MISSISSAUGA, ON, Nov. 19 /CNW/ -
- Our new Orange County, CA franchise commenced operations in August
2009; as a result Redishred earned $121,000 CDN in franchise fee
revenue during the third quarter.
- System sales in our PROSHRED(R) franchise system for the third quarter
of 2009 were $2.5 million USD setting a new record for system sales
achieved in any one quarter.
- Scheduled (recurring) system sales for the first three quarters of 2009
grew by 32% over the same period last year.
- Same store sales in our PROSHRED(R) franchise system for the first
three quarters of 2009 were $6.8 million USD, an increase of 7% from
the same period in 2008(1).
- Redishred's royalty and fee revenue for the third quarter of 2009 was
$209,000 CDN. Royalty and fee revenues are generated by franchises of
the PROSHRED(R) franchise system and are originally denominated in
For the three months ended, September 30, 2009 September 30, 2008
Operating income (loss)
amortization and interest) $ (117,629) $ 59,923
Net income (loss) $ (315,990) $ (217,742)
Income (loss) per share $ (0.01) $ (0.01)
Weighted average number of
common shares 22,884,616 22,884,614
For the nine months ended, September 30, 2009 September 30, 2008
Operating income (loss)
amortization and interest) $ (931,892) $ (213,348)
Net income (loss) $ (1,465,356) $ (598,367)
Income (loss) per share $ (0.06) $ (0.03)
Weighted average number of
common shares 22,884,616 19,263,757
(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 grow 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), including the new
Health Information Technology for Economic and Clinical Health Act
- increasing awareness for recycling paper products
- corporate initiatives to outsource "non-core" business services
Additionally, prices for recycled paper have started to show upward momentum resulting in slightly stronger recycling 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 Third Quarter and First Three Quarters
System Sales - During the third quarter of 2009, Redishred's management team continued to focus on working with its franchisees to (1) emphasize growing service related system sales and (2) continuing to work on enhancing operational efficiencies, particularly in the area of truck routing and streamlining workflow. As a result service sales continued to show solid growth, scheduled system sales (recurring) grew by 32% and un-scheduled system sales grew by 19% compared to the first three quarters of 2008.
Our continued goal is to reduce our reliance on recycling sales as the price for recycled paper is set by the global market for paper products. As a result of our focus on service sales, our service sales mix has increased to 88% for the first three quarters of 2009 versus 75% for the same period in 2008.
Franchise Development - Redishred continues to actively recruit franchisees across the United States under the PROSHRED(R) banner. The most recent franchise was recruited during the second quarter of 2009 (Orange County, California) and commenced operations in the middle of the third quarter. Redishred continues to develop a solid pipeline of qualified franchisee candidates, and anticipates that a number of additional franchise locations will be awarded over the next 12 months. These 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 third 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 in the production of all paper products. Redishred also continues to develop programs aimed at consumers and at home based businesses, such as our Residential Information Security Container (RISC (R)) Program.
Robert Crozier, the Company's CEO, had the following comments on the third quarter results for 2009, "We are very pleased that our new franchisee in Orange County, CA, has commenced operations, increasing our location count to 17. We have now begun to educate new clients on the West coast on the absolute necessity to shred their confidential documents on-site. In addition, our new clients can be proud of the positive impacts that our recycled paper program has on the environment".
Mr. Crozier also noted that "The Proshred system continued to show double digit service system sales growth when compared to the same period in 2008. It is fantastic that recurring scheduled sales was up by 32% during the first nine month of 2009 versus 2008, especially in these challenging economic times. This clearly demonstrates the demand for a regularly scheduled, secure on-site shredding solution."
Additionally Mr. Crozier stated that "we are looking forward to growing the Proshred location footprint across the United States by way of franchising and potentially by the opening of select corporate locations."
Redishred's September 30, 2009 Financial Statements, Notes and Management's Discussion and Analysis will be available 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 limited to:
(i) franchise and corporate development targets, including selling
new franchises, acquisitions and opening corporate locations
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) corporate development plans may be further impacted by the
company's ability to raise sufficient financing to acquire and
grow these locations
(iii) anticipated growth in system sales and royalty revenue which
may be impacted by industry growth levels, the demand and price
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
(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.
SOURCE REDISHRED CAPITAL CORP.
For further information: For further information: Jeffrey Hasham, MBA, CA, Chief Financial Officer, Redishred Capital Corp. (TSX.V - KUT), (416) 849-3469, Fax: (905) 812-9448, Jeffrey.email@example.com; www.redishred.com