MISSISSAUGA, ON, Aug. 18 /CNW/ -
- One new franchise awarded (Orange County, CA) with operations planned
to commence September 1, 2009.
- Scheduled (recurring) system sales for the first half of 2009
(January 1, 2009 to June 30, 2009) grew by 43% over the same period
- Same store sales in our PROSHRED(R) franchise system for the first half
of 2009 were $4.4 M USD, an increase of 11% from the same period in
- System sales in our PROSHRED(R) franchise system for the second quarter
of 2009 (April 1, 2009 to June 30, 2009) was $2.3M USD(1).
- Redishred Capital Corp.'s ("Redishred") royalty and fee revenue for the
second quarter of 2009 was $200,175 CDN. Royalty and fee revenues are
generated by franchises of the PROSHRED(R) franchise system and are
originally denominated in US dollars.
June 30, June 30,
For the three months ended, 2009 2008
Operating income (loss) (Before
depreciation, amortization and interest) $ (522,471) $ (198,702)
Net income (loss) $ (751,641) $ (372,857)
Income (loss) per share $ (0.03) $ (0.02)
Weighted average number of common shares 22,884,616 22,884,614
June 30, June 30,
For the six months ended, 2009 2008
Operating income (loss) (Before
depreciation, amortization and interest) $ (814,262) $ (273,271)
Net income (loss) $ (1,149,367) $ (380,625)
Income (loss) per share $ (0.05) $ (0.02)
Weighted average number of common shares 22,884,616 17,433,431
(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.
Management's Comments on the Industry
The North American shredding industry continues to remain strong despite
the current weak economic situation in the United States. Market growth and
demand is being driven by:
- continued tighter regulatory requirements and the related increasing
enforcement of regulations (via fines and penalties)
- increasing awareness for recycling paper products
- corporate initiatives to outsource "non-core" business services
Given these strong fundamentals, the company is optimistic about its
short, intermediate and long term development plans.
Management's Comments on the Second Quarter and First Half of 2009
System Sales - During the second quarter of 2009, the Company's
management team continued to support its franchise system by (1) focusing on
the growth of system sales in existing franchise locations, and (2) providing
operational support in the areas of cost management and truck operations. As a
result, scheduled system sales (recurring sales) grew by 43%, and un-scheduled
system sales grew by 22% over the first half of 2008. Recycling system sales
declined by 54% over the first half of 2008, as recycling system sales are
driven by market prices for paper which continue to be at their lowest level
in more than 2 years.
Franchise Development - Redishred has been actively recruiting
franchisees across the United States under the PROSHRED(R) banner. During the
second quarter of 2009, Redishred awarded a new franchise location in Orange
County, California. The location should be fully operational during the third
quarter of 2009. Redishred has developed a strong pipeline of qualified
franchisee candidates, and anticipates that several additional franchise
locations will be awarded 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. footprint.
Community Commitment - Redishred under the PROSHRED(R) banner conducted
nine Community Shredding events in the second quarter of 2009. 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 is the production of all paper products. The Company
also continues to develop programs aimed at consumers and at home based
businesses, such as our Residential Information Security Container (RISC(R))
Program. This type of residential program in conjunction with our community
shredding programs will help reduce the probability of identity theft for
consumers and home based businesses.
John Prittie, the Company's President and CEO, had the following comments
on the second quarter results of 2009, "We are very pleased to have awarded a
new franchise in Orange County, CA, increasing our location count to 17. We
are looking forward to educating and servicing new clients in California and
expanding our footprint on the West Coast. The current economic environment is
favorable for franchising activities, and we look forward to recruiting many
new franchisees for other major US markets by the end of 2009."
Mr. Prittie also noted that "The Proshred system continued to show double
digit system sales growth when compared to the same period in 2008. More
impressive is the fantastic growth of recurring scheduled sales which is up
43% for the first half of 2009 versus the first half of 2008. This clearly
demonstrates the demand for a regularly scheduled, secure onsite solution."
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 the 'system of choice' and provide shredding and recycling
services on a global basis.
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) franchise development targets and plans over the near and long
term, may be impacted by the economic situation in the United
States and the development plans may also impact the incremental
royalty and fee revenue associated with the new locations,
(ii) the anticipated opening of the Orange County, CA may be impacted by
delays in obtaining suitable real estate or delays in recruiting
suitable sales and operations employees,
(iii) 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 acceptance
of new services and the economic situation in the United States and
foreign exchange fluctuations,
(iv) the strong growth fundamentals in the document destruction industry
may be impacted by the economic situation in the United States or
by changes in federal and state legislation.
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,