Quest Resource Holding Corporation (NASDAQ:QRHC) Q3 2022 Earnings Conference Call November 14, 2022 5:00 PM ET
Company Participants
Dave Mossberg – Investor Relations
Ray Hatch – President and Chief Executive Officer
Brett Johnston – Chief Financial Officer
Conference Call Participants
Aaron Spychalla – Craig-Hallum
Gregg Kitt – Pinnacle Fund
Gerry Sweeney – ROTH Capital
George Melas – MKH Management
Operator
Good day, and welcome to the Quest Resource Holding Corporation Third Quarter 2022 Earnings Call. Today’s conference is being recorded.
At this time, I would like to turn the conference over to Dave Mossberg, Investor Relations representative. Please go ahead, sir.
Dave Mossberg
Thank you, Jenny, and thank you, everyone, for joining us on this call. Before we begin, I’d like to remind everyone that this conference call may contain predictions, estimates and other forward-looking statements regarding future events or future performance of Quest.
Use of words like anticipate, project, estimate, expect, intend, believe and other similar expressions are intended to identify those forward-looking statements. Such forward-looking statements are based on Quest’s current expectations, estimates, projections, beliefs and assumptions and involve significant risks and uncertainties.
Actual events or Quest results could differ materially from those discussed in the forward-looking statements as a result of various factors, which are discussed in greater detail in Quest filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such statements and to consult our SEC filings for additional risks and uncertainties. Quest forward-looking statements are presented as of the date made, and we disclaim any duty to update such statements unless required to do so by law.
In addition, in this call, we may include industry and market data and other statistical information, as well as Quest observations and views about industry conditions and developments. The data and information are based on Quest estimates, independent publications, government publications and reports by market research firms and other sources.
Although Quest believes these sources are reliable and the data and other information are accurate, we caution that Quest does not independently verify the reliability of the sources or the accuracy of the information.
Certain non-GAAP financial measures will be discussed during this call. These non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company’s current performance.
Management believes the presentation of these non-GAAP financial measures is useful to investors understanding in the assessment of the company’s ongoing core operations and prospects for the future. Unless it is otherwise noted, should be assumed that any financials discussed in this call will be on a non-GAAP basis. Full reconciliation of non-GAAP to GAAP financial measures are included in today’s earnings results – release.
With that said, I’ll now turn it over to Ray Hatch, President and Chief Executive Officer. Ray?
Ray Hatch
Thank you, Dave, and thanks, everyone, for your interest in Quest. We had another good quarter. We delivered a 78% increase in gross profit, a 57% growth in adjusted EBITDA. We generated $73.4 million in revenue, $12.2 million in gross profit and $3.8 million in adjusted EBITDA.
In the quarter, there was an adjustment of $850,000 for expenses related to one vendor at one of our recently acquired companies, which lowered our gross profit. Without that expense, adjusted EBITDA for the quarter would have been $4.7 million.
Our outlook remains very positive. We are executing on all of our strategic initiatives and expect a strong finish to what has been an exceptional year of growth for Quest. Our results continue to demonstrate the strength of our business model and how we can perform well in a market environment that’s been challenging for others.
We’re able to offset inflationary cost pressure with flexible pricing and cost recovery fees. And due to the nature of our pricing structure, gross profit dollars were not materially impacted by commodity price fluctuations.
In addition, we continue to make positive progress optimizing recent acquisitions. We are moving new opportunities through the pipeline, which I’ll explain more in detail later. And we see relatively stable economic activity across our customer base, all of which positions us well for continued profitable growth during the fourth quarter and next year.
Before I get into more detail, I want to welcome our new CFO, Brett Johnston, to his first earnings call with Quest Resource. Brett is a great addition to our team, and with extensive financial leadership experience, and I’m happy to have him on Board. I’ll turn it over to Brett now to cover the financial overview.
Brett Johnston
Thanks, Ray, and good afternoon, everyone. I’m excited to join Quest, especially at this point in its history, and I am excited to be part of the transformation that is well underway. Quest has a unique value proposition in a very large market, and I see a lot of potential for continued growth. Plus, also has a strong culture and proven leadership, and I’m thrilled to become part of the team.
Before I review the financials, I’d also like to thank Laurie Latham, our former CFO, for her ongoing support as we make the transition. She has been immensely helpful in getting me up to speed in the past couple of weeks.
Now moving on to our results. Third quarter financial results were in line with expectations, and all the major growth drivers of our business contributed to year-over-year growth. Revenue increased 96% year-over-year due to a combination of growth from new customers, expansion with existing customers and M&A activity.
During the third quarter, gross profit dollars increased to $12.2 million, which was a 78% increase year-over-year. In addition to incremental gross profit dollar contribution from acquisitions, we expanded service programs with existing customers, and we continue to see strong year-over-year growth from new customers that we have added in the past 12 months to 18 months.
Gross profit dollar growth will continue to benefit from new customers as we both roll out our services across their footprint and add new services. Additionally, growth will come as we optimize the delivery and cost structure of service delivery across our customer footprint.
Over the last few quarters, there have been variations in the sequential comparisons for gross profit dollars. So I want to take a minute to explain these fluctuations. The sequential decrease in gross profit dollars during the third quarter was primarily related to ongoing integration work for the acquisitions we completed during the end of 2021.
As was discussed on our last call, during the ongoing process of applying operational and accounting best practices to the acquisitions we completed at the end of 2021, we identified and made some one-time positive adjustments with some catch-up billings during the second quarter. Similarly, during third quarter, we identified a necessary adjustment that negatively impacted cost of sales.
I will point out that this adjustment has not affected our expectations for our acquisitions, and our year-to-date results are in line with our plan and are consistent with the annual performance expectations we gave last quarter.
I also want to note that sequential gross profit dollar comparisons were not materially affected by inflationary pressures or lower commodity prices. As Ray said earlier, we were able to offset inflationary cost pressure with flexible pricing and cost recovery fees. Due to the nature of our pricing structure, which produced fairly consistent gross profit dollars per unit of measure regardless of commodity price fluctuations, our gross profit dollars were not impacted during third quarter.
Our outlook for gross profit dollars is unchanged for the year. As was mentioned during the last quarter’s call, we expect gross profit dollars during the second half to be similar to the first half of the year.
Additionally, gross profit should benefit from continued momentum in organic growth and continued improvements from our integration efforts, and be partially offset by the return of a normalized seasonal pattern that we have seen historically during the fourth quarter.
Our SG&A expenses were $9.3 million during the third quarter compared to $5.3 million during the same period last year and relatively unchanged compared to the first and second quarters of 2022. The year-over-year increase relates to the business operations that we acquired during 2021 and during the first quarter of this year. During the fourth quarter, we expect SG&A costs will continue to be about $9 million to $9.5 million. The increase reflects the added overhead costs from acquired business operations, ongoing acquisition and integration costs and increased investment in systems, processes and people to continuously improve our efficiency and scalability of our platform.
During the third quarter, depreciation and amortization increased to $2.5 million versus $508,000 a year ago. The increase was primarily related to amortization of acquisition intangibles. We expect depreciation and amortization to be approximately $9.5 million for 2022. During the third quarter, interest expense increased to $1.9 million versus $542,000 last year. The increase is primarily related to the debt financing for acquisitions and an increase in the interest rate. Q3 adjusted EBITDA increased 57% to $3.8 million year-over-year.
Moving on to a review of the cash flow and balance sheet. Our cash balance was $7.1 million at the end of the quarter versus $4.2 million at the end of the second quarter, and $8.4 million at the beginning of the year. We used $4.3 million in operating cash flow during the first nine months of the year, and the pace of operating cash flow used slowed down to about $521,000 in the third quarter. The use of cash year-to-date and, to a lesser extent, in the third quarter, was primarily related to investment in working capital to support more than doubling the size of our company year-over-year. While our September 30 receivables balance was larger, I would point out that the collectibility of our receivables is within our normal expectations.
As was noted on our last earnings call, we have had several new customers that have ramped quickly during the year. In particular, our industrial customers were onboarded with extended payment terms. During the third quarter, we transitioned those terms to a more typical payment schedule, which will cycle through during the fourth quarter. As such, we expect to generate positive cash flow from operations during the fourth quarter. That is, of course, barring any significant acquisition or meaningful step-up in organic growth from the current run rate.
During the first nine months of 2022, CapEx was $627,000, and we utilized approximately $3.1 million in cash to finance a smaller acquisition during the first quarter. At the end of the quarter, we had $74.9 million in notes payable versus $67.9 million at the beginning of the year. That increase primarily reflects the financing for the acquisition that we completed during the first quarter.
At this time, I’ll turn the call back to Ray.
Ray Hatch
Thank you, Brett. I’ll start off with some thoughts on the resilience of our business model and how we’ve continued to perform well in a volatile economic environment. Regarding inflation, as we have mentioned on previous calls, we’re able to offset cost pressures with flexible contracts that allow us to pass through increases such as future surcharges. These pass-through increases have been in place throughout the year, including in the third quarter, and have not affected our gross profit dollars.
Regarding volatility in commodity prices, we structure our agreement so the gross profit dollars are not materially affected by these swings. These are the same contract structures we have had in place since the early days of our company, when used motor oil was one of the largest recycling streams. We now recycle a wide variety of commodity waste streams being generated by our clients, including used motor oil, scrap metals, used cooking oil, plastics, pallets, cardboard and other commodities. The price and the value of these recycled commodities can fluctuate significantly from quarter-to-quarter, which was the case this past quarter.
To give you an example, we estimate during this last quarter, there was a $6 million sequential decrease in the value of the scrap metals that we recycle for our clients. This has a one-for-one impact on our revenue. However, the gross profit dollars and the volume of these materials remained relatively even with the prior quarter.
Regarding the economic environment in general. We continue to see stable activity levels across our end markets, and our value proposition is resonating well with both existing and new customers. I continue to feel good about the growth we have in front of us. Within our installed base of customers, we use the land and expand strategy to deliver growth. This strategy is consistently to deliver a base of organic growth for the last five years.
We added several new service capabilities with our recent acquisitions, and we’re actively introducing those new services to our existing clients. We spoke about adding a wood pallet recycling program at the new service offering last quarter. We recently added this program to a second existing customer. Each of these expansions will produce seven figures in revenue at maturity.
In addition, we recently rolled out a new scrap metal recycling program at retail business locations. This new service line has been well received, and we’re now implementing it with two existing customers, each of which we expect to generate seven figures in revenue at maturity. By adding new services like these and continuing to expand geographies, we feel confident that existing customers will continue to provide a major contribution to our organic growth for years to come.
On top of growth from existing customers, during the last couple of years, we’ve improved new client targeting and are closed in the right new clients. During the third quarter, we added new prospects and several large opportunities across multiple end markets. Since the end of the third quarter, we’ve had two new seven-figure customer wins, one in the industrial end market and one in the automotive surface market. We will begin implementing our new industrial customer in January, and it will eventually ramp up to seven figures in annual revenue over the course of the following 12 to 18 months.
Our data platform with its ability to provide a uniform and supported data sets across multiple waste streams played a key role in this win. In addition, by centralizing the management of all their waste streams with Quest, we can use our scale and expertise to improve efficiencies, divert more waste from landfills and maximize the value from recycled commodities. These are the core elements of our value proposition, helping our clients become more environmentally friendly in a cost-effective manner.
I’ll also note that wood success comes more success. As we’ve grown in the industrial market, having multiple referenceable clients has helped us secure this new client. The automotive service win is a sister company of an existing customer. We’ll begin onboarding this new customer in December and expect it to be fully ramped up in the next 90 days.
Our data platform also played a key role in winning this business. Specifically, our data platform and expertise in environmental disposal compliance allows us to efficiently manage the federal state and local regulations, as well as reporting and data archiving requirements of the specialty and hazardous waste streams from this customer.
Along with this data platform, we also offer innovative processes to ensure compliance such as color coding system to manage the different containerized waste at each facility. A couple of things like color coding containers and other processes substantially reduce the risk of improperly disposing of hazardous waste.
As we’ve discussed in the last couple of calls, we’ve been busy integrating RWS and InStream, the large acquisitions were made at end of 2021. As Brett mentioned, the integration has cost of volatility and the sequential comparisons. Overall, these acquisitions are performing according to plan.
We continue to evaluate additional M&A transactions. I want to reiterate that we’ll also continue to maintain discipline in making acquisitions. We’ll only execute those that fit our criteria. As I’ve said before, there will be years like 2021 where we found several good deals of fair criteria, but there may be periods when we don’t find any.
Regarding our outlook, overall, our positive outlook for profitable growth has not changed. We expect continued positive momentum during the fourth quarter and for 2023. We managed tremendous growth year-to-date and have been successfully ramping new customers and integrating acquisitions. Now that we’ve at least partially digested this growth, we expect to return to operating cash flow generation in the fourth quarter.
Pressured to improve sustainability, increasing regulation and increasing cost of landfills are lowering the bar for adoption of recycling services. We continue to view inflation and commodity price fluctuations as net neutral to our business as our contracts have mechanisms in place to adjust. The contribution from new client wins will continue to provide incremental gross profit dollars as we onboard these programs.
We expect acquisition and integration to provide incremental contribution from both increased efficiencies and from cross-selling. Based on all these factors and with the business we have in hand, we’re optimistic we’ll continue with positive momentum for the next several years. I look forward to keeping you updated on our progress.
We now like the operator to provide instructions on how listeners can queue up for questions. Operator?
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] And we will go first to Aaron Spychalla with Craig-Hallum.
Aaron Spychalla
Hi, Ray. Hi, Brett. Thanks for taking the questions.
Ray Hatch
Hi, Aaron.
Aaron Spychalla
Hello. Maybe first on just you talked a little bit about expenses from one vendor and one of the recently acquired companies. Can you just provide a little bit more color on what that was? And it sounds like it’s not something that you think should be recurring going forward.
Ray Hatch
No, I think that was the point there. It was one acquired company, one vendor, and it was some identifying expenses. As you recall, Aaron, and we talked last quarter through our diligence, our integration effort. We found a lot of client non-billings, meaning clients that have been received as services not billed, we caught up on that. This quarter, we also found something on the vendor side that hadn’t been recorded properly, and that’s done now. And so it is an isolated instance to your point.
Aaron Spychalla
All right. Thanks. And then maybe just on the pipeline, good to hear about a couple of those new wins. Can you just talk about where qualitatively that might stand today as a whole and just how that compares to the last few quarters? And it sounds like maybe the close rate is starting to improve there.
Ray Hatch
Yes. I think the close rate – I think it’s more about – it’s been slower to fruition, and I think a lot of these have taken longer to get done than anybody anticipated, including the client. And so now it’s – that’s catching up. And we feel like as we – in this quarter, we’ll get some nice – more good news and hopefully, will continue on into Q1. Because the pipeline is just as strong as it was last quarter. It’s actually bigger because we’ve added more to the top of the funnel as we’re starting to move these out the bottom.
So it’s hard to quantify it, Aaron, because really what it boils down to is getting these things signed. But one of the indicative elements of it, I think, is important, several years ago or even a couple of years ago, our pipeline had a lot of customers that I don’t know, maybe they were smaller in their potential purchase.
These clients have all got, not all, but the vast majority, have got really significant ability for revenue. They’re large multi-location, in some cases, industrial that are generating quite a bit of complex waste streams. So we’re really excited about what that can do for us. One win can have a lot of impact two or three wins is going to have even a huge impact. So the funnel is bigger than it was, but we’ve got to keep filling the top of it, Aaron, as we get these things closed on the bottom.
Aaron Spychalla
Right. Right. Okay. Good to hear and good luck. Thanks for taking the questions. I’ll turn it over.
Ray Hatch
You bet. Thank you, Aaron.
Operator
And we’ll go next to Gregg Kitt with Pinnacle Fund.
Gregg Kitt
Hi, Ray. How are you?
Ray Hatch
Great. How are you, Gregg?
Gregg Kitt
I’m doing great. And hi, Brett, thank you for joining the team. We’re excited to get the opportunity to talk with you going forward.
Brett Johnston
That’s very thoughtful of you. Thank you.
Gregg Kitt
Yes, thank you. You talked about – I think, if I heard you correctly, three customer expansions and one in a wood pallet. And I think you said two existing in scrap metal recycling at retail locations. Did I hear that correctly?
Ray Hatch
Yes. Yes, you did.
Gregg Kitt
Okay. Great. And then you also – go ahead.
Ray Hatch
I was going to say those are – yes, those are existing clients, great clients, and we’ve added some service profiles, some service abilities capacities that we’ve been able to cross-sell into them, which is really exciting.
Gregg Kitt
Thanks, Ray. And then you added the two new customer wins that were both seven-figure customers. Could any of those – either the new wins or the expansions end up being more like mid-seven-figure or eight-figure type of opportunities?
Ray Hatch
One of them has that potential for sure. The other one I’m not quite sure. I’d like to go back and look, but less likely.
Gregg Kitt
Thank you. And I have one more question. You talked about investing in scalability and investing in capability of the data platform and the release what will these investments allow you to do?
Ray Hatch
Yes, it’s a great question, Gregg. I mean, this is something we’ve been focused on for quite a while. I mean, we all – and we’ve talked about this. We believe one of the key value propositions for Quest is that scalability. And so what our systems that we’re investing in and allow us to be quicker, more automated, more accurate to allow builds in and build out in a much more efficient way, which allows us to add new revenue volume with relatively little additional G&A.
And also, we’re expanding our capabilities as far as reporting data back as well on an ongoing basis. But the net effect, Gregg, if you boil it all down, there’s a lot of complexity associated with the charts that show what we’re doing. But at the end of the day, it allows us to do a lot more with a lot less, which enables us to rapidly grow without having to go find a lot of people to help us do it.
Gregg Kitt
Thank you very much and congratulations on the expansions and the two new wins. It’s been – we’ve been waiting all year, and it sounds like there’s opportunities for more of those things in the pipeline to cross the finish line potentially this year.
Ray Hatch
You bet. Thank you, Gregg. Appreciate it.
Gregg Kitt
Thank you.
Operator
And we’ll go next to Gerry Sweeney with ROTH Capital.
Gerry Sweeney
Hey, Ray. Thanks for taking the call.
Ray Hatch
Hey, Gerry.
Gerry Sweeney
Question on – this is a little bit higher level. You look at your, let’s say, portfolio of customers, do you have – is there a way that you can gauge how many of your customers have – I’m not sure, I’m trying to figure out the easy way to say it. If your customer base has fully inundated with all your services, or another way to look at it, how many – how much of your customer base still has the ability to take on more services?
Ray Hatch
Yes, you’re talking about wallet share, basically, right?
Gerry Sweeney
That would be a much easier way of saying it, yes.
Ray Hatch
Well, that’s the term that we use here. It’s hard to quantify that, Gerry. I mean, I can tell you, I can’t think of a single client where there’s not more opportunity, but some there’s a lot more than others. And I will tell you, I can’t emphasize enough the expanded capabilities like the cross-selling that some of these acquisitions brought us to sell into our significant client base. that represents a lot of growth opportunity.
But again, Gerry, it’s difficult to quantify. But we have a pretty good list. We know by client. We have a client services group that just – that really, really takes care of our existing clients. And we know what they’re buying from us, what they’re not. And we know services that they have that we don’t have. And that’s an emphasis for our client services group to continue to work to expand within that existing spend. I just – we know by client, but we don’t really have a macro number probably.
Gerry Sweeney
Got it. And then you brought up cross-selling. How would you characterize the success of cross-selling? Is it meeting your expectation? Exceeding? Underperforming?
Ray Hatch
No, that’s a great question. I hate to admit this. My expectation really wasn’t very high. I was hopeful as opposed to expecting, maybe that’s a better way to put it. And I think I was surprised – or I am surprised by maybe the size of some of the markets and spend in some areas we weren’t addressing before like pallets. It’s a significant amount of spend in the pallet space. And there’s very few clients we have that don’t use some type of pellet service. So I would say, it definitely has the potential to massively exceed any expectation I have. And currently, it’s more than I thought where we would be at this point. It’s a relatively early stage. But it’s progressing, and I’m quite happy about that.
Gerry Sweeney
Got it. Final question. You’ve seen strength in any areas of the economy more so than others in terms of one activity to client additions?
Ray Hatch
I don’t know that we’re seeing a lot of changes in the – you’re talking about the client themselves, the strength of the business segments, end markets?
Gerry Sweeney
Yes.
Ray Hatch
Yes. I don’t know that we’re seeing any change at this point, Gerry. I know there’s a lot of talk about all these different segments doing well or bad. But our automotive sector is fine. The grocery sector is fine. Manufacturing, if anything, I think is there’s more onshoring going on. Maybe seeing a little increase there. Again, I’m not an economist, but I can look at what we see, and I haven’t seen any indication of weakness in any of our end markets, frankly.
Gerry Sweeney
Are you seeing strength in any areas in terms of customer wins? Or is it still final sort of movement to the finish line? Yes. That was…
Ray Hatch
Yes. On the new customer win side, I would say – and I’m not sure if Andy is on the call. Andy has done a great job on the sales side, work in our industrial side, along with Stephen and others. The industrial side is really – I think there’s a lot of manufacturers that are looking for better solutions to complex waste streams than they have today. And I really believe that we represent that. So there’s numerous opportunities there.
The food waste segment continues to grow because of the – for no other reason, because of the landfill diversion goals, a lot of these grocers and manufacturers have and finding ways to meet those. So I mean, really, if I had to pick one, I would have to say our industrial sector is strong. But the food waste side has got a lot of interest going, too, as well.
Gerry Sweeney
Got it. I appreciate it and thanks for taking the call.
Ray Hatch
You bet, Gerry. Thank you.
Operator
We’ll go next to George Melas with MKH Management.
George Melas
Thank you. Hi Ray, good afternoon. And hell Brett, welcome to the team.
Ray Hatch
Thank you, George.
Brett Johnston
George, thank you.
George Melas
You’re welcome. Okay. Quick question on that vendor catch-up statement. Was that sort of a catch-up payment for the first quarter, the second quarter and part of the third quarter? Can you help us a little bit understand not what’s the nature of that, but how would it be distributed during the year.
Brett Johnston
Hey George, this is Brett. I’ll take that question. Yes. So we called it out just to give a little bit better visibility into Q3. And so you could see the performance a little bit. But that would be mostly related to the first half of the year.
George Melas
Okay. Great. Thank you for that. Yes and thanks for bringing it up. It’s very helpful.
Ray Hatch
Sure.
George Melas
If you think of the integration in streaming RWS, kind of what innings are you got in from a systems perspective, from a process perspective, from a depots perspective? Where are you guys in sort of that integration?
Ray Hatch
That’s multiple games there. I’ll give you innings on all three of those, George, respectively. I think on the people side, we’re in the late innings. I really do. Very happy with the folks that we have with these teams. They’re doing a great job really working through the change. It’s difficult when your company is purchased by another company to adapt as well, and I think they’ve done a fine job.
On the process side, far along, but maybe not quite as far along as the people side. We’ve really worked hard on the processes. I will say that our accounting group working closely with them. Our sales group and marketing group are fully integrated into what they’re doing. So I’d say, process standpoint, and also on the vendor relations sourcing procurement side, I think they’re probably in the middle to later innings as well.
On the systems side, that’s lagging behind a little bit for obvious reasons. I mean, they’re on a different platform. You don’t want to upset the apple cart. We’ve worked out the plans. We’ll be moving those as soon as possible. But we’re on down the innings on all three, just different stages on those, George.
George Melas
Okay. Great. Good to know that. And then just want to point out something, but I’m not exactly sure how to wrap that into a question. But like at the beginning of 2021, we’re looking at customer concentration, and the top two were 47% of revenue, and now the top two are just 21%. And I think your largest customer during the quarter was just 11%. So it seems like the customer risk has massively, massively sort of come down with the growth and also partly with the acquisition. So it’s great to see that.
Ray Hatch
Well, I’ll call that a question, George, so I can answer it. Yes, it is great to see.
George Melas
Yes.
Ray Hatch
We – that’s – we’re excited about that. We’re adding some really great quality customers to the portfolio. Customer diversification has always been a goal and not an easy one to achieve. When you get good customers, you grow like crazy. You got to get more of them to keep up. And so yes, there’s been – and the acquisitions are part of that. But we’ve brought on several strong customers that have kind of diluted the individual impact of the one or two that were driving that at the beginning of 2021. Thank you, George for that question.
George Melas
Great. And then maybe just one question. On the competition front, do you see any particular changes?
Ray Hatch
Competitively?
George Melas
Yes.
Ray Hatch
I really don’t think so. George, the interesting thing is we don’t focus a lot on those guys. I know that sounds silly, but we focus on finding the prospects that need, what we do best. And typically, there’s nobody out there that does everything we do. There’s a lot of people that pick up trash, there’s a lot of people that will pick up used motor oil. But there’s very few that do all these things like we do. And so competitively, I don’t think the front has changed at all, George. I think it’s just more incumbent on us to do as good a job as possible of showing the marketplace what we do well as opposed to our competitors.
George Melas
Great. Okay. Thank you, both of you. Thanks very much.
Ray Hatch
Thank you, George. Appreciate it.
Operator
And with no other questions in the queue, I would now like to turn the call over to Ray Hatch for any additional or closing comments.
Ray Hatch
Thank you, operator. I just want to thank everybody again for their interest in Quest. We really greatly appreciate it. I want to thank the employees of Quest and the acquired companies we have. I appreciate all their efforts. We feel very, very confident about where we are. We’ve come a long ways, and we really got a lot of traction and moving forward.
We’re excited about the resiliency of Quest and the strength of our customers and our ability to continue to serve more and grow more as we go forward. And I want to take another moment to, one, welcome Brett to the team; and two, to thank Laurie for all of her service and all the things she’s done for all of us. We appreciate her, and we’re excited to have Brett as well. And excited to have all of you as shareholders. So thank you very much. I appreciate it.
Operator
And so this concludes today’s call. Thank you for your participation. You may now disconnect.
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