March 22, 2022 – TORONTO, ONTARIO, CANADA and GATINEAU, QUÉBEC, CANADA– 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 twelve month period ended December 31, 2021. All figures are in Canadian dollars unless otherwise stated.
For the three-month period ended December 31, 2021 (“Q4-2021”) and full year 2021 (“FY21”), Converge reports the following financial highlights:
Q4-2021 net revenue increased 74% over the same quarter last year (“Q4-2020”) to $505.0 million
Q4-2021 gross profit increased 63% over Q4-2020 to $115.9 million
Q4-2021 Adjusted EBITDA increased 48% to $34.7 million from $23.4 million in Q4-2020
FY21 net revenue increased 61% to $1,527.8 billion compared to last year (“FY20”)
FY21 gross profit increased 48% to $345.7 million from FY20
FY21 Adjusted EBITDA1 increased 55% to $94.0 million from FY20
For Q4-2021, the Company generated Adjusted Free Cashflow and Adjusted Free Cash Flow Conversion1 of $29.0 million and 84%, respectively, increasing from $17.5 million and 75% in Q4-2020
Organic growth for FY211 was approximately 9.6%
Reported Adjusted EPS1 of $0.12 per share for Q4-2021, and $0.35 per share for FY21, increasing from $0.12 per share and $0.27 per share for Q4-2020 and FY20, respectively
Bookings backlog increased to approximately $350 million in Q4 2021 compared to approximately $250 million in Q3 2021
Closed three bought deal financings in FY21 for cumulative gross proceeds of approximately $518.0 million in equity financings, which on a price per-share basis, increased from $4.85 in January 2021 to $10.55 in September 2021
Q4-2021 & FY21 Business Highlights
Completed nine acquisitions throughout 2021, including REDNET GmbH, an IT solutions provider focused on serving clients in Germany’s public sector, and serves as a platform acquisition in Europe for further growth
Enhanced the analytics practice and managed services offerings, and deepened customer relationships through key North American acquisitions, including CarpeDatum LLC, Accudata Systems, Inc., Dasher Technologies, Inc., ExactlyIT, Inc., Vicom Infinity and Infinity Systems Software, Inc., and LPA Software Solutions, LLC
In response to customer demand, we expanded our cybersecurity capabilities across identity and data protection, risk and compliance, security intelligence and analytics, and threat assessments, partnering with a few of our key strategic partners
Achieved 95 net new logos in Q421 resulting in nearly 400 new logos throughout the fiscal year
Formed majority owned cybersecurity-focused SaaS entity, Portage CyberTech Inc. and closed a $35 million non-brokered private placement
As at the end of FY21, we have integrated over 70% of our companies onto our platform and we continue to integrate our sales organization by region and build our international platform of over 700 technical resources to better serve our customers for advanced analytics, cybersecurity, cloud, and managed services
Announced a new Google Cloud Marketplace solution, Converge Enterprise Cloud – IBM Power for Google Cloud (IP4G) allowing Converge and Google Cloud the ability to provide infrastructure-as-a-service solution to clients across North America and Europe
Expanded ABL Credit Facility from $190 million to $300 million in December 2021 in an agreement with syndicate of banks led by CIBC, and added J.P. Morgan Chase & Co. to the Company’s syndicate of banks
Graduated to the TSX from the TSX Venture Exchange in Q1 2021 and added to the S&P/TSX Composite Index in Q3 2021
Subsequent to Quarter in 2022
Appointed John Teltsch to the Company’s Senior Leadership team as Chief Revenue Officer, who will work closely with President Greg Berard on profit alignment and global strategy
Converge completed additional acquisitions of Paragon Development Systems, Inc., a Wisconsin-based digital transformation specialist, and added a complementary European acquisition in Visucom GmbH, a Germany-based supplier in media devices within the education and public sector
Portage CyberTech Inc. concluded Phase 1 of its growth strategy upon completing the acquisition of 1CRM Systems Corp. a Canadian SaaS-based software provider
CRN has named Converge to its Managed Service Provider (MSP) 500 list in the Elite 150 category for 2022 and featured Converge on its 2022 Tech Elite 250 list recognizing the highest level of technical certifications from leading technology suppliers
“The Company has added strategic acquisitions throughout the year expanding on high impact solution areas such as data analytics, AI, cloud, and cybersecurity while simultaneously rolling out various managed services and expanding offerings into Europe with the platform acquisition of REDNET GmbH,” stated Shaun Maine, CEO of Converge. “To achieve the net new logos and organic growth the Company has reported, while managing backlog and inventory challenges, really speaks to the level of commitment and success our employees strive for and reinforces the strength of our corporate culture. Additionally, we have rolled out various committees that are focused on wellness and inclusion initiatives, to progress employee satisfaction and awareness. I believe it is safe to say that Converge has advanced its business strategy beyond expectations for 2021 and will continue to do so throughout 2022, as we leverage our industry leaders including Doris Albiez, Thomas Volk, and John Teltsch who provide invaluable leadership to our family of companies and overall global strategy.”
Conference Call Details:
Date: Wednesday, March 23rd, 2022 Time: 8:00 AM Eastern Time
Conference ID: 5783149 Expiry Date: March 30th, 2022
A live audio webcast and archive of the conference call will be available by visiting the Company’s website at https://convergetp.com/investor-relations/. 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.
Converge Technology Solutions Corp. is a software-enabled IT & Cloud Solutions 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 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.
For further information contact: Converge Technology Solutions Corp. Email: [email protected] Phone: 416-360-1495
Summary of Consolidated Statements of Financial Position
(expressed in thousands of Canadian dollars)
Summary of Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
(expressed in thousands of Canadian dollars)
Summary of Consolidated Statements of Cash Flows
(expressed in thousands of Canadian dollars)
 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 news release for definitions, uses and a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures.
 Bookings backlog is calculated as purchase orders received from customers not yet delivered at the end of the fiscal period
 Non-IFRS measure. See “Adjusted EBITDA” under the Non-IFRS Financial Measures section of this news release.
 Non-IFRS measure. See “Adjusted EBITDA as a % of Gross Profit” under the Non-IFRS Financial Measures section of this news release.
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