Route1 Reports 2015 Fourth Quarter and Full Year Financial Results

TORONTO, ONTARIO--(Marketwired - April 5, 2016) - Route1 Inc. (TSX VENTURE:ROI) (the Company or Route1), a leading provider of secure access technologies for the mobile workspace to protect businesses and government agencies, today announced its fourth quarter (Q4) and fiscal year (FY) financial results for the period ended December 31, 2015.

"I am very pleased to be reporting our eighth consecutive quarter of growth in both services revenue and MobiKEY subscribers. As we move into and through 2016, I believe we have started to turn a corner with respect to adoption and penetration within certain civilian, intelligence and defense components of the U.S. Government; both with current customers as well as those undergoing pilot testing. Our team is hyper-focused on generating shareholder value through organic expansion of our current subscriber base, as well as adding to our product portfolio through ongoing development initiatives that are designed specifically for the U.S. Government sector," said Tony Busseri, Chief Executive Officer, Route1 Inc.

Fourth Quarter 2015

For Q4 2015, total revenue increased to $1.63 million from $1.49 million in Q4 2014. Gross profit also increased during the fourth quarter of 2015 to $1.34 million or 83% of revenue compared to gross profit of $1.24 million or 84% of revenue in Q4 2014.

Total Revenue in 000s of CAD dollars	Q4 2015	Q4 2014	FY 2015	FY 2014
Devices	9	12	156	536
Services	1,616	1,415	6,218	5,470
Other	-	58	23	71
Total Revenue	1,625	1,485	6,397	6,077

During the fourth quarter of 2015 Route1 realized further growth in revenue from subscribers (recurring revenue). The net increase in MobiKEY application software users (subscriber revenue being the largest component of Route1's services revenue) primarily came from agencies and components within the U.S. Department of Defense, the U.S. Navy, the U.S. Department of the Interior, and the U.S. Department of Agriculture.

Services Revenue In 000s of CAD dollars	Dec 31 2015		Sep 30 2015		Jun 30 2015		Mar 31 2015		Dec 31 2014		Sep 30 2014		Jun 30 2014		Mar 31 2014
Closing number of subscribers		16,286		15,989		15,410		15,012		14,792		14,645		14,461		14,240
Average number of subscribers		16,246		15,725		15,278		14,983		14,631		14,588		14,401		14,198
Revenue per subscriber	$	361	$	362	$	353	$	334	$	334	$	332	$	329	$	312
Subscriber Revenue	$	1,467	$	1,424	$	1,346	$	1,252	$	1,221	$	1,211	$	1,185	$	1,108
Other Services Revenue	$	149	$	148	$	223	$	209	$	194	$	188	$	189	$	173
Total Services Revenue	$	1,616	$	1,572	$	1,569	$	1,461	$	1,415	$	1,399	$	1,374	$	1,281

Earnings before interest, tax, depreciation, and amortization (Adjusted EBITDA) during the fourth quarter of 2015 amounted to approximately $279,000 compared to $107,000 in Q4 2014.

Adjusted EBITDA in 000s of CAD dollars	Dec 31 2015	Sep 30 2015	Jun 30 2015	Mar 31 2015	Dec 31 2014
Revenue	1,625	1,614	1,620	1,538	1,485
Gross Profit	1,341	1,294	1,326	1,272	1,243
Adjusted EBITDA	279	242	227	404	107
Amortization	127	118	99	90	87
Operating profit before stock based compensation	152	124	128	314	20

Route1's fourth quarter 2015 total comprehensive gain after income tax was $0.377 million compared to $0.021 million during the same period in 2014.

Fiscal Year 2015

The Company's operating results in fiscal year 2015 with comparatives are as follows:

In 000s of CAD dollars		FY 2015		FY 2014		FY 2013
Revenue
	Device	156		536		447
	Services	6,218		5,470		4,948
	Other	23		71		38
Total Revenue		6,397		6,077		5,433
Cost of revenue		1,164		1,145		1,137
Gross profit		5,233		4,932		4,296
Operating expenses		4,515		4,398		4,485
Operating profit (1)		718		534		(189	)
Total other expenses		(10	)	(103	)	154
Comprehensive net income		728		637		(343	)

(1)	Note: Before stock-based compensation

During FY 2015, Route1 had cash generated from operating activities of $0.88 million compared with cash generated $1.31 million in FY 2014.

Balance Sheet Extracts In 000s of CAD dollars	Dec 31 2015	Dec 31 2014	Dec 31 2013
Cash	1,251	1,533	700
Total current assets	2,112	2,246	1,588
Total current liabilities	1,948	1,927	1,715
Net working capital	164	319	(127	)
Total assets	3,656	2,976	2,387
Bank debt	0	0	0
Total liabilities	2,059	2,032	1,854

Route1's cash position is at its highest level during the second quarter of the fiscal year as a direct result of the timing of annual enterprise user subscription renewal payments.

Share Repurchase Program

On September 22, 2015, the Company announced with approval from the TSX Venture Exchange its intention to make a Normal Course Issuer Bid (NCIB). The NCIB permits the Company to purchase for cancellation up to 5% of the common shares in the public float. The maximum number of shares allowed for repurchase is 18,262,570. Purchases under the NCIB commenced September 27, 2015 and will end September 26, 2016, or the date upon which the maximum number of common shares have been purchased by the Company. As of December 31, 2015 and March 31, 2016 the Company had purchased a total of 2,592,000 and 4,357,000 common shares respectively under the NCIB.

Since the first NCIB was announced on February 28, 2012, Route1 has repurchased a total of 28,026,200 of its common shares, representing 7.2% of Route1's common shares outstanding as at February 28, 2012.

As at March 31, 2016, Route1 has 360,894,414 common shares outstanding.

Investor Conference Call and Webcast

The Company will hold a conference call and web cast on Tuesday, April 5, 2016 at 4:15 pm Eastern to discuss its Q4 2015 and FY 2015 financial results, and provide an update on its business and product development activities. Participants should dial 1-888-503-8169 or 1-719-325-2329 at least 10 minutes prior to the conference time of 4:15 pm Eastern. For those unable to attend the call, a replay will be available after 7:15 p.m. at 1-877-870-5176 or 1-858-384-5517, pass code 5799014 until midnight on April 19, 2016. The webcast will be presented live at http://public.viavid.com/index.php?id=118746.

About Route1, Inc.

Route1 enables the mobile workspace without compromising on security. Its flagship technology MobiKEY uniquely combines secure mobile access, with high assurance identity validation and plug-and-play usability. Remote and mobile workers are able to securely and cost-effectively access their workspace from any device without exposing the organization to the risk of data spillage or malware propagation. MobiKEY customers include Fortune 500 enterprises as well as the U.S. Department of Defense, the Department of Homeland Security, the Department of Energy and the Government of Canada. Headquartered in Toronto, Canada, Route1 is listed on the TSX Venture Exchange.

For more information, visit www.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.

© Route1 Inc., 2016. All rights reserved. Route1, Route 1, the Route1 and shield design Logo, MobiDESK, Mobi, Route1 MobiVDI, Route1 MobiDESK, Route1 MobiBOOK, Route1 MobiKEY, Route1 MobiNET, IBAD, MobiVDI, MobiNET, DEFIMNET, Powered by MobiNET, Route1 Mobi, Route1 MobiLINK, TruOFFICE, MobiLINK, EnterpriseLIVE, PurLINK, TruCOMMAND, MobiMICRO and MobiKEY 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, MobiKEY Classic 3, MobiKEY Fusion, MobiKEY Fusion2, and MobiKEY Fusion3 devices, and MobiLINK are protected by U.S. Patents 7,814,216, 7,739,726, 9,059,962 and 9,059,997, Canadian Patent 2,578,053, and other patents pending. The MobiKEY Classic 2 and MobiKEY Classic 3 devices are also protected by U.S. Patents 6,748,541 and 6,763,399, and European Patent 1001329 of Aladdin Knowledge Systems Ltd. and used under license. Other patents are registered or pending in various countries around the world.

Other product and company names mentioned herein may be trademarks of their respective companies.