Mr. Jeffrey Hasham reports

REDISHRED CAPITAL CORP. ("REDISHRED", OR THE "COMPANY") ANNOUNCES STRONG Q2 2023 RESULTS

Redishred Capital Corp. has released its second quarter 2023 results.

Quarterly earnings call -- 8:30 a.m. EST, Aug. 25, 2023

The participant call in number is 1-800-319-4610.

Quarterly highlights

Consolidated highlights:

• The company generated revenue of $16.8-million, growing $2.2-million or 15 per cent versus Q2 2022.
• Shredding sales for Q2 2023 were $12.5-million, growing 28 per cent versus Q2 2022.
• Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for Q2 2023 was $4.5-million, decreasing 1 per cent versus Q2 2022.
• Consolidated EBITDA, excluding the impact of net recycling revenue, was $2.2-million for Q2 2023, growing 28 per cent versus Q2 2022.

Corporate locations highlights:

• Corporate location revenue for Q2 2023 grew 15 per cent versus Q2 2022 to $16.2-million (constant currency growth of 10 per cent -- U.S. dollars is the constant currency).
• Corporate location EBITDA grew 8 per cent versus Q2 2022 to $6.2-million (constant currency growth of 3 per cent).
• Same-corporate-location EBITDA was $5.4-million, decreasing 5 per cent versus Q2 2022 (constant currency decrease of 10 per cent), driven by lower net recycling revenue due to lower commodity paper prices.

Capital management:

• The company generated $2.7-million in cash from operations during Q2 2023.
• As at June 30, 2023, the company has $5.4-million in cash, $1-million available on its operating line of credit and $4.8-million available on its non-revolving readvanceable term loan.

Management's comments on Q2 2023

Jeffrey Hasham, the company's chief executive officer, noted: "We are pleased with our results in the second quarter of 2023. We continue to see strong demand for our services, including our core recurring shredding service offering, which has helped drive our organic revenue growth. From a paper market perspective, paper prices have started to decline, impacting our recycling revenue. We had anticipated this and, as a result, are well positioned to deal with any softness in the paper market. Looking at our Proscan business, we have started seeing an uptick in revenue when compared to the beginning of 2023 and our pipeline of scanning projects remains strong.

"We have continued to focus on route efficiencies and this was very evident by the strong EBITDA less net recycling revenue growth of 28 per cent. We are seeing some signs of easing from a cost front, particularly in driver wage inflation and fuel pricing. From a pricing perspective, beginning in May, 2023, we started implementing price increases across our corporate locations, with all price increases now fully implemented. We also expect to realize further synergies from recently completed acquisitions related to route densification and optimization that should help enhance future margins.

"For the quarter, I am pleased to report that Q2 2023 corporate-location EBITDA was $6.2-million, an increase of 8 per cent from Q2 2022. This, coupled with our franchise business, has driven consolidated EBITDA to $4.5-million for Q2 2023. These results reflect the hard work and commitment of our employees, franchisees, management and board members, and I would like to personally thank each of them for their efforts and contributions."

Revenue growth in Q2 2023

The company achieved 15-per-cent total revenue growth and 8-per-cent total revenue growth in constant currency during Q2 2023 versus Q2 2022, primarily due to acquisitions conducted during the last 12 months, organic sales growth from new customers and price increases.

Corporate locations

Total corporate location revenue and EBITDA grew by 15 per cent and 8 per cent, respectively, in Q2 2023 versus Q2 2022, due to the acquisitions completed over the past 12 months, organic growth from same locations and price increases.

Same-corporate-location revenue grew 2 per cent and EBITDA decreased 5 per cent in Q2 2023 versus Q2 2022, driven by lower recycling revenue due to lower commodity paper prices.

Community and social commitment

The company's locations under the Proshred banner conduct numerous community shredding events. These events provide an opportunity for the company's 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 per cent of the shredded material is recycled, as the company's 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 on the company's website. The company's annual national Shred Cancer event was held in June, 2023, at various Proshred locations. These events are held to raise research funds for the American Institute for Cancer Research (AICR). It is the company's goal as a company and franchise system to support AICR in its endeavour to prevent cancer and possibly cure this disease. So far, Proshred has raised over $212,000 (U.S.) for this cause.

Non-IFRS (international financial reporting standards) measures

There are measures included in this news release that do not have a standardized meaning under IFRS and therefore may not be comparable with similarly titled measures presented by other publicly traded companies. The company includes these measures as a means of measuring financial performance of the company.

Financial statements

Redishred's June 30, 2023, financial statements and management's discussion and analysis will be available on SEDAR and on the company's website.

About Redishred Capital Corp.

Redishred is the owner of the Proshred, Proscan and secure e-Cycle brands, trademarks and intellectual property in the United States. Redishred digitizes, secures, shreds and recycles confidential documents and proprietary materials for thousands of customers in the United States in all industry sectors. Redishred is a pioneer in the mobile document destruction and recycling industry, and has the ISO 9001:2015 certification. It is Redishred's vision to be the system of choice in providing digital retention, secure shredding and recycling services on a global basis. Redishred grants Proshred and Proscan franchise businesses in the United States, and by way of a licence arrangement in the Middle East. Redishred also operates 15 corporate businesses directly. The company's plan is to grow its business by way of both franchising, and the acquisition and operation of, information security businesses that generate stable and recurring cash flow through a scheduled client base, continuous paper recycling and concurrent unscheduled shredding service.

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