TORONTO, CANADA / ACCESSWIRE / April 23, 2020 / Route1 Inc. (OTCQB:ROIUF)(TSXV:ROI) (the "Company" or "Route1"), an advanced North American provider of data-centric business empowerment solutions, today reported its financial results for the three- and twelve-month periods ended December 31, 2019.
Q4 2019 Financial Results
| Statement of operationsIn 000s of CAD dollars | Q42019 | Q32019 | Q22019 | Q12019 | Q42018 | Q32018 | ||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Subscription and services | 2,511 | 2,136 | 1,610 | 1,576 | 1,628 | 1,684 | ||||||||||||||||||
| Devices and appliances | 5,891 | 6,576 | 1,819 | 1,883 | 2,440 | 13,207 | ||||||||||||||||||
| Other | 1 | 2 | 1 | 3 | 6 | 4 | ||||||||||||||||||
| Total revenue | 8,403 | 8,714 | 3,430 | 3,462 | 4,074 | 14,895 | ||||||||||||||||||
| Cost of revenue | 5,653 | 5,953 | 1,672 | 1,700 | 2,216 | 12,311 | ||||||||||||||||||
| Gross profit | 2,750 | 2,761 | 1,758 | 1,762 | 1,858 | 2,584 | ||||||||||||||||||
| Operating expenses | 2,360 | 2,336 | 1,824 | 1,694 | 1,714 | 2,150 | ||||||||||||||||||
| Operating profit (loss) 1 | 390 | 425 | (66 | ) | 68 | 144 | 434 | |||||||||||||||||
| Total other expenses 2, 3 | (120 | ) | 424 | 487 | 580 | 499 | 246 | |||||||||||||||||
| Net income - (loss) | 510 | 1 | (553 | ) | (512 | ) | (355 | ) | 188 |
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 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 revenuein 000s of CAD dollars | Q42019 | Q32019 | Q22019 | Q12019 | Q42018 | Q32018 | ||||||||||||||||||
| Application software | 1,202 | 1,182 | 1,196 | 1,186 | 1,169 | 1,193 | ||||||||||||||||||
| Technology as a service (TaaS) | 353 | 322 | 311 | 307 | 329 | 289 | ||||||||||||||||||
| Other services | 956 | 632 | 103 | 83 | 130 | 203 | ||||||||||||||||||
| Total | 2,511 | 2,136 | 1,610 | 1,576 | 1,628 | 1,684 |
| Adjusted EBITDAin 000s of CAD dollars | Q42019 | Q32019 | Q22019 | Q12019 | Q42018 | Q32018 | ||||||||||||||||||
| Gross Profit | 2,750 | 2,761 | 1,758 | 1,762 | 1,858 | 2,584 | ||||||||||||||||||
| Adjusted EBITDA 4 | 676 | 743 | 200 | 322 | 331 | 627 | ||||||||||||||||||
| Amortization | 286 | 318 | 266 | 254 | 187 | 193 | ||||||||||||||||||
| Operating profit (loss) | 390 | 425 | (66 | ) | 68 | 144 | 434 |
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.
| Balance sheet extractsIn 000s of CAD dollars | Dec 312019 | Sep 302019 | Jun 302019 | Mar 312019 | Dec 312018 | Sep 302018 | ||||||||||||||||||
| Cash | 126 | 320 | 702 | 367 | 1,073 | 2,289 | ||||||||||||||||||
| Total current assets | 6,206 | 6,106 | 6,219 | 5,106 | 3,664 | 5,881 | ||||||||||||||||||
| Total current liabilities | 9,035 | 8,749 | 8,626 | 6,033 | 4,034 | 5,917 | ||||||||||||||||||
| Net working capital | (2,829 | ) | (2,640 | ) | (2,407 | ) | (927 | ) | (370 | ) | (36 | ) | ||||||||||||
| Total assets | 12,630 | 11,780 | 12,268 | 8,803 | 6,673 | 8,733 | ||||||||||||||||||
| Bank debt and seller notes | 2,415 | 2,294 | 1,862 | - | - | - | ||||||||||||||||||
| Total shareholders' equity 3 | 980 | 473 | 854 | 860 | 1,465 | 1,928 | ||||||||||||||||||
Route1 generated net cash flow from operating activities of approximately $0.33 million during FY 2019 compared with $0.42 million in FY 2018. Non-cash working capital generated was $0.28 million in FY 2019 compared to $0.39 million in cash generated during the same period a year earlier. Net cash generated by the day-to-day operations for the twelve months ended December 31, 2019 was $0.05 million compared to $0.03 million in FY 2018.
Route1's net cash balance (including all bank debt) as of April 22, 2020 was approximately $250,000 in contrast to a net debt balance of $1.23 as at December 31, 2019.
Fiscal Year 2019
The Company's operating results in fiscal year 2019 with comparatives are as follows:
| In 000s of CAD dollars | FY2019 | FY2018 | FY2017 | FY2016 | FY2015 | |||||||||||||||
| Revenue | ||||||||||||||||||||
| Device | 16,169 | 19,972 | 321 | 363 | 156 | |||||||||||||||
| Services | 7,834 | 6,209 | 5,698 | 7,080 | 6,218 | |||||||||||||||
| Other | 7 | 49 | 51 | 4 | 23 | |||||||||||||||
| Total Revenue | 24,010 | 26,231 | 6,070 | 7,447 | 6,397 | |||||||||||||||
| Cost of revenue | 14,978 | 18,732 | 1,325 | 1,475 | 1,164 | |||||||||||||||
| Gross profit | 9,032 | 7,499 | 4,745 | 5,972 | 5,233 | |||||||||||||||
| Operating expenses | 8,214 | 6,892 | 4,736 | 5,230 | 4,515 | |||||||||||||||
| Operating profit 5 | 818 | 607 | 9 | 742 | 718 | |||||||||||||||
| Patent litigation | 1,289 | 841 | 270 | 56 | 0 | |||||||||||||||
| Total other expenses | 735 | 200 | 349 | 356 | (10 | ) | ||||||||||||||
| Net income (loss) | (554 | ) | (434 | ) | (610 | ) | 330 | 728 | ||||||||||||
5 Before stock-based compensation and patent litigation
Use of the MobiKEY Technology During the COVID-19 Outbreak
There has been a significant increase in the demand for the Route1 MobiKEY technology - which includes the MobiKEY software and MobiKEY enabling devices, particularly the MobiKEY Fusion3 device. Sale and quote activity for both Department of Defense ("DoD") and certain civilian agencies of the U.S. government as well as corporate America and Canada has dramatically increased as the working implications of COVID-19, particularly the requirement to work from home, have been mandated by most levels of government and business.
Over the last seven weeks Route1 has added a net 2,675 MobiKEY subscribers and sold 4,975 MobiKEY Fusion3 and MobiKEY Classic 3 devices.
| MobiKEY Subscriptions | Enabling Devices: MobiKEY Fusion3 or MC3 | |||||||
| As at March 6, 2020 | 12,224 | |||||||
| From March 7 to April 22, 2020 | 3,834 | 4,978 | ||||||
| As at April 22, 2020 | 16,058 | |||||||
In mid-March 2020, Route1 placed an order for 6,000 MobiKEY Fusion3 devices. The Company currently has a purchase order backlog of 5,064 MobiKEY Fusion3 devices, with the majority of the backlog for clients with an enterprise license agreement; therefore, there is not a 1:1 relationship between device sales and new subscriptions.
The Company has also delivered many additional quotes. Some of these quotes were for a small number of users and/or enabling devices, while others were for user counts and/or enabling devices in the thousands.
The ability to execute on the larger quotes for United States government clients that includes MobiKEY Fusion3 devices is based on our clients accepting a 12 to 16-week shipping timetable for the devices. The current COVID-19 outbreak has and likely will continue to extend the shipping timetable for MobiKEY Fusion3 devices beyond the traditional 8 to 12-week period. In the interim, Route1 is offering certain of its clients innovative ways of bridging the time gap between their current requirements and the delivery of the Fusion3 devices.
The financial impact of the growth in MobiKEY subscribers can be best represented by the MobiKEY subscription revenue table provided below.
| in 000s of CAD dollars | May2020 | April2020 | March2020 | February2020 | ||||||||||||
| MobiKEY subscription revenue | 593 | 551 | 427 | 405 | ||||||||||||
The May and April 2020 values are based on sales already processed and assume for presentation purposes no additional MobiKEY subscriber growth during those months. The large jump in subscription revenue between March 2020 and May 2020 is attributable to the timing of the sale of MobiKEY subscriptions, which occurred late in the month of March 2020 and throughout the month of April 2020. The annualized revenue and gross profit change between May 2020 and March 2020 is approximately $188,000 per month.
Stock Option Grant
The Company today granted independent board directors, officers and employees stock options in the aggregate amount of 1,325,000 with an exercise price equal to the closing share price on Thursday, April 23, 2020. The stock options will expire on April 22, 2025 and will vest thirty percent on the first anniversary, thirty percent on the second anniversary and the remainder on the third anniversary. Under the Company's stock option plan, 10% of the issued capital is reserved for issuance for a total of 3,423,011 options. As of today's date, including the above grant, a total of 3,422,500 options are currently outstanding under the stock option plan.
Q4 and FY 2019 Financial Results Conference Call and Webcast
Participants should dial Toll-Free: 1-877-407-0782 or Toll/International: 1-201-689-8567 at least 10 minutes prior to the conference. For those unable to attend the call, a replay will be available on Wednesday, April 22, 2020 after 12:00 p.m. eastern at Toll-Free 1-877-481-4010 or Toll/International 1-919-882-2331, pass code #33603 until 4:30 pm on Tuesday, May 5, 2020.
The webcast will be presented live at https://www.webcaster4.com/Webcast/Page/2167/33603.
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.
© 2020 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.
View source version on accesswire.com:
https://www.accesswire.com/586440/Route1-Announces-Q4-and-Full-Year-2019-Financial-Results
