Route1 Announces Q3 2019 Financial Results

TORONTO, ON / ACCESSWIRE / November 26, 2019 / Route1 Inc. (OTCQB:ROIUF)(TSXV:ROI) (the “Company” or “Route1”), an advanced North American provider of data-centric business empowerment solutions today announced its third quarter (Q3) financial results for the period ended September 30, 2019.

Q3 2019 Financial Results

Statement of operations
In 000s of CAD dollars
    Q32019       Q22019       Q12019       Q42018       Q32018       Q22018  
Revenue
                                               
Subscription and services
    2,136       1,610       1,576       1,628       1,684       1,633  
Devices and appliances
    6,576       1,819       1,883       2,440       13,207       3,936  
Other
    2       1       3       6       4       7  
Total revenue
    8,714       3,430       3,462       4,074       14,895       5,577  
Cost of revenue
    5,953       1,672       1,700       2,216       12,311       3,620  
Gross profit
    2,761       1,758       1,762       1,858       2,584       1,957  
Operating expenses
    2,335       1,824       1,693       1,714       2,150       1,891  
Operating profit (loss) 1
    426       (66 )     69       144       434       65  
Total other expenses 2, 3
    425       488       581       499       246       52  
Net income gain (loss)
    1       (554 )     (513 )     (355 )     188       13  

1 Before stock-based compensation

2 Includes stock-based compensation, AirWatch litigation, gain on acquisition and foreign exchange

3 The reimbursements received from Bench Walk pursuant to its investment have, based on advice of its auditors, been accounted for as a long-term non-monetary liability within the consolidated financial statements, not as a reduction to patent litigation expense. All such amounts are non-recourse to the Company. In connection with the terms of the agreement, the Company does not have a present obligation to pay any amounts until such time as the litigation has been settled or an event of default has occurred. In the event of an award or settlement of the litigation, the Company will be obligated to pay Bench Walk the greater of 10% of such award or settlement and $2,000,000 or $3,000,000 if the litigation proceeds to trial.

Subscription and services revenue
in 000s of CAD dollars
    Q32019       Q22019       Q12019       Q42018       Q32018       Q22018  
Application software
    1,182       1,196       1,186       1,169       1,193       1,180  
Technology as a service (TaaS)
    322       311       307       329       289       266  
Other services
    632       103       83       130       203       186  
Total
    2,136       1,610       1,576       1,628       1,684       1,633  

 

Adjusted EBITDA
in 000s of CAD dollars
    Q32019       Q22019       Q12019       Q42018       Q32018       Q22018  
Gross Profit
    2,761       1,758       1,762       1,858       2,584       1,957  
Adjusted EBITDA 4
    744       200       322       331       627       272  
Amortization
    318       266       253       187       193       207  
Operating profit (loss)
    426       (66 )     69       144       434       65  

4 Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, stock-based compensation, patent litigation, restructuring and other costs. Adjusted EBITDA does not have any standardized meaning prescribed under IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. Adjusted EBITDA allows Route1 to compare its operating performance over time on a consistent basis.

Route1 generated net cash flow from operating activities of approximately $0.43 million during Q3 2019 compared with $0.43 million in Q3 2018. Non-cash working capital used was $0.41 million in Q3 2019 compared to $0.97 million in cash generated during the same period a year earlier. Net cash generated by the day-to-day operations for the three months ended September 30, 2019 was nil compared to $1.40 million in Q3 2018.

Balance sheet extracts
In 000s of CAD dollars
 
Sep 30
2019
   
Jun 30
2019
   
Mar 31
2019
   
Dec 31
2018
   
Sep 30
2018
   
Jun 30
2018
 
Cash
    320       702       367       1,073       2,289       1,084  
Total current assets
    6,109       6,219       5,106       3,664       5,881       4,872  
Total current liabilities
    8,749       8,626       6,033       4,034       5,917       5,227  
Net working capital
    (2,643 )     (2,407 )     (927 )     (370 )     (36 )     (355 )
Total assets
    11,780       12,268       8,803       6,673       8,733       7,892  
Bank debt and seller notes
    2,294       1,862                          
Total shareholders’ equity 3
    473       854       860       1,465       1,928       1,888  

Normal Course Issuer Bid (NCIB)

For the three months ended September 30, 2019, the Company purchased 1,179,900 shares for cancellation under the NCIB at an average price of approximately $0.395 per share. For the nine months ended September 30, 2019, the Company purchased 1,257,100 shares for cancellation under the NCIB at an average price of approximately $0.403 per share.

PCS Mobile Acquisition

On June 28, 2019, Route1 acquired Portable Computer Systems, Inc. (“PCS Mobile”). The Company completed the purchase of PCS Mobile for total consideration of US $2.5 million. PCS Mobile is a computer reseller with expertise in mobile data applications, including wireless products for in-vehicle use. The company offers guidance and state-of-the-art mobile devices for a wide range of applications including utilities, telecommunications, field services, insurance, healthcare, Fire/EMT, police and public safety – as well as state and local government.

Based in Denver, Colorado, PCS Mobile services customers primarily located in the Southwestern and Rocky Mountain regions of the U.S. Rugged devices and applications include but are not limited to Panasonic Toughbook mobile computers, Xplore and Getac rugged tablets, Genetec license plate recognition solutions, and accessories from Gamber-Johnson and Havis.

Q3 Financial Results Conference Call and Webcast

Route1 will hold a conference call and web cast to discuss the Company’s financial results and provide a business update on Tuesday, November 26, 2019 at 9 a.m. eastern. Participants should dial Toll-Free: 1-844-369-8770 or 1-862-298-0840 at least 10 minutes prior to the conference. For those unable to attend the call, a replay will be available 1-877-481-4010 or 1-919-882-2331, pass code 56854 until 9:00 am on Tuesday, December 10, 2019.

The webcast will be presented live at www.investornetwork.com/event/presentation/56854.

Annual General and Special Meeting Notification

Route1 will hold its annual general and special meeting (“AGM”) at the offices of Fasken Martineau DuMoulin LLP, 333 Bay Street, Suite 2400, Toronto, Ontario on December 2, 2019 at 9 a.m. (Toronto time) for the following purposes:

  1. to receive the comparative audited consolidated financial statements of the Corporation for the financial year ended December 31, 2018, together with the report of the auditors thereon;
  2. to elect directors of the Corporation for the ensuing year;
  3. to appoint Grant Thornton LLP, as Auditor for the ensuing year and to authorize the directors to fix their remuneration;
  4. to re-approve the stock option plan of the Corporation; and
  5. to transact such other business as may properly come before the Meeting or any adjournment thereof.

There will not be a management presentation at the end of the AGM.

About Route1 Inc.

Route1 Inc., also operating under the tradenames GroupMobile and PCS Mobile is an advanced North American technology company that empowers their clients with data-centric solutions necessary to drive greater profitability, improve operational efficiency and gain sustainable competitive advantages, while always emphasizing a strong cybersecurity and information assurance posture. Route1 delivers exceptional client outcomes through real-time secure delivery of actionable intelligence to decision makers, whether it be in a manufacturing plant, in-theater or in a university parking lot. Route1 is listed on the OTCQB in the United States under the symbol ROIUF and in Canada on the TSX Venture Exchange under the symbol ROI. For more information, visit: www.route1.com.

For More Information, Contact:

Tony Busseri
Chief Executive Officer
+1 416 509 1496

tony.busseri@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.

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.

© 2019 Route1 Inc. All rights reserved. No part of this document may be reproduced, transmitted or otherwise used in whole or in part or by any means without prior written consent of Route1 Inc. See https://www.route1.com/terms-of-use/ for notice of Route1’s intellectual property.

This news release may contain statements that are not current or historical factual statements that may constitute forward-looking statements. These statements are based on certain factors and assumptions, including, price and liquidity of the common shares, expected financial performance, business prospects, technological developments, and development activities and like matters. While Route1 considers these factors and assumptions to be reasonable, based on information currently available, they may prove to be incorrect. These statements involve risks and uncertainties, including but not limited to the risk factors described in reporting documents filed by the Company. Actual results could differ materially from those projected as a result of these and other risks and should not be relied upon as a prediction of future events. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, except as required by law. Estimates used in this presentation are from Company sources. Past performance is not guarantee of future performance and readers should not rely on historical results as an indication of future results.

SOURCE: Route1 Inc.

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