our to enhancements to competitive helping lower to up us new helped value has We're client client that onboarding stepped to platform and process major will to to tool incremental I we improvements ability discussed much technology that larger deciding several quoting platform has is and good a introducing improve we've stay due to so earlier, value, the size platform recent sourcing further in example technology the to expand relationships the factor years, accelerate These in process. our be provide.In a actively for which that a will built vendor us is technology and scale margins.A a technology of provide enable been The us we've automate, the and able years, key cost improvements XXXX. continuously scalability. efficiency invoices, enterprise.

and automate will a allow technology we're enhancement margin to of and In invoices cost further the improvements. achieve processing rolling savings us vendor out that significant addition,

our platform, new aimed We've great than serve.A is adding of cost example are lines, base. to all customer at service new increasing efficiency more our our investments added customer to across have experience, and management. XXX great vendors vendor technology potential revenue lowering improving Our X which while

us Our and efficiently this cost. enabling at faster, technology is to lower do a more

allows and an outlook, This let our me uncertainty. a our launched economic and on accuracy of portal, vendor vendor. move I inflation brief the our completion, costs.Before self-service year, lowering and broader hours views macro on of past environment our work, is comment for saving make type to onboarding we've about the which Over documentation automated a and increasing

and quarter the to the during manage top bottom generate levels across the stable the our activity see in We waste end business During materials and recycled the cycle. clients price in months, as recession, of to fourth and markets. The resistant continue of our cost continue fluctuation recent generally is we pressures the waste and to well.

to large the that cost new pipeline increasing by of side services.We of lower on during to adoption also endure continue Pressure sources made emphasize on on value wins the from I our have client as with growth propositions, the for overall to outlook cost front company. and have outlook, to sustainability, up the tremendous organic our bar XXXX dollar for opportunity regulation, of for landfills us. existing strong and and years progress compelling our a hand. which also confident growth I continued business We beyond. I gross the increasing during several have economic good for growing expanding that want optimizing in our organic grow improve and our We've trajectory the have have feel multiple creates of reiterate as ever and periods weakness.Regarding relationships we the the last of business. clients, recycling recent profit very we growth conviction ramping differentiated of want outlook we double-digit are about in to about growth

last growth procurement and has by it the complete, management our a of multiple distraction services over revenue ability dollars. technology have years.With ways Similarly, that integration vendor our efficiency optimize drives value-added investments to we've As profit a of gross we bring we've the to transitioned proven platform, continued our relations overall utilizing in the improving we RWS from our made part through business. onto being of several of cost

While the we business very frustrating, been fourth a quarter from annualized savings Through of RWS, now approximately began and a clean-up in RWS million during for efforts recognize which other of our actions, common platform. 'XX. of running expect our on adjustments have we're all portion to integration $X.X the

The a our niches ahead shareholders. we'll cost and on great also grow. expect sustainable build underway, preserving centered confidence. other our while and is our well.Finally, from debt, capital providing work fiscal savings we've lower look value plan additional reduced With leverage, we our pay for for of have with clients.The we now to done 'XX We business, set ability our foundation to on and continue focused is to to as to continued success building valued consistent services down

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

[Operator comes first Spychalla Instructions] The Craig-Hallum. from question of Aaron

first, but you the kind you months. are to that kind efforts and on quo talk is the And some wins customer, times? like handful to expand given there starting on land Can then, still shorten pipeline not there. potential of of today good talk color then the improvement just about it onboarding there's the where see. kind times, the sounds just of mentioned of those stands some customer And you just about, by also just in still a of it kind for status good onboarding and see you definitely and macro? to thanks Maybe maybe Can of conversion or for

clients really question I being point. growing of the anything continued I very exceeded as deals conversion pipeline. accelerate. the up, accelerated go out go. focused because several prospects, it's far just obviously have years, congratulate and team signed new want clients several on guess, that and has to it's getting message picked to frankly, in quality we as about as really the in.So that -- it's with to Yes. and really And at have that for getting the them months Aaron, far I'll goes, the aggressive we've sales last the We're number or for as done rate

So we're that. excited about

us about second you can quickly type and clients the guess of it's was I for.And believe, your pipeline land and I So, moving say we're comment, more bringing expand. really the looking is

of of lot large waste are clients, relatively of some generating clients need with of a All a that These them. these lot Quest them is and amounts are have huge bringing of for what upside.

continue mine had and there to already time, board I'm the So profitable things those really was bringing I -- ones revenue -- have another clients exercises oh, new those ability we continuous up profit through we're that excited about and Aaron to you was new on I part about the ramp believe. ramp-up on.And what -- and it

Yes.

of depends -- XX of I we're them ones think specifically less mentioned of ramp. of on on of to longer. XX mean, the it a little take the mentioned, type some Industrial days, looking just But at are of XX are days I Aaron. And quarters. we or them window largest some client win we couple some a

move as on the come. should that will get ramp client. through we through come as Others that us just So they QX,

cash Understood. free flow. just And maybe then on

but year. kind capital that to mostly the You end touched a like on of related little it sounds working it bit, was

as sounds it improves that thinking kind -- you that XXXX? like, Just move we are throughout of

We've Aaron. timing. about talked that, the absolutely, Yes, of

especially the forward. and finish that on AR of expect We push collect a to quarter that, lot strong,

cash, So cash. that as and we of you generator out, year the operating back have a would finished certainly

really feel we going about forward. So confident

All in. right. sneak one I can then if And just more

moving the RWS we forward? in you the about, of can kind more initiatives with hear just too integration shouldn't those of complete much and on Just talk adjustment hopefully, kind revenue are there kind quarter, of

clear, revenue, a be revenue of to the adjustment. it was not just cost And Absolutely.

going our and on our was side. we knew them foremost. about And first platform, we then, processes, So, on cleanup And to get work. absolutely, some it the just cost was needed and back it doing

forward. going confident very feel we So,

All turn over. the on it right. all I'll Congrats progress.

your line ahead, is go Gerry from Sweeney, Mr. Your of sir. open, ROTH Capital. next comes please question Sweeney

win, I program? an for was Question on sorry Fortune the food if food And a side the on this sort Proganics I maybe foothold this rest with this has this about to mute. distributor potentially the the Proganics is if does, industry? that. -- XXX or is and deal curious company, into win of of Hi, was it the

about services one has the great to it's that it, because multiple things have but over the Quest offer. of it So, time. all Initially, -- that's to doesn't that's expanding that but

all So stuff also next as us them. that's upside then things through with there's for few And months move the we other like fleets too. and

there's and is service number think obviously, excited food and us hopefully So that And going of a infinite penetration food part an is to being excited of going yield yes, lot we opportunities that.And forward. pretty my in first about background, Proganics we're this that that. vertical about penetration there, of our I'm from this -- distributor,

So, hopefully, $XX well a without little Proganics. I'm so X-digits, suffice to say But million, even that's and saying more. $XX million, maybe

lot mean, a that's runway win I big of with that's -- mean of in a I So, front it.

all there be piece is pieces that in future. relative bringing the the revenue penetration the Yes, near to without in expect we

million. questions, Got SG&A, Couple of it. $XX

return spending curious I was you on I it. as If bit. impression under correct, is technology marketing if But talked up, a where I spending understand little I'm I'm a spending may and a on that. QX, get little you I down sales sales tech, just coming a great, getting can -- to be especially on think also marketing. but about memory little serves and ramping think, on bit the older,

and ad to technology curious SG&A how will out the where higher, sales as much if it's come certainly marketing? in future, versus increase in Just

Yes.

that I'll So, take one.

with As out to initiatives continue got we we've -- on, platform. we've mentioned, efficiency the got going feel build confident the we really

pickup make some you a maybe spending, our we're sure the support to and operating little growth.We customers. operating to accelerated bit and growth said, continue -- about in should keep initial, relatively of around So, additional to be would year be, flat that the to funding as want maintain look the able a despite excited we over at new I of leverage expenses bit little

those out feel little of still So, have continue. some spend I operating we'll do building a of We're platforms. bit

closer so customer As come support the the of you'll -- start those we seeing some we'll the revenues. start get offsetting on back to the and efficiencies half to need of start new that customer year, through

it. Got

of looking as SG&A a percentage is that or at sales comes second probably half in a So way, down it? the fair

at to absolutely. it. very Yes. a That's fair look way

Ray, question spent here. lot technology. little your a on With you RWS, open-ended

pipeline and that There's Sounds conversions carpet for a items? like lot get for picking just is horse. the on it the what sales I with of want there, XXXX the mind, up. out is to in is what -- some other still plate goal But biggest don't your -- the the I laid or

with I put top and driving combined Well, I zero excited macro from -- tell invoicing driving existing -- that guess, and almost paperwork new level, the environment so those a noticing in you I that nice technology I see can't forget, some a the at the there is line penetrating Ops but it's revenue. was word momentum. don't the it's drive huge new together, EBITDA you we're really enough I many about, area a that think emphasis. of towards on here. enabling is an investing to this perfect team And I team margins.So, the say we And touch and and And been for is. when can't scale how technology a the all Gerry, it and reading clients storm. X times, about is well. really driving platform with think When doing us We've revenue we fantastic that I was job as it's years, internally use of

have Quest at and both I us, which -- improving growth, EBITDA as cost of a back think, your your it. see savings yield levers look and this we you're So companies, -- touting and into some get But that's half you right It's going going margins, margins as I is should stuff.Nice with to lot really lower now. on or and XXXX, growth this been SG&A we really that's larger revenue really scale either it, move touting through Gerry. think I've implementation them the you are

So 'XX. that's pretty exciting for us in

see Got Got a efficiency. it. Growth I'll All appreciate it. Very in much you and right. it. Yes. few days.

we to So look forward connecting.

next Kitt The Gregg from Pinnacle Fund. of question comes

-- call, QX were approval. large the earnings that you very to have there final of opportunities said progressed Could the you stages on several

customer would of Is And that several in so one right? was assume that of late-stage this food funnel that opportunities distributor I those opportunities. one

QX. we A ones Yes. were couple the were about in talking those of

sure. for yes, So,

Okay.

look So, and you was quarter. Several when see closed. at great in X quarter. a wins obviously, to wins there X a had now a pipeline not in your couple years ago, really year. congratulations, a have you Do -- this were I'm you excited

I think.

No, you're right.

You're right.

great there lot close customers there come pipeline Or "Hey, looking your other did start of still the a the that lot say, stuff [Indiscernible] Are that think you of out in when other today see through I there's a at you're about? you that pipeline of already?" year. still and kind we're -- to excited opportunities your

pipeline We a I've a remains I the out figure are you'd to asking.But out, pipeline seen no, guess, there. out we about But we're about, past, if I very encouraged is after considering in allow I healthy think talking in I to But think And there, record than emptied you -- further folks how what about reemphasize guess track clients, the that we're And or bit no, that's want in signing it. very strong. have remarks, more our it. as there. to just obviously, And of marketing. it sales the mentioned are good mentioned that you're to I'm It's talked and change. the describe There it investment closer and we as that get is about away, in what the excited investment some existing X it. describe sales X and guess what's operations structural in I've to sales got mentioned force. sales in of now. we're What in part of we've more that that trying No, the are would might

that. building lot forever focused our a of proposals mean, to enabling it in and of clients able how implementing be the knows large could doing so.So, Operations, in can't of onboard we're happen, investment the they're and worst trust time hope driving person you you to implement time to So more we've job continue a that that spending is one reasonable of that veteran do then And folks a great what Sales has that an period is And thing and on a to or added art more them And large with selling, time. these Gregg, do.The industry of to roles there's closing me, new a forward. and pipeline we do clients. new that to a to be Director but is -- what is doing now less what I take

we're be say, right have new in sure ahead and foresaw talent put pressure accounts on. and we that and these them, bringing that I'll we So, can the implement able place really flawlessly make to to that on go --

helpful. was That you. Thank

if that think it couple weeks. about I a I customer, you in of more Did distributor sounded I food talk can you say large I think I I -- right? the heard you On heard that like hear think that correctly,

being to in Yes. we but able that, quite weeks. we're to do to Yes, a able on be it forthcoming few in not be anticipate more a position

Okay, great.

you customer -- the come. able like so, who sounds is And to might everybody to like it or is that it more information there be potential there's sounds that tell

that of really about. That's Yes. with yes, customer. share them. able that to We're -- be proud what that's We're talking we'll information hopeful more we're

So Gregg. share a you we'll can weeks, see in with what we few

that always million funny is X-figure then that range. like because is $XX $XX million a And of really to think big revenue I commentary

in -- you start way can customer you I there several think and opportunity. about you're going ramping, especially second progress to about fleet way how that becoming there talked to any one Is point is obviously, to years, talked how think said that at so, the about about over you And think any could as quarter. an Proganics

[ and got customer spend ]. lot where large it's and correctional a XX%, It's potential that's somewhere, closer these customers, as just yes, But to that. all activity little the it's Gregg, probably huge than have a of just XX% to to amounts hope give -- larger they've of with you give to we as we're if Yes, earn looking wallet really what way of mean more our for, probably it. what front side. that's But you or a we're we're can't starting. a But I I I'd know I rest to be were that's it's the than I share going you. the of -- on number. much getting

you that place, And -- you're this could like COVID, RWS stuff.You want sure was service year more facility the doing put because I fall probably was a position in customer between refi was a of you million them one EBITDA, you had in something current customers, that the and out all coming make and quite you of probably facility quarter. think of you're well. you're you these this this now -- were to doing like in bit that, had thing flexibility balance so a $XX and debt the And last that the third want it million think I'm it's get like some cost. On $X.X Monroe you specific when year so XXXX, winning sure I piece, charge to

so, to EBITDA all do not unreasonable this you it's $XX like, away that can of And this year. year, million go should say

this while so you XX.X% is flexibility Xx all terms in rate like of you almost business do business that something on flexibility have the from execute the well you probably. you're Monroe that Is gives brings to that sure still So, EBITDA but there making you're winning the can piece, that up down

now, We make to We're to grow. as for that. be that think formed management to rate confident. the the we'd It's pretty committee, interest we it us, At the better why That's nailed have margins right, continue same this like don't really formed in we're feel flow-through exactly time, going much higher we're to you support want better be and demonstrate able a we is future and think position with You in enhanced Board answered cheaper environment We we've we to and going for able want the to growth the sure rates. handicap got. right value, I rate. a do to that. better the demonstrate We -- Gregg, question exactly that us. to

about really excited where going we're to end So up. we're

when Do something that think to by could expect you way you do conclude? there XXXX to in that think or about that sooner? -- you could the that is finish year Is that some be end that process, think how of the

need I from bit more to. it that's for if some a little fair probably it probably think starting a room to a we'll -- have deliverable push we point

set we've right need start to and a start advisor that We hard -- to pick it's to timeline now. the it and got. meeting find need options we So -- an through work

Okay.

offset to tech, in fall SG&A invest that, SG&A? year? increase on Okay, through like of we increase $XXX,XXX this [ that profitability $XXX,XXX and of first better, the gross step-up bit if $XXX,XXX way or increase that, a past, we're to so, which business obviously, to by implications in in -- sequentially, should we're when little not sequential that Is in profit $XXX,XXX may QX, dollars and through were in and profit a in you're -- a trying of first in, scale incremental And changed to SG&A integrations, seeing the be of sure. we probably or lot gross the because see part XX% the these the think investing would of EBITDA? it we you in if in ] think investing some the maybe also a then quarter, sounds and about.But there SG&A there to I'm some to a much first I'm but excited increase not

-quarter forward? talk can do believe the we're that certainly what a hard in improve into to as now expect plus to -- through and we you XX% going we we processes. It's these our We future. automation -to But Yes. new platforms asked quarter position question, roll operating leverage

we're excited throughout again, leverage continuing year. the So, about that really operating

Okay. last people other to question give I'll hop off after a this chance.

included So, of and more charge, the EBITDA. think said like, so adjusted I if million December you would that have $X.X adjusted of had the million EBITDA release been quarter, that for million $X.X $X.X you

Yes, there. in average

Okay.

EBITDA that of $X.X And $XXX,XXX should through there that of quarter you're by gross so, seeing go flow in that are that through? if sequentially million are or up by incremental so investments profit of kind the first SG&A up goes outside gross XX% XX% sequentially, profit fall to

XX% some because it's we'll I it's -- but going to why leverage assume some stuff, forward. That's think the there other fair investments to talk expect operating is hard on, see that going we

back hop else. I'll have I queue anything the Okay. in if

of from comes Melas question George MKH next The Management.

of the up they partly the up on can said? responsible you of feed question previously Operation. you mentioned focus operations. Director Quick hired now you they what are the ramping sales force and Was more on Is that and a closing. that for Ray, sales Sales selling kind and customer

kind It's of bridge, a Yes. George.

lot First do more of a all, the salespeople that. had than to

of smoother. responsibility, is large a I focus And with there hard. Now a are infinitely closing. plans the execute George, on out -- we're with many And sales He when our so locations. both to a rolling operations up full that we're things much laid their helps better But to are really prepared And wrong, sales on you're operations, out. and Implementing mean, also a implementation X,XXX that thing. much on focus can they be the There's better of that -- before. timing great everybody's can do every and matrix than customer go that so does strength. customer it job. X,XXX sides And also more freeing core equation, little team on or

So role a type from it's sides, kind beneficial. very that's it's both so -- takes bridge away of that

through? and RWS? mostly in the $X.X technology What people of interesting. -- it does million that that? it or at savings where some were also is it Is Brett, components is so are That's is flow to that related Thanks. the what it RWS, Great.

It's... Yes.

I additional -- [Indiscernible] billion. But comments, purely mentioned payroll. to think the were in it's well the purely, And to we is give purely -- George. about yield. continue technology a being we savings, additional just $X.X that's It's there us That's clear hard cost the our expect people, we

as Yes. place already And most in it was for QX. of in QX that partially was in baked

Okay.

in baked into billion $X.X a is So, quarter of December like quarter? the the almost

Yes, exactly.

Yes.

Okay, great.

Proganics, not exactly, the to Proganics then, large ] they decline really do, because with goods that the the dealing -- sure exactly waste, how what Okay, mostly [ distribution on food or related bring large side, Ray, that store. good. food the distributor. is they And to on on I'm food but as is

that could how talk that Proganics does pipeline to deal? opportunity a about look bit And a and lead what So also like? for the take maybe that Proganics to little

quite generate waste, do a bit distributors food of actually, And organic surprisingly. Yes. George,

quite at to is like in want of things there's addition, dairy -- the You bit But this level well. company as on get that. that.So also food cooler on don't -- a the produce, top has and which shrink into retail I and but speak the DC distributor a stuff, especially distributor, like stores of

So they're a bit of a hybrid.

you've also stores involved. got retail So

should can It's and a do -- is clients. valuable I'm -- are it's for have fit how pipeline the down, slows involves good the we're client. how pipeline in before, a involves kind as stabilized it of that great you're you compelling. are of -- the change changes an operation it, conversations imagine.So There's be, couple sale. a their talking. a it grocery operational looking really always outcome It in would about this it with them implemented right clients product, that. active almost of in for regardless that for easy Proganics chains get Proganics intrusive but itself, the moved to and you're in definitely in product, excited way. we nice more -- think through really I mispronounced process It's not store faster. anytime the large, that mentioned But -- asking Proganics the it's as of is And a, I've now.I going we future, in my thing Proganics the So head has at we're I'm And got it's

existing pipeline we and active our an clients, the one like also have that. within we mentioned we earlier, hope for So,

Obus The comes Capital. of Nelson next Wynnefield from question

as I Yes. accounting being problem year. fiscal the it clear obviously, just you RWS appreciate I that to had what and was integration. I a here antedated difficult minutiae. was mean, the an current

million, why there is Brett, error I number the Is adjustment adjusted of that from $X.X it accounting just an an you problem have there that? guess reads here a in to it an something million it for $X.X realm question that just with ]. is perspective, issue make do makes the and The there You adjustment. that? $X.X million? way was out point an RWS to immediately an [ difficult wouldn't accounting

Yes, expense mean, is it it -- Nelson, I was missed periods. prior in

can it backs, So prior back. didn't about we fully periods, then in expense kind it to add a missed of one be is non-cash, I because when think just add piece feel like it that. but of it But was appropriate was

us now. behind it's anyway, But That's for Okay. right? sure,

Yes, absolutely.

the my mean, in issue. the And obviously, much My I that XX into think is, simply, exactly opposed pay we other to as that's it's XXs with low all gone -- out because and have you clearly, question, the receivable. the question you your do get at other accounts down DOS up are back as as look at now? as QX slow look up DOS debt, pointed cleared you very And that and where you'll if you

just one December -- of on paid anecdote, focused, even been Nelson. customer X instead We've as January Absolutely, an Yes. XX.

to how I've why I we're really very we energy feel in that's So end -- on about quarter. timing the is the and issues. excited the those seen the The are focused. I'm team collection confident side, going

any This over for the concludes to I conference the Ray turn session. to remarks. Hatch closing back like would question-and-answer

I we're our new outlook. existing I our excited We're customers really about you, Quest, Thank appreciate reiterate want coming to appreciate positive us and to extending. about excited extremely and you. also that, customers on I all operator. and re-upping with of

want to commentary the that team about that's bringing. efforts these the that. a all team think does this thank I value real excited they're I to I'm so happy. clients comment keep for and on the work do that

focused to couldn't come proud I so, a on really this have these having fruition. year watch guys happening, exciting and initiatives, long-term lot and of and really or me working seeing to We last the these staying team been of vision, to they're that starting reach things for hard fruition.It's over has and a be more execution,

forward want to And keeping and come. future to telling thank lastly, looking support of about your Quest, I you we're for on excited quarters you So updated we're to all you things. about continued of

you Thank it. that's very So much.

conference today's concludes call. This

you may day. disconnect for lines. You a participating, and your have Thank pleasant