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Cortex Business Solutions Reports Q2 F2017 Financial Results

CALGARY, ALBERTA – March 14, 2017 - Cortex Business Solutions Inc. (TSXV: CBX), the online network helping companies connect and interact with each other to transmit documents and grow their businesses, today announces its three and six months ended January 31, 2017 (“Q2 F2017”) Management’s Discussion and Analysis and Condensed Interim Consolidated Financial Statements.

“We are excited to share the Q2 F2017 results today. With the restructuring and internal transformation behind us, the team continues to move forward with strong sales momentum with new and existing customers,” commented Joel Leetzow, President and CEO. “The sales organization was able to close six buyers in the quarter and to add to this momentum, our delivery organization was able to move one of these buyers through the integration process before the end of January allowing them to start transacting in the quarter.

In addition, there are lots of opportunities in our sales pipeline. We have more customers willing to work with Cortex on Case Studies to share their success stories. This has helped other buying organizations understand the benefits that can be achieved through increased automation levels, visibility into the monthly operational expenses and improved efficiencies.”

Q2 F2017 Highlights:

Cash Flow used in Operations

As the Company continues to improve its cost management and revenue the cash used in operations continues to improve.

Three months ended January 31, 2017 compared to January 31, 2016

  • The cash used in operating activities improved to $108,755 compared to $400,319 during the three months ended January 31, 2016.

Six months ended January 31, 2017 compared to January 31, 2017

  • The cash used in operating activities improved to $235,003 compared to $538,840 during the six months ended January 31, 2017 and 2016 respectively.

Revenue

The trending in revenue continues to show improvement as the oil and gas community starts to rebound as well as the investment into our sales organization starts to materialize into sales results.

Three months ended January 31, 2017 compared to January 31, 2016

  • Total revenue improved 6% to $2,721,676 Q2 F2017 compared to Q2 F2016 of $2,558,573.
  • Access and usage fees were down 2%:
    • Access fees grew 2%,
    • Usage fees declined 7%,
  • Integration and set up fees were down 26%, and
  • Project management fees were up 6130%.
  • Billable transactions improved 3% while active suppliers decreased 10%.

Six months ended January 31, 2017 compared to January 31, 2017

  • Total revenue was flat at $5,190,744 compared to $5,185,845 during the six months ended January 31, 2017 and 2016 respectively.
  • Access and usage fees were down 5%:
    • Access fees grew 4%,
    • Usage fees declined 15%,
  • Integration and set up fees were down 52%, and
  • Project management fees were up 2010%.
  • Billable transactions were down 5%.

Expenses

The cost controls for non-revenue generating activities continued into Q2 F2017. The maintenance of these costs did not limit the Company’s ability to deliver on sales and maintain customer satisfaction levels. The sales and marketing expenditures in the quarter grew in line with the size of the sales team and the resulting travel required to close six buyers in the quarter.

Three months ended January 31, 2017 compared to January 31, 2017

  • Total expenses declined 9%.
  • Cost of sales declined 45%
  • Sales and marketing expenses increased 80%
  • Research and development expenses declined 6%
  • General and administrative expenses increased 18%
  • Severance and employee termination costs declined 34%

Six months ended January 31, 2017 compared to January 31, 2017

  • Total expenses declined 17% or $1,145,791.
  • Cost of sales declined 43%
  • Sales and marketing expenses increased 55%
  • Research and development expenses declined 16%
  • General and administrative expenses declined 3%
  • Severance and employee termination costs declined 43%

“Q2 F2017 was a great follow up to Q1 F2017.” said Sandra Fawcett, CFO of Cortex. “The Company was able to improve its gross profit from 67% in Q1 F2017 to 72% for Q2 F2017 ending at 69% for the six months ended January 31, 2017. As the Company continues to maintain its cost structure, the additional sales will continue to improve the gross profit.”

 

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 15, 2017

Time: 10:00 a.m. Eastern time (8:00 a.m. Mountain time)  

Toll-free dial-in number:  1-866-225-0198

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 22, 2017.

Toll-free replay number:  1-800-408-3053

Toll replay number: 1-905-694-9451 

Replay ID:  1982971 

 

Download full release

 

About Cortex Business Solutions

Cortex Business Solutions Inc. (TSXV: CBX) is a business-to-business network that enables electronic invoicing for buying and supplying organizations. The Cortex network offers flexible connection methods to reduce the time required to process invoices and tools that 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. 

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