Route1 Inc.
TSX VENTURE : ROI

Route1 Inc.

May 20, 2010 08:00 ET

Route1 Reports First Quarter Financial Results

TORONTO, ONTARIO--(Marketwire - May 20, 2010) - Route1 Inc. (Route1 or the Company) (TSX VENTURE:ROI) a security and identity management company, today announced its financial results for the three-month period ended March 31, 2010.

For the first quarter of 2010, revenue increased by 129 percent to $1.0 million versus $438,519 for the corresponding period in 2009. Gross margin for the first quarter of 2010 amounted to $897,841 or 89 percent of revenue, versus $330,188 or 75 percent of revenue during the same period in 2009. The net loss for the period continued to decrease and amounted to $280,627 or nil per share, compared to a net loss of $944,058 or nil per share during the first quarter of 2009.

EBITDA, a non-GAAP financial measure, for the first quarter of 2010 was a negative $137,455 versus a negative $911,839 for the first quarter of 2009. 

In thousands of Canadian dollars Mar 31 2010   Dec 31 2009   Sept 30 2009   June 30 2009   Mar 31 2009  
                     
Revenue 1,005   1,695   1,493   1,583   439  
Gross Profit 898   1,407   1,011   680   319  
EBITDA (137 ) (513 ) (339 ) (536 ) (911 )
Loss before undernoted (232 ) (574 ) (444 ) (634 ) (1,005 )
Net Loss (280 ) (752 ) (1,093 ) (619 ) (944 )

As at March 31, 2010, Route1 had cash and cash equivalents amounting to $1.3 million.

"The Route1 team has embraced our singular focus to deliver a best-in-class, secure remote access solution for information assurance to our core enterprise clients. I am impressed with our organization's diligence and enthusiasm for delivering our solution and meeting customer needs. As a result of the team's efforts, I expect Route1 to continue to demonstrate an improved and growing bottom line throughout the remainder of 2010," said Tony Busseri, President and CEO of Route1. "In a very short period of time, we have strengthened Route1's position with key customers and partners, and addressed Route1's capital requirements. We have an extremely active, but focused, business development program ahead of us, which we anticipate will result in significant shareholder value creation."

The Company estimates its cash flow breakeven point to be achievable with approximately 22,500 active TruOFFICE subscribers in the third quarter of 2010. This estimate is based on current operating expense levels, pricing model, revenue mix, and current foreign currency exchange rates. As at May 19, 2010, Route1 had a growing base of approximately 17,100 TruOFFICE subscribers. Following the breakeven threshold, the Company estimates that for every incremental 25,000 new users, Route1 can generate $0.01 per share in net earnings.

As of March 31, 2010, Route1 had 388,388,115 common shares outstanding.

First Quarter 2010 Conference Call

Route1 will hold a conference call at 10:00 a.m. eastern time (ET) today to discuss the financial results for the first quarter, and the Company's business and growth plan. Scheduled speakers for the call include Tony Busseri, President and CEO, and Ali Mahdavi, Capital Markets Advisor for Route1.

Participants should dial 416-340-8527 or 1-877-440-9795 at least 10 minutes prior to the conference time. For those unable to attend the call, a replay will be available after 6:00 p.m. at 416-695-5800 or 1-800-408-3053, passcode 1760530, until midnight on June 3, 2010.

ABOUT ROUTE1 INC.

Route1 delivers award-winning security and identity management solutions to customers world-wide. These solutions provide universal, secure access to all digital resources and sensitive data. At the heart of Route1's solutions is MobiNET, a communications and service delivery platform focused on identity management and entitlement-based access to resources. Route1's patent-pending solutions are based on FIPS-140-2 cryptographic modules, and simplify the process of meeting increasingly stringent regulatory requirements around privacy and security. Headquartered in Toronto, Route1 is listed on the TSX Venture Exchange (symbol: ROI). For more information, visit www.route1.com.

This news release, required by applicable Canadian laws, and 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.

Certain statements in this press release may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "targets", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities legislation. These statements are based on Route1's current expectations, estimates, forecasts and projections about the operating environment, legal environment, economies and markets in which Route1 operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different from those contemplated in forward-looking statements. Unless otherwise required by applicable securities laws, Route1 disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

©2010 All rights reserved. Route1, the Route1 Logo, Mobi, Route1 MobiKEY, Route1 TruOFFICE, Route1 PurLINK, Route1 EnterpriseLIVE, and Route1 MobiNET 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.

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.

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