Quest Resource Holding Corporation (NASDAQ:QRHC) Q4 2022 Earnings Call Transcript

Chip Moore: Yes. Okay. Perfect. And then on the organic growth side, it sounds like the pipeline is quite strong, and you feel good. I think you mentioned maybe changing the comp structure. Maybe elaborate on that and early feedback and what you’ve seen and traction there.

Ray Hatch: Yes. I’m glad you brought that up. It gives me a chance to speak about that a little more. What we did was we added to the comp structure on the client services side. And those guys are the ones that work on with existing customers. And their job is to take care of those customers and retain those customers and grow with them. So what we’ve added is a bit of an incentive package as they expand locations, sell new services lines in. I mentioned Chip that we’ve added new lines through acquisition and otherwise. And these are the folks that use their skill sets and relationships to sell up — upsell, I guess, maybe is the term you’d want to use — to add these lines into existing customers. And existing customers has been such a huge and wonderful source of growth for us for many years, and it will continue to be.

And we just want to make sure and keep that momentum going and give these folks some goals to shoot for. So that’s really what that’s focused on, Chip.

Chip Moore: Perfect. And maybe just the last one, I guess, on the M&A side. It sounds like you’re still seeing things, opportunities emerge. With the deals you’ve integrated and what you’ve learned maybe more so on RWS, just talk about your capabilities now that you might layer in some of the investments you made on the data side and some other places, how you feel about future integration.

Ray Hatch: Yes, a couple of things. I’m really excited about where we are, frankly, as I look ahead. And the progress that we’re making internally, I think, on our own internal systems here at Quest or the investments we’ve been making, will do nothing but enable us to be even more effective and quicker in the integrations as we go forward. So I’m very optimistic and plus, we obviously have some learnings, obviously. I’m really excited about our ability to integrate when we do make acquisitions. I guess we use the word opportunistic a lot, Chip, but I think it’s the right one. Market goes up and down, and we keep our eyes open all the time for really complementary, immediately accretive, good strategic businesses. And I know that as we move forward and we do make those acquisitions, I’m really excited about our improved ability to be able to onboard.

And keep in mind, we only had really one with an issue. The rest had performed quite well. So I really think it’s going to be a nice part of our business going forward. But we don’t have a definitive target relative to what we’re doing from acquisitions and that type of thing right now.

Chip Moore: Understood. Understood. That’s fair. Appreciate it.

Operator: The next question comes from George Melas from MKH Management.

George Melas: Just wanted to dig a little bit deeper if we can on RWS. I believe that it was sort of 2 businesses. You bought it from a private equity firm that had made a recent acquisition, and those 2 businesses were totally different and not integrated. It’s almost like if you bought 2 separate businesses. Were they both problematic? Or was it just one of them?