Converge Reports Record Preliminary Results for FY 2022
(Adnkronos) - New Order Bookings Exceed $1 Billion in Q4-2022
TORONTO and GATINEAU, QC, Feb. 14, 2023 /PRNewswire/ -- Converge Technology Solutions Corp. (TSX:CTS) today announced certain preliminary, unaudited financial performance indicators for the full fiscal year and three-month periods ended December 31, 2022 ("Q4-2022").
Fiscal Year 2022 Preliminary Results
"Our team delivered exceptional performance throughout all of fiscal 2022," said Shaun Maine, Chief Executive Officer. "We continued to see strong demand across every industry sector of the mid-market, with more and more customers trusting Converge as their preferred technology partner, specifically for their analytics, cloud, and cyber needs."
Q4-2022 Preliminary Results
"Despite macro and short-term supply chain headwinds, we have started 2023 strong from both an order and delivery standpoint," added Maine. "At the same time, we invested approximately $8 million in 2022 to build out a dedicated team to accelerate the integrations of the 19 acquisitions we've made over the last two years. With no new acquisitions planned in the first half of 2023, we expect to demonstrate the organic strength of the business."
Business Update Subsequent to Q4-2022
The Company cautions that the above results are preliminary in nature and unaudited, as the Company's audit for the 2022 fiscal year has not yet been completed. Actual results may differ materially from these estimates due to the completion of the Company's financial closing procedures, final adjustments, audit by the Company's auditors and other developments that may arise between now and the time the financial results are finalized. These estimates are not a comprehensive statement of the Company's financial results for Q4-2022 and FY22 and should not be viewed as a substitute for full financial statements prepared in accordance with International Financial Reporting Standards, and these estimates are not necessarily indicative of the results to be achieved for Q4-2022 and FY22. The preliminary results provided in this press release constitute forward-looking statements within the meaning of applicable securities laws, are based on a number of assumptions and are subject to a number of risks and uncertainties. Please see the section below entitled "Forward-Looking Statements". The preliminary results have been prepared by, and are the responsibility of, management of the Company. The Company's independent registered public accounting firm, Ernst & Young LLP, has not audited the preliminary results. Neither Ernst & Young LLP nor any other independent accountants express an opinion or any other form of assurance with respect to the preliminary results.
The Company will provide additional discussion and analysis regarding its fourth quarter revenue, gross profit, and Adjusted EBITDA when the Company reports it quarterly and full year 2022 results on March 15, 2023, after close of markets.
About ConvergeConverge 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.
Non-IFRS Financial MeasuresThis release refers to certain performance indicators including Adjusted EBITDA that does 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 results. 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.
Adjusted EBITDA
Adjusted EBITDA represents net income or loss adjusted to exclude amortization, depreciation, interest expense and finance costs, foreign exchange gains and losses, share-based compensation expense, income tax expense, and special charges. Special charges consist primarily of restructuring related expenses for employee terminations, lease terminations, and restructuring of acquired companies, as well as certain legal fees or provisions related to acquired companies. From time to time, it may also include adjustments in the fair value of contingent consideration, and other such non-recurring costs related to restructuring, financing, and acquisitions.
The Company uses Adjusted EBITDA to provide investors with a supplemental measure of its operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company 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 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.
Adjusted EBITDA is not a recognized, defined or standardized measure under IFRS. 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. Investors are encouraged to review the Company's financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures.
For Q4-2022, the Company expects to report between $40.8 million to $44.2 million of Adjusted EBITDA and has provided a reconciliation to the most comparable IFRS financial measure as follows:
For FY22, the Company expects to report between $140.6 million to $144.0 million of Adjusted EBITDA and has provided a reconciliation to the most comparable IFRS financial measure as follows:
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. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Except as required by law, Converge assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change. The reader is cautioned not to place undue reliance on 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 filings statement available on SEDAR under the Company's profile at www.sedar.com including its most recent Annual Information Form, its Management Discussion and Analysis and its Annual and Quarterly Financial Statements.
Converge Technology Solutions Corp., Email: investors@convergetp.com, Phone: 416-360-1495
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