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 11 new purchase orders (POs) for a total of $2.1M CAD in new work and renewals for existing customers in the Financial, Government, and Telecom sectors.

 

These POs represent continued strong relations with our existing customers. The new work expands on the products and services we already provide, while the renewals continue some already large engagements with a key client in the Financial sector.

 

Also noteworthy is that the expected average gross margin on these contracts is approximately 40%, putting us on track to reach our targeted gross margin for 2024. The breakdown of the work is as follows, with all customers in the Middle East:

 

• $1.967M in renewals across 9 POs to provide on-site professional services to an existing customer in the Financial sector. 

 

• $185K in new work: 

  • 175K to provide offshore professional services for two months for an existing customer in the Government sector. 

  • $10K to provide expanded functionality to our NTGapps platform for an existing customer in the Telecom sector.
     

“It’s amazing to see the continued votes of confidence from our customers in renewing and expanding our engagements,” said Adam Zaghloul, Vice President, Strategy & Planning of NTG Clarity. “Our strong reputation for providing quality professional services at a competitive price is setting us up for continuing success.”

   

On an unrelated note, following the release of our 2023 year-end financials, we have received many inquiries concerning the company’s gross margin for the year. For the twelve months ending December 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 of approximately 33%.

  

Many investors were expecting a higher gross margin; however, several factors resulted in a higher-than-expected cost of sales in the fourth quarter of 2023:

 

1. Project timing 

Q4 had less of project work and product licenses which have much higher gross margins.

1. Customer acquisition strategies 

In order to secure new work with new clients and expand contracts with existing clients, we used strategies like discounts and free trials. As promotion periods have since expired, we expect our margins to recover.

1. Consulting costs 

In order to fill short-term demand for professional services, we hired several temporary higher-cost contractors. This is shown in a new “Consulting” line in our cost of sales breakdown. Many of these consultants have since transitioned to full-time status with higher gross margins.

 

The combination of these factors in Q4 led to a gross margin lower than usual; however, we don’t expect these strategies to be long-term aspects of our business, and the company is still on track to meet the previously released targets for 2024.

 

About NTG Clarity Networks Inc.

NTG Clarity Networks’ vision is to be a global leader in digital transformation solutions. As a Canadian company established in 1992, NTG Clarity has delivered software, networking, and IT solutions to large enterprises including financial institutions and network service providers. More than 700 IT and network professionals and associates provide design, engineering, implementation, software development and security expertise to the industry’s leading 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.

 

For Further Information:

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 its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.