Route1 Inc. (TSX VENTURE:ROI), a leading provider of mobile workspace
technologies that unlocks the productivity gains of mobile access without
exposing the organization to the risks of data spillage or malware propagation
and whose customers include the U.S. Department of Defense, the Department of
Homeland Security, the Department of Energy and the Government of Canada, today
the Company announced its financial results for the fourth quarter and year
ended December 31, 2013.
"I'm pleased we were able to continue to grow our fourth quarter, compared to
our third quarter, EBITDA on improved revenue and gross margin," said Tony
Busseri, Route1's chief executive officer. "An even more positive development
was the progress we made with supporting ID-1 smart card users (CAC, PIV and
FRAC) who want to use an iPad, iPad mini, iPhone or iPod touch to securely
access enterprise data remotely. Our expanded MobiKEY offering has created
deeper and expanded interest within the U.S. Department of Defense to address
their mobile workspace requirements."
Business Highlights
Notable developments and achievements during the fourth quarter of 2013 included
the following:
-- Brought to market the MobiKEY Fusion A2T device, a patented identity
validation device that integrates with ID-1 smart cards or government
issued identity cards such as CAC, PIV and FRAC. The multi-factor
authentication technology combines physical possession of the MobiKEY
Fusion A2T device and an identity card, with computer and network
access, allowing for remote use of an iPad, iPad mini, iPhone or iPod
touch running iOS 6 or higher.
-- As announced on September 23, 2013, a component of the U.S. Department
of Homeland Security ordered 7,000 MobiKEY Fusion devices through the
U.S. Department of Homeland Security FirstSource II contract vehicle.
During the fourth quarter of 2013, Route1 shipped a further 2,000
devices with sales value of approximately $0.2 million. The remaining
4,000 devices were shipped during the first quarter of 2014.
Financial Highlights
Quarter Comparative
For the quarter ended December 31, 2013, total revenue decreased to $1.5 million
from $2.3 million ($1.7 million before the arbitration award) in 2012. Gross
profit also decreased during the fourth quarter of 2013 to $1.2 million or 78%
of revenue compared to gross profit of $1.8 million ($1.2 million before the
arbitration award) or 80% of revenue during the fourth quarter of 2012. The
decrease in revenue and gross profit is attributable to the 2012 arbitration
award. Route1's fourth quarter 2013 total comprehensive net loss was $0.1
million compared to net income of $0.5 million (net loss of $0.1 million before
the arbitration award) in the fourth quarter of 2012.
Fiscal Year Comparative
For the year ended December 31, 2013, total revenue decreased to $5.4 million
from $9.1 million in 2012. Gross profit also decreased during the year to $4.3
million or 79% of revenue, compared to gross profit of $7.5 million or 83% of
revenue during the previous year. The reduction in revenue and gross profit is
attributable to the 2012 arbitration award. Route1's 2013 total comprehensive
net loss was $0.3 million from net income of $2.2 million in 2012.
The Company's operating results in fiscal year 2013 with 2012 comparatives are
as follows:
FY 2012
FY 2012 without
In 000s of CAD dollars FY 2013 with Award Award
-------------------------------------
Revenue 5,433 9,050 5,614
Cost of revenue 1,137 1,562 1,031
-------------------------------------
Gross profit 4,296 7,488 4,583
Operating expenses 4,485 4,751 4,751
-------------------------------------
Operating profit (loss) for the year (189) 2,737 (168)
Total other expenses (154) (579) (579)
-------------------------------------
Income (loss) from operations (343) 2,158 (747)
-------------------------------------
Earnings before interest, tax, depreciation, and amortization (Adjusted EBITDA)
during the year amounted to $72,000 compared to $2.9 million ($43,000 without
award) in 2012.
Dec 31 Sept 30 June 30 Mar 31 Dec 31
in 000s of CAD dollars 2013 2013 2013 2013 2012
--------------------------------------------
Revenue 1,525 1,485 1,366 1,057 2,277
Adjusted EBITDA 48 22 (7) 9 645
Amortization 70 69 72 50 47
Operating profit (loss) before
stock based compensation (22) (47) (79) (41) 598
--------------------------------------------
During the 2013 year Route1 generated cash flow from operations of $0.4 million.
As at December 31, 2013, the Company had no bank debt and a cash balance of
$699,944.
Dec 31 Dec 31 Dec 31
in 000s of CAD dollars 2013 2012 2011
------------------------------
Cash 700 755 87
Total current assets 1,588 1,928 5,723
Total current liabilities 1,715 1,739 7,430
Net working capital (127) 189 (1,707)
Total assets 2,387 2,503 5,999
Bank debt 0 0 0
Total liabilities 1,854 1,886 7,539
------------------------------
Paid, Active Subscribers
As at December 31, 2013, Route1 had 14,602 paying, active subscribers.
in 000s of Canadian dollars for Dec 31 Sept 30 June 30 Mar 31 Dec 31
Revenue from subscribers 2013 2013 2013 2013 2012
---------------------------------------------
Closing number 14,602 14,642 14,784 13,989 15,913
Average number 14,600 14,697 15,159 13,853 14,870
Revenue per subscriber $ 301 $ 310 $ 306 $ 245 $ 259
Revenue $ 1,100 $ 1,139 $ 1,158 $ 853 $ 964
---------------------------------------------
During the fourth quarter of 2013 Route1's average revenue per subscriber was
$301, an increase of $42 per subscriber or 16.2%, from the same period in 2012.
Investor Conference Call and Webcast
The Company will also hold a conference call and web cast to discuss the
financial results on Thursday, April 10, 2014 at 4:15 pm eastern.
Participants should dial 1-888-287-5563 or 1-719-325-2354 at least 10 minutes
prior to the conference time of 4:15 pm eastern. For those unable to attend the
call, a replay will be available after 7:15 p.m. at 1-877-870-5176 or
1-858-384-5517, pass code 9010761 until midnight on April 24, 2014. The webcast
will be presented live at http://public.viavid.com/index.php?id=108570.
ABOUT ROUTE1, INC.
Route1 enables the mobile workspace without compromising on security. Its
flagship technology MobiKEY uniquely combines secure mobile access, with high
assurance identity validation and plug-and-play usability. Remote and mobile
workers are able to securely and cost affectively access their workspace from
any device without exposing the organization to the risk of data spillage or
malware propagation. MobiKEY customers include Fortune 500 enterprises as well
as the U.S. Department of Defense, the Department of Homeland Security, the
Department of Energy and the Government of Canada. 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, 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.
(C) Route1 Inc., 2014. All rights reserved. Route1, the Route1 and shield design
Logo, SECURING THE DIGITAL WORLD, Mobi, MobiSecure, MobiLINK, Route1 MobiKEY,
Route1 MobiVDI, MobiKEY, MobiKEY IBAD, DEFIMNET, MobiNET, Route1 MobiNET,
TruOFFICE, TruFLASH, TruOFFICE VDI, MobiKEY Fusion, MobiNET Aggregation Gateway,
MobiNET Switching Array, MobiNET Secure Gateway, EnterpriseLIVE, EnterpriseLIVE
Virtualization Orchestrator, MobiNET Agent, MobiKEY Classic and MobiKEY Classic
2, 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, the MobiKEY,
MobiKEY Classic, MobiKEY Classic 2 and MobiKEY Fusion devices, and MobiLINK are
protected by U.S. Patents 7,814,216 and 7,739,726, Canadian Patent 2,578,053,
and other patents pending.
Other product and company names mentioned herein may be trademarks of their
respective companies.
FOR FURTHER INFORMATION PLEASE CONTACT:
Route1 Inc.
Tony Busseri
CEO
+1 416 814-2635
tony.busseri@route1.com
www.route1.com
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