(TheNewswire)
Toronto, ON / TheNewswire / May 28, 2018 - NTG Clarity Networks Inc. (TSX.V:NCI), is pleased to announce its first quarter results for the period ended March 31, 2018 (all figures in Canadian Dollars).
The first quarter of 2018 saw continued financial improvement as cost cutting measures implemented over the past 18 months were gradually realized. Management is committed to balancing expenses with revenue generation and returning the Company to stable profitability, and this was accomplished in the first quarter of this year.
Consolidated revenue for the three months ended March 31, 2018 increased 34% to $4,049,061 compared to $3,007,929 for the same period in 2017 and is made up of product-related revenue, professional services and a small amount for hardware/office supplies. Professional service revenue continues to be an major source of revenue for NTG Clarity given its recurring nature (86%). The contribution of product-related revenue was lower in Q1 2018, however we anticipate this to increase going forward as we work to make product sales a more balanced part of NTG’s revenue stream.
Gross margin for Q1 2018 was $1,547,831 or 38% of revenue compared to $584,070 or 19% for the same period in 2017. We continue to work in all regions to optimize the cost of sales for our revenue growth, which resulted in a return to historical margins during the first quarter of 2018.
The Company’s operating expenses were reduced by 21% in Q1 2018 to $1,053,459 compared to $1,327,924 in the same period last year. The reduction in operating expenses was a direct result of optimizing staff, salary, selling and travel expenses to be in line with revenues.
General and administrative expenses for the three months ended March 31, 2018 were $621,086 compared to $735,076 in Q1 2017. This 16% reduction was due to the continued reduction of salaries as we reduce staff and salaries as contracts allow.
For Q1 2018, the Company recorded positive net income of $160,482 or $0.003 per share, as compared to a net loss of ($752,579) or ($0.018) per share in Q1 2017. Net income in the first quarter included an exchange loss of ($88,997) arising on translation of foreign operations.
Working capital as at March 31, 2018 was ($4,739,878) compared to ($4,990,696) at December 31, 2017. The Company continues to address its working capital deficiency with cost reductions and improving cash flow and continues to make all necessary payments under its current credit facility demands.
Income Statement Highlights for the Three Months Ended March 31, 2018 and 2017
--------------------------------------------------------------- | |March |March | | |31, |31, | | |2018 |2017 | |-------------------------------------------------------------| |REVENUE |$ |4,049,061|$ |3,007,929| |-------------------------------------------------------------| |COST OF SALES | |2,501,230| |2,423,859| |-------------------------------------------------------------| |GROSS MARGIN |$ |1,547,831|$ |584,070 | |-------------------------------------------------------------| |Operating Expenses | |1,053,459| |1,327,924| |-------------------------------------------------------------| |Other Expenses | |244,893 | |220,617 | |-------------------------------------------------------------| |Net Income before taxes |$ |249,479 |$ |(964,471)| |-------------------------------------------------------------| |Other– Exchange loss on translation| |(88,997) | |(213,280)| |-------------------------------------------------------------| |Other– Reversal of | |– | |425,172 | |impairment of unbilled | | | | | |revenues | | | | | |-------------------------------------------------------------| |Net Income after Taxes | |160,482 | |(752,579)| |-------------------------------------------------------------| | | | | | | |-------------------------------------------------------------| | | | | | | |-------------------------------------------------------------| |per share (basic) |$ |0.003 |$ |(0.018) | |-------------------------------------------------------------| |per share (fully diluted) |$ |0.003 |$ |(0.017) | --------------------------------------------------------------- -------------------------------------------------------------- | |March 31, 2018 |December 31, 2017 | |------------------------------------------------------------| |Current Assets |$ |6,739,520 |$ |6,529,437 | |------------------------------------------------------------| |Current Liabilities|$ |11,479,398 |$ |11,520,133 | |------------------------------------------------------------| |Long-Term Debt |$ |8,005 |$ |8,927 | |------------------------------------------------------------| |Shareholder’s |$ |(2,900,141)|$ |(3,065,862)| |Equity | | | | | --------------------------------------------------------------The outlook for NTG Clarity is promising with increasing revenues, new sales opportunities, a lower cost structure, and improving economic conditions. The Saudi Arabia (KSA) economy is rebounding with the increase in the price of oil, and though some recently announced work has been slower than expected to start, recurring revenue is steady.
Subsequent to quarter end, in May 2018, we were awarded a $963,400 CAD grant to develop an autonomous vehicle user interface. The two year software project will work with cutting edge technology. This and a small amount of work being done with a new Canadian customer, sets the path back to work in North America.
Q1/18 marks the most profitable quarter for the Company since Q1 2015. This is a testament to the cost cutting measures implemented in the last half of 2016 and throughout 2017, as well as the hard work and dedication of all of our employees. Management remains confident that financial and operating results will continue to improve as a resurgence in economic growth in our key operating markets is driving opportunities in both existing and new sales channels.
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 350 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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