Mr. Emmanuel Mounouchos reports

AVANTE CORP. ANNOUNCES FINANCIAL RESULTS FOR THE SECOND FISCAL QUARTER ENDED SEPTEMBER 30, 2023

Avante Corp. has released its financial results for its second fiscal quarter ended Sept. 30, 2023 (all amounts in Canadian dollars thousands, unless otherwise indicated).

Manny Mounouchos, founder, chief executive officer and board chair of Avante, commented: "Second quarter was an exceptional quarter for Avante as we increased revenue and adjusted EBITDA, while completing the acquisition of NSSG. We are starting to gain traction on our initiatives to increase efficiencies and reinstate our high level of service. Our clients are noticing the difference in the level of service being provided to them and are becoming our advocates through providing a significantly increased number of referrals. Meanwhile, we continue to actively seek new opportunities to expand and enhance our services."

Raj Kapoor, Avante's chief financial officer, added: "I am pleased to report that the company has successfully acquired and integrated our latest acquisition, NSSG, while maintaining growth and liquid assets. We are expecting a boost in revenue and EBITDA in the fourth quarter with the contribution from NSSG. We continue to have a strong balance sheet and are able to fund the company's organic growth initiatives through positive cash flows from operations."

Financial highlights for the second fiscal quarter ended Sept. 30, 2023:

• Within continuing operations, the company reported revenue of $5,339 during the second quarter of fiscal 2024, representing year-over-year revenue growth of 8.2 per cent, or $404, compared with $4,934 for the prior fiscal year second quarter. The increase in revenue was mainly due to increased revenue from new products and services introduced during the past year.
• Gross profit margins within continuing operations increased to 39.7 per cent of revenue, versus 38.9 per cent during the prior year's second quarter, with total gross profit increasing by $196. Higher gross profit margins were due to stronger margins within protective service contracts and pricing increases implemented during the last 12 months for monitoring and managed services.
• The Avante Security segment delivered recurring monthly revenues (RMR) of $2,834 during the second quarter of fiscal 2024, up from $2,584 during the company's second in the prior year, a year-over-year growth of 9.7 per cent. The increase in recurring revenue was driven by increased pricing and net growth in monitoring customers.
• The company achieved adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations of $309 during the second quarter, an increase of 38.6 per cent, or $86, compared with $223 for the prior fiscal year second quarter.
• With cash balances of $4.9-million as at Sept. 30, 2023, and access to the senior secured revolver of $2-million and to the $10-million unsecured term loan facility, the company has excess liquidity to more than meet its existing requirements. The decrease in cash over the past year was primarily due to the NSSG acquisition, the provision of a loan for NSSG and changes in working capital.

Trailing-12-month financial highlights

On a trailing-12-month basis to Sept. 30, 2023:

• The company's total revenue was $21,207, compared with trailing-12-month revenue of $19,191 one year prior, an increase of 10.5 per cent.
• The company's RMR was $10,773, representing 50.8 per cent of total trailing-12-month revenue.
• The company's adjusted EBITDA from continuing operations was $1,383, representing adjusted EBITDA margin of 6.5 per cent of total trailing-12-month revenue.

Acquisition of NSSG

On Sept. 19, 2023, Avante announced its majority stake acquisition of North Star Support Group SRL (NSSG), through its subsidiary Avante International Inc. The transaction's effective date is Oct. 1, 2023. Avante acquired a 55-per-cent majority interest in NSSG, for an aggregate purchase price of 1.3 million euros, paid by way of a combination of cash in the amount of 1.2 million euros and the issuance of 154,301 common shares in the capital of the company. In addition, as part of the transaction, Avante advanced to NSSG a loan in principal amount of up to one million euros for a term of four years, bearing interest at a rate equal to the Bank of Canada Prime Rate plus 1 per cent, and repayable in eight quarterly equal repayments starting on the date that is 24 months after the date of each drawdown under the loan.

NSSG is a highly reputed risk management and security company operating globally. Founded in 2017, NSSG is headquartered in Bucharest, Romania, with offices in New York, Cairo and Kyiv, with representations in Saudi Arabia, Italy, Israel and the United Kingdom. NSSG offers a wide range of integrated corporate security solutions, with a strong focus on technological advancements and integration with existing corporate security platforms. NSSG has a worldwide clientele and has established itself as a trusted partner to Fortune 500 companies in the risk management industry. NSSG generated revenue of $5.9-million for the 12-month period ended Dec. 31, 2022, with net profit of $1.3-million.

Recent business highlights

• On Sept. 28, 2023, the company announced the launch of Avante Argus app, a mobile connectivity app for corporate clients. Avante Argus app provides peace of mind for Avante's executive clients with instant connectivity to the Avante Crisis Centre with real-time location tracking, enabling immediate emergency and medical response capabilities. Argus is designed to provide unparallelled security and support for Avante clients locally and for Avante Black clients internationally.
• On Nov. 2, 2023, the company announced it accepted an invitation to join the Global Shield Network, a law enforcement and intelligence network immersed in public/private sector partnerships designed to prevent crime and terrorism and improve public safety. After the safe and successful evacuation of its clients from the conflict zone in Israel, Avante was recognized for its world-class security and crisis management services with an invitation to join the Global Shield Network. This strategic alliance provides Avante with real-time access to police and international intelligence agencies worldwide.

Summary financial results for the second fiscal quarter ended Sept. 30, 2023

Readers should refer to the company's financial statements and MD&A (management's discussion and analysis) in respect of its second fiscal quarter ended Sept. 30, 2023, for additional risk factors, accounting policies, detailed financial disclosures, reconciliation of non-IFRS (international financial reporting standards) financial measures to the most directly comparable IFRS financial measures, related party transactions, contingencies and reporting of subsequent events since the year ended March 31, 2023. Such financial statements and MD&A are incorporated by reference into this news release and are filed electronically through SEDAR+.

The company's RMR from continuing operations during the last eight quarters is summarized herein. Gross profit margins over the last eight quarters ranged between 37.7 per cent and 42.8 per cent, and were 39.5 per cent on a trailing-12-month basis to Sept. 30, 2023.

Investor webinar scheduled for Tuesday, Dec. 5, 2023, at 1 p.m. ET (10 a.m. PT)

The company will also host an investor webinar to provide a corporate update and overview of the business, on Tuesday, Dec. 5, 2023, at 1 p.m. ET (10 a.m. PT). The call will be hosted by: Emmanuel Mounouchos, chief executive officer, chairman and founder of Avante, and Raj Kapoor, chief financial officer of Avante.

Webinar details:

Date:   Dec. 5, 2023

Time:  1 p.m. ET (10 a.m. PT)

Dial-in:  778-907-2071 (Vancouver local) and 647-374-4685 (Toronto local)

Confirmation No.:  849 3804 9871

About Avante Corp.

Avante is a Toronto-based provider of high-end security services. Avante acquires, manages and builds industry-leading businesses which provide specialized, mission-critical solutions that address the needs of its customers. The company's businesses continuously develop innovative solutions that enable its customers to achieve their objectives. With an experienced team and a proven record of solid growth, Avante is taking steps to establish a broad portfolio of security businesses to provide its customers and shareholders with exceptional returns. Avante is listed on the TSX Venture Exchange under the ticker XX.

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