Route1 Announces Q3 2021 Financial Results

Rhea-AI Summary

Route1 Inc. (OTCQB:ROIUF) reported its Q3 2021 financial results, showing total revenue of CAD 7.288 million, a 15.0% increase from Q2. Subscription and services revenue was CAD 2.297 million, down from CAD 2.671 million in Q2. The company reported a gross profit of CAD 2.592 million while net loss for the quarter was CAD 61, contrasting with a net income of CAD 461 in Q2. Cash flow from operating activities was CAD 435, reversing a negative trend from previous quarters. Total current liabilities rose to CAD 11.542 million, leading to a net working capital deficit of CAD 3.999 million.

Positive

• Total revenue increased by 15.0% compared to Q2 2021.
• Cash generated from operating activities was CAD 435, showing improvement.

Negative

• Net loss of CAD 61, a decline from a net income of CAD 461 in Q2 2021.
• Current liabilities increased to CAD 11.542 million, raising concerns over liquidity.

TORONTO, ON / ACCESSWIRE / November 22, 2021 / Route1 Inc. (OTCQB:ROIUF)(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 nine-month periods ended September 30, 2021.

The Company's operating results for Q3 2021 with comparatives are as follows:

Statement of operations In 000s of CAD dollars		Q3 2021				Q2 2021				Q1 2021				Q4 2020				Q3 2020				Q2 2020
Revenue
Subscription and services		2,297				2,671				2,758				2,528				2,599				2,489
Devices and appliances		4,960				3,663				3,786				4,637				6,523				4,477
Other		31				4				67				62				25				3
Total revenue		7,288				6,338				6,611				7,227				9,147				6,969
Cost of revenue		4,696				3,443				3,647				4,315				6,134				4,188
Gross profit		2,592				2,895				2,964				2,912				3,013				2,781
Operating expenses		2,437				2,451				2,542				2,469				2,562				2,570
Operating profit 1		155				444				422				443				451				211
Patent litigation 2		0				0				0				1,058				381				67
Total other expenses 3		216				(17	)			284				321				598				204
Net income (loss)		(61	)			461				138				(936	)			(528	)			(60	)

¹ 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.

Subscription and services revenue in 000s of CAD dollars		Q3 2021				Q2 2021				Q1 2021				Q4 2020				Q3 2020				Q2 2020
Application software		1,628				1,724				1,977				2,015				1,923				1,665
Technology as a service (TaaS)		150				435				293				204				241				315
Other services		519				512				488				309				435				509
Total		2,297				2,671				2,758				2,528				2,599				2,489

Adjusted EBITDA in 000s of CAD dollars		Q3 2021				Q2 2021				Q1 2021				Q4 2020				Q3 2020				Q2 2020
Gross Profit		2,592				2,895				2,964				2,912				3,013				2,781
Adjusted EBITDA 4		465				760				764				768				778				556
Amortization		310				316				342				325				327				346
Operating profit		155				444				422				443				451				211

Trailing 12 Months Adjusted EBITDA in 000s of CAD dollars		Q3 2021				Q2 2021				Q1 2021				Q4 2020				Q3 2020				Q2 2020
Adjusted EBITDA 4		2,757				3,070				2,865				2,459				2,368				2,332

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.

Balance sheet extracts In 000s of CAD dollars	Sep 30 2021				Jun 30 2021				Mar 31 2021				Dec 31 2020				Sep 30 2020				Jun 30 2020
Cash		727				166				513				1,137				2,226				107
Total current assets		7,543				5,008				5,357				6,408				8,836				5,448
Total current liabilities		11,542				9,095				9,887				9,779				13,385				8,901
Net working capital		(3,999	)			(4,087	)			(4,530	)			(3,371	)			(4,549	)			(3,453	)
Net working capital (adjusted for contract liability)		(228	)			(1,263	)			(853	)			256				490				800
Total assets		16,833				13,739				14,386				14,176				15,749				12,283
Net bank debt and seller notes		2,194				1,673				1,215				655				383				1,086
Total shareholders' equity		2,982				2,906				2,443				2,141				37				778

Net cash flow In 000s of CAD dollars		Q3 2021				Q2 2021				Q1 2021				Q4 2020				Q3 2020				Q2 2020
Cash generated (used) in operating activities		435				(125	)			1,266				(3,513	)			1,523				1,773
Cash generated (used) in investing activities		(308	)			(110	)			(1,700	)			906				(489	)			(240	)
Cash generated (used) in financing activities		451				(142	)			(211	)			1,601				1,092				(1,543	)
Net cash inflow (outflow)		578				(377	)			(645	)			(1,008	)			2,126				(10	)

Q3 2021 Business Update

Route1 issued a news release on November 1, 2021 providing a business update. The release can be found at https://www.route1.com/wp-content/uploads/2021/11/Route1-NR-Business-Update-Nov-1-21-FINAL.pdf.

Share Capital Update

As at November 22, 2021, Route1 had outstanding: 39,709,463 common shares; 3,574,411 common share purchase warrants expiring June 16, 2022 with a Canadian dollar $1.00 strike price; and 3,025,000 common share stock options.

Business Update Conference Call and Webcast

The Company will hold a conference call and web-cast to provide a business update on Tuesday, November 23, 2021 at 9:00 am Eastern Time.

Participants should dial Toll-Free 888-506-0062 or Toll/International 973-528-0011 at least 10 minutes prior to the conference call and web cast. The participant access code is 748119. For those unable to attend the call, a replay will be available at Toll-Free 877-481-4010 or Toll/International 919-882-2331 passcode 43782 until 9 am on November 30, 2021.

The webcast will be presented live at https://www.webcaster4.com/Webcast/Page/2167/43782.

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.

View source version on accesswire.com:
https://www.accesswire.com/674230/Route1-Announces-Q3-2021-Financial-Results

FAQ

What were Route1's Q3 2021 earnings results?

Route1 reported total revenue of CAD 7.288 million and a net loss of CAD 61 for Q3 2021.

How did Route1's revenue change in Q3 2021 compared to previous quarters?

Route1's total revenue increased by 15.0% from CAD 6.338 million in Q2 2021.

What is Route1's cash flow situation in Q3 2021?

The company generated CAD 435 in cash from operating activities during Q3 2021.

What is the outlook for Route1 following the Q3 2021 results?

Investors should monitor Route1's increasing liabilities and net loss to evaluate future performance.