In today’s digital world, more and more people rely on internet connections to perform daily tasks. What may have at one time been the beginning of a trend shift is now fully in the middle of the modality change as working and connecting in cyberspace is a daily occurrence for a large portion of the business community.
With the ever-increasing amount of document sharing and "cloud" computing, security is obviously a primary concern with companies focused on that industry seeing regular growth out of sheer demand.
Toronto-based, Route1, Inc. (TSX-Venture:ROI) is dedicated to delivering industry-leading security and identity management solutions to enterprises worldwide including businesses, government and military organizations which need universal, secure access to all digital resources and sensitive data.
The Company markets and maintains MobiNET®, its communications and service delivery platform which provides identity assurance and individualized access to networks and data. Route1's patented technologies are based on FIPS 140-2 cryptographic modules and simplify the process of meeting increasingly stringent regulatory requirements for privacy and security. Clients of Route 1 include household names such as ING Netherlands, the United States Department of Homeland Security, the Government of Canada, the Dutch government and Foresters.
Today, Route1 released its financial results for the three-month and 12-month periods ended December 31, 2010 which reflected the steady growth of the company. For the three-month period ended December 31, 2010, total revenues increased to $1.77 million as compared to the $1.69 million during the corresponding period in 2009.
Services revenue increased by a whopping 86% to a record $1.75 million, which more than compensated for decreases in Devices and Appliances revenue in the fourth quarter of 2009. Gross margin for the fourth quarter of 2010 increased to a record $1.69 million, or 96% as a percentage of revenues, versus $1.39 million for the year prior’s quarter. For the first time in Route1's operating history, the Company reported positive EBITDA and Net Income of $0.44 million and $90,183, respectively.
Results from the year-long period also continued growth and efficiency for Route1. For the 12-month period ended December 31, 2010, revenues may have only increased mildly to $5.36 million compared to $5.20 million in 2009, but gross margins significantly rose; climbing to a record $4.69 million, or 87% as a percentage of revenues, versus $3.41 million, or 66% during 2009.
While still operating at a net loss, the loss was reduced by nearly 50% as compared to 2009, which is a large step in the right direction. Additionally, 2010 came to a close with Route1 still holding a cash position of $484,457, with zero drawn on its credit facility, another infrequent occurrence amongst most junior companies.
Investors measure companies in many ways. In the small-capitalization world, looking for companies operating in the black can take some time, so a common barometer is overall direction of financials and potential for future growth.
With the calibre of clients that are using Route1 services at this point, no chance that Internet security is going to lose its importance and finances apparently taking a turn away from the red with record gross margin numbers being logged in 2010, V.ROI just may be a company hitting the watchlist of more investors throughout 2011.
