Welcome!

Microsoft Cloud Authors: Pat Romanski, John Basso, Liz McMillan, Glenn Rossman, Elizabeth White

News Feed Item

Tucows Reports Continuing Strong Financial Results for Third Quarter of 2012

- Company Achieves Tenth Consecutive Quarter of Record Revenue and Generates Strong Cash Flow From Operations -

TORONTO, Nov. 13, 2012 /PRNewswire/ - Tucows Inc. (NYSE AMEX:TCX, TSX:TC), a global provider of domain names and other Internet services, today reported its financial results for the third quarter ended September 30, 2012. All figures are in U.S. dollars. 

Summary Financial Results
(In Thousands of US Dollars, Except Per Share Data) 

  3 Months Ended
Sept. 30, 2012
(unaudited)
3 Months Ended
Sept. 30, 2011
(unaudited)
9 Months Ended
Sept. 30, 2012
(unaudited)
9 Months Ended
Sept. 30, 2011
(unaudited)
Net revenue 29,246 25,094 84,936 70,695
Income before provision for income taxes and change in fair value of forward exchange contracts  1,597  1,090 4,956 2,240
Net income for the period 1,635 (1,178) 3,995 115
Net earnings per common share 0.04 (0.02) $0.09 -
Net cash provided by operating activities 2,237 1,615 4,321 3,202

Summary of Revenues and Cost of Revenues
(In Thousands of US Dollars)

  Revenue Cost of Revenue
  3 Months Ended
Sept. 30, 2012
(unaudited)
3 Months Ended
Sept. 30, 2011
(unaudited)
3 Months Ended
Sept. 30, 2012
(unaudited)
3 Months Ended
Sept. 30, 2011
(unaudited)
Wholesale        
Domain Services 22,268 19,698 18,645 16,470
  Value-Added Services 2,603 2,609 532 515
Total Wholesale 24,871 22,307 19,177 16,985
         
Retail 2,965 1,358 2,064 495
Portfolio 1,410 1,429 205 179
         
Network, other costs - - 1,159 1,193
Network, depreciation and amortization costs - - 193 183
Total revenue/cost of revenue 29,246 25,094 22,798 19,035

NOTE: Beginning in the first quarter of 2012, Tucows reclassified its revenue streams into three distinct service offerings: Wholesale, Retail and Portfolio1. The realignment is intended to better reflect the manner in which these revenue streams are generated and assessed by management.

"Our third quarter results once again reflect the consistency and reliability of our business, the leverage inherent in our model, and our ability to deliver growth," said Elliot Noss, President and Chief Executive Officer, Tucows Inc.  "Revenue for the quarter grew 17% year-over-year to another record and we generated $2.2 million in cash flow from operations, a portion of which we used to repurchase an additional 1.3 million shares under our normal course issuer bid. In 2012, we have bought back 9.9 million shares and since we began buying back stock, we have now repurchased a total of 33.2 million shares, or almost 45% of outstanding shares. Our core businesses continue to perform well, allowing us to efficiently invest in new opportunities such as Ting.  As a result, we remain well positioned to continue to deliver growth while returning capital to shareholders over the long term."

Net revenue for the third quarter of 2012 increased 17% to a record $29.3 million from $25.1 million for the third quarter of 2011.

Net income for the third quarter of 2012 was $1.6 million, or $0.04 per share, compared with a net loss for the third quarter of 2011 of $1.2 million, or $0.02 per share.

Deferred revenue at the end of the third quarter of 2012 was $73.3 million, an increase of 6% from $68.9 million at the end of the third quarter of 2011 and a decrease of 2% from $74.5 million at the end of the second quarter of 2012.

Cash and cash equivalents at the end of the third quarter of 2012 were $5.0 million compared with $4.5 million at the end of the second quarter of 2012 and $4.7 million from the end of the third quarter of 2011.  During the third quarter of 2012, the Company generated cash flow from operations of $2.2 million compared with $1.6 million for the same quarter of 2011. During the quarter, the Company used $1.6 million for the repurchase of stock under its ongoing normal course issuer bid and invested $0.2 million in equipment purchases.

1Service Offerings:  Wholesale, primarily branded as OpenSRS, is composed of revenue generated by the OpenSRS Domain Service and Other Value-Added Services, including hosted email, SSL and other trust certificates, bulk sale of domain names and advertising from the OpenSRS Domain Expiry Stream, web publishing tools, mobile phone services, third-party marketing funds, and billing software for ISPs.  Retail is primarily composed of services to individuals and small businesses, including Hover, which generates revenue from the sale of domain name registration and email, and Ting, which generates revenue from mobile phone services. Portfolio includes revenue generated by the resale of names from the domain name portfolio and advertising revenue from the Company's domain name portfolio and two large advertising-supported websites.

Conference Call

Tucows management will host a conference call today, Tuesday, November 13, 2012 at 5:00 p.m. (ET) to discuss the Company's third quarter 2012 results. Participants can access the conference call via the Internet at www.tucowsinc.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 pass code 54761695 followed by the pound key.  The telephone replay will be available until Tuesday, November 20, 2012 at midnight. To access the archived conference call as an MP3 via the Internet, go to http://tucowsinc.com/investors.

About Tucows

Tucows is a global Internet services company. OpenSRS (http://opensrs.com) manages over fourteen million domain names and millions of value-added services through a reseller network of over 13,000 web hosts and ISPs. Hover (http://hover.com) is the easiest way for individuals and small businesses to manage their domain names and email addresses. Ting.com (https://ting.com) is a mobile phone service provider dedicated to bringing clarity and control to US mobile phone users. YummyNames (http://yummynames.com) owns and operates premium domain names that generate revenue through advertising or resale. More information can be found on Tucows' corporate website (http://tucows.com).

This release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995.  In particular, this release includes forward looking statements regarding our expectations as to our financial results and the impact of our consistent growth and leverage. 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 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, OpenSRS, Hover, Ting, and YummyNames are registered trademarks of Tucows Inc. or its subsidiaries.

Tucows  Inc.
Consolidated Balance Sheets
(Dollar amounts in U.S. dollars)
               
    September 30,     December 31,
    2012     2011
    (unaudited)     (unaudited)
               
Assets              
               
Current assets:              
  Cash and cash equivalents   $ 4,969,733     $ 6,408,209
  Accounts receivable     4,826,776       3,880,184
  Prepaid expenses and deposits     5,216,617       3,961,905
  Derivative instrument asset, current portion     468,675       -
  Prepaid domain name registry and ancillary services fees, current portion     46,467,392       43,209,033
  Income taxes recoverable     434,666       867,093
    Total current assets     62,383,859       58,326,424
               
Derivative instrument asset, long-term portion     -       87,023
Prepaid domain name registry and ancillary services fees, long-term portion     12,734,182       12,600,154
Property and equipment     1,413,952       1,437,564
Deferred financing charges     -       2,300
Deferred tax asset, long-term portion     6,674,517       6,880,377
Intangible assets     16,683,253       17,482,590
Goodwill     18,873,127       18,873,127
    Total assets   $ 118,762,890     $ 115,689,559
               
               
Liabilities and Stockholders' Equity              
               
Current liabilities:              
  Accounts payable   $ 1,716,725     $ 1,051,115
  Accrued liabilities     2,219,377       2,081,968
  Customer deposits     4,265,716       4,202,899
  Derivative instrument liability, current portion     13,011       781,027
  Loan payable, current portion     4,000,000       850,000
  Deferred revenue, current portion     56,780,763       52,683,546
  Accreditation fees payable, current portion     536,377       555,869
  Deferred tax liability, current portion     1,090,959       880,008
  Income taxes payable     192,716       158,258
    Total current liabilities     70,815,644       63,244,690
               
Derivative instrument liability, long-term portion     -       5,479
Deferred revenue, long-term portion     16,534,807       16,492,155
Accreditation fees payable, long-term portion     148,893       156,061
Deferred rent, long-term portion     47,945       26,487
Deferred tax liability, long-term portion     5,262,000       5,345,700
               
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; 44,249,184 shares issued
and outstanding as of September 30, 2012 and 53,497,584 shares issued and outstanding
as of December 31, 2011
    10,005,229       11,358,959
  Additional paid-in capital     33,887,740       40,994,013
  Deficit     (17,939,368)       (21,933,985)
    Total stockholders' equity     25,953,601       30,418,987
Total liabilities and stockholders' equity   $ 118,762,890     $ 115,689,559
               
               

Tucows  Inc.
Consolidated Statements of Operations
(Dollar amounts in U.S. dollars)
                           
          Three months ended September 30,       Nine months ended September 30,
          2012   2011       2012   2011
          (unaudited)       (unaudited)
                           
Net revenues       $ 29,246,069   25,094,056     $ 84,935,989 $ 70,695,186
                           
Cost of revenues:                          
  Cost of revenues         21,446,084   17,658,648       60,833,420   49,578,724
  Network expenses (*)         1,158,885   1,193,669       3,629,639   3,691,995
  Depreciation of property and equipment         157,203   159,191       460,259   608,961
  Amortization of intangible assets         35,910   23,960       107,730   49,680
     Total cost of revenues         22,798,082   19,035,468       65,031,048   53,929,360
                           
Gross profit         6,447,987   6,058,588       19,904,941   16,765,826
                           
Expenses:                          
  Sales and marketing (*)         2,037,338   1,867,085       6,287,702   5,663,759
  Technical operations and development (*)         1,010,949   1,220,953       3,229,669   3,651,782
  General and administrative (*) (note 1)         1,486,323   1,611,896       5,018,178   4,619,443
  Depreciation of property and equipment         46,981   48,874       139,918   140,556
  Amortization of intangible assets         219,030   201,180       657,090   785,920
  Loss (gain) on currency forward contracts (note 1)         (615,245)   1,845,550       (793,516)   1,374,177
     Total expenses         4,185,376   6,795,538       14,539,041   16,235,637
                           
Income (loss) from operations         2,262,611   (736,950)       5,365,900   530,189
                           
Other income (expenses):                          
  Interest (expense) income, net         (50,228)   (18,718)       (145,710)   (38,915)
  Other income         -   -       529,711   374,977
     Total other income (expenses)         (50,228)   (18,718)       384,001   336,062
                           
Income (loss) before provision for income taxes         2,212,383   (755,668)       5,749,901   866,251
                           
Provision for income taxes         577,383   422,592       1,755,284   750,906
Net income (loss)and comprehensive income for the period       $ 1,635,000 $ (1,178,260)     $ 3,994,617 $ 115,345
                           
                           
Basic earnings (loss) per common share       $ 0.04 $ (0.02)     $ 0.09 $ -
                           
Shares used in computing basic earnings (loss) per common share         45,094,678   53,452,205       46,362,261   53,444,959
                           
Diluted earnings (loss) per common share       $ 0.03 $ (0.02)     $ 0.08 $ -
                           
Shares used in computing diluted earnings (loss) per common share         48,411,429   53,452,205       49,603,870   55,748,777
                           
(Note 1) The Company accounts for the fair value of currency forward contracts within the consolidated Balance Sheet as a derivative financial asset or liability and the
corresponding change in fair value is recorded in the consolidated Statement of Operations.  In prior periods, the Company recorded the realized gain or loss upon
settlement of the currency forward contracts in "General and administrative expenses" and recorded the unrealized gain or loss in "Loss (gain) on change in fair value
of forward contracts".  The Company has determined that both of these amounts are more appropriately classified in expenses as "Loss (gain) on currency forward
contracts" and as a result a gain of $0.3 million for the three months ended September 30, 2011 and a gain of $1.1 million for the nine months ended September 30,
2011, has been reclassified from "General and administrative expense" to "Loss (gain) on currency forward contracts" respectively. As a result of this reclassification,
there was no change to previously reported net income (loss), income from operations, net revenues, gross profit, reported cash flows or the amounts recorded in the
consolidated Balance Sheets.        
                           
                           
(*) Stock-based compensation has been included in expenses as follows:                          
  Network expenses       $ 5,979 $ 5,808     $ 18,354 $ 17,170
  Sales and marketing       $ 24,116 $ 22,695     $ 67,047 $ 67,155
  Technical operations and development       $ 15,600 $ 13,020     $ 43,490 $ 40,122
  General and administrative       $ 120,676 $ 79,364     $ 163,041 $ 124,169
                             
                             

Tucows Inc.
Consolidated Statements of Cash Flows
(Dollar amounts in U.S. dollars)
                         
        Three months ended September 30,       Nine months ended September 30,
        2012   2011       2012   2011
Cash provided by:       (unaudited)       (unaudited)
Operating activities:                        
                         
  Net income (loss) for the period     $ 1,635,000 $ (1,178,260)     $ 3,994,617 $ 115,345
  Items not involving cash:                        
    Depreciation of property and equipment       204,184   208,065       600,177   749,517
    Amortization of deferred financing charges       100   3,000       2,300   11,100
    Amortization of intangible assets       254,940   225,140       764,820   835,600
    Deferred income taxes       228,169   (18,400)       333,111   (18,400)
    Deferred rent       8,258   5,310       21,458   19,274
    Acquisition of domain names               (3,664)  
    Disposal of domain names       15,142   8,816       38,181   29,907
    Gain on disposition of intangible assets               (508,800)  
    (Gain) loss on currency forward contracts       (698,781)   2,152,243       (1,155,147)   2,458,104
    Stock-based compensation       166,371   120,887       291,932   248,617
  Changes in non-cash operating working capital:                        
    Accounts receivable       90,239   448,692       (946,592)   (679,872)
    Prepaid expenses and deposits       636,756   299,673       (1,254,712)   (923,976)
    Prepaid fees for domain name registry and ancillary services fees       905,807   (995,565)       (3,392,387)   (4,745,147)
    Income taxes recoverable/payable       226,304   158,467       466,885   318,467
    Accounts payable       43,173   (539,199)       648,250   (335,376)
    Accrued liabilities       (279,427)   (119,997)       244,738   261,570
    Customer deposits       (2,781)   168,352       62,817   (89,351)
    Deferred revenue       (1,144,779)   684,204       4,139,869   4,941,471
    Accreditation fees payable       (51,839)   (16,194)       (26,660)   5,598
  Net cash provided by operating activities       2,236,836   1,615,234       4,321,193   3,202,448
                         
Financing activities:                        
  Proceeds received on exercise of stock options       14,186   10,685       363,898   14,145
  Repurchase of common stock       (1,630,643)         (9,115,833)  
  Proceeds received on loan payable               4,000,000  
  Repayment of loan payable         1,210,960       (850,000)   253,839
  Net cash used in financing activities       (1,616,457)   1,221,645       (5,601,935)   267,984
                         
Investing activities:                        
  Additions to property and equipment       (162,207)   (138,909)       (666,534)   (629,935)
  Acquisition of EPAG Domainservices Inc., net of cash acquired         (2,392,461)         (2,392,461)
  Proceeds on disposition of intangible assets with no book value               508,800  
  Net cash provided by (used in) investing activities       (162,207)   (2,531,370)       (157,734)   (3,022,396)
                         
(Decrease) increase in cash and cash equivalents       458,172   305,509       (1,438,476)   448,036
                         
Cash and cash equivalents, beginning of period       4,511,561   4,348,256       6,408,209   4,205,729
Cash and cash equivalents, end of period     $ 4,969,733 $ 4,653,765     $ 4,969,733 $ 4,653,765
                        -
Supplemental cash flow information:                        
  Interest paid     $ 50,511 $ 18,890     $ 146,342 $ 39,197
                         
Supplementary disclosure of non-cash investing activity:                        
  Property and equipment acquired during the period not yet paid for     $ 167,998 $ 124,979     $ 167,998 $ 124,979

 

 

 

 

SOURCE Tucows Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
I wanted to gather all of my Internet of Things (IOT) blogs into a single blog (that I could later use with my University of San Francisco (USF) Big Data “MBA” course). However as I started to pull these blogs together, I realized that my IOT discussion lacked a vision; it lacked an end point towards which an organization could drive their IOT envisioning, proof of value, app dev, data engineering and data science efforts. And I think that the IOT end point is really quite simple…
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
Extracting business value from Internet of Things (IoT) data doesn’t happen overnight. There are several requirements that must be satisfied, including IoT device enablement, data analysis, real-time detection of complex events and automated orchestration of actions. Unfortunately, too many companies fall short in achieving their business goals by implementing incomplete solutions or not focusing on tangible use cases. In his general session at @ThingsExpo, Dave McCarthy, Director of Products...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus...
Verizon Communications Inc. (NYSE, Nasdaq: VZ) and Yahoo! Inc. (Nasdaq: YHOO) have entered into a definitive agreement under which Verizon will acquire Yahoo's operating business for approximately $4.83 billion in cash, subject to customary closing adjustments. Yahoo informs, connects and entertains a global audience of more than 1 billion monthly active users** -- including 600 million monthly active mobile users*** through its search, communications and digital content products. Yahoo also co...
A critical component of any IoT project is what to do with all the data being generated. This data needs to be captured, processed, structured, and stored in a way to facilitate different kinds of queries. Traditional data warehouse and analytical systems are mature technologies that can be used to handle certain kinds of queries, but they are not always well suited to many problems, particularly when there is a need for real-time insights.
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
The best-practices for building IoT applications with Go Code that attendees can use to build their own IoT applications. In his session at @ThingsExpo, Indraneel Mitra, Senior Solutions Architect & Technology Evangelist at Cognizant, provided valuable information and resources for both novice and experienced developers on how to get started with IoT and Golang in a day. He also provided information on how to use Intel Arduino Kit, Go Robotics API and AWS IoT stack to build an application tha...
IoT generates lots of temporal data. But how do you unlock its value? You need to discover patterns that are repeatable in vast quantities of data, understand their meaning, and implement scalable monitoring across multiple data streams in order to monetize the discoveries and insights. Motif discovery and deep learning platforms are emerging to visualize sensor data, to search for patterns and to build application that can monitor real time streams efficiently. In his session at @ThingsExpo, ...
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Big Data, cloud, analytics, contextual information, wearable tech, sensors, mobility, and WebRTC: together, these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at @ThingsExpo, Erik Perotti, Senior Manager of New Ventures on Plantronics’ Innovation team, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it ...
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
It’s 2016: buildings are smart, connected and the IoT is fundamentally altering how control and operating systems work and speak to each other. Platforms across the enterprise are networked via inexpensive sensors to collect massive amounts of data for analytics, information management, and insights that can be used to continuously improve operations. In his session at @ThingsExpo, Brian Chemel, Co-Founder and CTO of Digital Lumens, will explore: The benefits sensor-networked systems bring to ...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, discussed how leveraging the Industrial Internet a...
There will be new vendors providing applications, middleware, and connected devices to support the thriving IoT ecosystem. This essentially means that electronic device manufacturers will also be in the software business. Many will be new to building embedded software or robust software. This creates an increased importance on software quality, particularly within the Industrial Internet of Things where business-critical applications are becoming dependent on products controlled by software. Qua...
In addition to all the benefits, IoT is also bringing new kind of customer experience challenges - cars that unlock themselves, thermostats turning houses into saunas and baby video monitors broadcasting over the internet. This list can only increase because while IoT services should be intuitive and simple to use, the delivery ecosystem is a myriad of potential problems as IoT explodes complexity. So finding a performance issue is like finding the proverbial needle in the haystack.
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Large scale deployments present unique planning challenges, system commissioning hurdles between IT and OT and demand careful system hand-off orchestration. In his session at @ThingsExpo, Jeff Smith, Senior Director and a founding member of Incenergy, will discuss some of the key tactics to ensure delivery success based on his experience of the last two years deploying Industrial IoT systems across four continents.