Cortex Business Solutions Reports Strong Q1 Fiscal 2018 Financial Results

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CALGARY, Alberta, Dec. 05, 2017 (GLOBE NEWSWIRE) -- Cortex Business Solutions Inc. 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.

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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
DeficitTotal
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 

 

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