Route1 Reports Fourth Quarter and Full Year 2009 Financial Results
TORONTO — April 7, 2010 — Route1 Inc. (“the Company” or “Route1”) (TSXV:ROI), the trusted provider of security and identity management network solutions, today announced its financial results for the three-month and twelve-month periods ended December 31, 2009.
For the three-month period ended December 31, 2009, revenues increased by 410 percent to $1.7 million versus $332,153 during the corresponding period in 2008. Gross margin for the fourth quarter of 2009 increased to $1.4 million versus $168,127 during the same period in 2008. Net loss for the period continued to decrease and amounted to $752,277 or nil per share, compared to a net loss of $829,535 or nil per share.
For the twelve-month period ended December 31, 2009, revenues increased by 345 percent to $5.2 million compared to $1.2 million for the same period in 2008. Gross margin for the twelve-month period increased to $3.4 million versus $367,904 during the same period in 2008. Net loss for the year ended December 31, 2009 was $3.4 million or $(0.01) per share, compared to a net loss of $5.4 million or $(0.02) per share for the same period in 2008.
As at December 31, 2009, Route1 had cash and cash equivalents amounting to $640,045. On October 19, 2009, the Company announced the closing of a $2.5 million senior bank debt financing to satisfy the Company’s working capital requirements. Subsequently, the Company utilized $854,717 of its debt facility to fund working capital. The repayment of this debt has been extended from February 28, 2010 to May 31, 2010. During the first quarter of 2010, Route1 completed a non-brokered private placement generating proceeds of $1.9 million. Management is confident that the Company is capitalized to fulfill its debt repayment obligations.
Route1 currently has approximately 17,000 subscribers and is approaching an estimated cash flow breakeven point at 22,500 active users. With the focus on a number of opportunities with various government agencies in North America and Europe, as well as certain financial institutions, management is confident in reaching the 22,500 user cash flow breakeven point in the near term and continues to target 100,000 users by the end of fiscal 2010.
“The fourth quarter and year-end results continue to demonstrate improvement on a year-over-year and sequential quarter basis; however, they do not demonstrate how powerful our technology is, and how critical our technology is in environments where there is zero tolerance for data leakage such as government and financial services verticals,” said Tony Busseri, President and CEO of Route1. “I am working directly with our team on operational improvements, new and existing client opportunities and I am looking forward to transforming Route1 into a profitable business with marquis client relationships and a rapidly growing user base in 2010.”
The Company estimates its cash flow breakeven point to be achievable with approximately 22,500 active TruOFFICE subscribers in the third or fourth quarter of 2010. This estimate is based on current operating expense levels, pricing model, revenue mix, and current foreign currency exchange rates. As at December 31, 2009, Route1 had a growing base of approximately 16,400 TruOFFICE subscribers. Following the breakeven threshold, the Company estimates that for every incremental 25,000 new users, Route1 can generate $0.01 per share in net earnings.
As of December 31, 2009, Route1 had 350,388,115 common shares outstanding.
Fourth Quarter and Full Year 2009 Conference Call
Route1 will hold a conference call at 10:00 a.m. Eastern Standard Time (EST) to discuss the financial results for the fourth quarter and year-end, and the Company’s business and growth plan. Scheduled speakers for the call include Tony Busseri, President and CEO, and Ali Mahdavi, Capital Markets Advisor of Route1.
Participants should dial 416-340-8527 or 1-877-440-9795 at least 10 minutes prior to the conference time at 10:00 a.m. EST. For those unable to attend the call, a replay will be available after 6:00 p.m. EST at 416-695-5800 or 1-800-408-3053, passcode number 4048344 until midnight on May 7, 2010.
ABOUT ROUTE1 INC.
Route1 delivers award-winning security and identity management solutions to customers world-wide. These solutions provide universal, secure access to all digital resources and sensitive data. At the heart of Route1’s solutions is MobiNET, a communications and service delivery platform focused on identity management and entitlement-based access to resources. Route1’s patent-pending solutions are based on FIPS-140-2 cryptographic modules, and simplify the process of meeting increasingly stringent regulatory requirements around privacy and security. Headquartered in Toronto, Route1 is listed on the TSX Venture Exchange (symbol: ROI). For more information, visit www.route1.com.
For More Information Contact:
Ali Mahdavi
Capital Markets Advisor
+1 416-962-3300
ali.mahdavi@route1.com
ir@route1.com
This news release, required by applicable Canadian laws, and 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.
Certain statements in this press release may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "targets", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities legislation. These statements are based on Route1's current expectations, estimates, forecasts and projections about the operating environment, legal environment, economies and markets in which Route1 operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different from those contemplated in forward-looking statements. Unless otherwise required by applicable securities laws, Route1 disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
©2010 All rights reserved. Route1, the Route1 Logo, Mobi, Route1 MobiKEY, Route1 TruOFFICE, Route1 PurLINK, Route1 EnterpriseLIVE, and Route1 MobiNET 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.