Redishred Capital (TSXV:KUT)
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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