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Converge Technology Solutions Corp
Symbol CTS
Shares Issued 214,896,369
Close 2022-05-10 C$ 7.23
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Converge loses $2.4-million in Q1

2022-05-10 17:05 ET - News Release

Mr. Shaun Maine reports

CONVERGE TECHNOLOGY SOLUTIONS REPORTS FIRST QUARTER 2022 FINANCIAL RESULTS

Converge Technology Solutions Corp. has provided its financial results for the three-month period ended March 31, 2022.

For the three-month period ended March 31, 2022, Converge reports the following financial highlights:

  • First quarter 2022 net revenue increased 77 per cent over the same quarter last year to $550.0-million.
  • Organic gross revenue growth (1) for Q1 2022 compared with last year was approximately 7.2 per cent.
  • Q1 2022 gross profit increased 60.8 per cent over last year to $109-million.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (1) increased 58 per cent to $29.6-million from $18.8-million last year and LTM (last 12 months) adjusted EBITDA (1) increased 53.4 per cent to $104.9-million from $68.4-million last year.
  • For Q1 2022, the company generated adjusted free cash flow and adjusted free cash flow conversion (1) of $24.2-million and 82 per cent, respectively.
  • The company reported adjusted EPS (earnings per share) (1) of 10 cents per share for Q1 2022, increasing by 25 per cent from eight cents per share in Q1 2021, and LTM adjusted EPS (1) of 38 cents per share, increasing by 27 per cent from 30 cents per share in Q1 2021 LTM.
  • Booking backlog (2) increased to approximately $472-million in Q1 2022 compared with $350-million in fourth quarter 2021 subsequent to clearing $250-million worth of backlog during the quarter.
  • The company achieved 111 net new logos in Q1 2022 compared with 95 net new logos in Q4 2021.

Q1 2022 business highlights and subsequent to quarter:

  • Converge acquired approximately $398.7-million of LTM gross revenue and $29.4-million EBITDA through five acquisitions year to date, including Paragon Development Systems Inc. (PDS), Visucom GmbH, Creative Breakthroughs Inc. and Interdynamix Systems.
  • Converge subsidiary Portage Cybertech completed the acquisition of 1CRM.
  • Converge expanded the company's senior leadership team through the appointment of John Teltsch as chief revenue officer and announced Richard Lecoutre to join Converge as global chief financial officer in third quarter 2022.
  • Converge was named to CRN managed service provider (MSP) 500 list in the elite 150 category and the 2022 CRN technology elite 250 list, and was placed eighth on the 2022 Canadian top-100 solution providers.

"I want to congratulate our team on a record quarter, showing outstanding year-over-year growth across key financial metrics," said Shaun Maine, chief executive officer. "Demand was extremely strong as we generated approximately $575-million in product orders from customers throughout Q1, combined with an improvement in the supply chain, where $250-million of the $350-million backlog that we reported in Q4 was invoiced in Q1. With now over $472-million in product backlog entering [second quarter], accounting for 24 per cent of Converge's total 2021 gross revenue, Converge is poised for strong double-digit organic growth as the supply chain normalizes."

Conference call details

Date:  May 11, 2022

Time:  8 a.m. Eastern Time

Participant dial-in details

A webcast will be available.

Toll-free -- North America:  1-888-708-0720

Toll-free -- international:  929-517-9011

Germany:  0800-181-5287

United Kingdom:  0800-028-8438

Conference ID:  5877301

Recording playback numbers

Toll-free:  855-859-2056

Alternative number:  404-537-3406

Conference ID:  5877301

Expiry date:  May 18, 2022

A live audio webcast accompanied by presentation slides and archive of the conference call will be available by visiting the company's website. Please connect at least 15 minutes prior to the conference call to ensure time for any software download that may be needed to hear the webcast.

About Converge Technology Solutions Corp.

Converge is a software-enabled information technology and cloud solution provider focused on delivering industry-leading solutions and services. Converge's global solution approach delivers advanced analytics, application modernization, cloud, cybersecurity digital infrastructure and digital workplace offerings to clients across various industries. The company supports these solutions with advisory, implementation and managed service expertise across all major information technology vendors in the marketplace. This multifaceted approach enables Converge to address the unique business and technology requirements for all clients in the public and private sectors.

(1) This is a non-international financial reporting standard measure (including non-IFRS ratio) and not a recognized, defined or standardized measure under IFRS.

(2) Booking backlog is calculated as purchase orders received from customers not yet delivered at the end of the fiscal period.

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