REDISHRED CAPITAL CORP. POSTS FOURTH QUARTER EBITDA OF $126,500, ANNOUNCES 2010 FOURTH QUARTER AND YEAR END RESULTS
April 29 2011 - 4:45PM
PR Newswire (Canada)
MISSISSAUGA, ON, April 29 /CNW/ -- MISSISSAUGA, ON, April 29 /CNW/
- Fourth Quarter and Annual Highlights: -- Redishred generated
$126,500 in earnings before interest, taxes, depreciation and
amortization ("EBITDA") in the fourth quarter of 2010. -- Operating
income was $21,000 in the fourth quarter of 2010. -- System sales(
(1)) in our PROSHRED® system were $12.9 million in 2010, an
increase of 34% over 2009: o System sales( )during the fourth
quarter of 2010 were $3.2 million USD growing 21% over the fourth
quarter of 2009. o Additionally, scheduled (recurring) system sales
for the fourth quarter were a record high of $1.6 million USD. --
Royalty revenue for the fourth quarter of 2010 was $221,000 CDN.
Royalty and service revenues are generated by franchises of the
PROSHRED® franchise system and are originally denominated in US
dollars. -- On November 15, 2010, Redishred announced that it has
entered into an agreement with Averda International FZ-LLC
("Averda") to operate the PROSHRED(®) and REDISHRED business
platform in 15 countries and four territories throughout the Middle
East. -- Redishred's two corporate locations in Syracuse, New York
and Albany, New York, generated $713,700 in revenue and $127,800 in
corporate location income for the eight months ended December 31,
2010. -- On December 31, 2010, Redishred acquired the Proshred
Milwaukee business from an existing franchisee. This marks the
third corporately owned location under the PROSHRED® banner. ((1))
System sales are revenues generated from the franchise system and
corporate owned locations. Redishred Capital Corp. derives its
royalty and service fee revenues based on a percentage of system
sales. Financial Highlights: For the three months ended, December
31, 2010 December 31, 2009 $ $ Franchising and licensing: Royalty
and service fee revenues 220,895 212,767 Franchise/license fees
246,249 - Total franchise revenues 467,144 212,767 Corporate
operations: Service and recycling revenue 288,135 - Income from
corporate locations 20,705 - Operating income (loss) 21,081
(310,615) Net income (loss) (456,990) (537,686) Income (loss) per
share (0.01) (0.03) Weighted average number of common shares
28,884,658 22,884,614 For the twelve months ended, December 31,
2010 December 31, 2009 $ $ Franchising and licensing: Royalty and
service fee revenues 934,639 828,944 Franchise Fees 355,413 139,883
Total franchise revenues 1,290,052 968,827 Corporate operations:
Service and recycling revenue 713,711 - Income from corporate
locations 127,754 - Operating income (loss) (413,986) (1,391,518)
Net income (loss) (1,217,490) (2,003,043) Income (loss) per share
(0.04) (0.09) Weighted average number of common shares 28,884,658
23,016,122 Management's Comments on the Industry The North American
shredding industry has continued to grow, as there is increasing
awareness with respect to the following demand drivers: --
regulatory requirements and enforcement continue to be increased
with respect to document destruction, including the federally
enacted Health Information Technology for Economic and Clinical
Health Act; -- consumers and businesses have heightened awareness
of their responsibility towards safeguarding the environment; --
corporate initiatives to outsource "non-core" business services;
and -- an increasing need to destroy and recycle other media such
as hard-drives. Additionally, prices for recycled paper have
continued to show upward momentum as a result of increased demand
from overseas markets, resulting in stronger recycling system
sales. Given these strong fundamentals, the company continues to be
optimistic about its short, intermediate and long-term development
plans. Management's Comments on the Fourth Quarter and fiscal year
2010 System Sales - Redishred's management team continued to focus
its efforts through its franchisees and its corporate locations on
(1) building recurring service revenues and (2) optimizing routing
and logistical efficiencies. System sales in all three major
categories continued to grow during the fourth quarter of 2010. --
Scheduled system sales were up 14% over the fourth quarter of 2009.
-- Unscheduled system sales grew by 9% over the fourth quarter of
2009. -- Recycling system sales grew by 54% over the fourth quarter
of 2009. -- In addition, the number of tons of paper recycled by
the PROSHRED® system was up 5% over the fourth quarter of 2009.
These strong results are driven by Redishred's sales and marketing
programs that are aimed at educating clients on the legislative
requirements to destroy confidential information using a secure
on-site solution. Additionally, a larger number of clients
are requiring their facilities to recycle all products, including
office paper and, by using our service, clients are assured that
documents are securely destroyed and the materials are recycled.
Franchise and license development - On July 26, 2010, Todd Hoover
and Bill and Desiree Chiles were awarded the San Diego, CA
PROSHRED® franchise. On October 25, 2010, the San Diego
franchise commenced operations marking the 18(th) operating
location in the PROSHRED® system. On November 15, 2010 the Company
announced that it had entered into an agreement with Averda
International FZ-LLC ("Averda") to operate the "Proshred" and
"Redishred" business platform in 15 countries and four territories
throughout the Middle East region. Acquisitions and Corporate
Operations - Since April 30, 2010, Redishred has completed three
acquisitions in Syracuse, Albany, and Milwaukee. The New York
locations are managed from the Syracuse regional office. The
Wisconsin location is corporately operated as of January 1, 2011.
The acquisitions have been accretive to Redishred's cash flows,
generating the following results on a year to date and quarterly
basis: 3 months ended 8 months ended (in CDN) December 31 December
31 % of % of 2010 revenue 2010 revenue $ $ Revenue: Shredding
service 218,401 76% 544,373 76% Recycling 69,734 24% 169,338 24%
Total revenue 288,135 100% 713,711 100% Operating costs 201,907 70%
438,580 61% Operating income 86,228 30% 275,131 39% Depreciation
33,000 11% 74,295 10% Interest expense 32,523 11% 73,082 10%
Corporate store income 20,705 7% 127,754 18% Community and Social
Commitment - Our locations under the PROSHRED® banner conducted 137
community shredding events throughout 2010. These events
provide an opportunity for our clients, clients' employees, local
businesses and local residents to ensure their personal and
confidential materials are securely destroyed. In addition to
helping to reduce identity theft, several of these events allow for
donations to various not-for-profit organizations. 100% of the
shredded material is recycled, as our continued goal is to foster
the use of fewer trees in the production of all paper products.
Future community shredding event locations can be found at our
website, www.proshred.com. During 2010, the PROSHRED® system,
through its recycling program, saved 306,000 trees. Jeffrey Hasham,
the Company's CEO, had the following comments on the fourth quarter
and 2010 annual results, "First and foremost we are very pleased to
have posted an operating profit during the fourth quarter of 2010,
this is a good result and we know that we can take this momentum
into 2011 and improve on this success." Mr. Hasham also noted that
"almost every one of our locations, franchise and corporate, has
improved their annual sales results over 2009, these improvements
in sales are a result of our franchise owners and corporate general
managers getting involved in their communities by way of charitable
activities and by way of educating clients on the dangers of
identity theft. I would like to congratulate our entire system for
their successes in 2010." Financial Statements Redishred's December
31, 2010 Financial Statements, Notes and Management's Discussion
and Analysis will be available at www.sedar.com and
www.redishred.com. Services Redishred Capital Corp. is the owner of
the PROSHRED® trademarks and intellectual property in the United
States. PROSHRED® shreds and recycles confidential documents
and proprietary materials for thousands of customers in the United
States in all industry sectors. PROSHRED® is a pioneer in the
mobile document destruction and recycling industry and has the ISO
9001:2008 certification. In addition to the ISO certification, all
of our franchise and corporate locations are NAID certified. It is
PROSHRED®'s vision to be the 'system of choice' and provide
shredding and recycling services on a global basis. Note: Neither
TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release. This news release contains forward looking
statements that reflect the current expectations of management of
Redishred and Redishred's future results, performance,
achievements, prospects and opportunities. Wherever possible,
words such as "may", "will", "estimate", "believe", "expect",
"intend" and similar expressions have been used to identify these
forward looking statements. These statements reflect current
beliefs and are based on information currently available to
management of Redishred. Forward looking statements
necessarily involve known and unknown risks and
uncertainties. A number of factors, including those discussed
in the 2009 and 2010 management discussion and analysis under "Risk
Factors", could cause actual results, performance, achievements,
prospects or opportunities to differ materially from the results
discussed or implied in the forward looking statements. These
factors should be considered carefully and a reader should not
place undue reliance on the forward looking statements. There
can be no assurance that the expectations of management of
Redishred will prove to be correct. In particular, certain
statements in this document discuss Redishred's anticipated outlook
of future events. These statements include, but are not
limited to: the commencement of a new franchise and license
operation (i) may be delayed by the inability of the franchisee or
licensee to comply with their agreement terms and conditions post
execution; anticipated system sales and royalty revenue which may
be (ii) impacted by industry growth levels which to date have been
driven by favorable legislation and favorable media coverage on the
impacts of identity theft. Readers are cautioned that such forward
looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from these
statements. Redishred can give no assurance that actual
results will be consistent with these forward-looking statements.
To view this news release in HTML formatting, please use the
following URL:
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Redishred Capital Corp. (TSX.V - KUT)br/ Jeffrey Hasham, CAbr/
Chief Executive Officerbr/ a
href="mailto:Jeffrey.hasham@redishred.com"
cr="true"Jeffrey.hasham@redishred.com/abr/ a
href="http://www.redishred.com" cr="true"www.redishred.com/abr/
Phone: (416) 849-3469 Fax: (905) 812-9448 /p p or, /p p Redishred
Capital Corp. (TSX.V - KUT)br/ Kasia Pawluk, CAbr/ Chief Financial
Officerbr/ a href="mailto:kasia.pawluk@redishred.com"
cr="true"kasia.pawluk@redishred.com/abr/ a
href="http://www.redishred.com" cr="true"www.redishred.com/abr/
Phone: (416) 204-0076 Fax: (905) 812-9448 /p
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