Posts Record Quarterly EBITDA
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TORONTO, ON / ACCESSWIRE / November 25, 2020 / Route1 Inc. (OTCQB:ROIUF) and (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 nine-month periods ended September 30, 2020.
| Statement of operationsIn 000s of CAD dollars | Q32020 | Q22020 | Q12020 | Q42019 | Q32019 | Q22019 | ||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Subscription and services | 2,599 | 2,489 | 1,958 | 2,511 | 2,136 | 1,610 | ||||||||||||||||||
| Devices and appliances | 6,523 | 4,477 | 4,401 | 5,891 | 6,576 | 1,819 | ||||||||||||||||||
| Other | 25 | 3 | 4 | 1 | 2 | 1 | ||||||||||||||||||
| Total revenue | 9,147 | 6,969 | 6,363 | 8,403 | 8,714 | 3,430 | ||||||||||||||||||
| Cost of revenue | 6,134 | 4,188 | 3,997 | 5,653 | 5,953 | 1,672 | ||||||||||||||||||
| Gross profit | 3,013 | 2,781 | 2,366 | 2,750 | 2,761 | 1,758 | ||||||||||||||||||
| Operating expenses | 2,562 | 2,570 | 2,334 | 2,360 | 2,336 | 1,824 | ||||||||||||||||||
| Operating profit (loss) 1 | 451 | 211 | 32 | 390 | 425 | (66 | ) | |||||||||||||||||
| Total other expenses 2, 3, 4 | 979 | 271 | 215 | (120 | ) | 424 | 487 | |||||||||||||||||
| Net income (loss) | (528 | ) | (60 | ) | (183 | ) | 510 | 1 | (553 | ) |
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.
4 In the third quarter of 2020, the Company incurred Total Other Expenses of approximately $1.0 million. The largest components are: (a) gain on settlement of litigation of $0.2 million, (b) AirWatch litigation expenses and costs related to posting the fully cash-collateralized bond of $0.4, and (c) a reserve for $0.6 million related to the recovery of goods fraudulently taken from Route1. The Company was the victim of a fraud in the United States perpetrated by a group posing as legitimate customers with the goal of purchasing rugged devices. The Company has paid its vendor of record the full amount and has no further financial obligations. The Company has been in contact with its insurers but there is no assurance the Company will receive any amount of compensation.
| Subscription and services revenuein 000s of CAD dollars | Q32020 | Q22020 | Q12020 | Q42019 | Q32019 | Q22019 | ||||||||||||||||||
| Application software | 1,923 | 1,665 | 1,217 | 1,202 | 1,182 | 1,196 | ||||||||||||||||||
| Technology as a service (TaaS) | 241 | 315 | 321 | 353 | 322 | 311 | ||||||||||||||||||
| Other services | 435 | 509 | 420 | 956 | 632 | 103 | ||||||||||||||||||
| Total | 2,599 | 2,489 | 1,958 | 2,511 | 2,136 | 1,610 |
| Adjusted EBITDAin 000s of CAD dollars | Q32020 | Q22020 | Q12020 | Q42019 | Q32019 | Q22019 | ||||||||||||||||||
| Gross Profit | 3,013 | 2,781 | 2,366 | 2,750 | 2,761 | 1,758 | ||||||||||||||||||
| Adjusted EBITDA 5 | 778 | 556 | 358 | 676 | 743 | 200 | ||||||||||||||||||
| Amortization | 327 | 346 | 326 | 286 | 318 | 266 | ||||||||||||||||||
| Operating profit (loss) | 451 | 211 | 32 | 390 | 425 | (66 | ) |
5 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 | Sep 302020 | Jun 302020 | Mar 312020 | Dec 312019 | Sep 302019 | Jun 302019 | ||||||||||||||||||
| Cash | - | 107 | 116 | 126 | 320 | 702 | ||||||||||||||||||
| Total current assets 6 | 8,836 | 5,448 | 4,391 | 6,206 | 6,106 | 6,219 | ||||||||||||||||||
| Total current liabilities | 13,385 | 8,901 | 7,532 | 9,035 | 8,749 | 8,625 | ||||||||||||||||||
| Net working capital | (4,549 | ) | (3,453 | ) | (3,141 | ) | (2,829 | ) | (2,643 | ) | (2,406 | ) | ||||||||||||
| Net working capital adjusted for contract liability | 490 | 800 | (1,570 | ) | (1,078 | ) | (221 | ) | (149 | ) | ||||||||||||||
| Total assets | 15,749 | 12,283 | 11,501 | 12,630 | 11,780 | 12,268 | ||||||||||||||||||
| Bank debt and seller notes | 2,609 | 1,193 | 2,461 | 2,415 | 2,294 | 1,862 | ||||||||||||||||||
| Total shareholders' equity 3 | 37 | 778 | 950 | 980 | 473 | 854 | ||||||||||||||||||
6 Included as at September 30, 2020 is restricted cash of US$1,669,840 (CAD $2,226,065) that allowed Route1 to post a cash-collateralized bond with the court in the same amount in connection with the Company's appeal of the United States District Court for the District of Delaware partial granting of AirWatch's motion for attorney's fees in the matter of Route1 Inc. v. AirWatch, LLC.
| Net cash flowIn 000s of CAD dollars | Q32020 | Q22020 | Q12020 | Q42019 | Q32019 | Q22019 | ||||||||||||||||||
| Cash generated in operating activities | 1,523 | 1,773 | 472 | 64 | 20 | 965 | ||||||||||||||||||
| Cash used in investing activities | (489 | ) | (240 | ) | (633 | ) | (174 | ) | (154 | ) | (1,303 | ) | ||||||||||||
| Cash generated (used) in financing activities | 1,092 | (1,543 | ) | 165 | (28 | ) | (247 | ) | 696 | |||||||||||||||
| Net cash inflow (outflow) | 2,126 | (10 | ) | 4 | (138 | ) | (381 | ) | 358 |
Financing
The Company intends to raise up to $2,500,000 by way of a non-brokered private placement (the "Offering") of Units ("Units") of the Company at a price of $0.85 per Unit.
Each Unit will consist of one common share in the capital of Route1 (the "Common Share") and one Common Share Purchase Warrant (the "Warrant"). Each Warrant will be exercisable into one Common Share for a period of 18 months at a price of $1.00 per share.
The completion of the private placement and payment of any commission and fees remains subject to the receipt of all necessary approvals, including the approval of the TSX Venture Exchange. The securities issued will be subject to a statutory hold period in Canada for a period of four months and one day from the Closing Date. Proceeds of the private placement will be used for growth and general corporate purposes.
Business Update Conference Call and Webcast
The Company will hold a conference call and webcast to provide a business update on Wednesday, November 25, 2020 at 9:00 am eastern.
Participants should dial Toll-Free: 1-877-407-0781 or Toll/International: 1-201-689-8568 at least 10 minutes prior to the conference. For those unable to attend the call, a replay will be available on November 25, 2020 after 4 pm eastern at Toll-Free 1-877-481-4010 or Toll/International 1-919-882-2331, passcode #39006 until 10 am on Wednesday, December 2, 2020.
The webcast will be presented live at https://www.webcaster4.com/Webcast/Page/2167/39006.
About Route1 Inc.
Route1 Inc. 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
President and Chief Executive Officer
+1 480 500-7030
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 or future-oriented financial information. These statements are based on certain factors and assumptions, including, expectations regarding the success of the private placement and the terms on which the Company will raise funds, price and liquidity of the common shares, expected financial performance, expected subscribers and subscription-based revenue, business prospects, technological developments, development activities, the ability of the Company to obtain the supersedeas bond in order to appeal the decision to the United States Court of Appeals for the Federal Circuit, 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 or future-oriented financial information 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 or forecasted performance is not a guarantee of future performance and readers should not rely on historical results or forward-looking statements or future-oriented financial information as an assurance of future results.
SOURCE: Route1 Inc.
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