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Press release from Marketwire

Cortex Announces Fiscal 2012 Annual Financial Results

Thursday, November 22, 2012

Cortex Announces Fiscal 2012 Annual Financial Results09:01 EST Thursday, November 22, 2012CALGARY, ALBERTA--(Marketwire - Nov. 22, 2012) - Cortex Business Solutions Inc. ("Cortex" or the "Company") (TSX VENTURE:CBX) is pleased to announce the Company's FY 2012 Financial and Operational Highlights. Complete financials and MD&A are available on Sedar (www.sedar.com).Revenue was $4.9 million in the Fiscal Year of 2012, compared to $3.1 million in the Fiscal Year 2011, reflecting a 61% growth in total revenue and a 63% recurring revenue growth year over year.At the end of the 2012 fiscal year, Cortex had signed agreements with 43 buying organizations ("Hubs"), 28 more than at the end of fiscal 2011. At the end of fiscal 2012, 21 of the 43 Hubs were available to receive invoices from their suppliers electronically. Hubs are the main driving force for the growth in the Company as each new Hub brings a list of additional customers to the Network and provides additional destinations for existing users to send to. Cortex added 2,860 new customers and increased total transactions through the system 65%.Cortex had a net loss of $9,303,590 or $0.05 per basic and diluted share, compared to net loss of $9,548,936 or $0.06 per basic and diluted share. This modest improvement in net loss year over year is the result of the Company's continued investment into US expansion, market development and the new technology platform. The expenditure in these areas has been declining over the last two quarters of fiscal 2012 and are expected to continue to decline for fiscal 2013."Cortex continues to grow our network of companies with excellent growth in 2012 specifically in the areas of new Hub signings and transaction growth," said Art Smith, President & CEO of Cortex. "Our revenue growth is accelerating with the network effect of our recurring revenue and we expect 2013 to be a significant year for the company as we expand our network in Canada and the United States."OutlookCortex will continue to expand the Network by adding buying organizations (Hubs) and their supplier groups through current and new partnerships. Cortex will explore new sources of revenue, industry and partnership opportunities in Canada and the U.S.Building on the strong Network growth in 2012, Cortex begins fiscal 2013 with 43 buying organizations signed to the Network, 21 Hubs active on the Network and 7,933 contracted suppliers. This is a strong improvement over where we started fiscal 2012 with 15 buying organizations and 5,073 suppliers. Our continued strong relationship with our clients will provide continued month over month revenue growth from increasing transaction volumes between our 43 Hub customers and their suppliers.Organic Network growth, both in the number of customers connected and the number of transactions they do, has provided a solid revenue foundation for the Company. Management expects to see continued Hub signings in 2013 projecting to exit fiscal year ended July 31, 2013 with over 100 Hub customers.Strategic partnerships with Full Circle, Powervision, Pandell, Basware, and Verian Technologies are providing numerous opportunities to add buying organizations in both Canada and the U.S.With the addition of multiple buying organizations to the Network, management expects the growth of access and usage fee revenue stream to accelerate. This growth was 63% Fiscal year 2012 over Fiscal year 2011.In the coming year, Management expects to complete more partnerships, launch new features to the Network and continue increasing recurring revenue.Organic Network growth, both in the number of customers connected and the number of transactions they do, has provided a solid revenue foundation for the Company. Management expects to see continued Hub signings in 2013 projecting to exit fiscal year ended July 31, 2013 with over 100 Hub customers.The Company has applied to the TSX Venture Exchange for the issuance of 2,207,900 common shares in alignment with the Company's Employee Performance Management ("EPM") Program. The issuance of these shares was voted on at the Company's AGM on June 11, 2012. These shares were applied for at a deemed price of $0.225. Of this amount 366,500 are to be issued to insiders.Annual Results Conference CallTo call in for the live conference call please contact:Toll-Free Dial-In Number: (877) 440-9795Local Dial-In #: (416) 340-9432 (Toronto)Time: 2:00 PM MSTA replay of the conference call will be available two hours after the call's completion and will expire by 11:59 pm EST on November 29, 2012. You may listen to the recording by calling (905) 694-9451 or toll-free at 1-800-408-3053. The password for the replay is 6143140.About Cortex Business SolutionsCortex Business Solutions Inc. is a leading eCommerce service company that improves efficiencies, reduces costs and streamlines procurement and supply chain processes for its customers. Accessing the Cortex Network enhances the exchange of business critical documents, such as purchase orders, receipts and invoices resulting in improved cash flow management and business controls, while reducing day's outstanding and administrative costs. Cortex is a low cost, low risk solution that can be implemented quickly by leveraging its customers existing business environment - evolving business. For more information please visit our website at www.cortex.net.Forward-Looking StatementsStatements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.Cortex Business Solutions Inc.Consolidated Statements of Financial Position(Prepared in Canadian dollars)July 31 2012July 31 2011AssetsCash$6,750,970$9,695,210Accounts receivable847,847514,877Prepaids and deposits168,160213,0637,766,97710,423,150Property and equipment611,082744,565Intangible asset2,970,2451,833,019$11,348,304$13,000,734LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities$1,842,431$1,613,030Current portion of deferred revenue710,598688,7662,553,0292,301,796Deferred revenue342,368771,8432,895,3973,073,639Shareholders' EquityShare capital41,858,96333,851,308Warrants753,2021,135,282Contributed surplus5,029,2714,825,444Deficit(39,188,529)(29,884,939)8,452,9079,927,095$11,348,304$13,000,734Cortex Business Solutions Inc.Consolidated Statements of Loss and Comprehensive LossFor the years ended July 31, 2012 and 2011(Prepared in Canadian dollars)20122011RevenueAccess and usage fee$4,093,869$2,512,978Integration fees552,601-Set-up fees290,847399,527Project management-150,0004,937,3173,062,505ExpensesGeneral and administrative1,356,068734,477Internet and hosting costs124,36385,696Market expansion and product development2,273,8501,875,279Professional fees181,896163,642Rent322,493317,849Salaries, employee benefits and subcontract8,922,9048,032,615Stock-based compensation496,3961,233,010Amortization603,562224,76314,281,53212,667,331Loss before the following(9,344,215)(9,604,826)Finance income40,62555,890Net loss and comprehensive loss$(9,303,590)$(9,548,936)Net loss per share-basic and diluted$(0.05)$(0.06)Cortex Business Solutions Inc.Consolidated Statements of Cash Flows For the years ended July 31, 2012 and 2011(Prepared in Canadian dollars)20122011Cash provided by (used in)Operating activitiesNet loss$(9,303,590)$(9,548,936)Items not affecting cashStock-based compensation496,3961,233,010Amortization603,562224,763Salaries paid in shares10,687133,711(8,192,945)(7,957,452)Changes in non-cash working capital332,878(265,966)Net cash used in operating activities(7,860,067)(8,223,418)Financing activityProceeds from issuance of shares and warrants, net of issue costs6,647,4028,431,249Net cash from financing activity6,647,4028,431,249Investing activitiesAcquisition of property and equipment(125,364)(406,498)Software development costs(1,481,941)(1,833,019)Changes in non-cash working capital(124,270)84,012Net cash used in investing activities(1,731,575)(2,155,505)Cash outflow(2,944,240)(1,947,674)Cash, beginning of year9,695,21011,642,884Cash, end of year$6,750,970$9,695,210FOR FURTHER INFORMATION PLEASE CONTACT: The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release. Contact Information: Brisco Capital PartnersScott Koyich(403) 215-5979skoyich@briscocapital.com