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Route1 Reports Record Results in Third Quarter of 2018

November 6, 2018

TORONTO, Nov. 06, 2018 (GLOBE NEWSWIRE) -- Route1 Inc. (OTCQB: ROIUF and TSXV: ROI) (the “Company” or “Route1”), North America’s most advanced provider of industrial-grade data intelligence, user authentication and ultra-secure mobile workforce solutions, today announced its third quarter (Q3) financial results for the three and nine months ended September 30, 2018.

Statement of operations Q3 Q2 Q1 Q4 Q3 Q2 In 000s of CAD dollars 2018 2018 2018 2017 2017 2017 --------------------------------- ------ ----- ----- ----- ----- ----- Revenue Subscription revenue and services 1,684 1,633 1,264 1,263 1,177 1,347 Devices and appliances 13,207 3,936 388 109 159 24 Other 4 7 32 48 2 - ------ ----- ----- ----- ----- ----- Total revenue 14,895 5,577 1,684 1,420 1,338 1,371 Cost of revenue 12,311 3,620 585 331 362 298 ------ ----- ----- ----- ----- ----- Gross profit 2,584 1,957 1,100 1,089 976 1,073 Operating expenses 2,150 1,891 1,136 1,164 1,131 1,151 ------ ----- ----- ----- ----- ----- Operating profit (loss) 1 434 65 (36) (75) (155) (78) Total other expenses 2 192 (144) 114 170 183 157 ------ ----- ----- ----- ----- ----- Net income gain (loss) 242 209 (150) (245) (338) (235) ------ ----- ----- ----- ----- -----

1 Before stock based compensation and patent litigation2 Includes stock based compensation, AirWatch litigation, gain on acquisition and foreign exchange

Subscription revenue and services Q3 Q2 Q1 Q4 Q3 Q2 in 000s of CAD dollars 2018 2018 2018 2017 2017 2017 --------------------------------- ----- ----- ----- ----- ----- ----- Application software 1,193 1,181 1,260 1,263 1,177 1,347 Technology as a service (TaaS) 288 266 - - - - Other services 203 186 4 - - - ----- ----- ----- ----- ----- ----- Total 1,684 1,633 1,264 1,263 1,177 1,347 ----- ----- ----- ----- ----- -----

Adjusted EBITDA Q3 Q2 Q1 Q4 Q3 Q2 in 000s of CAD dollars 2018 2018 2018 2017 2017 2017 ----------------------- ----- ----- ----- ----- ----- ----- Gross Profit 2,584 1,957 1,100 1,089 976 1,073 Adjusted EBITDA 3 627 272 46 24 (46) 16 Amortization 193 207 82 99 109 94 ----- ----- ----- ----- ----- ----- Operating profit (loss) 434 65 (36) (75) (155) (78) ----- ----- ----- ----- ----- -----

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.

Route1 generated cash from operating activities of approximately $0.5 million during Q3 2018 compared with cash used in operating activities of $0.2 million in Q3 2017. Non-cash working capital of $1.0 million was generated in Q3 2018 compared to $0.5 million of cash used in the same period a year earlier. Net cash generated from the day–to-day operations for the three months ended September 30, 2018 was $1.5 million compared to cash used of $0.6 million in Q3 2017.

Balance sheet extracts Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 In 000s of CAD dollars 2018 2018 2018 2017 2017 2017 ------ ------ ------ ------ ------ ------ Cash 2,289 1,084 600 1,037 1,408 2,080 Total current assets 5,998 4,989 6,292 2,035 2,856 2,924 Total current liabilities 5,559 4,863 6,292 1,829 2,534 2,396 Net working capital 439 126 - 206 322 528 Total assets 8,198 7,356 8,646 3,171 4,081 4,213 Bank debt - - - - - - Total shareholders’ equity 2,402 2,322 2,256 1,236 1,432 1,720 ------ ------ ------ ------ ------ ------

“I am pleased with the operating and financial performance the GroupMobile team delivered during our recently completed third quarter. The strong quarterly financial results reflect the high quality execution of our Group Mobile Int’l integration plan, closure on the July 2018 US $5.9 million purchase order for Getac rugged devices from a US based integrated energy company engaged primarily in electric power production and retail distribution operations, delivering to the market cutting edge software applications for data analytics and data security, and the start of realizing on the inherent business value that falls out of acquisition of Group Mobile Int’l earlier this year,” said Tony Busseri CEO of Route1. “Of note is the positive impact the addition of the rugged device resale business that we purchased earlier this year. Results will vary from quarter to quarter, as device sales can be influenced by one-time large orders similar to the impact the US $5.9 million had on this third quarter.

“We started our business pivot towards being an advanced provider of solutions for the ultra-secure mobile workforce, user authentication and data intelligence in mid-2017 and the plan is now producing better than expected results at this point in the business model’s maturity. We expect GroupMobile to grow organically and through acquisition over the next year and continue to aggressively move forward on realizing on the embedded value in our intellectual property.”

Investor Conference Call and Webcast

Route1 will hold a conference call and web cast to discuss the Company’s financial results and provide a business update on Wednesday, November 7, 2018 at 9 a.m. eastern. Participants should dial Toll-Free: 1-866-548-4713 or Toll/International: 1-323-794-2093 at least 10 minutes prior to the conference, pass code 1767112 . For those unable to attend the call, a replay will be available on November 7, 2018 after 12:00 p.m. at Toll-Free 1-844-512-2921 or Toll/International 1-412-317-6671, pass code 1767112 until 11:59 pm on November 21, 2018.

The webcast will be presented live at http://public.viavid.com/index.php?id=131797.

About Route1 Inc. Route1, operating under the trade name GroupMobile, is North America’s most advanced provider of industrial-grade data intelligence, user authentication, and ultra-secure mobile workforce solutions. The Company helps all manner of organizations, from government and military to private sector, to make intelligent use of devices and data for immediate process improvements while maintaining the highest level of cyber security. 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 BusseriCEO, Route1 Inc.+1 416 814-2635 tony.busseri@groupmobile.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.

© 2018 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.

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