Toronto, ON / TheNewswire / May 26, 2022 / NTG Clarity Networks Inc. (TSXV:NCI), announces its first quarter results for the period ended March 31, 2022 (all figures in Canadian Dollars).

 

In Q1 2022, revenue was the highest Q1 since 2015 and we have been profitable for the seventh straight quarter. Revenues were up 88% to $4.3M compared to $2.29M in Q1 2021. Profit was $554,342 compared to $249,727 in Q1 2021, an almost 122% increase. Our gross margin for this quarter was 32% and the income from operations was $501,137. We expect these strong quarterly results to continue in 2022 due to the new contracts announced in December 2021.

 

Professional service revenue continues to be an important strategic source of revenue for us, given its generally recurring nature (76%). The contribution of product-related revenue was higher than the same period last year (24% compared to 17% in Q1 2021). This is because of the product sales announced at the beginning of the year.

Working capital continues to improve with March 31, 2021 being a deficit of $3,296,716 compared to a deficit of $3,757,061 at December 31, 2021.

Income Statement Highlights for the Three Months Ended March 31, 2022 and 2021

	March 31, 2022		March 31, 2021
REVENUE	$	4,320,604	$	2,298,307
COST OF SALES		2,939,669		1,211,592
GROSS MARGIN	$	1,380,934	$	1,086,714
Operating Expenses		1,070,174		638,201
Foreign Exchange (Gain) Loss		(87,950)		3,624
Other Expenses		271,730		113,944
Net Income from continuing operations	$	126,980	$	330,945
Other – Exchange Gain (Loss) on Translation		427,362		(81,219)
Total Comprehensive Income for the Period		554,342		249,727
per share (basic)	$	0.00	$	0.00
per share (fully diluted)	$	0.00	$	0.00

 

Balance Sheet Highlights

	March 31, 2022		December 31, 2021
Total Assets	$	6,524,801	$	6,490,706
Total Liabilities	$	13,788,295	$	14,409,518
Shareholder’s Equity	$	(7,263,495)	$	(7,918,812)

 

Outlook

Customers have been recognizing our quality of work and track record and this has resulted in increased work from our major customers that include sales of our NTGapps digital toolbox product. KSA’s economic strength, due in large part to increasing prices for oil, has shown increasing demand for our products and services and has resulted in a 47% increase in revenue contribution for the country this quarter.

 

Some customers have retained some form of the “work from home” model and are making use of the technical, IT and professional services we offer through our Egypt Offshore Centre. We are excited about the increasing demand for this offering model as we expand our business into new verticals that include government and financial sectors. Egypt’s revenue has increased a significant 150% over the same period last year.

 

Revenues are increasing in all sectors however travel/accommodation costs have increased for both marketing and sales and cost of sales as we visit more customers and personnel return to onsite work. We are working to keep our expenses in line with the increasing revenue.

 

Finally, we are looking forward to expanding into new verticals with our software product; NTGapps digital toolbox. We are including tools related to small and medium enterprise (SME) end-to-end business operations and have already seen demand in the financial and government sectors. Of particular note is the PO we received in March for a new customer in the medical sector to deliver their digital products on the NTGapps platform. We have also seen an increased demand for our Utility software and Network Asset Management with revenue for these products making up 24% of this quarter’s revenue.

 

We are working on marketing our new NTGapps Digital Toolbox and low-code platform product in an effort to make product sales a more balanced part of NTG’s revenue stream. In February, we attended Mobile World Congress (MWC) in Barcelona. This is one of the biggest events for IT and telecommunication in the world. We presented to prospective customers and increased the awareness of NTG’s products and services. We look forward to marketing our NTGapps product in other such events throughout the year.

 

With the announcements made subsequent to quarter end of approximately $2M in received purchase orders, NTG has a backlog of $11.2M in unbilled amounts for POs on hand. This backlog amount is close to the total revenue for 2021 and is in addition to the $4.3M in revenue from Q1 2022. Additionally, we are expecting to renew several contracts with major customers that are coming up for renewal within the next few months.

  

About NTG Clarity Networks Inc.

NTG Clarity Networks’ vision is to be a global leader in providing networking solutions. As a Canadian company established 30 years ago in 1992, NTG Clarity has delivered networking, IT and network enabled application software solutions to network service providers and large enterprises. More than 400 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:

Kristine Lewis, President, NTG Clarity Networks Inc.

Ph: 905-305-1325

Fax: 905-752-0469

Email:klewis@ntgclarity.com