Greenwave Technology Solutions, Inc. ("Greenwave" or the "Company") (NASDAQ:GWAV), a leading operator of metal recycling facilities in Virginia, North Carolina, and Ohio, today released the following shareholder update:
Dear Greenwave Shareholders,
We are pleased to report that Greenwave is off to strong start in 2024 and is on track to generate record revenues this year. A few recent developments we'd like to highlight:
- Both our Virginia Beach and Cleveland yards continue to post impressive growth in terms of their revenues, volumes, and profits – we expect they will soon become two of our top performing locations.
- We recently commenced operations of a metal baler, wire stripper, and three sheers at our non-ferrous processing facility, enabling us to generate more revenues with higher margins on our aluminum and copper products.
- Greenwave generated more than $200,000 in revenue from cars purchased through our wholly-owned subsidiary, Scrap App, Inc. ("Scrap App"), during the first 130 days since it launched, as it continues to capture market share for end-of-life motor vehicles. Scrap App is currently available in the Hampton Roads and Cleveland markets. We intend to expand Scrap App to other strategic markets in the near future.
- In the coming days, we expect Virginia Dominion Power will inform of us of the final date on which our second automotive shredder will be connected to the power grid and can commence operations. Our existing automotive shredder is the same make and model – an American Pulverizer 60x85 – providing us expertise in its operation and maintenance. Given this experience, we expect our second shredder will be fully operational shortly after being connected to the power grid and is expected to double Greenwave's ferrous metal processing capacity. By shredding the steel which we currently sell unshredded, we anticipate that we will be able to generate approximately 30% more revenue with significant margins on that steel volume.
In August 2023, Baltimore Scrap Corp. was acquired for $177 million plus working capital and other adjustments(1). While Baltimore Scrap Corp. is larger than Greenwave – it operates 17 yards, four shredders, and processes 600,000 metric tons of scrap each year – we believe this acquisition supports management's view that Greenwave's expansion strategy has the potential to create significant value for its shareholders.
Once our second shredder commences operations, we believe Greenwave will have the requisite infrastructure and cashflows to expand it footprint of metal recycling facilities. As a technology platform, Scrap App has the ability to scale to multiple new markets with minimal capital investment – we do not have to open a new facility, purchase additional equipment, or hire a team of people when we expand to a new market. We believe the expansion of Greenwave's footprint and Scrap App, along with the second shredder commencing operations, will be the primary growth drivers for our revenues – and, likely, margins – in 2024.
Central to Greenwave's growth strategy are the principles that a) we do not overpay for acquisitions and b) any deal we pursue must be properly structured to minimize dilution and limit impact to cashflow. Our goal is to utilize seller's notes as our preferred form of consideration as we expand – we do not expect to win every deal, nor should that be our objective. We intend to spend the time and energy required to ensure the deals we pursue are fairly priced, properly structured, and have the potential to create significant value for our shareholders.
Similar to most industries, there has been a tremendous amount of consolidation in scrap metal companies over the past several years. Greenwave is now one of the largest independent chains of scrap yards remaining in the country, with significant market share in our key markets. Further, we believe there is significant value in our licenses, municipal and corporate contracts garnered over our 20 year operating history, robust infrastructure, and team of seasoned experts.
We believe the next few months will be transformative for Greenwave and look forward to sharing our progress and developments.
We thank all of our shareholders and appreciate your continued support.
To an exciting 2024,
Danny Meeks
Chairman and Chief Executive Officer
Greenwave Technology Solutions, Inc.