Record Adjusted EBITDA⁽¹⁾ and cash flows from operations supported by 15% YOY revenue growth

CALGARY, Alberta, June 12, 2018 (GLOBE NEWSWIRE) -- Cortex Business Solutions Inc. (“Cortex”) (TSXV:CBX), a North American network-as-a-service e-invoicing solutions provider, today announces its three and nine months ended April 30, 2018 (“Q3 F2018”) Management’s Discussion and Analysis and Consolidated Financial Statements. 

“I believe these results are just the beginning of the momentum that we are building at Cortex. Our team has remained focused on helping our customers to deliver their own results and savings with our ever-expanding service. We have never helped as many suppliers get paid as quickly as we have in this past quarter and our recently released payments business is now one of the fastest growing income lines at Cortex. I could not be more excited with the trajectory that Cortex is on,” said Joel Leetzow, President and CEO of Cortex Business Solutions.

“Cortex was successful in growing its recurring access revenue YTD by 26% and overall YTD revenue by 15% compared to prior year. Along with another quarter of record adjusted EBITDA, these results and the large cash balance will allow Cortex to explore further growth through M&A and developing new products internally,” said Jason Baird, VP, Finance & CFO of Cortex Business Solutions. “I believe Fiscal 2018 results has confirmed that Cortex is on the right path to achieving its long-term growth strategy.”

Q3 F2018 Financial Highlights

Three months ended April 30, 2018 compared to April 30, 2017

• Adjusted EBITDA⁽¹⁾ increased 264% or by $0.4 million to $0.6 million from $0.2 million
• Positive cash flow from operating activities increased 249% to $0.8 million from positive cash flows from operating activities of $0.2 million
• Overall revenue increased 6% or by $0.2 million to $3.1 million from $2.9 million
• Access and usage fees increased 12% or by $0.3 million to $2.9 million from $2.6 million
• Gross profit improved 11% or by $0.2 million to $2.3 million from $2.1 million
• Net income improved 3,147% or by $0.6 million to $0.6 million from $0.02 million

Nine months ended April 30, 2018 compared to April 30, 2017

• Adjusted EBITDA⁽¹⁾ increased 358% or by $1.3 million to $1.7 million from $0.4 million
• Positive cash flow from operating activities increased materially to $1.3 million from positive cash flows from operating activities of $0.006 million
• Overall revenue increased 15% or by $1.3 million to $9.4 million from $8.1 million
• Access and usage fees increased 17% or by $1.2 million to $8.6 million from $7.3 million
• Access fees increased 26% to $5.6 million from $4.4 million
• Gross profit improved 24% or by $1.2 million to $6.9 million from $5.7 million
• Net income improved 565% or by $1.6 million to $1.3 million from $(0.3) million

Cash Position

The overall cash position of Cortex improved 21% to $7.6 million at April 30, 2018, 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’s 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 13, 2018
Time:		10:00 a.m. Eastern time (8:00 a.m. Mountain time)
Toll-free dial-in number:		1-800-273-9672
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 20, 2018.

Toll-free replay number:		1-800-408-3053
Toll replay number:		1-905-694-9451
Replay ID:		1177420#

About Cortex

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               
President and CEO         
jleetzow@cortex.net    
403-219-2838       
             
Jason Baird         
VP, Finance & CFO    
jbaird@cortex.net
403-219-2838    

Cortex Business Solutions Inc.
Condensed Consolidated Interim Statements of Financial Position

(Prepared in Canadian Dollars)
(Unaudited)

		April 30 2018				July 31 2017
Assets
Current Assets
Cash and cash equivalents		$	7,561,299			$	6,248,176
Short-term investments			60,000				60,000
Accounts receivable			1,092,404				1,220,442
Prepaid expenses			218,281				180,710
			8,931,984				7,709,328
Long-term receivable			112,083				98,761
Deposits			67,439				35,061
Property and equipment			112,428				178,118
Intangible assets			23,264				30,018
		$	9,247,198			$	8,051,286
Liabilities
Current Liabilities
Accounts payable and accrued liabilities		$	1,095,390			$	1,834,471
Deferred revenue			375,919				423,734
Current income tax payable			20,951				9,203
Current portion of obligations under finance  lease			22,923				-
			1,515,183				2,267,408
Deferred rent			150,445				-
Obligations under finance lease			19,511				-
			1,685,139				2,267,408
Shareholders' Equity
Share capital			60,771,418				60,562,286
Accumulated other comprehensive income			602,103				591,752
Contributed surplus			9,802,315				9,526,341
Deficit			(63,613,777	)			(64,896,501	)
			7,562,059				5,783,878
		$	9,247,198			$	8,051,286

Cortex Business Solutions Inc.
Condensed Consolidated Interim Statement of Income (Loss) and Comprehensive Income (Loss)
For the three and nine months ended April 30, 2018 and 2017

(Prepared in Canadian Dollars)
(Unaudited)

		Three months ended April 30								Nine months ended April 30
			2018				2017				2018				2017
Revenue
Access and usage fees		$	2,911,847			$	2,603,932			$	8,575,652			$	7,339,745
Integration fees			87,612				119,792				224,856				220,391
Project management and other revenue			113,384				207,002				565,963				561,334
			3,112,843				2,930,726				9,366,471				8,121,470
Cost of Sales			799,126				853,057				2,420,930				2,449,037
Gross Profit			2,313,717				2,077,669				6,945,541				5,672,433
Expenses
Sales and marketing			500,085				596,473				1,674,647				1,640,534
Research and development			473,928				500,338				1,410,658				1,403,028
General and administrative			696,160				908,697				2,465,305				2,725,034
Severance and termination			5,747				36,436				164,431				128,057
			1,675,920				2,041,944				5,715,041				5,896,653
Income (loss) before finance income			637,797				35,725				1,230,500				(224,220	)
Finance income			38,540				921				58,701				1,359
Income tax expense			(2,227	)			(16,799	)			(6,477	)			(46,464	)
Net income (loss)		$	674,110			$	19,847			$	1,282,724			$	(269,325	)
Other comprehensive earnings
Items that may be reclassified subsequently to net income (loss):
Foreign exchange gain on foreign operations			60,197				97,922				10,351				70,473
Comprehensive income (loss)		$	734,307			$	117,769			$	1,293,075			$	(198,852	)
Net income (loss) per share – basic and diluted		$	0.07			$	0.00			$	0.14			$	(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 nine months ended April 30, 2018 and 2017

(Prepared in Canadian Dollars)
(unaudited)

	Three months ended April 30								Nine months ended April 30
	2018				2017				2018				2017
Cash provided by (used in)
Operating activities
Net income (loss)	$	674,110			$	19,847			$	1,282,724			$	(269,325	)
Items not affecting cash
Stock-based compensation		78,627				67,740				427,025				419,361
Amortization		9,220				25,004				167,681				74,889
Deferred Rent		(9,400	)			-				150,445				-
Accretion on rebate provision		-				2,153				-				6,460
Loss on disposal of equipment		868				-				868				1,012
Long term receivables		21,963				(26,517	)			(13,322	)			(79,551	)
Changes in non-cash working capital		67,660				153,229				(717,056	)			(146,393	)
Net cash provided by operating activities		843,048				241,456				1,298,365				6,453
Financing activities
Proceeds on exercise of compensation units & stock options		-				5,067				58,081				12,049
Finance lease payments		(5,696	)			-				(24,371	)			-
Net cash provided by (used in) financing activities		(5,696	)			5,067				33,710				12,049
Investing Activities
Acquisition of property and equipment		(11,591	)			(548	)			(29,300	)			(2,888	)
Net cash used in investing activities		(11,591	)			(548	)			(29,300	)			(2,888	)
Effect of exchange rate changes on cash and cash    equivalents held in foreign currency		60,198				97,822				10,348				70,472
Cash inflow		885,959				343,797				1,313,123				86,086
Cash, beginning of period		6,675,340				5,574,766				6,248,176				5,621,835
Cash, end of period	$	7,561,299			$	5,918,563			$	7,561,299			$	5,707,921