NTG Clarity Networks Inc.

NTG Clarity Networks Inc.

April 27, 2012 08:02 ET

NTG Clarity Networks Inc. Announces Year End 2011 Results

TORONTO, ONTARIO--(Marketwire - April 27, 2012) - NTG Clarity Networks Inc. (TSX VENTURE:NCI), today reported its year end results for the fiscal year ended December 31, 2011 (all figures in Canadian Dollars).

NTG Clarity had an exciting but challenging year in 2011. The Company started the year working on several significant Letters of Intent earned in late 2010 which was the platform for growth in 2011. Unfortunately in the second half of 2011, NTG suffered two contract cancellations in the Middle East totaling US$8.4 million which undermined financial performance for the remainder of the year. As previously reported, the receivables due from the customers (approximately US$1.5 Million USD) are insured by Export Development Canada and we are working with EDC on the claim.

2011 has been a year of change, particularly political and economic change in Egypt. In February 2011, the Company's Egypt office was closed for approximately two weeks due to a political uprising. While this had some short-term impact, there has been no significant effect to the Company's revenue stream or operations in the region. Egypt's revenue contribution remains approximately 10% (2010-9%%; 2009-11%) of the Company's revenue. Management anticipates business as usual in the region going forward.

Revenues for the year ended December 31, 2011 were $5,172,176 versus $6,356,699 for 2010. The Gross Margin was 40% in 2011 compared to 49% in 2010. The Company recorded a net income of $1,097 in 2011 as compared to $668,610 in 2010. The decrease in financial performance was due primarily to the loss of the two significant projects.

General and administration expenses were $854,371 in 2011 as compared to $935,944 in 2010. This decrease is due mainly to cost reductions. Selling and marketing expenses were $659,829 in 2011 as compared to $791,739 in 2010. Interest expense was $258,627 in 2011 as compared to $208,539 in 2010.

As at December 31, 2011, NTG Clarity had positive working capital of $829,186 and long-term debt of only $167,978.

Income statement highlights for the year ended December 31, 2011 and 2010
December 31, 2011 December 31, 2010
Revenue $ 5,172,176 $ 6,356,699
Cost of revenue 3,107,324 3,235,898
Gross profit 2,064,852 3,120,801
Expenses 2,166,744 2,407,128
Foreign exchange loss (gain) (102,989 ) 45,063
Net income for the period $ 1,097 $ 668,610
Balance Sheet Highlights as at December 31, 2011
December 31, 2011 December 31, 2010
Current Assets $ 3,390,605 $ 3,954,896
Current Liabilities $ 2,561,419 $ 2,083,137
Long-Term Debt $ 167,978 $ 346,959
Shareholder's Equity $ 2,688,819 $ 2,615,252

In 2011, we continued the development phase to move our Operations Support System/Business Support System (OSS/BSS) product called NTS to a new technology platform and to add new and upgrade existing functionality. This development continues in 2012. Due to market demand, we are evolving the legacy NTS system to incorporate the original NTS with new and expanded modules and functions. We continue to aggressively market our product and services in the international marketplace, which we view as an area of substantial growth due to the deregulation of the telecommunication sector and the licensing of new mobile operators.

We will continue to market in the Middle East as it has large infrastructure and telecom projects. NTG Clarity's brand name is gaining increased recognition worldwide as a reliable, quality supplier to telecom and network service providers. This is an enormous market and we will continue work on improving our market share through the enterprise and wireless areas of the business. We expect to achieve revenue growth throughout 2012 as we deliver on recently acquired contracts, service these contracts on an ongoing basis, and penetrate new market opportunities.

Management continues to feel that the underlying value of the business is not fully reflected in its share value and is committed to adding further shareholder value through revenue growth, cost control and effective investment promotion.


NTG Clarity Networks' vision is to be a global leader in providing networking solutions. Established in 1992, NTG Clarity is a leader in Canada in delivering networking, IT and network enabled application software solutions to network service providers and large enterprises. More than 200 network professionals provide design, engineering, implementation, software development and security expertise to the industry's leading network service providers and enterprises.


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.

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