Greenwave Technology Solutions' Second Shredder Currently Being Connected to Power Grid by Dominion Energy Ahead of Schedule

Rhea-AI Summary

Greenwave Technology Solutions, Inc. (GWAV) announces the connection of its second automotive shredder to the power grid, expected to double annual shredded ferrous output and boost revenues by $4.8 million. The company aims to increase revenue by 25-30% through shredding steel it currently sells unshredded. With the acquisition of Baltimore Scrap Corp., Greenwave becomes one of the largest independent chains of scrap yards on the East Coast.

Positive

• Connection of the second shredder to the power grid expected to increase annual revenues by $4.8 million
• Doubling of Greenwave's annual shredded ferrous output with the commencement of operations of the second shredder
• Anticipated revenue increase of 25-30% by shredding steel currently sold unshredded
• Acquisition of Baltimore Scrap Corp. by Sims Metal Management for $220 million in October 2023
• Greenwave positioned as one of the largest independent chains of scrap yards on the East Coast
• Expectation of revenue and steel processing volume growth in 2024 compared to 2023 levels

Negative

• None.

Insights

Market Research Analyst

The expansion of Greenwave's operational capacity with a second automotive shredder is a strategic move that can significantly influence its market position. Doubling the annual shredded ferrous output not only enhances production but also potentially improves the company's bargaining power in the market. By transitioning from selling unshredded to shredded steel, Greenwave is tapping into a higher-value segment of the scrap metal market. This shift can lead to a more favorable competitive landscape, especially considering the consolidation trend within the industry, as seen with Sims Metal Management's acquisition of Baltimore Scrap Corp.

From a market share perspective, Greenwave's expansion aligns with the industry's growth trajectory, where scale often correlates with operational efficiencies and increased profitability. With the company's robust infrastructure and seasoned team, it is poised to leverage its increased capacity to negotiate better terms with buyers and optimize its supply chain. The mention of licenses, contracts and a long operating history provides a foundation of stability and potential for growth that could appeal to investors looking for companies with established market presence and scalability.

Financial Analyst

The projected increase in annual revenues by $4.8 million due to the second shredder is a considerable figure that merits attention from an investment standpoint. The anticipated 25-30% revenue increase from shredding steel in-house suggests a significant enhancement in gross profit margins. This operational efficiency could translate into improved financial metrics such as EBITDA, which is often a key indicator for investors assessing company performance and valuation. Moreover, the CEO's statement about the potential undervaluation of Greenwave by the market could indicate an opportunity for re-rating if the company's strategic initiatives translate into tangible financial results.

It is important to analyze the capital expenditures associated with the installation and maintenance of the new shredder and weigh them against the expected increase in free cash flow. The short-term financial impact could include increased debt or capital outlays, but if managed effectively, the long-term benefits could outweigh these initial costs. Investors should monitor Greenwave's quarterly performance post-implementation to gauge the actual impact on the bottom line and compare it to industry benchmarks.

Environmental & Sustainability Expert

Greenwave's investment in a second shredder also has implications from an environmental sustainability perspective. The recycling of ferrous metals is a critical component in reducing the environmental footprint of metal production. By increasing its capacity to recycle, Greenwave not only positions itself as a larger player in the scrap metal industry but also contributes to the circular economy. This can enhance the company's reputation and potentially attract environmentally conscious investors.

Furthermore, the increased efficiency in recycling processes could lead to a reduction in energy consumption and greenhouse gas emissions per ton of metal processed. This improvement in operational sustainability might provide Greenwave with additional regulatory benefits or incentives. Investors with a focus on environmental, social and governance (ESG) criteria may find the company's efforts in this area to be a positive factor when evaluating its investment potential.

The second shredder is expected to boost annual revenues by approximately $4.8 million, with significant increase to gross profit 

Second shredder on track to be connected to power grid by March 29, 2024 and commence operations shortly thereafter, doubling Greenwave's annual shredded ferrous output

Greenwave is now one of the largest independent operators of metal recycling facilities on the East Coast

CHESAPEAKE, Va., March 25, 2024 /PRNewswire/ -- Greenwave Technology Solutions, Inc. ("Greenwave" or the "Company") (Nasdaq: GWAV), a leading operator of metal recycling facilities in Virginia, North Carolina, and Ohio, today announced that Dominion Energy is currently in the process of connecting its second automotive shredder to the power grid which is expected to be completed by March 29, 2024. The Company's second automotive shredder is expected to commence operations shortly thereafter and double Greenwave's annual shredded ferrous output.

Greenwave's existing automotive shredder – an American Pulverizer 60x85 – is the same make and model as its second one, providing the Company expertise in its operation and maintenance. By shredding the steel Greenwave currently sells unshredded, the Company anticipates that it will be able to generate approximately 25-30% more revenue with significant margins on that steel volume.

In October 2023, Sims Metal Management acquired Baltimore Scrap Corp., which operated 17 metal recycling facilities and four shredders, for consideration of $220 million_(1). Similar to most industries, there has been a tremendous amount of consolidation in scrap metal companies during the past several years. Greenwave is now one of the largest independent chains of scrap yards remaining on the East Coast, with significant market share in its key markets. Further, the Company believes there is significant value in its licenses, municipal and corporate contracts garnered over its 20-year operating history, robust infrastructure, and team of seasoned experts. 

"Greenwave's second shredder provides the infrastructure for us to expand our footprint of metal recycling facilities up from 13 currently – significantly growing Greenwave's revenues, margins, and free cashflow," stated Greenwave CEO Danny Meeks. "We believe the market is significantly undervaluing Greenwave and firmly believe that by continuing our hub-and-spoke strategy of shredder hubs with feeder yards, we will become an increasingly attractive acquisition target of the major scrap metal conglomerates."

Greenwave is on track to grow it revenues and volume of steel processed from 2023 levels in 2024.

1. Sims Limited's Semi-Annual Report, Note 10 (Page 28) https://ir.miraqle.com/DownloadFile.axd?file=/Report/ComNews/20240220/02774261.pdf

About Greenwave

Greenwave Technology Solutions, Inc., through its wholly owned subsidiary Empire Services, Inc. ("Empire"), is a leading operator of 13 metal recycling facilities in Virginia, North Carolina, and Ohio. The Company's recycling facilities collect, classify, and process raw scrap metal (ferrous and nonferrous) and implement several unique technologies to increase metal processing volumes and operating efficiencies, including a downstream recovery system and cloud-based ERP system.

Steel is one of the world's most recycled products with the ability to be re-melted and re-cast numerous times. Recycling steel provides key environmental benefits over virgin metals, including reduced energy use, lower CO2 emissions, lower waste, and conserving natural resources. Greenwave's customers include large corporations, industrial manufacturers, retail customers, and government organizations. The Company plans to aggressively expand its footprint of locations by acquiring independent, profitable scrap yards in the coming months. For more information, please visit www.GWAV.com.

Forward-looking Statements
This press release contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These include, without limitation, statements about its revenue growth, opening of additional locations, margin expansion, expected connection of the second shredder to the power grid, and cashflow projections. These statements are identified by the use of the words "could," "believe," "anticipate," "intend," "estimate," "expect," "may," "continue," "predict," "potential," "project" and similar expressions that are intended to identify forward-looking statements. All forward-looking statements speak only as of the date of this press release. You should not place undue reliance on these forward-looking statements. Although the Company believes that its plans, objectives, expectations and intentions reflected in or suggested by the forward-looking statements are reasonable, the Company can give no assurance that these plans, objectives, expectations or intentions will be achieved. Forward-looking statements involve significant risks and uncertainties (some of which are beyond the Company's control, such as weather in Carrollton, VA), assumptions and other factors that could cause actual results to differ materially from historical experience and present expectations or projections. Actual results may differ materially from those in the forward-looking statements and the trading price for the Company's common stock may fluctuate significantly. Forward-looking statements also are affected by the risk factors described in the Company's filings with the SEC. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

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SOURCE Greenwave Technology Solutions

FAQ

What is the expected revenue boost from connecting the second shredder to the power grid?

The second shredder is expected to increase annual revenues by approximately $4.8 million.

How much is Greenwave's annual shredded ferrous output expected to double by with the second shredder?

Greenwave's annual shredded ferrous output is expected to double with the commencement of operations of the second shredder.

What revenue increase percentage is anticipated by shredding the steel currently sold unshredded?

The company anticipates a revenue increase of 25-30% by shredding the steel it currently sells unshredded.

What was the consideration for Sims Metal Management's acquisition of Baltimore Scrap Corp.?

Sims Metal Management acquired Baltimore Scrap Corp. for consideration of $220 million in October 2023.

How is Greenwave positioned in terms of scrap yard chains on the East Coast after the acquisition?

Greenwave becomes one of the largest independent chains of scrap yards remaining on the East Coast after the acquisition.

What growth is Greenwave on track for in terms of revenue and steel processing volume in 2024?

Greenwave is on track to grow its revenues and volume of steel processed from 2023 levels in 2024.