Route1 Inc.
TSX VENTURE : ROI

Route1 Inc.

May 16, 2013 17:00 ET

Route1 Reports First Quarter 2013 Financial Results

TORONTO, ONTARIO--(Marketwired - May 16, 2013) - Route1 Inc. (TSX VENTURE:ROI), a digital security and identity management company whose customers include the U.S. Department of Defense, the Department of Homeland Security, the Department of Energy, and the Government of Canada, today announced its financial results for the three month period ended March 31, 2013.

Operating results for the three month period ended March 31, 2012 were positively affected by the proceeds of an arbitration award which was received in January 2012. As a result, in the first quarter of the prior year there was $1.7 million of revenue and $1.1 million of gross profit included in the Company's first quarter 2012 financial statements.

Q1 2013 Financial Results Summary

For the three month period ended March 31, 2013, total revenue decreased to $1.1 million from $3.0 million in the first quarter of 2012. The decrease was primarily a result of:

  • An arbitration award in the first quarter of 2012 - $1.1 million of devices and appliances revenue, and $0.6 million of services revenue.
  • As disclosed in the Company's November 26, 2012 press release, a net decrease in paid, active MobiKEY application software subscribers, which is primarily attributable to Route1's European Government client - approximately $139,000.
  • A reduction in the base monthly fee received from a prime contractor that sells Route1's MobiKEY technology to the U.S. Navy - approximately $90,000.

Services revenue for the three months ended March 31, 2013 does not include the impact of Route1's November 20, 2012 press release where Route1 announced that it had received a second purchase order from a component of the United States Department of Defense. The purchase order was for an additional 2,000 MobiKEY Fusion devices and 4,000 MobiKEY application software subscriptions covering the service period April 1, 2013 to March 31, 2014. As a result, during the term of the service period Route1 will increase services revenue by approximately $325,000 per three month period.

Gross profit decreased during the quarter to $0.9 million compared to gross profit of $2.3 million during the same period in the prior year. The decrease in gross profit is primarily attributable to the arbitration award. As a result, Route1's first quarter 2013 total comprehensive net loss was $0.1 million compared to total comprehensive net income of $1.0 million during the same period in the prior year.

Earnings before interest, tax, depreciation, and amortization (EBITDA) during the three-month period amounted to $9,000 compared to an EBITDA of $1.1 million in the first quarter of 2012.

As at March 31, 2013, Route1 had no bank debt and a cash balance of $1.8 million.

in 000s of CAD dollars Mar 31
2013
Dec 31
2012
Sept 30
2012
June 30
2012
Mar 31
2012
Revenue 1,057 2,277 1,933 1,888 2,952
EBITDA 9 645 514 634 1,125
Amortization 50 46 54 44 36
Operating profit (loss) (41 ) 599 460 590 1,089

Paid, Active Subscribers

As at March 31, 2013, Route1 had 13,989 paying, active subscribers.

In 000s of CAD dollars for Revenue from subscribers Mar 31
2013
Dec 31
2012
Sep 30
2012
Jun 30
2012
Mar 31
2012
Closing number of subscribers 13,989 15,913 14,615 14,876 15,794
Average Number of subscribers (1) 13,853 14,870 14,779 14,911 15,837
Revenue per subscriber $ 245 $ 259 $ 258 $ 253 $ 248
Revenue from subscribers $ 853 $ 964 $ 954 $ 942 $ 983
(1) Calculated by taking the average of the closing number of subscribers at the end of the month for each of the three months during the quarter.

Services revenue for the three months ended March 31, 2013 does not include the impact of Route1's November 20, 2012 press release where Route1 announced that it had received a second purchase order from a component of the United States Department of Defense. The purchase order was for an additional 2,000 MobiKEY Fusion devices and 4,000 MobiKEY application software subscriptions covering the service period April 1, 2013 to March 31, 2014. As a result, during the term of the service period Route1 will add an additional 2,000 paid, active subscribers.

"We are showing progress in growing our MobiKEY application software revenue base. Due to contract term dates and the lumpy nature of contract awards, the second quarter of 2013 will more accurately reflect the Company's run rate revenue in terms of paid, active subscribers and average revenue per paid, active subscriber," said Tony P. Busseri, CEO of Route1. "We continue to aggressively pursue business opportunities that will grow our paid user base and where possible, improve the quality of our services revenue."

Product Development Progress

On March 13, 2013, Route1 announced it had released MobiKEY 4.2. This version of the complete desktop, secure remote access technology includes updated features and security enhancements including:

  • Support for Windows 8 (Basic, Pro and Enterprise), and
  • Mac OS X functionality has been expanded to include remote printing.

On March 21, 2013, Route1 announced the release of MobiLINK, an authentication and secure access technology that enables users to securely access internal web-enabled applications and web resources from anywhere in the world. MobiLINK is NOT a VPN-based technology and does not create additional nodes on the enterprise network or open your application to the outside world. Features include:

  • Compatible with iOS based operating systems
  • Real-time out of band tool to manage certificate based entitlements
  • Centralized Policy Management for application entitlements and authorized MobiLINK versions
  • Offers users exactly the same access remotely that they have at their office
  • Multiple, distributed internal applications can be accessed from MobiLINK
  • Enterprise registration and deployment tools
  • Connection history details for auditing and reporting purposes
  • Easy to use application with no configuration required

Recent Events

On April 2, 2013, Route1 announced the immediate availability of the MobiKEY technology for the Apple iPad. MobiKEY subscribers will now be able to use MobiKEY on an Apple iPad running iOS 6 and higher. The MobiKEY technology includes the use of both Route1's universal identity management and service delivery platform and MobiKEY application software.

On April 5, 2013, Route1 announced that the Canadian Intellectual Property Office has issued Route1's first Canadian patent titled, "System and Method for Accessing Host Computer Via Remote Computer." The Canadian patent application was originally filed on February 26, 2007, claiming priority from a corresponding U.S. patent application (now U.S. Patent No. 7,814,216), filed on September 7, 2004.

Outlook

The Company recently provided a business update with its fiscal year 2012 financial results conference call. To access the presentation please go to http://www.route1.com/company/documents/Webcast-Presentation-April-11-2013.pdf.

ABOUT ROUTE1, INC.

Route1 delivers industry-leading security and identity management technologies to corporations and government agencies that require universal, secure access to digital resources and sensitive data. These customers depend on The Power of MobiNET - Route1's universal identity management and service delivery platform. MobiNET provides identity assurance and individualized access to applications, data and networks. Headquartered in Toronto, Canada, Route1 is listed on the TSX Venture Exchange.

For more information, visit our website at: www.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.

© Route1 Inc., 2013. All rights reserved. Route1, the Route1 and shield design Logo, SECURING THE DIGITAL WORLD, Mobi, MobiSecure, MobiLINK, Route1 MobiKEY, Route1 MobiVDI, MobiKEY, MobiKEY IBAD, DEFIMNET, MobiNET, Route1 MobiNET, TruOFFICE, TruFLASH, TruOFFICE VDI, MobiKEY Fusion, MobiNET Aggregation Gateway, MobiNET Switching Array, MobiNET Secure Gateway, EnterpriseLIVE, EnterpriseLIVE Virtualization Orchestrator, MobiNET Agent, MobiKEY Classic and MobiKEY Classic 2, are either registered trademarks or trademarks of Route1 Inc. in the United States and or Canada. All other trademarks and trade names are the property of their respective owners. The DEFIMNET and MobiNET platforms, the MobiKEY, MobiKEY Classic, MobiKEY Classic 2 and MobiKEY Fusion devices, and MobiLINK are protected by U.S. Patents 7,814,216 and 7,739,726, Canadian Patent 2,578,053, and other patents pending.

Other product and company names mentioned herein may be trademarks of their respective companies.

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.

Contact Information