Good morning, ladies and gentlemen, and welcome to the Route1 Q3 2021 Investor Update Conference Call and Webcast. At this time, all participants are in a listen-only mode. Shortly, we will begin with the formal presentation, which will be followed by a question-and-answer period. As a reminder, ladies and gentlemen, this call is being recorded today, Tuesday, November 23rd, 2021. I would now like to turn the call over to Tony Busseri, Route1 Chief Executive Officer. Good morning, everyone, and thank you for the introduction there. Let's go through the performance stuff real quickly. As described on the company slide, I'd like to inform listeners that this presentation 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 considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. These statements include risks and uncertainties, including, but not limited to, the risk factors described in reporting documents filed by our 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 presentation are from company sources. I also need to point out that on today's call, we use names that are either registered trademarks or trademarks of Route1 Inc. in the United States or Canada. Today's update has a couple of key messages that ultimately go with it. One is, as we described in the news release a couple weeks ago, some of the broader market factors have had an impact in the third quarter for us, related to supply chain or microchip availability, and we'll spend some time talking about that. For us as a company, we feel at this juncture that those disruptions had an impact on timing in Q3, and as we're moving through Q4, to date, we've our pipeline, our backlog of the related inventory that's required has been able to meet customer contracts and expectations. We're expecting, as a wholesome commentary, that Q4 to be back on track to what we would expect our business to be able to generate from the classic pillars that we have as a business, from our data security, data acquisition, data visualization, and other services and technological offerings. As we slide directly into the results for the quarter, sorry, the slide's just taking a little longer to update. Let's go through the operating performance. For our quarter, we actually had revenue that was better than the second quarter, better than the first quarter of this year. Part of that was related to encouraging clients to make orders earlier than they may otherwise do because of the concern around the supply chain. Back in Q1 and Q2, we were talking to our clients that would be more transactional-oriented about buying their Getac tablets or their Panasonic Toughbooks, and put those orders in earlier because there was going to be no guarantee around the timing for that hardware in the back half of this year. Some of those things led to sales that we were able to pull forward in the quarter. On the other side of that, as we've talked about pretty openly, when a Chevy Volt, a car, is delayed for a parking enforcement officer, we can't control that. Where it does impact us is our inability to potentially install the Genetec AutoVu technology, to be able to do the install work, the training, the servicing, et cetera. We've had a couple things that are going on in this quarter. One, we were able to encourage one-time transactional buying to happen a little quicker, and that was pre-planned earlier this year. On the other hand, we're being impacted by availability of cars, technology for LPR, and that's had an impact. Overall, revenue's up. We'll talk about the recurring revenue line item. Mostly that deals with technology as a service and the ending of certain contracts as we move away from that. Gross margin was slightly down from the second quarter, had an impact on the EBITDA, and we have a slight loss for the quarter. Disappointing for sure, we're no different than many other players that are impacted by the timing of hard goods and technology when it gets delivered. As we drill down into our numbers a little bit, obviously, we often talk about the four key metrics for us, revenue, GP, gross margin, and EBITDA. We would again expect third quarter to normalize fully or somewhat, and we look forward to be able to giving you indicators as we move towards the end of this quarter, how we're doing relative to some of these metrics. Right now, the quarter, we think it'll look more like Q1 and Q2 than necessarily the third quarter, because we've worked through the delays in the timing for certain projects. There always could be further disruptions. As we stand here in the seventh, eighth week of the fourth quarter, right now, we're not feeling that the quarter's going to look like the third quarter. As we slide into this further, some general notes important to keep in mind. We've talked about the delays in hardware and LPR hardware in particular. We did have the Spyrus acquisition close. We had a couple weeks of that, and in some ways, it's providing a hedge for us. Because Spyrus had their own inventory for their authentication product, and then a bunch of what they do is related to software offerings. That's a positive hedge as we close that deal. We'll talk a little bit more about it as we go through it. We continue to have the Canadian dollar erosion this year versus last year. We're starting to see some good movement of the US dollar in the last couple weeks, and again, today it's strengthening and that ultimately will help us. The timing of the two bigger orders and those renewals happen in March as well as August. Assuming the U.S. dollar strengthens as we go into the first quarter of next year, that could be a very positive outcome for us related to the renewal with the joint service provider of the Department of Defense, or as we like to call it, the Pentagon. We're going to talk a little bit about this that we talked about in the second quarter, there has been some pulling back of dollars that were put out there for the COVID or the pandemic, and that has seen some of the uptick in MobiKEY subscriptions that were procured during 2020 pulled back in 2021. As you're probably well aware of, the U.S. federal government is spending money at a record pace here, but not a lot of that in technology or data security. The focus is obviously on other issues. For us, what we've done, we're still at a level that's much higher than where we were pre-pandemic. Some of those dollars that were put out there for one-time or bridge work-from-home investments have been pulled back. From a Navy perspective, we continue to be stuck, let's call it that. The new prime contractor for the Navy being Leidos is working through the early months in servicing the Navy. It means a number of items in the catalog where Navy personnel can procure, including us, hasn't been lit up yet. We're at a similar level in DON users as we were about five, six months ago. We're hoping during the fourth quarter that finally gets resolved. Frustrating as it is, we are one of a couple hundred different offerings for the Navy, so they have a bigger issue than just whether they can buy MobiKEY. The broader issue is their ability to procure different technology through that Leidos relationship. Should point out also that we had greater than traditional costs in the accounting and finance team through some turnover and change. We don't believe those costs will happen again. There was some investment in new people, headhunter fees, and those type of things. When you look at our fixed costs, just note that. Talking more about the services revenue or that recurring line, again, as we talked a little bit about the MobiKEY application software revenue, eroded a little bit from the second quarter. Again, that's primarily related to some COVID dollars being pulled away. Again, why it looks so stark from Q3 2020 has everything to do with exchange rate. There's two impacts here again, when application software revenue drops from CAD 1.9 million in Q3 2020 to CAD 1.6 million in Q3 2021, it's primarily related to FX. It's also related to a lower number of MobiKEY subscribers. Technology as a service, we talked about that, this was inherited when we did the Group Mobile acquisition back some three and a half plus years ago. We've continued to have the relationship with a couple accounts in this area. As we move forward here, we're not going to be investing aggressively in technology as a service or effectively leasing hardware with some services to it under a longer-term model. We think there's a better way to connect with the client. One of those ways is our other services line item, that's 12- month to 60-month contracts where we're providing extended services and training and other features to them, again, under a defined contract where they're paying us monthly. This number will continue to grow, it would a lot bigger same quarter year-over-year. Again, if not for FX. This is an area that we think we can do quite well in as we move forward. When we bought PCS Mobile, it was more of a transactional business in the LPR space. We've pivoted it to being an outcomes or services-based approach, and we're taking a higher standard of service than is available in the industry. To date, we're seeing a really good uptick from clients about wanting to renew, you know, their support contracts at greater dollars for us, but there's greater things we're providing. As we've talked about in the past, we've made a real investment in high-quality talent that engineer-like people, designers, other people, and in making that investment, you need to get a proper rate of return for it. Once they're invested in these people, they're not a variable cost, they're a fixed cost for you. We are just starting to see that revenue grow related to that initiative, and that's creating better packages, better bundles for full sales support and training, and then having our clients obviously lock in for one to five years. As we continue on here, again, as we talked a little bit, G&A costs were a little higher. We expect those to come back to the levels of prior quarters. R&D has an uptick. That's primarily related to the Spyrus acquisition, two weeks of employees acquired from Spyrus. Selling and marketing is clearly under control and reflects the fact of a Canadian dollar that strengthened, so that the US dollar impact of sales and marketing initiatives, you know, won't run out of hand, but they're worth a little less in Canadian dollars, again, because of the strengthened Canadian dollar during Q3 2021 versus Q3 2020. One of those metrics I often like talking about is the quality or the return we're getting from a sales and marketing expenditure dollar that we invest in. As you can see from the slide in front of you, that's continuing to get better and better, which is really a simple equation. It's gross profit over sales and marketing expense. We as a business continue to expect ourselves to get greater gross profit for every one dollar we're investing and for this to continue to improve as we move forward. I should touch on. I know I flipped slides here, but one of the ways you're able to do that is internal promotion. What does that mean? It means you're bringing people in through your business at a reasonable rate of pay or career salary. As they learn and get better, they take on greater and greater responsibility, and you're able to get a better return out of one dollar that you're investing. We're very strong about first promoting and giving people that are part of our family an opportunity to grow and take on bigger responsibility before we go into the marketplace and look to bring in new talent. That will have an impact on that gross profit divided by sales and marketing expense metric. EBITDA less foreign exchange costs dropped, and that's clearly because we had a weaker third quarter EBITDA-wise than we wanted it to be. We know what our goal here is to continue to grow that bar to be bigger and bigger numbers, particularly bigger than Q2 2021. From a balance sheet perspective, it's healthy, it's gotten healthier. I guess if you want to call it that, we obviously spent some money buying a company at the end of the quarter, which makes you have greater assets than you would have normalized without the same level of a full quarter of operating cash flow from that investment. Not a whole lot directly to point out, except at this particular point in time, when you look at net working capital adjusted for non-cash items like deferred revenue or contract liability, it has gotten better, and we think the balance sheet, over time will continue to strengthen. To be very, very clear about this, we're not in the market right now looking to raise money, for the business that we have. From time to time, we explore acquisitions that could require some debt or some form of quasi-equity. That's my caveat. At this juncture, there's no capital raise requirement to support the business as it's currently constituted. The other metric we really look at and pride ourselves on is the return we're getting for a dollar invested. Two things here. Again, we jumped the denominator assets invested by closing a deal right at the end of the third quarter, and with the decreased EBITDA in the quarter that impacted this. Still slightly better than a year ago at this time, less than Q1 and Q2. Our goal is to get that back and beyond where we were in the second quarter of this year, and look forward to updating you as we move forward, obviously. Let's talk a little bit then from what's ahead. I'm going to be a little more specific, I guess you might say. Some of this was already put out in the news release from a couple weeks ago. I just can't stress enough that, over the last six to eight weeks, or particularly starting early in September of this year, there is a change for us relative to accessing hard goods, microchips, storage, memory, as it relates to the, you know, the items we need for our clients. We had done just about everything that we could do. We couldn't build massive inventories because there is not one piece of something that's only needed by our client base. There were some selective pre-buys where we felt the PO was coming. We did those type of things. We encouraged clients, as we talked about earlier, to get ahead of their traditional procurement cycles so that they could see the goods come in in the third quarter or fourth quarter. Ultimately right now, we are having a more difficult time forecasting simply because there's never a guarantee at this juncture about when a good is going to arrive. Again, that could be a client's parking enforcement vehicle. It could be a cruiser for law enforcement. It could be a tablet. It could be a camera. But there's many different hard goods, let's call it, that do impact us. We are working with our key OEMs to get well, let's call it stronger and better timing when they're able to deliver. We are an important dealer and partner with players like Genetec and Getac. We keep on working with those partnerships so that collectively we meet our clients' expectations. One of those that was a little disappointing was California Highway Patrol and the large order we announced at the end of the second quarter. We had hoped most of that would have been shipped during Q3. It wasn't. I'm not at all criticizing our partner in this case, Genetec. Some things are beyond their control, too. We've not seen anywhere near the full benefit of that larger LPR-oriented order. We do expect that fully or very close to fully to show up during the fourth quarter. What can we do? How do we respond to the marketplace when there's variables that where you have limited gears that you can pull on? One is an obvious statement. You need to reduce your fixed costs, or always consider the mix of them, to ensure that you're getting the value you want. That could mean, from time to time you adjust headcount. We have done some of that, and that will be reflected in the fourth quarter. We've looked for certain partners when we're on fixed price contracts, to tweak those a little bit down for the next three to four months as we work through the macro global supply chain challenges. Partners have been good about this. You know, as I've said to our board of directors recently, adjusting headcount is something you can do in a shorter window, but ultimately in the medium term is not a long-term solution for us to grow EBITDA. We've made some adjustments, and we expect that as we move through 2022, we will grow again from a headcount perspective as the GP jumps. The second thing you can do, and again, cost is one area that you can pull levers on, is to build out those activities that do not require additional human or third-party cost investment. We talked about our engineering and services revenue line item. We have five strategic markets, or four really, that should impact us during the fourth quarter this year and Q1 of next year. Northern California, Seattle through the Portland, Oregon corridor, Greater Denver, and Milwaukee, Wisconsin, where we have a number of key accounts that are your colleges or public safety-oriented clients or commercial enterprises. I think in Northern California that's where I can't necessarily talk of the shared name, but in that area of Sacramento and that Northern Cali area, we have some important technology companies that use our technology for their campus parking. What this basically is a hub-and-spoke concept where we have a talent that's in a geography, and that talent will be used to deal with three, four, five strategic accounts, whether that's going on site a fixed number of times a week or a month, and some very tailored services to that particular client. That will grow our revenue, our gross profit, and EBITDA being much more rifle shot focused in as we deliver our services. We're looking forward to that. We think it's the right-on model. It's leveraging the investment you've made, without generating really any new cost. We can continue to acquire businesses and assets that meet our specific business model. You know, it's funny you say, "Well, you want to grow when things are tougher." Yes, we do. It is an opportunity. We think the area of services. I probably should have stepped back earlier on. I think all of us have experienced moments over the last 12 months where we're just shocked with the poor quality of service or timing we're getting from whether it's a window manufacturer or maybe it's buying a new car. Things are different than they were 18 months ago. If we can separate ourselves off of service, we think there's a chance to get enhanced margins. That's an area we want to invest in. We have very strong engineering capabilities. It would make sense as we go with this hub-and-spoke services model to expand upon that. If we buy an engineering services company, they will have to come with contracts and clients and talent. We think that's an area we should invest in. B is an interesting one. I'm not about to say we're going to close on a drone acquisition. I'm not saying that we're going to go into the being an OEM for drones, but that area of a data set that comes from a different source. You think of data sets around what a public safety officer is wearing, a body-worn camera. You think of fixed and mobile cameras, LPR activities in particular. That's a data set. A number of large urban communities use drones above major arteries or highways way up. You wouldn't hear the buzz or see them. It's bringing those different data sets together so that you can make a more intelligent real-time decision, if not have an artificially created action delivered to you based off of those data sets. We think this continues to be an area to invest in. We have seen ourselves with our client base starting to move beyond LPR and work with them on some of their cameras on campus in particular, where those cameras have nothing to do with LPR. They motion cameras in front of a bookstore, and there's software applications that are used where the camera will react to environmental factors and trigger a response. That could be they hear a loud thud at 3 A.M. in the morning within 100 ft of the front door of a bookstore. That may trigger a warning signal to on-campus police to do a drive-by review because that sound shouldn't be happening. More and more, we're working with our clients to integrate, again, their data sets. It sounds like a sexy technical term, but simply put, you're trying to garner as much information and on a real-time basis react to that before the negative event happens, or as quickly as the negative event happens, you're addressing it. Then the third type of business we're looking to acquire is much like the Spyrus Solutions acquisition. I guess nicely, I would call that unfinished business model, not a broken company. We're able to go in, and because we have a little bit of capital, but more importantly, we have a sales and marketing team, and we have software engineering, network engineering capabilities, we're able to add value to that company, help finish off the technology, deliver it to the prospective client base, and hopefully make abnormal returns as a result of bringing our capabilities to the table. Look, you can't buy five businesses like that at once or you'll, I'm using that as an example, you'll swamp our current talent. But these are the areas that we're looking at. We think they're a good fit for us. Acquiring during periods of challenge, if done properly, is a good thing to do. The fourth response that we have is not related to acquisition, but it's related to what we bring to the table from our own software engineering capability. We recently announced MobiLPR. That's our own mobile license plate recognition technology app that works on an Android OS-based device. It's currently available on the Google Play Store. What's unique about that is now you're using your phone as the camera to be able to capture a plate image and respond to it using that same hotlist or database that you would use for the Genetec AutoVu mobile and fixed technology. We think this is a great additional offering for our current client base. It's a reason that new clients will look at switching from alternate technologies to the Genetec AutoVu technology and ourselves, and it's a reason that people will start investing in LPR where they haven't otherwise. This was a smart development. It was initiated by listening to our clients, particularly in the law enforcement arena. Again, MobiLPR isn't just for public safety or law enforcement, it's also for parking. We often think of parking just as a garage with an automated booth that I enter. Parking is a lot more. It's generally on campus. This type of technology is good for a manager or a party that's responsible for overseeing parking garages or parking not necessarily in the garage, but it's on a space that's out on a flat top. You can see the use cases with a Saturday afternoon SEC football game in the portions where you have 100,000 additional vehicles on campus, and not every one of them are going through a parking garage where you have your investment already made in cameras and plate. This extends, or as we like to call it's a force multiplier, whether it's, again, parking or whether it's for law enforcement. A technology we're coming out with, hopefully, in Q4, but it could run into early Q1, is a technology called MobiKEY X. It will probably be one of the largest advancements, if not the largest one, in our MobiKEY technology over the last decade. We're... The line is everything what you currently have with MobiKEY, but what it does is we're partnering up with a player, where we're going to deliver desktop as a service on demand. It will be in the cloud. Why this is important to us is as the Department of Defense moves more and more to adopting Microsoft 365, and what that is the applications a user would want to use, we now can deliver the virtualized desktop at the same time MobiKEY for the secure protocol and user authentication. We'll be delivering a turnkey solution directly to the government, not having to leverage VMware or Microsoft Hyper-V or Citrix. With our partner, we'll be delivering desktop as it's DaaS, Desktop as a Service, for certain DoD clients, and then eventually roll that out civilian-wise. This is an important movement for us as more and more things go to the cloud. Obvious statement. Desktops being delivered on demand is really important from a government perspective. We're going to talk more about this. This is me teasing the marketplace a little bit early, but it goes to the creativity and the ingenuity of the talent we have that build our technology and think about the applications our users will require one, three, five years from now. We also announced a couple weeks ago a shift in our Chief Technology Officer office or the office of the CTO, excuse me. Jamie Cotter, who's been a good partner, a good business leader for us, has moved on. Alex Shpuro, who used to be with us a number of years ago in a development role, and then went on to great heights with his career in the banking and finance vertical, has stepped in a few weeks ago as our new CTO, and he brings a fresh set of ideas. Those fresh ideas, we're excited to adopt some or all of them. I won't fully read what's on the page here, but we are exploring where, and I often get asked this. How we can play in the broader blockchain arena. We think about PKI or user authentication in particular when it comes to blockchain. We think about securing information in the cloud for banking clients. We also think about AI as it relates to our manufacturing, or IIoT offering called ActionPLAN. Stay tuned is the message here. You respond to a changing marketplace by responding yourself. It's not a full company pivot, but what it is is us evolving our technology or come out with new technologies to meet the client needs. This is ours. We think we have an organization that will support him well, and there's a lot that's going to come out of this over the coming quarters. The five ways to respond: control the cost, use your current cost structure to generate better or more profitable revenue streams, invest in companies that meet your needs that you can get abnormal returns on based off of the volatility in the marketplace. Invest in talent like Alex Shpurov, come up with new ideas. That's the right way for us at least. We're going to be active in the market, and we think we're going to be a winner here over the coming quarters. Here it is again. You're going to say, "Well, what's the forecast for the fourth quarter?" Look, historically, we've not put out forward-looking numbers specifically. I have hinted that with you today very clearly that our goal is to get Q4 right-sized again as a result of those delays that hit us in late Q3, to work through them and then have a pattern and a cadence where we understand the longer timing and are able then to have appropriate revenue, GP, and EBITDA for that. I would expect that the supply chain, when it collapses in our favor and reduces from a large number of weeks to delivery back to two to three, we're going to see an uptick in a particular quarter for that. Might that be the first quarter? I think that would be aggressive. I know there was news media reports yesterday saying the docks in L.A. are starting to free up and things will get better. I'm not a believer in that. I think with further supply chain disruptions to come as the vaccine rules roll out for the logistics and transportation shipping industry, those bottlenecks aren't going away anytime soon. We also know that issues in Asia have to get unstuck, let's call it, cleared up so that the parts or the tools that will ultimately build the plants that deliver more chips get manufactured. I live here in the greater Phoenix area. As you're probably aware, Intel made a massive investment in Chandler, Arizona, in a new plant to create new capacity or new supply. But you need the components to be able to build the plant so that you can build out the supply. That doesn't turn on a dime. It's It's not going to happen in one or two quarters. It takes two to five years. I'm not trying to be negative, but if you consider where we are, excuse me, and the greater investment in the green technology and the pivot in the way we move goods in the new economy, they require a lot of microprocessors. Just keep in mind that there's smarter people than me out there that will forecast when the global supply chain microprocessors will free up. It's our view that's not coming in the next couple of quarters. Why I say that is I'm not building a business off of hopes, just praying that something doesn't bite us in the bum. Our approach here is to expect the worst, and if the best happens, then we're all going to be massive winners. We think at this juncture, we've taken prudent steps to control the problem and have a plan in place that will deliver returns that are more reflective of Q1 and Q2 in the fourth quarter of this year and Q1 and so on next year. At this juncture, expect to hear from us late December, early January, where we'll give you an idea of how the fourth quarter went relative to revenue and gross margins. We won't be able to communicate with you the EBITDA for obvious reasons, be it the final quarter of our year, and there's an audit that will happen, et cetera. We do want to give you guidance, and we want you to understand where we are with the execution of our model. At this point, I would be happy to take questions, operator. I'll turn it back over to you. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Once again, if there are any questions or comments, please press star one. There are no questions in queue. Excellent. I'm going to take that as I gave the right amount of information today. Look, I know from time to time, people prefer to email me or call me. Glad to have that discussion. I just wanted to thank you for those that continue to support us. I appreciate it. If you joined midway through this call, there is a replay. Let me just give you those numbers. I think it'll be available today after 4 P.M. Eastern. Toll-free, 1-877-481-4010 or internationally at 1-919-882-231. Please use passcode 42782. That replay will be available until the end of this month on November 30th at 9 A.M. A copy of the slide presentation will go up on our website. Again, if you want to chat, glad to have you do so. To our American sisters and brothers, very happy Thanksgiving. Please be safe during this holiday season, and enjoy family and friends. God bless. Have a good day. Thank you, ladies and gentlemen. That will conclude today's conference call.