RediShred Capital Corp V.KUT

Alternate Symbol(s): RDCPF

Industrials Business Services

Redishred Capital Corp. is the owner of the PROSHRED, PROSCAN and secure e-Cycle brands, trademarks, and intellectual property in the United States. The Company operates through three segments: the granting and managing of shredding business franchises under the Proshred trademark (Franchising and Licensing); the operation of corporately owned shredding businesses (Corporate Locations); and supporting the franchises and corporately owned shredding businesses (Corporate). It digitizes, secures, shreds, and recycles confidential documents and proprietary materials for thousands of customers in the United States in all industry sectors. It grants PROSHRED and PROSCAN franchise businesses in the United States and by way of a license arrangement in the Middle East. It also operates 17 corporate businesses directly. The Company's services include home office shredding services, residential shredding services, hard drive destruction services, drop-off shredding services, and others.

TSXV:KUT - Post by User

RediShred Capital Corp

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Post by Possibleidiot01on Dec 20, 2023 1:57pm

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Post# 35794203

Petty cash - Dean

Redishred Capital Quick Update - $KUT.v

Quick update after Q3 2023

Nov 27, 2023

Price: $3.20 CAD

MC: 56.6 mil CAD

EV: 92.4 mil CAD

1 year performance: -22%

KUT reported last Thursday and held a call Friday morning. Results were ahead of my (lowish) expectations given the decline in paper prices and the outlook was as expected. The stock has bounced a bit off the lows but is still off over 20% in the last year.

Thank you for reading Petty Cash . This post is public so feel free to share it.

Share

Quarter Recap

Revenue up 5%
- This was driven mostly by acquisitions
- Shredding revenue up to 11.9 mil from 10.1 mil
- E-waste at 678k from 351k
- Scanning at 624k from 536k
- Recycling revenue down to 1.7 mil from 3.1 mil
EBITDA was down 16%
- This was mainly due to decline in paper prices
Sounds like they will meet the objectives for M&A this year
Ebitda excluding the impact of recycling was up 121%

Call Notes

Working on obtaining SOC 2 certification as an information protection company
- This will allow them to do more business with governments
Security Shred has been integrated
Baltimore acquisition integration going as expected
Q4 is off to a bit of stronger start than typical

Closing Thoughts

The business continues to hum along. They grew shredding revenue by 21%. As well, they continue to grow e-waste and scanning services. If we remove what the business can control, they are doing well.

Q3 and Q4 are the toughest comps for paper prices, so I’m expecting that the stock to bottom and the narrative to change a bit as we move into 2024. The incremental margin from recycling is more of a driver than I originally anticipated when I purchased shares. Having said that, I never expected paper prices to be a material contributor to the thesis.

Thanks for reading.

Dean

* long KUT.v