CALGARY, Alberta, June 13, 2017 (GLOBE NEWSWIRE) -- Cortex Business Solutions Inc. (“Cortex”, “The Company”), (TSXV:CBX), a North American network-as-a-service e-invoicing solutions provider, today announces its three and nine months ended April 30, 2017 (“Q3 F2017”) Management’s Discussion and Analysis and Condensed Interim Consolidated Financial Statements.
Joel Leetzow, the President and CEO of Cortex Business Solutions, said, “As Cortex Business Solutions Inc. celebrates its 10th year trading on the TSX.V, as CBX, we also celebrate what I believe are far greater and more significant milestones; positive net income and positive cashflow from operations. By achieving these milestones, we have become a legitimate business by anyone’s measure for the first time in our Company’s history. Reaching these goals speaks volumes towards the dedication and hard work put in by a streamlined Cortex team, as well as the continued faith our shareholders have shown us, which has helped us to build a strong future for Cortex.
"The growth in the commitment, drive and abilities of the individuals working for Cortex are driving forces in the results we are presenting today.”
The Company achieved positive cashflow from operations of $241,456, positive net income of $19,847 and income before finance income and income tax of $35,725.
One of the more interesting trends in the quarter was the recovery of usage fees, which grew 26% in the quarter; compared to a decline of 4% for the nine month period. This trend is in line with the Company’s billable transaction increase of 24% in the quarter compared to 4% during the nine months. This growth occurred in spite of one month of spring breakup in the quarter. The Network is seeing an increase in the volume of transactions as new buyers go live on the Network as well as stabilization in the energy sector.
The total expenses declined 3% during the quarter and 13% during the nine months ended April 30, 2017. The Company does not expect the large reductions like those seen in fiscal 2016 compared to fiscal 2015 as the Company has normalized its spending. This decline occurred despite the rebuilding of the sales organization resulting in a 77% increase in sales and marketing during the three month period and 62% during the nine month period.
The continued improvement in the speed at which the team is moving buyers from contract stage to live on the Network resulted in 96 active buyers at April 30, 2017 compared to 91 active at April 30, 2016. This materializes through increased monthly access and usage fees which contributed 64% of the total revenue growth in the quarter.
A summary of the percentage changes in the quarter are included below.
Q3 F2017 Highlights:
Cash provided by (used in) Operations
Three months ended April 30, 2017 compared to April 30, 2016
- The cash provided by (used in) operating activities improved to $241,456 during Q3 F2017 compared to $(205,502) during the three months ended April 30, 2016.
Nine months ended April 30, 2017 compared to April 30, 2016
- The cash provided by (used in) operating activities improved to $6,453 compared to $(744,342) during the nine months ended April 30, 2017 and 2016 respectively.
Net Income (loss)
Three months ended April 30, 2017 compared to April 30, 2016
- The net income (loss) improved to $19,847 during Q3 F2017 compared to $(564,981) during the three months ended April 30, 2016.
Nine months ended April 30, 2017 compared to April 30, 2016
- The net loss improved to $269,325 compared to $1,993,372 during the nine months ended April 30, 2017 and 2016 respectively.
Revenue
Three months ended April 30, 2017 compared to April 30, 2016
- Total revenue improved 22% to $2,930,726 Q3 F2017 compared to Q3 F2016 of $2,403,314.
- Access and usage fees were up 15%:
- Integration and set up fees were down 6%, and
- Project management fees were up 1517%.
- Billable transactions improved 24% while active suppliers decreased 4%.
Nine months ended April 30, 2017 compared to April 30, 2016
- Total revenue was increased to $8,121,470 compared to $7,589,159 during the nine months ended April 30, 2017 and 2016 respectively.
- Access and usage fees were up 2%:
- Integration and set up fees were down 34%, and
- Project management fees were up 1797%.
- Billable transactions were up 4%.
Expenses
Three months ended April 30, 2017 compared to April 30, 2016
- Total expenses declined 3%.
Nine months ended April 30, 2017 compared to April 30, 2016
- Total expenses declined 13%
“Q3 F2017 was a monumental quarter,” said Sandra Fawcett, CFO of Cortex. “The Company was successful in achieving both income and positive cashflow in the quarter. Also for the nine month period the Company had positive cash flow from operations. With a gross profit of 71%, the ability to further improve these metrics is within reach. Having been with Cortex for 12 years, I have been privileged to see its entire evolution, and I can say that we are well positioned for continued success in the future.”
Cortex management will host a conference call, followed by a question and answer period.
The details of the conference call are as follows:
Date: Wednesday, June 14, 2017
Time: 10:00 a.m. Eastern time (8:00 a.m. Mountain time)
Toll-free dial-in number: 1-800-377-0758
International dial-in number: 1-416-340-2216
Please call the conference telephone number ten minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Cortex Business Solutions at 403-219-2838.
A replay of the conference call will be available after the call through June 21, 2017.
Toll-free replay number: 1-800-408-3053
Toll replay number: 1-905-694-9451
Replay ID: 1523103#
About Cortex Business Solutions
Cortex’s strategy is to revolutionize B2B document exchange by replacing traditional paper-based manual systems with automated e-invoicing. This positions companies with the scalability and flexibility needed to meet the demands of today’s business. Cortex offers a B2B network that enables electronic invoicing for buying and supplying organizations using flexible connection methods to leverage existing customer technologies and processes. Access to the Cortex Network enhances the exchange of documents allowing companies to connect and interact with each other to grow their businesses.
Cortex is currently delivering e-invoicing services to over 10,000 Trading Partners in Oil & Gas, Mining, and Sports & Entertainment industries, with a focused expansion into additional verticals.
For more information, please visit www.cortex.net
| Cortex Business Solutions Inc. | |||||||
| Condensed Consolidated Interim Statements of Financial Position | |||||||
| (Prepared in Canadian dollars) | |||||||
| (Unaudited) | |||||||
April 30 | July 31 | ||||||
| 2017 | 2016 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash | $ | 5,707,921 | $ | 5,621,835 | |||
| Short‑term investments | 60,000 | 60,000 | |||||
| Accounts receivable | 1,115,770 | 866,142 | |||||
| Prepaid expenses | 276,605 | 145,823 | |||||
| 7,160,296 | 6,693,800 | ||||||
| Long term receivables | 79,551 | - | |||||
| Deposits | 35,061 | 35,061 | |||||
| Property and equipment | 229,426 | 292,791 | |||||
| Intangible assets | 33,234 | 42,882 | |||||
| $ | 7,537,568 | $ | 7,064,534 | ||||
| Liabilities | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued liabilities | $ | 1,307,285 | $ | 1,086,380 | |||
| Deferred revenue | 28,945 | 46,854 | |||||
| Rebate provision | 300,605 | 294,145 | |||||
| Income tax payable | 90,667 | 59,647 | |||||
| 1,727,502 | 1,487,026 | ||||||
| Shareholders' Equity | |||||||
| Share capital | 60,318,006 | 60,291,515 | |||||
| Accumulated other comprehensive income | 710,705 | 640,232 | |||||
| Contributed surplus | 9,531,867 | 9,126,948 | |||||
| Deficit | (64,750,512 | ) | (64,481,187 | ) | |||
| 5,810,066 | 5,577,508 | ||||||
| $ | 7,537,568 | $ | 7,064,534 | ||||
| Cortex Business Solutions Inc. | ||||||||||||
| Condensed Consolidated Interim Statements of Net Income (Loss) and Comprehensive Loss | ||||||||||||
| For the three and nine months ended April 30, 2017 and 2016 | ||||||||||||
| (Prepared in Canadian dollars) | ||||||||||||
| (unaudited) | ||||||||||||
| Three months ended April 30 | Nine months ended April 30 | |||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Revenue | ||||||||||||
| Access and usage fees | $ | 2,603,932 | $ | 2,263,485 | $ | 7,339,745 | $ | 7,223,753 | ||||
| Integration fees and set‑up fees | 119,792 | 127,025 | 220,391 | 335,810 | ||||||||
| Project management fees | 207,002 | 12,804 | 561,334 | 29,596 | ||||||||
| 2,930,726 | 2,403,314 | 8,121,470 | 7,589,159 | |||||||||
| Cost of Sales | 853,057 | 1,319,152 | 2,449,037 | 4,128,834 | ||||||||
| Gross Profit | 2,077,669 | 1,084,162 | 5,672,433 | 3,460,325 | ||||||||
| Expenses | ||||||||||||
| Sales and marketing | 596,473 | 336,405 | 1,640,534 | 1,009,993 | ||||||||
| Research and development costs | 500,338 | 434,426 | 1,403,028 | 1,509,674 | ||||||||
| General and administrative | 908,697 | 846,457 | 2,725,034 | 2,722,685 | ||||||||
| Severance and employee termination costs | 36,436 | 46,862 | 128,057 | 208,596 | ||||||||
| 2,041,944 | 1,664,150 | 5,896,653 | 5,450,948 | |||||||||
| Income (loss) before finance income | 35,725 | (579,988 | ) | (224,220 | ) | (1,990,623 | ) | |||||
| Finance income (expense) | 921 | 702 | 1,359 | (3,793 | ) | |||||||
| Current tax recovery (expense) | (16,799 | ) | 14,305 | (46,464 | ) | 1,044 | ||||||
| Net Income (loss) | $ | 19,847 | $ | (564,981 | ) | $ | (269,325 | ) | $ | (1,993,372 | ) | |
| Other comprehensive earnings | ||||||||||||
| Items that may be reclassified subsequently to net loss: | ||||||||||||
| Foreign exchange gain (loss) on foreign operations | 97,922 | (216,076 | ) | 70,473 | (70,214 | ) | ||||||
| Comprehensive income (loss) | $ | 117,769 | $ | (781,057 | ) | $ | (198,852 | ) | $ | (2,063,586 | ) | |
| Net loss per share‑basic and diluted | $ | 0.00 | $ | (0.06 | ) | $ | (0.03 | ) | $ | (0.23 | ) | |
| Cortex Business Solutions Inc. | |||||||||||||||||||||
| Condensed Consolidated Interim Statement of Changes in Shareholders' Equity | |||||||||||||||||||||
| (Prepared in Canadian dollars) | |||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||
| Number of Common Shares | Share Capital | Number of Warrants | Warrants Value | Contributed Surplus | Accumulated Other Comprehensive Income | Deficit | Total Shareholders' Equity | ||||||||||||||
| Balance ‑ July 31, 2015 | 7,426,349 | $ | 57,640,393 | 447,580 | $ | 980,941 | $ | 7,848,559 | $ | 580,502 | $ | (61,776,518 | ) | $ | 5,273,877 | ||||||
| Net loss | - | - | - | - | - | - | (1,993,372 | ) | (1,993,372 | ) | |||||||||||
| Issued during the period | 1,551,375 | 3,102,750 | - | - | - | - | - | 3,102,750 | |||||||||||||
| Issuance cost | - | (364,366 | ) | - | - | - | - | - | (364,366 | ) | |||||||||||
| Translation of foreign operations | - | - | - | - | - | (70,214 | ) | - | (70,214 | ) | |||||||||||
| Stock based compensation | - | - | - | - | 161,409 | - | - | 161,409 | |||||||||||||
| Compensation units issued in conjunction with private placement | - | (101,222 | ) | - | - | 101,222 | - | - | - | ||||||||||||
| Expiration of warrants | - | - | (447,580 | ) | (980,941 | ) | 980,941 | - | - | - | |||||||||||
| Balance ‑ April 30, 2016 | 8,977,724 | $ | 60,277,555 | - | $ | - | $ | 9,092,131 | $ | 510,288 | $ | (63,769,890 | ) | $ | 6,110,084 | ||||||
| Balance ‑ July 31, 2016 | 8,984,704 | $ | 60,291,515 | - | $ | - | $ | 9,126,948 | $ | 640,232 | $ | (64,481,187 | ) | $ | 5,577,508 | ||||||
| Net loss | - | - | - | - | - | - | (269,325 | ) | (269,325 | ) | |||||||||||
| Compensation units & stock options exercised | 6,158 | 12,049 | - | - | - | - | - | 12,049 | |||||||||||||
| Compensation units contributed surplus | - | 14,442 | - | - | (14,442 | ) | - | - | - | ||||||||||||
| Translation of foreign operations | - | - | - | - | - | 70,473 | - | 70,473 | |||||||||||||
| Stock based compensation | - | - | - | - | 219,361 | - | - | 219,361 | |||||||||||||
| Deferred share units issued | - | - | - | - | 200,000 | - | - | 200,000 | |||||||||||||
| Balance ‑ April 30, 2017 | 8,990,862 | $ | 60,318,006 | - | $ | - | $ | 9,531,867 | $ | 710,705 | $ | (64,750,512 | ) | $ | 5,810,066 | ||||||
| See accompanying notes | |||||||||||||||||||||
| Cortex Business Solutions Inc. | ||||||||||||
| Condensed Consolidated Interim Statement of Cash Flows | ||||||||||||
| For the three and nine months ended April 30, 2017 and 2016 | ||||||||||||
| (Prepared in Canadian dollars) | ||||||||||||
| (unaudited) | ||||||||||||
| For the three months ended April 30 | For the nine months ended April 30 | |||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Cash provided by (used in) Operating activities | ||||||||||||
| Net Income (loss) | $ | 19,847 | $ | (564,981 | ) | $ | (269,325 | ) | $ | (1,993,372 | ) | |
| Items not affecting cash | ||||||||||||
| Stock‑based compensation | 67,740 | 39,620 | 419,361 | 161,409 | ||||||||
| Amortization | 25,004 | 460,301 | 74,889 | 1,380,899 | ||||||||
| Long term receivables | (26,517 | ) | - | (79,551 | ) | - | ||||||
| Accretion on rebate provision | 2,153 | 1,245 | 6,460 | 10,874 | ||||||||
| Loss on disposal of equipment | - | - | 1,012 | 2,811 | ||||||||
| 88,227 | (63,815 | ) | 152,846 | (437,379 | ) | |||||||
| Changes in non‑cash working capital | 153,229 | (141,687 | ) | (146,393 | ) | (306,963 | ) | |||||
| Net cash provided by (cash used) in operating activities | 241,456 | (205,502 | ) | 6,453 | (744,342 | ) | ||||||
| Financing activities | ||||||||||||
| Proceeds from issuance of shares | - | - | - | 3,102,750 | ||||||||
| Share issuance costs | - | - | - | (364,366 | ) | |||||||
| Proceeds from exercise of compensation units & stock options | 5,067 | - | 12,049 | - | ||||||||
| Net cash from financing activities | 5,067 | - | 12,049 | 2,738,384 | ||||||||
| Investing activities | ||||||||||||
| Acquisition of property and equipment | (548 | ) | - | (2,888 | ) | (1,189 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents held in foreign currency | $ | 97,822 | $ | (377,756 | ) | $ | 70,472 | $ | (83,185 | ) | ||
| Cash inflow (outflow) | 343,797 | (583,258 | ) | 86,086 | 1,909,668 | |||||||
| Cash, beginning of period | 5,364,124 | 6,479,876 | 5,621,835 | 3,986,950 | ||||||||
| Cash, end of period | $ | 5,707,921 | $ | 5,896,618 | $ | 5,707,921 | $ | 5,896,618 | ||||