Route1 earns $728,000 in 2015

2016-04-05 08:33 ET - News Release

Mr. Tony Busseri reports

ROUTE1 REPORTS 2015 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS

Route1 Inc. has released its fourth quarter and fiscal year financial results for the period ended Dec. 31, 2015.

"I am very pleased to be reporting our eighth consecutive quarter of growth in both services revenue and MobiKEY subscribers. As we move into and through 2016, I believe we have started to turn a corner with respect to adoption and penetration within certain civilian, intelligence and defence components of the U.S. government; both with current customers as well as those undergoing pilot testing. Our team is hyperfocused on generating shareholder value through organic expansion of our current subscriber base, as well as adding to our product portfolio through ongoing development initiatives that are designed specifically for the U.S. government sector," said Tony Busseri, chief executive officer, Route1.

Fourth quarter 2015

For the fourth quarter of 2015, total revenue increased to $1.63-million from $1.49-million in the fourth quarter of 2014. Gross profit also increased during the fourth quarter of 2015 to $1.34-million or 83 per cent of revenue compared with gross profit of $1.24-million or 84 per cent of revenue in the fourth quarter of 2014.

                                 TOTAL REVENUE
                            (in thousands of dollars)

                                                  Q4      Q4      FY      FY
                                                2015    2014    2015    2014
                                            
Devices                                           $9     $12    $156    $536
Services                                       1,616   1,415   6,218   5,470
Other                                              -      58      23      71
                                            --------------------------------
Total revenue                                  1,625   1,485   6,397   6,077

During the fourth 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) primarily came from agencies and components within the U.S. Department of Defense, the U.S. Navy, the U.S. Department of the Interior and the U.S. Department of Agriculture.

                               SERVICES REVENUE
                           (in thousands of dollars)

                                      Dec. 31, Sept. 30,  June 30, March 31,
                                          2015      2015      2015      2015
                                    
Closing number of subscribers           16,286    15,989    15,410    15,012
Average number of subscribers           16,246    15,725    15,278    14,983
Revenue per subscriber                    $361      $362      $353      $334
                                    ----------------------------------------
Subscriber revenue                       1,467     1,424     1,346     1,252
Other services revenue                     149       148       223       209
                                    ----------------------------------------
Total services revenue                   1,616     1,572     1,569     1,461
                                    

                              SERVICES REVENUE
                          (in thousands of dollars)

                                      Dec. 31, Sept. 30,  June 30, March 31,
                                          2014      2014      2014      2014
                                    
Closing number of subscribers           14,792    14,645    14,461    14,240
Average number of subscribers           14,631    14,588    14,401    14,198
Revenue per subscriber                    $334      $332      $329      $312
                                    ----------------------------------------
Subscriber revenue                       1,221     1,211     1,185     1,108
Other services revenue                     194       188       189       173
                                    ----------------------------------------
Total services revenue                   1,415     1,399     1,374     1,281
                                    

Earnings before interest, tax, depreciation and amortization (adjusted EBITDA) during the fourth quarter of 2015 amounted to approximately $279,000 compared with $107,000 in the fourth quarter of 2014.

                                         ADJUSTED EBITDA 
                                    (In thousands of dollars)

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

Revenue                                    $1,625     $1,614     $1,620     $1,538     $1,485
Gross profit                                1,341      1,294      1,326      1,272      1,243
Adjusted EBITDA                               279        242        227        404        107
Amortization                                  127        118         99         90         87
Operating profit before stock-based
compensation                                  152        124        128        314         20

Route1's fourth quarter 2015 total comprehensive gain after income tax was $377,000 compared with $21,000 during the same period in 2014.

Fiscal year 2015

The company's operating results in fiscal year 2015 with comparatives are as shown in the associated table.

                                OPERATING RESULTS
                            (In thousands of dollars)

                                                  FY 2015  FY 2014  FY 2013 
Revenue                                                                     
Device                                               $156     $536     $447 
Services                                            6,218    5,470    4,948 
Other                                                  23       71       38 
                                                 ---------------------------
Total revenue                                       6,397    6,077    5,433 
Cost of revenue                                     1,164    1,145    1,137 
                                                 ---------------------------
Gross profit                                        5,233    4,932    4,296 
Operating expenses                                  4,515    4,398    4,485 
                                                 ---------------------------
Operating profit(1)                                   718      534     (189)
Total other (expenses)                                (10)    (103)     154 
                                                 ---------------------------
Comprehensive net income (loss)                       728      637     (343)

(1) Note: before stock-based compensation.                                 

During full year 2015, Route1 had cash generated from operating activities of $880,000 compared with cash generated $1.31-million in full year 2014.

Route1's cash position is at its highest level during the second quarter of the fiscal year as a direct result of the timing of annual enterprise user subscription renewal payments.

Share repurchase program

On Sept. 22, 2015, the company announced with approval from the TSX Venture Exchange its intention to make a normal course issuer bid (NCIB). The NCIB permits the company to purchase for cancellation up to 5 per cent of the common shares in the public float. The maximum number of shares allowed for repurchase is 18,262,570. Purchases under the NCIB commenced Sept. 27, 2015, and will end Sept. 26, 2016, or the date upon which the maximum number of common shares have been purchased by the company. As of Dec. 31, 2015, and March 31, 2016, the company had purchased a total of 2,592,000 and 4,357,000 common shares, respectively, under the NCIB.

Since the first NCIB was announced on Feb. 28, 2012, Route1 has repurchased a total of 28,026,200 of its common shares, representing 7.2 per cent of Route1's common shares outstanding as at Feb. 28, 2012.

As at March 31, 2016, Route1 has 360,894,414 common shares outstanding.

Investor conference call and webcast

The company will hold a conference call and webcast on Tuesday, April 5, 2016, at 4:15 p.m. Eastern Time to discuss its the fourth quarter of 2015 and full-year 2015 financial results, and provide an update on its business and product development activities. Participants should dial 1-888-503-8169 or 1-719-325-2329 at least 10 minutes prior to the conference time of 4:15 p.m. Eastern Time. 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 5799014 until midnight on April 19, 2016. The webcast will be presented live on-line.

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