NYWKF - NTG Clarity Networks Announces Year-End 2020 and Positive Q4 2020 Financial Results

(TheNewswire)

Toronto, ON – TheNewswire - April 29, 2021 - NTG Clarity Networks Inc.(TSXV:NCI) (OTC:NYWKF) reports its fourth quarter and year end resultsfor the fiscal year ended December 31, 2020 (all figures in CanadianDollars).

2020 was a good year for NTG that has seen a turnaroundto profitability in third and fourth quarters. We have capitalized onour track record and experience and the goodwill we have builtthroughout the years. NTG is now recognized as a provider of top tierquality service with very competitive pricing. We have added newclients to our customer base, especially in the financial sector.These are outside our traditional telecom vertical and are animportant growth opportunity for us as they are going through digitaltransformation.

Despite the COVID-19 lockdowns and the slowdown in Q22020, we have managed to keep quarter over quarter revenues strong andin Q3 and Q4 2020 we have returned NTG to profitability.

Sales for the year ended December 31, 2020 were$7,906,989 representing an 8% decline from the $8,626,429 recorded inthe prior year. The gross margin in 2020 improved to 28% compared to26% in 2019. Realistic margins are anticipated to be between 30-40%,based on the product mix. The Company posted a net loss of $1,098,617for the year, a substantial improvement from the net loss of $9.2million in the previous year.

COVID-19-related business changes, such as thecancellation of marketing events and related travel, had a significantimpact on 2020 results. NTG’s operating expenses were significantlyreduced to $3,394,410 in 2020 compared to $6,896,496 in the priorfiscal year. This is primarily because of significantly reducedselling/marketing and G&A costs as a result of office closures andCOVID-19 lockdowns.

IncomeStatement Highlights for the Year Ended December 31, 2020 and2019

Balance Sheet Highlights

Egypt

Historically, Egypt has been a challenging place to dobusiness with continued restrictions on using foreign currency forbusiness operations and on moving funds out of the country. Wemitigate much of the risk of doing business in the country as ourexpenses and the majority of our contracts in Egypt are both in thelocal currency. Additionally, most of the technical and professionalservices are based in Egypt and allow NTG to provide experiencedresources and expertise at extremely competitive prices.

This has proven to be a successful strategy because theoffshoring of resources to Egypt is becoming increasing popular, andhas resulted in NTG multiple opportunities being awarded to NTGsubsequent to year end. In addition to offshoring and our existingprofessional services outsourcing in Egypt, we are focusing efforts onour core software products and our Smart2Go low code digitaltransformation platform.

NTG Egypt’s revenue contribution continues to bestrong. In 2020, the subsidiary contributed 26% of the Corporation’srevenue (2019: 33%).

Kingdom of Saudi Arabia (KSA)

NTG has been doing business in KSA for over 15 years,and ongoing initiatives continue to show returns with 79% of ourprofessional service work and 63% of our revenue being from KSA (2019:62% and 49% respectively). NTG has developed good brand recognitionand a solid track record over the years, which is an asset to our workin the region.

Our KSA revenue has increased by 14% over 2019revenues. Additionally, new customers in the banking sector and inpublic sectors are contributing significantly to our revenue(28%).

Oman

In 2020, we continued work for our customer in Oman,who is using our NTS Network Inventory and Project Management modules.Recurring revenues in Oman from product maintenance, support, andchange requests as well as professional services contributed 11% toNTG’s revenue in 2020 (2019: 9%).

Outlook

We at NTG started 2020 with high expectations as we hadthe struggles with our indebtedness issues resolved and we hoped tosee a return to some normalcy. However NTG, along with the world,faced the challenges associated with COVID-19 and the globalshut-down. The ongoing pandemic measures presented and continue topresent a significant source of economic uncertainty and there havebeen impacts on NTG’s sales and operations.

COVID-19-related business changes such as thecancellation of marketing events and many customer in-person meetingsand travel, combined with management mandated salary reductions, havecombined to reduce our cost of sales by 12% and selling and G&Aexpenses by more than 50%.

Providing the offshoring and outsourcing of ourtechnical, IT and professional services resources has proven to be asuccessful strategy as working remotely has become increasing popular,most likely due to COVID-19. This has helped us grow and expand ourbusiness into new verticals that include government and financialsectors. We are looking forward to more contracts such as thoseannounced subsequent to year end, in Q1 2021.

Finally, with the soft release of our latest digitaltransformation software product, Smart2Go, we anticipate furtherexpansion into new verticals. Smart2Go allows enterprises to automatetheir processes and create applications by offering rapid applicationdevelopment without the need for knowledge of development languages.Smart2Go is built on NTG’s proven Workflow technology and providesboth a Portal and Mobile Apps for its users.

At the time of publishing of this report, it isuncertain how long COVID-19 conditions will last and what economicimpact they will have on our business, ongoing cash flows and ourability to continue as a going concern.

In an unrelated matter, the Company announced thatshare options will be issued for each member of the Board of Directorsfor the Company; Ashraf Zaghloul and Kristine Lewis will receive400,000 share options each; Saleem Siddiqi will receive 100,000 shareoptions; and Zeeshan Hasnain will receive 150,000 share options. Eachoption will be exercisable at a price of $0.05 per share and will vestimmediately.

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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