TORONTO, Nov. 07, 2016 (GLOBE NEWSWIRE) -- Tucows Inc. (NASDAQ:TCX) (TSX:TC), a provider of network access, domain
names and other Internet services, today reported its financial results for the third quarter ended September 30, 2016. All figures
are in U.S. dollars.
Summary Financial Results
(In Thousands of US Dollars, Except Per Share Data)
|
3
Months Ended September 30 |
9
Months Ended September 30 |
2016
(Unaudited) |
2015
(Unaudited) |
% Change |
2016
(Unaudited) |
2015
(Unaudited) |
% Change |
Net revenue |
49,064 |
44,268 |
|
11 |
% |
141,014 |
126,985 |
|
11 |
% |
Net income |
4,741 |
3,159 |
|
50 |
% |
13,250 |
8,278 |
|
60 |
% |
Net earnings per common
share |
0.45 |
0.29 |
|
55 |
% |
1.26 |
0.75 |
|
68 |
% |
Adjusted
EBITDA1 |
8,575 |
5,800 |
|
48 |
% |
22,798 |
15,439 |
|
48 |
% |
Net cash provided by operating
activities |
5,001 |
6,783 |
|
-26 |
% |
12,727 |
11,957 |
|
6 |
% |
- This Non-GAAP financial measure is described below and reconciled to GAAP net income in the accompanying table. Tucows has
revised its definition of Adjusted EBITDA as detailed in the description below and the table reconciling Adjusted EBITDA to GAAP
net income.
Summary of Revenues and Gross Margin
(In Thousands of US Dollars)
|
Revenue |
Gross Margin |
|
3 Months ended
September 30 |
3 Months ended
September 30 |
|
2016
(Unaudited) |
2015
(Unaudited) |
2016
(Unaudited) |
2015
(Unaudited) |
Network Access Services: |
Mobile
Services |
18,375 |
15,359 |
|
9,288 |
|
|
6,583 |
|
Other
Services |
878 |
916 |
|
376 |
|
|
542 |
|
Total Network Access Services |
19,253 |
16,275 |
|
9,664 |
|
|
7,125 |
|
|
|
|
|
|
Domain Services: |
Wholesale |
|
|
|
|
Domain
Services |
22,956 |
21,124 |
|
4,021 |
|
|
3,642 |
|
Value
Added Services |
2,227 |
2,400 |
|
1,764 |
|
|
1,913 |
|
Total Wholesale |
25,183 |
23,524 |
|
5,785 |
|
|
5,555 |
|
|
|
|
|
|
Retail |
3,721 |
3,220 |
|
1,993 |
|
|
1,790 |
|
Portfolio |
907 |
1,248 |
|
776 |
|
|
1,079 |
|
Total Domain Services |
29,811 |
27,992 |
|
8,554 |
|
|
8,424 |
|
|
|
|
|
|
Network Expenses: |
Network, other
costs |
─ |
─ |
|
(1,288 |
) |
|
(1,421 |
) |
Network,
depreciation and amortization costs |
─ |
─ |
|
(292 |
) |
|
(336 |
) |
Total Network expenses |
─ |
─ |
|
(1,580 |
) |
|
(1,757 |
) |
|
|
|
|
|
Total revenue/gross
margin |
49,064 |
44,268 |
|
16,638 |
|
|
13,792 |
|
“Continuing growth in both Ting Mobile and our Domain Services business propelled Tucows to a record quarter for both the top
and bottom lines,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “We continue to reap the benefits of the
significant operating leverage in the business. Overall revenue was up 11% year-over-year, while net income grew 50% to a
record $4.7 million, or $0.45 per share, and adjusted EBITDA1 increased 48% to a record $8.6 million.”
“As Ting Mobile and Domain Services continue to drive our near-term financial performance, Ting Internet takes positive steps
every day toward future contribution to our business. In Q2, we expanded our fiber network in Charlottesville, Virginia, began
construction in Holly Springs, North Carolina and saw Westminster, Maryland launch the next wave of construction on its municipal
fiber network. We also announced that Centennial, Colorado would be our next and largest Ting town to date, with a population over
100,000, and began taking pre-orders there immediately.”
Net revenue for the third quarter of 2016 increased 11% to a record $49.1 million from $44.3 million for the third quarter of
2015.
Net income for the third quarter of 2016 increased to a record $4.7 million, or $0.45 per share, from $3.2 million, or $0.29 per
share, for the third quarter of 2015. Adjusted EBITDA1 for the third quarter of 2016 increased to $8.6 million
from $5.8 million for the third quarter of 2015.
Cash and cash equivalents at the end of the third quarter of 2016 were $10.5 million compared with $5.9 million at the end of
the second quarter of 2016 and $11.9 million at the end of the third quarter of 2015. The increase relative to the second quarter
of 2016 was primarily the result of cash provided by operating activities of $5.0 million, as well as an increase in the amount
outstanding on the bank loan of $1.9 million, which partially offset by a further investment of $2.1 million in property and
equipment, primarily for the continued build out of the Ting Internet footprint.
NOTES:
1. Adjusted EBITDA
Tucows reports all financial information required in accordance with United States generally accepted accounting principles
(GAAP). Along with this information, to assist financial statement users in an assessment of our historical performance, the
Company typically disclose and discuss a non-GAAP financial measure, adjusted EBITDA, on investor conference calls and related
events that exclude certain non-cash and other charges as the Company believes that the non-GAAP information enhances investors'
overall understanding of our financial performance.
The Company believes that the provision of this supplemental non-GAAP measure allows investors to evaluate the operational and
financial performance of the Company’s core business using similar evaluation measures to those used by management. The Company
uses adjusted EBITDA to measure its performance and prepare its budgets. Since adjusted EBITDA is a non-GAAP financial
performance measure, the Company’s calculation of adjusted EBITDA may not be comparable to other similarly titled measures of other
companies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance
prepared in accordance with GAAP. Because adjusted EBITDA is calculated before recurring cash charges, including interest expense
and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be
considered as a liquidity measure. Non-GAAP financial measures do not reflect a comprehensive system of accounting and may differ
from non-GAAP financial measures with the same or similar captions that are used by other companies and/or analysts and may differ
from period to period. The Company endeavors to compensate for these limitations by providing the relevant disclosure of the items
excluded in the calculation of adjusted EBITDA to net income based on U.S. GAAP, which should be considered when evaluating the
Company's results. Tucows strongly encourages investors to review its financial information in its entirety and not to rely
on a single financial measure.
The Company’s adjusted EBITDA definition excludes depreciation, amortization of intangible assets, income tax provision,
interest expense, interest income, stock-based compensation, asset impairment, gains and losses from unrealized foreign currency
transactions and infrequently occurring items. Gains and losses from unrealized foreign currency transactions removes the
unrealized effect of the change in the mark-to-market values on outstanding unhedged foreign currency contracts, as well as the
unrealized effect from the translation of monetary accounts denominated in non-U.S. dollars to U.S. dollars.
Prior year Adjusted EBITDA amounts presented herein have been recast to reflect adjusted EBITDA definitional changes described
in the Company’s Form 10-Q Quarterly Report for the three months ended September 30, 2016.
During the financial statement close for the three months ended September 30, 2016, the Company identified an immaterial error
that affects the classification of certain marketing program costs. Prior to the third quarter of fiscal 2016, the Company
recorded the cost for certain marketing credits as Sales and marketing expense which should have been recorded as a reduction in
Net revenue. The discussion presented here correctly reflect these marketing credits as a reduction in Net Revenues for all
current and comparative periods. This resulted in a decrease in Net Revenues, and a corresponding decrease in Sales and
marketing expenses of $0.3 million and $0.9 million for the three months and nine months ended September 30, 2015. For the nine
months ended September 30, 2016, Net revenues and Sales and marketing expenses reflect a reduction of $1.1 million for the
reclassification of credits for the first six months of fiscal 2016.
Conference Call
Tucows management will host a conference call today, Monday, November 7, 2016 at 5:00 p.m. (ET) to discuss the Company’s third
quarter 2016 results. Participants can access the conference call by dialing 1-888-231-8191 or 647-427-7450 or via the Internet at
http://www.tucows.com/investors.
For those unable to participate in the conference call at the scheduled time, it will be archived for replay both by telephone
and via the Internet beginning approximately one hour following completion of the call. To access the archived conference call by
telephone, dial 416-849-0833 or 1-855-859-2056 and enter the passcode 3037132 followed by the pound key. The telephone replay will
be available until Monday, November 14, 2016 at midnight. To access the archived conference call as an MP3 via the Internet, go to
http://www.tucows.com/investors.
About Tucows
Tucows is a provider of network access, domain names and other Internet services. Ting (https://ting.com) delivers mobile phone
service and fixed Internet access with outstanding customer support. OpenSRS (http://opensrs.com) manages nearly 15 million domain
names and millions of value-added services through a global reseller network of over 13,000 web hosts and ISPs. Hover
(http://hover.com) makes it easy for individuals and small businesses to manage their domain names and email addresses. More
information can be found on Tucows’ corporate website (http://tucows.com).
Tucows Inc. |
|
Consolidated Balance Sheets |
|
(Dollar amounts in U.S. dollars) |
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
10,498,296 |
|
|
$ |
7,723,253 |
|
|
Accounts receivable |
|
|
11,606,638 |
|
|
|
7,171,388 |
|
|
Inventory |
|
|
1,502,433 |
|
|
|
903,775 |
|
|
Prepaid expenses and deposits |
|
|
6,007,725 |
|
|
|
5,067,790 |
|
|
Prepaid domain name registry and ancillary services fees, current portion |
|
|
49,735,226 |
|
|
|
44,708,041 |
|
|
Income taxes recoverable |
|
|
1,743,308 |
|
|
|
2,292,915 |
|
|
Total current assets |
|
|
81,093,626 |
|
|
|
67,867,162 |
|
|
|
|
|
|
|
|
Prepaid domain name registry and ancillary services fees, long-term
portion |
|
|
11,184,655 |
|
|
|
11,040,929 |
|
|
Property and equipment |
|
|
9,617,147 |
|
|
|
7,126,676 |
|
|
Deferred tax asset |
|
|
5,355,575 |
|
|
|
7,621,092 |
|
|
Intangible assets |
|
|
20,091,795 |
|
|
|
14,469,677 |
|
|
Goodwill |
|
|
21,005,143 |
|
|
|
21,005,143 |
|
|
Total assets |
|
$ |
148,347,941 |
|
|
$ |
129,130,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
4,036,804 |
|
|
$ |
4,166,135 |
|
|
Accrued liabilities |
|
|
4,426,617 |
|
|
|
5,855,686 |
|
|
Customer deposits |
|
|
5,227,879 |
|
|
|
5,136,909 |
|
|
Derivative instrument liability, current portion |
|
|
85,769 |
|
|
|
2,027,086 |
|
|
Deferred rent, current portion |
|
|
20,854 |
|
|
|
19,463 |
|
|
Loan payable, current portion |
|
|
1,933,110 |
|
|
|
3,500,000 |
|
|
Deferred revenue, current portion |
|
|
63,120,230 |
|
|
|
56,646,390 |
|
|
Accreditation fees payable, current portion |
|
|
520,033 |
|
|
|
465,300 |
|
|
Income taxes payable |
|
|
1,447,970 |
|
|
|
444,053 |
|
|
Total current liabilities |
|
|
80,819,266 |
|
|
|
78,261,022 |
|
|
|
|
|
|
|
|
Deferred revenue, long-term portion |
|
|
15,246,462 |
|
|
|
14,947,639 |
|
|
Accreditation fees payable, long-term portion |
|
|
114,962 |
|
|
|
118,480 |
|
|
Deferred rent, long-term portion |
|
|
129,920 |
|
|
|
100,864 |
|
|
Loan payable, long-term portion |
|
|
8,547,808 |
|
|
|
- |
|
|
Other liabilities |
|
|
1,073,500 |
|
|
|
1,459,960 |
|
|
Deferred tax liability |
|
|
4,827,192 |
|
|
|
4,876,691 |
|
|
|
|
|
|
|
|
Redeemable non-controlling interest |
|
|
3,073,642 |
|
|
|
3,036,598 |
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
Preferred stock - no par value, 1,250,000 shares authorized; none issued and outstanding |
|
|
- |
|
|
|
- |
|
|
Common stock - no par value, 250,000,000 shares authorized; 10,448,283 shares issued and
outstanding as of September 30, 2016 and 10,685,599 shares issued and outstanding as of December 31, 2015 |
|
|
14,401,326 |
|
|
|
14,530,633 |
|
|
Additional paid-in capital |
|
|
2,564,965 |
|
|
|
8,526,395 |
|
|
Retained earnings |
|
|
17,595,108 |
|
|
|
4,381,849 |
|
|
Accumulated other comprehensive income (loss) |
|
|
(46,210 |
) |
|
|
(1,109,452 |
) |
|
Total stockholders' equity |
|
|
34,515,189 |
|
|
|
26,329,425 |
|
|
Total liabilities and stockholders' equity |
|
$ |
148,347,941 |
|
|
$ |
129,130,679 |
|
|
|
|
|
|
|
|
Tucows Inc. |
Consolidated Statements of
Operations |
(Dollar amounts in U.S.
dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
|
49,064,327 |
|
|
|
44,267,645 |
|
|
|
141,014,329 |
|
$ |
|
126,985,121 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
30,846,668 |
|
|
|
28,718,613 |
|
|
|
89,445,493 |
|
|
|
83,767,472 |
|
Network expenses (*) |
|
|
1,287,620 |
|
|
|
1,421,279 |
|
|
|
3,925,377 |
|
|
|
4,138,213 |
|
Depreciation of property and equipment |
|
|
278,746 |
|
|
|
324,166 |
|
|
|
976,419 |
|
|
|
803,737 |
|
Amortization of intangible assets |
|
|
13,421 |
|
|
|
11,532 |
|
|
|
36,485 |
|
|
|
26,988 |
|
Total cost of revenues |
|
|
32,426,455 |
|
|
|
30,475,590 |
|
|
|
94,383,774 |
|
|
|
88,736,410 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
16,637,872 |
|
|
|
13,792,055 |
|
|
|
46,630,555 |
|
|
|
38,248,711 |
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Sales and marketing (*) |
|
|
5,479,445 |
|
|
|
4,517,666 |
|
|
|
15,174,619 |
|
|
|
12,548,415 |
|
Technical operations and development (*) |
|
|
1,270,107 |
|
|
|
1,101,581 |
|
|
|
3,445,118 |
|
|
|
3,405,052 |
|
General and administrative (*) |
|
|
2,166,217 |
|
|
|
2,607,917 |
|
|
|
7,497,752 |
|
|
|
7,826,405 |
|
Depreciation of property and equipment |
|
|
178,687 |
|
|
|
63,790 |
|
|
|
328,877 |
|
|
|
185,074 |
|
Amortization of intangible assets |
|
|
279,126 |
|
|
|
56,997 |
|
|
|
613,041 |
|
|
|
167,209 |
|
Impairment of indefinite life intangible assets |
|
|
2,866 |
|
|
|
18,550 |
|
|
|
27,745 |
|
|
|
68,848 |
|
Loss (gain) on currency forward contracts |
|
|
22,475 |
|
|
|
352,738 |
|
|
|
(96,993 |
) |
|
|
681,988 |
|
Total expenses |
|
|
9,398,923 |
|
|
|
8,719,239 |
|
|
|
26,990,159 |
|
|
|
24,882,991 |
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
7,238,949 |
|
|
|
5,072,816 |
|
|
|
19,640,396 |
|
|
|
13,365,720 |
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(135,168 |
) |
|
|
(78,959 |
) |
|
|
(301,868 |
) |
|
|
(161,136 |
) |
Other income |
|
|
130,147 |
|
|
|
- |
|
|
|
387,787 |
|
|
|
- |
|
Total other income (expenses) |
|
|
(5,021 |
) |
|
|
(78,959 |
) |
|
|
85,919 |
|
|
|
(161,136 |
) |
|
|
|
|
|
|
|
|
|
Income before provision for income taxes |
|
|
7,233,928 |
|
|
|
4,993,857 |
|
|
|
19,726,315 |
|
|
|
13,204,584 |
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
2,492,649 |
|
|
|
1,834,400 |
|
|
|
6,476,012 |
|
|
|
4,926,189 |
|
Net income before redeemable non-controlling interest |
|
|
4,741,279 |
|
|
|
3,159,457 |
|
|
|
13,250,303 |
|
|
|
8,278,395 |
|
|
|
|
|
|
|
|
|
|
Redeemable non-controlling interest |
|
|
(254,101 |
) |
|
|
(91,283 |
) |
|
|
(698,583 |
) |
|
|
(162,750 |
) |
|
|
|
|
|
|
|
|
|
Net (earnings) loss attributable to redeemable non-controlling interest |
|
|
254,101 |
|
|
|
91,283 |
|
|
|
698,583 |
|
|
|
162,750 |
|
|
|
|
|
|
|
|
|
|
Net income for the period |
|
|
4,741,279 |
|
|
|
3,159,457 |
|
|
|
13,250,303 |
|
|
|
8,278,395 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax |
|
|
|
|
|
|
|
|
Unrealized income (loss) on hedging activities |
|
|
(58,821 |
) |
|
|
(724,336 |
) |
|
|
516,406 |
|
|
|
(1,723,247 |
) |
Net amount reclassified to earnings |
|
|
131,912 |
|
|
|
364,330 |
|
|
|
546,836 |
|
|
|
1,152,359 |
|
Other comprehensive income (loss) net of tax of 41,580 and $198,664 for the three
months ended September 30, 2016 and September 30, 2015 and $585,943 and 321,879 for the nine months ended September 30,
2016 and September 30, 2015 |
|
|
73,091 |
|
|
|
(360,006 |
) |
|
|
1,063,242 |
|
|
|
(570,888 |
) |
|
|
|
|
|
|
|
|
|
Comprehensive income, net of tax for the period |
$ |
|
4,814,370 |
|
$ |
|
2,799,451 |
|
$ |
|
14,313,545 |
|
$ |
|
7,707,507 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
$ |
|
0.45 |
|
$ |
|
0.29 |
|
$ |
|
1.26 |
|
$ |
|
0.75 |
|
|
|
|
|
|
|
|
|
|
Shares used in computing basic earnings per common share |
|
|
10,432,763 |
|
|
|
10,984,869 |
|
|
|
10,549,056 |
|
|
|
11,057,634 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
$ |
|
0.45 |
|
$ |
|
0.28 |
|
$ |
|
1.23 |
|
$ |
|
0.72 |
|
|
|
|
|
|
|
|
|
|
Shares used in computing diluted earnings per common share |
|
|
10,619,005 |
|
|
|
11,372,682 |
|
|
|
10,736,775 |
|
|
|
11,469,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Stock-based compensation has been included in expenses as follows: |
|
|
|
|
|
|
|
|
Network expenses |
$ |
|
4,920 |
|
$ |
|
7,221 |
|
$ |
|
16,784 |
|
$ |
|
22,264 |
|
Sales and marketing |
$ |
|
60,832 |
|
$ |
|
45,385 |
|
$ |
|
176,095 |
|
$ |
|
144,408 |
|
Technical operations and development |
$ |
|
23,512 |
|
$ |
|
27,364 |
|
$ |
|
74,913 |
|
$ |
|
84,646 |
|
General and administrative |
$ |
|
106,175 |
|
$ |
|
48,605 |
|
$ |
|
318,062 |
|
$ |
|
126,910 |
|
|
|
|
|
|
|
|
|
|
Tucows Inc. |
Consolidated Statements of Cash
Flows |
(Dollar amounts in U.S.
dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Cash provided by: |
|
(unaudited) |
|
(unaudited) |
Operating activities: |
|
|
|
|
|
|
|
|
Net income for the period |
$ |
|
4,741,279 |
|
|
|
3,159,457 |
|
|
|
13,250,303 |
|
|
|
8,278,395 |
|
Items not involving cash: |
|
|
|
|
|
|
|
|
Depreciation of property and equipment |
|
|
457,433 |
|
|
|
387,956 |
|
|
|
1,305,296 |
|
|
|
988,811 |
|
Amortization of debt discount and issuance costs |
|
|
8,298 |
|
|
|
- |
|
|
|
8,298 |
|
|
|
- |
|
Amortization of intangible assets |
|
|
292,547 |
|
|
|
68,529 |
|
|
|
649,526 |
|
|
|
194,197 |
|
Impairment of indefinite life intangible asset |
|
|
2,866 |
|
|
|
18,550 |
|
|
|
27,745 |
|
|
|
68,848 |
|
Deferred income taxes (recovery) |
|
|
926,733 |
|
|
|
(53,085 |
) |
|
|
1,630,076 |
|
|
|
(1,019,254 |
) |
Amortization of deferred rent |
|
|
13,783 |
|
|
|
7,370 |
|
|
|
30,447 |
|
|
|
17,917 |
|
Disposal of domain names |
|
|
4,760 |
|
|
|
2,866 |
|
|
|
25,581 |
|
|
|
20,551 |
|
Other income |
|
|
(128,820 |
) |
|
|
- |
|
|
|
(386,460 |
) |
|
|
- |
|
Loss (gain) on change in the fair value of forward contracts |
|
|
(20,114 |
) |
|
|
99,052 |
|
|
|
(292,133 |
) |
|
|
160,394 |
|
Stock-based compensation |
|
|
195,439 |
|
|
|
128,575 |
|
|
|
585,854 |
|
|
|
378,228 |
|
Change in non-cash operating working capital: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,623,719 |
) |
|
|
262,149 |
|
|
|
(4,435,250 |
) |
|
|
(994,889 |
) |
Inventory |
|
|
(217,741 |
) |
|
|
(123,047 |
) |
|
|
(598,658 |
) |
|
|
(281,491 |
) |
Prepaid expenses and deposits |
|
|
419,939 |
|
|
|
1,000,287 |
|
|
|
(939,935 |
) |
|
|
(892,105 |
) |
Prepaid domain name registry and ancillary services fees |
|
|
(1,271,948 |
) |
|
|
149,905 |
|
|
|
(5,170,911 |
) |
|
|
(2,068,871 |
) |
Income taxes recoverable |
|
|
363,244 |
|
|
|
1,152,410 |
|
|
|
1,553,524 |
|
|
|
1,935,426 |
|
Accounts payable |
|
|
681,303 |
|
|
|
195,002 |
|
|
|
(1,993 |
) |
|
|
202,578 |
|
Accrued liabilities |
|
|
(581,495 |
) |
|
|
406,920 |
|
|
|
(1,429,069 |
) |
|
|
1,517,453 |
|
Customer deposits |
|
|
(943,579 |
) |
|
|
(199,695 |
) |
|
|
90,970 |
|
|
|
253,223 |
|
Deferred revenue |
|
|
1,666,291 |
|
|
|
140,850 |
|
|
|
6,772,663 |
|
|
|
3,185,946 |
|
Accreditation fees payable |
|
|
14,059 |
|
|
|
(20,621 |
) |
|
|
51,215 |
|
|
|
11,425 |
|
Net cash provided by operating activities |
|
|
5,000,558 |
|
|
|
6,783,430 |
|
|
|
12,727,089 |
|
|
|
11,956,782 |
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
Proceeds received on exercise of stock options |
|
|
48,376 |
|
|
|
189,914 |
|
|
|
107,672 |
|
|
|
737,369 |
|
Payment of tax obligations resulting from net exercise of stock options |
|
|
(76,537 |
) |
|
|
- |
|
|
|
(318,770 |
) |
|
|
- |
|
Excess tax benefits from share-based compensation expense |
|
|
268,565 |
|
|
|
312,091 |
|
|
|
714,764 |
|
|
|
1,400,793 |
|
Repurchase of common stock |
|
|
- |
|
|
|
(9,977,495 |
) |
|
|
(7,180,257 |
) |
|
|
(18,179,176 |
) |
Proceeds received on loan payable |
|
|
10,989,583 |
|
|
|
- |
|
|
|
16,989,583 |
|
|
|
3,500,000 |
|
Repayment of loan payable |
|
|
(9,062,500 |
) |
|
|
- |
|
|
|
(9,500,000 |
) |
|
|
- |
|
Payment of loan payable costs |
|
|
(383,463 |
) |
|
|
- |
|
|
|
(516,963 |
) |
|
|
- |
|
Net cash provided by (used in) financing activities |
|
|
1,784,024 |
|
|
|
(9,475,490 |
) |
|
|
296,029 |
|
|
|
(12,541,014 |
) |
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Additions to property and equipment |
|
|
(2,091,368 |
) |
|
|
(710,342 |
) |
|
|
(3,923,105 |
) |
|
|
(2,051,124 |
) |
Gross proceeds from the waiver of rights to .online registry |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,619,832 |
|
Remaining payment for the acquisition of Ting Virginia, LLC., net of cash of $21,423 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(357,493 |
) |
Acquisition of intangible assets |
|
|
(74,400 |
) |
|
|
- |
|
|
|
(6,324,970 |
) |
|
|
- |
|
Net cash provided by (used in) investing activities |
|
|
(2,165,768 |
) |
|
|
(710,342 |
) |
|
|
(10,248,075 |
) |
|
|
4,211,215 |
|
|
|
|
|
|
|
|
|
|
Increase in cash and cash equivalents |
|
|
4,618,814 |
|
|
|
(3,402,402 |
) |
|
|
2,775,043 |
|
|
|
3,626,983 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period |
|
|
5,879,482 |
|
|
|
15,300,762 |
|
|
|
7,723,253 |
|
|
|
8,271,377 |
|
Cash and cash equivalents, end of period |
$ |
|
10,498,296 |
|
$ |
|
11,898,360 |
|
$ |
|
10,498,296 |
|
$ |
|
11,898,360 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
|
Interest paid |
$ |
|
93,560 |
|
|
|
78,988 |
|
|
|
260,506 |
|
|
|
175,290 |
|
Income taxes paid, net |
$ |
|
927,826 |
|
|
|
512,954 |
|
|
|
2,507,699 |
|
|
|
2,457,225 |
|
|
|
|
|
|
|
|
|
|
Supplementary disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Property and equipment acquired during the period not yet paid for |
$ |
|
89,860 |
|
|
|
63,499 |
|
|
|
89,860 |
|
|
|
63,499 |
|
|
|
|
|
|
|
|
|
|
Tucows
Inc. |
Reconciliation of Net income to Adjusted
EBITDA |
(In Thousands of US
Dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Net income for the period |
$ |
|
4,741 |
|
$ |
3,159 |
$ |
|
13,250 |
|
$ |
8,278 |
Depreciation of property and equipment |
|
|
457 |
|
|
388 |
|
|
1,305 |
|
|
989 |
Amortization of intangible assets |
|
|
293 |
|
|
69 |
|
|
650 |
|
|
194 |
Impairment of intangible assets |
|
|
3 |
|
|
19 |
|
|
28 |
|
|
69 |
Interest expense, net |
|
|
135 |
|
|
79 |
|
|
302 |
|
|
161 |
Provision for income taxes |
|
|
2,493 |
|
|
1,834 |
|
|
6,476 |
|
|
4,926 |
Stock-based compensation |
|
|
195 |
|
|
129 |
|
|
586 |
|
|
378 |
Unrealized loss (gain) on change in fair value of forward contracts |
|
|
(20 |
) |
|
99 |
|
|
(292 |
) |
|
160 |
Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets
and liabilities |
|
|
278 |
|
|
24 |
|
|
493 |
|
|
284 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
|
8,575 |
|
$ |
5,800 |
$ |
|
22,798 |
|
$ |
15,439 |
|
|
|
|
|
|
|
|
|
This release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform
Act of 1995 including statements regarding our expectations regarding our future financial results and, including, without
limitation, our expectation regarding our ability to manage realized gains/losses from foreign currency contracts. These statements
are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual
results to differ materially from those described in the forward-looking statements. Information about other potential factors that
could affect Tucows’ business, results of operations and financial condition is included in the Risk Factors sections of Tucows’
filings with the Securities and Exchange Commission. All forward-looking statements should be evaluated with the understanding of
their inherent uncertainty. All forward-looking statements are based on information available to Tucows as of the date they are
made. Tucows assumes no obligation to update any forward-looking statements, except as may be required by law.
TUCOWS® is a registered trademark of Tucows Inc. or its subsidiaries. All other trademarks and service marks are the properties
of their respective owners.
Lawrence Chamberlain NATIONAL Equicom (416) 848-1457 lchamberlain@national.ca