Route1 Announces Q4 and Full Year 2020 Financial Results (ROIUF)

TORONTO, ON / ACCESSWIRE / April 29, 2021 / 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 and twelve-month periods ended December 31, 2020.

Fiscal Year 2020
The Company’s operating results for fiscal year 2020 with comparatives are as follows:

In 000s of CAD dollarsFY2020FY2019FY2018FY2017
Revenue
Device20,03816,16919,972321
Services9,5747,8346,2095,698
Other9474951
Total Revenue29,70724,01026,2316,070
Cost of revenue18,63514,97818,7321,325
Gross profit11,0729,0327,4994,745
Operating expenses9,9368,2146,8924,736
Operating profit 11,1368186079
Patent litigation 21,6101,289841270
Total other expenses 3, 41,23382200349
Net income (loss)(1,707)(554)(434)(610)

Before stock-based compensation

2 For FY 2020, the Company incurred expenses for patent litigation net of the reversal of an accounting liability reflecting the funds the Company received from its litigation funding agreement. The Company has concluded the litigation with VMWare in both Canada and the United States and will incur no additional expense for this litigation.

3 Includes gain on litigation, gain or loss on asset disposal, stock-based compensation expense, interest expense, income tax recovery, foreign exchange loss or gain, other expenses and acquisition expense.

For FY 2020, Total Other Expenses (in 000s of CAD dollars) are comprised of the following items:

GainsLosses or Expenses
Litigation Settlement163Reserve for goods fraudulently taken597
Stock-based compensation497
Interest163
Foreign exchange71
Other68
Total Gains163Total Losses or Expenses1,396
Total Other Expenses1,233

Q4 2020
The Company’s operating results for Q4 2020 with comparatives are as follows:

Statement of operationsIn 000s of CAD dollarsQ4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
Q3
2019
Revenue
Subscription and services2,5282,5992,4891,9582,5112,136
Devices and appliances4,6376,5234,4774,4015,8916,576
Other62253412
Total revenue7,2279,1476,9696,3638,4038,714
Cost of revenue4,3156,1344,1883,9975,6535,953
Gross profit2,9123,0132,7812,3662,7502,761
Operating expenses2,4692,5622,5702,3342,3602,336
Operating profit 144345121132390425
Patent litigation 21,05838167104195279
Total other expenses 3321598204111(315)145
Net income (loss)(936)(528)(60)(183)5101
Subscription and services revenuein 000s of CAD dollarsQ4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
Q3
2019
Application software2,0151,9231,6651,2171,2021,182
Technology as a service (TaaS)204241315321353322
Other services309435509420956632
Total2,5282,5992,4891,9582,5112,136
Adjusted EBITDAin 000s of CAD dollarsQ4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
Q3
2019
Gross Profit2,9123,0132,7812,3662,7502,761
Adjusted EBITDA 4768778556358676743
Amortization325327346326286318
Operating profit (loss)44345121132390425

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.

Balance sheet extractsIn 000s of CAD dollarsDec 312020Sep 302020Jun 302020Mar 312020Dec 312019Sep 302019
Cash1,137107116126320
Total current assets6,4088,8365,4484,3916,2066,106
Total current liabilities9,77913,3858,9017,5329,0358,749
Net working capital(3,371)(4,549)(3,453)(3,141)(2,829)(2,643)
Net working capital (adjusted for contract liability)256490800(1,570)(1,078)(221)
Total assets14,17615,74912,28311,50112,63011,780
Bank debt and seller notes1,7922,6091,1932,4612,4152,294
Total shareholders’ equity2,14137778950980473
Net cash flowIn 000s of CAD dollarsQ4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
Q3
2019
Cash generated (used) in operating activities(3,513)1,5231,7734726420
Cash used in investing activities906(489)(240)(633)(174)(154)
Cash generated (used) in financing activities1,6011,092(1,543)165(28)(247)
Net cash inflow (outflow)(1,008)2,126(10)4(138)(381)

Q4 2020 Material Events

  • December 16, 2020 – Route1 closed its previously announced $3,000,000 private placement. The $3,000,000 was raised by way of a non-brokered private placement of units of the Company at a price of $0.85 per Unit. Each unit consists of one common share in the capital of Route1 and one common share purchase warrant. Each warrant will be exercisable into one common share for a period of 18 months at a price of $1.00 per share.
  • December 29, 2020 – Route1 entered into a settlement agreement with AirWatch and its parent company VMWare ending the patent infringement litigation between the parties in both the United States and Canada. Under the terms of the settlement agreement, Route1 will pay US$1,400,000 to VMWare.

Stock Option Grant
The Company yesterday granted an employee stock options in the aggregate amount of 400,000 with an exercise price equal to the closing share price on Thursday, April 29, 2021. The stock options will expire on April 29, 2026 and will vest thirty percent on the first anniversary, thirty percent on the second anniversary and the remainder on the third anniversary. Under the Company’s stock option plan, 10% of the issued capital is reserved for issuance for a total of 3,841,996 options. As of today’s date, including the above grant, a total of 3,712,500 options are currently outstanding under the stock option plan.

Business Update Conference Call and Webcast
The Company will hold a conference call and webcast to provide a business update on Thursday, April 29, 2021 at 9:00 am eastern.

Participants should dial Toll-Free: 877-407-0782 or Toll/International: 201-689-8567 at least 10 minutes prior to the conference call and webcast. For those unable to attend the call, a replay will be available on April 30, 2021 after 4 pm eastern at Toll-Free 877-481-4010 or Toll/International 919-882-2331 passcode #41087 until 9 am on Thursday, May 13, 2021.

The webcast will be presented live at https://www.webcaster4.com/Webcast/Page/2167/41087.

About Route1 Inc.
Route1 Inc. 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
President and Chief Executive Officer
+1 480 500-7030
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.

© 2021 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 or future oriented financial information. These statements are based on certain factors and assumptions, including, expectations regarding the success of the private placement and the terms on which the Company will raise funds, price and liquidity of the common shares, expected financial performance, expected subscribers and subscription-based revenue, business prospects, technological developments, development activities, the ability of the Company to obtain the supersedeas bond in order to appeal the decision to the United States Court of Appeals for the Federal Circuit, 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 or future oriented financial information 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 or forecasted performance is not a guarantee of future performance and readers should not rely on historical results or forward-looking statements or future oriented financial information as an assurance of future results.

SOURCE: Route1 Inc.

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