from Redishred Capital Corp. (isin : CA7574891098)
Redishred Capital Corp. ("Redishred", or the "Company") Announces Q1 2023 Results with Record Consolidated Revenue and EBITDA
MISSISSAUGA, ON / ACCESSWIRE / May 25, 2023 / Redishred Capital Corp. (TSX-V:KUT)
Quarterly Earnings Call:
8:30am EST, May 29, 2023, Participant call in number is 1-800-319-4610
Quarterly Highlights:
Consolidated Highlights:
- The Company generated record revenue of $17.0 million CAD, growing $4.5 million CAD, or 36% versus Q1 2022.
- Consolidated EBITDA for Q1 2023 was a record $4.7 million CAD, growing $0.7 million CAD, or 17% versus Q1 2022.
- The growth in consolidated EBITDA was driven by organic growth from increased bookings for existing and new customers, growth from acquisitions completed in the past twelve months; and price increases.
- Free Cash Flow for Q1 2023 was $2.4 million CAD, growing $0.8 million CAD, or 48% versus Q1 2022, driven by higher cash generated from operating activities from higher EBITDA and more favourable changes in non-cash operating working capital, partially offset by higher capital expenditures to support the Company's growth.
Corporate Locations Highlights:
- Corporate location revenue for Q1 2023 grew 37% versus Q1 2022 to $16.4 million CAD (28% constant currency growth - US Dollars is the constant currency).
- Corporate location EBITDA grew 23% versus Q1 2022 to $6.1 million CAD (15% constant currency growth).
- Same corporate location EBITDA was $5.6 million CAD, growing 13% versus Q1 2022 (6% constant currency growth).
Capital Management:
- The Company generated $3.6 million CAD in cash from operations during Q1 2023.
- As at March 31, 2023, the Company has $6.3 million CAD in cash, $1 million CAD available on its operating line of credit, and $3.8 million CAD available on its non-revolving re-advanceable term loan.
Management's Comments on Q1-2023
Jeffrey Hasham, the Company's Chief Executive Officer, noted "We are very pleased with our results in the first quarter of 2023. We continue to see strong demand for our services, including our core shredding service offering, which, coupled with continued strong recycling revenue and increases in our e-waste business, has helped drive our organic revenue growth. The revenue from our Proscan business is in part dictated by timing and approval of customer budgets, which impacts when the Company can perform these services. Our pipeline of scanning projects remains strong.
From a cost perspective, we have started to see some signs of easing, particularly in driver wage inflation and fuel pricing. The Company is reviewing its pricing and will look to increase prices in 2023 in response to cost increases. The Company also expects to realize further synergies from recently completed acquisitions related to route densification and optimization that should help enhance future margins.
For the quarter, I am pleased to report that Q1 2023 Corporate location EBITDA was $6.1 million Canadian, an increase of 23% from Q1 2022. This, coupled with our franchise business, has driven consolidated EBITDA to $4.7 million Canadian for Q1 2023. These results are a reflection of 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 to start the year."
For the three months ended March 31, | 2023 | 2022 | Change(1) | ||||||||
System Sales Performance - in USD, in $000's | |||||||||||
Total locations in the United States | 30 | 30 | 0 | % | |||||||
Total system sales | $ | 19,307 | $ | 16,409 | 18 | % | |||||
% of scheduled sales | 48 | % | 46 | % | |||||||
| Consolidated Operating Growth - in CAD, in $000's | |||||||||||
Revenue | $ | 16,996 | $ | 12,517 | 36 | % | |||||
EBITDA | $ | 4,737 | $ | 4,066 | 17 | % | |||||
EBITDA margin | 28 | % | 32 | % | (400) | bps | |||||
Operating income | $ | 2,861 | $ | 2,732 | 5 | % | |||||
Operating income margin | 17 | % | 22 | % | (500) | bps | |||||
Free cash flow | $ | 2,395 | 1,621 | 48 | % | ||||||
Operating income per weighted average share fully diluted | $ | 0.16 | $ | 0.15 | 7 | % | |||||
EBITDA per weighted average share fully diluted | $ | 0.26 | $ | 0.22 | 18 | % | |||||
Free cash flow per weighted average share fully diluted | $ | 0.13 | $ | 0.09 | 44 | % | |||||
| Corporate Location Performance - in CAD, in $000's | |||||||||||
Revenue | $ | 16,418 | $ | 11,996 | 37 | % | |||||
EBITDA | $ | 6,070 | $ | 4,929 | 23 | % | |||||
EBITDA margin | 37 | % | 41 | % | (400) | bps | |||||
Operating income | $ | 4,265 | $ | 3,617 | 18 | % | |||||
Operating income margin | 26 | % | 30 | % | (400) | bps | |||||
Operating income less recycling | $ | 1,289 | $ | 1,508 | (15) | % | |||||
Capital Management - in CAD:
(In $000's)
As at March 31, and December 31, | 2023 | 2022 | Change(1) | |||||||||
Working capital(2) | $ | 180 | $ | 8 | 2150 | % | ||||||
Debt to total assets ratio | 0.50 | 0.52 | (4) | % | ||||||||
Normalized Fixed Charge Coverage ratio - rolling 12 months | 1.51 | 1.82 | (17) | % | ||||||||
Normalized Total Funded Debt to EBITDA ratio - rolling 12 months | 1.97 | 2.11 | (7) | % | ||||||||
(1) Change expressed as a percentage or basis point ("bp").
(2) Working Capital represents the excess of the Company's current assets over its current liabilities.
Revenue Growth in Q1-2023
The Company achieved 36% total revenue growth and 27% total revenue growth in constant currency during Q1 2023 versus Q1 2022 primarily due to acquisitions conducted during the last 12 months, organic sales growth from new customers and price increases.
Corporate Locations
Total corporate location revenue and EBITDA grew by 37% and 23%, respectively, in Q1 2023 versus Q1 2022 due to the acquisitions completed over the past twelve months, organic growth from same locations, and price increases.
Same corporate location revenue and EBITDA grew 21% and 13%, respectively, in Q1 2023 verses Q1 2022.
| Total Corporate Locations | Same Corporate Locations | Non-same Corporate Locations | ||||||||||||||||||||||||||||||
For the 3 months | ||||||||||||||||||||||||||||||||
ended March 31, | 2023 | 2022 | % Change | 2023 | 2022 | % Change | 2023 | 2022 | ||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||
Shredding sales | 12,379 | 8,754 | 41 | % | 10,922 | 8,754 | 25 | % | 1,457 | - | ||||||||||||||||||||||
Secure e-Cycle electronic waste sales | 365 | 297 | 23 | % | 365 | 297 | 23 | % | - | - | ||||||||||||||||||||||
Scanning sales | 382 | 648 | (41) | % | 382 | 648 | (41) | % | - | - | ||||||||||||||||||||||
Recycling sales | 3,292 | 2,297 | 43 | % | 2,861 | 2,297 | 25 | % | 431 | - | ||||||||||||||||||||||
Total sales | 16,418 | 11,996 | 37 | % | 14,530 | 11,996 | 21 | % | 1,888 | - | ||||||||||||||||||||||
Operating costs (1) | 10,348 | 7,067 | 46 | % | 8,941 | 7,067 | 27 | % | 1,407 | - | ||||||||||||||||||||||
EBITDA | 6,070 | 4,929 | 23 | % | 5,589 | 4,929 | 13 | % | 481 | - | ||||||||||||||||||||||
% of revenue | ||||||||||||||||||||||||||||||||