09:25:37 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



NTG Clarity Networks Inc
Symbol NCI
Shares Issued 48,662,355
Close 2018-08-29 C$ 0.04
Market Cap C$ 1,946,494
Recent Sedar Documents

NTG Clarity earns $16,369 in Q2

2018-08-29 07:45 ET - News Release

Ms. Kristine Lewis reports

NTG CLARITY NETWORKS ANNOUNCES SECOND QUARTER 2018 FINANCIAL RESULTS

NTG Clarity Networks Inc. had revenues for the first half of 2018 of $6,656,899 compared with $7,156,886 during the first half of 2017, a decline of 7 per cent. Second quarter 2018 revenues were $2,607,838, as compared with $4,148,957 during the same period in 2017.

Second quarter revenues were lighter in 2018 due mainly to the completion of a contract in Kuwait and delayed renewals/new projects in Saudi Arabia.

The corporation's operating expenses for the three and six months ended June 30, 2018, were $905,865 and $1,959,323 compared with $1,087,171 and $2,415,095 for the same periods last year, a 19-per-cent reduction. The company has aggressively reduced staff, salary, general and administrative expenses, and travel costs to bring expenses more in line with revenue.

During the second quarter of 2018, NTG Clarity reported positive income from operations of $325,768 compared with $199,081 during the same quarter in 2017. Year-to-date 2018 cash flow provided by operations was $377,888 compared with a loss of $344,063 during the same period last year.

For the second quarter of 2018, NTG Clarity recorded a net income of $16,369 compared with a net loss of $85,539 for the same period in 2017. For the six months ended June 30, 2018, the corporation recorded a net income of $176,851 compared with a net loss of $838,118 in 2017. This is a substantial improvement as the company continues to work to reduce selling and G&A costs, and to optimize cost of sales for the company's current revenue.

Though a significant improvement over the same period in 2017, factors contributing to challenges continue to include end of service (severance) salary costs due to reductions of selling and G&A staff as well as rental expense obligations.

Gross margin for the second quarter of 2018 was $1,231,633 or 47 per cent, compared with $1,286,252 or 31 per cent for the same period in 2017. For the six months ended June 30, 2018, gross margin was $2,779,464 or 42 per cent, compared with $1,870,322 or 26 per cent for the same period in 2017. The company is pleased with its continued recovery of gross margin percentage as it works to bring its margins back in line with historical averages.

     INCOME STATEMENT HIGHLIGHTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018, AND 2017
  
                                                     Three months ended            Six months ended             
                                            June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017

Revenue                                        $2,607,838    $4,148,957    $6,656,899    $7,156,886
Cost of sales                                   1,376,205     2,862,705     3,877,435     5,286,564
Gross profit                                    1,231,633     1,286,252     2,779,464     1,870,322
Expenses                                        1,389,596     1,470,969     2,679,099     2,863,217
Foreign exchange loss (gain)                     (190,640)     (115,166)     (181,791)       41,127
Net income (loss) before taxes                     32,677       (69,551)      282,156    (1,034,022)
Other comprehensive (loss)                        (16,308)      (15,988)     (105,305)     (229,268)
Reversal of impairment of unbilled revenue                                                  425,172
Net income (loss) after taxes                      16,369       (85,539)      176,850      (838,118)
(Loss) per share                                    0.000         (0.00)        0.004         (0.03)

Overall financial results continued the positive trend started in late 2017. Revenues were lower in the second quarter due to the completion of a larger contract and the delay in starting new projects; however, the company was able to post positive cash flow and net income due to cost cutting measures and higher margins.

As a result of actively marketing the company's IoT (Internet of things) solutions, in June, 2018, the company received a new PO in Toronto, Canada, for manufacturing tracking. This new project commenced in the third quarter and is expected to open new opportunities with manufacturing customers. This and a small amount of work being done with another Canadian customer set the path for a return to stable revenues in North America.

In Egypt, as many international companies are reluctant to do business in the local currency and have left the marketplace, the service gap continues to provide significant growth opportunities for NTG. In the second quarter of 2018, the company added a new customer, one of the largest retail store chains in Egypt. The company is also in discussions with a multmillion-pound CR (change request) for an existing regulatory authority customer.

In Saudi Arabia (KSA), the economy has rebounded with the increase in the price of oil. The company looks forward to increasing its work as organizations and government departments start awarding new projects in September. The recent political developments between Canada and KSA have had no impact on the company's operations.

Finally, in the second quarter of 2018, the company continued work for its customer in Oman, which is using its NTS network inventory and project management modules. Work includes change requests, continuing maintenance/support and new user licences. The company anticipates additional work in the form of requests for new systems and modules and customer support in mobility.

Subsequent to quarter-end, in August, 2018, RBC Royal Bank extended the due date for the non-revolving credit facility 4 to March 1, 2019, and continues to require NTG to pay down $60,000 per month against the outstanding principal.

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, information technology and network-enabled application software solutions to network service providers and large enterprises. More than 350 network professionals provide design, engineering, implementation, software development and security expertise to the industry's leading network service providers and enterprises.

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