Quest Resource (QRHC) 15th Annual Midwest IDEAS Investor Conference summary

Business overview and differentiation

• Provides national waste and recycling solutions for large, multi-location businesses, focusing on complex waste streams and regulatory compliance.

• Serves a diverse range of B2B clients, including automotive, food, retail, and construction sectors, with over 100 waste streams managed.

• Asset-light model leverages thousands of subcontractors, enabling scalability and rapid rollout without significant capital investment.

• Differentiates from competitors by aligning with customer sustainability goals and offering flexible, tech-enabled services.

• High-quality customer service and long-term, contracted relationships drive low churn and strong client retention.

Growth strategy and financial performance

• Shifted from reliance on a single large client in 2016 to a diversified client base, driving a 40% three-year CAGR in revenue.

• Focuses on gross profit dollars and EBITDA margin improvement rather than top-line revenue, due to commodity price fluctuations.

• Growth driven by expanding services to existing clients, acquiring new clients, and selective M&A targeting smaller, infrastructure-limited firms.

• Gross margins have more than doubled since 2016, with EBITDA improvement exceeding $17 million and further gains expected in 2024-2025.

• Automation initiatives in G&A are expected to further enhance margins and cash flow.

Market dynamics and regulatory environment

• Industry is highly fragmented, with major players controlling less market share than commonly perceived.

• Increasing landfill costs and growing ESG requirements provide secular tailwinds for alternative waste solutions.

• Regulatory environment is driven primarily by state and local governments, with varying requirements and fees across regions.

• Consumer and client demand for sustainability and data transparency is rising, supporting ongoing business growth.

• Asset-light model allows for rapid adaptation to regulatory and market changes without heavy capital constraints.