Mr. Richard Adair reports

PLURIBUS TECHNOLOGIES CORP. ANNOUNCES Q2 2023 FINANCIAL RESULTS

Pluribus Technologies Corp. has released its financial results for the second quarter ended June 30, 2023. The company's consolidated financial statements and accompanying notes for the quarters ended June 30, 2023, and June 30, 2022, are available under Pluribus's profile on SEDAR. All dollar amounts are in thousands of Canadian dollars unless otherwise noted. Certain metrics, including adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), are non-IFRS (international financial reporting standards) measures.

"Despite a continued challenging macroeconomic environment as seen in our e-learning business unit, we delivered another quarter of positive adjusted EBITDA," said Richard Adair, chief executive officer of Pluribus Technologies. "Our focus during the back half of the year remains on expanding revenue through continued cross-selling, developing channel partnerships, and finding new markets and new verticals for the product and services offered by our business units. In addition, we have right-sized our costs within the e-learning segment to align with near term revenue."

Selected financial and business highlights for the fourth quarter:

• Revenue for the three-month period ended June 30, 2023, was $9.1-million, consistent with the comparable period in 2022. Revenue for the six-month period ended June 30, 2023, was $18.4-million, an increase of 6 per cent, reflecting the four acquisitions made during the comparable period in 2022 and organic growth driven by POWR and HealthTech.
• Adjusted EBITDA (1) for the three-month period ended June 30, 2023, was $900,000, consistent with the comparable period in 2022. For the six months ended June 30, 2023, adjusted EBITDA was $1.8-million, a decline of $200,000, compared with the prior-year period. The decrease in adjusted EBITDA reflects the lower contribution of adjusted EBITDA from the e-learning business unit, partially offset by higher adjusted EBITDA from the company's other business units.
• In the current quarter, the company incurred certain restructuring costs relating to the realignment of the e-learning cost structure to near-term revenue. The company estimates incremental annual cost savings of $1.2-million to $1.4-million from such restructuring.
• Net loss for the three months ended June 30, 2023, was $2.1-million, a decrease of $800,000 compared with a loss of $2.9-million for the comparable period in the prior year. The decrease in net loss for the quarter is primarily driven by lower share-based compensation, foreign exchange impact and acquisition costs. For the six months ended June 30, 2023, net loss was $3.8-million, a decrease of $3.8-million from the prior-year period, due to a reduction of acquisition costs, transaction costs and share-based compensation in the comparable period.
• Cash on hand on June 30, 2023, was $3.2-million, compared with $5.3-million on Dec. 31, 2022. As of June 30, 2023, the company has not drawn upon its $3.0-million revolving line of credit.

(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 with similar measures presented by other companies.

Outlook

In the current macro environment, the company is prioritizing conserving cash and meeting its debt service obligations as opposed to acquisitions. Given the increased cost of capital, the company is focused on aligning costs to revenues in this recessionary environment to maximize profitability. In the e-learning segment, the company competed a restructuring that will reduce annualized costs by $1.2-million to $1.4-million while allowing the company to continue to deliver on its commitments to its customers.

Despite this focus on the optimization of the existing portfolio, the company maintains a robust pipeline of patient owner-operators that are looking for liquidity. The company deepens these relationships until an acquisition can occur through strategic partnerships to cross-sell into its respective clients.

The company intends to continue to selectively deploy capital on EBITDA-accretive acquisitions in its key verticals when the macroeconomic and capital market conditions support this M&A (merger and acquisition) strategy.

Conference call details

Pluribus's management team will host a conference call to discuss its fiscal 2023 second quarter financial results on Wednesday, Aug. 30, 2023.

Date:  Wednesday, Aug. 30, 2023

Time:  8:30 a.m. EDT

To join the conference call without operator assistance, you may register and enter your phone number on-line to receive an instant automated callback.

Dial-in numbers:  416-764-8650 or 888-664-6383

Conference ID No.:  29125207

Webcast:  available on the events and presentations page of the company's investor website

Replay:  416-764-8677 or 888-390-0541 (playback code 125207 followed by the pound key) -- available until 12 a.m. EDT on Sept. 6, 2023

About Pluribus Technologies Corp.

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.

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 with 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 attached table presents the reconciliation from net income (loss) to adjusted EBITDA for the three and six months ended June 30, 2023.

We seek Safe Harbor.