Greenwave Technology Solutions, Inc., through its wholly-owned subsidiary Empire Services, Inc., is a leading operator of 11 metal recycling facilities in Virginia and North Carolina. At these facilities, Empire collects, classifies, and processes raw scrap metal (ferrous and nonferrous) for recycling. Steel is one of the world’s most recycled products, with the ability to be re-melted and recast numerous times while offering significant economic and environmental benefits compared to virgin materials.
The company has invested $15 million in capital expenditures over the last 18 months. These investments will help Greenwave achieve margins of over 80% and will help drive major growth, the company believes.
The company has invested $15 million in capital expenditures over the last 18 months. These investments will help Greenwave achieve margins of over 80% and will help drive major growth, the company believes.
Category
🗞
NewsTranscript
00:00 (upbeat music)
00:02 - Isaac, thank you so much for hopping on
00:06 with us this morning.
00:07 - Great to be here.
00:08 Thank you for having me.
00:09 - Absolutely.
00:10 There's a lot that we need to talk about,
00:12 but for the folks at home that might not be familiar
00:14 with your company,
00:15 if you could kind of just explain it to me like I'm five,
00:17 what is it that your company does?
00:19 - Sure.
00:20 So GreenWave operates 13 metal recycling facilities
00:23 in Virginia, North Carolina, and Ohio.
00:26 So we call metal recycling facilities,
00:28 essentially they're scrap yards.
00:30 People bring in their metal,
00:32 sell it to us and they get a cash or check.
00:34 And then we turn around and process that metal,
00:37 upgrade it, shred it,
00:39 and then sell it to some of the leading steel mills
00:42 and recycling facilities in the country.
00:45 - You know, right now in this space,
00:47 and I feel like just in general,
00:48 some companies are kind of pulling back
00:50 with recession fears, this, that, and the other,
00:52 but I kind of see that you're in the middle
00:53 of an aggressive expansion plan.
00:56 So what's kind of the status of your current facilities
00:58 and what can we expect in the near future as well?
01:01 - So over the past 18 months,
01:03 we've invested over $15 million in capital expenditures.
01:07 The main two projects are downstream processing system,
01:10 enables us to recover millimeter minus type metals
01:15 from our shred residue,
01:16 or some in the industry call it fluff.
01:18 Up until a few years ago,
01:20 most metal recycling facilities
01:22 were throwing this material away
01:24 because it kind of looks like trash,
01:26 but it turns out there's a tremendous amount
01:28 of metal in there that it went to run it
01:31 through the downstream processing system.
01:34 It aggregates into a significant amount of metal.
01:37 So right now we're generating about $750,000 per month
01:42 from that machine.
01:44 And then we just announced yesterday
01:46 that our copper extraction component
01:48 is currently being installed.
01:50 That will take the revenues that we're able to generate
01:53 from the downstream processing system
01:55 to north of $1 million per month
01:58 with margins in excess of 80%
02:00 because we don't have to pay for the material.
02:02 - Yeah.
02:03 - So yes, we're very bullish on the scrap metal industry
02:08 with the infrastructure act
02:10 and all of the investment that's going on.
02:13 We feel that the scrap metal industry
02:15 is poised for significant growth.
02:18 And especially with a lot of these companies
02:20 mandating environmentally friendly methods
02:22 of obtaining these metals,
02:26 metal recycling scrap metal presents a significant amount
02:30 of environmental benefits versus mining it raw.
02:33 So we feel we're in the right place at the right time.
02:35 - You know, as you were talking,
02:36 I was thinking about all the metals
02:37 that I may or may not have in my place
02:39 to see if I could at least get like a Chick-fil-A sandwich.
02:41 So I'll reach out to you,
02:42 see if there's a process that I can get some money out of it.
02:45 But I think you added a second car shredder
02:48 to your operations as well.
02:51 That doesn't sound cheap though.
02:52 So what kind of like ROI can we expect?
02:54 And more importantly, how soon do you kind of expect
02:57 to go ahead and get profits from that investment as well?
03:01 - So the second automotive shredder is fully installed.
03:03 We're just waiting on a transformer
03:05 to be installed by the power company.
03:07 We actually think we found the transformer.
03:09 It's currently being tested.
03:11 So we expect to have good news on that frontier very soon.
03:15 But that second automotive shredder
03:17 will enable us to process all of our fairest metal
03:20 through the shredder,
03:22 which enables us to generate about 33% more revenue
03:26 from that metal with margins of about 60%.
03:29 So that's transformative for our business.
03:31 We feel that's going to take us well past positive EBITDA,
03:36 positive cash flows from operations,
03:38 likely profitable as well.
03:41 So we feel that we're well on track for revenues
03:45 north of $50 million next year,
03:48 potentially higher than that.
03:50 We're looking at a number of acquisitions
03:52 because we now have the infrastructure that we need
03:55 in order to successfully handle that capacity.
04:00 So there's a lot of interesting things
04:02 going on here at GreenWave.
04:05 - Any opportunity that we see an expansion into copper
04:08 is already into play or how soon can potential investors
04:11 and investors expect that?
04:13 - Well, we already processed a significant amount of copper
04:16 from our normal operations.
04:18 The copper extraction unit itself
04:20 will be operational in September.
04:22 - Okay.
04:22 - And then kind of the next big upcoming catalyst
04:25 is within the next 45 days,
04:27 we'll be purchasing all of the land underlying the scrapyards
04:31 from our chairman and CEO, Danny Meeks.
04:34 We currently pay about $2.5 million per year in rent
04:38 for that equipment and that land.
04:40 So by purchasing that in a seller's note,
04:42 very friendly terms for the company,
04:45 that's going to present a P&L improvement
04:47 of about $2.5 million a year.
04:51 And for a company of our size, that's very significant.
04:54 And we have less than 15 million shares outstanding.
04:57 So the EPS improvement, we believe,
05:00 will be a material as well.
05:02 So we're very excited about that.
05:05 We also recently opened our Chesapeake facility.
05:08 We're installing a shaler, a baler shear there,
05:11 and it's actually right in the middle
05:13 of the industrial hub of Norfolk and Virginia Beach.
05:17 So we'll be able to have a conveyor belt
05:20 and bring that metal directly onto a barge
05:23 and then barge it over to our customers.
05:26 So that's another catalyst.
05:29 We're actually working on getting some drone footage
05:31 so our shareholders and the market can really see
05:35 the size, scale, and I guess robustness of our operations.
05:40 - I recently had to go to the DMV
05:41 'cause I lost my wallet, so I had to get a license.
05:43 But you actually just obtained a imported license
05:46 with the North Carolina DMV.
05:49 What's the game plan with that?
05:50 Any partnerships that we can expect?
05:52 - Well, it was with the Virginia DMV,
05:54 but we're now (indistinct)
05:56 the back leaf from consumers
05:58 at our Norfolk metal scrapyard.
06:01 So that's significant because we're already
06:03 one of the largest buyers of cars at auctions,
06:06 whether it be pedal.
06:07 We have municipal contracts to buy cars that are abandoned.
06:11 We have contracts with towing companies.
06:14 So we're already a large buyer of these scrap cars,
06:17 but by buying them direct from the consumer,
06:20 we can increase our margins
06:24 that we're able to realize on those scrap cars.
06:26 So we're working on a number of technology fronts
06:30 and operational fronts to increase the volume of cars
06:34 that we're buying while decreasing the cost.
06:39 But it is important to know we already have enough volume
06:42 to keep our second automotive shredder busy.
06:45 So anything above and beyond that will just be,
06:49 I think, very accretive for our shareholders.
06:52 - You know, Isaac, a lot of times when companies grow fast,
06:56 sometimes too fast, quality can decrease.
07:00 Are you at concerns about that at all?
07:02 Or what do you have in place to make sure
07:04 that the quality and the efficiency stays the same,
07:06 if not increases as you grow so rapidly?
07:10 - So our chairman, Danny Meeks,
07:12 has been in this industry for 20 years
07:14 along with the core team.
07:16 So they know the scrap metal industry
07:19 better than almost anyone.
07:21 They've been able to navigate it profitably
07:23 through numerous economic climates.
07:25 So we feel our quality is maintaining,
07:29 is the same as it's always been,
07:32 which is amongst the highest in the industry.
07:34 But I think going forward,
07:38 we're definitely going to have to have a solid plan
07:40 to minimize any dilution to our shareholders,
07:44 to take out more traditional debt
07:45 to finance some of these acquisitions,
07:47 and also make sure the acquisitions are structured properly
07:50 so that we can recuperate any cash outlay for them
07:54 within 12 to 18 months to minimize our downside risk,
07:59 maximize shareholder value.
08:02 So we're looking at all these things.
08:05 We're, I think, amongst some of the hardest working team
08:08 in the industry.
08:09 So I think our shareholders have a lot to be excited about
08:13 here at GreenLive.
08:15 - And then speaking of the shareholders
08:16 and potential shareholders,
08:18 the floor is kind of yours.
08:19 We covered a lot of topics in the last 10 minutes,
08:21 but if there's anything else that you wanna discuss,
08:23 the floor is yours to talk to the viewers
08:25 for about 30 seconds here.
08:27 - Sure.
08:27 So one thing I didn't mention was our Cleveland facility.
08:31 We opened this in April, 2023.
08:35 It typically takes nine to 12 months
08:38 before a facility reaches its full potential
08:40 'cause we have to let people know it's open.
08:43 We have to optimize the operations,
08:44 get the right equipment in there.
08:47 So right now it's generating in the low
08:50 hundreds of thousands of dollars in revenue per month.
08:53 We think that can ramp significantly
08:55 up towards around a half million dollars per month
08:59 by next year.
09:01 So that's another major growth opportunity.
09:03 So between the downstream system, second shredder,
09:06 Chesapeake facility,
09:08 buying the properties from our chairman and Cleveland,
09:13 I think there's a lot of significant upcoming catalysts
09:18 that should result in significant shareholder value.
09:24 - And I know you've got some fans in the chat
09:25 from what I've seen as well.
09:26 Thank you so much for hopping on with us.
09:28 That is Isaac Dietrich,
09:30 CFO of GreenWave Technology Solutions.
09:33 Ticker on NASDAQ is GWAV.
09:36 Thank you so much for hopping on, Isaac.
09:38 (upbeat music)
09:40 (upbeat music)