Cortex Business Solutions Inc.
TSX VENTURE : CBX

Cortex Business Solutions Inc.

December 29, 2010 09:00 ET

Cortex Announces Q1 2011 Financial Results

First Quarter 2011 Financial and Operational Highlights

CALGARY, ALBERTA--(Marketwire - Dec. 29, 2010) - Cortex (TSX VENTURE:CBX) began implementation of its accelerated growth plan during the three month period ended October 31, 2010. Part of this growth strategy was expansion into the United States and the other part was increasing focus on our recurring revenue stream. The Company continues to see growth in the number of suppliers on our Cortex Trading Partner Network ("CTPN" or "Network") resulting in an increase in the access and usage fees revenue stream of 35% over the same three month period ended October 31, 2009 and 12% growth over the three month period ended July 31, 2010. These increases are the result of organic growth from continued on boarding of Husky suppliers and increased activity in the oil and gas industry. The additional revenue generation and Network growth from Apache Canada/US, Bonavista, Murphy Oil, and Petro-Hunt will begin to materialize over the upcoming six months. 

Highlights of Q1 are:

  • Total revenue for the three month period ended October 31, 2010 was $731,573 which is a 14% increase over the most recent quarter ended July 31, 2010 of $643,823. 
  • Access and usage fee revenue has grown 12% or $57,107 compared to the most recent quarter ended July 31, 2010 and 35% or $138,400 (2011 - $529,060, 2010 - $390,660) over the same quarter 2010.
  • Volume of transactions flowing through the Network continues to grow, increasing 103% since the most recent quarter ended July 31 2010. 
  • Cortex has increased the number of contracted customers to over 3,800, an increase of 27% since July 31, 2010.
  • On September 2, 2010 Cortex announced system testing and set up has been completed and together with Apache, Cortex has begun connecting Apache Canada suppliers with the goal to achieve over 80% automation through Cortex. On November 1, 2010, Apache Canada and its suppliers began transacting on the Network. Apache US is scheduled to begin transacting in January 2011 which includes a supplier on boarding program to reach over 2,000 new suppliers. 
  • On October 18, 2010 Cortex announced, together with its US partner, Full Circle Systems ("Full Circle") the signing of Petro-Hunt, LLC ("Petro-Hunt") onto the CTPN. Petro-Hunt is a Dallas based independent producer with significant oil and gas operations throughout the United States. Petro-Hunt and their suppliers are scheduled to begin transacting in the spring of 2011.
  • In December 2010, Cortex Business Solutions Inc, together with its partner Powervision Software Inc. ("Powervision"), announced the signing of two new hub projects with a mid-sized natural gas-focused Canadian energy corporation based in Calgary and Northern Blizzard Resources.

The Company continues to implement its business plan which has resulted in the accelerated growth of our Company, revenue, Network and brand. Due to the acceleration of our US expansion, pipeline of opportunities and current signed contracts, Cortex will continue to invest in the manpower and resources needed to meet demand. 

    Total Revenue   Access and Usage fees revenue   Net Loss   Basic and diluted loss per share
2011                
                 
Quarter One   $731,573   $529,060   $(2,484,339)   $(0.01)
2010                
                 
Quarter Four   $643,823   $471,953   $(3,837,184)   $(0.03)
Quarter Three   897,822   $448,146   (1,429,583)   (0.01)
Quarter Two   1,263,592   $447,742   (744,084)   (0.01)
Quarter One   1,522,382   $390,660   (72,009)   (0.00)
2009                
                 
Quarter Four   $434,995   $349,908   $(1,395,259)   $(0.012)
Quarter Three   353,184   $299,266   (1,611,614)   (0.015)
Quarter Two   318,113   $273,250   (1,677,054)   (0.016)

Outlook

During fiscal 2011, Cortex will continue expanding the Network, by adding additional buying organizations and supplier groups. The growth strategy includes a strong presence in the U.S. marketplace. Through current partnerships and potential new partnerships, Cortex will continue to grow the size of the Network, increasing access and usage fees. Cortex will continue to explore new revenue, industry and partnership opportunities in Canada and the US. In addition to growth from an ongoing strong relationship with Husky Energy, Cortex will begin to see increased revenue in fiscal 2011 from increased transaction volumes with Apache Corporation, Bonavista, Murphy and Petro-Hunt and their suppliers which have began transacting subsequent to October 31, 2010. Organic Network growth in companies currently connected as well as transaction growth has provided a solid foundation. Strategic partnerships with Full Circle, Basware and Powervision are providing numerous opportunities to add buying organizations in both Canada and the US over the next 2 quarters.

Management began to invest in expansion projects to incorporate new technology in our core service, expanded sales efforts in both Canada and the US and expansion project into new industries. These projects are important for the accelerated growth of the Network and will provide significant opportunities for the Company in the future. The validation of Cortex Solutions in the marketplace together with a strong balance sheet at July 31, 2010, has increased the credibility and acceptance of the Cortex Solutions resulting in numerous opportunities to expand. The Company's pipeline of new suppliers and buyers has strengthened significantly resulting in accelerated growth of the network. Management expects to complete more partnerships, announce more buying organizations joining the Network in both Canada and the US and continue increasing recurring revenue towards break even in 2011.

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.

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.

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

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