Canada NewsWire
VANCOUVER and TORONTO, Nov. 20, 2019
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
VANCOUVER and TORONTO, Nov. 20, 2019 /CNW/ - Converge Technology Solutions Corp. ("Converge" or "Company") (TSXV:CTS) (FSE:0ZB) (OTCQX:CTSDF), a Software Enabled Hybrid IT Solutions Provider, is pleased to provide its financial results for the three and nine month period ended September 30, 2019. All figures are in CAD dollars unless otherwise stated.
"As small and medium sized enterprises continue their journey towards cloud integration, Converge continues to benefit strongly by guiding these organizations through the transition process," said Shaun Maine, Chief Executive Officer of Converge Technology Solutions. "With 12.5% of our annualized gross revenue driven from monthly recurring cloud, managed services and annualized software revenue, our cloud strategy has become increasingly effective and the Converge family of companies continues to cross-sell opportunities to each others' customers and generate new business between themselves. On a quarterly basis, we are seeing gross margins further reflect this growth in the high-margin segment of our cloud business and we are very pleased to report gross margins in excess of 24% in Q3, a significant shift from traditional Value Added Resellers. The Artificial Intelligence, Analytics, Cybersecurity, and RedHat Ansible roadshows that our President Greg Berard implemented around our Converge practice areas have driven hundreds of opportunities across the company and bodes well as we look forward to Q4 and into 2020."
Mr. Maine continued, "We are pleased to announce that we are near completion of our Phase II strategy and we intend to initiate our Phase III strategy beginning in 2020 which is primarily focused on generating additional operating leverage and efficiencies, working towards further increasing our Adjusted EBITDA margin."
Third Quarter 2019 Financial Highlights
1 EBITDA and Adjusted EBITDA are non-IFRS financial measures and do not have any standardized meaning under IFRS. See "Use of Non-IFRS Financial Measures" below. |
Key Items from the Third Quarter
Key Items Subsequent to Quarter End
Third Quarter Conference Call
The Company will host a conference call featuring management's quarterly remarks and follow-up question and answer period.
A recording of the call will be available and posted on the Company's website. Dial-in details can be found below.
Conference Call Details:
Date: Thursday, November 21st, 2019
Time: 9:00 AM Eastern Time
Participant Dial-in Numbers:
Local – Toronto (+1) 416 764 8609
Toll Free – North America (+1) 888 390 0605
Conference ID: 59985193
Recording Playback Numbers:
Toronto (+1) 416 764 8677
Toll Free – North America (+1) 888 390 0541
Passcode: 985193 #
Expiry Date: Thursday, November 28, 2019 at 11:59pm
Quarterly and Annual Results Materials
The Company's outlook is contained in its MD&A for the three and nine months ended September, 2019, which is available along with the 2019 consolidated financial statements, at www.convergetp.com and at www.sedar.com.
Summary of Consolidated Financial Results
(in thousands of dollars)
For the three months | For the nine months | |||||||
2019 | 2018 | 2019 | 2018 | |||||
Revenues | $ | 144,504 | $ | 100,044 | $ | 473,091 | $ | 323,105 |
Cost of sales | 109,615 | 79,812 | 364,861 | 263,458 | ||||
Gross profit | 34,889 | 20,232 | 108,230 | 59,647 | ||||
Selling, general and administrative expenses | 31,342 | 21,119 | 92,777 | 50,506 | ||||
Income before the following: | 3,547 | (887) | 15,453 | 9,141 | ||||
Depreciation and amortization | 3,225 | 1,306 | 8,409 | 3,250 | ||||
Finance expense, net | 3,880 | 1,608 | 10,527 | 4,998 | ||||
Change in fair value of contingent consideration | 2,140 | 190 | 2,140 | 7,633 | ||||
Transaction costs – acquisitions, including retention | 843 | 2,157 | 4,327 | 4,685 | ||||
Initial public offering costs | - | 385 | - | 660 | ||||
Other expense | 466 | 61 | 919 | 99 | ||||
Net loss before taxes | $ | (7,007) | $ | (6,594) | $ | (10,889) | $ | (12,185) |
Income tax expense | 70 | 182 | 1,544 | 1,854 | ||||
Net loss | (7,077) | (6,776) | (12,433) | (14,039) | ||||
Exchange loss (gain) on translation of foreign operations | 155 | 80 | (43) | 222 | ||||
Comprehensive loss | $ | (7,232) | $ | (6,856) | $ | (12,390) | $ | (14,261) |
EBITDA1 | $ | 1,446 | $ | (2,982) | $ | 11,535 | $ | (2,328) |
Adjusted EBITDA1 | $ | 5,827 | $ | (189) | $ | 19,790 | $ | 10,749 |
1 | EBITDA and Adjusted EBITDA are non-IFRS financial measures and do not have any standardized meaning under IFRS. See "Use of Non-IFRS Financial Measures" below. |
About Converge
Converge Technology Solutions Corp. combines innovation accelerators and foundational infrastructure solutions to deliver best-of-breed solutions and services to customers. The Company is building a platform of regionally-focused Hybrid IT solution providers to enhance their ability to provide multi-cloud solutions, blockchain, resiliency, and managed services, enabling Converge to address the business and IT issues that public and private-sector organizations face today.
Notice to Reader: Use of Non-IFRS Financial Measures and Forward-Looking Statements
For a detailed description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's filing statement dated April 1st, 2019 which is available on SEDAR under the Company's profile at www.sedar.com in addition to the consolidated financial statements for the years ended December 31, and 2017 together with the corresponding Management's Discussion and Analysis for additional risk factors described under "Risk Management".
Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws, unless an exemption from such registration is available.
SOURCE Converge Technology Solutions Corp.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/November2019/20/c8442.html