RE:RE:RE:RE:RE:Volume back down Agree CTS seems to be safe for the forseeable future provided they continue to remain in compliance with their debt covenants, which is different from how much more they can borrow under their credit facility. Even if they violate a condition of their loans, the lender(s) will typically meet with the company and come to an agreement that relaxes that debt covenant and allows the company time to get back into compliance as lenders ideally like to see the company succeed and be able to pay all interest and principle owed vs. calling the loan and having to go through the CCAA proicess if CTS can't come up with the money to pay it off. A number of other Canadian tech companies have violated one or more debt covenants over the past couple of years, and most received relief (i.e., time) to get back onside.
Unfortunately, CTS was one of many Canadian tech companies that grew too much too fast when money was cheap and interest rates were at rock bottom, borrowing and/or issuing new shares to acquire other companies at what may have been a significantly higher purchase price than was reasonable.
That said, I think the best route for CTS to go is focus on debt reduction as opposed to share buybacks. Interest rates are much higher than they were 12-18 months ago and inflation is likely dissuading some existing or potential clients from upgrading their systems if it would cause their debt to rise by a significant amount. Higher inflation has almost certainly caused a rise in the costs for CTS to acquire the equipment needed to implement IT solutions for clients, thus either squeezing margins or requiring CTS to pass the added costs onto clients.
Typically, a well-run company only pays dividends or buys back shares if their debt is under control and they have excess cash over and above what they need for ongoing operations. CTS still pays a dividend of 0.01 per quarter, likely so they can technically claim they are still a "dividend-paying company" (though I'm sure the investment community is well aware of their motive). Also, CTS is under no obligation to buy back any shares even though they recently renewed their NCIB, so they have flexibility, but IMO paying off debt would be the priority after money spent integrating their many acquisitions and finding any further cost efficiencies.