Operational Highlights

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Cortex Announces Fiscal Q2 2012 Financial Results

Fiscal Q2 2012 Financial and Operational Highlights (March 28, 2012)

CALGARY, ALBERTA -- (Marketwire) -- 03/28/12 -- Cortex Business Solutions Inc. ("Cortex" or the "Company") (TSX VENTURE:CBX) is pleased to announce the Company's quarter ended January 31st 2012 ("Q2 2012") Financial and Operational Highlights.

Operational Highlights

The Company's most recent quarter ended January 31, 2012 continues to see growth in access and usage, set-up and integration fees revenue ("baseline revenue") as well as continued interest in the Company's integrated product. The Company has established itself as a reputable player in the relatively new eInvoicing industry.

During fiscal Q2 2012, Cortex signed agreements with 3 new buying organizations ("Hubs"), for a total of 22 signed to date. Of these, 16 have progressed through the pilot phase and 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 Cortex Trading Partner Network ("CTPN" or "the Network") and provides an additional destination for existing Network users to send invoices to.

During the first six months of fiscal 2012, Cortex saw a 56% revenue increase (excluding interest) over the first six months of fiscal 2011. The integration fee and set-up fee revenue streams grew 129%; access and usage fee revenue grew 65% and project management fees were eliminated as planned, or 100% decrease. The baseline revenue growth for fiscal Q2 2012 compared to fiscal Q2 2011 was 59% ($407,420) reflecting the Network growth over the last year.

Cortex exited January 31, 2012 with 6,798 suppliers, an increase of 941 new suppliers in fiscal Q2 2012. The number of active contracts increased 16% from October 31, 2011 to January 31, 2012. The increase in suppliers was influential in the 10% growth in access and usage fees revenue fiscal Q2 2012 compared to fiscal Q1 2012. The combined set-up and integration fees invoiced in fiscal Q2 2012 increased 31% ($57,350) compared to the amount recognized in fiscal Q2 2012 which decreased over fiscal Q1 2012 by 59% or $179,905. As a result, baseline revenue decreased 8% fiscal Q2 2012 compared to fiscal Q1 2012.

During the quarter, Cortex continued with the rollout of our new software platform. The majority of customers in the U.S. have now been transitioned and all new U.S. customers use this platform from the start. Feedback has been very positive.

The following table illustrates the growth in some key metrics:

Operational Highlights ---------------------------------------------------------------------------- 2012 % % Q2 Change Q1 Change ---------------------------------------------------------------------------- Number of Buyer integrations Completed 16 12 In progress 6 7 Number of Contracted Suppliers 6,798 16% 5,864 16% Total documents exchanged 2,018,443 12% 1,799,926 37% Supplier initiated documents 648,026 9% 595,599 54% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- 2011 % % Q4 Change Q3 Change ---------------------------------------------------------------------------- Number of Buyer integrations Completed 11 10 In progress 4 4 Number of Contracted Suppliers 5,073 28% 3,964 22% Total documents exchanged 1,318,390 10% 1,202,928 10% Supplier initiated documents 387,959 4% 374,671 13% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- 2011 % Q2 Change Q1 ---------------------------------------------------------------------------- Number of Buyer integrations Completed 6 5 In progress 6 3 Number of Contracted Suppliers 3,252 17% 2,775 Total documents exchanged 1,095,762 18% 931,603 Supplier initiated documents 331,996 14% 291,881 ----------------------------------------------------------------------------

Financial Highlights


The increase in number of Hubs active on the Network and the rapid on-boarding of their suppliers translates into an increase in recurring revenue.

The Company earns four types of revenue from its Network;

1. Set-up revenue when Cortex first enables a customer to use the Network; 2. Integration fees that consist of integration project fees; 3. Access revenue that consists of monthly per user fees; and 4. Usage revenue charged per document initiated by the customer.

Together, these constitute baseline revenue. Access and usage revenue has a recurring nature, whereas the set-up and integration fees are one off revenues.

The addition of a Hub creates the opportunity to onboard two types of customers. The first type is a crossover customer, which means they are already on the Network, transacting with one of Cortex's existing Hubs. The second type of customer is a net new customer to the Network. The crossover customers increase the billable transactions per customer and the net new customers increase the number of customers transacting on a daily basis. Both types of customers add to baseline revenue and overall document volumes.


During fiscal Q2 2012, the Company continued its program to expand into the U.S. This program continues with five Hubs signed and a strong pipeline of potential sales. To date, Cortex has invested in setting up a U.S. subsidiary and has contracted a senior sales executive in Denver to set up a satellite sales office. Revenues from U.S. customers started in fiscal Q3 2011 and it is expected that the U.S. will become a major portion of the Company's growth strategy, understanding that the lead time for expenses will remain ahead of the revenue rewards.

Development continues on the conversion and upgrade of the Company's core system to convert it into a Cloud based system. U.S. based suppliers have started to transact in the new environment and the feedback has been positive. This is essential in order to handle increased volumes and to increase efficiencies. A Cloud based system will also allow the Company to expand internationally without additional system expenses.

Management intends to continue investing in system enhancements that will allow Cortex to automate labour intensive processes, further improving our productivity, as witnessed in a reduced average cost per supplier.

Cash position

The Company has a solid cash position at January 31, 2012 at $4.75M. These available resources will assist the go forward strategy of accelerated growth into the U.S. as well as funding operations.


Building on the strong start to fiscal 2012, Cortex continues to expand the Network by adding buying organizations (Hubs) and their supplier groups through current and new partnerships in the coming quarters. Cortex will explore new revenue, industry and partnership opportunities in Canada and the U.S.

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 an acceleration of Hub signing in fiscal 2012 and exit the fiscal year with over 30 Hub customers.

Strategic partnerships with Full Circle, Basware, Verian Technologies, Amex and Powervision are providing numerous opportunities to add buying organizations in both Canada and the U.S.

Management is investing in market expansion and product development to incorporate new technology in our core service, expanding sales efforts in both Canada and the U.S. and into new industries. These investments are important for accelerating growth of the Network and will provide significant opportunities for the Company in the future.

The validation of Cortex in the marketplace together with continued revenue growth has increased the credibility and acceptance of Cortex resulting in numerous opportunities to expand.

With the addition of multiple buying organizations to the Cortex Network, management expects the growth of access and usage fee revenue stream to accelerate. The U.S. expansion is contributing to significant increases in customers connected to the Network with over 2,000 suppliers now connected in the U.S. and a strong pipeline of U.S. hubs.

Cortex is also starting to experience the "network effect", with significant increases in monthly revenue per supplier from customers transacting with multiple buying organizations on the Network. Recurring revenue growth has accelerated and management expects this to continue for fiscal 2012.

In the next 6 months, management expects to complete more partnerships, announce more buying organizations joining the Network in both Canada and the U.S. and continue increasing recurring revenue.

The Company has applied to the TSX Venture Exchange for the issuance of 250,000 common shares to employees, including 100,000 to insiders of the Company. 150,000 common shares are being issued in alignment with our employee performance management program on the sale of a buying organization into the Network with the remaining 100,000 common shares being issued as part of an incentive bonus for joining the Company after a year of service.

About Cortex Business Solutions

Cortex 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 Statements

Statements 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.

To view the maps and charts associated with this press release, please visit the following link: http://media3.marketwire.com/docs/777692_figures.pdf

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.

Brisco Capital Partners
Scott Koyich
(403) 215-5979

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