TORONTO, May 29, 2018 (GLOBE NEWSWIRE) -- Route1 Inc. (OTCQB:ROIUF) (TSXV:ROI) (the “Company” or “Route1”), a leading technology
solutions innovator dedicated to delivering secure data protection technologies and mobility solutions for government and the
enterprise sector, earlier today announced its first quarter (Q1) financial results for the period ended March 31, 2018.
The Company’s Q1 results include results from Group Mobile Int’l, LLC (“Group Mobile”) for the nine days from
March 22 to March 31, 2018.
Statement of operations
In 000s of CAD dollars |
Q1
2018 |
|
Q4
2017 |
|
Q3
2017 |
|
Q2
2017 |
|
Q1
2017 |
Revenue |
|
|
|
|
|
Subscription revenue and services |
1,264 |
|
1,263 |
|
1,177 |
|
1,347 |
|
1,911 |
Devices and appliances |
388 |
|
109 |
|
159 |
|
24 |
|
30 |
Other |
32 |
|
48 |
|
2 |
|
- |
|
- |
Total revenue |
1,684 |
|
1,420 |
|
1,338 |
|
1,371 |
|
1,941 |
Cost of revenue |
585 |
|
331 |
|
362 |
|
298 |
|
335 |
Gross profit |
1,100 |
|
1,089 |
|
976 |
|
1,073 |
|
1,606 |
Operating expenses |
1,136 |
|
1,164 |
|
1,131 |
|
1,151 |
|
1,289 |
Operating (loss) profit 1 |
(36 |
) |
(75 |
) |
(155 |
) |
(78 |
) |
317 |
Total other expenses 2 |
(24 |
) |
170 |
|
183 |
|
157 |
|
109 |
Comprehensive net (loss) gain |
(60 |
) |
(245 |
) |
(338 |
) |
(235 |
) |
208 |
1 Before stock based compensation and patent litigation
2 Includes stock based compensation, AirWatch litigation, gain on acquisition and foreign exchange
|
Subscription revenue and services by
quarter
in 000s of CAD dollars |
Q1
2018 |
Q4
2017 |
Q3
2017 |
Q2
2017 |
Q1
2017 |
Application software |
1,260 |
1,263 |
1,177 |
1,347 |
1,759 |
Appliance licensing or yearly maintenance |
- |
- |
- |
- |
152 |
Technology as a service (TaaS) |
- |
- |
- |
- |
- |
Other services |
4 |
- |
- |
- |
- |
Total |
1,264 |
1,263 |
1,177 |
1,347 |
1,911 |
Adjusted EBITDA
reconciliation
in 000s of CAD dollars |
Q1
2018 |
|
Q4
2017 |
|
Q3
2017 |
|
Q2
2017 |
|
Q1
2017 |
Gross Profit |
1,100 |
|
1,089 |
|
976 |
|
1,073 |
|
1,606 |
Adjusted EBITDA 3 |
46 |
|
24 |
|
(46 |
) |
16 |
|
406 |
Amortization |
82 |
|
99 |
|
109 |
|
94 |
|
89 |
Operating (loss) profit |
(36 |
) |
(75 |
) |
(155 |
) |
(78 |
) |
317 |
3 Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and
amortization, stock-based compensation, patent litigation, restructuring and other costs. Adjusted EBITDA does not have any
standardized meaning prescribed under IFRS and is therefore unlikely to be comparable to similar measures presented by other
companies. Adjusted EBITDA allows Route1 to compare its operating performance over time on a consistent basis.
Route1 used cash in operating activities of approximately $0.2 million during Q1 2018 compared with cash
generated from operating activities of $0.4 million in Q1 2017. Non-cash working capital used was $0.4 million in Q1 2018
compared to $1.6 million used in the same period a year earlier. Net cash used in the day–to-day operations for the three
months ended March 31, 2018 was $0.6 million compared to $1.2 million in Q1 2017, a decrease of $0.6 million. The decrease in
net cash used was a result of an increase in deferred revenue for the three months ended March 31, 2018 and the working capital
balances acquired with the acquisition of Group Mobile.
Balance sheet extracts
In 000s of CAD dollars |
Mar 31
2018 |
Dec 31
2017 |
Sep 30
2017 |
Jun 30
2017 |
Mar 31
2017 |
Cash |
600 |
1,037 |
1,408 |
2,080 |
704 |
Total current assets |
6,292 |
2,035 |
2,856 |
2,924 |
1,890 |
Total current liabilities |
6,292 |
1,829 |
2,534 |
2,396 |
1,113 |
Net working capital |
- |
206 |
322 |
528 |
777 |
Total assets |
8,646 |
3,171 |
4,081 |
4,213 |
3,114 |
Bank debt |
- |
- |
- |
- |
- |
Total shareholders’ equity |
2,256 |
1,236 |
1,432 |
1,720 |
1,904 |
Route1’s cash position historically has been at its highest level during the second quarter of the fiscal year
as a direct result of the timing of annual MobiKEY subscription renewal payments. With the closing of the Group Mobile acquisition, this likely will change and the highest
level of cash on Route1’s balance sheet will be tied to the timing of payments related to Group Mobile sales.
The following table summarizes the estimated fair value of the consideration transferred and the preliminary
estimated fair values of the assets acquired and liabilities assumed at the acquisition date of for Group Mobile. Route1 may adjust the preliminary purchase price
allocation up to one year after the acquisition closing date.
Assets acquired (in 000s of US
Dollars) |
Liabilities assumed (in 000s of US
Dollars) |
|
Cash and cash equivalents |
$ |
246 |
|
Trade and other payables |
$ |
1,724 |
|
|
Trade and other receivables |
$ |
1,233 |
|
Employee liabilities |
$ |
80 |
|
|
Inventory |
$ |
590 |
|
Sales tax payable |
$ |
51 |
|
|
Prepaid expenses |
$ |
3 |
|
Contract liability |
$ |
85 |
|
|
Current assets |
$ |
2,072 |
|
Total liabilities |
$ |
1,940 |
|
|
Furniture and fixtures (net) |
$ |
47 |
|
Fair value of net assets acquired |
$ |
1,039 |
|
|
TaaS assets (net) |
$ |
860 |
|
|
|
|
|
Fixed assets |
$ |
907 |
|
|
|
|
|
Total assets |
$ |
2,979 |
|
|
|
|
|
|
|
|
|
|
|
|
in 000s of CAD Dollars |
|
|
|
|
|
|
Fair value of net assets acquired |
$ |
1,341 |
|
|
|
|
|
Less: Consideration paid |
$ |
1,034 |
|
|
|
|
|
Gain on acquisition |
$ |
307 |
|
|
|
|
|
Less: Acquisition costs |
$ |
200 |
|
|
|
|
|
Net purchase gain on acquisition |
$ |
107 |
|
|
|
|
|
Investor Conference Call and Webcast
Route1 will hold a conference call and web cast to discuss the Company’s financial results and provide a
business update on Tuesday, May 29, 2018 at 4 p.m. eastern. Participants should dial Toll-Free: 1-800-263-0877 or
Toll/International: 1-646-828-8143 at least 10 minutes prior to the conference, pass code 7132615. For those unable to attend
the call, a replay will be available on May 29, 2018 after 7 p.m. at Toll-Free 1-844-512-2921 or Toll/International 1-412-317-6671,
pass code 7132615 until 11:59 am on June 12, 2018.
The webcast will be presented live at http://public.viavid.com/index.php?id=129861.
About Route1
Inc.
Route1 Inc. is a leading technology solutions innovator dedicated to enabling mobility for government and focused enterprise
vertical markets by delivering secure data protection technologies and mobility solutions. The Company’s suite of patented
enterprise security solutions, which includes MobiKEY, ActionPLAN, Powered by MobiNET, MobiENCRYPT and DerivID, delivers
best-in-class authentication, data security, data analytics and secure remote access, running on a proven, trusted infrastructure,
which meets or exceeds the highest security standards for government and industry. Route1 has earned a Full Authority to
Operate from the U.S. Department of Defense, the U.S. Department of the Navy, the U.S. Department of the Interior, and other
government agencies. The Company is proud to be a trusted solutions partner in the banking, healthcare, legal, education,
public sector, manufacturing, logistics, field service and warehousing industries.
Through Route1’s wholly owned subsidiary, Group Mobile Int’l, LLC, the Company is a trendsetter in the
enterprise technology space by providing expertise in building mobility solutions and deploying complete offerings into vertical
markets through specialized hardware, software and our expanding services capabilities. Route1 is a pioneer in IIoT
(Industrial Internet of Things) through the delivery of our ActionPLAN, Powered by MobiNET technology, which not only
captures data from electrical inputs including sensor data but takes it to the next level by interpreting, analyzing, transforming
the data to deliver strategic business intelligence.
The diverse but complimentary technologies our Company provides, along with the level of experience and
expertise of our team, uniquely positions us as the pre-emptive leader in secure and complete mobile technology solutions.
Route1 remains focused and dedicated to serving the needs of our business partners; to positively influence their profitability,
contribute to their longevity and share in their success. With offices and staff in Washington, D.C., Boca Raton, FL, Phoenix
AZ, Chattanooga TN and Toronto, Canada, Route1 provides leading-edge solutions to public and private sector clients around the
world. Route1 is listed on the OTCQB in the United States under the symbol ROIUF and in Canada on the TSX Venture Exchange
under the symbol ROI. For more information, visit: www.route1.com.
For More Information Contact:
Tony Busseri
CEO, Route1 Inc.
+1 416 814-2635
tony.busseri@route1.com
This news release, required by applicable Canadian laws, does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or
sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities
laws or an exemption from such registration is available.
Neither the 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.
© 2018 Route1 Inc. All rights reserved. No part of this document may be reproduced, transmitted or otherwise
used in whole or in part or by any means without prior written consent of Route1 Inc. See https://www.route1.com/terms-of-use/ for notice of
Route1’s intellectual property.