Pluribus Technologies Corp. Announces Q4 2023 Financial Results

Fourth Quarter delivers positive Adjusted EBITDA during a challenging time for the Company

TORONTO, April 29, 2024 /CNW/ - Pluribus Technologies Corp. (TSXV: PLRB) ("Pluribus" or the "Company"), an acquiror of small, profitable technology companies, today announced its financial results for the fourth quarter ended December 31, 2023. The Company's consolidated financial statements and accompanying notes for the quarters ended December 31, 2023 and 2022 are available under Pluribus' profile on SEDAR (www.sedarplus.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 Company continues to deliver positive EBITDA during a challenging macroeconomic environment while we navigate our banking challenges and explore strategic alternatives to maximize shareholder value through the strategic review process," said Richard Adair, CEO of Pluribus Technologies.

Selected Financial and Business Highlights for the Fourth Quarter and 2023 Fiscal Year

• Revenue for the three months to December 31, 2023, was $9,237, a decline of $826 or 8% when compared to the prior year quarter. The decline in revenue was primarily driven by lower customer spending in eLearning. Adjusted EBITDA¹ for the quarter decreased by $257, or 17% due to the decline in revenue.
• Revenue for the twelve months ended December 31, 2023 declined by 4% to $36,779 in 2023. For the twelve months ended December 31, 2023, Adjusted EBITDA was $4,143, a decrease of 26% versus the comparable period. The decrease was the result of lower Adjusted EBITDA from the eLearning business unit.
• In 2023, the Company announced total restructuring to reduce annualized costs by $2,800 to $3,200, which will be fully reflected in operating results in Q1 2024. Adjusted EBITDA in Q4 2023 benefited from some of the cost savings being realized.
• Net loss for the quarter ended December 31, 2023 was $9,532, compared to net income of $637 in the comparable period. The increase in net loss is primarily attributable to an impairment charge booked to eLearning goodwill and intangible assets of $10,000, offset by a gain on the revaluation of contingent consideration of $3,011.
• For the twelve months ended December 31, 2023, net loss was $15,662, an increase of $8,807 or 78%, versus the comparable period. The loss to December 2023 increased due to the eLearning impairment charge of $10,000 and the decline in Adjusted EBITDA of $1,473, and an increase in income tax expense of $2,236, offset by the increase in the gain on revaluation of contingent consideration of $3,343.
• Cash on hand at December 31, 2023 was $1,279 compared with $5,323 on December 31, 2022. During Q4 2023, the Company determined that it was not in compliance with its external debt covenants under the FY2022 Credit Facility relating to its financial position as at September 30, 2023. The Company signed a forbearance agreement with National Bank in January 18, 2024. The agreement was subsequently amended in March 2024 and April 2024.
• During Q4 2023, the Company announced a review and evaluation of strategic alternatives that may be available to the Company to further enhance the Company's growth, development and prosperity in the short and long terms with the goal of maximizing shareholder value. The Company has established a Special Committee of the Board of Directors for such purpose and has engaged Canaccord Genuity as its strategic advisor. The Special Committee continues to explore the viability of raising capital through debt financing/refinancing, equity rights offerings, and the sale of core and/or noncore assets.

Results of Operations

(000's)	Three Months					Twelve Months
For the period ended December 31,	2023	2022	Var	Var		2023	2022	Var	Var
	$	$	$	%		$	$	$	%
Revenue	9,237	10,063	(826)	-8 %	#	36,779	38,120	(1,341)	-4 %
Gross Profit	6,066	6,309	(243)	-4 %	#	23,566	24,370	(804)	-3 %
Operating Expenses	4,770	4,756	14	0 %	#	19,423	18,754	669	4 %
Non-Operational Expenses	10,327	2,032	7,883	388 %	#	19,260	16,114	3,413	21 %
Net Loss	(9,523)	637	(10,160)	1595 %	#	(15,662)	(8,807)	(6,855)	-78 %
Adjusted EBITDA	1,296	1,553	(257)	-17 %		4,143	5,616	(1,473)	-26 %
Adjusted EBITDA %	14.0 %	15.4 %		-1.4 %		11.3 %	14.7 %		-3.5 %

Outlook

While management believes all the business units have significant opportunity, the Company continues to be negatively affected by lower customer spending in the eLearning and eCommerce verticals in a difficult macro-economic recessionary environment. To provide increased operating cashflow and to align its cost structure to the current revenue levels, management initiated two rounds of restructuring in 2023 with total reduced annualized costs of $2,800 to $3,200.

Conference Call Details

Pluribus' management team will host a conference call to discuss its fiscal 2023 fourth quarter financial results on Tuesday, April 30, 2024.

Date: Tuesday, April 30, 2024
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/49Zkccw to receive an instant automated call back.

Dial-In Numbers: [phone] or [phone]
Conference ID: 73395622
Webcast: Available on the Events & Presentations page of the Company's investor website
Replay: [phone] or [phone] (playback code: 395622 #) – available until midnight (EDT) on May 7, 2024

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: 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 and year ended December 31, 2023.

	Three Months					Twelve Months
For the period ended December 31,	2023	2022	Var	Var		2023	2022	Var	Var
	$	$	$	%		$	$	$	%
Total Revenue	9,237	10,063	(826)	-8 %		36,779	38,120	(1,341)	-4 %
Net income (loss) for the year	(9,523)	637	(10,160)	1595 %		(15,662)	(8,807)	(6,855)	-78 %
Acquisition costs	1,606	725	881	122 %		4,261	4,650	(389)	-8 %
Transaction costs	—	—	—	N/A		—	1,665	(1,665)	-100 %
Amortization and depreciation	1,367	1,161	206	18 %		5,508	5,153	355	7 %
Impairment of goodwill and intangible assets	10,000	—	10,000	100 %		10,000	—	10,000	100 %
Share-based compensation	104	288	(184)	-64 %		477	2,004	(1,527)	-76 %
Gain on revaluation of contingent consideration	(3,224)	(213)	(3,011)	1414 %		(3,556)	(213)	(3,343)	1569 %
Loss on disposal of fixed assets	8	—	8	100 %		6	—	6	100 %
Gain on lease termination	(17)	—	(17)	-100 %		(15)	—	(15)	-100 %
Loss from change of fair value of financial liabilities	—	—	—	N/A		—	9	(9)	-100 %
Finance expense, net	686	749	(63)	408 %		2,795	2,379	416	20 %
Foreign exchange loss (gain)	(203)	(678)	475	0 %		(216)	467	(683)	0 %
Income tax expense (recovery)	492	(1,116)	1,608	-144 %		545	(1,691)	2,236	-132 %
Total Adjustments	10,819	916	9,903	1081 %	#	19,805	14,423	5,382	37 %
Adjusted EBITDA	1,296	1,553	(257)	-17 %		4,143	5,616	(1,473)	-26 %
Adjusted EBITDA %	14.0 %	15.4 %		-1.4 %		11.3 %	14.7 %		-3.5 %

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.

Contact:

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

SOURCE Pluribus Technologies Corp.