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Cortex Business Solutions Announces Third Quarter 2016 Financial Results

CALGARY, ALBERTA – June 9, 2016 - Cortex Business Solutions Inc. (TSXV: CBX), an online business-to-business network as a service, that helps companies reduce invoice processing times by connecting and interacting with each other, today announces the results for the three and nine months ended April 30, 2016.

Sandra Weiler, CFO of Cortex Business Solutions commented “Cutting costs is difficult for any company, but it is considerably more difficult to exhibit the discipline needed to maintain cost reductions without negatively impacting the company’s overall performance. Cortex has shown over the past 12 months a willingness to reduce costs and improve adjusted EBITDA, while improving other areas of the business, which has moved us closer to profitability than ever before.”

“The Company continues the financial discipline required to drive costs to appropriate levels while remaining focused on investing in strategic priorities to enable long-term growth” commented Joel Leetzow, President and CEO of Cortex Business Solutions, “our strategy remains expanding further into other verticals to minimize the fluctuations in commodities pricing. As well, we are recommitting to our growth strategies in the United States by hiring a Texas based VP of Sales giving us boots on the ground in our targeted geographical area”.

Three months ending April 30, 2016;

  • Adjusted EBITDA of $(80)K, an improvement of 93% over same quarter last year.
  • Net cash used in operating activities of $206K, an improvement of 85% over same quarter last year.
  • Revenue of $2.4M, down 9% over same quarter last year.
  • Access fees up 14% to $1.4M
  • Usage fees down 30% to $0.85M
  • Gross profit, net of amortization improved to 63%
  • Three new buying organizations signed in the quarter for an estimated $200K in annualized revenue. Internal efficiencies are continuing to be improved with the re-architecture of our CRM and various other initiatives to improve data management and increase productivity.
  • We are in the process of moving the production environment to a managed service agreement. This will provide Cortex with the following benefits:
    • Eliminate the expenditure spikes in purchasing our own equipment
    • Re-purpose the existing production equipment in our corporate infrastructure further reducing capital expenditures
    • Reduce the amount spent on maintenance contracts
    • Enhance our disaster recovery and back-up options
    • The ability to add capacity at an accelerated rate

Nine months ended April 30, 2016;

  • Adjusted EBITDA of $(448)K, an improvement of 89% over same period last year.
  • Net cash used in operating activities of $744K, an improvement of 83% over same period last year.
  • Revenue of $7.6M, down 6% over same period last year.
  • Access fees up 22% to $4.1M
  • Usage fees down 23% to $3.1M
  • Gross profit, net of amortization improved to 63%

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Investor Relations Contacts:

Joel Leetzow Sandra Fawcett (formerly Weiler)         Andrew Stewart
President and CEO CFO Director, Marketing & Investor Relations
jleetzow@cortex.net                  sfawcett@cortex.net astewart@cortex.net