Pluribus Technologies Corp. Announces Q3 2022 Financial Results

Third Quarter Highlighted by Improved Revenue and Adjusted EBITDA Growth

TORONTO, Nov. 22, 2022 /CNW/ - Pluribus Technologies Corp. (TSXV: PLRB) ("Pluribus" or the "Company"), a growing acquiror of small, profitable technology companies, today announced its unaudited financial results for the third quarter ended September 30, 2022. The Company's condensed consolidated interim financial statements and accompanying notes for the quarters ended September 30, 2022 and 2021 (the "Q3 Financials") 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).

"The improvement in both revenue and Adjusted EBITDA for both the quarter and year-to-date periods reflects progress made in the integration process of the five acquisitions completed over the past twelve months," said Richard Adair, CEO of Pluribus Technologies. "Our focus through the balance of the year will be on executing our sales and marketing and business development strategies to drive organic growth from this growing group of businesses. We continue to maintain a strong pipeline of acquisition targets, but intend to be selective in how we deploy capital through the balance of the year to ensure both our ability to maximize the value associated with any new transaction, while also preserving capital should challenging macroeconomic conditions persist well into 2023."

Selected Financial and Business Highlights for the Third Quarter

• Revenue for the three and nine months ended September 30, 2022 was $10.8 million and $28.1 million, increasing by 66% and 139%, respectively, reflecting the five acquisitions completed since September 30, 2021.
• Adjusted EBITDA¹ for the three months ended September 30, 2022 was $2.1 million, and $4.0 million for the year-to-date period, up from $1.1 million and $0.7, respectively, in the prior in the comparative periods a year ago. The increase in Adjusted EBITDA reflects the contribution from the five acquisitions closed since the comparable period, net of higher corporate and public company costs.
• Net loss for the quarter ended September 30, 2022 was $1.9 million, which decreased from a loss of $3.0 million for the comparable period. For the nine months ended September 30, 2022, net loss was $9.4 million compared with $8.3 million in the same period of 2021. The decrease in net loss for the quarter is primarily driven by higher operating income and no transaction costs as compared to the prior period.
• Cash on hand on September 30, 2022 was $5.6 million compared with $1.7 million on December 31, 2021. As of September 30, 2022 the Company has not drawn upon it's $3.0M 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					Nine Months
For the period ended September 30,	2022	2021	Var	Var		2022	2021	Var	Var
	$	$	$	%		$	$	$	%
						(Restated)
Revenue	10,746	6,470	4,276	66 %		28,057	11,720	16,337	139 %
Gross Profit	6,887	4,433	2,454	55 %		18,061	8,806	9,255	105 %
Operating Expenses	4,816	3,305	1,511	46 %		13,998	8,077	5,921	73 %
Non-Operational Expenses	4,442	4,338	104	2 %		14,082	9,147	4,935	54 %
Net Loss	(1,907)	(2,994)	1,087	36 %		(9,444)	(8,346)	(1,098)	-13 %
Adjusted EBITDA	2,071	1,128	943	84 %		4,063	729	3,334	457 %
Adjusted EBITDA %	19.3 %	17.4 %		1.8 %		14.5 %			8.3 %

Restatement of Results

In the current period, the Company identified that it had over estimated revenue and receivables from a eCommerce marketplace provider within the Company's eCommerce operating segment for the three months ended March 31, 2022 and the three and six months ended June 30, 2022 period. This was caused by a change in the revenue share agreement initiated by this provider that was misinterpreted by the Company, which has since been reconciled in the Q3 Financials.

As a result, the Company restated its previously reported consolidated statements of loss and comprehensive loss for the first two quarters of 2022 in the Q3 Financials and related management's discussions and analysis. No periods other than the first two quarters of 2022 were affected and there was no impact on previously reported cash flows from operating, investing, or financing activities.

Outlook

Pluribus is currently operating in four verticals: eLearning, eCommerce, Health Tech and Digital Enablement. The Company's strategy is to acquire technology businesses that are owner operated, less than $10 million in revenue and have normalized EBITDA margins of 20-30%. Operationally, we generally expect to grow these acquisitions profitably following the completion of the integration of the business and the subsequent roll out of our sales and business development plans, which typically takes six to twelve months. As of the date of this financial report, we have completed four acquisitions so far in 2022. In the near term, our primary focus is to further integrate these companies and generate organic growth primarily through improved sales and marketing execution and, where possible, cross-selling. While the broader operating environment is currently more challenging for some of our businesses, management is focused on continued growth in Adjusted EBITDA and Adjusted EBITDA margins. The pipeline of acquisition opportunities remains robust, as owner-operators continue to look for succession options for their businesses. Pluribus will continue evaluating EBITDA-accretive acquisitions to scale up our existing vertical business units, expand into new ones on an opportunistic basis, as well as grow revenue and further expand our product offering.

Conference Call Details

Pluribus' management team will host a conference call to discuss its fiscal 2022 third quarter financial results on Wednesday, November 23, 2022.

Date: Wednesday, November 23, 2022
Time: 8:30 am EDT
Dial-In Numbers: [phone] or [phone]
Conference ID: 25292436
Webcast: Available on the Events & Presentations page of the Company's investor website
Replay: [phone] or [phone] (playback code: 810434#) – available until midnight (EDT) on November 30, 2022

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 months ended September 30, 2022.

	Three Months					Nine Months
For the period ended September 30,	2022	2021	Var	Var		2022	2021	Var	Var
	$	$	$	%		$	$	$	%
						(Restated)
Total Revenue	10,746	6,470	4,276	66 %		28,057	11,720	16,337	139 %
Net loss for the year	(1,907)	(2,994)	1,087	36 %		(9,444)	(8,346)	(1,098)	-13 %
Acquisition costs	1,389	837	552	66 %		3,925	1,364	2,561	188 %
Transition costs	—	438	(438)	N/A		1,665	1,356	309	23 %
Amortization and depreciation	1,471	943	528	56 %		3,992	1,594	2,398	150 %
Share-based compensation	437	6	431	N/A		1,716	29	1,687	N/A
Loss from change of fair value of financial liabilities	—	1,885	(1,885)	N/A		9	4,338	(4,329)	N/A
Loss (gain) on revaluation of contingent consideration	—	—	—	N/A		—	(31)	31	N/A
Finance expense, net	624	261	363	139 %		1,630	531	1,099	207 %
Foreign exchange loss	521	(32)	553	N/A		1,145	(34)	1,179	N/A
Income tax expense	(464)	(216)	(248)	115 %		(575)	(72)	(503)	699 %
Total Adjustments	3,978	4,122	(144)	-3 %		13,507	9,075	4,432	49 %
Adjusted EBITDA	2,071	1,128	943	84 %		4,063	729	3,334	457 %
Adjusted EBITDA %	19.3 %	17.4 %		1.8 %		14.5 %	6.2 %		8.3 %

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 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.

SOURCE Pluribus Technologies Corp.

Craig Armitage, LodeRock Advisors, [email protected], [phone]; Richard Adair, Chief Executive Officer, Pluribus Technologies Corp., 1 [phone]