Mr. Doug Emsley reports

SSC SECURITY SERVICES CORP. ANNOUNCES RECORD REVENUE AND ADJUSTED EBITDA GROWTH WITH FY2024 Q2 RESULTS

SSC Security Services Corp. has released its results for the second quarter of the 2024 fiscal year ended March 31, 2024.

"We have reached a couple of milestones this quarter with some of the strongest results in the history of the company. January to March is typically a slow period for the security industry, and our team generated record Q2 revenues while containing expenses allowing us to improve our adjusted EBITDA and overall profitability. I'm very proud of the hard work of our team this quarter and our continued progress in creating value for our shareholders", said Chairman and CEO Doug Emsley.

Q2 2024 HIGHLIGHTS

• During the second quarter, which ended on March 31, 2024, revenue was the strongest in SSC's Q2 history at $30.4-million. This represents an increase of $5.2-million (20.6 per cent organic growth) over the revenue recorded in the same period last year. This represents very strong results for what is typically a slower quarter for the Company.
• Adjusted EBITDA for the quarter was $1.1-million ($0.06 per share), up from $0.8-million ($0.04 per share) during the same quarter last year (33 per cent increase over Q2 2023).
• During the quarter we paid $0.03 per share in dividends to shareholders and bought back 233,900 shares of the Company.
• We finished the quarter ended March 31, 2024, with:
  • Cash and cash equivalents of $14.1-million (versus $9.8-million in Q1 2024);
  • Working capital of $28.6-million (versus $27.8-million in Q1 2024);
  • Further monetization of Legacy assets yielding a gain of $1.0-million during Q2 2024, and remaining Legacy assets of $6.8-million (versus $7.7-million in Q1 2024);
  • Total shareholders' equity of $66.3-million (versus $66.9-million in Q1 2024); and
  • No long-term debt.

Key Performance Indicators for the quarter and previous comparable period are summarized below:

REVENUE, GROSS PROFIT & NET INCOME

Revenues for the quarter ended March 31, 2024, were $30.4-million compared with $25.2-million during the previous quarter ended March 31, 2023, an increase of $5.2-million (revenue increase of 20.6 per cent). Traditionally we see a seasonal reduction in revenues in our second quarter, but over the last three months demand has remained high and revenues are therefore consistent with that of the quarter ended December 31, 2023.

Revenues for the YTD ended March 31, 2024, were $61.3-million compared with $53.2-million during the same period last year, an increase of $8.1-million or 15.2 per cent. The increase in revenues is entirely attributable to internally generated organic growth.

Gross profit for the quarter ended March 31, 2024, increased to $4.3-million from $4.0-million during the same quarter last year. The gross margin per cent for both periods remains within our long-term expectations for the security business.

Comprehensive net income for the quarter ended March 31, 2024, was $0.7-million (profit of $0.03 per share), compared to a comprehensive net loss in the same quarter last year of $0.0-million (loss of $0.00 per share).

ADJUSTED EBITDA

Adjusted EBITDA, and Adjusted EBITDA per share are the primary KPI's used by the Company to measure the financial performance of the Company. Adjusted EBITDA for the quarter ended March 31, 2024, was $1.1-million ($0.06 per share), as compared to $0.8-million ($0.04 per share) during the same quarter last year.

Adjusted EBITDA for the six months ended March 31, 2024, was $2.5-million ($0.13 per share), as compared to $1.7-million ($0.09 per share) during the same six months last year.

A reconciliation of earnings to EBITDA and Adjusted EBITDA is provided in the Non-IFRS section of the MD&A published concurrently with this press release.*

UPDATE ON NORMAL COURSE ISSUER BID

During the quarter ended March 31, 2024, we bought back 233,900 shares.

We renewed our NCIB for the upcoming year on January 4, 2024 because we continue to believe that our shares have been trading in a price range which does not adequately reflect their value and that the purchase of shares under the NCIB will enhance shareholder value in general.

OUTLOOK

We expect demand for security services to continue to grow and our national presence will assist us in winning new contracts across all geographic regions in the country. Additional growth may come via acquisition, as we look to acquire other companies in the Canadian security industry. Any additional acquisitions will of course accelerate our growth, however we will continue to be disciplined and conservative in our approach to any new deals.

The majority of our remaining legacy assets are expected to convert to cash over the next year. Our objective is to make these resources available for the expansion of our security business.

We plan to continue to distribute capital to shareholders via the dividend, operate with minimal to no debt while maintaining solid liquidity, and focus on maximizing Adjusted EBITDA per share.

ABOUT SSC

SSC Security Services Corp. is a national provider of cyber, physical and electronic security services to corporate and public sector clients across Canada. For more information, please visit www.securityservicescorp.ca

We seek Safe Harbor.