Mississauga, Ontario--(Newsfile Corp. - May 28, 2015) - Redishred Capital Corp. (TSXV: KUT) ("Redishred") announces Q1-2015 results.
First Quarter Highlights:
Total system sales(1) in the PROSHRED® system were $5.7 million USD in the first quarter of 2015, growing 25% over the comparative period in 2014.
Scheduled (recurring) system sales for the first quarter reached a record of $2.76 million USD, growing 19% over the first quarter of 2014;
Unscheduled system sales for the first quarter reached a record of $1.9 million USD, growing 28% over the first quarter in 2014 and;
Recycling system sales for the first quarter were $1 million USD, growing 37% over the first quarter of 2014.
The PROSHRED® system shred and recycled 8,400 tons of paper during the first quarter of 2015, an increase of 24% over the first quarter of 2014.
Redishred's six directly operated corporate locations in Syracuse, Albany, Milwaukee, New York City, Charlotte and Miami produced $1.37 million CDN in revenues during the three months ended March 31, 2015, generating $575,000 CDN in earnings before interest, taxes, depreciation and amortization ("EBITDA"), an increase of 11% over the comparative period in 2014.
Franchise and license revenue for the first quarter of 2015 was $400,000 CDN, growing 22% over the first quarter of 2014. This category of revenue is generated by franchisees and licensees of the PROSHRED® system, originally denominated in US dollars.
(1) System sales are revenues generated from franchisees, licensees and corporate owned locations. Redishred Capital Corp. derives its royalty and service fee revenues based on a percentage of system sales from franchisees and licensees. Redishred Capital Corp. derives revenues from corporate location system sales.
Financial Highlights:
| Percentage | ||||||||
For the 3 months ended, | 2015 | 2014 | change | ||||||
| $ | $ | % | ||||||
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Corporate location financial results: | |||||||||
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Corporate location revenue | 1,374,062 | 1,157,734 | 19% | ||||||
Corporate location operating costs | (798,527 | ) | (640,594 | ) | 25% | ||||
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Corporate location EBITDA | 575,535 | 517,140 | 11% | ||||||
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Depreciation - tangible assets | (120,778 | ) | (94,746 | ) | 27% | ||||
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Operating income from corporate locations | 454,757 | 422,394 | 8% | ||||||
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Franchise and license sales: | |||||||||
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Franchise and license fees | 26,896 | 69,788 | (61)% | ||||||
Royalties and service fees | 371,992 | 258,058 | 44% | ||||||
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Franchise related revenue | 398,888 | 327,846 | 22% | ||||||
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Operating income | 448,366 | 340,074 | 32% | ||||||
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Net income | 605,838 | 140,653 | 331% | ||||||
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Income per share | 0.02 | 0.00 | 331% | ||||||
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System sales (USD) | 5,749,246 | 4,591,163 | 25% | ||||||
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System Sales
Redishred's management team continued to focus its efforts through its franchisees and its corporate locations on (1) building recurring service revenues, (2) maximizing route density and logistical efficiencies and (3) implementing dedicated hard drive destruction trucks/equipment throughout the system. The strong service system sales results are driven by Redishred's sales and marketing programs that are aimed at educating clients on their requirements to destroy confidential information using a secure on-site solution. Additionally, an increasing 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. Proshred also offers hard drive destruction services in almost all of its locations, and has been deploying high speed on-site hard drive destruction trucks. Currently eight franchised locations have deployed high-speed on-site hard drive destruction trucks.
These factors led to 23% growth in service sales in the first quarter of 2015 over the same quarter in 2014.
Recycling system sales increased by 37% for the three months ended March 31, 2015 in comparison to the same period in 2014 and the PROSHRED® system shred and recycled 8,400 tons of paper, which equates to 126,000 trees saved.
Corporate Operations
During the three months ended March 31, 2015, Redishred directly operated six shredding locations in Syracuse, NY, Albany, NY, Milwaukee, WI, New York City, NY, Charlotte, NC and Miami, FL.
The Company operates six shredding locations in Syracuse, Albany, Milwaukee, New York City, Charlotte and Miami. These locations represent the Company's corporately owned locations. During the quarter ended March 31, 2015, the corporate location revenues grew by 19% over the same comparative prior year period. The Company has also increased EBITDA by 11% over the three months ended March 31, 2014.
Corporate Locations Results:
| 3 months ended March 31 | ||||||||||||
| % of | % of | |||||||||||
| 2015 | revenue | 2014 | revenue | |||||||||
| $ | $ | ||||||||||
Revenue: | ||||||||||||
Shredding service | 1,136,674 | 83% | 952,301 | 82% | ||||||||
Recycling | 237,388 | 17% | 205,433 | 18% | ||||||||
Total revenue | 1,374,062 | 100% | 1,157,734 | 100% | ||||||||
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Operating costs | 798,527 | 58% | 640,594 | 55% | ||||||||
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EBITDA | 575,535 | 42% | 517,140 | 45% | ||||||||
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Corporate Locations Trend:
| 2015 | 2014 | 2013 | ||||||||||||||||||||||
| Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | |||||||||||||||||
Corporate location revenue ($) | 1,374,062 | 1,257,312 | 1,247,349 | 1,263,114 | 1,157,734 | 973,436 | 937,033 | 789,584 | ||||||||||||||||
Quarter over quarter % change | 9% | 1% | (1)% | 9% | 19% | 4% | 19% | 16% | ||||||||||||||||
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Corporate location EBITDA ($) | 575,535 | 533,728 | 527,868 | 567,231 | 517,141 | 352,585 | 360,514 | 292,808 | ||||||||||||||||
Quarter over quarter % change | 8% | 1% | (7)% | 10% | 47% | (2)% | 23% | 57% | ||||||||||||||||
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Management's Comments on the First Quarter of 2015
Jeffrey Hasham, the Company's CEO, had the following comments, "The first quarter's results continue to reflect the positive trends from 2014. In particular, our clients continue to look to Proshred to provide an on-site solution for destroying paper, hard drives and other materials, which provide our clients with the comfort that their documents and materials leave their premises in a shred format, strongly reducing the risk of an information breach. The on-site solution, coupled with our ISO Certification continues to resonate with our clients." Mr. Hasham also noted that, "The performance of the system continues to be a result of our system's willingness to invest in human resources and modern equipment so we can continue to provide a best in class service. The Company's plan is to continue to invest in new trucks and sales resources to further drive results. I would like to thank our franchisees, employees and vendor partners for their hard work and our shareholders for their continued support of our Company."
Community and Social Commitment
Our locations under the PROSHRED® banner conducted 8 community shredding events in the first quarter of 2015. 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. PROSHRED® is also proud that 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.
On June 6, 2015, PROSHRED® will be holding its' 2nd annual Shred for Cancer event at most of its locations, raising money for the American Institute for Cancer Research ("AICR"). It is our goal as a Company to support the AICR in their endeavor to conduct research to prevent and possibly cure this disease. Please visit www.proshred.com/aicr for more information on this effort.
Financial Statements
Redishred's March 31, 2015 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. Redishred Capital Corp. grants PROSHRED® franchise businesses in the United States and by way of license arrangement in the Middle East. Redishred Capital Corp. also operates five corporate shredding businesses directly. The Company's plan is to grow its business by way of both franchising and the acquisition and operation of document destruction businesses that generate stable and recurring cash flow through a scheduled client base, continuous paper recycling and concurrent unscheduled shredding service.
FOR FURTHER INFORMATION PLEASE CONTACT:
Redishred Capital Corp. (TSXV: KUT)
Jeffrey Hasham, MBA, CPA, CA
Chief Executive Officer
Jeffrey.hasham@redishred.com
www.redishred.com
Phone: (416) 849-3469 Fax: (905) 812-9448
or,
Redishred Capital Corp. (TSXV: KUT)
Kasia Pawluk, CPA, CA
Chief Financial Officer
kasia.pawluk@redishred.com
www.redishred.com
Phone: (416) 204-0076 Fax: (905) 812-9448
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 2014 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. 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.
