Toronto, ON – TheNewswire - May 19, 2021 - NTG Clarity Networks Inc. (TSXV:NCI) (OTC:NYWKF), announces its first quarter results for the period ended March 31, 2021 (all figures in Canadian Dollars).
In 2021, we have continued our road back to profitability with the third straight quarter of positive results. This quarter’s net income was $249,727, making the total for the three consecutive positive quarters of $769,562. Our gross margin for this quarter was 47% and the income from operations was $444,890.
The COVID-19 pandemic continues to present a significant source of economic uncertainty however despite restrictions on travel, market/trade shows and client/potential client visits, our collections have remained current and we have no bad debt recorded in Q1 2021. Our outsourced resources and project-focused staff are continuing to work remotely as much as possible. Office staff in Egypt is rotating between working from the office and working remotely.
In February, we announced the signing of a Memo of Understanding (MOU) with a major bank in the Gulf region to provide offshore software development and IT resources and facilities through our Egypt subsidiary.
In February we also announced the receipt of multiple purchase orders for a total estimated amount of over $1.1 Million CAD in contract value. Some of this was for renewal of existing work however the majority was for new work.
In March we soft-launched our latest software called Smart2Go (a Digital Transformation product). We also announced the receipt of a CAD$550,000 PO for it from a major Health Care Provider to deliver their digital products on the Smart2Go platform.
Consolidated revenue for the three months ended March 31, 2021 was $2,298,307 compared to $2,474,766 for the same period in 2020. Due to the exchange rate differences, our revenue is lower this quarter than Q1 2020, as most of our income is in USD (exchange rate of 1.25 compared to 1.42 in Q1 2020).
Professional service revenue continues to be an important strategic source of revenue for us, given its generally recurring nature (82%). The contribution of product-related revenue was 18% in Q1 2021. We are working on marketing our new low-code platform product in an effort to make product sales a more balanced part of NTG’s revenue stream.
G&A expenses for the three months ended March 31, 2021 was down to $420,081 compared to $596,720 in Q1 2020. The decrease was due to:
- salary reductions
- lower insurance costs in KSA due to a change in insurance carrier
- lower rent expenses in KSA and Oman as we work to optimize rent for offices and housing
Selling and marketing expenses for the three months ended March 31, 2021 were reduced to $218,120 compared to $273,289 in Q1 2020. The significant decrease in the selling and marketing expenses was the direct result of COVID-19. Travel, trade shows and most customer meetings/visits continue to be done virtually.
For Q1 2021, NTG recorded a net income of $249,727 as compared to a net loss of $598,736 in Q1 2020.
The working capital as at March 31, 2021 was a deficit of $6,333,921 compared to a deficit of $6,336,678 at December 31, 2020.
Income Statement Highlights for the Three Months Ended March 31, 2021 and 2020
March 31, 2021 | March 31, 2020 | |||
REVENUE | $ | 2,298,307 | $ | 2,474,766 |
COST OF SALES | 1,211,592 | 1,587,358 | ||
GROSS MARGIN | $ | 1,086,714 | $ | 887,409 |
Operating Expenses | 638,201 | 870,009 | ||
Foreign Exchange Loss | 3,624 | 344,830 | ||
Other Expenses | 113,944 | 71,091 | ||
Net (Loss) Income before taxes | $ | 330,945 | $ | (398,521) |
Other – Exchange (loss) gain on translation | (81,219) | (200,215) | ||
Net (Loss) Income after Taxes | 249,727 | (598,736) | ||
per share (basic) | $ | 0.00 | $ | (0.01) |
per share (fully diluted) | $ | 0.00 | $ | (0.01) |
March 31, 2021 | December 31, 2020 | |||
Current Assets | $ | 2,025,667 | $ | 2,154,910 |
Current Liabilities | $ | 8,359,588 | $ | 8,491,588 |
Long-Term Debt | $ | 7,217,784 | $ | 7,217,784 |
Shareholder’s Equity | $ | (12,187,060) | $ | (12,536,069) |
Outlook
Providing the offshoring and outsourcing of our technical, IT and professional services resources has proven to be a successful strategy as working remotely has become increasing popular. This has helped us grow and expand our business into new verticals that include government and financial sectors. We are looking forward to more contracts such as those announced this quarter.
Additionally, with the release of our latest software product, Smart2Go, we anticipate being able to further expand into new verticals. Smart2Go allows enterprises to automate their processes and create applications by offering rapid application development without the need for knowledge of development languages. Smart2Go is built on NTG’s proven Workflow technology and provides both a Portal and Mobile Apps for its users.
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 275 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
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