Route1 Inc. (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, 2024.
Statement of operations
In 000s of CAD dollars
Q32024
Q22024
Q12024
Q42023
Q32023
Q22023
Revenue
Subscription and services
$
1,417
$
888
$
906
$
1,064
$
1,148
$
1,159
Devices and appliances
2,301
2,605
3,123
3,222
3,370
3,026
Other
(12
)
(9
)
3
10
5
(1
)
Total revenue
3,706
3,484
4,032
4,296
4,523
4,184
Cost of revenue
2,376
2,269
2,716
2,797
2,998
3,011
Gross profit
1,331
1,215
1,317
1,499
1,525
1,173
Operating expenses
1,418
1,457
1,431
1,558
1,542
1,533
Operating profit 1
(87
)
(242
)
(115
)
(59
)
(18
)
(360
)
Total other expenses 2
196
86
34
223
52
265
Net income (loss)
$
(283
)
$
(328
)
$
(149
)
$
(282
)
$
(70
)
$
(625
)
1 Before stock-based compensation
2 Includes gain or loss on asset disposal, stock-based compensation expense, interest expense, income tax recovery, foreign exchange loss or gain, other expenses and acquisition expenses.
Adjusted EBITDA 1
In thousands of Canadian dollars
Q32024
Q22024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Adjusted EBITDA
$
147
$
2
$
134
$
226
$
297
$
(27
)
Depreciation and amortization
234
245
248
285
314
333
Operating profit
$
(87
)
$
(242
)
$
(115
)
$
(59
)
$
(18
)
$
(360
)
1 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.
Subscription and services revenue in 000s of CAD dollars
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Application software
$
37
$
49
$
129
$
139
$
280
$
343
Other services
1,380
839
777
925
868
816
Total
$
1,417
$
888
$
906
$
1,064
$
1,148
$
1,159
Other services revenue in 000s of CAD dollars
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Technology life-cycle maintenance and support
$
370
$
356
$
347
$
323
$
314
$
310
Professional services
1,010
483
430
602
553
506
Total
$
1,417
$
839
$
777
$
925
$
867
$
816
" Not a dramatic quarter, rather a steady quarter that showed continued operational improvement, revenue growth and improving free cash flow. Route1's fourth quarter should also demonstrate quarter over quarter improvement and set us up for a financially improved fiscal year 2025, said Tony Busseri, Route1's CEO".
Balance Sheet Extracts
In 000s of CAD dollars
Sep 30
2024
Jun 30
2024
Mar 31
2024
Dec 31
2023
Sep 30
2023
Jun 30
2023
Cash
$
(47
)
$
136
$
27
$
38
$
23
$
27
Total current assets
3,099
2,501
2,650
3,071
3,877
3,563
Total current liabilities
8,585
7,983
7,856
8,089
8,728
8,484
Net working capital
(5,486
)
(5,482
)
(5,206
)
(5,018
)
(4,851
)
(4,921
)
Total assets
8,923
8,677
9,017
9,541
10,678
10,571
Net bank debt and seller notes
2,690
2,953
2,783
3,258
3,248
3,378
Total shareholders' equity
$
(211
)
$
47
$
407
$
584
$
838
$
936
Business and Operations Metrics
Route1 has established three operating metrics that are critical to the Company's business model, initially creating cash flow stability and then generating sustainable shareholder value. It is the Company's goal to demonstrate success through cash flow generation that provides for meaningful debt reduction and improved returns on invested capital, and additionally demands scaling the business model through acquisition.
In early 2025, the Company will provide shareholders with updated operating metrics for fiscal year 2025 and 2026, better reflecting the next stage in the Company's development - growth.
Gross profit (GP) generated from non-MobiKEY and other Route1 software application sales on a quarterly basis needs to achieve and maintain a minimum value of US $1.15 million ("Benchmark A"). Gross profit is defined as revenue less devices and appliances direct costs but does not include other direct costs including salaries, wages and consulting fees, bad debts and travel expenses.
in US 000s
Q3-24
Q2-24
Q1-24
Q4-23
Q3-23
Q2-23
Quarter Value
$
1,129
$
998
$
1,064
$
1,170
$
1,124
$
794
Recurring ALPR support contracts need to grow to more than US $1.0 million in annualized revenue ("Benchmark B").
Route1 started the 2022 fiscal year at a base of US $595,000 per annum.
in US 000s
Q3-24
Q2-24
Q1-24
Q4-23
Q3-23
Q2-23
Q1-23
Quarter Value
$
272
$
261
$
258
$
237
$
235
$
228
$
212
Annualized Value
$
1,088
$
1,044
$
1,032
$
946
$
941
$
914
$
847
Fixed costs including amortization need not exceed CAD $1.65 million per quarter ("Benchmark C").
In CAD 000s
Q3-24
Q2-24
Q1-24
Q4-23
Q3-23
Q2-23
Q1-23
Fixed Costs
$
1,418
$
1,457
$
1,431
$
1,558
$
1,542
$
1,533
$
1,805
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. Route1 is listed 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 +1 480 578-0287 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.
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 expected growth in the value of support contracts for the LPR business, price and liquidity of the common shares, competition for skilled personnel, expected financial performance and subscription-based revenue, business prospects, technological developments, 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 market demand for the Company's products and services and 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.
