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Redishred Capital Corp. (“Redishred”) Announces Q1-2016 Results First Quarter Highlights

MISSISSAUGA, ON / ACCESSWIRE / May 26, 2016 / Redishred Capital Corp. (TSXV: KUT), based in Mississauga, Ontario, Canada announces its first quarter 2016 financial results.

Management’s Comments on the First Quarter of 2016

Jeffrey Hasham, the Company’s CEO, had the following comments, “The first quarter of 2016 reflects the positive impact of the acquisition concluded in Florida to start the year, the sales growth in our corporate locations as well as the continued sales and EBITDA growth by our franchisees. Our clients continue to request our on-site destruction methodology, which provides them with the peace of mind that their information is destroyed before we leave their premises,”

Mr. Hasham also noted that, “During the first quarter management implemented a truck refurbishment program on its older trucks to continue to ensure the highest uptime and client service in Q2 and beyond.”

(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 March,   2016     2015     change  
    $     $     %  
                   
Corporate location financial results:                  
Corporate location revenue   1,892,024     1,374,062     38 %
Corporate location operating costs   (1,195,510 )   (798,527 )   (50 )%
Corporate location EBITDA   696,514     575,535     21 %
Depreciation – tangible assets   (144,157 )   (120,778 )   (19 )%
Operating income from corporate locations   552,357     454,757     21 %
                   
Franchise and license sales:                  
Franchise and license fees   2,636     26,896     (90 )%
Royalties and service fees   453,492     371,992     22 %
Franchise related revenue   456,128     398,888     14 %
                   
Operating income   472,447     448,366     5 %
                   
Net income (loss)   (72,582 )   605,838     (112 )%
                   
Income per share   (0.00 )   0.02        
                   
System sales (USD)   6,865,531     5,749,246     19 %
                   

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 twelve franchised locations have deployed high-speed on-site hard drive destruction trucks.

These factors led to 25% growth in service sales in the first quarter of 2016 over the same quarter in 2015.

Recycling system sales decreased by 7% for the three months ended March 31, 2016 in comparison to the same period in 2015 due to the decline in paper pricing which reflects the overall softness in global commodity pricing. The PROSHRED® system shred and recycled 9,830 tons of paper, which equates to 147,500 trees saved.

Corporate Operations

During the three months ended March 31, 2016, Redishred directly operated six shredding locations in Syracuse, NY, Albany, NY, Milwaukee, WI, New York City, NY, Charlotte, NC and Miami, FL.

These locations represent the Company’s corporately owned locations. During the quarter ended March 31, 2016, the corporate location revenues grew by 38% over the same comparative prior year period. The Company has also increased EBITDA by 21% over the three months ended March 31, 2015.

Corporate Locations Results:

    3 months ended March 31  
          % of           % of  
    2016     revenue     2015     revenue  
    $           $        
Revenue:                        
 Shredding service   1,642,515     87%     1,136,674     83%  
 Recycling   249,509     13%     237,388     17%  
Total revenue   1,892,024     100%     1,374,062     100%  
                         
Operating costs   1,195,510     63%     798,527     58%  
                         
EBITDA   696,514     37%     575,535     42%  
                         

Corporate Locations Trend:

    2016     2015     2014  
    Q1     Q4     Q3     Q2     Q1     Q4     Q3     Q2  
Corporate location revenue ($)   1,892,024     1,549,379     1,554,557     1,443,384     1,374,062     1,257,312     1,247,349     1,263,114  
Quarter over quarter % change   22%     (1)%     7%     5%     9%     1%     (1)%     9%  
                                                 
Corporate location EBITDA ($)   696,514     626,711     646,108     678,855     575,535     533,728     527,868     567,231  
Quarter over quarter % change   11%     (3)%     (5)%     18%     8%     1%     (7)%     10%  
                                                 

Community and Social Commitment

Our locations under the PROSHRED® banner conducted 18 community shredding events in the first quarter of 2016. 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 4, 2016, PROSHRED® will be holding its’ 3rd 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, 2016 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)
Jack Pulkinen, CPA, CA
Chief Financial Officer
jack.pulkinen@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.

SOURCE: Redishred Capital Corp.

ReleaseID: 440451

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