Third Quarter delivers Positive Adjusted
EBITDA however recessionary environment continues to adversely
affect revenue
TORONTO, Nov. 29,
2023 /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, 2023. The Company's consolidated
financial statements and accompanying notes for the quarters ended
September 30, 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).
"We continue to experience a challenging macroeconomic
environment, impacting customer spending at eLearning and increased
churn within eCommerce," said Richard
Adair, CEO of Pluribus Technologies. "In light of the lack
of growth in 2023, we have announced a second round of
restructuring to right size our cost base to current revenue
levels. We are also exploring strategic alternatives to maximize
shareholder value through a strategic review process, announced
today. The management team will continue to execute on our business
strategy to drive revenue growth during the strategic review."
Selected Financial and Business Highlights for the Fourth
Quarter
- Revenue for the three months to September 30, 2023, was $9,166, a decline of 15% when compared to the
prior year quarter. The decline in revenue was primarily driven by
lower customer spending at the Learning Network. Adjusted
EBITDA1 for the quarter decreased by $1,009, or 49%.
- Revenue for the nine-month period ended September 30, 2023 declined by 2% to $27,542 in 2023. For the nine months ended
September 30, 2023, Adjusted EBITDA
was $2,847, a decrease of 30% versus
the comparable period. The decrease was the result of lower
Adjusted EBITDA from the eLearning business unit.
- A second round of restructuring which will reduce annualized
costs by $1,600 to $1,800 was initiated in November 2023. This is in addition to the
announcement in August 2023 of an
initial restructuring with annualized savings of $1,200 to $1,400.
These cost savings will be achieved through the reduction of the
employee base across a number of businesses. These annualized costs
totalling $2,800 to $3,200 are expected to be fully implemented in
2023 and fully reflected in operating results in Q1 2024.
- Net loss for the quarter ended September
30, 2023 was $2,264, an
increase of 19%, versus the comparable period. The increase in net
loss is attributable to the decline in Adjusted EBITDA and income
tax recovery, primarily offset by a decrease in share-based
compensation, foreign exchange and the gain on deferred
consideration recognized the quarter.
- For the nine months ended September 30,
2023, net loss was $6,139, a
decrease of 35%, versus the comparable period. The loss to
September 2023 declined due to a
reduction in acquisition costs, share-based compensation, foreign
exchange and nil transaction costs, offset by an increase in the
income taxes and a decline in Adjusted EBITDA.
- Cash on hand at September 30,
2023 was $1.7 million compared
with $5.3 million on December 31, 2022. During Q4, 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 has advised National Bank of such default
and National Bank has issued a reservation of rights letter in
relation thereto. The Company is currently in discussions with
National Bank regarding potential steps to rectify this default,
including further amendments to the terms of the covenants under
the facility.
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,
|
2023
|
2022
|
Var
|
Var
|
|
2023
|
2022
|
Var
|
Var
|
$
|
$
|
$
|
%
|
|
$
|
$
|
$
|
%
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
9,166
|
10,746
|
(1,580)
|
-15 %
|
#
|
27,542
|
28,057
|
(515)
|
-2 %
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
5,981
|
6,887
|
(906)
|
-13 %
|
#
|
17,500
|
18,061
|
(561)
|
-3 %
|
Operating
Expenses
|
4,919
|
4,816
|
103
|
2 %
|
#
|
14,653
|
13,998
|
655
|
5 %
|
Non-Operational
Expenses
|
3,328
|
4,442
|
(1,114)
|
-25 %
|
#
|
8,933
|
14,082
|
(5,149)
|
-37 %
|
Net Loss
|
(2,264)
|
(1,907)
|
(357)
|
-19 %
|
#
|
(6,139)
|
(9,444)
|
3,305
|
35 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
1,062
|
2,071
|
(1,009)
|
-49 %
|
|
2,847
|
4,063
|
(1,216)
|
-30 %
|
Adjusted EBITDA
%
|
11.6 %
|
19.3 %
|
|
-7.7 %
|
|
10.3 %
|
14.5 %
|
|
-4.1 %
|
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.
Management continues to closely monitor cash to meet our
operating obligations and debt service requirements. To address its
financing requirements, the Company will explore the viability of
raising capital through debt financing/refinancing, equity rights
offerings, and the sale of core and/or non-core assets. The Company
will also focus on increasing cashflow from operations by
restructuring its cost base to align to current revenues and
prioritizing projects with a greater expected rate of return.
To facilitate finding a solution to address these challenges, in
November 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. There can
be no assurances that the strategic review process will result in a
transaction and whether such transaction will have its intended
outcome.
Conference Call Details
Pluribus' management team will host a conference call to discuss
its fiscal 2023 second quarter financial results on Thursday November 30, 2023.
Date: Thursday November 30,
2023
Time: 8:30 a.m. EST
To join the conference call without operator assistance, you
may register and enter your phone number at
https://emportal.ink/3RfKXmN to receive an instant automated
call back.
Dial-In Numbers: (416) 764-8650 or (888) 664-6383
Conference ID: 84045051
Webcast: Available on the Events & Presentations
page of the Company's investor website
Replay: (416) 764-8677 or (888) 390-0541 (playback
code: 045051#) – available until midnight (EST) on December 7, 2023
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 for the
three and nine months ended September 30,
2023.
|
Three
Months
|
|
Nine
Months
|
For the period ended
September 30,
|
2023
|
2022
|
Var
|
Var
|
|
2023
|
2022
|
Var
|
Var
|
|
$
|
$
|
$
|
%
|
|
$
|
$
|
$
|
%
|
|
|
|
|
|
|
|
|
|
|
Total
Revenue
|
9,166
|
10,746
|
(1,580)
|
-15 %
|
|
27,542
|
28,057
|
(515)
|
-2 %
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
period
|
(2,264)
|
(1,907)
|
(357)
|
19 %
|
|
(6,139)
|
(9,444)
|
3,305
|
-35 %
|
|
|
|
|
|
|
|
|
|
|
Acquisition
costs
|
1,354
|
1,389
|
(35)
|
-3 %
|
|
2,655
|
3,925
|
(1,270)
|
-32 %
|
Transaction
costs
|
—
|
—
|
—
|
N/A
|
|
—
|
1,665
|
(1,665)
|
-100 %
|
Amortization and
depreciation
|
1,354
|
1,471
|
(117)
|
-8 %
|
|
4,141
|
3,992
|
149
|
4 %
|
Share-based
compensation
|
95
|
437
|
(342)
|
-78 %
|
|
373
|
1,716
|
(1,343)
|
-78 %
|
Gain on revaluation
of contingent consideration
|
(332)
|
—
|
(332)
|
N/A
|
|
(332)
|
—
|
(332)
|
N/A
|
Gain on disposal of
fixed assets
|
(2)
|
—
|
(2)
|
N/A
|
|
(2)
|
—
|
(2)
|
N/A
|
Loss on lease
termination
|
2
|
—
|
2
|
N/A
|
|
2
|
—
|
2
|
N/A
|
Loss from change of
fair value of financial liabilities
|
—
|
—
|
—
|
0 %
|
|
—
|
9
|
(9)
|
-100 %
|
Finance expense,
net
|
681
|
624
|
57
|
9 %
|
|
2,109
|
1,630
|
479
|
29 %
|
Foreign exchange
loss (gain)
|
176
|
521
|
(345)
|
-66 %
|
|
(13)
|
1,145
|
(1,158)
|
-101 %
|
Income tax expense
(recovery)
|
(2)
|
(464)
|
462
|
-100 %
|
|
53
|
(575)
|
628
|
-109 %
|
|
|
|
|
|
|
|
|
|
|
Total
Adjustments
|
3,326
|
3,978
|
(652)
|
-16 %
|
#
|
8,986
|
13,507
|
(4,521)
|
-33 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
1,062
|
2,071
|
(1,009)
|
-49 %
|
|
2,847
|
4,063
|
(1,216)
|
-30 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
%
|
11.6 %
|
19.3 %
|
|
-7.7 %
|
|
10.3 %
|
14.5 %
|
|
-4.1 %
|
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 completion of future
acquisitions, the Company management's expectation on the growth,
profitability and performance of its portfolio companies, the
Company's ability to acquire business-to-business technology
companies in the future, the Company's ability to grow its
portfolio companies, the results and effectiveness of the Company's
internal restructuring, results of discussions with National Bank,
and the Company achieving a positive transaction as a result of 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 manage a complex portfolio of
companies effectively; and the Company's ability to
raise sufficient financing to continue its acquisition strategy.
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 (800) 851-9383
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SOURCE Pluribus Technologies Corp.