NYWKF - NTG Clarity Networks Announces an Improved Third Quarter 2021 Financial Results
(TheNewswire)
Toronto, ON - T heNewswire - November 18, 2021 - NTG Clarity NetworksInc. (TSXV:NCI) , announcesits third quarter results for the period ended September 30, 2021 (allfigures in Canadian Dollars).
We have continued our road back to profitability withthe fifth straight quarter of positive results. This quarter’s netincome was $237,671, making the year to date 2021 a total of $947,211or 12.2% of revenue. Our gross margin for this quarter was 43% and theincome from operations was $526,474.
In July, we announced our intention to initiate aboard-approved Shares for Debt transaction. In August we closed thetransaction and issued 40,000,000 shares and reduced our outstandingpayables/loans by $2,000,000.
Last quarter, we introduced the NTGapps DigitalToolbox; a cloud-based suite of digital tools for Telecom Operators,along with orders we had received for the product of approximately$1.1 Million. In August we announced two new POs for the producttotaling $800K.
Other announced POs valued at approximately $140K werefor support of other NTG products.
In September we announced receipt of a Letter of Intent(LOI) for the purchase of NTG’s Asset Management, Network Discovery,Discrepancy and Reconciliation software. The value of this newcustomer’s LOI is approximately $4.5M and we anticipate somecontribution to revenue in Q4 2021.
Consolidated revenue for the three months endedSeptember 30, 2021 was $2,844,338 compared to $2,233,248 for the sameperiod in 2020 and is made up of product-related revenue andprofessional services. Year to date revenues are up by 22% from 2020($7,763,897 compared to $6,359,223).
Gross margin for Q3 2021 was $1,213,537 or 43% comparedto $846,241 or 38% for Q3 2020. For the nine months ended September30, 2021 the gross margin was $3,338,310 or 43%, compared to$2,360,901 or 37% for the same period in 2020.
Selling and marketing expenses for the three and ninemonths ended September 30, 2021 were $261,654 and $616,117respectively compared to $187,105 and $654,355 in the previous year.The 40% increase in the selling and marketing in the quarter occurredas COVID-19 restrictions are being lifted and travel and some customervisits are resuming. YTD selling expenses were down by 6%.
G&A expenses for the three and nine months endedSeptember 30, 2021 were $397,016 and $1,110,561 respectively comparedto $384,815 and $2,172,818 in the previous year. G&A costs havedecreased in the quarter, and year to date significantly (49%) due tolower salary costs and the capitalization of work done on our Smart2Goproduct.
Working capital as at September 30, 2021 was a deficitof $4,440,638 compared to a deficit of $6,336,678 at December 31,2020.
Incomestatement highlights for the three and nine months ended September 30,2021 and 2020
| 3 Months Ended |
| 9 Months Ended |
| Sept 30, 2021 |
| Sept 30, 2020 |
| Sept 30, 2021 |
| Sept 30, 2020 |
| REVENUE |
| $ |
| 2,844,338 |
| $ |
| 2,233,248 |
| $ |
| 7,763,897 |
| $ |
| 6,359,223 |
| COST OF SALES |
| 1,630,801 |
| 1,387,007 |
| 4,425,587 |
| 3,998,322 |
| GROSS PROFIT |
| $ |
| 1,213,537 |
| $ |
| 846,241 |
| $ |
| 3,338,310 |
| $ |
| 2,360,901 |
| Expenses |
| 989,129 |
| 632,277 |
| 2,259,911 |
| 3,321,159 |
| Foreign exchange loss (gain) |
| 28,393 |
| (32,551) |
| (49,549) |
| 190,611 |
| Net Income before taxes |
| 252,801 |
| 246,515 |
| 1,028,850 |
| (1,150,869) |
| Other - Exchange (loss) gain on translation |
| (15,130) |
| 5,544 |
| (81,640) |
| (215,524) |
| Net Income after taxes |
| $ |
| 237,671 |
| $ |
| 252,059 |
| $ |
| 947,210 |
| $ |
| (1,366,393) |
| Per Share |
| $ |
| 0.00 |
| $ |
| 0.00 |
| $ |
| 0.01 |
| $ |
| (0.01) |
Balance Sheet Highlights for the nine months ended September 30,2021 and December 31, 2020
| September 30, 2021 |
| Dec. 31, 2020 |
| Current Assets |
| $ |
| 3,151,453 |
| $ |
| 2,154,910 |
| Current Liabilities |
| $ |
| 7,592,091 |
| $ |
| 8,491,588 |
| Long-Term Debt |
| $ |
| 6,538,705 |
| $ |
| 7,217,784 |
| Shareholder’s Equity |
| $ |
| (23,767,724) |
| $ |
| (24,796,574) |
Outlook
Customers have been recognizing our quality of work andtrack record and this has resulted in increased work from majorcustomers and work from new customers in Canada and Saudi Arabia(KSA). KSA’s economic rebound, due in large part to increasingprices for oil, is anticipated to show increasing demand for ourproducts and services. Our Q3 2021 revenue is the highest quarterlyrevenue since Q1 2019 and we have been profitable for the fifthstraight quarter.
Though COVID-19 continues to have an impact on ourcustomers and operating activities, we are adjusting processes andprocedures as required. NTG’s offices have returned to normaloperation, however, onsite/remote customer work varies from customerto customer. Travel restrictions continue to slow the movement ofpersonnel. We are still required to quarantine our personnel for twoweeks in another country (Bahrain or Maldives) prior to arriving inKSA. This has resulted in increased travel and accommodation costs.
Offshoring and outsourcing of our technical, IT andprofessional services resources continues to contribute to our revenuein Egypt and has helped us grow and expand our business into thegovernment and financial sectors.
The NTG roadmap for the foreseeable future is tointroduce 4 new tools every month to the NTGapps Digital Toolbox.To-date we have 24 digital tools. This new concept will allow the SMEsand Telecom Operators to have immediate access to the digital toolsthat meet their needs. NTGapps are easily integrated into theoperators’ existing systems with very little effort. For moreinformation, visit www.ntgapps.com .
In an unrelated matter, the Company announced thatshare options will be issued for the President and CEO of the Company;Ashraf Zaghloul will receive 500,000 share options; and Kristine Lewiswill receive 500,000 share options. Each option will be exercisable ata price of $0.05 per share and will vest immediately.
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 275 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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