Route1 Inc.
TSX VENTURE : ROI

Route1 Inc.

November 24, 2011 12:00 ET

Route1 Reports Third Quarter Financial Results

TORONTO, ONTARIO--(Marketwire - Nov. 24, 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 period ended September 30, 2011.

For the three-month period ended September 30, 2011, revenues amounted to $1,399,163 versus $1,380,747 during the corresponding period in 2010. During the same period, services revenue increased by 23 percent from $995,082 to $1,226,101. Gross profit for the third quarter of 2011 amounted to $1,133,026 or 81 percent of revenues, versus $1,031,280 or 75 percent of revenues during the same period in 2010. The increase in gross profit is attributable to increase in services revenue which generates superior gross margin.

EBITDA for the third quarter amounted to a loss of $36,000.

Net loss for the period amounted to $626,435 or nil per share, compared to a net loss of $1,158,778 or nil per share during the third quarter of 2010. Excluding the impact of a one-time $260,953 severance charge, net loss amounted to $265,482.

As at November 21, 2011, Route1's cash balance amounted to $355,903 with no bank indebtedness.

Quarter Ended
In 000s of CAD dollars
Sept 30
2011
Jun 30
2011
Mar 31
2011
Dec 31
2010
Sept 30 2010
Revenue 1,399 1,238 1,417 1,777 1,381
Gross Margin 1,133 953 1,207 1,699 1,031
EBITDA (36 ) 70 205 440 (284 )
Operating Income (Loss) (71 ) 30 154 405 307
Net Income (Loss) (627 ) (264 ) 61 10 (1,159 )

As at November 17, 2011, Route1 had 15,796 paid, active TruOFFICE application software subscribers, plus an additional 1,335 U.S. Navy subscribers who have not yet been provisioned. The total U.S. Navy subscriber base is 1,735.

TruOFFICE Subscribers
(in 000s of CAD dollars for Revenue)
Sept 30
2011
Jun 30
2011
Mar 31
2011
Dec 31
2010
Sept 30
2010
Closing Number 15,796 15,722 15,642 15,654 15,648
Average Number(1) 15,776 15,694 15,672 15,635 14,585(2)
Revenue per Subscriber $246 $245 $251 $253 $248
Revenue $969 $960 $982 $958 $904
(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) For the three months ended September 30, 2010, the ending subscriber number includes the 1,533 subscriptions sold to US DHS, CBP on September 16, 2010. Revenue recognition for the new subscriber service, as per Company policy, commenced in the month of October 2010.

Route1 also announced today that Amar S. Doman has resigned from the Company's Board of Directors.

"On behalf of the Board of Directors and the management team, I would like to thank Amar for his support and stewardship during the past year," noted Tony Busseri, CEO of Route1 Inc. "Over the course of fiscal 2012, we are hopeful to further strengthen the Board with individuals familiar and active in our core markets."

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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