PLRB Pluribus Technologies Corp

Second Quarter Highlighted by Two Further Acquisitions and New Credit Facility

TORONTO, Aug. 29, 2022 /CNW/ - Pluribus Technologies Corp. (TSXV: PLRB) ("Pluribus" or the "Company"), a growing acquiror of small, profitable technology companies, today announced its unaudited financial results for the second quarter ended June 30, 2022. The Company's condensed consolidated interim financial statements and accompanying notes for the quarters ended June 30, 2022 and 2021 are available under Pluribus' profile on SEDAR (www.sedar.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).

"In the second quarter we continued to deliver on our acquisition strategy, expanding our eLearning business operating under The Learning Network banner and growing our presence in the digital enablement vertical with a second acquisition in the property asset management space," said Richard Adair, CEO of Pluribus Technologies. "Our dual focus in the coming quarters is on continuing to deploy available capital on acquisitions while also working to deliver organic growth and optimized performance from businesses across the portfolio. As we integrate the recent additions and implement our business development and marketing initiatives, we are seeing solid performance across the portfolio driven by revenue synergies and positive industry tailwinds in our core verticals. In the first half of the year Kesson Group experienced the expected seasonality in revenue, which historically has been weighted to the second half.  The current quarter, in particular, saw lower revenues in international recruitment sales and teacher accreditation to teach English as a foreign language as key international markets continued to be essentially shut down due to COVID-19. Kesson is working to help solve the global teacher shortage, including in the U.S. where the federal government is actively investing in the near-term to help school boards across the country recover from the loss of learning experienced during the COVID-19 pandemic. We intend to carefully manage expenses to ensure they align closely with the potential for specific opportunities."

Selected Financial and Business Highlights for the Second Quarter

• Revenue for the three and six months ended June 30, 2022 were $9.6 million and $18.1 million, increasing by 215% and 244%, respectively, reflecting the seven acquisitions completed since June 30, 2021.
• Adjusted EBITDA¹ for the three months ended June 30, 2022 was $1.3 million, and $2.7 million for the first half of the year, up from a loss of $0.1 million in both the comparative periods a year ago. The increase in Adjusted EBITDA reflects the contribution from the seven acquisitions closed since the comparable period, net of higher corporate and public company costs.
• Net loss for the quarter ended June 30, 2022 was $2.7 million, up from $2.2 million for the comparable period. For the six months ended June 30, 2022, net loss was $7.1 million compared with $5.1 million in the first half of 2021. The increase in net loss was primarily due to higher non-operational expenses, specifically acquisition costs associated with the two acquisitions closed in the quarter and transaction costs relating to the RTO process.
• Cash on hand on June 30, 2022, amounted to $6.7 million compared to $1.7 million on December 31, 2021.
• On April 27, 2022, Pluribus entered into an agreement for a new three-year, $42.0 million credit facility with National Bank of Canada. The New Facility provides the Company with $3.0 million revolving credit facility, $24.0 million non-revolving term loan and a $15.0 million delayed draw term loan.
• Expanded eLearning portfolio with the acquisition of Tortal Training, a provider of Learning Management Systems, employee training and eLearning program services.
• Announced the acquisition of property asset management solutions provider Rowanwood Professional Services Limited, Pluribus' second in the space following Assured Software.

Results of Operations

Pluribus is currently focused on four verticals: eLearning, eCommerce, HealthTech and Digital Enablement. We continue to focus on acquisition targets that are owner operated, less than $10 million in revenue and have normalized EBITDA margins of 20-30%. The pipeline of acquisition opportunities remains robust, as owner-operators continue to look for succession options for their businesses. Pluribus is seeking EBITDA-accretive acquisitions to scale up our existing vertical business units, expand into new ones on an opportunistic basis, as well as grow revenue and further expand our product offering. In 2022, we expect to close additional acquisitions at a similar cadence to the one we delivered in 2021, subject to access to the necessary capital. As of the date of this financial report, we have completed four acquisitions so far in 2022. Operationally, we generally expect to grow these acquisitions profitably following the completion of the integration of the business and the subsequent rollout of our sales and business development plans, which typically takes six to twelve months. In 2022, we are expecting higher corporate costs associated with being a public company as well as lower SR&ED income to offset Canadian R&D expenditures due to our public company status versus private in 2021.

Following quarter end, the Company strategically transitioned the cross-selling revenue responsibility to the business unit management teams and reinvested the funds in sales and marketing at that level. As a result, the Chief Revenue Officer ("CRO") role at the Corporate level has been eliminated.

"As a co-founder of Pluribus, Tim Lindsay has been involved since the very beginning when Pluribus was only an idea. Over the past four years as CRO, he worked closely with the management of the acquired companies to develop effective sales strategies and we are starting to see that growth in the business units. I would like to thank him for his contribution and wish him best of luck in his next endeavour where I am sure he will bring a similar level of success," said Richard Adair, CEO of Pluribus Technologies.

Pluribus' management team will host a conference call to discuss its fiscal 2022 second quarter financial results on Tuesday, August 30, 2022.

Date: Tuesday, August 30, 2022
Time: 8:30 am EDT
Dial-In Numbers: (416) 764-8650 or (888) 664-6383
Conference ID: 25292436
Webcast: Available on the Events & Presentations page of the Company's investor website
Replay: (416) 764-8677 or (888) 390-0541 (playback code: 292436#) – available until midnight (EDT) on September 6, 2022

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:
https://www.pluribustechnologies.com/.

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.

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 ended June 30, 2022.

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.

SOURCE Pluribus Technologies Corp.