Quest Solution Reports First Quarter Results
First Quarter net Revenue of $10.7 Million
(firmenpresse) - HENDERSON, NV -- (Marketwired) -- 05/21/15 -- (OTCQB: QUES), today announced financial results for the first quarter ended March 31, 2015.
First quarter Total Revenues of $10.7 million, up 11% compared to the prior year.
Tom Miller named as Chairman of the Board and Chief Executive Officer effective May 1, 2015
Announced signing of a Letter of Intent to merge with ViascanQData, a leading provider of Data Collection and label-ribbon converter services and technology based in Ontario, Canada.
Please refer to the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2014, and the financial tables included below for the Company's GAAP financial statements and a reconciliation of GAAP results to Pro Forma Results and other Non-GAAP measures.
"We are just beginning to capitalize on the strategic synergies and cross-selling opportunities related to the combination of Quest and Bar Code Specialties," commented Tom Miller, Quest Solution's recently appointed Chief Executive Officer. "Today, we are going to the market with increased scale, a comprehensive, mobile and cloud-based technology solutions offering, and a world-class customer base which we believe we can further penetrate. Our customers are looking for solutions to drive operational efficiency by effectively harnessing technology in order to increase productivity and drive enhanced profitability. Our pipeline of opportunities continues to grow as companies respond to our increased value proposition and I am increasingly excited about the future."
Scot Ross, Quest's CFO, added, "Beginning with the first quarter of 2015, the Company is recording hardware and service contract revenue and the related costs and expenses over the life of the service agreement, typically 1-5 years. We expect this monthly recurring revenue model will provide greater visibility into the results of operations, less volatility and greater efficiency as we continue to scale the services portion of our business-. As of March 31, 2015, the net revenue deferred into future periods totaled $827,228. This metric represents a leading indicator of our solutions based strategy."
Pro forma Revenue
Revenues for the three month period ended March 31, 2015 increased 11% to $10.7 million compared to $9.63 million for the three months ended March 31, 2014. This increase was due primarily to the acquisition of BCS in November 2014. The increase in revenue excludes the additional $1.57 million of contracts with customers which were sold, and are being recorded over the term of the contract in our deferred net revenue account.
Pro forma Gross Margin
For the first quarter of 2015, gross profit margin was 22.4% of pro forma revenues compared to 20.6% in the first quarter of 2014. The gross margin improvement was due primarily to the removal of the related party cost of goods sold which was reflected on our 2014 financials due to the non-cash reinsurance funds paid when the company was a private company.
Net Income (Loss)
Net loss for the three month period ended March 31, 2015 was $422,000 compared to net income of $246,000 for the three months ended March 31, 2014. The decrease in net income is attributable to $395,000 of interest expense, ($200,000 of which was a non cash debt discount on the accretion of a promissory note issued in the acquisition of Quest Marketing, Inc. in January 2014), as well as the additional costs incurred related to the BCS acquisition in November 2014.
Adjusted EBITDA
The company's operating expenses during both quarters ended March 31, 2015 and 2014 included non-cash expenses including depreciation, amortization of acquisition intangibles and stock-based compensation for employee and director stock options. Without the effect of these non-cash expenses, Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization ("Adjusted EBITDA") for the quarter ended March 31, 2015 was approximately $37,197. Please refer to the financial tables included below for a reconciliation of GAAP to non-GAAP financial results.
As of December 31, 2014, the Company had recorded net deferred tax assets of approximately $1.3 million which included net operating loss ("NOLs") carryforwards for U.S. federal income tax purposes of $11.6 million, and are available to offset future taxable income, if any. The NOLs begin to expire in 2021. This deferred tax asset created an income tax benefit in a gain on the financial statements of the company.
The Company's backlog of signed, contracted orders at March 31, 2015 was approximately $3.66 million. The backlog reflects orders expected to be delivered during 2015.
Quest Solution, Inc. is a leading provider in the technology, software, and mobile data collection systems business. In November 2014, the Company announced that Bar Code Specialties, Inc. (BCS) joined with Quest Solution, Inc. The Company intends on continuing to acquire existing companies with revenues and positive cash flow.
Quest Solution, Inc. serves as a national mobility and data collection systems integrator with a focus on design, delivery, deployment and support of fully integrated mobile solutions. The Company takes a consultative approach by offering end to end solutions that include hardware, software, communications and full lifecycle management services. The highly tenured team of professionals simplifies the integration process and delivers proven problem solving solutions backed by numerous customer references.
The recent BCS acquisition is in addition to the recently announced creation of a wholly-owned division focused on commercializing Intellectual Property, Patents and Distribution of industry-specific technologies in an array of new verticals. The new division will focus on the acquisition of existing intangibles, which we anticipate will build future value to the company.
On May 14, 2015 Quest announced a letter of intent to merge with ViascanQData. ViascanQData currently serves in excess of 4,000 enterprise customers, mainly in Canada. Unaudited financials indicate annual revenues of about CDN$28 million (approximately $24 million USD), and ViascanQData is currently on track to deliver unaudited double digit EBITDA for 2015. The Company estimates the proforma revenue for the combined entities for 2014 would have been approximately US $83 - 85 million.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. This release contains "forward-looking statements" that include information relating to future events and future financial and operating performance. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential" and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for Quest Solution, Inc.'s products, the introduction of new products, the Company's ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company's liquidity and financial strength to support its growth, and other information that may be detailed from time-to-time in Quest Solution Inc.'s filings with the United States Securities and Exchange Commission. Examples of such forward looking statements in this release include statements regarding growth in our parts and vehicle sales and increases in our ability to produce new products. For a more detailed description of the risk factors and uncertainties affecting Quest Solution, Inc. please refer to the Company's recent Securities and Exchange Commission filings, which are available at . Quest Solution, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Hayden IR
Brett Maas
(646) 536-7331
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Cameron Donahue
(651) 653-1854
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Datum: 21.05.2015 - 16:03 Uhr
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