First
Billion-Dollar Gross
Sales Quarter Driven
by Strong Demand
TORONTO and GATINEAU, QC,
Nov. 14, 2023 /PRNewswire/ --
Converge Technology Solutions Corp. ("Converge" or "the
Company") (TSX: CTS) (FSE: 0ZB) (OTCQX: CTSDF) is pleased to
provide its financial results for the three and nine months period
ended September 30, 2023. All
figures are in Canadian dollars unless otherwise stated.
Third Quarter 2023 Financial Highlights:
- Gross sales1 of $1.037 billion, an increase of 42% from the
comparative period in the prior year;
- For the first nine months of 2023, achieved gross sales organic
growth of 10.8%;
- Revenue of $710.1 million, an
increase of 38% from the comparative period in the prior year;
- Gross profit increased 25% to $174.1
million from $139.7 million in
Q3 2022;
- Adjusted EBITDA1 increased 33% to $41.3 million from $31.0
million in Q3 2022;
- Net income of ($3.3) million
compared to $18.2 million in Q3
2022
- Cash flows from operating activities were $95.9 million, an increase of $80.9 million, compared to $15.0 million in Q3 2022;
- Decreased net leverage to 1.8x compared to 2.24x in Q2
2023;
- Reduced net debt (cash less borrowings) by $44.3 million to $307.5
million, compared to $351.9
million in Q2 2023; and
- Product bookings backlog2 at the end of Q3 2023 was
$479 million, an increase of
$32 million from Q2 2023.
"The structural demand tailwinds of planning, implementing and
monitoring complex technology projects whether AI, cloud or cyber
related are driving a higher quality revenue mix," said
Shaun Maine, Group CEO. "Converge
continues to witness significant demand for higher end products,
services and solutions which is crucial to positioning the Company
as a trusted advisor to our clients."
Financial Summary
In $000s except per
share amounts
|
3-month
Q3
2023
|
3-month
Q3 2022
|
|
9-month
Q3
2023
|
9-month
Q3 2022
|
Gross Sales
|
1,036,760
|
730,571
|
|
2,959,237
|
2,134,178
|
Revenue
|
710,106
|
514,485
|
|
2,054,117
|
1,523,721
|
Gross profit
(GP)
|
174,090
|
139,654
|
|
521,351
|
381,851
|
Gross profit (GP)
%
|
24.5 %
|
27.1 %
|
|
25.4 %
|
25.1 %
|
Adjusted
EBITDA
|
41,258
|
30,967
|
|
123,789
|
99,804
|
Adjusted EBITDA as a %
of GP1
|
23.7 %
|
22.2 %
|
|
23.7 %
|
26.1 %
|
Net (loss)
income
|
(3,316)
|
18,228
|
|
(11,174)
|
27,449
|
Adjusted net
income1
|
20,622
|
21,266
|
|
70,187
|
73,676
|
Adjusted
EPS1
|
0.10
|
0.10
|
|
0.34
|
0.34
|
_______________________________
|
1 This is a
Non-IFRS measure (including non-IFRS ratio) and not a recognized,
defined or a standardized measure under IFRS. See the "Non-IFRS
Financial Measures" section of this press release for definitions,
uses and a reconciliation of historical non-IFRS financial measures
to the most directly comparable IFRS financial measures.
|
2 Bookings backlog is calculated as
purchase orders received from customers not yet delivered at the
end of the fiscal period for Canada and United States.
|
Subsequent to Quarter-End
- Board of Directors authorized a third quarter dividend of
$0.01 per common share to be paid on
December 28, 2023 to shareholders of
record at the close of business on December
13, 2023
Financial Outlook
Converge is providing financial guidance for the three months
ended December 31, 2023 as
follows:
- Gross Profit between $177 million
and $184 million
- Adjusted EBITDA between $45
million and $47 million
Conference Call Details:
Date: Tuesday, November 14th, 2023
Time: 8:00 AM Eastern Standard
Time
Participant Webcast Link: Webcast Link
– https://app.webinar.net/QdG07XJ8abr
Participant Dial-in Details with Operator
Assistance:
Conference ID:
64850592
Toronto:
416-764-8609
North American Toll Free: 888-390-0605
International Toll-Free Numbers:
Germany: 08007240293
Ireland: 1800939111
Spain: 900834776
Switzerland: 0800312635
United Kingdom: 08006522435
You may register and enter your phone number to receive an
instant automated call back
via https://emportal.ink/46xbql2
Recording Playback:
Webcast Link - https://app.webinar.net/QdG07XJ8abr
Toronto: 416-764-8677
North American Toll Free: 1-888-390-0541
Replay Code: 850592 #
Expiry Date: November
21st, 2023
Please connect at least 15 minutes prior to the conference call
to ensure time for any software download that may be required to
access the webcast. A live audio webcast accompanied by
presentation slides and archive of the conference call and webcast
will be available by visiting the Company's website
at https://convergetp.com/investor-relations/.
About Converge
Converge Technology Solutions Corp. is a services-led,
software-enabled, IT & Cloud Solutions provider focused on
delivering industry-leading solutions. Converge's global approach
delivers advanced analytics, application modernization, cloud
platforms, cybersecurity, digital infrastructure, and digital
workplace offerings to clients across various industries. The
Company supports these solutions with advisory, implementation, and
managed services expertise across all major IT vendors in the
marketplace. This multi-faceted approach enables Converge to
address the unique business and technology requirements for all
clients in the public and private sectors. For more information,
visit convergetp.com.
Summary of Consolidated Statements of Financial
Position
(expressed in thousands of Canadian
dollars)
|
|
September 30,
2023
|
December 31,
2022
|
Assets
|
|
|
|
Current
|
|
|
|
|
Cash
|
|
$
105,221
|
$
159,890
|
|
Restricted
cash
|
|
3,103
|
5,230
|
|
Trade and other
receivables
|
|
803,673
|
781,683
|
|
Inventories
|
|
165,788
|
158,430
|
|
Prepaid expenses
and other assets
|
|
22,224
|
23,046
|
|
|
|
1,100,009
|
1,128,279
|
Non-current
|
|
|
|
|
Other assets
|
|
17,460
|
4,646
|
|
Property, equipment,
and right-of-use assets, net
|
|
73,592
|
88,352
|
|
Intangible assets,
net
|
|
400,536
|
463,751
|
|
Goodwill
|
|
568,188
|
563,848
|
Total
assets
|
|
$
2,159,785
|
$
2,248,876
|
|
|
|
|
|
Liabilities
|
|
|
|
Current
|
|
|
|
|
Trade and other
payables
|
|
$
898,423
|
$
824,924
|
|
Other financial
liabilities
|
|
52,625
|
123,932
|
|
Deferred
revenue
|
|
48,633
|
60,210
|
|
Borrowings
|
|
109
|
421,728
|
|
Income taxes
payable
|
|
10,971
|
7,112
|
|
|
|
1,010,761
|
1,437,906
|
Non-current
|
|
|
|
|
Other financial
liabilities
|
|
47,206
|
77,183
|
|
Borrowings
|
|
412,644
|
-
|
|
Deferred tax
liabilities
|
|
77,034
|
102,977
|
Total
liabilities
|
|
$
1,547,645
|
$
1,618,066
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
Common
shares
|
|
603,716
|
595,019
|
|
Contributed
surplus
|
|
10,016
|
7,919
|
|
Exchange
rights
|
|
-
|
1,705
|
|
Accumulated other
comprehensive income
|
|
3,047
|
13,708
|
|
Deficit
|
|
(31,674)
|
(18,441)
|
Total equity
attributable to shareholders of
Converge
|
|
585,105
|
599,910
|
Non-controlling
interest
|
|
27,035
|
30,900
|
|
|
612,140
|
630,810
|
Total liabilities and
shareholders' equity
|
|
$
2,159,785
|
$
2,248,876
|
Summary of Consolidated Statements of Loss and Comprehensive
Loss
(expressed in thousands of Canadian dollars)
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Product
|
$
|
559,646
|
$
|
385,285
|
$
|
1,607,932
|
$
|
1,193,038
|
Service
|
|
150,460
|
|
129,200
|
|
446,185
|
|
330,683
|
Total
revenue
|
|
710,106
|
|
514,485
|
|
2,054,117
|
|
1,523,721
|
Cost of
sales
|
|
536,016
|
|
374,831
|
|
1,532,766
|
|
1,141,870
|
Gross
profit
|
|
174,090
|
|
139,654
|
|
521,351
|
|
381,851
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
134,935
|
|
111,032
|
|
403,667
|
|
287,267
|
Income before the
following
|
|
39,155
|
|
28,622
|
|
117,684
|
|
94,584
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
29,456
|
|
23,094
|
|
82,239
|
|
54,751
|
Finance expense,
net
|
|
10,867
|
|
5,886
|
|
30,870
|
|
10,798
|
Acquisition,
integration, restructuring and other
|
|
2,601
|
|
8,211
|
|
10,969
|
|
19,492
|
Change in fair value of
contingent consideration
|
|
-
|
|
-
|
|
9,209
|
|
-
|
Share-based
compensation
|
|
774
|
|
1,275
|
|
2,738
|
|
4,172
|
Other (income)
expenses
|
|
(170)
|
|
(25,570)
|
|
(4,230)
|
|
(22,432)
|
(Loss) income before
income taxes
|
|
(4,373)
|
|
15,726
|
|
(14,111)
|
|
27,803
|
|
|
|
|
|
|
|
|
|
Income tax (recovery)
expense
|
|
(1,057)
|
|
(2,502)
|
|
(2,937)
|
|
304
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(3,316)
|
$
|
18,228
|
$
|
(11,174)
|
$
|
27,499
|
Net (loss) income
attributable to:
|
|
|
|
|
|
|
|
|
Shareholders of
Converge
|
|
(1,802)
|
|
20,595
|
|
(7,309)
|
|
30,819
|
Non-controlling
interest
|
|
(1,514)
|
|
(2,367)
|
|
(3,865)
|
|
(3,320)
|
|
$
|
(3,316)
|
$
|
18,228
|
$
|
(11,174)
|
$
|
27,499
|
Other comprehensive
(loss) income
|
|
|
|
|
|
|
|
|
Item that may be
reclassified subsequently to (loss)
income:
|
|
|
|
|
|
|
|
|
Exchange differences
on translation of foreign
operations
|
|
(2,891)
|
|
5,352
|
|
(10,661)
|
|
(859)
|
|
|
(2,891)
|
|
5,352
|
|
(10,661)
|
|
(859)
|
Comprehensive (loss)
income
|
$
|
(425)
|
$
|
23,580
|
$
|
(21,835)
|
$
|
26,640
|
Comprehensive (loss)
income attributable to:
|
|
|
|
|
|
|
|
|
Shareholders of
Converge
|
|
1,089
|
|
25,947
|
|
(17,970)
|
|
29,960
|
Non-controlling
interest
|
|
(1,514)
|
|
(2,367)
|
|
(3,865)
|
|
(3,320)
|
|
|
(425)
|
|
23,580
|
|
(21,835)
|
|
26,640
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
41,258
|
$
|
30,967
|
$
|
123,789
|
$
|
99,804
|
Adjusted EBITDA as a
% of Gross Profit
|
|
23.7 %
|
|
22.2 %
|
|
23.7 %
|
|
26.1 %
|
Adjusted EBITDA as a
% of Revenue1
|
|
5.8 %
|
|
6.0 %
|
|
6.0 %
|
|
6.6 %
|
Summary of Consolidated Statements of Cash Flows
(expressed in thousands of Canadian dollars)
|
|
|
For the three
months
ended September 30,
|
For the nine
months
ended September
30,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Cash flows (used in)
from operating activities
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(3,316)
|
$
|
18,228
|
$
|
(11,174)
|
$
|
27,499
|
Adjustments to
reconcile net (loss) income
to net
cash from operating activities
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
31,559
|
|
24,101
|
|
88,344
|
|
58,071
|
Unrealized foreign
exchange gains
|
|
|
-
|
|
(24,233)
|
|
(2,818)
|
|
(20,532)
|
Share-based
compensation expense
|
|
|
774
|
|
1,275
|
|
2,738
|
|
4,172
|
Finance
expense, net
|
|
|
10,867
|
|
5,886
|
|
30,870
|
|
10,798
|
Gain on
sale of property and equipment
|
|
|
-
|
|
-
|
|
(598)
|
|
-
|
Change in
fair value of contingent consideration
|
|
|
-
|
|
-
|
|
9,209
|
|
-
|
Income tax
(recovery) expense
|
|
|
(1,057)
|
|
(2,502)
|
|
(2,937)
|
|
304
|
|
|
|
38,827
|
|
22,755
|
|
113,634
|
|
80,312
|
Changes in
non-cash working capital items
|
|
|
63,102
|
|
(5,904)
|
|
18,858
|
|
(50,195)
|
|
|
|
101,929
|
|
16,851
|
|
132,492
|
|
30,117
|
Income
taxes paid
|
|
|
(5,987)
|
|
(1,901)
|
|
(17,433)
|
|
(18,926)
|
Cash from operating
activities
|
|
|
95,942
|
|
14,950
|
|
115,059
|
|
11,191
|
|
|
|
|
|
|
|
|
|
|
Cash flows (used in)
from investing activities
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(1,593)
|
|
(4,332)
|
|
(8,790)
|
|
(18,812)
|
Proceeds on disposal of
property and equipment
|
|
|
-
|
|
-
|
|
3,749
|
|
(6)
|
Payment of contingent
consideration
|
|
|
(10,899)
|
|
-
|
|
(20,834)
|
|
(10,135)
|
Payment of deferred
consideration
|
|
|
(14,095)
|
|
(121)
|
|
(43,815)
|
|
(7,069)
|
Payment of NCI
liability
|
|
|
(973)
|
|
-
|
|
(30,967)
|
|
-
|
Business combinations,
net of cash acquired
|
|
|
-
|
|
(154,212)
|
|
-
|
|
(353,683)
|
Cash used in
investing activities
|
|
|
(27,560)
|
|
(158,665)
|
|
(100,657)
|
|
(389,705)
|
|
|
|
|
|
|
|
|
|
|
Cash flows (used in)
from financing activities
|
|
|
|
|
|
|
|
|
|
Transfers (to) from
restricted cash
|
|
|
(519)
|
|
141
|
|
2,068
|
|
(4,372)
|
Interest
paid
|
|
|
(10,544)
|
|
(1,229)
|
|
(25,786)
|
|
(4,287)
|
Dividends
paid
|
|
|
(2,047)
|
|
-
|
|
(4,114)
|
|
(1,080)
|
Payments of lease
liabilities
|
|
|
(4,975)
|
|
(3,462)
|
|
(15,199)
|
|
(8,494)
|
Repurchase of common
shares
|
|
|
(1,064)
|
|
(30,539)
|
|
(15,294)
|
|
(30,539)
|
Repayment of notes
payable
|
|
|
(39)
|
|
(37)
|
|
(119)
|
|
(196)
|
Net (repayment to)
proceeds from borrowings
|
|
|
(21,977)
|
|
173,084
|
|
(10,593)
|
|
357,901
|
Cash (used in) from
financing activities
|
|
|
(41,165)
|
|
137,958
|
|
(69,037)
|
|
308,933
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
during the period
|
|
|
27,217
|
|
(5,757)
|
|
(54,635)
|
|
(69,581)
|
Effect of foreign
exchange on cash
|
|
|
(439)
|
|
(6,189)
|
|
(34)
|
|
(6,383)
|
Cash, beginning of
period
|
|
|
78,443
|
|
184,175
|
|
159,890
|
|
248,193
|
Cash, end of
period
|
|
$
|
105,221
|
$
|
172,229
|
$
|
105,221
|
$
|
172,229
|
Non-IFRS Financial Measures
This press release refers to certain performance indicators
including Adjusted EBITDA, Gross Profit, Adjusted Net Income and
Adjusted EPS that do not have any standardized meaning
prescribed by IFRS and may not be comparable to similar measures
presented by other companies. Management believes that these
measures are useful to most shareholders, creditors, and other
stakeholders in analyzing the Company's operating results and
can highlight trends in its core business that may not otherwise be
apparent when relying solely on IFRS financial measures. The
Company also believes that securities analysts, investors and other
interested parties frequently use non-IFRS measures in the
evaluation of issuers.
Management also uses non-IFRS measures in order to facilitate
operating performance comparisons from period to period, prepare
annual operating budgets and assess the ability to meet capital
expenditure and working capital requirements. These non-IFRS
financial measures should not be considered as an alternative to
the consolidated income (loss) or any other measure of performance
under IFRS. Investors are encouraged to review the Company's
financial statements and disclosures in their entirety, are
cautioned not to put undue reliance on non-IFRS measures and view
them in conjunction with the most comparable IFRS financial
measures.
Adjusted EBITDA
Adjusted EBITDA represents net income or loss adjusted to
exclude amortization, depreciation, interest expense and net
finance expense, foreign exchange gains and losses, other expenses
and income, share-based compensation expense, income tax
expense, change in fair value of contingent consideration, and
acquisition, integration, restructuring and other expenses.
Acquisition and transaction related costs primarily consists
of acquisition-related compensation tied to continued employment of
pre-existing shareholders of the acquiree not included in the total
purchase consideration and professional fees. Integration costs
primarily consist of professional fees incurred related to
integration of acquisitions completed. Restructuring costs mainly
represent employee exit costs as a result of synergies created from
acquisitions and organizational changes. The IFRS measure most
directly comparable to Adjusted EBITDA presented in the Company's
financial statements is net (loss) income before taxes.
The Company's definition of Adjusted EBITDA will likely differ
from that used by other companies and therefore comparability may
be limited. Adjusted EBITDA should not be considered a
substitute for or in isolation from measures prepared in accordance
with IFRS.
The Company has reconciled Adjusted EBITDA to the most
comparable IFRS financial measure as follows:
|
For the three
months
ended September
30,
|
For the nine
months
ended September
30,
|
|
2023
|
2022
|
2023
|
2022
|
Net (loss) income
before income taxes
|
$
(4,373)
|
$
15,726
|
$
(14,111)
|
$ 27,803
|
Finance expense,
net
|
10,867
|
5,886
|
30,870
|
10,798
|
Share-based
compensation expense
|
774
|
1,275
|
2,738
|
4,172
|
Depreciation and
amortization
|
29,456
|
23,094
|
82,239
|
54,751
|
Depreciation included
in cost of sales
|
2,103
|
1,008
|
6,105
|
3,320
|
Other (income)
expense
|
(170)
|
(24,233)
|
(4,230)
|
(20,532)
|
Change in fair
value of contingent
consideration
|
-
|
-
|
9,209
|
-
|
Acquisition,
integration, restructuring
and other
|
2,601
|
8,211
|
10,969
|
19,492
|
Adjusted
EBITDA
|
$
41,258
|
$
30,967
|
$
123,789
|
$
99,804
|
Adjusted EBITDA as a % of Gross Profit
The Company believes that Adjusted EBITDA as a % of Gross Profit
is a useful measure of the Company's operating efficiency and
profitability. This is calculated by dividing Adjusted EBITDA by
gross profit.
Adjusted EBITDA as a % of Revenue
The Company believes that Adjusted EBITDA as a % of Revenue is a
useful measure of the Company's operating efficiency and
profitability. This is calculated by dividing Adjusted EBITDA by
revenue.2
Adjusted Net Income (Loss) and Adjusted Earnings per Share
("Adjusted EPS")
Adjusted Net Income represents net income adjusted to exclude
acquisition, integration, restructuring and other expenses, change
in fair value of contingent consideration, amortization of acquired
intangible assets, unrealized foreign exchange gain/loss, and
share-based compensation. The Company believes that Adjusted Net
Income is a more useful measure than net income as it excludes the
impact of one-time, non-cash and/or non-recurring items that are
not reflective of Converge's underlying business performance.
Adjusted EPS is calculated by dividing Adjusted Net Income by the
total weighted average shares outstanding on a basic and diluted
basis. The IFRS measure most directly comparable to Adjusted
Net Income presented in the Company's financial statements is net
(loss) income and net (loss) income per share.
The Company has provided a reconciliation to the most comparable
IFRS financial measure as follows:
|
For the three
months
|
For the nine
months
|
ended September
30,
|
ended September
30,
|
|
2023
|
2022
|
2023
|
2022
|
Net (loss)
income
|
$
(3,316)
|
$
18,228
|
$
(11,174)
|
$
27,499
|
Acquisition,
integration, restructuring and other
|
2,601
|
8,211
|
10,969
|
19,492
|
Change in fair value of
contingent
consideration
|
-
|
-
|
9,209
|
-
|
Amortization on
intangibles
|
21,056
|
17,785
|
62,793
|
43,045
|
Foreign exchange
gain
|
(493)
|
(24,233)
|
(4,348)
|
(20,532)
|
Share-based
compensation
|
774
|
1,275
|
2,738
|
4,172
|
Adjusted Net
Income:
|
$
20,622
|
$
21,266
|
$ 70,187
|
$ 73,676
|
Adjusted EPS
-Basic
|
0.10
|
0.10
|
0.34
|
0.34
|
Gross sales and gross sales for organic growth
Gross sales, which is a non-IFRS measurement, reflects the gross
amount billed to customers, adjusted for amounts deferred or
accrued. The Company believes gross sales is a useful alternative
financial metric to net revenue, the IFRS measure, as it better
reflects volume fluctuations as compared to net revenue. Under the
applicable IFRS 15 'principal vs agent' guidance, the principal
records revenue on a gross basis and the agent records commission
on a net basis. In transactions where Converge is acting as an
agent between the customer and the vendor, net revenue is
calculated by reducing gross sales by the cost of sale
amount.
The Company has provided a reconciliation of gross sales to net
revenue, which is the most comparable IFRS financial measure, as
follows:
|
For the three
months
|
For the nine
months
|
ended September
30,
|
ended September
30,
|
|
2023
|
2022
|
2023
|
2022
|
Product
|
$
721,871
|
$
474,006
|
$
2,027,384
|
$ 1,419,216
|
Managed
services
|
38,728
|
35,681
|
124,546
|
101,932
|
Third party and
professional services
|
276,161
|
220,884
|
807,307
|
613,030
|
Gross sales
|
$
1,036,760
|
$
730,571
|
$
2,959,237
|
$
2,134,178
|
Adjustment for sales
transacted as
agent
|
(326,654)
|
(216,086)
|
(905,120)
|
(610,457)
|
Revenue
|
$
710,106
|
$
514,485
|
$
2,054,117
|
$
1,523,721
|
Organic Growth
The Company measures organic growth at the gross sales and gross
profit levels, and includes the contributions under Converge
ownership in the current and comparative period(s). In calculating
organic growth, the Company therefore deducts gross sales and gross
profit generated from companies that were acquired in the current
reporting period.
Gross sales organic growth is calculated by deducting prior
period gross sales, as reported in the Company's public filings,
from current period gross sales for the same portfolio of
companies. Gross sales organic growth percentage is calculated by
dividing organic growth by prior period reported gross sales.
The following table calculates gross sales organic growth for
three and nine months ended September 30,
2023:
|
For the three
months
|
For the nine
months
|
ended September
30,
|
ended September
30,
|
|
2023
|
2022
|
2023
|
2022
|
Gross sales
|
1,036,760
|
730,571
|
2,959,237
|
2,134,178
|
Less: gross sales from
companies not
owned in comparative period
|
133,891
|
230,348
|
593,758
|
634,781
|
Gross sales of
companies owned in
comparative period
|
902,869
|
500,223
|
2,365,479
|
1,499,397
|
Prior period gross
sales
|
730,571
|
472,419
|
2,134,178
|
1,332,639
|
Organic Growth -
$
|
172,298
|
27,804
|
231,301
|
166,758
|
Organic Growth -
%
|
23.6 %
|
5.9 %
|
10.8 %
|
12.5 %
|
Gross profit organic growth is calculated by deducting prior
period gross profit, as reported in the Companies public filings,
from current period gross profit for the same portfolio of
companies. Gross profit organic growth percentage is calculated by
dividing organic growth by prior period reported gross profit.
|
For the three
months
|
For the nine
months
|
ended September
30,
|
ended September
30,
|
|
2023
|
2022
|
2023
|
2022
|
Gross profit
|
174,090
|
139,654
|
521,351
|
381,851
|
Less: gross profit from
companies not
owned in comparative period
|
20,375
|
44,994
|
104,212
|
117,539
|
Gross profit of
companies owned in
comparative
period
|
153,715
|
94,660
|
417,139
|
264,312
|
Prior period gross
profit
|
139,654
|
83,771
|
381,851
|
229,811
|
Organic Growth -
$
|
14,061
|
10,889
|
35,288
|
34,501
|
Organic Growth -
%
|
10.1 %
|
13.0 %
|
9.2 %
|
15.0 %
|
Forward-Looking Information
This press release
contains certain "forward-looking information" and "forward-looking
statements" (collectively, "forward-looking statements")
within the meaning of applicable Canadian securities legislation
regarding Converge and its business. Any statement that involves
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions, future events or
performance (often but not always using phrases such as "expects",
or "does not expect", "is expected" "anticipates" or "does not
anticipate", "plans", "budget", "scheduled", "forecasts".
"estimates", "believes" or "intends" or variations of such words
and phrases or stating that certain actions, events or results
"may" or "could", "would", "might" or "will" be taken to occur or
be achieved) are not statements of historical fact and may be
forward-looking statements.
Specifically, statements regarding Converge's forecast on Gross
Profit and Adjusted EBITDA, expectations of future results,
performance, prospects, the markets in which it operates, or about
any future intention with regard to its business and acquisition
strategies are considered forward-looking information. The
foregoing demonstrates Converge's objectives, which are not
forecasts or estimates of its financial position, but are based on
the implementation of its strategic goals, growth prospects, and
growth initiatives. The forward-looking information, including
management's assessments of, and outlook for, Gross Profit
and Adjusted EBITDA, are based on management's opinions, estimates
and assumptions, including, but not limited to: (i) Converge's
results of operations will continue as expected, (ii) the Company
will continue to effectively execute against its key strategic
growth priorities, (iii) the Company will continue to retain and
grow its existing customer base and market share, (iv) the Company
will be able to take advantage of future prospects and
opportunities, and realize on synergies, including with respect of
acquisitions, (v) there will be no changes in legislative or
regulatory matters that negatively impact the Company's business,
(vi) current tax laws will remain in effect and will not be
materially changed, (vii) economic conditions will remain
relatively stable throughout the period, (vii) the industries
Converge operates in will continue to grow consistent with past
experience, and (ix) those assumptions described under the heading
"About Forward-Looking Information" in the Company's Management's
Discussion and Analysis for the three and nine-months ended
September 30, 2023. While these
opinions, estimates and assumptions are considered by the Company
to be appropriate and reasonable in the circumstances as of the
date of this press release, they are subject to known and unknown
risks, uncertainties, assumptions and other factors that may cause
the actual results, levels of activity, performance, or
achievements to be materially different from those expressed or
implied by such forward-looking information.
The forward looking information, including the achievement of
target Gross Profit and Adjusted EBITDA set out above, are subject
to significant risks including, without limitation: that the
Company will be unable to effectively execute against its key
strategic growth priorities, including in respect of acquisitions;
the Company will be unable to continue to retain and grow its
existing customer base and market share; risks related to the
Company's business and financial position; that the Company may not
be able to accurately predict its rate of growth and profitability;
risks related to economic and political uncertainty; income tax
related risks; and those risk factors discussed in greater detail
under the "Risk Factors" section of the Company's most recent
annual information form and under the heading "Risks and
Uncertainties" in the Company's most recent Management's Discussion
and Analysis, which are each available under the Company's profile
on SEDAR+ at www.sedarplus.ca. Many of these risks are beyond the
Company's control.
If any of these risks or uncertainties materialize, or if the
opinions, estimates or assumptions underlying the forward-looking
information prove incorrect, actual results or future events might
vary materially from those anticipated in the forward-looking
information. Although the Company has attempted to identify
important risk factors that could cause actual results to differ
materially from those contained in forward-looking information,
there may be other risk factors not presently known to the Company
or that the Company presently believes are not material that could
also cause actual results or future events to differ materially
from those expressed in such forward-looking information.
Although the Company bases these forward-looking statements on
assumptions that it believes are reasonable when made, the Company
cautions investors that forward-looking statements are not
guarantees of future performance and that its actual results of
operations, financial condition and liquidity and the development
of the industry in which it operates may differ materially from
those made in or suggested by the forward-looking statements
contained in this press release. In addition, even if the Company's
results of operations, financial condition and liquidity and the
development of the industry in which it operates are consistent
with the forward-looking statements contained in this press
release, those results of developments may not be indicative of
results or developments in subsequent periods.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. No
forward-looking statement is a guarantee of future results.
Accordingly, you should not place undue reliance on forward-looking
information, which speaks only as of the date made. The
forward-looking information contained in this press release
represents the company's expectations as of the date specified
herein, and are subject to change after such date. However, the
Company disclaims any intention or obligation or undertaking to
update or revise any forward-looking information or to publicly
announce the results of any revisions to any of those statements,
whether as a result of new information, future events or otherwise,
except as required under applicable securities laws. Comparisons of
results for current and any prior periods are not intended to
express any future trends or indications of future performance,
unless specifically expressed as such, and should only be viewed as
historical data.
All of the forward-looking information contained in this press
release is expressly qualified by the foregoing cautionary
statements.
CONTACT: Converge Technology Solutions Corp., Email:
investors@convergetp.com, Phone: 416-360-1495
View original
content:https://www.prnewswire.co.uk/news-releases/converge-reports-third-quarter-2023-results-301987289.html