Toronto, ON / TheNewswire / August 17, 2017 / NTG Clarity Networks Inc. (TSX.V:NCI), a world leader in the telecommunications OSS/BSS market, today reported second quarter 2017 revenues of $4,148,957, as compared to a record $5,077,129 during the same quarter in 2016 (All amounts in Canadian dollars). For the first half of 2017, revenues were $7,156,886 as compared to $7,510,462, a 5% decline. This reduction in revenues is due mainly to the slow start to the current year. Q2 2017 revenue was up 38% from Q1 2017.

 

The Corporation’s operating expenses for the three and six months ended June 30, 2017 were $1,087,171 and $2,415,095 compared to $3,011,329 and $4,996,564 for the same periods last year, a significant reduction year to date over last year. We have aggressively reduced staff, salary, selling and travel to bring expenses more in line with revenue.

 

During the second quarter of 2017, NTG Clarity reported positive income from operations of $199,081 compared to negative income from operations of ($541,141) during the same quarter in 2016. Q2 2017 cash flow provided by operations was $132,910 compared to ($701,271) during the same period last year.

 

For Q2 2017, NTG Clarity recorded a net loss of ($85,539) compared to a net loss of ($1,009,297) for the same period in 2016. For the six months ended June 30, 2017, the Corporation recorded a net loss of ($838,118) compared to a net loss of ($2,995,754) in 2016. This is a substantial improvement as we continue to work to reduce selling and G&A costs, and to optimize cost of sales for our current revenue.

Though a significant improvement over the same period in 2016, factors contributing to the net loss continue to include end of service (severance) salary costs due to reductions of selling and G&A staff as well as rental expense obligations for unprofitable offices/accommodations which have been closed.

 

Gross margin for Q2 2017 was $1,286,252 or 31%, compared to $2,470,188 or 49% for the same period in 2016. For the six months ended June 30, 2017 gross margin was $1,870,322 or 26%, compared to $3,166,189 or 42% for the same period in 2016.

Income statement highlights for the three and six months ended June 30, 2017 and 2016

	3 Months Ended				6 Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
REVENUE	$	4,148,957	$	5,077,129	$	7,156,886	$	7,510,462
COST OF SALES		2,862,705		2,606,941		5,286,564		4,344,273
GROSS PROFIT	$	1,286,252	$	2,470,188	$	1,870,322	$	3,166,189
Expenses		1,470,969		2,593,073		2,863,217		4,940,921
Foreign exchange loss (gain)		(115,166)		801,614		41,127		816,126
Net Income before taxes		(69,551)		(924,499)		(1,034,022)		(2,590,858)
Other comprehensive (loss)		(15,988)		(84,798)		(229,268)		(404,896)
Reversal of impairment of unbilled revenue						425,172
Net Income after taxes	$	(85,539)	$	(1,009,297)	$	(838,118)	$	(2,995,754)
Per Share	$	(0.00)	$	(0.03)	$	(0.03)	$	(0.08)

Balance Sheet Highlights for the six months ended June 30, 2017 and December 31, 2016

 

	June 30, 2017			Dec. 31, 2016
Current Assets	$	6,468,299		$	6,086,530
Current Liabilities	$	11,724,953		$	11,205,545
Long-Term Debt	$	0		$	0
Shareholder’s Equity	$	(3,226,780)		$	(2,820,821)

 

In the Gulf region, NTG's main market, lower oil prices continue to affect customers’ projects, though revenue numbers are now recovering. Throughout the first two quarters of 2017, we focused on reducing our costs, which is reflected in our results this quarter. Management is continuing with cost reductions to bring the Corporation back to profitability. We are also focusing on collections and increasing sales to relieve cash flow challenges.

 

Management is pleased with another quarter of recovery and growth. It has been a long process but this is the third consecutive quarter of significant recovery in revenues and earnings and is the best net income the Company has reported since the third quarter of 2015. Management is committed to continuing this recovery and bringing NTG Clarity back to profitability in 2017.

 

In an unrelated matter, NTG would like to announce the election of Mr. Mohammed Saleem Siddiqi to NTG Clarity's Board of Directors. As an independent board member, Saleem brings over 40 years experience in finance and accounting. He is the president and founder of Siddiqi & Company Inc., Registered Professional Accountants and Certified Management Accountants. Past experience includes work at Richter, Usher and Wineberg, Charted Accounts and Director of Finance for the Dictograph Corporation, an innovative electronic manufacturing company, overseeing operations in Canada, the United States and China, before starting Siddiqi & Company Inc., in 1984.

 

“Saleem is a skilled professional, bringing substantial knowledge and expertise to our organization. The NTG team is delighted to welcome Saleem aboard and plans to make the most of his financial, accounting and process expertise” said Ashraf Zaghloul, NTG’s Chairman and CEO.

 

100,000 share options will be issued for Mr. M. Saleem Siddiqi, as member of the Board of Directors for the Company. Each option will be exercisable at a price of $0.10 per share and will vest six months from date of issuance.

 

About NTG Clarity Networks Inc.

NTG Clarity Networks’ vision is to be a global leader in providing networking solutions. As a Canadian company established in 1992, NTG Clarity has delivered networking, IT and network enabled application software solutions to network service providers and large enterprises. More than 300 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:

Doren Quinton, President QIS Capital

Ph:250-377-1182

Fax:250-377-1183

Email:info@smallcaps.ca

 

Kristine Lewis, President, NTG Clarity Networks Inc.

Ph: 905-305-1325

Fax: 905-752-0469

Email:klewis@ntgclarity.com