Company Posts its Ninth Consecutive Quarter of Growth in Services Revenue and MobiKEY Subscribers

TORONTO, ONTARIO--(Marketwired - May 12, 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 first quarter (Q1) financial results for the period ended March 31, 2016.

In 000s of CAD dollars		Q1 2016	Q4 2015	Q3 2015	Q2 2015	Q1 2015
Revenue
	Device	69	9	42	50	55
	Services	1,648	1,616	1,572	1,569	1,461
	Other	1	0	0	1	22
Total Revenue		1,718	1,625	1,614	1,620	1,538
Cost of revenue		348	284	320	294	266
Gross profit		1,370	1,341	1.294	1,326	1,272
Operating expenses		1,332	1,189	1,170	1,198	958
Operating profit (1)		38	152	124	128	314
Total other expenses		(304)	225	(22)	(472)	280
Comprehensive net income		(266)	377	102	(344)	594

(1) Note: Before stock-based compensation

During Q1 2016 Route1 realized further growth in revenue from MobiKEY application software subscribers (recurring revenue). Revenue from services includes MobiKEY application software, as well as the DEFIMNET platform and other appliance licensing or yearly maintenance. The net increase in MobiKEY application software subscribers primarily came from agencies and components within the U.S. Department of Defense, the U.S. Navy, and the U.S. Department of the Interior.

Services Revenue In 000s of CAD dollars	Q1 2016	Q4 2015	Q3 2015	Q2 2015	Q1 2015
Closing number of subscribers	16,490	16,286	15,989	15,410	15,012
Revenue per subscriber	$367	$361	$362	$353	$334
Subscriber Revenue	$1,496	$1,467	$1,424	$1,346	$1,252
Other Services Revenue	$152	$149	$148	$223	$209
Total Services Revenue	$1,648	$1,616	$1,572	$1,569	$1,461

For the noted 16,490 MobiKEY application software subscribers, Route1's average revenue per subscriber will increase in Q2 2016 to CAD $375 or better as a result of the improved exchange rate realized since renewing certain U.S. government accounts in March and April 2016.

The Company's operating expenses increased in Q1 2016 by $143k from Q4 2015. Drivers of the difference were a decrease in the Company's Scientific Research and Experimental Development (SRED) credit available estimate of $112k, and research and development salaries and wages increase of $45k.

During the first quarter of 2016 the Company realized a foreign exchange loss of $177,369. The foreign exchange loss was primarily unrealized ($172,104) and a direct result of the US dollar weakening against the Canadian dollar from a rate of 1.384 on December 31, 2015 to 1.2987 on March 31, 2016.

Earnings before interest, tax, depreciation, and amortization (Adjusted EBITDA) during the first quarter of 2016 amounted to approximately $172,000 compared to $404,000 in Q1 2015.

in 000s of CAD dollars	Q1 2016	Q4 2015	Q3 2015	Q2 2015	Q1 2015
Gross Profit	1,370	1,341	1,294	1,326	1,272
Adjusted EBITDA	172	279	242	227	404
Amortization	134	127	118	99	90
Operating profit before stock based compensation	38	152	124	128	314

Route1 used cash in operating activities of approximately $0.006 million during Q1 2016 compared with cash generated of $0.452 million in Q1 2015. As at March 31, 2016, the Company had no bank debt and a cash balance of $407,020.

Balance Sheet Extracts In 000s of CAD dollars	Mar 31 2016	Dec 31 2015	Sep 30 2015	Jun 30 2015	Mar 31 2015
Cash	407	1,251	2,433	3,468	1,277
Total current assets	3,880	2,112	3,161	4,166	3,363
Total current liabilities	3,814	1,948	3,155	4,351	2,986
Net working capital	66	164	6	(185)	377
Total assets	5,296	3,656	4,466	5,494	4,631
Bank debt	0	0	0	0	0
Total liabilities	3,919	2,059	3,256	4,453	3,092

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 that it had initiated another 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 May 4, 2016 the Company had purchased a total of 7,746,000 common shares under the NCIB.

Since the first NCIB was announced on February 28, 2012, Route1 has repurchased a total of 31,415,200 of its common shares, representing 8.1% of Route1's common shares outstanding as at February 28, 2012.

As at May 4, 2016, Route1 has 357,505,414 common shares outstanding.

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, 9,059,997 and 9,319,385, 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.