Pluribus Technologies Corp. Announces Q2 2024 Financial Results

Second quarter highlighted by the Company's continued focus on the strategic review

TORONTO, Aug. 29, 2024 /PRNewswire/ - 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, 2024. The Company's consolidated financial statements and accompanying notes for the quarters ended June 30, 2024 and 2023 are available under Pluribus' profile on SEDAR+ (www.sedarplus.ca).

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).

"As we finalize our strategic review, our priority is to restructure the balance sheet and reduce debt," said Richard Adair, CEO of Pluribus. "Our focus is now on driving growth for our remaining businesses as we move forward."

Selected Financial and Business Highlights for the Second Quarter

• During the second quarter of 2024 as part of the strategic review undertaken by the Company's Special Committee, management decided to proceed with a sale process to dispose of its Digital Enablement and POWR businesses. The Company has not reached a definitive arrangement to sell these businesses. All figures referenced therein are from continuing operations, therefore excluding the results of Digital Enablement and POWR, unless otherwise noted.
• Revenue for the quarter increased by $33 or 1% from $4,965 in 2023 to $4,998 in 2024. The increase in revenue was primarily driven by eLearning ($143), offset by a decline in eCommerce revenue ($110). Revenue for the six months ended June 30, 2024 increased by $1,043 or 10% from $10,031 in 2023 to $11,074 in 2024. The increase in revenue was primarily driven by the Learning Network perpetual license sale in Q1 2024 ($1,109).
• Adjusted EBITDA¹ for the quarter increased by $547, or 68% from ($802) in 2023 to ($255) in 2024, while Adjusted EBITDA for the six months ended June 30, 2024 increased by $2,325, or 137% from ($1,697) in 2023 to $628 in 2024. The change for both periods was driven by the increase in revenue and lower cost base following the restructuring undertaken by the Company in 2023. While the Company undertakes the sale process to divest of POWR and Digital Enablement, the shared services to support these businesses have been retained at Corporate and the associated costs are fully burdening continuing operations.
• The Company incurred a net loss of $4,062 for the quarter ended June 30, 2024 compared to a net loss of $3,504 for the comparable period in 2023. The increase in the net loss was primarily due to an impairment charge taken against Social5 goodwill ($1,643), offset by the increase in Adjusted EBITDA ($547).
• The Company incurred a net loss of $6,453 for the six months ended June 30, 2024 compared to a net loss of $6,443 for the comparable period. This flat trend was primarily attributable to the increase in Adjusted EBITDA ($2,325), offset by the impairment charge booked to Social5 goodwill ($1,643) and an increase in income tax expense ($468).
• Cash on hand from continuing operations at June 30, 2024 was $1,067, of which $467 was restricted, compared with $1,279 on December 31, 2023. Subsequent to June 30, 2024, National Bank released the restricted balance to the Company to use for net working capital requirements.
• The Company signed a forbearance agreement with National Bank in January 18, 2024. The agreement was subsequently amended multiple times. On August 16, 2024, the Company and National Bank entered into a second forbearance agreement whereby National Bank will continue to forbear from exercising its rights and remedies under the Credit Agreement until the earlier of September 16, 2024 and the occurrence of any terminating event. The Company has provided a covenant to close a certain sale transaction, in respect of which the Company has executed a non-binding letter of intent, on or before September 16, 2024.

Results of Operations

Outlook

The Special Committee continues its previously communicated strategic review to explore alternatives to optimize its capital structure including reviewing the remaining verticals to determine which are core and non-core based on their growth potential and looking at refinancing opportunities.

The Board of Directors and Management determined selling Digital Enablement and POWR would provide the necessary liquidity to allow the Company to continue to deleverage and reduce the debt with National Bank while still leaving the profitable eLearning vertical as a strategic asset where value can be grown.

About Pluribus Technologies Corp.

Pluribus is a technology company that is a value-based acquirer and operator 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. When market conditions are conducive to raising capital at reasonable costs, Pluribus focuses on rapidly acquiring and integrating new acquisitions to accelerate growth. When the environment does not support this, Pluribus focuses on implementing strategies to maximize organic growth and increase cashflow from operations in its existing portfolio companies. 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 from continuing operations for the three and six months ended June 30, 2024.

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 of future acquisitions, 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, the Company's ability to grow its portfolio companies into significant organizations, the benefits from the proposed sale of its Digital Enablement and POWR businesses and the Company's ability to achieve a positive transaction pursuant to its strategic review process. 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 its growth; the Company's ability to raise sufficient financing to continue its acquisition strategy; the Company's ability to achieve positive results pursuant to its strategic review process. 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, 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 (800) 851-9383

SOURCE Pluribus Technologies Corp.