REDISHRED CAPITAL CORP. POSTS FIRST QUARTER RESULTS - HIGHLIGHTING RECORD SYSTEM SALES AND EBITDA GENERATED BY CORPORATE LOCATI.

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:[e-mail]" cr="true"[e-mail]/abr/ a href="http://www.redishred.com" cr="true"www.redishred.com/abr/ Phone: [phone] Fax: [phone] /p p or, /p p Redishred Capital Corp. (TSX.V - KUT)br/ Jeffrey Hasham, MBA, CAbr/ Chief Executive Officerbr/ a href="mailto:[e-mail]" cr="true"[e-mail]/abr/ a href="http://www.redishred.com" cr="true"www.redishred.com/abr/ Phone: [phone] Fax: [phone] /p 

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