Redishred Capital Corp.

Thank you for standing by. This is the conference operator. Welcome to the ReadyShred Capital Corp third quarter 2023 financial results and business update conference call. As a reminder all participants are in listen-only mode and the conference is being recorded. After the presentation there'll be an opportunity to ask questions. To join the question queue you may press star then 1 on your telephone keypad. Should you need assistance during the conference call You may signal an operator by pressing star and zero. I would now like to turn the conference over to Jeffrey Hashim, Chief Executive Officer. Please go ahead.

Thank you, Arielle. This is Jeff Hashim. Good morning, everyone. I wanted to welcome you to our third quarter investor call for ReadyShred Capital Corp. I want to thank everyone for attending on Friday morning, especially those that wake up early on the West Coast, which are a number of you. And, of course, it's Black Friday in the U.S., so a number of you might still be recovering from Turkey Day. So thank you for joining us. I'm also joined by Harjeet Bharar, who's our CFO. Together, we'll be reviewing the third quarter 2023 results. And, of course, we'll have a Q&A session at the end of the presentation. I do want to let everyone know that, of course, our financial statements, MD&A, and press release are all available on CDAR for your consumption as you need it. I would say for the third quarter, an okay quarter. I think, you know, when I look at the operations, operations were solid. Operations we made solid. very solid strides, particularly versus last year, even versus the first quarter of this year. Very strong strides. We grew our trading revenue by 21% versus last year in the same quarter. EBITDA, though, of course, came in lower by 16%. Now, if you strip out paper out of that, our EBITDA without paper grew by almost a million dollars that's 121 increase over the third quarter of 2022 hence my comment it was an okay quarter um strong operational profitability offset by a strong decline in the paper prices so how did that happen how did the paper prices impact our results so uh our sop is the class of paper sort of office pack is our our class of paper and those paper prices reverted back to their long-term average uh if you recall uh a year ago um we were hovering close to 300 per ton uh and now we're half that um uh or just a little just a little shy of half that um a little better though um however um That has had a significant impact, of course, on the results. And we've seen a decrease by $600,000 when we compare this quarter versus last year's quarter. So those historical highs from last year now are close to the 10-year average. I will say, thankfully, you know, we're at that 10-year average and not somewhere below that. And I think that's the good news in all of this is that the paper prices seem to be plateauing or flattening out as we sit at this point in time. So, again, if we sort of look at what we can control, we can control our core business. We can hone in on doing the right things every day. And if you look at our EBITDA margins without the paper, you'll see this. Our margins and percentage of revenue improved 500 basis points. And our corporate location operating income, again, less recycling margins, also improved by 1,000 basis points when we compare to last year at this time. How has that happened? This has happened by very good right densification rates. This was helped by, in particular, in a few regions where we finished the implementation of some very large acquisitions. The team has done an amazing job of integrating these acquisitions in the first half of this year. ones that we did in late 21 and into 22. So seeing that happen has been quite satisfying for all of us and quite timely, if you ask me. When you also look out and look forward, we acquired ProShift Baltimore in September. And of course, you know, we're looking at bringing that in and integrating that into with our North Virginia, existing North Virginia corporate location. So Baltimore is a very good operation. We're going to look to bring those two operations together over the first six, seven months of ownership. But Baltimore is performing as expected. So, you know, we look at that. We also did a smaller acquisition, Security Shred, The day before we did the Baltimore acquisition, that one I can safely say has been integrated. The team in New York, New Jersey, the ops team, the finance team, the marketing sales team have done an amazing job. integrating that acquisition. In fact, the trucks that we received for those acquisitions were distributed to other markets. So, very happy about that acquisition as well. So, looking forward, building on a strong operational platform and operational results We have a couple acquisitions which we only saw a little bit of in the third quarter. We'll see more of their results in the fourth quarter and, of course, into 2024. I would be remiss if I didn't take the opportunity here to speak about the investments we've been making. As we've been growing, we need to continue to create the right environment for us to scale our without burdening ourselves from extra cost that's associated with growth. And the best way to do that is to use technology. And we've invested in technology. Number one, earlier this year, we went with a new customer relationship management tool, Salesforce. It's the best in the business. Integrated into that, we used Peridot, which is our marketing automation platform. All of this together is going to allow us not only to have better closing rates and better efficacy on the sales side, but allow us to nurture market our clients going forward. So we saw that investment. We also took, in this quarter, we migrated to Azure and And why do we migrate to Azure? Azure is the leading cloud platform. And having the right cloud platform is the foundation of our technology stack. Azure is the language that allows us to link all our platforms. So Azure provides a number of things, speed, security, and linkage between our platforms so we can have them talking to each other reducing double data entry, reducing administrative burden that comes with our type of business where you have thousands of transactions on any given day and they're all small. So having these things talk to each other, this is going to help us for many, many years because we're using the best in the business. We're using a Salesforce Azure, our workflow software is the best in the business, our routing and tracking systems are the best in the business. So these will pay dividends for many, many, many years, which we've done this year. The last thing we've invested in this year is a SOC 2 certification as an information protection company. You know, having this certification allows us to do more business with governments, both on the shredding side as well as in particular the scanning side. Our scanning business is growing, which you can see in the financial statements. Harjeet will talk to that. And Having that certification will allow us to capitalize on larger scanning clients, government, large institutions. So this year, the investments that we've made are going to really, really pay off. I think the team has done a great job at polishing our rocks. They've done a great job at finding those operational opportunities and savings and efficiencies and route densities. I can't thank everyone enough for what they've done there. And now the ability to invest in these technologies to allow us to be even better, that's pretty exciting for us. So we're looking forward to, we've already started deploying Salesforce. Azure has just been deployed. The integration of those tools will be next year in terms of our workflow and our Salesforce. There's a number of things that that are on the go that are going to be very beneficial to us and allow us to scale with more leverage. And that's really what we want to do, scale with more leverage. So on that note, I want to turn it over to Harjeet, who will give us the incremental color on our financial results.

Thank you, Jeff, and thank you again, everyone, who was able to join this call. So in terms of our financial results, our top-line revenue grew by – 5% grew to 15.4 million compared to 14.7 million in the third quarter of 2022. If we look at the revenue growth from a service line perspective, our shredding revenue grew 21%, as Jeff noted, with scanning sales growing by 17% and our e-waste revenue being comparable to the third quarter of 2022. Recycling revenue, of course, decreased, as Jeff noted, and that's, of course, driven by lower SOP pricing, which has now reverted to sort of its longer-term average. If you sort of translate the results on a per share basis, EBITDA came in at $0.17 per share for the quarter. That compared to $0.20 per share in the third quarter of 2022. Stripping out paper, EBITDA less net recycling revenue, that grew by $0.9 million. So almost $1 million there to $1.7 million. So in terms of how the results translated from a cash flow perspective, so our free cash flow was $2.7 million for the quarter or $0.15 per share. So a strong FCF conversion rate. If you look at Q2 2022, we were at $0.03 per share from a free cash flow perspective. So if you look at the free cash flow, what was that sort of being generated by? So that's, again, driven by strong cash generated from operations. So our EBITDA was translating to strong cash flow from operations. And that's offset by some CAPEX, which we had $0.8 million in CAPEX As you know, our CapEx is primarily comprised of shredding truck purchases. That is our largest CapEx item. If you look at our capital resources right now that we have on hand, we have $3.6 million. We still have some additional capacity under existing banking facilities as well. Again, some strong capital that we can deploy to continue to grow the business and to execute on any items in the M&A pipeline And so that's an overview of the financials. I will turn it over now to Jeff for some closing remarks.