CALGARY, Alberta, March 06, 2018 (GLOBE NEWSWIRE) -- Cortex Business Solutions Inc. (TSXV:CBX), a North American network-as-a-service e-invoicing solutions provider, today announces its three and six months ended January 31, 2018 (“Q2 F2018”) Management’s Discussion and Analysis and Consolidated Financial Statements.
“As represented by our year to date 20% increase in total revenue and record Adjusted EBITDA(1) along with a flat cost line, Cortex’s strategy to grow and to add shareholder value has been successful in the first half of fiscal 2018. We will continue to focus on these key metrics and to execute on our growth strategy,” said Joel Leetzow, President and CEO of Cortex Business Solutions. “In what has now been another year of uncertainty across the Canadian energy sector, we have more often than not been the benefactor of asset changes and company transactions across Canada, but this quarter we recently lost two Cortex clients in Calgary due to the purchase and consolidation of certain Canadian assets. That said, our programs for diversifying our revenue are working. Because of this, Cortex is positioned to sustain and build on these record results.
This quarter has also been a major shift for me personally regarding where I am able to focus my time with the addition of Jason Baird as our CFO. I have been able to transfer many of my former day-to-day operating activities of the company over to Jason and this has allowed me to work closer with the Cortex commercial teams on growing revenue.”
“Cortex continues to deliver consistent positive results each quarter and has achieved its highest quarterly Adjusted EBITDA(1) of $0.6 million in the history of the company. Furthermore, the six months ended Adjusted EBITDA(1) of $1.1 million is already greater than the entire fiscal 2017,” said Jason Baird, VP, Finance & CFO of Cortex Business Solutions. “I am very excited to be completing my first quarter at Cortex and witnessing first-hand the successful implementation of our corporate strategy translating into increased shareholder value. With a strong balance sheet showing $6.7 million in cash and no debt, Cortex is on track to take its business to the next stage.”
Cortex would also like to thank Scott Lamacraft and Greg Mark for their commitment and valuable service as Directors to the Company and wish them well in future endeavors.
Q2 F2018 Financial Highlights
Three months ended January 31, 2018 compared to January 31, 2017
- Adjusted EBITDA(1) increased 272% or by $0.4 million to $0.6 million from $0.2 million
- Positive cash flow from operating activities increased 230% to $0.1 million from negative cash flows from operating activities of $(0.1) million
- Overall revenue increased 11% or by $0.3 million to $3.0 million from $2.7 million
- Access and usage fees increased 19% or by $0.5 million to $2.9 million from $2.4 million
- Gross profit improved 14% or by $0.3 million to $2.2 million from $1.9 million
- Net income improved 264% or by $0.5 million to $0.3 million from $(0.2) million
Six months ended January 31, 2018 compared to January 31, 2017
- Adjusted EBITDA(1) increased 418% or by $0.9 million to $1.1 million from $0.2 million
- Positive cash flow from operating activities increased 294% to $0.5 million from negative cash flows from operating activities of $(0.2) million
- Overall revenue increased 20% or by $1.1 million to $6.3 million from $5.2 million
- Access and usage fees increased 20% or by $0.9 million to $5.6 million from $4.7 million
- Gross profit improved 29% or by $1.0 million to $4.6 million from $3.6 million
- Net income improved 310% or by $0.9 million to $0.6 million from $(0.3) million
Cash Position
The overall cash position of Cortex improved 7% to $6.7 million at January 31, 2018 from $6.2 million at July 31, 2017 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 January 31, 2018 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, March 7, 2018
Time: 11:00 a.m. Eastern time (9:00 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 March 14, 2018.
Toll-free replay number: 1-800-408-3053
Toll replay number: 1-905-694-9451
Replay ID: 6644640#
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.
Cortex Business Solutions Inc.
Condensed Consolidated Interim Statements of Financial Position
(Prepared in Canadian Dollars)
(Unaudited)
| January 31 2018 |
July 31 2017 |
||||||||||
| Assets | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 6,675,340 | $ | 6,248,176 | |||||||
| Short-term investments | 60,000 | 60,000 | |||||||||
| Accounts receivable | 1,363,850 | 1,220,442 | |||||||||
| Prepaid expenses | 95,014 | 180,710 | |||||||||
| 8,194,204 | 7,709,328 | ||||||||||
| Long-term receivable | 134,046 | 98,761 | |||||||||
| Deposits | 99,978 | 35,061 | |||||||||
| Property and equipment | 108,673 | 178,118 | |||||||||
| Intangible assets | 25,515 | 30,018 | |||||||||
| $ | 8,562,416 | $ | 8,051,286 | ||||||||
| Liabilities | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable and accrued liabilities | $ | 1,088,992 | $ | 1,834,471 | |||||||
| Deferred revenue | 498,408 | 423,734 | |||||||||
| Current income tax payable | 17,917 | 9,203 | |||||||||
| Current portion of obligations under finance lease | 22,867 | - | |||||||||
| 1,628,184 | 2,267,408 | ||||||||||
| Deferred rent | 159,845 | - | |||||||||
| Obligations under finance lease | 25,262 | - | |||||||||
| 1,813,291 | 2,267,408 | ||||||||||
| Shareholders' Equity | |||||||||||
| Share capital | 60,651,418 | 60,562,286 | |||||||||
| Accumulated other comprehensive income | 541,906 | 591,752 | |||||||||
| Contributed surplus | 9,843,688 | 9,526,341 | |||||||||
| Deficit | (64,287,887) | (64,896,501) | |||||||||
| 6,749,125 | 5,783,878 | ||||||||||
| $ | 8,562,416 | $ | 8,051,286 | ||||||||
Cortex Business Solutions Inc.
Condensed Consolidated Interim Statement of Income (Loss) and Comprehensive Income (Loss)
For the three and six months ended January 31, 2018 and 2017
(Prepared in Canadian Dollars)
(Unaudited)
| Three months ended January 31 |
Six months ended January 31 |
||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| Revenue | |||||||||||||||||||
| Access and usage fees | $ | 2,853,893 | $ | 2,398,153 | $ | 5,663,805 | $ | 4,735,813 | |||||||||||
| Integration fees | 50,683 | 82,475 | 137,244 | 100,599 | |||||||||||||||
| Project management and other revenue |
114,379 | 241,048 | 452,579 | 354,332 | |||||||||||||||
| 3,018,955 | 2,721,676 | 6,253,628 | 5,190,744 | ||||||||||||||||
| Cost of Sales |
789,504 | 772,442 | 1,621,804 | 1,595,980 | |||||||||||||||
| Gross Profit | 2,229,451 | 1,949,234 | 4,631,824 | 3,594,764 | |||||||||||||||
| Expenses | |||||||||||||||||||
| Sales and marketing |
484,593 | 584,152 | 1,174,562 | 1,044,061 | |||||||||||||||
| Research and development |
459,143 | 462,159 | 936,730 | 902,690 | |||||||||||||||
| General and administrative |
971,726 | 1,014,480 | 1,769,145 | 1,816,337 | |||||||||||||||
| Severance and termination |
2,762 | 70,233 | 158,684 | 91,621 | |||||||||||||||
| 1,918,224 | 2,131,024 | 4,039,121 | 3,854,709 | ||||||||||||||||
| Income (loss) before finance income |
311,227 | (181,790 | ) | 592,703 | (259,945 | ) | |||||||||||||
| Finance income | 13,065 | 429 | 20,161 | 438 | |||||||||||||||
| Income tax expense | (2,142 | ) | (15,024 | ) | (4,250 | ) | (29,665 | ) | |||||||||||
| Net income (loss) | $ | 322,150 | $ | (196,385 | ) | $ | 608,614 | $ | (289,172 | ) | |||||||||
| Other comprehensive earnings |
|||||||||||||||||||
| Items that may be reclassified subsequently to net income (loss): | |||||||||||||||||||
| Foreign exchange loss on foreign operations |
(63,782 | ) | (100,826 | ) |
(49,846 | ) | (27,449 | ) | |||||||||||
| Comprehensive income (loss) | $ | 258,368 | $ | (297,211 | ) | $ | 558,768 | $ | (316,621 | ) | |||||||||
| Net income (loss) per share – basic and diluted |
$ |
0.04 |
$ |
(0.02 |
) |
$ |
0.07 |
$ |
(0.03 |
) |
|||||||||
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 | - | - | - | - | (289,172 | ) | (289,172 | ) | ||||||||
| Translation of foreign operations |
- | - | (27,449 | ) | - | - | (27,449 | ) | ||||||||
| Compensation units & stock options exercised |
3,491 |
18,368 |
- |
(11,386 |
) |
- |
6,982 |
|||||||||
| Deferred share units issued | - | - | - | 200,000 | - | 200,000 | ||||||||||
| Stock based compensation | - | - | - | 75,566 | - | 75,566 | ||||||||||
| Balance – January 31, 2017 | 8,988,195 | 60,309,883 | 612,783 | 9,391,128 | (64,770,359 | ) | 5,543,435 | |||||||||
| Balance - July 31, 2017 | 9,069,983 | 60,562,286 | 591,752 | 9,526,341 | (64,896,501 | ) | 5,783,878 | |||||||||
| Net income | - | - | - | - | 608,614 | 608,614 | ||||||||||
| Translation of foreign operations | - | - | (49,846 | ) | - | - | (49,846 | ) | ||||||||
| Compensation units & stock options exercised | 27,163 |
89,132 |
- |
(31,051 |
) |
- |
58,081 |
|||||||||
| Deferred share units issued | - | - | - | 200,000 | - | 200,000 | ||||||||||
| Stock based compensation | - | - | - | 148,398 | - | 148,398 | ||||||||||
| Balance – January 31, 2018 | 9,097,146 | $ | 60,651,418 | $ | 541,906 | $ | 9,843,688 | $ | (64,287,887 | ) | $ | 6,749,125 | ||||
Cortex Business Solutions Inc.
Condensed Consolidated Interim Statement of Cash Flows
For the three and six months ended January 31, 2018 and 2017
(Prepared in Canadian Dollars)
(unaudited)
| Three months ended January 31 |
Six months ended January 31 |
||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| Cash provided by (used in) | |||||||||||||||||||
| Operating activities | |||||||||||||||||||
| Net income (loss) | $ | 322,150 | $ | (196,385 | ) | $ | 608,614 | $ | (289,172 | ) | |||||||||
| Items not affecting cash | |||||||||||||||||||
| Stock-based compensation | 282,451 | 276,055 | 348,398 | 351,621 | |||||||||||||||
| Amortization | 8,167 | 25,030 | 158,461 | 49,885 | |||||||||||||||
| Deferred Rent | 79,922 | - | 159,845 | - | |||||||||||||||
| Accretion on rebate provision | - | 2,154 | - | 4,307 | |||||||||||||||
| Loss on disposal of equipment | - | 1,012 | - | 1,012 | |||||||||||||||
| Long term receivables | (9,311 | ) | (26,577 | ) | (35,285 | ) | (53,034 | ) | |||||||||||
| Changes in non-cash working capital | (541,926 | ) | (190,044 | ) | (784,717 | ) | (299,622 | ) | |||||||||||
| Net cash provided by (used in) operating activities |
141,453 |
(108,755 |
) |
455,316 |
(235,003 |
) |
|||||||||||||
| Financing activities | |||||||||||||||||||
| Proceeds on exercise of compensation units & stock options |
11,831 |
6,982 |
58,081 |
6,982 |
|||||||||||||||
| Finance lease payments | (5,683 | ) | - | (18,676 | ) | - | |||||||||||||
| Net cash provided by financing activities |
6,148 | 6,982 | 39,405 | 6,982 | |||||||||||||||
| Investing Activities | |||||||||||||||||||
| Acquisition of property and equipment |
(1,478 | ) | (2,340 | ) | (17,709 | ) | (2,340 | ) | |||||||||||
| Net cash used in investing activities |
(1,478 | ) | (2,340 | ) | (17,709 | ) | (2,340 | ) | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents held in foreign currency |
(63,781) | (106,529) | (49,848) | (27,350) | |||||||||||||||
| Cash inflow (outflow) | 82,342 | (210,642 | ) | 427,164 | (257,711 | ) | |||||||||||||
| Cash, beginning of period |
6,592,998 | 5,574,766 | 6,248,176 | 5,621,835 | |||||||||||||||
| Cash, end of period | $ | 6,675,340 | $ | 5,364,124 | $ | 6,675,340 | $ | 5,364,124 | |||||||||||
Investor Relations Contacts:
Joel Leetzow Jason Baird
President and CEO VP, Finance & CFO
jleetzow@cortex.net jbaird@cortex.net
403-219-2838 403-219-2838
