from Redishred Capital Corp. (isin : CA7574891098)
Redishred Capital Corp. Announces Strong Q4 2023 Results
MISSISSAUGA, ON / ACCESSWIRE / April 29, 2024 / Redishred Capital Corp. ("Redishred", or the "Company")
Quarterly Earnings Call:
9:30am EST, April 30, 2024 (updated from 8:30am EST previously announced)
Participant call in number is 1-800-319-4610
Quarterly Highlights:
Consolidated Highlights:
- The Company generated revenue of $16.8 million CAD , growing $1.4 million CAD , or 9% versus Q4 2022.
- Consolidated EBITDA excluding the impact of net recycling revenue was $1.5 million, growing by $1.3 million CAD or 573% versus Q4 2022.
- The Company generated free cash flow of $2.0 million CAD , consistent with Q4 2022.
- Consolidated EBITDA was $3.1 million CAD , growing by 2% versus Q4 2022, driven by higher shredding and scanning sales, partially offset by lower net recycling revenue due to lower commodity paper prices.
Corporate Locations Highlights:
- Corporate location revenue grew 10% versus Q4 2022 to $16.3 million CAD (10% constant currency growth - US Dollars is the constant currency) .
- Corporate location EBITDA grew 10% versus Q4 2022 to $5.2 million CAD (11% constant currency growth) .
- Same corporate location EBITDA grew 2% versus Q4 2022 to $4.8 million CAD (2% in constant currency).
Full year Highlights:
Consolidated Highlights:
- The Company generated revenue of $65.9 million CAD , growing $8.7 million CAD , or 15% versus 2022.
- The Company generated free cash flow of $7.0 million CAD , growing $0.7 million CAD , or 11% versus 2022.
- Consolidated EBITDA excluding the impact of net recycling revenue was $7.1 million CAD , growing by $2.5 million CAD or 53% versus 2022.
- Consolidated EBITDA was $15.4 million CAD , growing by $0.1 million CAD or 1% versus 2022.
Corporate Locations Highlights:
- Corporate location revenue grew 16% versus 2022 to $63.7 million CAD (12% constant currency growth) .
- Corporate location EBITDA grew 11% versus 2022 to $22.5 million CAD (7% constant currency growth) .
- Same corporate location EBITDA was $20.4 million CAD, growing 1% versus with 2022 (3% constant currency decrease).
Capital Management:
- The Company generated $3.0 million CAD and $12.8 million CAD in cash from operations during Q4 2023 and 2023, respectively.
- As at December 31, 2023, the Company has $3.6 million CAD in cash, $1 million CAD available on its demand operating line of credit, $19.2 million CAD available on its demand non-revolving re-advanceable term loan, and $6.0 million CAD available on its demand revolving re-advanceable interest only acquisition facility.
Management's Comments on Q4-2023
Jeffrey Hasham, the Company's Chief Executive Officer, noted "We are very pleased with our Q4 2023 performance, with EBITDA of $3.1 million Canadian, despite lower paper recycling prices. When we look at EBITDA less net recycling revenue, this was $1.5 million Canadian compared to $0.2 million Canadian in Q4 2022. We continue to focus on our core operations, and this has driven performance. From a top-line perspective, we continue to see strong demand for our shredding services, with organic shredding revenue growth of 10% versus Q4 2022. We also saw a very strong quarter for Proscan, our digital imaging business, with revenue growth of 11% versus Q4 2022.
In 2023, including in Q4 2023, the Company made significant investments in our information technology infrastructure, customer relationship management and marketing automation platforms, and is working towards obtaining a SOC-2 Type II certification, which could potentially increase the pipeline of scanning opportunities for our Proscan business. These investments impacted our Q4 2023 and 2023 bottom line results, but will help drive long-term value creation.
I wanted to thank our employees, franchisees, management and board members for their hard work and contributions to the Company; their support has been instrumental in creating the foundations for the continued growth of our Company."
Financial Highlights:
| Three months ended December 31, | Year ended December 31, | |||||||||||||||||||
| 2023 | 2022 | Change (1) | 2023 | 2022 | Change (1) | |||||||||||||||
System Sales Growth - in USD, in $000's | ||||||||||||||||||||
Total locations in the United States | 30 | 30 | - | % | 30 | 30 | - | % | ||||||||||||
Total system sales | 18,014 | $ | 18,219 | (1) | % | 74,234 | 71,764 | 3 | % | |||||||||||
% of scheduled sales | 53 | % | 50 | 50 | % | 45 | % | |||||||||||||
| Consolidated Operating Growth - In CAD, in $000's | ||||||||||||||||||||
Revenue | $ | 16,816 | $ | 15,409 | 9 | % | $ | 65,934 | $ | 57,226 | 15 | % | ||||||||
EBITDA | $ | 3,138 | $ | 3,071 | 2 | % | $ | 15,405 | $ | 15,318 | - | % | ||||||||
EBITDA margin | 19 | % | 20 | % | (200) bps | 23 | % | 27 | % | (400) bps | ||||||||||
EBITDA less net recycling | $ | 1,520 | $ | 226 | 573 | % | $ | 7,144 | $ | 4,658 | 53 | % | ||||||||
EBITDA less net recycling margin | 10 | % | 2 | % | 800 bps | 13 | % | 10 | % | 300 bps | ||||||||||
Operating income | $ | 1,106 | $ | 1,203 | (8) | % | $ | 7,696 | $ | 9,099 | (15) | % | ||||||||
Operating income margin | 7 | % | 8 | % | (200) bps | 12 | % | 16 | % | (400) bps | ||||||||||
Free cash flow | $ | 1,999 | $ | 1,974 | 1 | % | $ | 6,986 | $ | 6,316 | 11 | % | ||||||||
Operating income per weighted average share fully diluted | $ | 0.06 | $ | 0.07 | (14) | % | $ | 0.42 | $ | 0.50 | (16) | % | ||||||||
EBITDA per weighted average share fully diluted | $ | 0.17 | $ | 0.17 | - | % | $ | 0.84 | $ | 0.84 | 0 | % | ||||||||
EBITDA less net recycling per weighted average share fully diluted | $ | 0.08 | $ | 0.01 | 573 | % | $ | 0.39 | $ | 0.26 | 53 | % | ||||||||
Free cash flow per weighted average share fully diluted | $ | 0.11 | $ | 0.11 | - | % | $ | 0.38 | $ | 0.35 | 9 | % | ||||||||
| Corporate Location Growth - In CAD, in $000's | ||||||||||||||||||||
Revenue | $ | 16,269 | $ | 14,850 | 10 | % | $ | 63,731 | $ | 55,020 | 16 | % | ||||||||
EBITDA | $ | 5,185 | $ | 4,697 | 10 | % | $ | 22,509 | $ | 20,257 | 11 | % | ||||||||
EBITDA margin | 32 | % | 32 | % | (100) bps | 35 | % | 37 | % | (200) bps | ||||||||||
Operating income | $ | 3,202 | $ | 2,866 | 12 | % | $ | 15,015 | $ | 14,139 | 6 | % | ||||||||
Operating income margin | 20 | % | 19 | % | - | % | 24 | % | 26 | % | (300) bps | |||||||||
Operating income less net recycling | $ | 1,584 | $ | 22 | 7,100 | % | $ | 6,753 | $ | 3,482 | 94 | % | ||||||||
(1) Change expressed as a percentage or basis point ("bp").
Revenue Growth
The Company achieved 9% revenue growth during Q4 2023 versus Q4 2022 and 15% revenue growth during 2023 versus 2022, primarily due to acquisitions conducted during the last twelve 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 Q4 2023 Performance
Total corporate location revenue and EBITDA grew by 10% in Q4 2023 versus Q4 2022.
Same corporate location operating income, excluding the impact of net recycling revenue, grew 6,468% in Q4 2023 versus Q4 2022. Same corporate location shredding revenue grew by 10% in Q4 2023 versus Q4 2022, with same corporate location EBITDA growing by 2%.
| Total Corporate Locations | Same Corporate Locations | Non-same Corporate Locations | ||||||||||||||||||||||
For the three months | ||||||||||||||||||||||||
ended December 31, | 2023 | 2022 | % Change | 2023 | 2022 | % Change | 2023 | 2022 | ||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Shredding sales | 13,150 | 10,958 | 20 | % | 12,090 | 10,958 | 10 | % | 1,060 | - | ||||||||||||||
Secure E-cycle electronic waste sales | 343 | 372 | (8) | % | 343 | 372 | (8) | % | - | - | ||||||||||||||
Scanning sales | 906 | 360 | 152 | % | 906 | 360 | 152 | % | - | - | ||||||||||||||
Recycling sales | 1,870 | 3,160 | (41) | % | 1,664 | 3,160 | (47) | % | 206 | - | ||||||||||||||
Total sales | 16,269 | 14,850 | 10 | % | 15,003 | 14,850 | 1 | % | 1,266 | - | ||||||||||||||
Operating costs (1) | 11,084 | 10,153 | 9 | % | 10,200 | 10,153 | - | % | 884 | - | ||||||||||||||