Route1 Inc.
TSX VENTURE : ROI

Route1 Inc.

March 23, 2011 10:59 ET

Route1 Reports Profitable Fourth Quarter and Improved Full Year 2010 Financial Results

- Record Fourth Quarter Revenues

- Route1 Reports Positive EBITDA and Net Income in the Fourth Quarter

TORONTO, ONTARIO--(Marketwire - March 23, 2011) - Route1 Inc. (TSX VENTURE:ROI) ("Route1" or the "Company"), a security and identity management company, today announced its financial results for the three month and twelve month periods ended December 31, 2010.

For the three-month period ended December 31, 2010, total revenues increased to $1.77 million versus $1.69 million during the corresponding period in 2009. Services revenue increased by 86 percent to a record $1.75 million, while Devices and Appliances revenue decreased to $21,679 from $750,720 in the fourth quarter of 2009. Gross margin for the fourth quarter of 2010 increased to a record $1.69 million, or 96 percent as a percentage of revenues, versus $1.39 million, or 82 percent during the same period in 2009. For the first time in Route1's operating history, the Company reported positive EBITDA and Net Income of $0.44 million and $90,183, respectively.

For the twelve-month period ended December 31, 2010, revenues increased marginally to $5.36 million compared to $5.20 million for the same period in 2009. Services revenue increased by 78 percent to a record $4.70 million, while Device and Appliance revenues decreased to $665,790 versus $2.57 million in 2009. Gross margin for the 2010 year increased to a record $4.69 million, or 87 percent as a percentage of revenues, versus $3.41 million, or 66 percent during 2009. Net loss for the year ended December 31, 2010 was reduced by 48 percent to $1.75 million or $(0.00) per share, compared to a net loss of $3.40 million or $(0.01) per share for the same period in 2009.

Quarter Ended Dec 31 Sept 30 June 30 Mar 31 Dec 31
In 000s of CAD dollars 2010 2010 2010 2010 2009
Revenue 1,777 1,381 1,207 1,005 1,695
Gross Margin 1,699 1,031 1,069 898 1,390
EBITDA 440 (284) (209) (127) (617)
Operating Income (Loss) 406 (307) (228) (157) (651)
Net Income (Loss) 90 (1,058) (510) (280) (752)

As at December 31, 2010 Route1 had a cash position of $484,457, with nil drawn on its credit facility.

"I am pleased to report that we did what we said we were going to do. Our record fourth quarter results are an early indication of the scalability and earnings power of Route1," said Tony Busseri, President and CEO of Route1.

As at December 31, 2010, Route1 had 15,654 paid, active TruOFFICE application software subscribers.

TruOFFICESubscribers Dec 31 Sept 30 June 30 Mar 31 Dec 31
(in 000s of CAD dollars for Revenue) 2010 2010 2010 2010 2009
Closing Number 15,654 15,648 13,451 16,719 16,363
Average Number (1) 15,635 14,585 15,651(2) 16,669 16,182
Revenue per Subscriber $253 $248 $233 $209 $196
Revenue $958 $904 $912 $869 $794
  1. Calculated by taking the average of the closing TruOFFICE subscriber number at the end of the month for each of the three months during the quarter.
  2. During the second quarter of fiscal year 2010, current management evaluated the various pricing models which were used by the previous management team to arrive at a subscriber total. Current management, after reviewing the sustainable and upward trend seen on a revenue per subscriber basis, elected to terminate any heavily discounted and/or free subscriptions as of June 30, 2010. All of these discounted and/or free service arrangements were with channel partners and had been put in place by past management.

Fourth Quarter and Full Year 2010 Conference Call

Route1 will hold a conference call today at 4:00 p.m. Eastern Standard Time (EST) to discuss the financial results for the fourth quarter and full year 2010.

Participants should dial 416-340-8527 or 1-877-440-9795 at least 10 minutes prior to the conference time of 4:00 p.m. EST. For those unable to attend the call, a replay will be available after 6:00 p.m. at 905-694-9451 or 1-800-408-3053 pass code 6031666 until midnight, April 6, 2011.

ABOUT ROUTE1 INC.

Route1 delivers industry-leading security and identity management solutions to enterprises worldwide – businesses, government and military which need universal, secure access to all digital resources and sensitive data. These customers depend on The Power of MobiNET® - Route1's communications and service delivery platform. MobiNET® provides identity assurance and individualized access to networks and data. Route1's patented solutions are based on FIPS 140-2 cryptographic modules, and simplify the process of meeting increasingly stringent regulatory requirements for privacy and security. 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, 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.

© Route1 Inc., 2011. All rights reserved. Route1, the Route1 and shield design Logo, SECURING THE DIGITAL WORLD, Mobi, MobiSecure, Route1 MobiKEY, Route1 MobiVDI, MobiKEY, MobiKEY IBAD, DEFIMNET, MobiNET, Route1 MobiNET, TruOFFICE, TruFLASH, TruOFFICE VDI, MobiKEY Fusion, EnterpriseLIVE, EnterpriseLIVE VO, MobiNET Agent and MobiKEY Classic, 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 and the MobiKEY, MobiKEY Classic and MobiKEY Fusion devices are protected by U.S. Patents 7,814,216 and 7,739,726, and other patents pending.

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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