TORONTO, ONTARIO — (Marketwired) — 11/26/13 — . (TSX VENTURE: ROI), a digital security and identity management company 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 three and nine month period ended September 30, 2013.
Operating results for the three and nine month period ended September 30, 2012 were positively affected by the proceeds of an arbitration award which was received in January 2012. For additional information, please see Route1-s September 30, 2013 Financial Statements and Management-s Discussion & Analysis.
Q3 2013 Financial Results Summary
For the three month period ended September 30, 2013, total revenue decreased to $1.5 million from $1.9 million in the third quarter of 2012. The decrease was a result of recognizing $0.6 million of services revenue from the arbitration award during the third quarter of 2012.
Gross profit decreased during the third quarter to $1.1 million compared from $1.7 million during the same period in the prior year. The decrease in gross profit is attributable to $0.6 million recognized from the arbitration award in the prior year and a $0.1 million write down of MobiKEY Classic devices in the current quarter.
Operating expenses for the three months ended September 30, 2013 were $1.15 million compared to $1.24 million for the same period in 2012. The decrease was primarily a result of a decrease in general administration expense. Professional fees decreased by approximately $0.1 million for the three months ended September 30, 2013 as compared to the same period in 2012, as a result of reducing outsourced human resource and investor relations activities.
As a result, Route1-s third quarter 2013 total comprehensive net loss was $0.06 million compared to total comprehensive net income of $0.16 million during the same period in the prior year. Adjusted earnings before interest, income taxes, depreciation and amortization, stock-based compensation, restructuring and other costs (Adjusted EBITDA) during the three-month period amounted to $22,000 compared to an Adjusted EBITDA of $0.5 million in the third quarter of 2012.
As at September 30, 2013, Route1 had no bank debt and a cash balance of $1.4 million.
Year-to-date 2013 Financial Results Summary
For the nine month period ended September 30, 2013, total revenue decreased to $3.9 million from $6.8 million in the first nine months of 2012. Gross profit also decreased for the nine month period ended September 30, 2013 to $3.1 million from $5.7 million during the same period in the prior year. The decrease in total revenue and gross profit is primarily a result of the arbitration award.
Operating expenses for the nine month ended September 30, 2013 were $3.3 million compared to $3.5 million for the same period in 2012. The reduction in operating expenses was driven by lower professional fees, an increase in the SR&ED tax credit amount, and lower salaries and benefits costs.
As a result, Route1-s year-to-date 2013 total comprehensive net loss was $0.3 million compared to total comprehensive net income of $1.6 million during the same period in the prior year.
Route1 Receives Order for 7,000 MobiKEY Fusion Devices
As announced on September 23, 2013, a component of the U.S. Department of Homeland Security ordered 7,000 MobiKEY Fusion devices through the U.S. Department of Homeland Security FirstSource II contract vehicle. This client will be replacing their allotment of MobiKEY Classic devices with Route1-s MobiKEY Fusion devices. Route1 expects to ship the 7,000 devices between September 2013 and February 2014. The award has a sales value of approximately US $0.7 million.
During the quarter ended September 30, 2013, Route1 shipped 1,000 devices with sales value of approximately $0.1 million.
Paid, Active Subscribers
As at September 30, 2013, Route1 had 14,642 paying, active subscribers.
Business Development Update
On April 11, 2013 during its fiscal year 2012 investor conference call and webcast, Route1 laid out to shareholders its business development plan. Route1 provided a further update to its plan on August 29, 2013.
Over the last 90 days the Canadian Government component of the business development plan has materially advanced, specifically Shared Services Canada (SSC), the program manager for Workplace Technology Devices (WTD), prior termed Workplace Technology Services program, issued a Letter of Interest on November 4, 2013. Route1 responded on November 20, 2013 per the document requirements. Specifics of the WTD program are as follows:
Product Development Progress
Recent Releases
Upcoming Releases (over the next 60 days):
2014 Target Releases:
There are also a number of additional product development projects being considered.
Product development plans are subject to change without notice, based on market factors and/or client demands.
Forward Looking Statements
This news release contains statements that are not current or historical factual statements that may constitute forward-looking statements. These statements are based on certain factors and assumptions, including, expected financial performance, business prospects, technological developments, and development activities 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 Route1. Actual results could differ materially from those projected as a result of these risks and should not be relied upon as a prediction of future events. Route1 undertakes no obligation to update any forward-looking statement 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 Route1 sources.
About Route1 Inc.
Route1 delivers industry-leading security and identity management technologies to corporations and government agencies that require universal, secure access to digital resources and sensitive data. These customers depend on The Power of MobiNET – Route1-s universal identity management and service delivery platform. MobiNET provides identity assurance and individualized access to applications, data and networks. Headquartered in Toronto, Canada, Route1 is listed on the TSX Venture Exchange.
For more information, visit our website at:
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., 2013. 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, the MobiKEY, MobiKEY Classic, MobiKEY Classic 2 and MobiKEY Fusion devices, and MobiLINK are protected by U.S. Patents 7,814,216 and 7,739,726, Canadian Patent 2,578,053, and other patents pending.
Other product and company names mentioned herein may be trademarks of their respective companies.
Contacts:
Route1 Inc.
Tony Busseri
CEO
+1 416 814-2635
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