Second quarter highlighted by the Company's
continued focus on the strategic review
TORONTO, Aug. 29,
2024 /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, 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.
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
|
For the period ended
June 30,
|
2024
|
2023
|
Var
|
Var
|
|
2024
|
2023
|
Var
|
Var
|
$
|
$
|
$
|
%
|
|
$
|
$
|
$
|
%
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
4,998
|
4,965
|
33
|
1 %
|
|
11,074
|
10,031
|
1,043
|
10 %
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
2,843
|
2,495
|
348
|
14 %
|
|
6,829
|
5,013
|
1,816
|
36 %
|
Operating
Expenses
|
3,098
|
3,297
|
(199)
|
-6 %
|
|
6,201
|
6,710
|
(509)
|
-8 %
|
Non-Operational
Expenses
|
3,815
|
2,772
|
1,043
|
38 %
|
|
6,851
|
4,984
|
1,867
|
37 %
|
Net Loss from
continuing operations after tax
|
(4,062)
|
(3,504)
|
(558)
|
16 %
|
|
(6,453)
|
(6,443)
|
(10)
|
0 %
|
Net Income (Loss)
from discontinued operations after tax
|
(9,908)
|
1,375
|
(11,283)
|
-821 %
|
|
(9,020)
|
2,568
|
(11,588)
|
-451 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
(255)
|
(802)
|
547
|
-68 %
|
|
628
|
(1,697)
|
2,325
|
-137 %
|
Adjusted EBITDA
%
|
-5.1 %
|
-16.2 %
|
|
|
|
5.7 %
|
-16.9 %
|
|
|
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.
|
Three
Months
|
|
Six
Months
|
For the period ended
June 30,
|
2024
|
2023
|
Var
|
Var
|
|
2024
|
2023
|
Var
|
Var
|
|
$
|
$
|
$
|
%
|
|
$
|
$
|
$
|
%
|
|
|
|
|
|
|
|
|
|
|
Total
Revenue
|
4,998
|
4,965
|
33
|
1 %
|
|
11,074
|
10,031
|
1,043
|
10 %
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for
the period
|
(4,062)
|
(3,504)
|
(558)
|
16 %
|
|
(6,453)
|
(6,443)
|
(10)
|
0 %
|
|
|
|
|
|
|
|
|
|
|
Acquisition
costs
|
614
|
775
|
(161)
|
-21 %
|
|
1,535
|
1,262
|
273
|
22 %
|
Amortization and
depreciation
|
628
|
859
|
(231)
|
-27 %
|
|
1,292
|
1,578
|
(286)
|
-18 %
|
Impairment of
goodwill
|
1,643
|
—
|
1,643
|
n/a
|
|
1,643
|
—
|
1,643
|
n/a
|
Share-based
compensation
|
13
|
122
|
(109)
|
-89 %
|
|
49
|
278
|
(229)
|
-82 %
|
Loss (gain) on
revaluation of contingent consideration
|
(150)
|
—
|
(150)
|
n/a
|
|
330
|
—
|
330
|
n/a
|
Finance expense,
net
|
816
|
703
|
113
|
16 %
|
|
1,673
|
1,430
|
243
|
17 %
|
Foreign exchange loss
(gain)
|
251
|
313
|
(62)
|
-20 %
|
|
329
|
436
|
(107)
|
-25 %
|
Income tax
expense
|
(8)
|
(70)
|
62
|
-89 %
|
|
230
|
(238)
|
468
|
-197 %
|
|
|
|
|
|
|
|
|
|
|
Total
Adjustments
|
3,807
|
2,702
|
1,105
|
41 %
|
|
7,081
|
4,746
|
2,335
|
49 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
(255)
|
(802)
|
547
|
-68 %
|
|
628
|
(1,697)
|
2,325
|
-137 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
%
|
-5.1 %
|
-16.2 %
|
|
|
|
5.7 %
|
-16.9 %
|
|
|
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
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SOURCE Pluribus Technologies Corp.