Condensed interim consolidated financial statements
Converge Technology Solutions Corp.
For the three months ended March 31, 2021 and 2020 (Unaudited)
Converge Technology Solutions Corp.
Condensed Interim Consolidated Statements of Financial Position (expressed in thousands of Canadian dollars, except share amounts) (unaudited)
Note | March 31, 2021 | December 31, 2020 | |||
Assets | |||||
Current assets | |||||
Cash | $ | 68,432 | $ | 64,767 | |
Restricted cash | 13 | 49,671 | - | ||
Trade and other receivables | 345,239 | 364,308 | |||
Inventories | 51,710 | 37,868 | |||
Prepaid expenses and other assets | 10,397 | 10,376 | |||
525,449 | 477,319 | ||||
Long-term assets | |||||
Property, equipment, and right-of-use assets, net | 25,509 | 23,558 | |||
Intangible assets, net | 113,066 | 108,926 | |||
Goodwill | 121,447 | 110,068 | |||
Other non-current assets | 2,023 | 749 | |||
$ | 787,494 | $ | 720,620 | ||
Liabilities and shareholders' equity | |||||
Current liabilities | |||||
Trade and other payables | 12 | $ | 370,030 | $ | 398,003 |
Borrowings | 5 | 141,316 | 133,281 | ||
Other financial liabilities | 7 | 19,952 | 22,125 | ||
Deferred revenue and other liabilities | 20,885 | 17,376 | |||
Income taxes payable | 1,461 | 764 | |||
553,644 | 571,549 | ||||
Long-term liabilities | |||||
Other financial liabilities | 7 | 30,403 | 28,858 | ||
Borrowings | 5 | 895 | 5,882 | ||
Deferred tax liability | 14,527 | 12,584 | |||
$ | 599,469 | $ | 618,873 | ||
Shareholders' equity | |||||
Common shares | 6 | 217,907 | 135,354 | ||
Exchange rights | 5,115 | 4,853 | |||
Foreign exchange translation reserve | 614 | 817 | |||
Deficit | (35,611) | (39,277) | |||
188,025 | 101,747 | ||||
$ | 787,494 | $ | 720,620 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
On behalf of the Board: | |
"Signed" | "Signed" |
Director - Shaun Maine | Director - Brian Phillips |
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Converge Technology Solutions Corp.
Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (expressed in thousands of Canadian dollars, except share amounts)
(unaudited)
For the three months ended March 31, | Notes | 2021 | 2020 | |
Revenues | ||||
Product | $ | 252,507 | $ | 190,383 |
Service | 57,695 | 51,142 | ||
Total revenue | 9 | 310,202 | 241,525 | |
Cost of sales | 242,405 | 186,690 | ||
Gross profit | 67,797 | 54,835 | ||
Selling, general and administrative expenses | 49,643 | 45,204 | ||
Income before the following | 18,154 | 9,631 | ||
Depreciation and amortization | 6,488 | 5,401 | ||
Finance expense, net | 5,7 | 2,420 | 5,499 | |
Special charges | 11 | 3,051 | 1,939 | |
Other expenses (income) | 1,093 | (1,619) | ||
Income (loss) before income taxes | 5,102 | (1,589) | ||
Income tax expense (recovery) | 1,436 | (173) | ||
Net Income (loss) | $ | 3,666 | $ | (1,416) |
Other comprehensive income (loss) | ||||
Item that may be reclassified subsequently to income: | ||||
Exchange loss on translation of foreign operations | 203 | 1,699 | ||
203 | 1,699 | |||
Comprehensive income (loss) | $ | 3,463 | $ | (3,115) |
Net income (loss) per share - basic | $ | 0.02 | $ | (0.02) |
Net income (loss) per share - diluted | $ | 0.02 | $ | (0.02) |
Weighted average number of shares outstanding - basic | 159,794 | 87,409 | ||
Weighted average number of shares outstanding - diluted | 164,290 | 87,409 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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Converge Technology Solutions Corp.
Condensed Interim Consolidated Statements of Changes in Shareholders' Equity (Deficiency) (expressed in thousands of Canadian dollars, except share amounts)
(unaudited)
Foreign | ||||||||||
exchange | ||||||||||
Warrants | Contributed | Exchange | transaction | |||||||
Common shares | surplus | rights | reserve | Deficit | Total | |||||
Notes | # | $ | # | $ | $ | $ | $ | $ | $ | |
Balance, December 31, 2019 | 81,257,474 | 20,612 | 4,040,925 | 243 | 307 | 6,773 | 69 | (37,881) | (9,877) | |
Warrants exercised | 3,991,030 | 2,563 | (3,948,055) | (237) | - | - | - | - | 2,326 | |
Exercise of exchange rights | 1,500,000 | 960 | - | - | - | (960) | - | - | - | |
Shares issued from treasury for public offering | 6,361,315 | 7,294 | - | - | - | - | - | - | 7,294 | |
Share repurchase commitment under normal | ||||||||||
course issuer bid | (964,500) | - | - | - | - | - | - | - | - | |
Net loss and comprehensive loss | - | - | - | - | - | - | (1,699) | (1,416) | (3,115) | |
Balance, March 31, 2020 | 92,145,319 | 31,429 | 92,870 | 6 | 307 | 5,813 | (1,630) | (39,297) | (3,372) | |
Balance, December 31, 2020 | 143,580,081 | 135,354 | - | - | - | 4,853 | 817 | (39,277) | 101,747 | |
Issuance of exchange rights | - | - | - | - | - | 1,875 | - | - | 1,875 | |
Exercise of exchange rights | 2,217,850 | 1,613 | - | - | - | (1,613) | - | - | - | |
Shares issued from treasury for public offering | 6 | 17,825,000 | 80,940 | - | - | - | - | - | - | 80,940 |
Net income and comprehensive income | - | - | - | - | - | - | (203) | 3,666 | 3,463 | |
Balance, March 31, 2021 | 163,622,931 | 217,907 | - | - | - | 5,115 | 614 | (35,611) | 188,025 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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Converge Technology Solutions Corp.
Condensed Interim Consolidated Statements of Cash Flows (expressed in thousands of Canadian dollars, except share amounts) (unaudited)
For the three months ended March 31,Notes20212020
Cash flows from operating activities
Net income (loss) | $ | 3,666 | $ | (1,416) |
Adjustments to reconcile net income (loss) to net cash | ||||
from operating activities | ||||
Depreciation and amortization | 7,240 | 6,779 | ||
Finance expense, net | 5,7 | 2,420 | 5,499 | |
Change in fair value of contingent consideration | 7 | 597 | - | |
Income tax expense (recovery) | 1,436 | (173) | ||
15,359 | 10,689 | |||
Changes in non-cash working capital items | ||||
Trade and other receivables | 22,796 | (7,403) | ||
Inventories | (12,167) | (19,735) | ||
Prepaid expenses and other assets | (565) | 3,115 | ||
Trade and other payables | (35,139) | 38,926 | ||
Income taxes payable | 496 | (794) | ||
Other financial liabilities | - | 246 | ||
Deferred revenue and customer deposits | 3,680 | 4,234 | ||
Cash from (used in) operating activities | (5,540) | 29,278 |
Cash flows from investing activities
Purchase of property and equipment | (1,765) | (356) | |
Proceeds on disposal of property and equipment | 89 | - | |
Repayment of contingent consideration | 7 | (3,420) | - |
Repayment of deferred consideration | 7 | (3,205) | (4,117) |
Business combinations, net of cash acquired | 4 | (10,194) | (6,699) |
Cash used in investing activities | (18,495) | (11,172) |
Cash flows from financing activities
Transfers to restricted cash | (49,671) | (250) | ||
Interest paid | (2,460) | (4,432) | ||
Payments of lease liabilities | (2,285) | (2,527) | ||
Proceeds from issuance of common shares and | ||||
warrants | 6 | 80,940 | 9,653 | |
Repurchase of common shares | - | (1,246) | ||
Repayment of notes payable | 7 | (2,691) | - | |
Net proceeds from (repayment of) borrowings | 5 | 4,242 | (12,392) | |
Cash from (used in) financing activities | 28,075 | (11,194) | ||
Net change in cash during the period | 4,040 | 6,912 | ||
Effect of foreign exchange on cash | (375) | (753) | ||
Cash, beginning of period | 64,767 | 20,590 | ||
Cash, end of period | $ | 68,432 | $ | 26,749 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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Converge Technology Solutions Corp. published this content on 03 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 March 2022 01:19:06 UTC.