MISSISSAUGA, ON, Aug. 23, 2011 /CNW/ -- MISSISSAUGA, ON, Aug. 23,
2011 /CNW/ - Second Quarter Highlights: -- System sales( (1)) in
our PROSHRED® system were $3.95 million USD, setting a new record
for system sales achieved in any one quarter, growing 23% over the
second quarter of 2010. o Scheduled (recurring) system sales for
the second quarter were a record high of $1.7 million USD. o
Unscheduled system sales were a record high of $930,000 USD. o
Recycling system sales were a record high of $1.3 million USD. --
Redishred's corporate locations generated $217,728 CDN in earnings
before interest, taxes, depreciation and amortization ("EBITDA") in
the second quarter of 2011. -- Royalty revenue for the second
quarter of 2011 was $242,000 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. As a
result, Redishred generated $62,000 CDN in franchise revenue during
the second quarter of 2011. ((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, June 30, 2011 June 30, 2010
$ $ Franchise operations: System sales (USD) 3,951,035 3,202,222
Franchise and license fee revenues 61,989 - Royalty and service fee
revenues 242,222 235,092 Total franchise and license revenue
304,211 235,092 Corporate operations: Service and recycling revenue
523,068 100,685 Income from corporate locations 114,194 7,809
Operating income (loss) (83,756) (169,176) Operating income (loss)
- excluding one-time costs 3,925 (169,176) Net income (loss)
(244,583) (216,006) Income (loss) per share (0.01) (0.01) For the
six months ended, June 30, 2011 June 30, 2010 $ $ Franchise
operations: System sales (USD) 7,481,728 6,310,703 Franchise and
license fee revenues 61,989 - Royalty and service fee revenues
461,650 477,105 Total franchise and license revenue 523,639 477,105
Corporate operations: Service and recycling revenue 1,014,832
100,685 Income from corporate locations 187,903 7,809 Operating
income (loss) (253,301) (287,771) Operating income (loss) -
excluding one-time costs (121,013) (287,771) Net income (loss)
(570,489) (427,117) Income (loss) per share (0.02) (0.01) Weighted
average number of common shares 28,884,658 28,884,658 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: -- 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; -- corporate initiatives to outsource "non-core"
business services; and -- consumers and businesses have heightened
awareness of their responsibility towards the environment.
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 Second Quarter of 2011 Jeffrey
Hasham, the Company's CEO, had the following comments on the second
quarter results, "Once again our system set new sales records in
every revenue category. These strong results are driven by our
sales programs targeted at educating our clients on the requirement
to securely destroy their confidential documents. Additionally, we
are pleased that we continue to recycle more paper every quarter,
which helps save trees and reduce our carbon footprint. I would
like to thank the entire Proshred team in contributing towards
these record results." 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) maximizing route density 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 Milwaukee 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 three and six months ended June 30, 2011: 3 months
ended 6 months ended June 30 June 30 % of % of % of % of 2011
revenue 2010(1) revenue 2011 revenue 2010(1) revenue $ $ $ $
Revenue: Shredding 365,277 (70%) 79,195 (79%) 727,600 (72%) 79,195
(79%) service Recycling 157,791 (30%) 21,490 (21%) 287,232 (28%)
21,490 (21%) Total revenue 523,068 (100%) 100,685 (100%) 1,014,832
(100%) 100,685 (100%) Operating 305,340 (58%) 74,012 (74%) 624,819
(62%) 74,012 (74%) costs EBITDA 217,728 (42%) 26,673 (26%) 390,013
(38%) 26,673 (26%) Depreciation (2) 33,975 (6%) 9,666 (10%) 63,757
(6%) 9,666 (10%) Interest 69,559 (13%) 9,198 (9%) 138,353 (14%)
9,198 (9%) expense Corporate operating income 114,194 (22%) 7,809
(8%) 187,903 (19%) 7,809 (8%) (1) The results for the three and six
months ended June 30, 2010 include the corporate operations of
Syracuse, which began May 1, 2010. (2) Includes depreciation
expense taken on tangible assets, including shredding vehicles,
computer equipment, bins and shredding containers, recycling
equipment and furniture. Community and Social Commitment - Our
locations under the PROSHRED® banner conducted 88 community
shredding events up to June 30(th), 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 second quarter of 2011, the PROSHRED®
system, through its recycling program, saved 85,200 trees and has
saved 164,000 trees in the first half of 2011. Financial Statements
Redishred's June 30, 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. 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 2010 and 2011 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; and (ii) the short, intermediate and
long-term development plans which may be impacted by negative
economic circumstances and industry growth levels. 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, MBA, CAbr/
Chief Executive Officerbr/ a
href="mailto:Jeffrey.hasham@redishred.com"
font-weight="bold"Jeffrey.hasham@redishred.com/abr/ a
font-weight="bold"
href="http://www.redishred.com"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"
font-weight="bold"kasia.pawluk@redishred.com/abr/ a
font-weight="bold"
href="http://www.redishred.com"www.redishred.com/abr/ Phone: (416)
204-0076 Fax: (905) 812-9448 /p
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