Pluribus Technologies Corp. Announces Q2 2023 Financial Results

Second Quarter Highlighted by Continued Track Record of Delivering Positive Adjusted EBITDA

TORONTO, Aug. 29, 2023 /CNW/ - Pluribus Technologies Corp. (TSXV: PLRB) ("Pluribus" or the "Company"), a growing acquiror of small, profitable technology companies, today announced its financial results for the second quarter ended June 30, 2023. The Company's consolidated financial statements and accompanying notes for the quarters ended June 30, 2023 and 2022 are available under Pluribus' profile on SEDAR (www.sedar.com). All dollar amounts are in thousands of Canadian dollars unless otherwise noted. Certain metrics, including Adjusted EBITDA, are non-IFRS measures (see "Non-IFRS Measures" below).

"Despite a continued challenging macroeconomic environment as seen in our eLearning business unit, we delivered another quarter of positive Adjusted EBITDA," said Richard Adair, CEO of Pluribus Technologies. "Our focus during the back half of the year remains on expanding revenue through continued cross selling, developing channel partnerships and finding new markets and new verticals for the product and services offered by our business units. In addition, we have right sized our costs within the eLearning segment to align with near term revenue."

Selected Financial and Business Highlights for the Fourth Quarter

• Revenue for the three month period ended June 30, 2023 was $9.1 million, consistent with the comparable period in 2022. Revenue for the six month period ended June 30, 2023 was $18.4 million, an increase of 6%, reflecting the four acquisitions made during the comparable period in 2022 and organic growth driven by POWR and HealthTech.
• Adjusted EBITDA¹ for the three month period ended June 30, 2023 was $0.9 million, consistent with the comparable period in 2022. For the six months ended June 30, 2023, Adjusted EBITDA was $1.8 million, a decline of $0.2 million, compared to the prior year period. The decrease in Adjusted EBITDA reflects the lower contribution of Adjusted EBITDA from the eLearning business unit, partially offset by higher Adjusted EBITDA from the Company's other business units.
• In the current quarter, the Company incurred certain restructuring costs relating to the re-alignment of the eLearning cost structure to near-term revenue. The Company estimates incremental annual cost savings of $1.2m to $1.4m from such restructuring.
• Net loss for the three months ended June 30, 2023 was $2.1 million, a decrease of $0.8 million compared to a loss of $2.9 million for the comparable period in the prior year. The decrease in net loss for the quarter is primarily driven by lower share based compensation, forex impact and acquisition costs. For the six months ended June 30, 2023, net loss was $3.8 million, a decrease of $3.8 million from the prior year period, due to a reduction of acquisition costs, transaction costs and share based compensation in the comparable period.
• Cash on hand on June 30, 2023 was $3.2 million compared with $5.3 million on December 31, 2022. As of June 30, 2023 the Company has not drawn upon its $3.0 million revolving line of credit.

¹ Adjusted EBITDA is a non-IFRS measure as described in the "Non-IFRS Measures" section of this news release. These measures are not recognized measures under IFRS, do not have a standardized meaning under IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.

Results of Operations

(000's)	Three Months					Six Months
	2023	2022	Var	Var		2023	2022	Var	Var
For the period ended June 30,	$	$	$	%		$	$	$	%
Revenue	9,120	9,153	(33)	0 %		18,376	17,311	1,065	6 %
Gross Profit	5,730	5,817	(87)	-1 %		11,519	11,174	345	3 %
Operating Expenses	4,862	4,914	(52)	-1 %		9,734	9,182	552	6 %
Non-Operational Expenses	2,999	3,814	(815)	-21 %		5,605	9,640	(4,035)	-42 %
Net Loss	(2,129)	(2,917)	788	27 %		(3,875)	(7,537)	3,662	49 %
Adjusted EBITDA	868	903	(35)	-4 %		1,785	1,992	(207)	-10 %
Adjusted EBITDA %	9.5 %	9.9 %		-0.3 %		9.7 %	11.5 %		-1.8 %

Outlook

In the current macro environment, we are prioritizing conserving cash and meeting our debt service obligations as opposed to acquisitions.  Given the increased cost of capital, we are focused on aligning costs to revenues in this recessionary environment to maximize profitability. In the eLearning segment, we competed a restructuring which will reduce annualized costs by $1.2m to $1.4m while allowing the Company to continue to deliver on its commitments to its customers.

Despite this focus on the optimization of the existing portfolio, we maintain a robust pipeline of patient owner-operators who are looking for liquidity. We deepen these relationships until an acquisition can occur through strategic partnerships to cross-sell into our respective clients.

We intend to continue to selectively deploy capital on EBITDA-accretive acquisitions in our key verticals when the macro-economic and capital market conditions support this M&A strategy.

Conference Call Details

Pluribus' management team will host a conference call to discuss its fiscal 2023 second quarter financial results on Wednesday, August 30, 2023.

Date: Wednesday, August 30, 2023
Time: 8:30 am EDT

To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/45FculR to receive an instant automated call back.

Dial-In Numbers: [phone] or [phone]
Conference ID: 29125207
Webcast: Available on the Events & Presentations page of the Company's investor website
Replay: [phone] or [phone] (playback code: 125207 #) – available until midnight (EDT) on September 6, 2023

About Pluribus Technologies Corp.
Pluribus is a technology company that is a value-based acquirer of small, profitable business-to-business technology companies in a range of verticals and industries. Pluribus provides its acquisitions access to experienced sales and marketing resources, strategic partnership opportunities, a diverse portfolio of customers in different geographical markets and enabling technologies to create new revenue streams and provide the opportunity for these companies to grow in their respective markets. For more information, please visit:

https://www.pluribustechnologies.com/.

Non-IFRS Measures

The Company uses non-IFRS measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. The Company uses Adjusted EBITDA as a measure of operating performance. Management uses Adjusted EBITDA to evaluate operating performance as it excludes amortization of software and intangibles (which is an accounting allocation of the cost of software and intangible assets arising on acquisition), any impact of finance and tax related activities, asset depreciation, foreign exchange gains and losses, other income, restructuring and transition costs primarily related to acquisitions and other one-time non-recurring transactions.

Reconciliation of Non-IFRS Measures

The Company uses the non-IFRS measure Adjusted EBITDA to evaluate performance. The following table presents the reconciliation from net income (loss) to Adjusted EBITDA for the three and six months ended June 30, 2023.

	Three Months					Six Months
For the period ended June 30,	2023	2022	Var	Var		2023	2022	Var	Var
	$	$	$	%		$	$	$	%
Total Revenue	9,120	9,153	(33)	0 %		18,376	17,311	1,065	6 %
Net loss for the period	(2,129)	(2,917)	788	27 %		(3,875)	(7,537)	3,662	49 %
Acquisition costs	811	938	(127)	-14 %		1,301	2,536	(1,235)	-49 %
Transition costs	—	(48)	48	N/A		—	1,665	(1,665)	-100 %
Amortization and depreciation	1,390	1,322	68	5 %		2,787	2,521	266	11 %
Share-based compensation	122	483	(361)	-75 %		278	1,279	(1,001)	N/A
Loss from change of fair value of financial liabilities	—	—	—	N/A		—	9	(9)	N/A
Finance expense, net	703	671	32	5 %		1,428	1,006	422	42 %
Foreign exchange loss (gain)	(27)	448	(475)	N/A		(189)	624	(813)	-130 %
Income tax expense (recovery)	(2)	6	(8)	-132 %		55	(111)	166	-150 %
Total Adjustments	2,997	3,820	(823)	-22 %		5,660	9,529	(3,869)	-41 %
Adjusted EBITDA	868	903	(35)	-4 %		1,785	1,992	(207)	-10 %
Adjusted EBITDA %	9.5 %	9.9 %		-0.3 %		9.7 %	11.5 %		-1.8 %

Forward-Looking Information 

Certain information in this press release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking information in this press release includes, but is not limited to, statements with respect to the business plans of the Company, including the successful completion and pace of future acquisitions, the Company management's expectation on the growth, profitability and performance of its current and future acquisitions, the Company's ability to meet its debt service obligations, the Company's ability to align costs to revenues, the Company's ability to continue acquiring business-to-business technology companies at reasonable prices and the Company's ability to grow its portfolio companies into significant organizations. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expect", "potential", "believe", "intend" or negatives of these terms and similar expressions.

Forward-looking statements are based on certain assumptions, including the Company's ability to complete acquisitions on favourable terms; the Company's ability to manage a complex portfolio of companies effectively; the Company's ability to scale its management team to support a rapid pace of growth; the Company's ability to raise sufficient financing to continue the pace of its acquisition strategy; the Company's ability to maintain its rapid pace of growth. Other assumptions include industry trends, the availability of growth opportunities, and general business, economic, competitive, political, regulatory and social uncertainties will not prevent the Company from conducting its business. While the Company considers these assumptions to be reasonable based on information currently available, they are inherently subject to significant business, economic and competitive uncertainties and contingencies and they may prove to be incorrect. Forward-looking information speaks only to such assumptions as of the date of this release.

Forward-looking statements also necessarily involve known and unknown risks, including without limitation, risks associated with general economic conditions, including the COVID-19 pandemic, adverse industry events, marketing costs, loss of markets, future legislative and regulatory developments, the inability to access sufficient capital on favourable terms, the Company's limited operating history; ability to complete favourable acquisitions; the technology industry in Canada and internationally, income tax and regulatory matters, the ability of the Company to execute its business strategies, including the ability manage a complex portfolio of companies effectively, competition, currency and interest rate fluctuations, and other risks.

Readers are cautioned that the foregoing is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ from those anticipated. Forward-looking statements are not guarantees of future performance. The purpose of forward-looking information is to provide the reader with a description of management's expectations, and such forward-looking information may not be appropriate for any other purpose. Except as required by law, the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

Contact:

Richard Adair
Chief Executive Officer
Pluribus Technologies Corp.
1 [phone]

SOURCE Pluribus Technologies Corp.