COMMUNIQUÉ DE PRESSE

par Route1 Inc. (isin : CA77929Q4051)

Route1 Announces Q3 2023 Financial Results

TORONTO, ON / ACCESSWIRE / November 16, 2023 / 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, 2023.

Statement of operations
In 000s of CAD dollars
Q32023Q22023Q12023Q42022Q32022Q22022
Revenue
Subscription and services
1,1481,1591,0861,1031,3261,854
Devices and appliances
3,3703,0263,4862,2795,5195,251
Other
5(1)3629
Total revenue
4,5234,1844,5753,3886,8477,114
Cost of revenue
2,9983,0112,8972,0324,8425,015
Gross profit
1,5251,1731,6781,3562,0052,099
Operating expenses
1,5421,5331,8051,8591,8021,972
Operating profit 1
(17)(360)(128)(503)203127
Total other expenses 2, 3
532651751,223139183
Net income (loss)
(70)(625)(303)(1,726)64(56)

1 Before stock-based compensation

2 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.

3 For Q4 2022, the Company wrote down its deferred tax asset and liabilities with a net impact of ($1,141).

Subscription and services revenue
in 000s of CAD dollars
Q32023Q22023Q12023Q42022Q32022Q22022
Application software
2803434564758041,402
Other services
867816630628522452
Total
1,1481,1591,0861,1031,3261,854
Other services revenue
in 000s of CAD dollars
Q32023Q22023Q12023Q42022Q32022Q22022
Technology life-cycle maintenance and support
314310285300275214
Professional services
553506345328246238
Total
867816630628521452
Adjusted EBITDA
in 000s of CAD dollars
Q32023Q22023Q12023Q42022Q32022Q22022
Adjusted EBITDA 3
297(27)219(142)543459
Amortization
314332346361340332
Operating profit
(17)(360)(128)(503)203127

3 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
2023
Jun 30
2023
Mar 31
2023
Dec 31
2022
Sep 30
2022
Jun 30
2022
Cash
23278079103299
Total current assets
3,8773,5633,6914,9015,4454,593
Total current liabilities
8,7288,4848,0018,8259,6299,012
Net working capital
(4,851)(4,921)(4,329)(3,924)(4,184)(4,419)
Total assets
10,67810,57111,01612,35514,82613,909
Net bank debt and seller notes
3,2483,3783,4253,1183,0182,515
Total shareholders' equity
8389361,4991,7653,2092,883

As of November 15, 2023, there are a total of 2,075,000 options currently outstanding under the stock option plan.

Business and Operations Metrics

Further to the Company's prior news releases, shareholder calls and webcast presentations, Route1 has communicated operating metrics that it believes assist in establishing whether the Company's business model is generating shareholder value. The Company is adapting to an increasingly difficult competitive environment and is achieving success in the automatic license plate recognition technology component of its business. It is the Company's goal to demonstrate success through cash flow generation that provides for impactful debt reduction and improved returns on invested capital, and additionally justifies scaling the business model.

Further in In today's update, we have added a third metric, quarterly fixed costs.

A. 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
Q3-23Q2-23Q1-23Q4-22Q3-22Q2-22Q1-22
Quarter Value
$1,124$794$1,163$862$1,231$896$876

B. Recurring ALPR support contracts need to grow to in excess of 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
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