Converge Technology Solutions Corp Releases Year-End Financials
Financial Performance Overview
Converge Technology Solutions Corp. (CTS) presents its financial results for the three months and fiscal year ending December 31, 2024. Presenting these results in Canadian dollars, the company has highlighted notable changes and trends that affirm its operational strategies.
Fourth Quarter 2024 Highlights
The fourth quarter showcased the following key metrics:
- Gross sales reached $1.11 billion, marking an increase of $27.4 million, representing a growth of 2.5% year-over-year.
- Organic growth in gross sales was recorded at 3.0%, while gross profit organic growth was stable with no change.
- Revenue stood at $680.8 million, reflecting a year-over-year growth of $29.7 million, equivalent to 4.6%.
- Despite these gains, gross profit saw a slight decrease of 1.6%, totaling $178.6 million, which corresponds to a gross margin of 26.7%.
- Adjusted EBITDA grew by 3.0% to $47.9 million, demonstrating effective operational leverage.
- Cash flow from operating activities was reported at $57.0 million, a substantial decrease compared to $114.5 million in the same period last year.
- Capital returned to shareholders amounted to $20.6 million, an increase from $4.7 million in the previous fourth quarter.
- Net debt decreased by $14.5 million, bringing it to $113.4 million, with a leverage ratio maintained below 0.7x.
Fiscal Year 2024 Overview
For the entire fiscal year, the following highlights were noted:
- Gross sales reached $4.12 billion, increasing by $82.8 million, resulting in a year-over-year growth of 2.1%.
- Organic growth in gross sales measured at 2.3%, while gross profit organic growth noted a decrease of 0.7%.
- Total revenue was recorded at $2.59 billion, a decline of $113.1 million, which represents a reduction of 4.2% year-over-year.
- Gross profit totaled $691.4 million, down 1.6% compared to last year, with a gross margin maintained at 26.7%.
- Adjusted EBITDA fell by 1.7%, recording a total of $167.3 million.
- The company reported a net loss of $181.0 million over the year, with a significant portion attributed to non-cash impairment charges.
- Distribution to shareholders reached $82.3 million, significantly increased from $23.5 million from the previous year.
- Cash from operating activities totaled $269.4 million, which shows an upward trend compared to $229.5 million in the prior year.
Strategic Movements and Future Outlook
Converge has entered an arrangement agreement with H.I.G. Capital, with the intent for H.I.G. to acquire all outstanding common shares of the company. This transaction is set to provide shareholders with $5.50 per share, indicating considerable premiums against previous share prices. This acquisition is expected to enhance Converge's operational effectiveness by delisting from public markets and ceasing reporting obligations.
About Converge Technology Solutions
Converge Technology Solutions Corp. is reshaping the approach businesses take towards IT. Established in 2017, Converge focuses on delivering innovative solutions that address human-centered challenges with a blend of services and software. Their core offerings include advanced analytics, artificial intelligence, cybersecurity measures, and transformative digital solutions aimed at empowering businesses to attain measurable results.
Frequently Asked Questions
What were Converge's gross sales in Q4 2024?
Converge reported gross sales of $1.11 billion for Q4 2024.
How did Converge's net debt change in 2024?
The company reduced its net debt by $14.5 million, bringing it down to $113.4 million.
What strategic move did Converge announce in early 2025?
Converge announced an agreement to be acquired by H.I.G. Capital, offering $5.50 per common share to shareholders.
What is Converge's focus as a technology provider?
Converge focuses on delivering IT solutions, including cloud services, advanced analytics, and cybersecurity solutions tailored to business needs.
How does Converge define Adjusted EBITDA?
Adjusted EBITDA is the net income adjusted for various non-cash and one-time expenses, aiming to reflect operational performance without the impact of extraordinary items.
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