ROUTE1 REPORTS SIXTH CONSECUTIVE QUARTER OF SUBSCRIBER GROWTH

Route1 Inc. today released its third-quarter and year-to-date financial results for the period ended Sept. 30, 2015.

For third-quarter 2015, total revenue increased to $1.61-million from $1.43-million in third-quarter 2014. Gross profit also increased during the third quarter of 2015 to $1.29-million or 80 per cent of revenue compared with gross profit of $1.11-million or 78 per cent of revenue in third-quarter 2014.

                                TOTAL REVENUE
                          (in thousands of dollars)

                                            Q3        Q3       YTD       YTD
                                          2015      2014      2015      2014

Devices                                     42        33       147       524
Services                                 1,572     1,399     4,602     4,054
Other                                        -         -        23        14
Total revenue                            1,614     1,432     4,772     4,592

During the third quarter of 2015, Route1 realized further growth in revenue from subscribers (recurring revenue). The net increase in MobiKEY application software users (subscriber revenue being the largest component of Route1's services revenue) continues to come from a variety of new United States government non-Department of Defense agencies and enterprise accounts, and continued growth from accounts within the U.S. Department of Defense.

                            REVENUE FROM SUBSCRIBERS
                            (in thousands of dollars)

                               Sept. 30,  June 30,  March 31, Dec. 31, Sept. 30
                                    2015      2015       2015     2014     2014

Closing number of subscribers     15,989    15,410     15,012   14,792   14,645
Average number of subscribers     15,725    15,278     14,983   14,631   14,588
Revenue per subscriber              $362      $353       $334     $334     $332
Subscriber revenue                $1,424    $1,346     $1,252   $1,221   $1,211

Earnings before interest, tax, depreciation and amortization (adjusted EBITDA) during the third quarter of 2015 amounted to approximately $242,000 compared with $110,000 in third-quarter 2014.

                                ADJUSTED EBITDA
                            (in thousands of dollars)

                               Sept. 30,  June 30,  March 31, Dec. 31, Sept. 30
                                    2015      2015       2015     2014     2014

Revenue                            1,614     1,620      1,538    1,485    1,432
Adjusted EBITDA                      242       227        404      107      110
Amortization                         118        99         90       87       89
Operating profit before                                                
stock-based compensation             124       128        314       20       21
                         

Route1's third-quarter 2015 total comprehensive gain was $102,000 compared with $210,000 during the same period in 2014.

Route1 used cash in operating activities of approximately $874,000 during third-quarter 2015 compared with $879,000 in third-quarter 2014. As at Sept. 30, 2015, the company had no bank debt and a cash balance of $2,433,425.

Business update

On Oct. 15, 2015, Route1 provided an update on market drivers, its operations and business development activity. A copy of the news release can be found at its website.

MobiKEY 5.0

On Nov. 12, 2015, Route1 released MobiKEY 5.0, the latest version of its mobile access solution that uses comprehensive multifactor authentication and identity management to securely connect an organization's digital assets with its employees, mobile workers and contractors. A copy of the news release can be found at its website.

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