Cortex Business Solutions Inc reports 7.2% revenue decline in FY2016
27.10.2016 • About Cortex Business Solutions Inc (
$CBX) • By InTwits
Cortex Business Solutions Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cortex Business Solutions Inc doesn't have a profitable business model yet: FY2016 ROIC is -48.6%
- EBITDA Margin is relatively stable: in FY2016 vs. in FY2015 vs. -177.0% in FY2012
- Cortex Business Solutions Inc spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 is 0.0%. Average EBITDA Margin for the same period was -48.4%0
- Cortex Business Solutions Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's in pair with industry average of 1.7%.
- CAPEX is quite volatile: 0.0029 in FY2016, 0.17 in FY2015, 0.054 in FY2014, 0.17 in FY2013, 0.13 in FY2012
- The company has unprofitable business model: ROIC is at -48.6%
- It operates with high leverage: Net Debt/EBITDA is 3.5x while industry average is -4.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cortex Business Solutions Inc ($CBX) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4.937 | 6.164 | 8.977 | 10.587 | 9.824 | -7.2% |
| Gross Profit | | 2.284 | 3.220 | 4.215 | 4.361 | 3.5% |
| SG&A | | 7.694 | 7.621 | 8.289 | 4.842 | -41.6% |
| EBITDA | -8.741 | -6.216 | -4.656 | | | |
| Net Income | -9.304 | -6.877 | -5.887 | -7.926 | -2.705 | |
Balance Sheet
|
|---|
| Cash | 6.751 | 5.179 | 9.548 | 3.987 | 5.622 | 41.0% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.125 | 0.170 | 0.054 | 0.173 | 0.003 | -98.3% |
Ratios
|
|---|
| Revenue growth | 61.2% | 24.8% | 45.6% | 17.9% | -7.2% | |
| EBITDA growth | -12.7% | -28.9% | -25.1% | | | |
| Gross Margin | | 37.0% | 35.9% | 39.8% | 44.4% | 4.6% |
| EBITDA Margin | -177.0% | -100.8% | -51.9% | 0.0% | 0.0% | 0.0% |
| Net Income Margin | -188.4% | -111.6% | -65.6% | -74.9% | -27.5% | 47.3% |
| SG&A, % of revenue | | 124.8% | 84.9% | 78.3% | 49.3% | -29.0% |
| CAPEX, % of revenue | 2.5% | 2.8% | 0.6% | 1.6% | 0.0% | -1.6% |
| ROIC | -101.6% | -87.7% | -63.5% | -94.2% | -48.6% | 45.6% |
| ROE | -101.2% | -87.7% | -63.5% | -95.5% | -49.8% | 45.6% |
Cortex Business Solutions Inc ($CBX) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 3 | 2 | 2 | -0.2% | -9.4% | -9.0% | -10.3% |
| Net Income | -1 | -1 | -1 | -1 | | | | |
Balance Sheet
|
|---|
| Cash | 7 | 6 | 6 | 6 | -23.1% | -5.5% | 11.4% | 41.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 46.2% | 45.4% | 45.1% | 40.3% | 11.0% | -0.0% | -2.6% | 10.4% |
| Net Income Margin | -30.8% | -24.2% | -23.5% | -31.8% | 42.7% | 56.6% | 39.9% | 49.9% |
Revenue and profitability
The company's Revenue decreased on 7.2%. Revenue decline showed acceleration in FY16Q4 - it was 10.3% YoY.
Gross Margin increased on 4.6 pp from 39.8% to 44.4% in FY2016. SG&A as a % of Revenue dropped on 29.0 pp from 78.3% to 49.3% in FY2016.
Net Income marign jumped on 47.3 pp from -74.9% to -27.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Cortex Business Solutions Inc's CAPEX/Revenue was 0.030% in FY2016. Cortex Business Solutions Inc showed decline in CAPEX/Revenue of 2.7 pp from 2.8% in FY2013 to 0.030% in FY2016. For the last three years the average CAPEX/Revenue was 0.76%.
Return on investment
The company operates at negative ROIC (-48.63%) and ROE (-49.85%). ROIC jumped on 45.6 pp from -94.2% to -48.6% in FY2016. ROE jumped on 45.6 pp from -95.5% to -49.8% in FY2016.
Leverage (Debt)
The company has no debt. Cash jumped on 41.0%.
Appendix 1: Peers in Technology
Below you can find Cortex Business Solutions Inc benchmarking vs. other companies in Technology industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intrinsyc Technologies Corp ($ITC) | | -21.7% | 70.8% | 24.5% | 39.2% |
| ProntoForms Corp ($PFM) | | 75.4% | 43.9% | 46.4% | 28.2% |
| Kinaxis Inc ($KXS) | | 30.3% | 15.2% | 30.3% | 27.0% |
| NexJ Systems Inc ($NXJ) | | 4.3% | -12.6% | 19.7% | 17.3% |
| Constellation Software Inc/Canada ($CSU) | | 35.9% | 37.9% | 10.1% | 15.6% |
| |
|---|
| Median (12 companies) | | 0.3% | 13.3% | 11.5% | 12.7% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 86.2% | 85.5% | 86.1% | 86.2% | 87.1% |
| ProntoForms Corp ($PFM) | 96.1% | 98.1% | 98.0% | 79.4% | |
| Espial Group Inc ($ESP) | 77.5% | 81.7% | 78.5% | 74.3% | 74.7% |
| Halogen Software Inc ($HGN) | 72.0% | 74.8% | 71.8% | 73.8% | 76.2% |
| Kinaxis Inc ($KXS) | 71.8% | 70.4% | 70.4% | 71.8% | 69.1% |
| |
|---|
| Median (12 companies) | 71.8% | 55.6% | 61.9% | 61.9% | 71.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wi-LAN Inc ($WIN) | 40.9% | 12.2% | 56.2% | 53.2% | 57.8% |
| Kinaxis Inc ($KXS) | 18.7% | 23.0% | 19.2% | 28.0% | 17.6% |
| Constellation Software Inc/Canada ($CSU) | 20.9% | 20.1% | 21.8% | 25.2% | 26.0% |
| Intrinsyc Technologies Corp ($ITC) | -10.5% | -38.8% | 2.2% | 10.8% | |
| Mitel Networks Corp ($MNW) | 10.2% | 10.0% | 7.0% | 7.7% | |
| |
|---|
| Median (14 companies) | 0.9% | 3.9% | 4.4% | 0.1% | 7.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kinaxis Inc ($KXS) | 2.9% | 2.3% | 5.0% | 4.7% | 5.0% |
| Halogen Software Inc ($HGN) | 4.9% | 9.0% | 8.4% | 2.9% | 2.6% |
| Espial Group Inc ($ESP) | 1.6% | 0.2% | 1.9% | 2.1% | 1.5% |
| ProntoForms Corp ($PFM) | 1.1% | 0.8% | 3.6% | 1.9% | |
| Critical Control Energy Services Corp ($CCZ) | | 0.5% | 1.0% | 1.6% | |
| |
|---|
| Median (14 companies) | 1.1% | 1.1% | 1.2% | 1.2% | 1.0% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 45.9% | 22.4% | 24.7% | 38.5% | 40.5% |
| Kinaxis Inc ($KXS) | | 61.8% | 63.6% | 44.0% | 22.6% |
| Halogen Software Inc ($HGN) | | -28.4% | -45.9% | -40.5% | 12.6% |
| Wi-LAN Inc ($WIN) | 2.6% | -7.6% | 8.9% | 7.4% | 8.4% |
| NexJ Systems Inc ($NXJ) | | -44.6% | -19.8% | -13.9% | 4.5% |
| |
|---|
| Median (14 companies) | -7.5% | -17.5% | 0.5% | -1.2% | 8.4% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mitel Networks Corp ($MNW) | 3.7x | 3.8x | 2.6x | 6.2x | |
| Pivot Technology Solutions Inc ($PTG) | | -0.4x | 1.1x | 4.8x | |
| Constellation Software Inc/Canada ($CSU) | 0.0x | 1.6x | 0.6x | 0.4x | -0.0x |
| Wi-LAN Inc ($WIN) | -4.9x | -12.1x | -2.3x | -1.7x | -2.0x |
| Kinaxis Inc ($KXS) | 1.9x | 4.7x | -4.2x | -3.9x | -6.3x |
| |
|---|
| Median (7 companies) | 0.9x | 1.5x | -0.8x | -1.7x | -6.3x |
|---|
