NCI:CC - NTG Clarity Announces POs for Work Valued at Over $2.1M CAD and Provides Corporate Update
(TheNewswire)
Toronto, ON / TNW-Accesswire / May 2,2024 / NTG Clarity Networks Inc. (TSX.V:NCI, OTC: NYWKD); NTG Clarity is excited to announce that it has received 11new purchase orders (POs) for a total of $2.1M CAD in new work andrenewals for existing customers in the Financial, Government, andTelecom sectors.
These POs represent continued strong relations with ourexisting customers. The new work expands on the products and serviceswe already provide, while the renewals continue some already largeengagements with a key client in the Financial sector.
Also noteworthy is that the expected average grossmargin on these contracts is approximately 40%, putting us on track toreach our targeted gross margin for 2024. The breakdown of the work isas follows, with all customers in the Middle East:
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$1.967M in renewals across 9 POs to provide on-siteprofessional services to an existing customer in the Financialsector.
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$185K in new work:
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175K to provide offshore professional services for twomonths for an existing customer in the Government sector.
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$10K to provide expanded functionality to our NTGappsplatform for an existing customer in the Telecom sector.
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“It’s amazing to see the continued votes ofconfidence from our customers in renewing and expanding ourengagements,” said Adam Zaghloul, Vice President, Strategy &Planning of NTG Clarity. “Our strong reputation for providingquality professional services at a competitive price is setting us upfor continuing success.”
On an unrelated note, following the release of our 2023year-end financials, we have received many inquiries concerning thecompany’s gross margin for the year. For the twelve months endingDecember 21, 2023, NTG’s audited financials reported a revenue of$27,728,117 with a cost of sales of $18,504,982, and a gross margin ofapproximately 33%.
Many investors were expecting a higher gross margin;however, several factors resulted in a higher-than-expected cost ofsales in the fourth quarter of 2023:
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Project timing
Q4 had less of project work and product licenses whichhave much higher gross margins.
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Customer acquisition strategies
In order to secure new work with new clients and expandcontracts with existing clients, we used strategies like discounts andfree trials. As promotion periods have since expired, we expect our margins to recover.
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Consulting costs
In order to fill short-term demand for professionalservices, we hired several temporary higher-cost contractors. This isshown in a new “Consulting” line in our cost of sales breakdown.Many of these consultants have since transitioned to full-time statuswith higher gross margins.
The combination of these factors in Q4 led to a grossmargin lower than usual; however, we don’t expect these strategiesto be long-term aspects of our business, and the company is still ontrack to meet the previously released targets for 2024.
About NTG Clarity NetworksInc.
NTG Clarity Networks’ vision is to be a global leaderin digital transformation solutions. As a Canadian company establishedin 1992, NTG Clarity has delivered software, networking, and ITsolutions to large enterprises including financial institutions andnetwork service providers. More than 700 IT and network professionalsand associates provide design, engineering, implementation, softwaredevelopment and security expertise to the industry’s leadingenterprises.
Forward Looking Information
Certain statements in this release, other thanstatements of historical fact, are forward looking information thatinvolves various risks and uncertainties. Such statements relating to,among other things, the prospects for the company to enhance operatingresults, are necessarily subject to risks and uncertainties, some ofwhich are significant in scope and nature.
These uncertainties may cause actual results to differfrom information contained herein. There can be no assurance that suchstatements will prove to be accurate. Actual results and future eventscould differ materially from those anticipated in such statements.These and all subsequent written and oral forward-looking statementsare based on the estimates and opinions of the management on the datesthey are made and expressly qualified in their entirety by thisnotice. The Company assumes no obligation to update forward lookingstatements should circumstances or management's estimates or opinionschange.
Adam Zaghloul, Vice President, Strategy &Planning
NTG Clarity Networks Inc.
Ph: 905-305-1325
Fax: 905-752-0469
Email: adam@ntgclarity.com
Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in the policiesof the TSX Venture Exchange) accepts responsibility for the adequacyor accuracy of this release.
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