NYWKF - NTG Clarity Networks Announces an Improved Third Quarter 2020 Financial Results
(TheNewswire)
Toronto, ON - T heNewswire - November 2, 2020 - NTG Clarity NetworksInc. (TSXV:NCI) (OTC:NYWKF), announces its third quarterresults for the period ended September 30, 2020 (all figures inCanadian Dollars). We are pleased to see that despite the ongoingdifficulties, we have returned to profitability in Q3 2020 with a netprofit of $246,515.
The ongoing COVID-19 pandemic measures present asignificant source of economic uncertainty in 2020 and there have beenimpacts on NTG sales activities and collections have slowed. Thoughrevenues have strengthened in Q3 2020, collections and cash flow stillremain an issue.
Consolidated revenue for the three and nine monthsended September 30, 2020 to $2,233,248 and $6,359,223 compared to$575,594 and $6,227,237 for the same periods in 2019 and is made up of product-related revenue and professionalservices.
The gross margin for Q3 2020 was $846,241 or 38%. Yearto date gross margin was $2,360,901 or 37%.
Selling and marketing expenses for the three and ninemonths ended September 30, 2020 were $187,105 and $654,355respectively compared to $617,450 and $1,483,505 in the previous year.This 70% decrease in the selling and marketing in the quarter (56%year to date) was the result continued customer site closures, andrestricted travel and customer visits, suspended trade shows, andreduced salaries.
G&A expenses for the three and nine months endedSeptember 30, 2020 were $384,815 and $2,172,818 respectively comparedto $941,281 and $2,020,750 in the previous year. G&A costs havedecreased in this period due to reduced salaries and no Kuwaitexpenses compared to the same period last year. In Q3, as in Q2 2020,there were no salaries accrued or paid for employees and management inthe Canadian office due to COVID-19.
Working capital as at September 30, 2020 was a deficitof $5,870,854 compared to a deficit of $4,490,883 at December 31,2019.
Incomestatement highlights for the three and nine months ended September 30,2020 and 2019
| 3 Months Ended |
| 9 Months Ended |
| Sept 30, 2020 |
| Sept 30, 2019 |
| Sept 30, 2020 |
| Sept 30, 2019 |
| REVENUE |
| $ |
| 2,233,248 |
| $ |
| 575,594 |
| $ |
| 6,359,223 |
| $ |
| 6,227,237 |
| COST OF SALES |
| 1,387,007 |
| 1,393,617 |
| 3,998,322 |
| 4,486,129 |
| GROSS PROFIT |
| $ |
| 846,241 |
| $ |
| (818,024) |
| $ |
| 2,360,901 |
| $ |
| 1,741,107 |
| Expenses |
| 632,277 |
| 4,387,045 |
| 3,321,159 |
| 6,878,433 |
| Foreign exchange loss (gain) |
| (32,551) |
| 33,913 |
| 190,611 |
| 212,887 |
| Net Income before taxes |
| 246,515 |
| (5,238,982) |
| (1,150,869) |
| (5,350,213) |
| Other - Exchange (loss) gain on translation |
| 5,544 |
| 28,516 |
| (215,524) |
| 155,296 |
| Net Income after taxes |
| $ |
| 252,059 |
| $ |
| (5,210,467) |
| $ |
| (1,366,393) |
| $ |
| (5,194,917) |
| Per Share |
| $ |
| 0.00 |
| $ |
| (0.09) |
| $ |
| (0.01) |
| $ |
| (0.09) |
Balance Sheet Highlights for the nine months ended September 30,2020 and December 31, 2019
| September 30, 2020 |
| Dec. 31, 2019 |
| Current Assets |
| $ |
| 2,281,590 |
| $ |
| 2,588,976 |
| Current Liabilities |
| $ |
| 8,152,444 |
| $ |
| 7,079,859 |
| Long-Term Debt |
| $ |
| 7,100,712 |
| $ |
| 7,100,712 |
| Shareholder's Equity |
| $ |
| (12,804,409) |
| $ |
| (12,102,151) |
Outlook
COVID-19 continues to impact NTG in the form of lowerthan expected revenues and slower collections.
In Q3 2020, existing projects resumed and employees arenow working either on customer sites or remotely.
COVID-19-related business changes, such as thecancellation of marketing events, customer in-person meetings andtravel, combined with management mandated salary reductions, havecombined to reduce cost of sales by 16% and selling expenses by46%.
In Q3 2020 our revenue amounts were stronger and weshowed a net profit of $246,515. We also announced three new projectsthat we anticipate will be starting in Q4 2020:
-
- a significant project in a government department inthe Gulf area to provide technical resources (24 to 36-months;$1.9M).
- a project to provide technical resources to a majortelecom operator in Canada (1 year; $375,000).
- another project in a government department in theGulf area to provide technical resources (3 year; $1M).
It remains uncertain how long COVID-19 conditions willcontinue and what long-term impact they will have on our customers,our business and cash flows.
About NTG Clarity NetworksInc.
NTG Clarity Networks' vision is to be a global leaderin providing networking solutions. As a Canadian company establishedin 1992, NTG Clarity has delivered networking, IT and network enabledapplication software solutions to network service providers and largeenterprises. More than 300 network professionals provide design,engineering, implementation, software development and securityexpertise to the industry's leading network service providers andenterprises.
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.
The TSX Venture Exchange does not accept responsibilityfor the adequacy or accuracy of this release.
For Further Information:
Kristine Lewis, President, NTG Clarity NetworksInc.
Ph: 905-305-1325
Fax: 905-752-0469
Email: klewis@ntgclarity.com
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