Redishred Capital Corp. ("Redishred") Announces Q1-2018 Results

Mississauga, Ontario--(Newsfile Corp. - May 29, 2018) - Redishred Capital Corp. (TSXV: KUT)

Quarterly Earnings Call:

4:30pm EST, May 30, 2018, Participant call in number is 1-800-319-4610.

First Quarter Highlights:

Consolidated Highlights:

• Total system sales (the revenues produced by all franchise, license and corporate locations) were $9 million USD, increasing 7% in Q1 of 2018, compared to Q1 of 2017 (of the $9 million USD, $4.4 million USD or 49% was recurring revenue).

• The Company generated $3 million CDN in revenue during Q1 of 2018, growing 14% over Q1 of 2017.

• Q1-2018 EBITDA was $779,000 CDN, declining 3% over Q1-2017 as a result of a non cash stock compensation expense of $141,000 CDN booked in full in the 1^st quarter.

Corporate Locations Highlights:

• Revenues from corporate locations in Q1 of 2018 were $2.5 million CDN, growing 19% over Q1 of 2017.

• Corporate locations EBITDA in Q1-2018 reached a record high of just over $1 million CDN, growing 20% over Q1-2017.

• Subsequent to the 1^st quarter, the Company acquired the assets of the Shred Con business in upstate New York which includes two on-site shredding vehicles, other equipment and customer relationships.

Capital Management:

• At March 31, 2018, the Company's working capital improved by just under $400,000 CDN over December 31, 2017 to $1.8 million CDN.

• The Company has continued to improve its debt ratios into Q1 of 2018 and has the resources required to conduct accretive acquisitions.

Management's Comments on the 1^st Quarter of 2018

Jeffrey Hasham, the Company's CEO, had the following comments, "The Proshred system continues to post strong revenues in the important category of scheduled recurring revenue, increasing the mix of total revenue by 2% from Q1-2017. The Company has continued to focus its sales, marketing and technology resources on enhancing our recurring scheduled client base. Additionally, we continue to focus and promote the on-site shredding method, which continues to resonate with our target market of small and medium size enterprises. The focus on scheduled and recurring revenues coupled with an emphasis on finding route efficiency has led us to double digit growth on the corporate locations sales and EBITDA line."

Financial Highlights:

1. EBITDA is determined as revenue less operating costs. Consolidated EBITDA includes a stock compensation expense of $134,000.
2. Operating income is determined as revenue less operating costs less depreciation related to tangible assets. Consolidated Operating income includes a stock option compensation expense of $134,000.
3. The Company issued 17,962,929 common shares on January 23, 2017 through an equity raise for a total of $4.03 million. The Company made a discretionary $3 million repayment on its line of credit in February, improving the Company's Balance Sheet.
4. Certain amounts have been reclassified to conform to the current period's presentation.

Stronger System Sales driving Revenue

System sales increased due to the Company's continued focus on providing recurring scheduled service to small and medium sized enterprise clients. In addition, the Company continued to invest in sales and marketing initiatives designed to capture scheduled revenue as well as one-time unscheduled revenue.

Franchise Operations

The Company's roots are founded in Franchising and at March 31, 2018, the Company supported 22 Franchisees across the United States. The Franchise system continued to perform well in Q1-2018 with the following high level sales results (Note: same location system sales represent 100% of total system sales):

Corporate Operations

The Company operates seven shredding locations in Syracuse, Albany, Milwaukee, New York City, Charlotte, Miami and Northern Virginia. These locations represent the Company's corporately owned locations.

During the three months ended March 31, 2018, the total corporate location revenues grew by 19% over the prior comparative period. The Company also increased EBITDA and operating income by 20% and 17%, respectively, over the 1^st quarter of 2017. Both EBITDA and operating income reached a record high in Q1-2018.

Q1 corporate operation results

Corporate Locations Trend:

Community and Social Commitment

Our locations under the PROSHRED^® banner conduct many community shredding events. 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 2, 2018, PROSHRED^® will hold its' 5^th annual Shred Cancer event at most of its locations, raising money for the American Institute for Cancer Research ("AICR"). It is our goal as a Company and Franchise System to support the AICR in their endeavor to conduct research to prevent and possibly cure this disease. So far, PROSHRED^® has raised in excess of $125,000 for this cause. Please visit www.proshred.com/aicr for more information on this effort.

Financial Statements

Redishred's March 31, 2018 Financial Statements, Notes and Management's Discussion and Analysis will be available at www.sedar.com and www.redishred.com.

About Redishred

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 9001:2015 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 seven 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
[email protected]
www.redishred.com
Phone: (416) 849-3469 Fax: (905) 812-9448

or,

Redishred Capital Corp. (TSXV: KUT)
Kasia Pawluk, CPA, CA
Chief Financial Officer
[email protected]
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 2017 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.