(via Thenewswire.ca)
Toronto, ON / TheNewswire / May 27, 2016 - NTG Clarity Networks Inc. (TSX.V:NCI), announces its first quarter results for the period ended March 31, 2016 (all figures in Canadian Dollars).
During the first quarter of 2016, NTG Clarity continued the trend of customer and geographical diversification. Along with this trend comes higher cost of sales and selling and G&A expenses as we incurred expenses for our new offices in Oman and Kuwait as well as higher wages and salaries for key personnel which are required for anticipated new revenues to be achieved over the remainder of 2016.
During Q1 2016, NTG Clarity generated revenues of $2,433,333 as compared to $5,002,161 in the same period last year (which was an exceptional, record quarter). Traditionally, Q1 revenue is weaker due to the timing of new budgets and projects. Q1 2016 is in line with first quarters in previous years (Q1 2014: $2,933,749; Q1 3013: $1,486,872). The decrease in revenues was due to:
-foreign currency exchange including the weakening of the Egyptian pound in relation to the Canadian dollar, and fluctuations in currencies in the period.
-longer lead time to close new projects as the uncertainty in the Middle East due to lower oil prices has delayed the awarding of new projects. However, with the recent stability in oil prices, we expect the start of new projects in the next quarter.
The increase in operating expenses was due to:
-the costs of our new offices in Egypt, Kuwait and Oman; and
-the retention of highly skilled employees after the completion of projects, pending the start of new projects. It is important to note that these personnel are the company's main assets.
Revenue was comprised of 79% professional services, 12% product related sales, 7% for office equipment/services and 2% for field service work. As professional services carry a lower gross margin than product related sales, margins were lower in Q1 compared to the prior year but showed improvement over Q4/15 margins. In Q1 2016, our Gross Margin was 29% compared to 35% in Q1 2015. The higher cost of skilled personnel continues to affect our margins. We are working to balance between growth and expenses to help generate increased margins.
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Income Statement Highlights for the Three Months Ended March 31, 2016 and 2015 |
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March 31, 2016 |
March 31, 2015 |
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Revenue |
$ 2,433,333 |
$ 5,002,161 |
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Cost of Sales |
1,737,332 |
3,247,342 |
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Gross profit |
696,001 |
1,754,820 |
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Operating Expenses |
1,985,235 |
631,098 |
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Other Expenses |
377,125 |
213,739 |
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Net income before taxes |
$(1,666,359) |
$909,982 |
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Other - Exchange loss on translation of foreign operations |
$(320,098) |
-- |
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Net income after taxes |
$(1,986,457) |
$722,489 |
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per share (basic) |
$(0.05) |
$0.02 |
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(fully diluted) |
$(0.04) |
$0.02 |
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Balance Sheet Highlights |
March 31, 2016 |
December 31, 2015 |
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Current Assets |
$ 10,536,023 |
$11,887,900 |
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Current Liabilities |
$ 8,257,259 |
$7,220,191 |
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Long-Term Debt |
$ nil |
$ nil |
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Shareholder's Equity |
$ 7,655,766 |
$9,592,137 |
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NTG Clarity continues to diversify its customer base and is starting to see revenue from these new customers. Growth from new customers is expected to show a dramatic improvement over the remainder of 2016 and should lead to continued revenue growth, despite the slower start to this year. This is the base of our strategy going forward to achieve our targets by year end.
In an unrelated matter, the Company announced that 100,000 share options will be issued for Mr. Zafar Farooqui, a member of the Board of Directors for the Company. Each option will be exercisable at a price of $0.10 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 470 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
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