THE COLONY, Texas - Quest Resource (NASDAQ:QRHC) Holding Corporation (NASDAQ:QRHC), a provider of environmental waste and recycling services, announced today that it has completed a refinancing process with Monroe Capital (NASDAQ:MRCC) Management Advisors, LLC and PNC Bank. The refinancing is aimed at reducing the company’s long-term cost of capital to support growth.
The amended financing agreements include a $54 million aggregate principal amount of term loan with Monroe, with an extended maturity date to June 2030 and a reduced interest rate. The interest rate is now set at SOFR plus 450 to 550 basis points, a margin reduction of 100 to 200 basis points from the previous agreement.
In addition, the agreement with PNC Bank has been revised to increase the revolver commitment from $35 million to $45 million with an extended maturity date to December 2029. The interest rate has been lowered to SOFR plus 200 basis points, reflecting a 25 basis point margin reduction from the prior agreement. The terms have also been improved to increase availability.
Dan Friedberg, Chairman of the Board of Directors, stated that the successful refinancing, which will cut approximately $1 million in annual interest expense, reflects confidence in Quest’s business by the current lenders, who offered the most attractive terms. President and CEO S. Ray Hatch emphasized that the reduced interest expenses, fees, and improved terms are indicative of Quest's strong credit profile and business model.
Brett Johnston, Chief Financial Officer, expressed appreciation for the continued partnership with PNC and Monroe, noting that their support positions Quest well for future growth.
The details of the refinanced terms have been filed in a Current Report on Form 8-K with the U.S. Securities and Exchange Commission.
Quest Resource Holding Corporation specializes in waste and recycling services that help businesses achieve environmental and sustainability goals. The company provides solutions across multiple industry sectors and delivers quantifiable sustainability results. While the stock has experienced a significant decline of 31% over the past six months and currently trades near its 52-week low, InvestingPro analysis suggests the stock is currently undervalued. Subscribers to InvestingPro can access 13 additional investment tips and a comprehensive Pro Research Report, offering deeper insights into the company's valuation and growth prospects.
This news is based on a press release statement from Quest Resource Holding Corporation.
In other recent news, Quest Resource Holding Corp. reported a modest revenue increase of 3.3% year-over-year to $72.8 million in its third-quarter earnings call. This growth was largely driven by the onboarding of seven new clients, contributing $16 million. However, this positive development was somewhat offset by weaker market conditions and client attrition, including a significant loss from an industrial client. Additionally, the company reported a decline in gross profit by 5.9%, attributed to a shift in revenue mix, higher service costs, and unexpected billing credits.
Despite these challenges, Quest Resource remains optimistic about its future growth prospects. The company anticipates over $20 million in net incremental revenue in 2025, driven by new client growth and technological enhancements. Quest Resource also highlighted its ongoing efforts to refine its debt structure to improve terms and reduce interest rates. The company's management expressed confidence in their ability to improve Days Sales Outstanding (DSOs) and prevent future billing errors.
These recent developments underscore Quest Resource's commitment to navigating market challenges and focusing on client growth and technological advancements. The company continues to onboard new clients and is keen on enhancing its technology platform and client service capabilities.
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