Route1 Reports 2014 First Quarter Financial Results
TORONTO, ONTARIO--(Marketwired - May 29, 2014) - Route1 Inc.
(TSX-VENTURE:ROI), a leading provider of secure access technologies
for the mobile workspace that protects businesses and government
agencies 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 announced its financial
results for the first quarter ended March 31, 2014.
For Q1 2014, total revenue increased to $1.8 million from $1.1
million in 2013. Gross profit also increased during the first
quarter of 2014 to $1.4 million or 80% of revenue compared to gross
profit of $0.9 million or 82% of revenue in Q1 2013.
Total Revenue in 000s of CAD dollars |
Mar 31 2014 |
Mar 31 2013 |
Devices |
461 |
30 |
Services |
1,281 |
1,027 |
Other |
14 |
0 |
Total
Revenue |
1,756 |
1,057 |
The increase in revenue and gross profit year over year is
attributable to the previously announced sale of 7,000 MobiKEY
Fusion devices to a component of the U.S. Department of Homeland
Security, 4,000 of which were delivered in the quarter and the
purchase of the MobiKEY application software service by a second
component of the United States Department of Defense.
Route1's Q1 2014 total comprehensive net income was $0.4 million
compared to a net loss of $0.1 million during the same period of
2013.
Earnings before interest, tax, depreciation, and amortization
(Adjusted EBITDA) during the first quarter of 2014 amounted to
$564,000 compared to $9,000 in Q1 2013.
Adjusted EBITDA in 000s of CAD dollars |
Mar 31 2014 |
Dec 31 2013 |
|
Sept 30 2013 |
|
June 30 2013 |
|
Mar 31 2013 |
|
Revenue |
1,756 |
1,525 |
|
1,485 |
|
1,366 |
|
1,057 |
|
Adjusted EBITDA |
564 |
48 |
|
22 |
|
(7 |
) |
9 |
|
Amortization |
95 |
70 |
|
69 |
|
72 |
|
50 |
|
Operating profit (loss) before stock based compensation |
469 |
(22 |
) |
(47 |
) |
(79 |
) |
(41 |
) |
During the first quarter of 2014, Route1 used cash flow in
operating activities of $0.4 million. As at March 31, 2014, the
Company had no bank debt and a cash balance of $332,288.
Balance Sheet Extracts in 000s of CAD dollars |
Mar 31 2014 |
Dec 31 2013 |
|
Mar 31 2013 |
Cash |
332 |
700 |
|
1,826 |
Total
current assets |
3,057 |
1,588 |
|
2,996 |
Total
current liabilities |
2,629 |
1,715 |
|
2,824 |
Net
working capital |
428 |
(127 |
) |
172 |
Total
assets |
3,778 |
2,387 |
|
3,567 |
Bank
debt |
0 |
0 |
|
0 |
Total
liabilities |
2,770 |
1,854 |
|
2,971 |
Paid, Active Subscribers
As at March 31, 2014, Route1 had 14,240 paying, active
subscribers. During Q1 2014 Route1's average revenue per subscriber
was $312, an increase of $67 per subscriber or 27%, from the same
period in 2013.
Revenue from Subscribers in 000s of CAD dollars |
Mar 31 2014 |
Dec 31 2013 |
Sep 30 2013 |
Jun 30 2013 |
Mar 31 2013 |
Closing number of subscribers |
14,240 |
14,602 |
14,642 |
14,784 |
13,989 |
Average number of subscribers |
14,198 |
14,600 |
14,697 |
15,159 |
13,853 |
Revenue per subscriber |
$312 |
$301 |
$310 |
$306 |
$245 |
Subscriber Revenue |
$1,108 |
$1,100 |
$1,139 |
$1,158 |
$853 |
The decrease in MobiKEY subscribers, between Q1 2014 and Q4
2013, is primarily attributable to the loss of its European
Government client's remaining users. The loss of the account was
first announced by Route1 on November 20, 2012 and is due to budget
cutbacks.
Business and Market Commentary
- Route1 renewed its two largest accounts, both with the U.S.
government, between March 15, 2014 and April 30, 2014.
- Route1 will realize revenue growth in "Revenue from
Subscribers" and per subscriber in Q2 2014 compared to Q1 2014 as a
result of a stronger U.S. dollar exchange rate at the time of
renewing U.S. based accounts in late Q1 and early Q2 2014.
- Leveraging U.S. government reciprocity rules and the installed
accredited infrastructure, Route1 has a growing number of pilots
with new U.S. DoD prospect clients.
- Route1 is actively working to have the MobiKEY technology added
to the U.S. Defense Information Systems Agency (DISA) Approved
Products List.
- Continued business development focus on the Canadian Federal
Government and selective commercial enterprise opportunities.
- The macro digital security environment is changing in a way
that should benefit Route1 as board and corporate executives of
potential Enterprise clients now face increased scrutiny over the
loss of client or employee data and their own intellectual
property. We are in the midst of a sea change with respect
corporate accountability, specifically the C-Suite, as evidenced
by:
- The departure of Target's CEO and CIO over the last 120 days
after a very public data breach affecting over 70 million customers
was announced in Q4 2013;
- The U.S. District Court of New Jersey's affirmation on April 7,
2014 that the Federal Trade Commission could proceed with its USD
$6.5 million lawsuit against Wyndham Worldwide Corp. after the
company experienced a data breach stemming from inadequate security
methodology, setting a precedent for federal litigation against
major organizations that fail to protect sensitive information;
and
- More than 60% of Internet services were affected by the
Heartbleed Bug that drew worldwide attention in April 2014. It is
expected that organizations will search for alternatives to
browser-based mobile access solutions and look to implement
easy-to-use multifactor authentication technologies.
- Route1 will be releasing MobiKEY 4.4 releasing - audio support
- in early June 2014.
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 effectively 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.
© 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, and the MobiKEY, MobiKEY
Classic, MobiKEY Classic 2 and MobiKEY Fusion devices are protected
by copyright, international treaties, and various patents,
including Route1's U.S. Patents 7,814,216 and 7,739,726, Canadian
Patent 2,578,053, and other patents pending. The MobiKEY Classic 2
is also protected by U.S. Patents 6,748,541 and 6,763,399, and
European Patent 1001329 of Aladdin Knowledge Systems Ltd. and used
under license. Other patents are registered or pending in various
countries around the world.
Other product and company names mentioned herein may be
trademarks of their respective companies.
Tony BusseriCEO+1 416 814-2635tony.busseri@route1.com
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