Route1 Announces Q1 2020 Financial Results
*TORONTO, ON / ACCESSWIRE / May 26, 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-month period ended March 31, 2020.
Statement of operations
In 000s of CAD dollars
Q12020 Q42019 Q32019 Q22019 Q12019 Q42018
Revenue
Subscription and services
1,958 2,511 2,136 1,610 1,576 1,628
Devices and appliances
4,401 5,891 6,576 1,819 1,883 2,440
Other
4 1 2 1 3 6
Total revenue
6,363 8,403 8,714 3,430 3,462 4,074
Cost of revenue
3,997 5,653 5,953 1,672 1,700 2,216
Gross profit
2,366 2,750 2,761 1,758 1,762 1,858
Operating expenses
2,334 2,360 2,336 1,824 1,694 1,714
Operating profit (loss) ^1
32 390 425 (66 ) 68 144
Total other expenses ^2, 3
215 (120 ) 424 487 580 499
Net income (loss)
(183 ) 510 1 (553 ) (512 ) (355 )^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.
Subscription and services revenue
in 000s of CAD dollars
Q12020 Q42019 Q32019 Q22019 Q12019 Q42018
Application software
1,217 1,202 1,182 1,196 1,186 1,169
Technology as a service (TaaS)
321 353 322 311 307 329
Other services
420 956 632 103 83 130
Total
1,958 2,511 2,136 1,610 1,576 1,628
Adjusted EBITDA
in 000s of CAD dollars
Q12020 Q42019 Q32019 Q22019 Q12019 Q42018
Gross Profit
2,366 2,750 2,761 1,758 1,762 1,858
Adjusted EBITDA ^4
358 676 743 200 322 331
Amortization
326 286 318 266 254 187
Operating profit (loss)
32 390 425 (66 ) 68 144 ^4 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.
"Q1 2020 operating profit and EBITDA reflect the slowdown experienced in February and March 2020 in rugged device revenue resulting from shipping delays from our manufacturing partners, and towards the end of the first quarter as COVID-19 affected America, we experienced delays to certain contract implementations for license plate recognition technology clients", stated Route1's CEO Tony Busseri. "In addition, the offsetting growth in Route1 MobiKEY subscribers and related recurring revenue happened during the last two weeks of March 2020 and, therefore, did not materially impact our financial results for the first quarter of 2020."
Balance sheet extracts
In 000s of CAD dollars
Mar 31
2020
Dec 31
2019
Sep 30
2019
Jun 30
2019
Mar 31
2019
Dec 31
2018
Cash
116 126 320 702 367 1,073
Total current assets
4,391 6,206 6,106 6,219 5,106 3,664
Total current liabilities
7,532 9,035 8,749 8,625 6,033 4,034
Net working capital
(3,141 ) (2,829 ) (2,643 ) (2,406 ) (927 ) (370 )
Total assets
11,501 12,630 11,780 12,268 8,803 6,673
Bank debt and seller notes
2,461 2,415 2,294 1,862 - -
Total shareholders' equity ^3
950 980 473 854 860 1,465 Route1 generated net cash flow from operating activities of approximately $0.47 million during Q1 2020 compared with cash used of $0.62 million in Q1 2019. Non-cash working capital generated was $0.20 million in Q1 2020 compared to $0.39 million in cash used during the same period a year earlier. Net cash generated by the day-to-day operations for the three months ended March 31, 2020 was $0.27 million compared to $0.22 million used in Q1 2019.
Route1's net cash balance (including all bank debt) as of May 25, 2020 was approximately $0.20 million in contrast to a net debt balance of $1.23 million as at December 31, 2019.
*Business Update Conference Call and Webcast*
The Company will hold a conference call and web cast to provide a business update later in Q2 2020.
*About Route1 Inc.*
Route1 Inc., also operating under the tradenames GroupMobile and PCS Mobile, 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
Chief Executive Officer
+1 416 509 1496
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. These statements are based on certain factors and assumptions, including, price and liquidity of the common shares, 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 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 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 performance is not guarantee of future performance and readers should not rely on historical results as an indication of future results.
*SOURCE:* Route1 Inc.
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