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Converge Reports Third Quarter 2024 Results

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Year-to-date cash generated from operating activities increased by $97 million to $212 million, enabling continued net debt1 reduction and a return of $61.7 million in capital to shareholders1

Announces Completion of Group CEO Transition and Appoints Greg Berard, CEO to the Company’s Board of Directors

TORONTO and GATINEAU, QC, Nov. 12, 2024 /PRNewswire/ — 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 nine months period ended September 30, 2024. All figures are in Canadian dollars unless otherwise stated.

Third Quarter 2024 Highlights (year-over-year, unless otherwise noted):

Gross sales1 of $945.0 million, a decrease of $91.8 million or 8.9%;Gross sales organic growth1 of (8.4%) and gross profit organic growth1 of (7.3%);Revenue of $630.7 million, a decrease of $79.4 million or 11.2%;Gross profit decreased 9.1% to $158.3 million, representing a gross margin of 25.1%;Adjusted EBITDA1 decreased 22.2% to $32.1 million;Cash from operating activities was $48.9 million, a decrease of $47.1 million, compared to $95.9 million for the comparative period in the prior year;Returned $10.0 million of capital to shareholders1 as compared to $3.1 million return of capital to shareholders in Q3 FY23; andReduced net debt1 by $30 million from $157.9 million at Q2 2024; maintaining a leverage ratio1 below 1.0x.

Year-To-Date 2024 Highlights (year-over-year, unless otherwise noted):

Gross sales1 of $3.0 billion, an increase of $55.4 million or 1.9%;Gross sales organic growth1 of 2.0% and gross profit organic growth1 of (1.0%);Revenue of $1.9 billion, a decrease of $142.8 million;Gross profit decreased 1.6% to $512.8 million, representing a gross margin of 26.8%;Adjusted EBITDA1 decreased 3.5% to $119.4 million;Net loss of $171.8 million, an increase in loss of $160.6 million, driven by the non-cash impairment charge on the Germany segment of $176.1 million;Returned $61.7 million of capital to shareholders1 as compared to $19.4 million return of capital to shareholders for the comparative period in prior year;Cash from operating activities was $212.4 million, an increase of $97.3 million, compared to $115.1 million for the comparative period in the prior year; andReduced net debt1 by $81.9 million to $127.8 million, from $209.8 million at Q4 2023.

“While adverse macroeconomic conditions led to delays in hardware spending that impacted our third quarter results, we have already closed about 25% of the deals contributing to our gross profit shortfall and expect to close the remainder in Q4 and 2025. Meanwhile, we continued to see double-digit growth in our strategic investment areas—AI, cloud, and cybersecurity, driving growth in software and managed services revenue in the third quarter of 2024,” said Greg Berard, CEO. “Our robust cash flow generation is a testament to our financial strength, and we are committed to executing a strategic and disciplined capital allocation approach to drive long-term value creation. This will be achieved through targeted, high-impact growth investments, while simultaneously returning a significant amount of capital to shareholders.”

Financial Summary

In $000s except per share amounts

3-month

Q3 2024

3-month

Q3 2023

9-month

Q3 2024

9-month  

Q3 2023  

Gross Sales1

945,006

1,036,760

3,014,662

2,959,258

Revenue

630,690

710,106

1,911,303

2,054,117

Gross profit (GP)

158,257

174,090

512,813

521,351

Gross profit (GP) %

25.1 %

24.5 %

26.8 %

25.4 %

Adjusted EBITDA1

32,114

41,258

119,430

123,789

Adjusted EBITDA as a % of GP1

20.3 %

23.7 %

23.3 %

23.7 %

Net loss

(3,309)

(3,316)

(171,812)

(11,174)

Adjusted net income1

23,237

20,622

84,703

70,187

Adjusted EPS1

0.12

0.10

0.42

0.34

Subsequent to Quarter-End

On November 11, 2024, the Board declared a quarterly dividend of $0.015 per common share to be paid on December 28, 2024 to shareholders of record at the close of business on December 10, 2024.

Financial Outlook
Converge is providing financial guidance for the three months ended December 31, 2024 and fiscal year ended December 31, 2024 as follows:

(expressed in millions of Canadian dollars)

Q4 2023 Actual

Q4 2024 Expected

FY 2023 Actual

FY 2024 Expected

Revenue

$651.1

$600 – $646

$2,705.2

$2,511 – $2,558

Gross profit

$181.5

$165 – $178

$702.9

$678 – $691

Adjusted EBITDA

$46.5

$36 – $47

$170.3

$155 – $166

Note: Q4 2023 Actual and FY 2023 Actual include results of Portage CyberTech Inc. (“Portage”) which has been deconsolidated on June 27, 2024.

Completion of Group CEO Transition
Converge is announcing today that the previously disclosed Group CEO transition plan has progressed ahead of schedule. As a result, the Board of Directors (the “Board”) has accepted Shaun Maine’s decision to step down as Group CEO and member of the Board, effective immediately. Greg Berard, currently CEO of Converge, has been appointed as a member to the Company’s Board of Directors.

“On behalf of the Board, I want to thank Shaun for his visionary leadership and the profound impact he’s had since co-founding the Company in 2017,” said Thomas Volk, Chair of the Board. “We are pleased to welcome Greg Berard as the newest member of the Board. Greg’s leadership as operational CEO has been a tremendous asset to the Company, and we look forward to the fresh perspectives and wealth of experience that he will bring to the Board.”

Conference Call Details:
Date: Tuesday, November 12th, 2024
Time: 8:00 AM Eastern Standard Time

Participant Webcast Link: 
Webcast Link – https://app.webinar.net/kPR1pwqzK50 

Participant Dial-in Details with Operator Assistance:
Conference ID: 71060
Toronto: 1-416-945-7677
North American Toll Free: 1-888-699-1199

International Toll-Free Numbers:
Germany: 498005889782
Ireland: 35315251826
Spain: 34917918582
Switzerland: 41432107274
United Kingdom: 448002797040

You may register and enter your phone number to receive an instant automated call back via https://emportal.ink/3BJcbwy.

Recording Playback:
Webcast Link – https://app.webinar.net/kPR1pwqzK50
Toronto: 1-289-819-1450
North American Toll Free:  1-888-660-6345
Replay Code: 71060 #
Expiry Date: November 19th, 2024

Please connect at least 15 minutes prior to the conference call to ensure time for any software download that may be required to access the webcast. A live audio webcast accompanied by presentation slides and archive of the conference call and webcast will be available by visiting the Company’s website at https://convergetp.com/investor-relations/.

About Converge 
Converge 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, artificial intelligence (AI), 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.

Summary of Condensed Consolidated Interim Statements of Financial Position
(expressed in thousands of Canadian dollars) (unaudited)

September 30,
2024

$

December 31,
2023

$

Assets

Current

 Cash

180,464

170,419

 Trade and other receivables

775,026

803,652

 Inventories

71,753

73,166

 Prepaid expenses and other assets

34,111

26,528

1,061,354

1,073,765

Non-current

Investment in associates

27,909

Unbilled receivables and other assets

202,290

64,158

Property, equipment and right-of-use assets, net

66,621

75,488

Intangible assets, net

272,646

375,181

Goodwill

385,022

564,770

 Total assets

2,015,842

2,153,362

Liabilities

Current

Trade and other payables

976,301

853,655

Other financial liabilities

43,799

54,095

Deferred revenue

61,872

59,325

Borrowings

25,754

1,664

Income taxes payable

9,286

1,107,726

978,025

Non-current

Accrued liabilities and other payables

180,704

60,339

Other financial liabilities

41,955

57,668

Borrowings

282,589

378,007

Deferred tax liabilities

43,396

67,168

 Total liabilities

1,656,370

1,541,207

Shareholders’ equity

Common shares

557,292

599,434

Contributed surplus

15,347

10,970

Accumulated other comprehensive income 

13,009

3,963

Deficit

(226,176)

(28,167)

Total equity attributable to shareholders of Converge

359,472

586,200

Non-controlling interest (“NCI”)

25,955

359,472

612,155

Total liabilities and shareholders’ equity

2,015,842

2,153,362

Summary of Condensed Consolidated Interim Statements of Income and Comprehensive Income
(expressed in thousands of Canadian dollars) (unaudited)

Three months ended

September 30,

Nine months ended

September 30,

2024

2023

2024

2023

Revenue

Product

500,881

559,646

1,503,439

1,607,932

Service

129,809

150,460

407,864

446,185

Total revenue

630,690

710,106

1,911,303

2,054,117

Cost of sales

472,433

536,016

1,398,490

1,532,766

Gross profit

158,257

174,090

512,813

521,351

Selling, general and administrative expenses 

129,042

134,935

400,878

403,667

Income before the following

29,215

39,155

111,935

117,684

Depreciation and amortization

19,961

29,456

69,382

82,239

Finance expense, net

7,126

10,867

22,881

30,870

Acquisition, integration, restructuring and other

2,236

2,601

10,692

10,969

Change in fair value of contingent consideration

1,016

4,289

9,209

Share-based compensation

2,761

774

4,673

2,738

Other expense (income), net

865

(170)

1,120

(4,230)

Loss on loss of control of Portage

117

Loss from investment in associates

 

1,968

1,968

Impairment loss – Germany segment

176,124

Loss before income taxes

(6,718)

(4,373)

(179,311)

(14,111)

Income tax recovery

(3,409)

(1,057)

(7,499)

(2,937)

Net loss

(3,309)

(3,316)

(171,812)

(11,174)

Net loss attributable to:

 

Shareholders of Converge

(3,309)

(1,802)

(168,539)

(7,309)

Non-controlling interest

(1,514)

(3,273)

(3,865)

(3,309)

(3,316)

(171,812)

(11,174)

Other comprehensive income (loss)

Item that may be reclassified subsequently to income (loss):

Exchange differences on translation of foreign operations

(2,988)

2,891

9,046

(10,661)

Comprehensive loss                       

(6,297)

(425)

(162,766)

(21,835)

Comprehensive loss attributable to:

Shareholders of Converge

(6,297)

1,089

(159,493)

(17,970)

Non-controlling interest

(1,514)

(3,273)

(3,865)

(6,297)

(425)

(162,766)

(21,835)

Adjusted EBITDA                                         

32,114

41,258

119,430

123,789

Adjusted EBITDA as a % of Gross profit

20.3 %

23.7 %

23.3 %

23.7 %

Summary of Condensed Consolidated Interim Statements of Cash Flows
(expressed in thousands of Canadian dollars) (unaudited)

For the three months
ended September 30,

For the nine months
ended September 30,

2024

2023

2024

2023

Cash flows from operating activities

Net loss

(3,309)

(3,316)

(171,812)

(11,174)

Adjustments to reconcile net loss to net cash from operating activities

Depreciation and amortization

22,860

31,559

76,877

88,344

Unrealized foreign exchange loss (gain)

650

880

(2,818)

Share-based compensation

2,761

774

4,673

2,738

    Finance expense, net

7,126

10,867

22,881

30,870

    (Loss) gain on sale of property and equipment

4

73

(598)

    Change in fair value of contingent consideration

1,016

4,289

9,209

Impairment loss – Germany segment

176,124

Loss on loss of control of Portage

117

Loss from investment in associates

1,968

1,968

   Income tax recovery

(3,409)

(1,057)

(7,499)

(2,937)

29,667

38,827

108,571

113,634

Changes in non-cash working capital items

22,289

63,102

131,642

18,858

51,956

101,929

240,213

132,492

Income taxes paid

(3,097)

(5,987)

(27,805)

(17,433)

Cash from operating activities

48,859

95,942

212,408

115,059

Cash flows from (used in) investing activities

Purchase of (proceeds from) property, equipment and intangible assets

2,213

 

(1,593)

(1,648)

(5,041)

Payment of contingent consideration

(10,899)

(19,328)

(20,834)

Payment of deferred consideration

(508)

(14,095)

(12,375)

(43,815)

Payment of NCI liability

(973)

(30,967)

Cash from (used in) investing activities

1,705

(27,560)

(33,351)

(100,657)

Cash flows (used in) from financing activities

Transfers from restricted cash

(519)

2,068

Interest paid

(5,801)

(10,544)

(18,130)

(25,786)

Dividends paid

(2,922)

(2,047)

(7,925)

(4,114)

Payment of lease liabilities

(4,677)

(4,975)

(14,793)

(15,199)

Repurchase of common shares

(7,072)

(1,064)

(53,793)

(15,294)

Stock options exercised

875

Repayment of notes payable

(39)

(39)

(119)

Net repayment of borrowings

(23,874)

(21,977)

(78,346)

(10,593)

Cash used in financing activities

(44,346)

(41,165)

(172,151)

(69,037)

Net change in cash during the period

6,218

27,217

6,906

(54,635)

Effect of foreign exchange on cash

159

(439)

4,213

(34)

Cash derecongnized on loss of control of Portage

(1,074)

Cash, beginning of the period

174,087

78,443

170,419

159,890

Cash, end of the period

180,464

105,221

180,464

105,221

Non-IFRS Financial Measures
This press release refers to certain performance indicators including Adjusted EBITDA, gross sales, gross sales organic growth, net debt, return of capital, leverage ratio, adjusted net income (“Adjusted Net Income”) and adjusted earnings per share (“Adjusted EPS”) that do 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 operating results and can highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company also 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 in order 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. 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. Investors are encouraged to review the Company’s financial statements and disclosures in their entirety, are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures.

Please see “Non-IFRS Financial & Supplementary Financial Measures” and “Summary of Consolidated Financial Results” in the Company’s most recent Management’s Discussion and Analysis, which is available on the Company’s profile on SEDAR+ at www.sedarplus.ca, for further details on certain non-IFRS measures, which information is incorporated by reference herein.

Adjusted EBITDA

Adjusted EBITDA represents net income or loss adjusted to exclude amortization, depreciation, net finance expense, foreign exchange gains and losses, other expenses and income, share-based compensation expense, income tax expense or recovery, change in fair value of contingent consideration, impairment loss, gain or loss on loss of control of subsidiary, income or loss from investment in associates and acquisition, integration, restructuring and other expenses.  Acquisition and transaction related costs primarily consists of acquisition-related compensation tied to continued employment of pre-existing shareholders of the acquiree not included in the total purchase consideration and professional fees. Integration costs primarily consist of professional fees incurred related to integration of acquisitions completed. Restructuring costs mainly represent employee exit costs as a result of synergies created from acquisitions and organizational changes. 

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.

The IFRS measure most directly comparable to Adjusted EBITDA presented in the Company’s financial statements is net (loss) income before taxes.

The Company has reconciled Adjusted EBITDA to the most comparable IFRS financial measure as follows:

For the three months
ended September 30,

For the nine months
ended September 30,

2024

2023

2024

2023

Net loss before taxes

(6,718)

(4,373)

(179,311)

(14,111)

Depreciation and amortization

19,961

29,456

69,382

82,239

Depreciation included in cost of sales

2,899

2,103

7,495

6,105

Finance expense, net

7,126

10,867

22,881

30,870

Acquisition, integration, restructuring and other

2,236

2,601

10,692

10,969

Change in fair value of contingent consideration

1,016

4,289

9,209

Share-based compensation

2,761

774

4,673

2,738

Other expense (income), net

865

(170)

1,120

(4,230)

Loss on loss of control on Portage

117

Loss from investment in associates

1,968

1,968

Impairment loss – Germany segment

176,124

Adjusted EBITDA

32,114

41,258

119,430

123,789

Adjusted EBITDA as a % of Gross Profit

The Company believes that Adjusted EBITDA as a % of gross profit is a useful measure of the Company’s operating efficiency and profitability. This is calculated by dividing Adjusted EBITDA by gross profit.

Adjusted Net Income and Adjusted EPS

Adjusted Net Income represents net income or loss adjusted to exclude acquisition, integration, restructuring and other expenses, change in fair value of contingent consideration, impairment loss, gain or loss on loss of control of subsidiary, income or loss from investment in associates, amortization of acquired intangible assets, unrealized foreign exchange gain or loss, and share-based compensation. The Company believes that Adjusted Net Income is a more useful measure than net income as it excludes the impact of one-time, non-cash and/or non-recurring items that are not reflective of Converge’s underlying business performance. Adjusted EPS is calculated by dividing Adjusted Net Income by the total weighted average shares outstanding on a basic and diluted basis. The IFRS measure most directly comparable to Adjusted Net Income presented in the Company’s financial statements is net income (loss) and net income (loss) per share.

The Company has provided a reconciliation to the most comparable IFRS financial measure as follows:

For the three months

For the nine months

ended September 30,

ended September 30,

2024

2023

2024

2023

Net loss

(3,309)

(3,316)

(171,812)

(11,174)

Acquisition, integration, restructuring and other

2,236

2,601

10,692

10,969

Change in fair value of contingent consideration

1,016

4,289

9,209

Amortization on intangibles

17,915

21,056

57,772

62,793

Foreign exchange loss (gain)

650

(493)

880

(4,348)

Share-based compensation

2,761

774

4,673

2,738

Loss on loss of control or Portage

117

Loss from investment in associates

1,968

1,968

Impairment loss- Germany segment

176,124

Adjusted Net Income

23,237

20,622

84,703

70,187

Adjusted EPS – Basic

0.12

0.10

0.42

0.34

Return of capital

The Company calculates return of capital to shareholders as the total of cash used in dividend payments and share repurchases.

Net Debt

The Company calculates net debt1 as current and non-current borrowings) less cash.

Leverage Ratio

The Company defines leverage ratio as net debt (current and non-current borrowings less cash) divided by trailing twelve months Adjusted EBITDA.

Gross sales and gross sales organic growth

Gross sales, which is a non-IFRS measure, reflects the gross amount billed to customers, adjusted for amounts deferred or accrued. The Company believes gross sales is a useful alternative financial metric to net revenue, the IFRS measure, as it better reflects volume fluctuations as compared to net revenue. Under the applicable IFRS 15 ‘principal vs agent’ guidance, the principal records revenue on a gross basis and the agent records commission on a net basis. In transactions where Converge is acting as an agent between the customer and the vendor, net revenue is calculated by reducing gross sales by the cost of sale amount. 

The Company has provided a reconciliation of gross sales to revenue, which is the most comparable IFRS financial measure, as follows:

For the three months

For the nine months

ended September 30,

ended September 30,

2024

2023

2024

2023

Product

668,057

721,871

2,086,201

2,027,198

Managed services and professional services

119,128

129,382

353,407

384,826

Maintenance, support and cloud solutions

157,821

185,507

575,054

547,234

Gross sales

945,006

1,036,760

3,014,662

2,959,258

Less: adjustment for sales transacted as agent

314,316

326,654

1,103,359

905,141

Revenue

630,690

710,106

1,911,303

2,054,117

Organic Growth

The Company measures organic growth at the gross sales and gross profit levels, and includes the contributions under Converge ownership in the current and comparative period(s). In calculating organic growth, the Company therefore deducts gross sales and gross profit generated from all corresponding prior comparable pre-acquisition period(s) from the current reporting period(s) included in the consolidated results.

Organic growth calculations for the three and nine-months ended September 30, 2024, deduct gross sales and gross profits from Portage for the three months ended September 30, 2023 due to deconsolidation of Portage on June 27, 2024.

Gross sales organic growth is calculated by deducting prior period gross sales, from current period gross sales for the same portfolio of companies. Gross sales organic growth percentage is calculated by dividing organic growth by prior period reported gross sales.

For the three months

For the nine months

ended September 30,

ended September 30,

2024

2023

2024

2023

Gross sales

945,006

1,036,760

3,014,662

2,959,258

Less: gross sales from companies not owned in comparative period

133,891

593,758

Gross sales of companies owned in comparative period

945,006

902,869

3,014,662

2,365,500

Less: prior period gross sales(i)

1,031,779

730,571

2,954,277

2,134,178

Organic Growth – $

(86,773)

172,298

60,385

231,322

Organic Growth – %

(8.4 %)

23.6 %

2.0 %

10.8 %

(i)

For the three and nine months ended September 30, 2024, Portage prior period gross sales of $4,981 is excluded

Gross profit organic growth is calculated by deducting prior period gross profit, from current period gross profit for the same portfolio of companies. Gross profit organic growth percentage is calculated by dividing organic growth by prior period reported gross profit.

For the three months

For the nine months

ended September 30,

ended September 30,

2024

2023

2024

2023

Gross profit

158,257

174,090

512,813

521,351

Less: gross profit from companies not owned in comparative period

20,375

104,212

Gross profit of companies owned in comparative period

158,257

153,715

512,813

417,139

Less: Prior period gross profit(ii)

170,639

139,654

517,900

381,851

Organic Growth – $

(12,382)

14,061

(5,087)

35,288

Organic Growth – %

(7.3 %)

10.1 %

(1.0 %)

9.2 %

(ii)

For the three and nine months ended September 30, 2024, Portage prior period gross profits of $3,451 is excluded

 

________________________________

1 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 press release for definition, uses and a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures.

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.

Specifically, statements regarding Converge’s forecast on revenue, gross profit and Adjusted EBITDA, expectations of future results, performance, prospects, the markets in which it operates or about any future intention with regard to its business and acquisition strategies are considered forward-looking information. The foregoing demonstrates Converge’s objectives, which are not forecasts or estimates of its financial position, but are based on the implementation of its strategic goals, growth prospects, and growth initiatives. The forward-looking information, including management’s assessments of, and outlook for,  gross profit and Adjusted EBITDA, are based on management’s opinions, estimates and assumptions, including, but not limited to: (i) Converge’s results of operations will continue as expected, (ii) the Company will continue to effectively execute against its key strategic growth priorities, (iii) the Company will continue to retain and grow its existing customer base and market share, (iv) the Company will be able to take advantage of future prospects and opportunities, and realize on synergies, including with respect of acquisitions, (v) there will be no changes in legislative or regulatory matters that negatively impact the Company’s business, (vi) current tax laws will remain in effect and will not be materially changed, (vii) economic conditions will remain relatively stable throughout the period, (vii) the industries Converge operates in will continue to grow consistent with past experience, and (ix) those assumptions described under the heading “About Forward-Looking Information” in the Company’s Management’s Discussion and Analysis for the three and nine months ended September 30, 2024. While these opinions, estimates and assumptions are considered by the Company to be appropriate and reasonable in the circumstances as of the date of this press release, they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information.

The forward looking information, including the achievement of target revenue, gross profit and Adjusted EBITDA set out above, are subject to significant risks including, without limitation: that the Company will be unable to effectively execute against its key strategic growth priorities, including in respect of acquisitions; the Company will be unable to continue to retain and grow its existing customer base and market share; risks related to the Company’s business and financial position; that the Company may not be able to accurately predict its rate of growth and profitability; risks related to economic and political uncertainty; income tax related risks; and those risk factors discussed in greater detail under the “Risk Factors” section of the Company’s most recent annual information form and under the heading “Risks and Uncertainties” in the Company’s most recent Management’s Discussion and Analysis, which are each available under the Company’s profile on SEDAR+ at www.sedarplus.ca. Many of these risks are beyond the Company’s control.

If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information.

Although the Company bases these forward-looking statements on assumptions that it believes are reasonable when made, the Company cautions investors that forward-looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which it operates may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if the Company’s results of operations, financial condition and liquidity and the development of the industry in which it operates are consistent with the forward-looking statements contained in this press release, those results of developments may not be indicative of results or developments in subsequent periods.

There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents the company’s expectations as of the date specified herein, and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information or to publicly announce the results of any revisions to any of those statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.

For further information contact: Converge Technology Solutions Corp., Email:  investors@convergetp.com, Phone:  416-360-1495

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/U P D A T E — TrendAI/

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This release has been updated to include new information provided by TrendAI. The complete, corrected release follows, with additional details at the end:

TrendAI™ Adopts Claude Opus 5 to Advance Vulnerability Prioritization and Virtual Patching

As a participant in Anthropic’s Cyber Verification Program, TrendAI applies frontier reasoning to convert vulnerability intelligence into faster protection across hybrid environments

DALLAS, July 24, 2026 /PRNewswire/ — TrendAI™, the enterprise AI security leader from Trend Micro Incorporated (TYO: 4704; TSE: 4704), today announced it is adopting Claude Opus 5, Anthropic’s latest and most capable Opus model, to help security teams convert vulnerability intelligence into immediate protection, from prioritization to virtual patching. The move builds on TrendAI’s collaboration with Anthropic on Claude Opus 4.8, extending the same defensive focus to a model that delivers step-change gains in advanced reasoning, agentic workflows, and long-horizon analysis. As AI makes finding vulnerabilities easier than ever, the harder problem becomes protecting organizations faster than software can be permanently patched, and that is where TrendAI is putting Opus 5 to work.

As a participant in Anthropic’s Cyber Verification Program, which credentials organizations for the defensive use of frontier AI models, TrendAI is positioned to apply Claude Opus 5 to defensive security as access becomes available. The model is Zero Data Retention compatible, supporting TrendAI’s governance and data-protection requirements as it scales AI across security operations.

The work extends to TrendAI Threat Research, where frontier AI models are combined with our proprietary frontier intelligence engine and human expertise to generate pre-disclosure intelligence. Those insights power TrendAI Vision One™, delivering stronger detection, deeper forensic insights, and proactive protection through virtual patching.

Rachel Jin, Chief Platform and Business Officer, Head of TrendAI™:
“With Claude Opus 5, TrendAI can move from vulnerability intelligence to action faster than ever, prioritizing what matters most by exploitability and business impact. Finding the vulnerability was always the hard part. Now the challenge is protecting organizations faster than software can be permanently patched, and frontier reasoning is what changes that equation, extending all the way to virtual patching that protects customers before a vendor fix ships. This is what it means to secure the AI age, fearlessly.”

These capabilities support TrendAI Vision One™ in helping security analysts, AppSec teams, and SOC teams prioritize exposure, map attack paths, and accelerate mitigation, including virtual patching, across hybrid environments, moving vulnerability management from a static scanning process into a faster, context-aware risk mitigation workflow.

About TrendAI™
TrendAI™, the global AI security leader and enterprise business unit of Trend Micro, empowers organizations with full AI visibility and consolidated security that inspires confidence, drives innovation, and eliminates risk. Trusted by the largest enterprises and governments across 185 countries, TrendAI™ secures the entire organization, from identities, to infrastructure, to data. Global Fortune 500 companies rely on TrendAI™ to cut risk and stop threats up to three months earlier, powered by world-leading threat and attack intelligence. Through deep ecosystem partnerships with market leaders like NVIDIA, Anthropic, AWS, Google, and Microsoft, TrendAI™ empowers your organization to securely drive forward at the speed of AI. AI Fearlessly. Learn more: trendaisecurity.com

About Anthropic
Anthropic is an AI safety and research company dedicated to building reliable, interpretable, and steerable AI systems. Its Claude family of models, including Claude Opus 5, enables advanced capabilities across a wide range of applications, including code understanding and security analysis.

Update: The latest version of this release includes additional statements from TrendAI related to the original announcement.

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Ralph Ye on 10 Years of Entrepreneurship at CASEKOO: Less Identity Shift, More Habits That Endure

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NEW YORK, July 24, 2026 /PRNewswire/ — As CASEKOO approaches its 10th anniversary, founder Ralph Ye says the company’s biggest achievement isn’t measured by units sold, but by how its philosophy has evolved.

Ten years ago, Ye found himself frustrated by a simple problem: his phone wouldn’t stand upright on a fast-food table. Instead of accepting the inconvenience, he saw an opportunity to rethink what a phone case could do.

Today, CASEKOO has sold more than 20 million phone cases across 32 countries. Over the past decade, the company has evolved from creating protective accessories into designing products that fit naturally into everyday life.

“Innovation isn’t about changing identities,” Ye said. “It’s about making meaningful habits easier to keep.”

From Q Line to LinKOO

The evolution of CASEKOO’s product portfolio reflects a broader shift in the company’s design philosophy.

The journey began with the Q Line (Quality Line), a collection of crystal-clear phone cases engineered to deliver premium protection without compromising aesthetics. In 2021, CASEKOO introduced the E Line (Innovation Line), the world’s first phone case with an integrated ring stand. The product earned an iF Design Award and became an Amazon bestseller, demonstrating the market’s appetite for accessories that combined protection with everyday functionality. The X Line (Expression Line) followed, expanding the brand’s focus on personalization and expressive design.

Each product generation introduced new capabilities, but each also reinforced an important insight.

“We moved from Q Line to E Line to X Line, and every generation taught us something about what people actually need,” said Ye. “By the time we introduced The KOO series, we weren’t designing features anymore. We were designing around everyday behaviors.”

Today, the portfolio gives each rhythm a clear name: LinKOO — Link Your Way for hands-free carry, StandKOO — Elevate Your Day for hands-free viewing and grip, and X-LINE — Fit Your Vibe for expressive personalization.

It represents CASEKOO’s transition from designing accessories with added functions to creating products that support everyday habits. For the company, the future of consumer technology lies not in how many features a product offers, but in how seamlessly it integrates into the way people live.

A Philosophy Born from Everyday Life

The inspiration behind LinKOO came from one of Ye’s longest-standing habits.

For nearly two decades, he has left home every day holding his wife’s hand. One evening, while carrying his phone, keys, and wallet in his other hand, he realized how often everyday essentials compete with life’s simplest moments.

That observation inspired ClipSafe™, a foldable clasp integrated into the LinKOO series. Hidden when not in use and deployable with a single press, it allows users to carry everyday essentials without sacrificing comfort or aesthetics.

For CASEKOO, LinKOO is more than a product launch. It represents the company’s belief that technology should adapt to people—not the other way around.

“Ten years ago, we asked how to better protect a phone,” Ye said. “Today, we’re asking how to protect a moment.”

That is what designed to fit you means. That is Less Effort, More Living. And after a decade of iteration, failure, and quiet persistence, CASEKOO has finally arrived—not at an answer, but at a better question.

About CASEKOO

CASEKOO is a design-led lifestyle accessories brand built around a simple idea: freeing your hands in everyday life. Through thoughtful hands-free solutions, we help people move seamlessly between different moments of the day—from active, on-the-go moments to times of focus and connection.

What makes CASEKOO different from a regular phone case? We believe technology should support life, not interrupt it. By designing products that adapt naturally to how people live, work, and move, CASEKOO reduces everyday friction and creates a more effortless experience—making room for freedom, connection, and the moments that truly matter.

For more information, visit: casekoo.com.

Contact:
Charlotte Yu
brandteam@casekoo.com 

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Paramount Skydance Corporation Announces Extension of Expiration Dates of Previously Announced Exchange Offers and Tender Offers

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LOS ANGELES and NEW YORK, July 24, 2026 /PRNewswire/ — Paramount Skydance Corporation (NASDAQ: PSKY) (“Paramount”) today announced the extension of the Expiration Dates in connection with the previously announced (i) offers to purchase (the “Tender Offers” and each, a “Tender Offer”) for cash, upon the terms and subject to the conditions set forth in the related offer to purchase (the “Offer to Purchase”), any and all of the identified notes in each series of the Existing Tender Offer Notes (defined by reference to the table set forth below) issued by Discovery Global Holdings, Inc. (formerly WarnerMedia Holdings, Inc.) (the “DGH Issuer”) and Discovery Communications, LLC (the “DCL Issuer” and together with the DGH Issuer, each a “WBD Issuer” and collectively the “WBD Issuers”), as applicable, and (ii) offers to exchange (the “Exchange Offers” and each, an “Exchange Offer” and, together with the Tender Offers, the “Offers” and each, an “Offer”), upon the terms and subject to the conditions set forth in the related exchange offer memorandum (the “Offering Memorandum”), any and all of the identified notes in each series of the Existing Exchange Offer Notes (defined by reference to the table set forth below) (together with the Existing Tender Offer Notes, the “Offer Notes”) issued by the applicable WBD Issuer for notes to be newly issued by Paramount.

The Expiration Dates for the Tender Offers and Exchange Offers (as defined in each of the Offer to Purchase and Offering Memorandum, respectively) have been extended to 5:00 p.m., New York City time, on August 7, 2026, unless further extended. The Settlement Dates for the Tender Offers and Exchange Offers (as defined in each of the Offer to Purchase and Offering Memorandum, respectively) will occur promptly after the Expiration Date and are currently anticipated to occur in the third quarter of 2026. Paramount anticipates extending the Expiration Date for such Tender Offers and Exchange Offers until such time that would result in the Settlement Dates occurring on or promptly following the closing date of the proposed acquisition (the “Acquisition”) by Paramount of Warner Bros. Discovery, Inc. (“WBD”). Tenders of the Offer Notes in the Offers may be withdrawn at any time prior to the Expiration Date. The aforementioned extensions further extend the Expiration Dates previously extended by Paramount on June 12, 2026, June 26, 2026, July 13, 2026, and July 17, 2026.

As of 5:00 p.m., New York City time, on July 23, 2026, approximately 66.17% and 76.38% of the aggregate principal amount of the Existing Tender Offer Notes and Existing Exchange Offer Notes, respectively, have been validly tendered in the applicable Offers. As Paramount previously announced that it anticipates extending the Offers to align with the closing date of the Acquisition, Paramount does not view these figures to be representative of the final results of the applicable Offers.

Information about each series of Offer Notes eligible to participate in the Offers is summarized below.

Type of Offer

Offer Notes to be Tendered
or Exchanged, as
Applicable

Issuer of Offer Notes

CUSIP No. / Common Code 
/ ISIN Eligible to
Participate in the Offers (1)

Aggregate Principal
Amount of Offer Notes
Eligible to Participate in the
Offers (2)

Tender Offer

3.950% Senior Notes due 2028

DCL Issuer

25470D CP2

US25470DCP24

$1,234,458,000

Exchange Offer

4.125% Senior Notes due 2029

DCL Issuer

25470D CQ0

US25470DCQ07

$655,825,000

Exchange Offer

3.625% Senior Notes due 2030

DCL Issuer

25470D CR8

US25470DCR89

$914,183,000

Exchange Offer

5.000% Senior Notes due 2037

DCL Issuer

25470D CS6

US25470DCS62

$453,281,000

Exchange Offer

6.350% Senior Notes due 2040

DCL Issuer

25470D CT4

US25470DCT46

$438,102,000

Exchange Offer

4.950% Senior Notes due 2042

DCL Issuer

25470D CU1

US25470DCU19

$130,366,000

Exchange Offer

4.875% Senior Notes due 2043

DCL Issuer

25470D V91 CV9US25470DC

$141,584,000

Exchange Offer

5.200% Senior Notes due 2047

DCL Issuer

25470D W74 CW7US25470DC

$3,161,000

Exchange Offer

5.300% Senior Notes due 2049

DCL Issuer

25470D X57 CX5US25470DC

$247,860,000

Tender Offer

3.755% Senior Notes due 2027

DGH Issuer

254948 AH5

US254948AH58

254948 AN2

US254948AN27

U25483 AA3

USU25483AA38

$1,189,336,000

Exchange Offer

4.054% Senior Notes due 2029

DGH Issuer

254948 AJ1

US254948AJ15

254948 AP7

US254948AP74

U25483 AB1

USU25483AB11

$1,353,828,000

Exchange Offer

4.279% Senior Notes due 2032

DGH Issuer

254948 AK8

US254948AK87

254948 AQ5

US254948AQ57

$2,691,764,000

Exchange Offer

5.050% Senior Notes due 2042

DGH Issuer

254948 AL6

US254948AL60

254948 AR3

US254948AR31

U25483 AD7

USU25483AD76

$4,104,687,000

Exchange Offer

5.141% Senior Notes due 2052

DGH Issuer

254948 AM4

US254948AM44

254948 AS1

US254948AS14

$949,883,000

Exchange Offer

4.302% Senior Notes due 2030

DGH Issuer

XS3393993285

339399328

€234,382,000

Exchange Offer

4.693% Senior Notes due 2033

DGH Issuer

XS3393994507

339399450

€316,641,000

1

No representation is made as to the correctness or accuracy of the identifiers listed in this press release or printed on the Offer Notes. Such identifiers are provided solely for the convenience of the holders.

2

Represents the aggregate principal amount of Offer Notes outstanding that are eligible to participate in the Offers.

The Exchange Offers are being made pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations of the Securities and Exchange Commission (the “SEC”) promulgated thereunder, and are also not being registered under any state or foreign securities laws. Any securities offered pursuant to the Exchange Offers may not be offered or sold in the United States or to any U.S. persons (as defined below) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offers will only be made, and the securities offered pursuant to the Exchange Offers are only being offered and issued, to holders of applicable Existing Exchange Offer Notes who are (a) reasonably believed to be “qualified institutional buyers” as defined in Rule 144A under the Securities Act or (b) not “U.S. persons,” as defined in Rule 902 of Regulation S under the Securities Act (such holders, “Eligible Holders”), and only Eligible Holders who have completed and returned the eligibility certification are authorized to receive or review the Offering Memorandum or to participate in the Exchange Offers. The eligibility certification is available electronically at: https://gbsc-usa.com/eligibility/paramount.

General

Each Offer is a separate offer, and each may be individually consummated, amended, extended, terminated, or withdrawn, subject to certain conditions and applicable law, at any time in Paramount’s sole discretion, and without also consummating, amending, extending, terminating, or withdrawing any other Offer with respect to any other series of Offer Notes. Paramount may terminate an Offer if any of the conditions of such Offer described in the Offer to Purchase or Offering Memorandum, as applicable, are not satisfied or waived by the applicable Expiration Date, subject to applicable law. In addition, Paramount may waive the conditions to an Offer without extending such Offer in accordance with applicable law.

The Offers are being made solely by Paramount and are not being made by WBD or the WBD Issuers. None of Paramount, WBD, the WBD Issuers, the Dealer Managers, the Exchange Agent (as defined below), the Information Agent (as defined below), the trustees under each of the indentures governing the Offer Notes, the trustee or collateral agent under the indenture that will govern the notes to be issued in the Exchange Offers, or any affiliate of any of them makes any recommendation as to whether any holder of Offer Notes should tender or refrain from tendering all or any portion of the principal amount of such holder’s Offer Notes for cash or notes to be issued in the Exchange Offers. No one has been authorized by any of them to make such a recommendation. Holders must make their own decision whether to tender Offer Notes in any Offer and, if so, the amount of Offer Notes to tender.

Only Eligible Holders may receive a copy of the Offering Memorandum and participate in the Exchange Offers. Paramount has engaged Global Bondholder Services Corporation to act as the exchange agent (in such capacity, the “Exchange Agent”) and information agent (in such capacity, the “Information Agent”) for the Offers. Questions concerning the Offers, or requests for additional copies of the Offer to Purchase or Offering Memorandum or other related documents, may be directed to Corporate Actions by telephone at (855) 654-2014 (U.S. toll-free) or (212) 430-3774 (banks and brokers) or by email at contact@gbsc-usa.com. Holders should also consult their broker, dealer, commercial bank, trust company or other institution for assistance concerning the Offers. The Exchange Offer documents and the Tender Offer documents can be accessed at the following link: https://gbsc-usa.com/paramount.

Paramount has engaged BofA Securities and Citigroup as dealer managers (in such capacity, the “Dealer Managers”) for the Offers. Holders with questions regarding the Offers should contact BofA Securities, Inc. at +1 (888) 292-0070 (toll-free) or +1 (980) 388-3646 (collect) or debt_advisory@bofa.com or Citigroup Global Markets Inc. at +1 (800) 558-3745 (toll-free) or +1 (212) 723-6106 or ny.liabilitymanagement@citi.com. Latham & Watkins LLP is serving as legal counsel to Paramount and Cahill Gordon & Reindel LLP is serving as legal counsel to the Dealer Managers.

This press release is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security, and does not constitute an offer, solicitation, or sale of any security in any jurisdiction in which such offer, solicitation, or sale would be unlawful.

About Paramount, a Skydance Corporation

Paramount, a Skydance Corporation is a next-generation global media and entertainment company, comprised of three business segments: Studios, Direct-to-Consumer, and TV Media. PSKY’s portfolio unites legendary brands, including Paramount Pictures, Paramount Television, CBS, CBS News, CBS Sports, Nickelodeon, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance Animation, Film, Television, Interactive/Games, and Paramount Sports Entertainment.

PSKY-IR

Cautionary Note Concerning Forward-Looking Statements

This communication contains “forward-looking statements” regarding the Acquisition and the other transactions referred to herein. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Paramount. Risks and uncertainties include, but are not limited to: the risk that the closing conditions for the Acquisition will not be satisfied, including the risk that clearances under applicable antitrust or regulatory laws will not be obtained or will be obtained subject to conditions that are not anticipated; the possibility that the transactions described herein will not be completed in the expected timeframe or at all; the occurrence of any event, change or other circumstances that could give rise to the termination of the Acquisition; potential adverse effects to the businesses of Paramount or WBD during the pendency of the Acquisition, such as employee departures or distraction of management from business operations; negative effects of the announcement or the consummation of the Acquisition on the market price of WBD or Paramount stock; the risk of stockholder litigation relating to the Acquisition, including resulting expense or delay; the potential that the expected benefits and opportunities of the Acquisition, if completed, may not be realized or may take longer to realize than expected; risks related to the streaming business of the post-Acquisition combined business (the “Combined Company”); the adverse impact on the Combined Company’s advertising revenues as a result of changes in consumer behavior, advertising market conditions, and deficiencies in audience measurement; risks related to operating in highly competitive and dynamic industries; the unpredictable nature of consumer behavior, as well as evolving technologies and distribution models; risks related to the Combined Company’s decision to invest in new businesses, products, services, and technologies, and the evolution of the Combined Company’s business strategy; the potential for loss of carriage or other reduction in, or the impact of negotiations for, the distribution of the Combined Company’s content; damage to the Combined Company’s reputation or brands; losses due to asset impairment charges for goodwill, content and long-lived assets, including finite-lived intangible assets; liabilities related to discontinued operations and former businesses; increasing scrutiny of, and evolving expectations for, sustainability initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; challenges in protecting and maintaining the Combined Company’s intellectual property rights; domestic and global political, economic and regulatory factors affecting the Combined Company’s business generally or the Acquisition; the inability to hire or retain key employees or secure creative talent; disruptions to the Combined Company’s operations as a result of labor disputes; risks and costs associated with the integration of, and Paramount’s ability to integrate, the businesses of Paramount Global, Skydance Media, LLC, and WBD successfully and to achieve anticipated synergies, including in the amounts or on the timelines anticipated to realize such synergies; litigation related to the Acquisition and other matters or transactions; risks associated with the Combined Company’s holding company structure, including its dependence on distributions from its subsidiaries to meet tax obligations and other cash requirements; risks related to our indebtedness, including our substantial outstanding debt obligations, our ability to incur substantially more debt and our ability to meet the financial and other covenants contained in the agreements governing the indebtedness of Paramount, WBD, or the Combined Company. A further list and description of these risks, uncertainties and other factors and the general risks associated with the respective businesses of Paramount and WBD can be found in Paramount’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 25, 2026, including in the sections captioned “Cautionary Note Concerning Forward-Looking Statements” and “Item 1A. Risk Factors,” Paramount’s most recently filed Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 4, 2026, including in the sections captioned “Cautionary Note Concerning Forward-Looking Statements” and “Item 1A. Risk Factors,” and Paramount’s subsequent filings with the SEC, and in WBD’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026, including in the section captioned “Item 1A. Risk Factors,” WBD’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 6, 2026, and WBD’s subsequent filings with the SEC. Neither Paramount nor WBD undertakes to update any forward-looking statement as a result of new information or future events or developments, except as required by law.

 

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