Cortex Business Solutions Reports Fiscal 2017 Financial Results
Positive annual cash flows from operations for the first time
CALGARY, Alberta, Oct. 24, 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 July 31, 2017 (“Q4 F2017”) and year ended July 31, 2017 (“F2017”) Management’s Discussion and Analysis and Consolidated Financial Statements.
“Fiscal 2017 marks a historic and significant inflection point for the company as the transformative activities taken in the previous years have propelled Cortex to its first ever positive net cash provided by operating activities” 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 assured to sustain and build on results from this year and achieve continued growth”.
“Cortex continues to deliver improved results for the year and for the latest quarter” said Henry Pham, Interim CFO of Cortex Business Solutions. “With a shored up balance sheet, extinguishment of the rebate provision and no debt, the pivot towards sustained profitability is well underway. Had it not been for the recognition of an onerous contract pertaining to the Company’s previous head office lease in Calgary that expires in January 2018, Cortex would have reported positive Q4 2017 net income; building on similar results from Q3 2017. We will look to build on the results of F2017 and assure to our existing and prospective customers alike, that Cortex is here to stay and to help deliver value from the Cortex brand.”
F2017 Financial Highlights:
- Position cash flow from operating activities increased 144% to $0.5 million from negative cash flows from operating activities of $(1.2) million
- Overall revenue increased 13% to $11.1 million from $9.8 million
- Access and usage fees increased 6% to $10.0 million from $9.4 million
- Gross profit improved 80% to $7.8 million from $4.4 million
- Net loss improved 85% to $(0.4) million from $(2.7) million
- Adjusted EBITDA(1) increased 290% to $0.6 million from $(0.3) million
Q4 F2017 Financial Highlights (as compared to Q4 2016):
- Position cash flow from operating activities increased 218% to $0.5 million from negative cash flows from operating activities of $(0.4) million.
- Overall revenue increased 31% to $2.9 million from $2.2 million
- Access and usage fees increased 22% to $2.6 million from $2.2 million
- Gross profit improved 141% to $2.2 million from $0.9 million
- Net loss improved 79% to $(0.1) million from net loss of $(0.7) million
- Adjusted EBITDA(1) increased 233% to $0.2 million from $(0.1) million
Cash Position
The overall cash position of Cortex improved 11% to $6.2 million at July 31, 2017 from $5.6 million driven predominantly from strong net cash provided by operating activities.
(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 year ended July 31, 2017 for further information on the Company’s use of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to Net loss. |
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, October 25, 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 November 1, 2017
Toll-free replay number: | 1-800-408-3053 | |
Toll replay number: | 1-905-694-9451 | |
Replay ID: | 5459208# |
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.
Investor Relations Contacts:
Joel Leetzow | Henry Pham | Andrew Stewart | ||
President and CEO | Interim CFO | Director, Marketing & Investor Relations | ||
jleetzow@cortex.net | pham@cortex.net | astewart@cortex.net | ||
403-219-2838 | 403-219-2838 | 403-219-2838 |
Cortex Business Solutions Inc.
Consolidated Statements of Financial Position
(Prepared in Canadian dollars)
July 31 | July 31 | ||||||
2017 | 2016 | ||||||
Assets | |||||||
Current assets | |||||||
Cash |
$ | 6,248,176 | $ | 5,621,835 | |||
Short‑term investments | 60,000 | 60,000 | |||||
Accounts receivable | 1,220,442 | 866,142 | |||||
Prepaid expenses | 180,710 | 145,823 | |||||
7,709,328 | 6,693,800 | ||||||
Long term receivables | 98,761 | - | |||||
Deposits | 35,061 | 35,061 | |||||
Property and equipment | 178,118 | 292,791 | |||||
Intangible assets | 30,018 | 42,882 | |||||
$ | 8,051,286 | $ | 7,064,534 | ||||
Liabilities | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | $ | 1,834,471 | $ | 1,086,380 | |||
Deferred revenue | 423,734 | 46,854 | |||||
Rebate provision | - | 294,145 | |||||
Current income tax payable | 9,203 | 59,647 | |||||
2,267,408 | 1,487,026 | ||||||
Shareholders' Equity | |||||||
Share capital | 60,562,286 | 60,291,515 | |||||
Accumulated other comprehensive income | 591,752 | 640,232 | |||||
Contributed surplus | 9,526,341 | 9,126,948 | |||||
Deficit | (64,896,501 | ) | (64,481,187 | ) | |||
5,783,878 | 5,577,508 | ||||||
$ | 8,051,286 | $ | 7,064,534 | ||||
Cortex Business Solutions Inc.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended July 31, 2017 and 2016
(Prepared in Canadian dollars)
2017 | 2016 | ||||||
Revenue | |||||||
Access and usage fees | $ | 9,964,212 | $ | 9,376,298 | |||
Integration fees | 268,579 | 404,062 | |||||
Project management and other revenue | 826,501 | 43,158 | |||||
11,059,292 | 9,823,518 | ||||||
Cost of Sales | 3,217,622 | 5,462,248 | |||||
Gross Profit | 7,841,670 | 4,361,270 | |||||
Expenses | |||||||
Sales and marketing | 2,382,665 | 1,429,838 | |||||
Research and development | 1,869,596 | 1,990,361 | |||||
General and administrative | 3,676,862 | 3,412,059 | |||||
Severance and termination charges | 138,897 | 213,445 | |||||
Onerous contract | 217,638 | - | |||||
8,285,658 | 7,045,703 | ||||||
Loss before finance income (expense) | (443,988 | ) | (2,684,433 | ) | |||
Finance income (expense) | 6,546 | (7,249 | ) | ||||
Income tax recovery (expense) | 22,128 | (12,987 | ) | ||||
Net loss | $ | (415,314 | ) | $ | (2,704,669 | ) | |
Other comprehensive (loss) earnings | |||||||
Items that may be reclassified subsequently to net loss: | |||||||
Foreign exchange gain (loss) on foreign operations | (48,480 | ) | 59,730 | ||||
Comprehensive loss | $ | (463,794 | ) | $ | (2,644,939 | ) | |
Net loss per share ‑ basic and diluted | $ | (0.05 | ) | $ | (0.31 | ) | |
Cortex Business Solutions Inc.
Consolidated Statements of Changes in Shareholders' Equity
(Prepared in Canadian dollars)
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 | - | - | - | - | - | - | (2,704,669 | ) | (2,704,669 | ) | ||||||||||||||||||
Issued during the period | 1,558,355 | 3,116,710 | - | - | - | - | - | 3,116,710 | ||||||||||||||||||||
Issuance cost | - | (364,366 | ) | - | - | - | - | - | (364,366 | ) | ||||||||||||||||||
Translation of foreign operations | - | - | - | - | - | 59,730 | - | 59,730 | ||||||||||||||||||||
Stock based compensation | - | - | - | - | 196,226 | - | - | 196,226 | ||||||||||||||||||||
Expiration of Warrants | - | - | (447,580 | ) | (980,941 | ) | 980,941 | - | - | - | ||||||||||||||||||
Compensation units issues in conjunction with private placement | - | (101,222 | ) | - | - | 101,222 | - | - | - | |||||||||||||||||||
Balance ‑ July 31, 2016 | 8,984,704 | 60,291,515 | - | - | 9,126,948 | 640,232 | (64,481,187 | ) | 5,577,508 | |||||||||||||||||||
Net loss | - | - | - | - | - | - | (415,314 | ) | (415,314 | ) | ||||||||||||||||||
Translation of foreign operations | - | - | - | - | - | (48,480 | ) | - | (48,480 | ) | ||||||||||||||||||
Compensation units & stock options exercised | 85,279 | 270,771 | - | - | (100,480 | ) | - | - | 170,291 | |||||||||||||||||||
Stock based compensation | - | - | - | - | 499,873 | - | - | 499,873 | ||||||||||||||||||||
Balance ‑ July 31, 2017 | 9,069,983 | $ | 60,562,286 | - | $ | - | $ | 9,526,341 | $ | 591,752 | $ | (64,896,501 | ) | $ | 5,783,878 | |||||||||||||
Cortex Business Solutions Inc.
Consolidated Statements of Cash Flows
For the years ended July 31, 2017 and 2016
(Prepared in Canadian dollars)
2017 | 2016 | ||||||
Cash provided by (used in) | |||||||
Operating activities | |||||||
Net loss | $ | (415,314 | ) | $ | (2,704,669 | ) | |
Items not affecting cash | |||||||
Stock‑based compensation | 499,873 | 196,226 | |||||
Amortization | 139,051 | 1,841,521 | |||||
Long term receivables | (98,761 | ) | - | ||||
Accretion on rebate provision | 7,896 | 15,924 | |||||
Loss on disposal of equipment | 1,096 | 3,494 | |||||
Rebate payment | (302,041 | ) | (494,543 | ) | |||
Changes in non‑cash working capital | 685,343 | (34,719 | ) | ||||
Net cash provided by (used in) operating activities | 517,143 | (1,176,766 | ) | ||||
Financing activities | |||||||
Proceeds from issuance of shares | - | 3,102,750 | |||||
Share issuance costs | - | (364,366 | ) | ||||
Proceeds on exercise of compensation units & stock options | 170,291 | 13,960 | |||||
Net cash provided by financing activities | 170,291 | 2,752,344 | |||||
Investing activities | |||||||
Acquisition of property and equipment | (12,610 | ) | (2,924 | ) | |||
Net cash used in investing activities | (12,610 | ) | (2,924 | ) | |||
Effect of exchange rate changes on cash and cash equivalents held in foreign currency | (48,483 | ) | 62,231 | ||||
Cash inflow | 626,341 | 1,634,885 | |||||
Cash, beginning of year | 5,621,835 | 3,986,950 | |||||
Cash, end of year | $ | 6,248,176 | $ | 5,621,835 | |||
Supplemental cash flow information: | |||||||
Interest received during the year | $ | 14,442 | $ | 8,675 | |||
