CALGARY, ALBERTA – October 22, 2015 - 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 Q4 F2015 and F2015 Annual Report, including Management’s Discussion and Analysis and Consolidated financial statements.
Joel Leetzow, President and CEO commented, “Although Cortex faced some significant challenges in 2015 retooling, we were also able to take advantage of the current downturn in the Oil & Gas market to spend some long overdue time with our customers and partners. Listening to what they expected and how we could improve our value proposition for them has set us on a course to create what I will refer to as Cortex 2.0. This is not a version of our product, but a cultural revolution at Cortex that will prepare us for the next decade of business. I appreciate their time and willingness to work with us as partners which I think is a testament to the value we provide.
I believe that 2016 will be the year to capitalize on our strengths as a company. The changes we have made thus far are not small and they were by no means easy, but they were essential to protect our significant and loyal customer base, improve upon a product suite that pays more than it costs and ensure our dedicated partners and employees were clearly aligned with our building shareholder value. “
Fiscal 2015 Highlights:
During a year where many oil and gas companies struggled to remain profitable and grow revenue, Cortex was able to:
- Grow total revenue 18%.
- Increase recurring access and usage fee 27%.
Gross Profit and Cost of Sales
During F2015, the Company improved its gross profit from 36% to 40%.
- Amortization in fiscal 2015 was 62% higher than it was in fiscal 2014 as the Company revised its estimates of the useful life of intangible assets which accelerated its amortization.
- The cost of sales, with the impact of amortization removed, remained flat, while the total revenue line grew at 18%, resulting in an improvement to the gross profit.
The new leadership made significant changes to the companies cost structure during the last two quarters of fiscal 2015. Although these reductions will not be fully realized until fiscal 2016; the results were material in Q4 F2015.
- Total expenditures for F2015 increased 24%.
- Non-recurring severance and termination benefits were $789,325 in the year compared to $153,190 in the preceding year.
- The staff reductions carried out in Q4 F2015 will result in a reduction in annualized salaries and related expenditures of $1.4M annually. In addition there are savings related to the reduction in the officers of the Company. These will result in an additional reduction in F2016 of $625,229 compared to spend in F2015.
- Research and development costs grew 101% to $3,008,873 in fiscal 2015. The majority of the research and development costs were related to the additional team added in the year in order to complete special projects.
- The general and administrative expenses increased 10% F2015 over F2014. Included in general and administrative expenses are the transitional costs related to the change in leadership during Q3 and Q4.
- Billable transactions increased 16% F2015 over F2014. The majority of that increase was in Q1 F2015 which saw an increase in billable transactions of 25% over Q4 F2014. Q2 through Q4 was impacted by the downturn in the oil and gas industry.
- Active suppliers on the Network increased 9% at July 31, 2015 compared to July 31, 2014 to a total of 8,997 suppliers (July 31, 2014 – 8,236).
- There were 86 active buying organizations on the Network at July 31, 2015 compared to 75 at July 31, 2014. The increase of 15% in active buying organizations has contributed to the increase of active suppliers on the Network.
- The Company consolidated its share capital on a 50 to 1 basis and began trading on a consolidated basis on July 15, 2015.
Investor Relations Contacts:
|Joel Leetzow||Sandra Fawcett (formerly Weiler)||Andrew Stewart|
|President and CEO||CFO||Director, Marketing & Investor Relations|