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spk01: Good morning.
spk00: My name is Lara, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pluribus Technologies Corp conference call to present the financial results for the first quarter ended March 31, 2024. All lines have been placed on mute to prevent any background noise. After management's prepared remarks, there will be a question and answer session. Instructions on how to queue up to ask questions will be given at that time. Forward-looking information is based on a number of assumptions, including the business plans of the company, including the successful completion and pace of future acquisitions, management's expectations and the growth, the company's ability to meet its debt service obligations, the company's ability to align costs to revenues, profitability and performance of its current and future acquisitions, the company's ability to continue acquiring business-to-business software companies at reasonable prices, and the company's ability to grow its portfolio companies into significant organizations. And other assumptions are set out in the risk factor section of the company's first quarter MD&A, dated May 30, 2024. Forward-looking information is subject to risks, many of which are beyond the company's control. A comprehensive summary of the risks and uncertainties that may affect the business is set out in the company's filing statement, dated January 7, 2022. This forward-looking information represents management's expectations as of today, and accordingly is subject to change. Such information is based on current assumptions that may not materialize and is subject to a number of important risks and uncertainties. Actual results may differ materially, and listeners are cautioned not to place undue reliance on this forward-looking information. Paribus does not undertake any obligation to update forward-looking information, whether as a result of new information, future events, or otherwise, except as expressly required under applicable securities laws. Pluribus MDNAs and filing statements are available on the corporate website and its filings with the Canadian Securities Administrators and CEDAR at www.cedaplus.ca. With that, I will now turn the call over to Mr. Richard Adair, Chief Executive Officer of Pluribus Technologies.
spk01: Mr. Adair, you may begin your remarks.
spk04: Thank you. Good morning, everyone, and thank you for joining us today. On the call with me today is Nancy Fahey, our CFO. In terms of an agenda, I will review the key highlights for the first quarter before turning the call over to Nancy for a brief financial overview. We'll then open the call to questions. We were pleased to announce the sale of HealthTech Vertical earlier this month as a first step in deleveraging the balance sheet. We determined that the growth opportunities in HealthTAC Vertical were limited without additional investment and deemed it to be non-core. Since acquisition of the HealthTAC Vertical in December 2019, we were able to more than double the EBITDA and achieve an attractive return on invested capital. The service delivered another quarter of adjusted EBITDA that was positive in this difficult economic environment. with the benefits of the previously announced cost-cutting initiatives we implemented in 2023, fully benefiting adjusted EBITDA. At e-learning, we're starting to see more activity and more slow increases in spending by customers as compared to 2023. During the quarter, Skillshare was approached by a key customer in the UK to acquire a perpetual software license. Skillshare retained its own version of the code to sell to other customers, and the sale generated cash in Q1 to assist in paying the
spk02: credit facility.
spk04: In the first quarter of 2024, the e-commerce vertical saw a negative impact from the difficult macroeconomic recessionary environment and due to changes in its key marketplaces that had a negative impact on new subscribers. We initiated changes to adapt to the marketplace requirements that should have a positive impact in Q2 2024. The digital enablement vertical showed stable results with Rowland benefiting from increase in spending by existing customers and moving to Cloud9. The cost-cutting measures implemented in Assured at 2023 were fully realized in the first quarter of 2024. We continue to work with the National Bank on the forbearance agreement, which was amended in March, April, and May of this year to allow the company to continue its strategic review. The special committee and its strategic advisor continue to review and evaluate strategic alternatives that may be available to further enhance growth, development, and prosperity in the short and long term with the goal of maximizing shareholder value. With that, I'm going to turn the call over to Nancy for a brief financial review. Nancy.
spk03: Thank you, Richard, and good morning, everyone. Revenue for the quarter ended March 31, 2024, with $9.5 million, an increase of $0.8 million, or 9%, compared to $8.7 million for the prior period. The increase in revenue was driven by e-learning, by the e-learning perpetual license sale in the UK. Operating expenses for the fourth quarter were $4.4 million, a decrease of $0.3 million, or 6%, compared to $4.7 million in the prior period. The decline in operating expenses was driven by sales and marketing, which benefited from a reduction of employee and contractor costs following the 2023 restructuring. Adjusted EBITDA for the quarter was $2.3 million compared to $0.6 million in the comparative period. The increase in adjusted EBITDA was primarily driven by the revenue highlighted above and a reduction in cost of sales and operating expenses from lower employee and contractor costs. Net loss for the quarter was $1.8 million, a decrease of $0.1 million compared to a net loss of $1.9 million in the prior period. The decline in the net loss for the quarter was primarily driven by the increase in adjusted EBITDA, offset by increased acquisition costs relating to severance and costs incurred supporting the forbearance agreement, and an increase in taxes, loss on the revaluation of contingent consideration, and income taxes. Turning briefly to the balance sheet, we closed the quarter with cash on hand of $1.5 million compared to $1.3 million on December 31st, 2023. That concludes the financial review and our prepared remarks for today. I will now turn the call back over to the operator to begin the Q&A session. Lara?
spk01: Thank you, ma'am. We will now conduct a question and answer session.
spk00: If you would like to ask a question during this time, simply press star then the number 1 on your telephone keypad. If you would like to withdraw your question, please press star followed by the number 2. Again, to queue up for questions, please press star followed by the number 1.
spk01: We will now take a moment to compile the Q&A roster. Again, to all our participants, if you do have a question, please press star followed by the number one on your telephone keypad. At this time, there are no questions. I would now like to turn the call back over to Mr. Adair for any closing remarks.
spk02: Thank you. talking to you about Q2.
spk04: Thank you.
spk00: Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.
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