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Message: Route1 earns $242,000 in Q3 2018 with record revenue

Route1 earns $242,000 in Q3 2018


2018-11-06 19:13 ET - News Release


Mr. Tony Busseri reports


Route1 Inc. has released its third-quarter financial results for the three and nine months ended Sept. 30, 2018.


                               Statement of operations
                                In 000s of CAD dollars

                                             Q3 2018Q2  2018Q1  2018Q4 2017Q3  2017Q2  2017
Subscription revenue and services            1,684  1,633   1,264   1,263  1,177   1,347   
Devices and appliances                       13,207 3,936   388     109    159     24      
Other                                        4      7       32      48     2       -       
Total revenue                                14,895 5,577   1,684   1,420  1,338   1,371   
Cost of revenue                              12,311 3,620   585     331    362     298     
Gross profit                                 2,584  1,957   1,100   1,089  976     1,073   
Operating expenses                           2,150  1,891   1,136   1,164  1,131   1,151   
Operating profit (loss) 1                    434    65      (36)    (75)   (155)   (78)    
Total other expenses 2                       192    (144)   114     170    183     157     
Net income gain (loss)                       242    209     (150)   (245)  (338)   (235)   


1 Before stock based compensation and patent litigation

2 Includes stock based compensation, AirWatch litigation, gain on acquisition and foreign exchange


                                 Subscription revenue and services
                                     in 000s of CAD dollars

                                                       Q3 2018Q2  2018Q1  2018Q4  2017Q3 2017Q2  2017
Application software                                   1,193  1,181   1,260   1,263   1,177  1,347   
Technology as a service (TaaS)                         288    266     -       -       -      -       
Other services                                         203    186     4       -       -      -       
Total                                                  1,684  1,633   1,264   1,263   1,177  1,347   



                                  Adjusted EBITDA
                              in 000s of CAD dollars

                                   Q32018Q2 2018Q1 2018Q4 2017Q3 2017Q2 2017
Gross Profit                         2,584 1,957  1,100  1,089  976    1,073  
Adjusted EBITDA 3                    627   272    46     24     (46)   16     
Amortization                         193   207    82     99     109    94     
Operating profit (loss)              434   65     (36)   (75)   (155)  (78)   


3 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.

Route1 generated cash from operating activities of approximately $0.5 million during Q3 2018 compared with cash used in operating activities of $0.2 million in Q3 2017. Non-cash working capital of $1.0 million was generated in Q3 2018 compared to $0.5 million of cash used in the same period a year earlier. Net cash generated from the day{A –}to-day operations for the three months ended September 30, 2018 was $1.5 million compared to cash used of $0.6 million in Q3 2017.

"I am pleased with the operating and financial performance the GroupMobile team delivered during our recently completed third quarter. The strong quarterly financial results reflect the high quality execution of our Group Mobile Int'l integration plan, closure on the July 2018 US $5.9 million purchase order for Getac rugged devices from a US based integrated energy company engaged primarily in electric power production and retail distribution operations, delivering to the market cutting edge software applications for data analytics and data security, and the start of realizing on the inherent business value that falls out of acquisition of Group Mobile Int'l earlier this year," said Tony Busseri CEO of Route1. "Of note is the positive impact the addition of the rugged device resale business that we purchased earlier this year. Results will vary from quarter to quarter, as device sales can be influenced by one-time large orders similar to the impact the US $5.9 million had on this third quarter.

"We started our business pivot towards being an advanced provider of solutions for the ultra-secure mobile workforce, user authentication and data intelligence in mid-2017 and the plan is now producing better than expected results at this point in the business model's maturity. We expect GroupMobile to grow organically and through acquisition over the next year and continue to aggressively move forward on realizing on the embedded value in our intellectual property."

Investor Conference Call and Webcast

Route1 will hold a conference call and web cast to discuss the Company's financial results and provide a business update on Wednesday, November 7, 2018 at 9 a.m. eastern. Participants should dial Toll-Free: 1-866-548-4713 or Toll/International: 1-323-794-2093 at least 10 minutes prior to the conference, pass code 1767112 . For those unable to attend the call, a replay will be available on November 7, 2018 after 12:00 p.m. at Toll-Free 1-844-512-2921 or Toll/International 1-412-317-6671, pass code 1767112 until 11:59 pm on November 21, 2018.

About Route1 Inc.

Route1, operating under the trade name GroupMobile, is North America's most advanced provider of industrial-grade data intelligence, user authentication, and ultra-secure mobile workforce solutions. The Company helps all manner of organizations, from government and military to private sector, to make intelligent use of devices and data for immediate process improvements while maintaining the highest level of cyber security.

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