Redishred Capital Corp. (“Redishred”, or the “Company”) Announces Strong Q3 2023 Results

MISSISSAUGA, ON / ACCESSWIRE / November 23, 2023 /

Quarterly Earnings Call:

8:30am EST, November 24, 2023, Participant call in number is 1-800-319-4610

Quarterly Highlights:

Consolidated Highlights:

Corporate Locations Highlights:

Year-to-date Highlights:

Consolidated Highlights:

Corporate Locations Highlights:

Capital Management:

Management's Comments on Q3-2023

Jeffrey Hasham, the Company's Chief Executive Officer, noted "We are very pleased with our EBITDA less net recycling revenue growth of 121% during the third quarter of 2023. Our continued focus on route efficiencies and cost optimization were the main drivers of the $0.9 million increase in EBITDA less net recycling revenue. We continue to see strong demand for our core recurring shredding service offering, which has helped drive our organic shredding revenue growth of 9% in Q3 2023 versus Q3 2022. In addition, our new client relationship management system will allow us to increase sales efficiency and better connect with our customers moving forward. From a paper market perspective, paper prices have continued to decline, impacting our recycling revenue. We had anticipated this and continue to focus on growing our recurring revenue stream. Looking at our Proscan business, we saw strong revenue growth of 16% when compared to Q3 2022 and our pipeline of scanning projects remains strong.

During the quarter, we also completed the acquisitions of Proshred Baltimore and Security Shredding, which were accretive to the Company's EBITDA and cash flows. We also expect to realize further synergies from these acquisitions related to route densification and cost optimization that should enhance future margins.

For the quarter, I am also pleased that Q3 2023 free cash flow was $2.7 million Canadian, an increase of 333% from Q3 2022.

These results reflect the hard work and commitment of our employees, franchisees, management and board members, and I would like to personally thank each of them for their efforts and contributions."

Revenue Growth

The Company achieved 5% total revenue growth during Q3 2023 versus Q3 2022 and 17% total revenue growth during Q3 2023 YTD versus Q3 2022 YTD, primarily due to acquisitions conducted during the last 12 months and organic sales growth from new customers and price increases, partially offset by a decrease in recycling revenue from lower commodity paper prices.

Corporate Locations Q3 2023 Performance

Total corporate location revenue and EBITDA grew by 5% and 3%, respectively, in Q3 2023 versus Q3 2022.

Same corporate location operating income, excluding the impact of net recycling revenue, grew 324% in Q3 2023 versus Q3 2022. Same corporate location shredding revenue grew by 9% in Q3 2023 versus Q3 2022, with same corporate location EBITDA decreasing by 6%, driven by lower commodity paper pricing.

_{Note 1: During Q3 2023, acquisition/vendor-related consulting fees of $22 (Q3 2022 - $211) are included in the total and non-same corporate location operating costs.}

Corporate Locations Q3 2023 YTD Performance

Total corporate location revenue and EBITDA grew by 18% and 11%, respectively, in Q3 2023 YTD versus Q3 2022 YTD.

Same corporate location operating income, excluding the impact of net recycling revenue, grew 46% in Q3 2023 YTD versus Q3 2022 YTD. Same corporate location shredding revenue grew by 16% in Q3 2023 YTD versus Q3 2022 YTD, with same corporate location EBITDA remaining flat, driven by lower commodity paper pricing.