$QUES letter to shareholders
HENDERSON, NV, Dec 29, 2015 (Marketwired via COMTEX) -- Quest Solution, Inc, (otcqb:QUES), announced today that Gilles Gaudreault, Chief Executive Officer, issued a letter to shareholders. The text of the letter is below:
Quest Solution looking back at 2015 and looking forward to 2016.
Highlights include:
Profitability attained: in the 3rd quarter Quest Solution attained profitability as well as increased EBITDA and cash flow. As the integration of the new acquisition makes more headway, we anticipate this path to continue to grow.
ViascanQdata acquired: Adding new geographic and new product suite, as well increasing our sales force. This adds the ability to compete for and sign new and bigger contracts heretofore unavailable to Quest Solution.
Balance sheet strengthened: Debt load reduced, warrants canceled, total outstanding shares reduced. The better balance sheet enables us to more easily attain growth prospects.
New business wins: We won significant new contracts with major new clients, some of which included a multinational auto manufacturer, the leading Do It Yourself Company in the US, a multinational apparel retailer. Our added product offering will accelerate this into 2016 and beyond.
New financing relationship: We signed an expanded and more flexible financing relationship that allows us more flexibility in meeting customer needs.
To Our Valued Shareholders, Employees, Partners and Investment Community:
As 2015 comes to a close, we look back upon a milestone year for Quest Solution (the Company) as well as look forward to the future for the Company. We have made tremendous progress in 2015, and we believe that we have positioned our Company and its shareholders for success in years to come. While we feel this progress has not been properly reflected in our market valuation, and it is the intention of management to address that issue, Quest nevertheless exits the year in a much better position than it was in at the start, due to a streamlined capital structure, strategic combination with ViascanQData, stronger management team and broader market opportunities. In the summer of 2014, the Company was on track for $35 million in sales, and now, 18 months later, the Company is expected to start with a plan to achieve more than $90 million in sales for 2016.
We achieved substantial milestones in our financial performance. In the third quarter of 2015, we achieved our stated goals of achieving profitability and generating positive operating cash flow with GAAP net income of nearly $700,000 and cash flow from operations of $2.9 million. Also during the quarter, we delivered Adjusted EBITDA of over $1 million, marking consecutive quarters of adjusted EBITDA profitability. Revenues are increasing as well, in part from acquisitions, but we are also organically growing our revenues by increasing our wallet share with existing clients and adding new customers. Boosted by the ViascanQdata transaction, we are laser-focused on shifting our product mix to include a higher proportion of consumables and media, which we believe will help to further increase recurring revenue and drive margin expansion. As we enter 2016, we expect that we will have much of the integration and cross-selling between Quest and the recently acquired ViascanQdata employees completed. In February 2016 we will host our annual sales meeting in Chicago and re-inforce our push to achieve greater than $90 million in revenue during 2016, with positive EBITDA.
We achieved substantial milestones in our operations -- adding new geographic, new product suite, as well as increase in sales force. The increasing power and complexity of mobile devices makes the role we play as an integrator even more critical to the success of mobile technology deployment. We believe that the acquisition of ViascanQdata increased our purchasing power, elevated our production capabilities with the addition of modern production assets and strengthened our service capabilities to create a world-class delivery infrastructure. Combined, these improvements to our operations should create more opportunities for new sales, improved profitability, margin expansion and excellent customer service.
We achieved substantial milestones in growing our business. Throughout the year, our sales professionals developed a pipeline of qualified deals which meet the growing market demand created by commercial businesses that are looking for opportunities to deploy mobile technology to exploit inefficiencies in their business models, reduce costs and elevate their levels of service. As of September 30, 2015, our backlog of business was more than $3 million and we had sold nearly $7 million in long-term service contracts, which are deferred over the lifetime of the agreements. With an experienced team of over 150 employees including sales and sales support professionals and a robust suite of products and solutions enhanced by recent acquisitions and teaming arrangements, we believe that our sales structure is well-positioned to further build upon our success.
We achieved substantial milestones in setting the stage for increased shareholder value. During 2015, we secured agreements to settle approximately $9.6 million in debt at a discount. In addition, we redeemed all of the shares of voting preferred stock and approximately 12,400,000 stock options, streamlining our capital structure. Our board is now comprised of a majority of independent directors with good corporate governance in mind.
Looking ahead, we plan to pursue and shape technology projects that offer a larger portion of higher margin services and media requirements within the scope of work. By specifically targeting higher value-added, service-oriented opportunities, we expect to increase our base of recurring revenue and create annuity-like revenue streams for future periods. This should play directly to the combined strengths of our legacy Quest Solution business and the newly acquired ViascanQdata business.
Today, we bring state-of-the-art, integrated solutions to the marketplace, partnering with industry-leading suppliers, enabling us to bring the best-of-the-best to our customers. Keeping pace with ever-evolving technology trends will require a modest level of investment in both our U.S. sales organization and our production facilities. As part of the acquisition integration, we will be upgrading certain aspects of our U.S. production facilities to include the transfer of manufacturing equipment from our facility in Montreal. When completed, this will allow for a meaningful increase in our high margin media business.
We have created a more tightly integrated solution provider, offering an expanded line-up of products to broader, cross-border markets by combining Quest Solution's integrated hardware and solutions with ViascanQdata's media business. As more and more global companies embrace the Internet of Things concept and the use of mobile devices continues to expand, we believe we are equipped to be the full-service integration bridge between mobile hardware solutions and existing ERP and supply chain platforms. We have coalesced the technological know-how, production capabilities and management expertise to take our Company to the next level.
As we said, we feel this meaningful progress across our entire organization has not been properly reflected in our stock price. So while we have many positives, we as a management team recognize the opportunities and challenges that arise from moving from a $35 million company to a $90 million company. We believe we have the management team and board of directors in place to achieve this. We also believe we have the team in place to navigate through any new challenges that arise given our size.
The Year 2015 was a pivotal year both strategically and tactically, and we look forward to capitalizing on the many opportunities that lie ahead in 2016 and beyond. We enter 2016 with a proven management team, an expanded sales organization, more solutions to sell and a growing base of customers to cross-sell our solutions. Along with our capital structure being streamlined, the foundation of the Company is continuing to improve. We are excited about the future, and we hope you are too.
We wish each of you a Merry Christmas, Happy Holidays and a prosperous New Year.
Gilles Gaudreault Chief Executive Officer
Tom Miller President and Chairman
