MISSISSAUGA, ON, May 14 /CNW/ -
- Redishred Capital Corp.'s ("Redishred") royalty and fee revenue for the
fiscal quarter ended March 31, 2009 was $225,459 CDN. Royalty and fee
revenues are generated by franchisees of the PROSHRED(R) franchise
system and are originally denominated in US dollars.
- Same store sales in our PROSHRED(R) franchise system for the period of
January 1, 2009 to March 31, 2009 were $2,141,981 USD, an increase of
25.1% from the same period in 2008(1).
- Recurring system sales up 62% over the same period last year
- Renewed an existing franchise location to a five year extension.
For the three months ended, March 31, 2009 March 31, 2008(2)
Operating income (loss)
amortization and interest) $ (291,792) $ (74,568)
Net income (loss) $ (397,726) $ (7,768)
Income (loss) per share $ (0.02) $ (0.00)
Weighted average number of
common shares 22,884,616 10,529,505
(1) Same store system sales are revenues generated from the franchise
system. Redishred Capital Corp. derives its royalty and service fee
revenues based on a percentage of system sales.
(2) March 31, 2008 results include operating results from Professional
Shredding Corporation and its subsidiary Proshred Franchising Corp.
from March 17, 2008 to March 31, 2008. Prior to March 17, 2008,
Redishred was a CPC and had no operations.
Redishred has been actively increasing its franchise recruitment
initiatives across the United States under the PROSHRED(R) banner. Redishred
anticipates that several new franchise locations will be open and operating
prior to the end of this fiscal year. The new PROSHRED(R) locations will
generate incremental franchise fee and royalty revenues and enlarge our U.S.
The Company will continue to work with its existing franchisees to assist
them in improving their revenues and operations, with the view to enhancing
Management's Comments on the Industry
The North American document shredding and recycling market continues to
grow despite the poor economic situation in the United States. Market growth
and demand is being driven by:
- tighter regulatory requirements and the related increasing enforcement
of regulations via fines and penalties
- increasing awareness and demand for recycled products
- corporate initiatives to outsource "non-core" business services to
improve productivity and performance
Given these strong fundamentals, the Company is optimistic about its
short, intermediate and long-term franchise and acquisition development plans.
Management's Comments on the Quarter
System sales - During the first quarter of 2009, the Company continues to
support its franchise system by focusing on the growth of system sales in
existing franchise locations and by providing operational support in the areas
of cost management, operations and routing. We are pleased to report that
system sales grew by 26.9% in the first quarter of 2009, with same store sales
growing by 25.1% when compared with the same period in 2008. During the first
quarter of 2009, franchisees in the PROSHRED(R) system saw a decline in the
value of their recycling revenue as a result of ongoing reduction in the value
of paper; however, the decline in recycled paper revenue was more than offset
by continued growth in regularly scheduled business when compared to the same
period in 2008.
Franchise sales - As of the end of the first quarter of 2009, the Company
had not finalized any new franchise agreements. The Company now has a number
of franchise candidates in various stages of the franchise sales and
qualifying process, and is optimistic that several new locations will be
operating by the end of the fiscal year.
General, administrative and marketing costs - After one-time expenses
relating to terminated or postponed acquisitions, the Company has achieved
reduced costs versus the fourth quarter of 2008. The Company continues to
monitor all costs with the view to further cost reductions where warranted.
CEO's comments - John Prittie, the Company's President and CEO, had the
following comments on the first quarter results of 2009, "Despite the poor
U.S. economy, the Proshred system continued to show double digit growth when
compared to the same period in 2008. More impressive is the system achieved
62% growth in the all important regularly scheduled service revenue category,
which is the recurring component of our system sales". Mr. Prittie further
noted that, "The Q1 system sales results have exceeded our expectations. This
is a testament to the strength of the PROSHRED(R) brand and the dedication and
hard work of Proshred franchisees. This fantastic result in recurring business
demonstrates that there is an increasing awareness and demand to destroy
confidential information and recycle shredded material."
On the topic of development, Mr. Prittie indicated that "the Company will
continue to recruit and award franchises in new markets and we are optimistic
that we will have a number of new locations opened in major U.S. cities by
Redishred's March 31, 2009 Financial Statements, Notes and Management's
Discussion and Analysis can be found at www.sedar.com and www.redishred.com.
Redishred Capital Corp. is the owner of the PROSHRED(R) trademarks and
intellectual property in the United States. PROSHRED(R) shreds and recycles
confidential documents and proprietary materials for tens-of-thousands of
customers in the United States in all industry sectors. PROSHRED(R) is a
pioneer in the mobile document destruction and recycling industry and is the
only company with both ISO 9001:2000 and NAID certifications. The company
utilizes state-of-the-art equipment and operates its business with trained,
certified and bonded customer service professionals. It is PROSHRED(R)'s
vision is to be recognized as the 'system of choice' for the secure
destruction and recycling of confidential documents and proprietary materials
Note: The TSX Venture Exchange has neither approved nor disapproved of
the information contained herein.
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 2008 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
(i) anticipated acquisition activity, which has been and may continue
to be impacted by the current global credit crisis, as well as by
the Company's limited cash resources with which to identify and
evaluate the acquisitions,
(ii) the Company's ability to execute its acquisition strategy which has
been negatively impacted by the Company's efforts to obtain
adequate financing which may continue and which may also be
impacted by the availability of acquisition targets on suitable
(iii) franchise development targets, which may be impacted by the
economic situation in the United States and foreign exchange
(iv) anticipated opening and operating of new franchise locations maybe
impacted by the franchisees ability to source adequate real estate,
employees and by state specific franchise legislation that may
mandate prolonged disclosure periods,
(v) anticipated growth in system sales and royalty revenue which may be
impacted by industry growth levels, the demand for recycled paper
products, changes in local and federal regulations the economic
situation in the United States, the timing of opening new locations
and foreign exchange fluctuations,
(vi) commodity paper prices which will vary with market conditions, and
(vii) the Company's expectations for reduced overhead which may be
impacted by economic conditions facing our franchisees.
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.
For further information:
For further information: Jeffrey Hasham, CA, Chief Financial Officer,
Redishred Capital Corp. (TSX.V - KUT), (416) 849-3469, Fax: (905) 812-9448,