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CORRECTION – Cortex Business Solutions Announces Q3 Fiscal 2018 Financial Results

/EIN News/ -- CALGARY, Alberta, June 12, 2018 (GLOBE NEWSWIRE) -- In a release issued under the same headline earlier today by Cortex Business Solutions Inc. (TSXV:CBX), we are advised by the company there have been numerous changes to figures in the financial tables. Complete corrected text follows.

Cortex Business Solutions Announces Q3 Fiscal 2018 Financial Results

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 $ 1,125,052     $ 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       -  
         
      1,714,801       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     (63,643,439 )     (64,896,501 )
         
      7,532,397       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     808,897       853,057       2,430,701       2,449,037  
                 
Gross Profit     2,303,946       2,077,669       6,935,770       5,672,433  
                 
Expenses                
Sales and marketing     501,039       596,473       1,675,601       1,640,534  
Research and development     479,843       500,338       1,416,573       1,403,028  
General and administrative     709,182       908,697       2,478,327       2,725,034  
Severance and termination     5,747       36,436       164,431       128,057  
                 
      1,695,811       2,041,944       5,734,932       5,896,653  
                 
Income (loss) before finance income   608,135       35,725       1,200,838       (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)   $ 644,448     $ 19,847     $ 1,253,062     $ (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)   $ 704,645     $ 117,769     $ 1,263,413     $ (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 -     -     -       -       (269,325 )     (269,325 )
Translation of foreign operations -     -     70,473       -       -       70,473  
Compensation units & stock options exercised 6,158     26,491      -       (14,442 )      -       12,049  
Deferred share units issued -     -     -       200,000       -       200,000  
Stock based compensation -     -     -       219,361       -       219,361  
             
Balance – April 30, 2017 8,990,862     60,318,006     710,705       9,531,867       (64,750,512 )     5,810,066  
             
Balance - July 31, 2017 9,069,983     60,562,286     591,752       9,526,341       (64,896,501 )     5,783,878  
             
Net income -     -     -       -       1,253,062
      1,253,062  
Translation of foreign operations -     -     10,351       -       -       10,351  
Compensation units & stock options exercised 27,163      89,132       -         (31,051 )       -        58,081  
Deferred share units exercised for shares 40,554     120,000      -       (120,000 )      -        -  
Deferred share units issued -     -     -       200,000       -       200,000  
Stock based compensation -     -     -       227,025       -       227,025  
             
Balance – April 30, 2018 9,137,700   $ 60,771,418   $ 602,103     $ 9,802,315     $ (63,643,439 )   $ 7,532,397  
 
 

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) $ 644,448     $ 19,847     $ 1,253,062     $ (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   97,323       153,229       (687,393 )     (146,393 )
               
Net cash provided by operating activities   843,049       241,456       1,298,366       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
  60,197        97,822         10,347       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  

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