REDISHRED CAPITAL CORP. POSTS FIRST QUARTER RESULTS - HIGHLIGHTING RECORD SYSTEM SALES AND EBITDA GENERATED BY CORPORATE LOCATI.
June 29 2011 - 4:51PM
PR Newswire (Canada)
MISSISSAUGA, ON, June 29, 2011 /CNW/ -- MISSISSAUGA, ON, June 29,
2011 /CNW/ - First Quarter Highlights: -- System sales( (1)) in our
PROSHRED® system were $3.53 million USD, setting a new record for
system sales achieved in any one quarter, growing 14% over the
first quarter of 2010. o Scheduled (recurring) system sales for the
first quarter were a record high of $1.68 million USD growing 15%
over the same period in 2010. o Unscheduled system sales were a
record high of $880,000 USD growing 5% over the first quarter of
2010. o Recycling system sales were a record high of $967,000 USD
growing 19% over the same period in 2010. -- Redishred's corporate
locations generated $174,000 CDN in earnings before interest,
taxes, depreciation and amortization ("EBITDA") in the first
quarter of 2011. -- Royalty revenue for the first quarter of 2011
was $219,000 CDN. Royalty and service revenues are generated by
franchises of the PROSHRED® franchise system and are originally
denominated in US dollars. -- On May 16, 2011, Redishred announced
the addition of the Indianapolis, Indiana franchise to the system.
Operations commenced in June of 2011. This marks the Company's
19(th) PROSHRED® location in the United States. ((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, March 31, 2011
March 31, 2010 $ $ System sales (USD) 3,530,693 3,108,481 Royalty
and service fee revenues 219,428 242,013 Corporate operations:
Service and recycling revenue 491,764 - Income from corporate
locations 73,707 - Operating income (loss) (167,115) (118,596) Net
income (loss) (325,908) (211,110) Income (loss) per share (0.01)
(0.01) Weighted average number of common shares 28,884,658
22,884,658 Management's Comments on the Industry The North American
shredding industry has continued to grow, as there is continued and
increasing awareness with respect to the following demand drivers:
-- consumers and businesses have heightened awareness of their
responsibility towards safeguarding the environment; -- 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; -- an
increasing need to destroy and recycle other media such as
hard-drives; and -- corporate initiatives to outsource "non-core"
business services. 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 First Quarter of 2011
Jeffrey Hasham, the Company's CEO, had the following comments on
the first quarter results, "We are pleased that our system has
recorded a new sales record yet again. These results have been
driven by increasing the awareness and education of our customers
on the need to shred documents and destroy materials using the
Proshred system. Once again, the sales increases were across almost
every location. I would like to commend our franchisees and
corporate store teams for their continued efforts in their
communities." 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. The strong system
sales 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 May 16, 2011, Redishred
announced that Ken Carite was awarded the Indianapolis, IN
PROSHRED® franchise, which marks PROSHRED®'s fourth location in the
Midwest, and 19(th) overall. Ken Carite, the new Indianapolis
franchisee, stated "I searched for over a year to identify the
right business model for my new business endeavor. I selected
Proshred because I think document security is relevant in today's
world of identity theft. I firmly believe that there is solid
demand for a "best in class" service in Central Indiana. Proshred
is attractive because it has a solid infrastructure and support
system in addition to a successful base of existing locations. I
look forward to duplicating the Proshred model in Indianapolis and
growing a great business." 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 in the first quarter of 2011: (in CDN) 3 months ended March
31 % of 2011 revenue $ Revenue: Shredding service 362,323 74%
Recycling 129,441 26% Total revenue 491,764 100% Operating costs
319,479 65% Operating income 172,285 35% Depreciation 29,783 6%
Interest expense 68,795 14% Corporate store income 73,707 15%
Community and Social Commitment - Our locations under the PROSHRED®
banner conducted 72 community shredding events up to May 31, 2011.
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 the first quarter of 2011,
the PROSHRED® system, through its recycling program, saved 78,800
trees. Financial Statements Redishred's March 31, 2011 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, almost all of our franchise and
corporate locations are NAID AAA 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: (i) anticipated system
sales and royalty revenue which may be 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:
http://www.cnw.ca/en/releases/archive/June2011/29/c2374.html 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 p or, /p p Redishred
Capital Corp. (TSX.V - KUT)br/ Jeffrey Hasham, MBA, 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
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