NTG Clarity Networks Inc., a leading provider of communication solutions, reported, today, a record high quarterly revenue for the second quarter of fiscal year 2001. Consolidated revenues have grown to CDN $4.1-million for the second quarter and CDN $8-million for the first six months of 2001, despite very challenging market conditions. This compares with CDN $1.7-million and CDN $2.7-million respectively, for the same periods in 2000. The quarter is highlighted with a number of significant achievements towards the establishment of NTG Clarity's network solutions business.

The net loss from continuing operations for the second quarter was CDN $1-million whereas net earnings for the same period in 2000 were CDN $0.2-million. The loss is attributed to the non-recurring charges related to acquisition costs, the expansion of business development, marketing activities, growth into the USA and international, as well as costs associated with the corporate amalgamation.

Commenting on the company's performance, Essam Zaghloul, President and Chief Operating Officer, said, "We achieved a great deal towards building our company in the second quarter. We successfully launched our Virtual Nervous System application, wrote off E-nerves acquisition costs, and expanded into the USA and internationally. Our expedited international growth is in preparation for the deregulation of the global telecommunication industry and to allow us to offer our unique, complete solutions. Another area of growth was in the enterprise field, where NTG Clarity has developed and diversified its business."

NTG Clarity has made the strategic shift to a solutions company with the emphasis on telecommunications and enterprise customers. The diversification of their service offerings has enabled NTG Clarity to acquire new customers and increase business. NTG Clarity's clients include telecommunication companies and a variety of vertical enterprises, such as the health and energy industries. Business has grown steadily, and NTG Clarity's working capital has grown accordingly. For the first six months of 2001, the company's average billing was more than CDN $1-million per month and increasing steadily. The business model is self-financing and NTG Clarity still has over $3-million in the bank.

During a time of economic difficulty, NTG Clarity behaved responsibly and found the opportunity to continue to advance their leadership in the communication field. NTG Clarity will continue to invest in their technological lead and in the sales and services resources. This investment is needed to increase market share while maintaining industry-leading customer satisfaction levels and to eliminating unnecessary costs. NTG Clarity's strategy is aimed squarely at long-term profitable growth and market leadership.

"Despite the market downturn, NTG Clarity's revenue tripled, booking CDN $8-million in revenue for the first six months of the fiscal year 2001, compared to CDN $2.6-million for the same period in 2000," said Ashraf Zaghloul, Chair and Chief Executive Officer of NTG Clarity. "This increase in revenue is significant, but we continue to take the downturn into account by cutting operating costs. Cutting costs this way reduces our break-even point and improves profitability. We are confident that these efforts will help us build on our strong customer relationships and market position. We are working with our clients to deliver the highest value and greatest business impact over both the short and long term."