Plurilock Security Inc. Reports Record First Quarter Fiscal 2024 Financial Results

Rhea-AI Summary

Plurilock Security Inc. announced its financial results for Q1 Fiscal 2024, reporting increased gross margins and growth in services. Gross margin rose to $2.5 million, or 21.9% of sales, up from $2.1 million, or 13.6%, in Q1 2023. Services sales grew by 66% to $1.0 million. Revenue for the quarter was $11.57 million, down from $15.77 million in Q1 2023, mainly due to the timing of large orders and lower volume from the Integra acquisition. Adjusted EBITDA improved to a loss of $0.4 million, and cash and cash equivalents were $0.63 million. Major orders included a $4.7 million sale to a US public library and a $2.5 million cybersecurity order from a US hospital system. The company aims to achieve cash flow breakeven by growing its Critical Services and improving efficiencies, expecting $2.0 million in annual savings.

Positive

• Gross margin increased to 21.9% in Q1 2024 from 13.6% in Q1 2023.
• Services sales grew by 66% to $1.0 million in Q1 2024 compared to $0.6 million in Q1 2023.
• Adjusted EBITDA improved to a loss of $0.4 million in Q1 2024 from a loss of $1.0 million in Q1 2023.
• Critical Services launched, contributing to growth.
• Major sale orders totaling US$7.2 million received in Q1 2024.
• Company aims to save $2.0 million annually through efficiency improvements.

Negative

• Total revenue decreased to $11.57 million in Q1 2024 from $15.77 million in Q1 2023.
• Hardware and systems sales dropped to $8.92 million from $12.44 million in Q1 2023.
• Software, license, and maintenance sales fell to $1.65 million from $2.71 million.
• Cash and cash equivalents decreased to $0.63 million from $2.06 million.
• Net loss for Q1 2024 was $1.11 million, slightly improved from $1.36 million in Q1 2023.

• Gross Margin $2.5 million, 21.9% of sales in Q1 2024 vs. $2.1 million, 13.6% in Q1 2023.
• Plurilock Critical Services growth of 66% to $1.0 million in Q1 2024 from $0.6 million in Q1 2023.

Vancouver, British Columbia--(Newsfile Corp. - May 30, 2024) - Plurilock Security Inc. (TSXV: PLUR) (OTCQB: PLCKF) and related subsidiaries ("Plurilock" or the "Company"), an identity-centric cybersecurity solution provider for workforces, today announces its financial results for the three months ended March 31, 2024. All dollar figures are stated in Canadian dollars, unless otherwise indicated.

"During the first quarter of 2024, Plurilock achieved growth in its services, a key strategic initiative for the company," said Ian L. Paterson, CEO of Plurilock. "Plurilock is diligently marching forward with its Critical Services offer and gaining momentum towards its profitability goals."

Key Business Milestones During Q1 Fiscal 2024

• Gross margins increased to 21.9% in Q1 2024 from 13.6% in Q1 2023, driven by increases in Critical Services mix and margin improvements in margin throughout the Company's portfolio.

• Services sales increased 66% driven by Plurilock's focus on Critical Services and traction it is seeing with new clients.

• Adjusted EBITDA improved to a loss of $0.4M in Q1 2024 from a loss of $1.0M from stronger margins and cost containment versus the prior year.

First Quarter Fiscal 2023 Financial Highlights

• Total revenue for the three months ended March 31, 2023, was $11,574,930 as compared to $15,767,328 for the year three months ended March 31, 2023. Revenue for the three months ended March 31, 2024 and 2023, included revenue from both the Technology Division and the Solutions Division. Revenue for the three months ended March 31, 2024, is lower than the comparative period as a result of the timing on a few large orders and lower volume from the Integra acquisition ("INC") offset partially by +66% growth in professional services sales.

• Hardware and systems sales revenue for the three months ended March 31, 2024, totalled $8,915,252 compared to $12,444,129 respectively in the prior three months ended March 31, 2023. Software, license, and maintenance sales revenue for the three months ended March 31, 2024, was $1,647,753 compared to $2,713,578 in the prior period ended March 31, 2023. Professional services revenue was $1,011,925 for the three months ended March 31, 2024, compared to $609,621 in the prior period ended March 31, 2023.

• Hardware and systems sales revenues for the three months ended March 31, 2024, accounted for 77.0% of total revenues compared to 78.9% for the three months ended March 31, 2023. Software, license and maintenance sales revenues for the three months ended March 31, 2024, accounted for 14.2% compared to 17.2% for the three months ended March 31, 2023. Professional services revenue for the three months ended March 31, 2024, accounted for 8.7% of total revenues, compared to 3.9%% for the three months ended March 31, 2023.

• Gross margin for the three months ended March 31, 2024, was 21.9% compared to 13.6% for the three months ended March 31, 2023.

• Adjusted EBITDA for the three months ended March 31, 2024 was $(369,551) compared to $(971,966) in the prior three months ended March 31, 2023.

• Cash and cash equivalents and restricted cash on March 31, 2024 was $629,473 compared to $2,058,193 on December 31, 2023.

• During the three months ended March 31, 2024, the Company used $683,179 of cash from operating activities compared to $1,699,960 in the prior year.

First Quarter Fiscal 2023 Operational Highlights

• On January 3, 2024, the Company received a US$4.7 million sale order from a US public library.

• On January 24, 2024 the Company received a US$2.5 million cybersecurity sale order from the US hospital system.

• On February 21, 2024, the Company launched its new Critical Services offer. This offer is aimed at enabling security and resilience for multinational companies and business partners with geopolitical exposure.

Outlook for 2024

The Company remains committed to reaching cash flow breakeven by growing Plurilock Critical Services as well as continuing to identify more opportunities to achieve financial and operational efficiencies across all business units. At the end of December 2023, Plurilock enacted a plan in accordance with this strategy and expects to realize approximately $2.0 million in savings on an annualized basis.

Summary of Key Financial Metrics

		Three months ended March 31,
		2024				2023
		$				$
Revenue		11,574,930				15,767,328
Hardware and systems sales		8,915,252				12,444,129
Software, license and maintenance sales		1,647,753				2,713,578
Professional services		1,011,925				609,621
Gross margin (%)		21.9%				13.6%
Net loss for the year		(1,112,610	)			(1,357,987	)
Basic and diluted loss per share - for the period		(0.10	)			(0.17	)
EBITDA(1)		(441,886	)			(1,265,133	)
Reconciliation of EBITDA:
Net loss for the period		(1,112,610	)			(1,357,987	)
Foreign exchange translation gain/(loss)		122,985				(150,684	)
Amortization		131,080				97,554
Interest expenses		416,659				143,545
Income tax recovery		-				2,439
Impairment on goodwill		-				-
Adjusted EBITDA(1)		(371,130	)			(971,966	)
Reconciliation of adjusted EBITDA:
EBITDA(1)		(441,886	)			(1,265,133	)
Stock-based compensation		60,839				165,310
Financing expenses		3,843				109,794
Acquisition-related expenses		4,280				14,724
Loss on disposal on assets		-				3,339
Impairment on assets on assets		1,794				-
		March 31, 2024				December 31, 2023
		$				$
Cash and cash equivalents		609,473				1,917,770
Restricted cash		20,000				140,423
Total current assets		11,897,618				21,607,729
Total assets		17,392,367				2,715,736
Total current liabilities		21,075,799				29,941,855
Total liabilities		22,597,859				31,471,496

 

Note:

(1) Non-GAAP measure. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") and Adjusted EBITDA should not be construed as alternatives to net income/loss determined in accordance with IFRS. EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines EBITDA as earnings before interest, taxes, and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation, financing, and acquisition related expenses. The Company believes that EBITDA and Adjusted EBITDA is a meaningful financial metric for investors as it adjusts income to reflect amounts which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives.

Non-IFRS measures

This news release presents information about EBITDA and Adjusted EBITDA, both of which are non-IFRS financial measures, to provide supplementary information about operating performance. Plurilock defines EBITDA as net income or loss before interest, income taxes, depreciation, and amortization. Adjusted EBITDA removes non-cash share-based compensation, financing, and acquisition-related expenses from EBITDA. The Company believes that EBITDA and Adjusted EBITDA is a meaningful financial metric for investors as it adjusts income to reflect amounts which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. EBITDA and Adjusted EBITDA are not intended as a substitute for IFRS measures. A limitation of utilizing these non-IFRS measures is that the IFRS accounting effects of the adjustments do in fact reflect the underlying financial results of Plurilock's business and these effects should not be ignored in evaluating and analyzing Plurilock's financial results. Therefore, management believes that Plurilock's IFRS measures of net loss and the same respective non-IFRS measure should be considered together. Non-IFRS measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Readers should refer to the Company's most recently filed MD&A for a more detailed discussion of these measures and their calculations.

Quarterly Filings

Management's Discussion and Analysis and Interim Condensed Consolidated Financial Statements and the notes thereto for the fiscal period ended March 31, 2024 can be obtained from Plurilock's corporate website at www.plurilock.com and under Plurilock's SEDAR profile at www.sedar.com.

About Plurilock

Plurilock sells Cyber Security solutions to the United States and Canadian Federal Governments along with Global 2000 companies. Through these relationships, Plurilock sells its unique brand of Critical Services - aiding clients with our expertise to defend against, detect, and prevent costly data breaches and cyber-attacks.

For more information, visit https://www.plurilock.com or contact:

Ian L. Paterson
Chief Executive Officer
ian@plurilock.com
416.800.1566

Ali Hakimzadeh
Executive Chairman
ali@sequoiapartners.ca
604.306.5720

Sean Peasgood
Investor Relations
Sean@SophicCapital.com
905.364.4746

Forward-Looking Statements

This press release may contain certain forward-looking statements and forward-looking information (collectively, "forward-looking statements") which relate to future events or Plurilock's future business, operations, and financial performance and condition. Forward-looking statements normally contain words like "will", "intend", "anticipate", "could", "should", "may", "might", "expect", "estimate", "forecast", "plan", "potential", "project", "assume", "contemplate", "believe", "shall", "scheduled", and similar terms. Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. Although management believes that the forward-looking statements herein are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Plurilock's business. Additional material risks and uncertainties applicable to the forward-looking statements herein include, without limitation, unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being inaccurate or irrelevant. Many of these factors are beyond the control of Plurilock. All forward-looking statements included in this press release are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in this press release are made as at the date hereof and Plurilock undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/211209

FAQ

What were Plurilock Security's financial results for Q1 2024?

Plurilock reported a gross margin of $2.5 million (21.9% of sales), services sales growth of 66% to $1.0 million, and total revenue of $11.57 million for Q1 2024.

How did Plurilock's revenue perform in Q1 2024 compared to Q1 2023?

Total revenue decreased from $15.77 million in Q1 2023 to $11.57 million in Q1 2024.

What was Plurilock Security's net loss in Q1 2024?

Plurilock reported a net loss of $1.11 million for Q1 2024, compared to a net loss of $1.36 million in Q1 2023.

How did Plurilock's cash position change in Q1 2024?

Cash and cash equivalents decreased to $0.63 million on March 31, 2024, from $2.06 million on December 31, 2023.

What were Plurilock Security's major orders in Q1 2024?

Plurilock received a US$4.7 million sale order from a US public library and a US$2.5 million cybersecurity sale order from a US hospital system.

What is Plurilock's outlook for 2024?

Plurilock aims to achieve cash flow breakeven by growing its Critical Services and implementing efficiency improvements, expecting $2.0 million in annual savings.