Route1 Reports 2016 Fourth Quarter and Full Year Financial Results

TORONTO, ONTARIO--(Marketwired - April 13, 2017) - Route1 Inc. (OTCQB:ROIUF)(TSX VENTURE:ROI) (the Company or Route1), a world- leader in secure data protection technologies and user authentication for government and enterprise, today announced its fourth quarter (Q4) and fiscal year (FY) financial results for the period ended December 31, 2016.

Fourth Quarter (Q4) 2016
In 000s of CAD dollars		Q4 2016	Q3 2016	Q2 2016	Q1 2016	Q4 2015
Revenue
	Device	21	221	51	69	9
	Services	1,865	1,808	1,760	1,648	1,616
	Other	0	2	1	1	0
Total Revenue		1,886	2,031	1,812	1,718	1,625
Cost of revenue		338	448	341	348	284
Gross profit		1,548	1,583	1,471	1,370	1,341
Operating expenses		1,356	1,243	1,299	1,332	1,189
Operating profit (1)		192	340	172	38	152
Total other expenses		101	34	(27)	304	(225)
Comprehensive net income		91	306	199	(266)	377
(1)	Note: Before stock-based compensation

During the fourth quarter of 2016, Route1 realized growth in revenue from MobiKEY application software subscribers (recurring revenue). Revenue from Services includes MobiKEY application software, the MobiNET (DEFIMNET) platform and other appliance licensing or yearly maintenance.

Services Revenue	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
In CAD dollars	2016	2016	2016	2016	2015
Closing number of subscribers	17,883	17,344	16,800	16,490	16,286
Revenue per subscriber	$388	$383	$383	$367	$361
Subscriber Revenue *	$1,702	$1,639	$1,591	$1,496	$1,467
Other Services Revenue *	$163	$169	$169	$152	$149
Total Services Revenue *	$1,865	$1,808	$1,760	$1,648	$1,616
* Note: Figures are in 000s

Earnings before interest, taxes, depreciation amortization, and stock-based compensation (Adjusted EBITDA) during the fourth quarter of 2016 amounted to approximately $307,000 compared to $279,000 in Q4 2015.

in 000s of CAD dollars	Q4 2016	Q3 2016	Q2 2016	Q1 2016	Q4 2015
Gross Profit	1,548	1,583	1,471	1,370	1,341
Adjusted EBITDA	307	447	278	172	279
Amortization	115	107	106	134	127
Operating profit before stock based compensation	192	340	172	38	152

Route1 used cash in operating activities of approximately $0.7 million during Q4 2016 compared with cash used in operating activities of $1.0 million in Q4 2015. As at December 31, 2016, the Company had no bank debt and a cash balance of $1.9 million.

Balance Sheet Extracts	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
In 000s of CAD dollars	2016	2016	2016	2016	2015
Cash	1,946	2,898	3,735	407	1,251
Total current assets	2,910	3,938	4,765	3,880	2,112
Total current liabilities	2,500	3,555	4,719	3,814	1,948
Net working capital	410	383	46	66	164
Total assets	4,190	5,230	6,116	5,296	3,656
Bank debt	0	0	0	0	0
Total liabilities	2,590	3,656	4,820	3,919	2,059

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.

Fiscal Year 2016

The Company's operating results in fiscal year 2016 with comparatives are as follows:

In 000s of CAD dollars		FY 2016	FY 2015	FY 2014	FY 2013
Revenue
	Device	363	156	536	447
	Services	7,080	6,218	5,470	4,948
	Other	4	23	71	38
Total Revenue		7,447	6,397	6,077	5,433
Cost of revenue		1,475	1,164	1,145	1,137
Gross profit		5,972	5,233	4,932	4,296
Operating expenses		5,230	4,515	4,398	4,485
Operating profit (1)		742	718	534	(189)
Total other expenses		412	(10)	(103)	154
Comprehensive net income		330	728	637	(343)
(1)	Note: Before stock-based compensation

Investor Conference Call and Webcast - Note the Date Change

The Company will also hold a conference call and web cast to discuss the financial results on Tuesday, April 18, 2017 at 4:15 pm eastern. Participants should dial 1-800-263-8506 or 1-719-325-2362 at least 10 minutes prior to the conference time of 4:15 pm eastern, pass code 1247452. For those unable to attend the call, a replay will be available after 7:15 p.m. at 1-844-512-2921 or 1-412-317-6671, pass code 1247452 until midnight on May 2, 2017. The webcast will be presented live at http://public.viavid.com/index.php?id=123610.

About Route1 Inc.

Route1 Inc. is a world-leader in secure data protection technologies and user authentication for government and enterprise. Route1 solutions enable the workforce to be more productive and more flexible without compromising system access, data-at-rest, or data-in-use. The Company's suite of patented enterprise security solutions combines best-in-class authentication, data security and secure communications with streamlined administration tools, running on a proven, trusted infrastructure. From mobile access to business continuity to best-in-class full system encryption, Route1 offers the most effective, affordable methods to secure the digital fortress, while meeting or exceeding the highest standards for government and industry. Route1 has Full Authority to Operate from the U.S. Department of Defense, the U.S. Department of the Navy, the U.S. Department of the Interior, and other government agencies. The Company is also trusted by enterprise security teams in the banking, healthcare, legal and education sectors, among others. With offices in Washington, D.C., Boca Raton, FL and Toronto, Canada, Route1 serves public and private sector clients around the world. 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.

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 contains statements that are not current or historical factual statements that may constitute forward-looking statements. These statements are based on certain factors and assumptions, including, expected financial performance, business prospects, technological developments, and development activities and like matters. While Route1 Inc. 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 risks and should not be relied upon as a prediction of future events. The Company undertakes no obligation to update any forward-looking statement 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 news release are from Company sources.

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