Quest Resource Holding Corp
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 11, 2025
QRHC$1.12+7.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0000950170-25-069129
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0000950170-25-106524
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 72 previous paragraphs and 79 current paragraphs.
31 unchanged; 36 reworded; 12 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
For the quarter ended June 30, 2025, revenue was $59.5 million, a decrease of $13.6 million, or 18.6% compared to $73.1 million for the quarter ended June 30, 2024. For the six months ended June 30, 2025, revenue was $128.0 million, a decrease of $17.8 million, or 12.2%, compared to $145.8 million for the six months ended June 30, 2024.
Current report
The revenue decline for the quarter ended June 30, 2025 was primarily attributable to the divestiture of the mall-related business and ongoing softness in the industrial end market, which reduced revenues by approximately $5 million and $11 million, respectively. These impacts were partially offset by growth within the remaining business, which contributed approximately $3 million in incremental revenue, driven by an $8 million increase from new clients, partially offset by a $5 million decline due to customer attrition.
Current report
For the six months ended June 30, 2025, the decrease in revenue was similarly attributable to the divestiture of the mall-related business and softness in the industrial end market, which reduced revenues by approximately $9 million and $17 million, respectively. These declines were partially offset by growth within our remaining business, which contributed approximately $8 million in incremental revenue, driven by an $18.5 million increase from new clients, partially offset by a $9 million reduction due to customer attrition."
Current report
Gross profit for the quarter ended June 30, 2025 was $11.0 million, compared to $13.5 million for the quarter ended June 30, 2024. The gross profit margin was 18.5% for the quarter ended June 30, 2025, compared to 18.5% for the same quarter of 2024. Gross profit for the six months ended June 30, 2025 was $22.0 million, compared to $27.6 million for the six months ended June 30,
Current report
The gross profit margin was 17.2% for the six months ended June 30, 2025, compared to 18.9% for the six months ended June 30, 2024. The changes in gross profit for the quarter and year to date periods were primarily due to the net impacts of the changes in both revenue and cost of revenue.
Current report
The gross profit margin percentage for the quarter ended June 30, 2025 remained flat compared to the quarter ended June 30, 2024. While we began to see the positive impact on margins resulting from current period performance initiatives gains, they were offset by approximately 2% due to the higher costs of implementing new customers. For the six months ended June 30, 2025, gross profit margin percentages declined by 1.7% due to the higher cost of implementing new customers which negatively impacted margins by approximately 2%. When new customers are on-boarded, we typically experience a higher cost of revenue during the implementation period while revenue is still ramping up. This results in lower margins during the implementation period, but as business with the customer increases the margins will mature over time.
Current report
Operating expenses were $10.7 million and $11.8 million for the quarters ended June 30, 2025 and 2024, respectively. Operating expenses were $29.7 million and $23.9 million for the six months ended June 30, 2025 and 2024, respectively.
Current report
net loss of $(2.2) million;
Current report
Goodwill Impairment Testing
Current report
The qualitative assessment of goodwill at June 30, 2025 determined a triggering event occurred requiring that we conduct additional quantitative analyses. The triggering event was primarily due to the decrease in the Company's share price during the six months ended June 30, 2025 resulting in a decline in market capitalization.
Current report
Management engaged a third party to perform a series of quantitative assessments utilizing multiple valuation methods. Those assessments included both market and income-based methods utilizing Level 2 observable market data and Level 3 unobservable inputs, respectively. Significant estimates in the market-based method included identifying similar companies with comparable business factors such as service offerings, customers, size, growth, profitability, risk and return on investment, as well as assessing comparable market multiples in estimating the fair value of the Company. The income-based method is a discounted cash flow analysis and the significant estimates included expected growth rates, profitability and the weighted average cost of capital. The Company used an equal weighted average blend of these methods to assess its fair value. The results of those assessments indicated that the Company's fair value was in excess of the Company's book value and therefore its goodwill was not impaired as of June 30, 2025.
Current report
Management will continue to monitor market conditions to determine if another triggering event has occurred. Should a triggering event occur, the Company will perform a quantitative assessment to estimate fair value.
Removed paragraphs (5)
Previous report
For the quarter ended March 31, 2025, revenue was $68.4 million, a decrease of $(4.2) million, or (5.8)% compared to $72.7 million for the quarter ended March 31, 2024.
Previous report
The decrease in revenue for the quarter ended March 31, 2025 was partially attributable to lower volumes due to lost customers which contributed to an approximately $7.0 million decline in revenues. This includes lost revenues from clients in the divested mall related business which contributed approximately half of the loss. Positively, revenues from new clients contributed approximately $11.0 million in revenue. All other revenues were down approximately $8.0 million which was mostly related to lower volumes because of soft conditions in certain customer end markets.
Previous report
Gross profit for the quarter ended March 31, 2025 was $10.9 million, compared to $14.0 million for the quarter ended March 31, 2024. The gross profit margin was 16.0% for the quarter ended March 31, 2025, compared to 19.3% for the same quarter of 2024. Gross profit margin was negatively impacted in the quarter ended March 31, 2025 by approximately 2.0% due to a combination of temporarily lower revenues and higher cost of revenue for an isolated group of customers in a specific end market. Additionally, margins were impacted in the quarter by approximately 1.0% as new customers typically come on board at lower margins and can take multiple quarters to ramp up.
Previous report
Operating expenses were $19.1 million and $12.2 million for the quarters ended March 31, 2025 and 2024, respectively.
Previous report
net loss of $(0.7) million;
Reworded paragraphs (36)
Previous wording
The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in or incorporated by reference into this Form 10-Q, including statements regarding our future operating results, future financial position, business strategy, objectives, goals, plans, prospects, and markets, and plans and objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “targets,” “contemplates,” “projects,” “predicts,” “may,” “might,” “plan,” “will,” “would,” “should,” “could,” “can,” “potential,” “continue,” “objective,” or the negative of those terms, or similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. Specific forward-looking statements in this Form 10-Q include statements regarding the impact, if any, of the adoption of an ASU on our consolidated financial statements; any changes to inflation rates; exposure to significant interest, currency, or credit risks arising from our financial instruments; and sufficiency of our cash and cash equivalents, borrowing capacity, and cash generated from operations to fund our operations for the next 12 months. All forward-looking statements included herein are based on information available to us as of the date hereof and speak only as of such date. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. The forward-looking statements contained in or incorporated by reference into this Form 10-Q reflect our views as of the date of this Form 10-Q about future events and are subject to risks, uncertainties, assumptions, and changes in circumstances that may cause our actual results, performance, or achievements to differ significantly from those expressed or implied in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, performance, or achievements. A number of factors, including the state of the U.S. economy, general economic conditions and the potential effect of inflationary pressures and increased interest rates on our cost of doing business, could cause actual results to differ materially from those indicated by the forward-looking statements and other risks detailed from time to time in our reports to the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”).
Current wording
The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in or incorporated by reference into this Form 10-Q, including statements regarding our future operating results, future financial position, business strategy, objectives, goals, plans, prospects, and markets, and plans and objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “targets,” “contemplates,” “projects,” “predicts,” “may,” “might,” “plan,” “will,” “would,” “should,” “could,” “can,” “potential,” “continue,” “objective,” or the negative of those terms, or similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. Specific forward-looking statements in this Form 10-Q include statements regarding the impact, if any, of the adoption of an ASU on our consolidated financial statements; any changes to inflation rates; exposure to significant interest, currency, or credit risks arising from our financial instruments; and sufficiency of our cash and cash equivalents, borrowing capacity, and cash generated from operations to fund our operations for the next 12 months. All forward-looking statements included herein are based on information available to us as of the date hereof and speak only as of such date. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. The forward-looking statements contained in or incorporated by reference into this Form 10-Q reflect our views as of the date of this Form 10-Q about future events and are subject to risks, uncertainties, assumptions, and changes in circumstances that may cause our actual results, performance, or achievements to differ significantly from those expressed or implied in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, performance, or achievements. A number of factors, including the state of the U.S. economy, general global economic conditions, including tariffs and the potential effect of inflationary pressures and increased interest rates on our cost of doing business, could cause actual results to differ materially from those indicated by the forward-looking statements and other risks detailed from time to time in our reports to the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”).
Previous wording
Three Months Ended March 31, 2025 and 2024 Operating Results
Current wording
Three and Six Months Ended June 30, 2025 and 2024 Operating Results
Previous wording
The following table summarizes our operating results for the three months ended March 31, 2025 and 2024 (in thousands):
Current wording
The following table summarizes our operating results for the three and six months ended June 30, 2025 and 2024 (in thousands):
Previous wording
Three Months Ended March 31, 2025, compared to Three Months Ended March 31, 2024
Current wording
Three and Six Months Ended June 30, 2025, compared to Three and Six Months Ended June 30, 2024
Previous wording
There has been heightened uncertainty in the macroeconomic environment, characterized by increasing unemployment, significant inflation, tariffs, and decreased consumer and business spending. There are also significant geopolitical concerns, including the ongoing conflict between Ukraine and Russia, which have created extreme volatility in the global capital markets and are expected to have further global economic consequences, including disruptions of the global supply chain and energy markets. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Inflation can adversely affect us by increasing our costs, including salary costs. Any significant increases in inflation and related increases in interest rates could have a material adverse effect on our business, results of operations and financial condition.
Current wording
There has been heightened uncertainty in the macroeconomic environment, especially as it relates to fluctuations in unemployment, inflation, tariffs, and consumer and business spending. There are also significant geopolitical concerns, including ongoing global conflicts, which have created extreme volatility in the global capital markets and are expected to have further global economic consequences, including disruptions of the global supply chain and energy markets. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Inflation can adversely affect us by increasing our costs, including salary costs. Any significant increases in inflation and related increases in interest rates could have a material adverse effect on our business, results of operations and financial condition.
Previous wording
Cost of revenue decreased $(1.1) million to $57.5 million for the quarter ended March 31, 2025 from $58.6 million for the quarter ended March 31, 2024. The changes in cost of revenue were mostly directly related to the changes in revenue. We also experienced higher cost of revenue as a percentage of revenue in the quarter ended March 31, 2025 due to onboarding and ramping up of new customers.
Current wording
Cost of revenue decreased $11.1 million to $48.5 million for the quarter ended June 30, 2025 from $59.6 million for the quarter ended June 30, 2024. Cost of revenue decreased $12.2 million to $106.0 million for the six months ended June 30, 2025 compared to $118.2 million for the six months ended June 30, 2024. The changes in cost of revenue were primarily related to the changes in revenue.
Previous wording
Revenue, gross profit, and gross profit margins are affected period to period by the volumes of waste and recyclable materials generated by our customers, the frequency and type of services provided, the price and mix of the services provided, price changes for recyclable materials, the cost and mix of subcontracted services provided in any one reporting period, and the timing of acquisitions and divestitures. Volumes of waste and recyclable materials generated by our customers is impacted period to period based on several factors including their production or sales levels, demand of their product or services in the market, supply chain reliability, and labor force stability, among other business factors.
Current wording
Revenue, gross profit, and gross profit margins are affected period to period by the volumes of waste and recyclable materials generated by our customers, the frequency and type of services provided, the price and mix of the services provided, price changes for recyclable materials, the cost and mix of subcontracted services provided in any one reporting period, and the timing of customer on-boarding and divestitures. Volumes of waste and recyclable materials generated by our customers is impacted period to period based on several factors including their production or sales levels, demand of their product or services in the market, supply chain reliability, and labor force stability, among other business factors.
Previous wording
Selling, general, and administrative expenses were $11.4 million and $9.8 million for the quarters ended March 31, 2025 and 2024, respectively. The increase primarily relates to increases in labor related expenses which included $0.7 million in severance and retirement expenses in the current quarter. We reduced headcount beginning late in the first quarter of 2025 as a result of operational efficiency initiatives. We expect to realize cost savings of the headcount reduction beginning in the second quarter of 2025.
Current wording
Selling, general, and administrative expenses were $9.3 million and $9.4 million for the quarters ended June 30, 2025 and 2024, respectively. Selling, general, and administrative expenses were $20.7 million and $19.2 million for the six months ended June 30, 2025 and 2024, respectively. The increase primarily relates to increases in labor related expenses which included $0.7 million in severance and retirement expenses in the first quarter of 2025. We reduced headcount beginning late in the first quarter of 2025 as a result of operational efficiency initiatives. We began to realize cost savings from the headcount reduction beginning in the second quarter of 2025.
Previous wording
Operating expenses for the quarters ended March 31, 2025 and 2024 included depreciation and amortization of $1.5 million and $2.4 million, respectively.
Current wording
Operating expenses for the quarters ended June 30, 2025 and 2024 included depreciation and amortization of $1.3 million and $2.4 million, respectively. Operating expenses for the six months ended June 30, 2025 and 2024 included depreciation and amortization of $2.8 million and $4.7 million, respectively. The decrease in depreciation and amortization expense in 2025 is due primarily to lower customer relationship intangible asset balances being amortized.
Previous wording
We recognized a $4.4 million loss on sale of assets in the three months ended March 31, 2025 based on the carrying value of sold accounts receivable and other assets classified as held for sale. See Note 3 to our condensed consolidated financial statements for further discussion.
Current wording
We recognized a $4.5 million loss on sale of assets in the six months ended June 30, 2025 ($61 thousand loss recognized in the three months ended June 30, 2025) resulting from the sale of the mall related business and additional post closing adjustments. See Note 3 to our condensed consolidated financial statements for further discussion.
Previous wording
We recorded a $1.7 million impairment charge for the quarter ended March 31, 2025 associated with certain customer relationship intangible assets. See Note 6 to our condensed consolidated financial statements for further discussion.
Current wording
We recorded a $1.7 million impairment charge in the first quarter of 2025 associated with certain customer relationship intangible assets. See Note 6 to our condensed consolidated financial statements for further discussion.
Previous wording
Interest expense was $2.3 million and $2.5 million for the quarters ended March 31, 2025 and 2024, respectively. The decrease is primarily due to lower interest rates, partially offset by increased borrowings under our revolving credit facility and our equipment term loan. We are amortizing debt issuance costs of $4.8 million and OID of $1.8 million to interest expense over the life of the related debt arrangements as discussed in Note 8 to our condensed consolidated financial statements.
Current wording
Interest expense was $2.4 million and $2.6 million for the quarters ended June 30, 2025 and 2024, respectively. Interest expense was $4.6 million and $5.1 million for the six months ended June 30, 2025 and 2024, respectively. The decrease is primarily due to lower interest rates, partially offset by increased borrowings under our revolving credit facility and our equipment term loan. We are amortizing debt issuance costs of $5.3 million and OID of $1.8 million to interest expense over the life of the related debt arrangements as discussed in Note 8 to our condensed consolidated financial statements.
Previous wording
We recorded an income tax benefit of $(22) thousand and a provision for income taxes of $59 thousand for the quarters ended March 31, 2025 and 2024, respectively. The provision/(benefit) for income tax is primarily attributable to state tax obligations based on current estimated state tax income/(loss) multiplied by the state tax apportionment percentage for states with no net operating loss carryforwards.
Current wording
We recorded an income tax benefit of $(22) thousand and a provision for income taxes of $684 thousand for the quarters ended June 30, 2025 and 2024, respectively. We recorded an income tax benefit of $(44) thousand and a provision for income taxes of $743 for the six months ended June 30, 2025 and 2024, respectively. The provision/(benefit) for income tax is primarily attributable to state tax obligations based on current estimated state tax income/(loss) multiplied by the state tax apportionment percentage for states with no net operating loss carryforwards.
Previous wording
We recorded a full valuation allowance against all our deferred tax assets (“DTAs”) as of both March 31, 2025 and December 31, 2024. We intend on maintaining a full valuation allowance on our DTAs until there is sufficient evidence to support the reversal of all or some portion of these allowances. However, given our anticipated future earnings, webelieve that there is a reasonable possibility that within the next 48 to 60 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain DTAs and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that we are able to actually achieve.
Current wording
We continued to record a full valuation allowance against all our deferred tax assets (“DTAs”) as of both June 30, 2025 and December 31, 2024. We intend on maintaining a full valuation allowance on our DTAs until there is sufficient evidence to support the reversal of all or some portion of these allowances. Over the near term, we do not anticipate reversing a significant portion of this allowance. Release of the valuation allowance would result in the recognition of certain DTAs and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that we are able to actually achieve.
Previous wording
Net loss for the quarter ended March 31, 2025 was $(10.4) million, compared to net loss of $(0.7) million for the quarter ended March 31, 2024. The explanations above detail the majority of the changes related to the change in net results.
Current wording
Net loss for the quarter ended June 30, 2025 was $(2.0) million, compared to net loss of $(1.5) million for the quarter ended June 30, 2024. Net loss for the six months ended June 30, 2025 was $(12.4) million, compared to net loss of $(2.2) million for the six months ended June 30, 2024. The explanations above detail the majority of the changes related to the change in net results.
Previous wording
Net loss per basic and diluted share attributable to common stockholders was $(0.50) and $(0.03) for the quarters ended March 31, 2025 and 2024, respectively.
Current wording
Net loss per basic and diluted share attributable to common stockholders was $(0.09) and $(0.07) for the quarters ended June 30, 2025 and 2024, respectively. Net loss per basic and diluted share attributable to common stockholders was $(0.59) and $(0.11) for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
The basic and diluted weighted average number of shares of common stock outstanding were approximately 20.9 million and 20.4 million for the three months ended March 31, 2025 and 2024, respectively.
Current wording
The basic and diluted weighted average number of shares of common stock outstanding were approximately 20.9 million and 20.5 million for the three months ended June 30, 2025 and 2024, respectively. The basic and diluted weighted average number of shares of common stock outstanding were approximately 20.9 million and 20.4 million for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
For the three months ended March 31, 2025, Adjusted EBITDA (as defined below), a non-GAAP financial measure, decreased 69.6% to $1.6 million from $5.1 million for the three months ended March 31, 2024.
Current wording
For the three months ended June 30, 2025, Adjusted EBITDA (as defined below), a non-GAAP financial measure, decreased 47.8% to $2.7 million from $5.1 million for the three months ended June 30, 2024. For the six months ended June 30, 2025, Adjusted EBITDA decreased 58.7% to $4.2 million from $10.3 million for the same period in 2024.
Previous wording
The following table reflects the reconciliation of net loss to Adjusted EBITDA for the three months ended March 31, 2025 and 2024 (in thousands):
Current wording
The following table reflects the reconciliation of net loss to Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024 (in thousands):
Previous wording
For the three months ended March 31, 2025, other adjustments primarily related to severance and retirement costs as well as certain professional fees. For the three months ended March 31, 2024, other adjustments included certain professional fees as well as certain administrative fees related to borrowings.
Current wording
For the three months ended June 30, 2025, other adjustments primarily related to certain loan amendment costs and other professional fees. For the six months ended June 30, 2025, other adjustments primarily related to severance and retirement costs, certain loan amendment costs, and other professional fees. For the three and six months ended June 30, 2024, other adjustments included certain professional fees as well as certain administrative fees related to borrowings.
Previous wording
Adjusted net income (loss), a non-GAAP financial measure, was $(2.9) million for the three months ended March 31, 2025, compared with $1.7 million for the three months ended March 31, 2024. We present adjusted net income (loss) and adjusted net income (loss) per diluted share, both non-GAAP financial measures, supplementally because they are widely used by investors as a valuation measure in the solid waste industry. Management uses adjusted net income (loss) and adjusted net income (loss) per diluted share as two of the principal measures to evaluate and monitor the ongoing financial performance of our operations. We provide adjusted net income (loss) to exclude the effects of items management believes impact the comparability of operating results between periods. Adjusted net income (loss) has limitations due to the fact that it excludes items that have an impact on our financial condition and results of operations. Adjusted net income (loss) and adjusted net income (loss) per diluted share are not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate these non-GAAP financial measures differently. Our adjusted net income (loss) and adjusted net income (loss) per diluted share for the three months ended March 31, 2025 and 2024 are calculated as follows (in thousands except per share amounts):
Current wording
Adjusted net income (loss), a non-GAAP financial measure, was $(0.8) million for the three months ended June 30, 2025, compared with $0.7 million for the three months ended June 30, 2024. Adjusted net income (loss) was $(3.7) million for the six months ended June 30, 2025, compared with $2.3 million for the six months ended June 30, 2024. We present adjusted net income (loss) and adjusted net income (loss) per diluted share, both non-GAAP financial measures, supplementally because they are widely used by investors as a valuation measure in the solid waste industry. Management uses adjusted net income (loss) and adjusted net income (loss) per diluted share as two of the principal measures to evaluate and monitor the ongoing financial performance of our operations. We provide adjusted net income (loss) to exclude the effects of items management believes impact the comparability of operating results between periods. Adjusted net income (loss) has limitations due to the fact that it excludes items that have an impact on our financial condition and results of operations. Adjusted net income (loss) and adjusted net income (loss) per diluted share are not a substitute for, and should be used in conjunction with, GAAP financial measures. Other companies may calculate these non-GAAP financial measures differently. Our adjusted net income (loss) and adjusted net income (loss) per diluted share for the three and six months ended June 30, 2025 and 2024 are calculated as follows (in thousands except per share amounts):
Previous wording
As of March 31, 2025, we had working capital of $21.6 million, including $1.4 million of cash and cash equivalents, compared with working capital of $30.7 million, including $0.4 million of cash and cash equivalents as of December 31, 2024.
Current wording
As of June 30, 2025, we had working capital of $16.9 million, including $0.4 million of cash and cash equivalents, compared with working capital of $30.7 million, including $0.4 million of cash and cash equivalents as of December 31, 2024. Working capital at December 31, 2024 included $8.1 million net assets held for sale which were sold in the first quarter of 2025.
Previous wording
We believe our existing cash and cash equivalents of $1.4 million, our borrowing availability under our $45.0 million ABL Facility (as defined and discussed in Note 8 to our condensed consolidated financial statements), and cash expected to be generated from operations will be sufficient to fund our operations for the next 12 months and thereafter for the foreseeable future. Our known current- and long-term uses of cash include, among other possible demands, capital expenditures, lease payments and repayments to service debt and other long-term obligations. We have no agreements, commitments, or understandings with respect to any such placements of our securities and any such placements could be dilutive to our stockholders.
Current wording
We believe our existing cash and cash equivalents of $0.4 million, our borrowing availability under our $45.0 million ABL Facility (as defined and discussed in Note 8 to our condensed consolidated financial statements), and cash expected to be generated from operations will be sufficient to fund our operations for the next 12 months and thereafter for the foreseeable future. Our known current- and long-term uses of cash include, among other possible demands, capital expenditures, lease payments and repayments to service debt and other long-term obligations. We have no agreements, commitments, or understandings with respect to any such placements of our securities and any such placements could be dilutive to our stockholders.
Previous wording
The following discussion relates to the major components of our cash flows for the three months ended March 31, 2025 and 2024.
Current wording
The following discussion relates to the major components of our cash flows for the six months ended June 30, 2025 and 2024.
Previous wording
Net cash used in operating activities was $(1.1) million for the three months ended March 31, 2025 compared with net cash used in operating activities of $(1.7) million for the three months ended March 31, 2024.
Current wording
Net cash provided by operating activities was $2.8 million for the six months ended June 30, 2025 compared with net cash used in operating activities of $(0.8) million for the six months ended June 30, 2024.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2024 related primarily to the net effect of the following:
Current wording
Net cash provided by operating activities for the six months ended June 30, 2025 related primarily to the net effect of the following:
Previous wording
net loss of $(10.4) million, which includes a non-cash impairment loss of $1.7 million and a loss on sale of assets of $4.4 million;
Current wording
net loss of $(12.4) million, which includes a non-cash impairment loss of $1.7 million and a loss on sale of assets of $4.5 million;
Previous wording
other non-cash items of $2.9 million, which primarily related to depreciation, amortization of intangible assets and debt issuance costs, provision for doubtful accounts, and stock-based compensation; and
Current wording
other non-cash items of $5.3 million, which primarily related to depreciation, amortization of intangible assets and debt issuance costs, provision for doubtful accounts, and stock-based compensation; and
Previous wording
net cash provided by the net change in operating assets and liabilities of $0.3 million, primarily associated with relative changes in accounts receivable, accounts payable, and accrued liabilities.
Current wording
net cash provided by the net change in operating assets and liabilities of $3.7 million, primarily associated with relative changes in accounts receivable, accounts payable, and accrued liabilities.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2025 related primarily to the net effect of the following:
Current wording
Net cash used in operating activities for the six months ended June 30, 2024 related primarily to the net effect of the following:
Previous wording
non-cash items of $3.7 million, which primarily related to depreciation, amortization of intangible assets and debt issuance costs, provision for doubtful accounts, and stock-based compensation; and
Current wording
non-cash items of $6.9 million, which primarily related to depreciation, amortization of intangible assets and debt issuance costs, provision for doubtful accounts, and stock-based compensation; and
Previous wording
net cash used in the net change in operating assets and liabilities of $(4.7) million, primarily associated with relative changes in accounts receivable, accounts payable, and accrued liabilities. This includes an earn-out payment of $(1.0) million.
Current wording
net cash used in the net change in operating assets and liabilities of $(5.6) million, primarily associated with relative changes in accounts receivable, accounts payable, and accrued liabilities. This includes an earn-out payment of $(1.0) million.
Previous wording
Cash provided by investing activities for the three months ended March 31, 2025 was $4.5 million and primarily related to $5.0 million in proceeds from the sale of mall related business assets. Cash used in investing activities for the three months ended March 31, 2024 was $(2.3) million and primarily related to the purchase of $(1.6) million in compactors and related equipment. Other investing activities are primarily from purchases of intangible assets such as software development costs and other property and equipment.
Current wording
Cash provided by investing activities for the six months ended June 30, 2025 was $4.2 million and primarily related to $5.0 million in proceeds from the sale of mall related business assets. Cash used in investing activities for the six months ended June 30, 2024 was $(4.8) million and primarily related to the purchase of $(3.1) million in compactors and related equipment. Other investing activities are primarily from purchases of intangible assets such as software development costs and other property and equipment.
Previous wording
Net cash used in financing activities for the three months ended March 31, 2025 was $(2.5) million, primarily from $3.5 million in repayments of notes payable with proceeds from sale of assets as further discussed in Note 3 to our condensed consolidated financial statements. Other financing activities included net repayments of $0.9 million on our ABL facility, which includes $1.5 million from the proceeds from the sale of assets, and $0.4 million borrowings from our PNC equipment term loan. Net cash provided by financing activities for the three months ended March 31, 2024 was $4.2 million, primarily from net borrowings of $4.2 million on our ABL Facility. See Note 8 to our condensed consolidated financial statements for a discussion of the ABL Facility and other notes payable.
Current wording
Net cash used in financing activities for the six months ended June 30, 2025 was $(7.0) million, primarily from $3.5 million in repayments of notes payable with proceeds from sale of assets as further discussed in Note 3 to our condensed consolidated financial statements and net repayments of $2.8 million on our ABL Facility. Net cash provided by financing activities for the six months ended June 30, 2024 was $6.3 million, primarily from net borrowings of $4.0 million on our ABL Facility and $2.5 million borrowings from our PNC equipment term loan. See Note 8 to our condensed consolidated financial statements for a discussion of the ABL Facility and other notes payable.
Previous wording
Although the overall economy has experienced some inflationary pressures, we do not believe that inflation had a material impact on us during the three months ended March 31, 2025 and 2024. We believe that current inflationary increases in costs, such as fuel, labor, and certain capital items, can be addressed by our flexible pricing structures and cost recovery fees allowing us to recover certain of the cost of inflation from our customer base. Consistent with industry practice, many of our contracts allow us to pass through certain costs to our customers or adjust pricing. Although we believe that we should be able to offset many cost increases that result from inflation in the ordinary course of business, we may be required to absorb at least part of these costs increases due to competitive pressures or delays in timing of rate increases. Although we have not been materially affected by inflation in the past, we can provide no assurance that we will not be affected in the future by higher rates of inflation and increases in interest rates.
Current wording
Although the overall economy has experienced some inflationary pressures, we do not believe that inflation had a material impact on us during the six months ended June 30, 2025 and 2024. We believe that volatility in costs, such as fuel, labor, and certain capital items, can be addressed by our flexible pricing structures and cost recovery fees allowing us to recover certain of the cost of inflation from our customer base. Consistent with industry practice, many of our contracts allow us to pass through certain costs to our customers or adjust pricing. Although we believe that we should be able to offset many cost increases that result from inflation in the ordinary course of business, we may be required to absorb at least part of these costs increases due to competitive pressures or delays in timing of rate increases. Although we have not been materially affected by inflation in the past, we can provide no assurance that we will not be affected in the future by higher rates of inflation and increases in interest rates.
Previous wording
Our discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to areas that require a significant level of judgment or are otherwise subject to an inherent degree of uncertainty. These areas include carrying amounts of accounts receivable, goodwill and other intangible assets, stock-based compensation expense, deferred taxes and the fair value of assets and liabilities acquired in business acquisitions. We base our estimates on historical experience, our observance of trends in particular areas, and information or valuations and various other assumptions that we believe to be reasonable under the circumstances and which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Actual amounts could differ significantly from amounts previously estimated. For a discussion of our critical accounting policies, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report. There have been no significant changes in our critical accounting policies during the three months ended March 31, 2025.
Current wording
Our discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to areas that require a significant level of judgment or are otherwise subject to an inherent degree of uncertainty. These areas include carrying amounts of accounts receivable, goodwill and other intangible assets, stock-based compensation expense, and deferred taxes. We base our estimates on historical experience, our observance of trends in particular areas, and information or valuations and various other assumptions that we believe to be reasonable under the circumstances and which form the basis for making judgments about the carrying value of assets and liabilities that may not be readily apparent from other sources. Actual amounts could differ significantly from amounts previously estimated. For a discussion of our critical accounting policies, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report. There have been no significant changes in our critical accounting policies during the six months ended June 30, 2025, except as follows: