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Sunday, November 19, 2017 5:02:48 AM
Nov 17, 2017
http://www.otcmarkets.com/stock/QUES/news/Quest-Solution-Reports-Third-Quarter-2017-Results?id=175788&b=y
EUGENE, OR--(Marketwired - November 17, 2017) - Quest Solution, Inc. (OTCQB: QUES), a specialty systems integrator focused on field and supply chain mobility announced its financial results for the three and nine-month periods ended September 30, 2017.
Highlights
•Revenues for Q3 2017 of $12.96 million declined slightly from $13.56 for Q3 2016
•Improved gross margin of 21.8% for the quarter ended September 30, 2017, compared to 19.6% in Q3-2016
•Salary and employee benefits Operating expenses includes $416,548 of non-cash stock based compensation
•Total operating expenses decreased 8.6% to $9.1 million for the first nine months ended September 30, 2017 compared to $10 million in the prior year period
•Substantial reduction of net loss from continuing operations to $0.9 million for the three months ended, an improvement of $1.6 million compared to the prior year period
•$4.6 million reduction in current portion of notes payable
•Management focuses on turnaround plan aiming to strengthen the financial structure and turn to profitability
Quest reported revenues of $12.96 million for the third quarter ended September 30, 2017 compared to $13.56 million in the comparable 2016 period. The slight decrease was mainly attributable to unavailability of inventory at the manufacturer which delayed shipments into Q4-2017. Gross margin improved to 21.8% in the third quarter of 2017 compared to 19.6% in the prior year period, primarily due to a 7.1% decrease in the cost of goods sold. During the quarter the Company expensed $416,548 in non-cash stock based compensation. The Company reported improved net loss from continuing operations of $902,882, or a net loss from continuing operations of $0.03 per share, as compared to net loss from continuing operations of $2,467,290, or a net loss from continuing operations of $0.07 per share in the same quarter last year. Adjusted EBITDA (Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization) improved to $309,812, or 2.4% of sales, compared to $190,437 or 1.4% of sales in Q3-2016.
Shai Lustgarten, CEO, commented, "One of our primary goals entering the third quarter was to improve operational efficiency, and our results reflect just that. Not only did gross profit increase as a percentage of sales, we significantly reduced net loss from continuing operations. Moreover, while total operating expenses rose slightly during the quarter, this increase was largely related to $416,548 in non-cash, stock based compensation."
For the nine months ended September 30, 2017, Quest reported revenues of $40.9 million, compared to $43.4 million in the comparable 2016 period. The decrease was primarily related to a temporary unavailability of inventory at the manufacturer, as described above. Gross margin improved to 21.1% in the first nine months of 2017 compared to 20.2% in the same period in 2016, primarily related to a 6.9% decrease in the cost of goods sold. During the period the Company expensed $565,593 in non-cash stock based compensation. Net loss from continuing operations improved significantly on a nine-month basis to $1.7 million, or a loss of $0.05 per share, compared to a net loss from continuing operations of $5.4 million, or a loss from continuing operations of $0.15 per share in the prior year period. Adjusted EBITDA for the nine month period improved to $1,405,202, or 3.4% of sales, compared to $503,338, or 1.16% of sales for the comparable period.
Mr. Lustgarten continued, "We are pleased with the initial progress we have made in several areas of our turnaround strategy. An initial priority has been to reduce costs in the business, and we have realized significant efficiencies thus far which should translate into over $1 million in savings in 2018. Second, the balance sheet saw marked improvement, with a $4.6 reduction in the current portion of our notes payable."
Mr. Lustgarten concluded, "Quest has built a world class customer base of Fortune 100 companies who look to us to help solve their supply chain needs. This market is evolving quickly and Quest sits in a unique position to drive more profitable growth. To that end, a key focus of the new management team is to offer new and enhanced solutions, with a particular focus on software and services. This year Quest launched the Route Edge software product which has been well received. We saw an increase in our more profitable software and services sales during the quarter and our goal is to continue to grow this portion of our sales mix and better leverage our valuable sales channel."
Please refer to the financial tables included below for a reconciliation of generally accepted accounting principles in the United States ("GAAP") to non-GAAP financial results. Please refer to the financial tables included below for a reconciliation of GAAP to non-GAAP results.
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