(TheNewswire)



Toronto, ON / TheNewswire / April 30, 2018 - NTG Clarity Networks Inc. (TSX.V:NCI) reports its year end results for the fiscal year ended December 31, 2017. (all figures in Canadian Dollars).

 

NTG Clarity made great strides in 2017 as we worked to optimize costs and increase cash flow, while increasing our revenue by 26% over last year. The aggressive cost reduction strategy initiated by management in Q3 2016, began to show results in the second half of 2017, and the focus on collections has helped to steady our cash flow. We anticipate that these measures will continue to lead to improvement throughout 2018.

 

Consolidated revenues for the three months ended December 31, 2017 was $3,893,502 compared to $599,251 for the same period in 2016. Revenue for the year increased by 26% to $14,359,523 compared to $11,372,455 reported in the prior year and is primarily made up of product-related revenue, professional services and hardware sales.

 

The Corporation’s operating expenses decreased by 28% in 2017 to $5,364,665 compared to $7,401,310 in the prior fiscal year.

 

G&A expenses for the three months and year ended December 31, 2017 were $819,940 and $3,170,997 respectively, compared to $637,528 and $4,488,100 in 2016. Year to date, G&A costs were 29% lower than in 2016 as we reduced staff, salaries and consultants in Canada and KSA. We also reduced the occupancy costs in Kuwait.

 

Gross margin for Q4 2017 was 34% or $1,320,427, compared to ($2,394,476) in 2016. Gross margin for the year ended December 31, 2017 was 35% compared to 17% in 2016. Margins are stronger based on our continuing efforts to optimize costs with our revenue stream. Realistic margins are anticipated to be between 35-40%, based on the current product mix.

 

For Q4 2017, the Corporation recorded a net loss of ($409,372) compared to ($8,649,235) for the same period in 2016. For the year ending December 31, 2017, the Corporation recorded a net loss of ($1,116,183) compared to ($12,526,486) in 2016.

 

Income Statement Highlights for the Year Ended December 31, 2017 and 2016

--------------------------------------------------------- |  |December |December | | | |31, |31, | | | |2017 |2016 | | |-------------------------------------------------------| |REVENUE |$ |14,359,523 |$ |11,372,455 | | |-------------------------------------------------------| |COST OF SALES |  |9,318,018 |  |9,437,286 | | |-------------------------------------------------------| |GROSS PROFIT |$ |5,041,505 |$ |1,935,169 | | |-------------------------------------------------------| |Operating Expenses|  |5,364,665 |  |7,401,310 | | |-------------------------------------------------------| |Other Expenses |  |762,713 |  |7,165,352 |*| |-------------------------------------------------------| |Net Income |$ |(1,116,183)|$ |(12,526,486)| | |-------------------------------------------------------| |  |  |  |  |  | | |-------------------------------------------------------| |per share (basic) |$ |(0.02) |$ |(0.35) | | |-------------------------------------------------------| |per share |$ |(0.02) |$ |(0.31) | | |(fully | | | | | | |diluted) | | | | | | ---------------------------------------------------------

* In 2016, Other Expenses contained a $4 million intangible impairment and a $1.6 million bad debt write off.

 

Balance Sheet Highlights

  --------------------------------------------------------------- |  |December 31, 2017 |December 31, 2016 | |-------------------------------------------------------------| |Current Assets |$ |6,529,437 |$ |6,086,530 | |-------------------------------------------------------------| |Current Liabilities|$ |11,520,133 |$ |11,205,545 | |-------------------------------------------------------------| |Long-Term Debt |$ |8,927 |$ |12,620 | |-------------------------------------------------------------| |Shareholder’s |$ |(3,065,862)|$ |(2,820,821)| |Equity | | | | | ---------------------------------------------------------------  

In September, 2017 the bank extended the Facility 4 repayment deadline to March 1, 2018 and required NTG Clarity to pay down $50,000 per month from the principal. Subsequent to year end, in February 2018, the bank extended the repayment deadline to September 1, 2018 and requires NTG to pay down $60,000 per month from the principal.  The Company continues to meet these obligations.

Outlook

In 2017, management has worked diligently to optimize costs in keeping with the current revenue stream. Focused collection activities have resulted in a more balanced cash flow, though legacy debt remains a challenge. These activities, along with new customers in Kuwait and KSA, and expanded projects in Egypt, have contributed toward returning the Corporation to profitability.  

Looking towards the future, we remain committed to bringing NTG back to profitability and providing additional growth in 2018. We are currently working on a number of new initiatives which we expect will build on our business model and open up new revenue streams in the second half of this year.  We will also focus on capitalizing on the goodwill we have with our existing customers to expand our business and increase our margins. We will concentrate on marketing our products; NTS, StageEM and Voice Over WiFi, which are currently in high demand and have higher margins.

  

In an unrelated matter, the Company announced that 100,000 share options each will be issued for Mr. Nick Hamilton-Piercy, Mr. Zafar Farooqui, Mr. Ashraf Zaghloul, Mr. Adel Zaghloul and Ms. Kristine Lewis, as members of the Board of Directors for the Company. An additional 100,000 options will be issued to Mr. Ashraf Zaghloul and 50,000 options will be issued to each of Mr. Adel Zaghloul and Ms. Kristine Lewis, as management, All options will be exercisable at a price of $0.10 per share and will be to replace expired options.

  

About NTG Clarity Networks Inc.

NTG Clarity Networks’ vision is to be a global leader in providing networking solutions. As a Canadian company established in 1992, NTG Clarity has delivered networking, IT and network enabled application software solutions to network service providers and large enterprises. More than 400 network professionals provide design, engineering, implementation, software development and security expertise to the industry’s leading network service providers and enterprises.

 

Forward Looking Information

Certain statements in this release, other than statements of historical fact, are forward looking information that involves various risks and uncertainties. Such statements relating to, among other things, the prospects for the company to enhance operating results, are necessarily subject to risks and uncertainties, some of which are significant in scope and nature.

These uncertainties may cause actual results to differ from information contained herein. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward looking statements are based on the estimates and opinions of the management on the dates they are made and expressly qualified in their entirety by this notice. The Company assumes no obligation to update forward looking statements should circumstances or management's estimates or opinions change.

 

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

For Further Information:

Doren Quinton, President QIS Capital

Ph: 250-377-1182

Fax: 250-377-1183

Email: info@smallcaps.ca

 

Kristine Lewis, President, NTG Clarity Networks Inc.

Ph: 905-305-1325

Fax: 905-752-0469

Email: klewis@ntgclarity.com

  

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