PLRB Pluribus Technologies Corp

Third quarter highlighted by the Company's continued focus on the Strategic Review

TORONTO, Nov. 28, 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 third quarter ended September 30, 2024. The Company's consolidated financial statements and accompanying notes for the quarters ended September 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).

"The divestiture of Digital Enablement and POWR reflects our commitment to strengthening our balance sheet and freeing up liquidity to reduce bank indebtedness," stated Diane Pedreira, Interim President and COO. "This step is a key component of our ongoing strategic review to improve capital structure while allowing us to focus on our core businesses."

Selected Financial and Business Highlights for the Third Quarter

• On October 11, 2024, the Company sold all of the issued and outstanding fully-diluted shares of its wholly-owned subsidiaries, POWR Inc., Assured Software Limited and Pluribus Technologies Limited (which includes its wholly- owned subsidiaries, Rowanwood Professional Services Limited and Cranham Haig Limited). All figures referenced therein are from continuing operations, therefore excluding the results of Digital Enablement and POWR, unless otherwise noted.
• Revenue for the quarter decreased by $645 or 13% from $5,107 in 2023 to $4,462 in 2024. The decline was primarily driven by a reduction in eLearning revenue ($518) due to softer service delivery at TLN and a reduction in eCommerce revenue ($127) due to increased churn at Social5. Revenue for the nine months ended September 30, 2024 increased by $398 or 3% from $15,138 in 2023 to $15,536 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 $59, or 11% from ($536) in 2023 to ($477) in 2024, while Adjusted EBITDA for the nine months ended September 30, 2024 increased by $2,384, or 107% from ($2,233) in 2023 to $151 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 allocated to continuing operations.
• Management initiated a restructuring program in October and November 2024 which is expected to reduce annualized costs by $1,800. This cost savings will be achieved through the reduction of the employee base across a number of businesses and are expected to be substantially reflected in Q1 2025 operating results.
• The Company incurred a net loss of $2,672 for the quarter ended September 30, 2024 compared to a net loss of $2,982 for the comparable period in 2023. The decrease in the net loss was primarily due to decline in acquisition costs ($879), offset by increase in foreign exchange loss ($643).
• The Company incurred a net loss of $9,125 for the nine months ended September 30, 2024 compared to a net loss of $9,425 for the comparable period. The decrease was primarily attributable to the increase in Adjusted EBITDA ($2,384), offset by the impairment charge booked to Social5 goodwill ($1,643) and an increase in income tax expense ($212).
• Cash on hand from continuing operations at September 30, 2024 was $678, compared with $1,279 on December 31, 2023.
• The Company signed a forbearance agreement with National Bank on January 18, 2024. 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. The second forbearance agreement has been extended to the earlier of November 29, 2024 and the occurrence of any terminating event to allow the Bank time to consider forecast financial information submitted by the Company. The Company will provide an update in connection with the status of the second forbearance agreement when further disclosure is required or otherwise appropriate.

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 as 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, operator, and divestor 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 drive growth. When market conditions are conducive to raising capital at reasonable costs, Pluribus focuses on rapidly acquiring and integrating new companies to accelerate growth. In less favorable environments, Pluribus implements strategies to maximize organic growth, increase cash flow, and selectively divest portfolio companies to optimize value. 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 nine months ended September 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 Company's ability to achieve a positive transaction pursuant to its strategic review process, and whether National Bank will continue to forbear from exercising their rights and remedies on expiry of the second forbearance agreement. 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:

Diane Pedreira
Interim President and Chief Operating Officer
Pluribus Technologies Corp.
1 (800) 851-9383

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SOURCE Pluribus Technologies Corp.