CALGARY, Alberta, Dec. 05, 2017 (GLOBE NEWSWIRE) -- Cortex Business Solutions Inc. (TSXV:CBX), a North American network-as-a-service e-invoicing solutions provider, today announces its three months ended October 31, 2017 (“Q1 F2018”) Management’s Discussion and Analysis and Consolidated Financial Statements.
“As represented by our successful quarter over quarter growth of 31% in top line revenue and a relatively flat cost line, Cortex’s push to grow revenue and Adjusted EBITDA (1) with our current team is working. We will continue to focus on these metrics and to improve them to grow our business,” said Joel Leetzow, President and CEO of Cortex Business Solutions. “With substantial milestones achieved in our product, a repeatable business model, the implementation of a proven sales strategy combined with the delivery of set-up and integration services, Cortex is positioned to sustain and build on results from this quarter and achieve continued growth and value for its stakeholders”.
“Cortex continues to deliver improved results each quarter and has achieved its highest Adjusted EBITDA (1) in the history of the company,” said Jason Baird, VP, Finance & CFO of Cortex Business Solutions. “I am very excited to be joining Cortex at this stage of its development and growth. With a strong balance sheet, $6.6 million in cash and debt free, Cortex is on track to grow its business”.
Q1 F2018 Financial Highlights (as compared to Q1 F2017)
- Positive cash flow from operating activities increased 349% to $0.3 million from negative cash flows from operating activities of $(0.1) million
- Overall revenue increased 31% or by $0.7 million to $3.2 million from $2.5 million
- Access and usage fees increased 20% or by $0.5 million to $2.8 million from $2.3 million
- Gross profit improved 46% or by $0.8 million to $2.4 million from $1.6 million
- Net income improved 409% or by $0.5 million to $0.4 million from $(0.1) million
- Adjusted EBITDA (1) increased 895% or by $0.6 million to $0.5 million from $0.1 million
Cash Position
The overall cash position of Cortex improved 6% to $6.6 million at October 31, 2017 from $6.2 million driven predominantly from an increase in net cash provided by operating activities mainly from higher access and usage fees and project management revenues.
(1) Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, non-recurring charges and share based payments. Adjusted EBITDA is a non-IFRS financial measure that does not have any standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other reporting issuers. This measure assists the Company in evaluating the Company’s operating performance against its expectations and against other entities. Please refer to the Company’s management’s discussion and analysis for the quarter ended October 31, 2017 for further information on the Company’s use of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to Net Income.
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, December 6, 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 December 13, 2017
| Toll-free replay number: | 1-800-408-3053 | ||
| Toll replay number: | 1-905-694-9451 | ||
| Replay ID: | 5405733# |
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, Manufacturing and Sports & Entertainment industries, with a focused expansion into additional verticals.
For more information, please visit www.cortex.net .
Investor Relations Contacts:
| Joel Leetzow | Jason Baird | Andrew Stewart | ||
| President and CEO | VP, Finance & CFO | Director, Marketing & Investor Relations | ||
| jleetzow@cortex.net | jbaird@cortex.net | astewart@cortex.net | ||
| 403-219-2838 | 403-219-2838 | 403-219-2838 |
| Cortex Business Solutions Inc. Condensed Consolidated Interim Statements of Financial Position | |||||||||||
| (Prepared in Canadian Dollars) | |||||||||||
| (Unaudited) | |||||||||||
| October 31 2017 | July 31 2017 | ||||||||||
| Assets | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 6,592,998 | $ | 6,248,176 | |||||||
| Short-term investments | 60,000 | 60,000 | |||||||||
| Accounts receivable | 1,445,604 | 1,220,442 | |||||||||
| Prepaid expenses | 178,521 | 180,710 | |||||||||
| 8,277,123 | 7,709,328 | ||||||||||
| Long-term receivable | 124,735 | 98,761 | |||||||||
| Deposits | 99,978 | 35,061 | |||||||||
| Property and equipment | 113,112 | 178,118 | |||||||||
| Intangible assets | 27,766 | 30,018 | |||||||||
| $ | 8,642,714 | $ | 8,051,286 | ||||||||
| Liabilities | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable and accrued liabilities | $ | 1,805,570 | $ | 1,834,471 | |||||||
| Deferred revenue | 495,200 | 423,734 | |||||||||
| Current income tax payable | 11,734 | 9,203 | |||||||||
| Current portion of obligations under finance lease | 22,812 | - | |||||||||
| 2,335,316 | 2,267,408 | ||||||||||
| Deferred rent | 79,923 | - | |||||||||
| Obligations under finance lease | 31,000 | - | |||||||||
| 2,446,239 | 2,267,408 | ||||||||||
| Shareholders' Equity | |||||||||||
| Share capital | 60,632,576 | 60,562,286 | |||||||||
| Accumulated other comprehensive income | 605,688 | 591,752 | |||||||||
| Contributed surplus | 9,568,248 | 9,526,341 | |||||||||
| Deficit | (64,610,037 | ) | (64,896,501 | ) | |||||||
| 6,196,475 | 5,783,878 | ||||||||||
| $ | 8,642,714 | $ | 8,051,286 | ||||||||
| Cortex Business Solutions Inc. Condensed Consolidated Interim Statement of Income (Loss) and Comprehensive Income (Loss) | |||||||||||
| For the three months ended October 31, 2017 and 2016 | |||||||||||
| (Prepared in Canadian Dollars) | |||||||||||
| (Unaudited) | |||||||||||
| Three months ended | |||||||||||
| October 31 2017 | October 31 2016 | ||||||||||
| Revenue | |||||||||||
| Access and usage fees | $ | 2,809,912 | $ | 2,337,660 | |||||||
| Integration fees | 86,561 | 18,124 | |||||||||
| Project management and other revenue | 338,200 | 113,284 | |||||||||
| 3,234,673 | 2,469,068 | ||||||||||
| Cost of Sales | 832,300 | 823,538 | |||||||||
| Gross Profit | 2,402,373 | 1,645,530 | |||||||||
| Expenses | |||||||||||
| Sales and marketing | 689,969 | 459,909 | |||||||||
| Research and development | 477,587 | 440,531 | |||||||||
| General and administrative | 797,419 | 801,857 | |||||||||
| Severance and termination charges | 155,922 | 21,388 | |||||||||
| 2,120,897 | 1,723,685 | ||||||||||
| Income (loss) before finance income | 281,476 | (78,155 | ) | ||||||||
| Finance income | 7,096 | 9 | |||||||||
| Income tax expense | (2,108 | ) | (14,641 | ) | |||||||
| Net income (loss) | $ | 286,464 | $ | (92,787 | ) | ||||||
| Other comprehensive earnings | |||||||||||
| Items that may be reclassified subsequently to net income (loss): | |||||||||||
| Foreign exchange gain on foreign operations | 13,936 | 73,377 | |||||||||
| Comprehensive income (loss) | $ | 300,400 | $ | (19,410 | ) | ||||||
| Net income (loss) per share – basic and diluted | $ | 0.03 | $ | (0.01 | ) | ||||||
| Cortex Business Solutions Inc. Condensed Consolidated Interim Statement of Changes in Shareholders’ Equity | ||||||||||||||||||||
| (Prepared in Canadian Dollars) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Number of Common Shares | Share Capital | Accumulated Other Comprehensive Income | Contributed Surplus | Deficit | Total Shareholders’ Equity | |||||||||||||||
| Balance – July 31, 2016 | 8,984,704 | $ | 60,291,515 | $ | 640,232 | $ | 9,126,948 | $ | (64,481,187 | ) | $ | 5,577,508 | ||||||||
| Net loss | - | - | - | - | (92,787 | ) | (92,787 | ) | ||||||||||||
| Translation of foreign operations | - | - | 73,377 | - | - | 73,377 | ||||||||||||||
| Stock based compensation | - | - | - | 75,566 | - | 75,566 | ||||||||||||||
| Balance – October 31, 2016 | 8,984,704 | 60,291,515 | 713,609 | 9,202,514 | (64,573,974 | ) | 5,633,664 | |||||||||||||
| Balance - July 31, 2017 | 9,069,983 | 60,562,286 | 591,752 | 9,526,341 | (64,896,501 | ) | 5,783,878 | |||||||||||||
| Net income | - | - | - | - | 286,464 | 286,464 | ||||||||||||||
| Translation of foreign operations | - | - | 13,936 | - | - | 13,936 | ||||||||||||||
| Compensation units & stock options exercised | 21,158 | 70,290 | - | (24,040 | ) | - | 46,250 | |||||||||||||
| Stock based compensation | - | - | - | 65,947 | - | 65,947 | ||||||||||||||
| Balance – October 31, 2017 | 9,091,141 | $ | 60,632,576 | $ | 605,688 | $ | 9,568,248 | $ | (64,610,037 | ) | $ | 6,196,475 | ||||||||
| Cortex Business Solutions Inc. Condensed Consolidated Interim Statement of Cash Flows For the three months ended October 31, 2017 and 2016 | |||||||||||
| (Prepared in Canadian Dollars) | |||||||||||
| (unaudited) | |||||||||||
| Three months ended | |||||||||||
| October 31 2017 | October 31 2016 | ||||||||||
| Cash provided by (used in) | |||||||||||
| Operating activities | |||||||||||
| Net income (loss) | $ | 286,464 | $ | (92,787 | ) | ||||||
| Items not affecting cash | |||||||||||
| Stock-based compensation | 65,947 | 75,566 | |||||||||
| Amortization | 150,294 | 24,855 | |||||||||
| Deferred Rent | 79,923 | - | |||||||||
| Accretion on rebate provision | - | 2,153 | |||||||||
| Loss on disposal of equipment | - | - | |||||||||
| Long term receivables | (25,974 | ) | - | ||||||||
| Changes in non-cash working capital | (242,791 | ) | (136,035 | ) | |||||||
| Net cash provided by (used in) operating activities | 313,863 | (126,248 | ) | ||||||||
| Financing activities | |||||||||||
| Proceeds on exercise of compensation units & stock options | 46,250 | - | |||||||||
| Finance lease payments | (12,993 | ) | - | ||||||||
| Net cash provided by financing activities | 33,257 | - | |||||||||
| Investing Activities | |||||||||||
| Acquisition of property and equipment | (16,231 | ) | - | ||||||||
| Net cash used in investing activities | (16,231 | ) | - | ||||||||
| Effect of exchange rate changes on cash | |||||||||||
| and cash equivalents held in foreign currency | 13,933 | 79,179 | |||||||||
| Cash inflow (outflow) | 344,822 | (47,069 | ) | ||||||||
| Cash, beginning of period | 6,248,176 | 5,621,835 | |||||||||
| Cash, end of period | $ | 6,592,998 | $ | 5,574,766 | |||||||
