Ms. Kristine Lewis reports

NTG CLARITY NETWORKS ANNOUNCES THIRD QUARTER 2017 FINANCIAL RESULTS

NTG Clarity Networks Inc. has provided its financial and operating results for the third quarter of 2017. After an aggressive cost reduction process, management has successfully returned the company to profitability in the third quarter.

Consolidated revenue for the three months ended Sept. 30, 2017, increased to $3,309,135 compared with $3,262,742 for the same period in 2016 and is made up of product-related revenue, professional services and a small amount for hardware. Year to date revenues are down slightly to $10,466,021 compared with $10,773,204 in 2016.

For the first nine months of 2017, the gross margin was $3,721,078 or 36 per cent, compared with $4,329,645 or 40 per cent for the same period in 2016.

Year to date, selling expenses decreased by 21 per cent to $1,578,237, compared with $2,008,689 in 2016. This decrease was due to restrictions implemented for travel and marketing expenses, as well as some salary reductions.

General and administration (G&A) continued to fall in the third quarter of 2017 to $901,181, compared with $1,072,884 during the same period in 2016. For the first three quarters of 2017, general and administrative costs decreased to $2,351,057 from $3,850,572 during the same period in 2016. This 39-per-cent decrease was due mainly to the continued reduction of staff/salaries and consulting costs, lower occupancy costs in Canada and Kuwait, and the reduction of research activities related to the company's new software product StageEM.

For Q3 2017, the corporation recorded a net income of $131,308, compared with a net loss of $881,497 for the same period in 2016. For the nine months ended Sept. 30, 2017, NTG Clarity recorded a net loss of $706,810 compared with a net loss of $3,877,251 in 2016, an 82-per-cent improvement. Though a significant improvement over the same period in 2016, factors contributing to the year to date net loss continue to include end of service (severance) salary costs due to reductions of selling and general and administrative staff, and rental expense obligations for offices/accommodations. The company continues to work to reduce salary costs and other expenses and anticipates this effort to continue going forward.

                                  INCOME STATEMENT HIGHLIGHTS 
  
                                               Three months ended Sept. 30,          Nine months ended Sept. 30,
                                                    2017              2016               2017              2016

Revenue                                   $    3,309,135    $    3,262,742    $    10,466,021     $  10,773,204 
Cost of sales                                  1,458,379         2,099,286         6 ,744,943         6,443,560  
Gross profit                              $    1,850,756    $    1,163,456    $     3,721,078     $   4,329,645  
Expenses                                       1,776,196         1,979,723          4,605,401         6,920,644  
Foreign exchange loss (gain)                     (58,633)           32,772            (17,506)          848,898    
Exchange loss (gain) on translation                  885            32,458            230,153           437,354    
Reversal of impairment of unbilled revenue                                            425,172                      
Total net income (loss)                   $      131,308    $     (881,497)    $     (706,810)    $  (3,877,251)
Per share                                 $        0.003    $       (0.024)    $       (0.017)    $      (0.107)    


   

At the end of 2016 and throughout 2017, the company has focused efforts on reducing its costs and bringing expenses in line with revenues, as the Middle East continues to grapple with a depressed economy due mainly to lower oil prices. The company can see the effects of these measures in Q3 2017 as NTG Clarity was able to return to profitability. Management will continue these efforts going forward.

Subsequent to the end of the third quarter, the company announced new contracts totalling $4.8-million which is expected to have an immediate impact on financial and operating results for the succeeding quarters. Management continues to work on potential new contracts and is looking to capitalize on the economic improvement that is now becoming apparent in the Middle East as oil prices stabilize.

In an unrelated matter, the company announced that 100,000 share options will be issued for Nick Hamilton-Piercy, a member of the board of directors for the company. Each option will be exercisable at a price of 10 cents per share and will be to replace expired options.

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 400 network professionals provide design, engineering, implementation, software development and security expertise to the industry's leading network service providers and enterprises.

We seek Safe Harbor.