Route1 Inc.

Route1 Inc.

November 26, 2009 08:00 ET

Route1 Reports Third Quarter 2009 Financial Results

- TruOFFICE subscriptions total more than 15,400 at the quarter's end

- Gross margin increases to more than $1 million for the third quarter

TORONTO, ONTARIO--(Marketwire - Nov. 26, 2009) - Route1 Inc. ("Route1" or "the Company") (TSX VENTURE:ROI), the trusted provider of security and identity management network solutions, today announced its third quarter financial results for the three month and nine-month periods ended September 30, 2009.

For the three-month period ended September 30, 2009, revenues increased by 225 percent to $1.5 million versus $458,075 during the corresponding period in 2008. Gross margin for the third quarter of 2009 increased to $1.0 million versus $172,073 during the same period in 2008. Net loss for the third quarter amounted to $1.1 million or $(0.00) per share, compared to a net loss of $1.3 million or $(0.00) per share. During the third quarter of 2009, the Company incurred a one-time charge of $514,694 in connection with the shareholder proxy battle. Excluding the impact of this one-time charge, the net loss for the quarter would have amounted to $578,223 or $(0.00) per share.

For the nine-month period ended September 30, 2009, revenues increased by 320 percent to $3.5 million compared to $837,309 for the same period in 2008. Gross margin for the nine-month period increased to $2.0 million versus $199,777 during the third quarter of 2008. Net loss for the nine months ended September 30, 2009 was $2.7 million or $(0.01) per share, compared to a net loss of $4.6 million or $(0.01) per share for the same period in 2008. Excluding the impact of the on-time charge in connection with the proxy battle, the net loss for the quarter would have amounted to $2.1 million or $(0.01) per share.

As at September 30, 2009, Route1 had cash and cash equivalents amounting to $304,067 and $2.5 million in accounts receivable. On October 19, 2009, the Company announced the closing of a $2.5 million senior bank debt financing to satisfy the Company's working capital requirements. With the current cash balance, receivables and adequate working capital available to the Company, management is confident in Route1's ability to service its customer orders and generate free cash flow to strengthen the balance sheet in the near term.

As of September 30, 2009, Route1 had 350,388,115 common shares outstanding.

"The third quarter results are indicative of our ability to penetrate large enterprise customers; in time we can significantly ramp up volume sales of our proven technology. I am pleased with our efforts and the financial results are certainly moving Route1 in the right direction to set us up for a strong year in 2010," said Andrew White, President and CEO, Route1 Inc. "With the recent changes at Route1, the third quarter of 2009 will be viewed as the turning point to a bright and prosperous future for Route1 and its stakeholders."

The Company estimates its breakeven point will be achieved at approximately 30,000 TruOFFICE subscribers based on its current operating expense level, pricing model, revenue mix, and current foreign currency exchange rates. As at September 30, 2009, Route1 had a growing base of approximately 15,400 TruOFFICE subscribers, excluding approximately 25,300 TruOFFICE subscriptions to be sold under the current terms of an agreement with a reseller who is servicing the U.S. Federal Government.

Third Quarter 2009 Conference Call and Webcast

The Company will hold a conference call and live webcast today at 11:00 a.m. Eastern Standard Time (EST) to discuss the financial results for the current quarter, and the Company's business and growth plan. Scheduled speakers for the call include K. Andrew White, President and Chief Executive Officer, Tony Busseri, Independent Director, and Ali Mahdavi, Investor Relations and Capital Markets Advisor of Route1 Inc.

Participants should dial 416-340-8527 or 1-877-440-9795 at least 10 minutes prior to the conference time of 11:00 a.m. EST. 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 7103752 until midnight, December 10, 2009.

Webcast link:


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

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.

(C)2009 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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