Tucows Reports Continuing Strong Financial Results for Third Quarter 2018
November 07 2018 - 4:05PM
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, 2018.
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 |
|
|
2018(Unaudited) |
2017(Unaudited) |
% Change |
2018(Unaudited) |
2017(Unaudited) |
% Change |
Net
revenue |
83,519 |
85,008 |
-2 |
% |
260,401 |
238,800 |
9 |
% |
Net income |
5,346 |
3,440 |
55 |
% |
12,698 |
11,128 |
14 |
% |
Basic Net earnings per common share |
0.50 |
0.33 |
52 |
% |
1.20 |
1.06 |
13 |
% |
Adjusted EBITDA1 |
11,858 |
9,368 |
27 |
% |
33,425 |
26,082 |
28 |
% |
Net cash provided by operating activities |
11,214 |
7,282 |
54 |
% |
26,541 |
17,814 |
49 |
% |
- This Non-GAAP financial measure is described below
and reconciled to GAAP net income in the accompanying table.
Summary of Revenues and Gross
Margin(In Thousands of US Dollars)
|
Revenue |
Gross Margin |
|
3 Months endedSeptember 30 |
3 Months endedSeptember 30 |
|
2018(Unaudited) |
2017(Unaudited) |
2018(Unaudited) |
2017(Unaudited) |
Network Access Services: |
Mobile
Services |
22,546 |
21,749 |
11,147 |
|
9,384 |
|
Other Services |
2,033 |
1,442 |
1,161 |
|
847 |
|
Total Network Access Services |
24,579 |
23,191 |
12,308 |
|
10,231 |
|
|
|
|
|
|
Domain Services: |
Wholesale |
|
|
|
|
Domain Services |
45,070 |
47,770 |
7,656 |
|
5,477 |
|
Value Added Services |
4,541 |
4,203 |
3,734 |
|
3,516 |
|
Total Wholesale |
49,611 |
51,973 |
11,390 |
|
8,993 |
|
|
|
|
|
|
Retail |
8,731 |
8,873 |
4,266 |
|
4,262 |
|
Portfolio |
598 |
971 |
450 |
|
791 |
|
Total Domain Services |
58,940 |
61,817 |
16,106 |
|
14,046 |
|
|
|
|
|
|
Network Expenses: |
Network, other costs |
- |
- |
(2,315 |
) |
(2,461 |
) |
Network, depreciation and amortization costs |
- |
- |
(1,838 |
) |
(1,322 |
) |
Total Network expenses |
- |
- |
(4,153 |
) |
(3,783 |
) |
|
|
|
|
|
Total revenue/gross margin |
83,519 |
85,008 |
24,261 |
|
20,494 |
|
“Our third quarter results again demonstrate how the consistent
performance and cash flow generation of our Domains and Ting Mobile
businesses are enabling us to invest in the build out of the Ting
Internet footprint for our next phase of outsized growth,” said
Elliot Noss, President and Chief Executive Officer, Tucows Inc.
“Gross margin contribution expanded in each of our businesses, with
Domains benefiting from normalized margins following the Enom
acquisition and Network Access benefiting from Ting Mobile’s lower
costs, a larger subscriber base and higher usage per subscriber, as
we continue to reposition our offering for renewed growth.
Importantly, Ting Internet continues to steadily advance its
network builds, grow its number of serviceable addresses, and
expand its subscriber base. We now have five fully active
towns where we are installing, activating and supporting customers
every day.”
Financial Results
Net revenue for the third quarter of 2018 was $83.5 million
compared with $85.0 million for the third quarter of 2018, with the
decrease due primarily to acceleration of revenue in the first
quarter of 2018 related to the bulk transfer of 2.65 million very
low margin domain names, which was partially offset by the
continued growth of Ting Mobile and a bulk transfer of 0.2 million
very low margin domains names in the third quarter of 2018.
Excluding the impact of these of bulk transfers, net revenue for
the third quarter of 2018 increased 3.5% compared to the third
quarter of 2017.
Net income for the third quarter of 2018 increased 55% to $5.3
million, or $0.50 per share from $3.4 million, or $0.33 per share,
for the third quarter of 2017.
Adjusted EBITDA1 for the third quarter of 2018 increased 27% to
$11.9 million from $9.4 million for the third quarter of
2017.
Cash and cash equivalents at the end of the third quarter of
2018 was $10.8 million compared with $11.2 million at the end of
the second quarter of 2018 and $12.5 million at the end of the
third quarter of 2017.
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
discloses and discusses a non-GAAP financial measure, adjusted
EBITDA, in press releases and 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, including
acquisition and transitions costs. 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.
The following table reconciles net income to adjusted EBITDA
(dollars in thousands):
|
3 months ended September 30 |
9 months ended September 30 |
|
|
|
|
2018(unaudited) |
2017(unaudited) |
2018(unaudited) |
2017(unaudited) |
Net income
for the period |
5,346 |
|
3,440 |
|
12,698 |
11,128 |
|
Depreciation of property and equipment |
1,445 |
|
978 |
|
4,007 |
2,614 |
|
Amortization of intangible assets |
2,296 |
|
2,245 |
|
6,953 |
6,070 |
|
Impairment of intangible assets |
- |
|
2 |
|
- |
2 |
|
Interest expense, net |
914 |
|
864 |
|
2,761 |
2,703 |
|
Provision for income taxes |
1,370 |
|
1,823 |
|
3,781 |
2,781 |
|
Stock-based compensation |
711 |
|
203 |
|
1,904 |
834 |
|
Unrealized loss (gain) on change in fair value of forward
contracts |
(35 |
) |
1 |
|
7 |
(37 |
) |
Unrealized loss (gain) on foreign exchange revaluation of foreign
denominated monetary assets and liabilities |
(269 |
) |
(427 |
) |
191 |
(761 |
) |
Acquisition and transition costs* |
80 |
|
239 |
|
1,123 |
748 |
|
|
|
|
|
|
Adjusted EBITDA |
11,858 |
|
9,368 |
|
33,425 |
26,082 |
|
*Acquisition and other costs represents
transaction-related expenses, transitional expenses, such as
duplicative post-acquisition expenses, related to our acquisition
of Enom in January 2017. Expenses include severance or
transitional costs associated with department, operational or
overall company restructuring efforts, including geographic
alignments. |
Conference CallAs per its new quarterly
conference call format initiated last quarter, concurrent with the
dissemination of this news release, management’s pre-recorded
remarks discussing the quarter and outlook for the Company have
been posted to the Tucows web site at
http://www.tucows.com/investors/financials. In lieu of a live
question and answer period, for the next five days (until Monday,
November 12), shareholders, analysts and prospective investors can
submit questions to Tucows’ management at ir@tucows.com. Management
will post responses to questions of general interest to the
Company’s web site at http://www.tucows.com/investors/financials/
on Friday, November 16 at approximately 4:00 p.m. ET. All
questions will receive a response, however, questions of a more
specific may be responded to directly.
About TucowsTucows 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) and Enom (http://www.enom.com) manage a
combined 23 million domain names and millions of value-added
services through a global reseller network of over 38,000 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
thousands of U.S. dollars) |
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
2018 |
|
2017 |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
10,775 |
|
|
$ |
18,049 |
|
Accounts receivable |
|
|
11,529 |
|
|
|
12,376 |
|
Inventory |
|
|
3,140 |
|
|
|
2,944 |
|
Prepaid expenses and deposits |
|
|
14,554 |
|
|
|
14,186 |
|
Prepaid
domain name registry and ancillary services fees, current
portion |
|
|
91,590 |
|
|
|
103,302 |
|
Income
taxes recoverable |
|
|
3,109 |
|
|
|
3,004 |
|
Total current assets |
|
|
134,697 |
|
|
|
153,861 |
|
|
|
|
|
|
|
Prepaid domain name registry and ancillary services
fees, long-term portion |
|
|
19,636 |
|
|
|
23,701 |
|
Property and equipment |
|
|
40,220 |
|
|
|
24,620 |
|
Contract costs |
|
|
1,383 |
|
|
|
- |
|
Intangible assets |
|
|
51,505 |
|
|
|
58,414 |
|
Goodwill |
|
|
90,054 |
|
|
|
90,054 |
|
Total assets |
|
$ |
337,495 |
|
|
$ |
350,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
8,242 |
|
|
$ |
7,026 |
|
Accrued liabilities |
|
|
6,877 |
|
|
|
6,412 |
|
Customer deposits |
|
|
11,885 |
|
|
|
15,255 |
|
Derivative instrument liability |
|
|
62 |
|
|
|
- |
|
Deferred rent, current portion |
|
|
21 |
|
|
|
21 |
|
Loan payable, current portion |
|
|
17,810 |
|
|
|
18,290 |
|
Deferred revenue, current portion |
|
|
120,459 |
|
|
|
129,155 |
|
Accreditation fees payable, current portion |
|
|
1,035 |
|
|
|
1,175 |
|
Income taxes payable |
|
|
1,128 |
|
|
|
1,226 |
|
Total current liabilities |
|
|
167,519 |
|
|
|
178,560 |
|
|
|
|
|
|
|
Deferred revenue, long-term portion |
|
|
28,033 |
|
|
|
31,427 |
|
Accreditation fees payable, long-term portion |
|
|
260 |
|
|
|
289 |
|
Deferred rent, long-term portion |
|
|
121 |
|
|
|
130 |
|
Loan payable, long-term portion |
|
|
46,605 |
|
|
|
58,634 |
|
Deferred Gain |
|
|
258 |
|
|
|
429 |
|
Deferred tax liability |
|
|
19,265 |
|
|
|
19,834 |
|
|
|
|
|
|
|
Redeemable non-controlling interest |
|
|
- |
|
|
|
1,136 |
|
|
|
|
|
|
|
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; 10,615,566 shares issued and outstanding as of
September 30, 2018 and 10,583,879 shares issued and outstanding as
of December 31, 2017 |
|
|
15,635 |
|
|
|
15,368 |
|
Additional paid-in capital |
|
|
3,462 |
|
|
|
2,167 |
|
Retained earnings |
|
|
56,373 |
|
|
|
42,676 |
|
Accumulated other comprehensive income |
|
|
(36 |
) |
|
|
- |
|
Total stockholders' equity |
|
|
75,434 |
|
|
|
60,211 |
|
Total liabilities and stockholders' equity |
|
$ |
337,495 |
|
|
$ |
350,650 |
|
|
|
|
|
|
|
Tucows
Inc. |
Consolidated Statements
of Operations |
(Dollar amounts in
thousands of U.S.
dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended September
30, |
|
Nine months ended
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
83,519 |
|
$ |
85,008 |
|
$ |
260,401 |
|
$ |
238,800 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
Cost of revenues |
|
55,105 |
|
|
60,731 |
|
|
178,578 |
|
|
169,488 |
|
Network expenses (*) |
|
2,315 |
|
|
2,461 |
|
|
7,590 |
|
|
7,064 |
|
Depreciation of property and equipment |
|
1,339 |
|
|
823 |
|
|
3,698 |
|
|
2,128 |
|
Amortization of intangible assets |
|
499 |
|
|
499 |
|
|
1,497 |
|
|
1,335 |
|
Total cost of revenues |
|
59,258 |
|
|
64,514 |
|
|
191,363 |
|
|
180,015 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
24,261 |
|
|
20,494 |
|
|
69,038 |
|
|
58,785 |
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Sales and marketing (*) |
|
8,412 |
|
|
7,384 |
|
|
24,629 |
|
|
22,051 |
|
Technical operations and development (*) |
|
2,207 |
|
|
1,910 |
|
|
6,657 |
|
|
5,402 |
|
General and administrative (*) |
|
4,120 |
|
|
3,381 |
|
|
12,906 |
|
|
10,124 |
|
Depreciation of property and equipment |
|
106 |
|
|
155 |
|
|
309 |
|
|
486 |
|
Amortization of intangible assets |
|
1,797 |
|
|
1,746 |
|
|
5,456 |
|
|
4,735 |
|
Impairment of indefinite life intangible assets |
|
- |
|
|
2 |
|
|
- |
|
|
2 |
|
Loss (gain) on currency forward contracts |
|
(27 |
) |
|
(54 |
) |
|
22 |
|
|
(115 |
) |
Total expenses |
|
16,615 |
|
|
14,524 |
|
|
49,979 |
|
|
42,685 |
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
7,646 |
|
|
5,970 |
|
|
19,059 |
|
|
16,100 |
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
Interest expense, net |
|
(914 |
) |
|
(864 |
) |
|
(2,761 |
) |
|
(2,703 |
) |
Other income, net |
|
(16 |
) |
|
157 |
|
|
181 |
|
|
512 |
|
Total other income (expenses) |
|
(930 |
) |
|
(707 |
) |
|
(2,580 |
) |
|
(2,191 |
) |
|
|
|
|
|
|
|
|
|
Income before provision for income taxes |
|
6,716 |
|
|
5,263 |
|
|
16,479 |
|
|
13,909 |
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
1,370 |
|
|
1,823 |
|
|
3,781 |
|
|
2,781 |
|
Net income before
redeemable non-controlling interest |
|
5,346 |
|
|
3,440 |
|
|
12,698 |
|
|
11,128 |
|
|
|
|
|
|
|
|
|
|
Redeemable
non-controlling interest |
|
- |
|
|
(69 |
) |
|
(26 |
) |
|
(312 |
) |
|
|
|
|
|
|
|
|
|
Net income attributable
to redeemable non-controlling interest |
|
- |
|
|
69 |
|
|
26 |
|
|
312 |
|
Net income for the
period |
|
5,346 |
|
|
3,440 |
|
|
12,698 |
|
|
11,128 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
Unrealized income (loss) on hedging activities |
|
144 |
|
|
309 |
|
|
(112 |
) |
|
638 |
|
Net amount reclassified to earnings |
|
63 |
|
|
(318 |
) |
|
76 |
|
|
(416 |
) |
Other comprehensive income (loss) net of tax of $
(59) and $ 5 for the three months ended September 30, 2018
and September 30, 2017, $ 19 and $ (127) for the nine months
ended September 30, 2018 and September 30, 2017 |
|
207 |
|
|
(9 |
) |
|
(36 |
) |
|
222 |
|
|
|
|
|
|
|
|
|
|
Comprehensive income,
net of tax for the period |
$ |
5,553 |
|
$ |
3,431 |
|
$ |
12,662 |
|
$ |
11,350 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
$ |
0.50 |
|
$ |
0.33 |
|
$ |
1.20 |
|
$ |
1.06 |
|
|
|
|
|
|
|
|
|
|
Shares used in computing basic earnings per common
share |
|
10,611,579 |
|
|
10,564,311 |
|
|
10,599,243 |
|
|
10,522,841 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
$ |
0.50 |
|
$ |
0.32 |
|
$ |
1.18 |
|
$ |
1.03 |
|
|
|
|
|
|
|
|
|
|
Shares used in computing diluted earnings per common share |
|
10,794,297 |
|
|
10,785,342 |
|
|
10,795,668 |
|
|
10,785,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Stock-based compensation has been included in expenses as
follows: |
|
|
|
|
|
|
|
|
Network expenses |
$ |
70 |
|
$ |
52 |
|
$ |
153 |
|
$ |
60 |
|
Sales and marketing |
$ |
307 |
|
$ |
197 |
|
$ |
739 |
|
$ |
318 |
|
Technical operations and development |
$ |
150 |
|
$ |
96 |
|
$ |
501 |
|
$ |
215 |
|
General and administrative |
$ |
184 |
|
$ |
(143 |
) |
$ |
511 |
|
$ |
241 |
|
|
|
|
|
|
|
|
|
|
Tucows
Inc. |
Consolidated Statements of Cash
Flows |
(Dollar amounts in thousands of U.S.
dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended September
30, |
|
Nine months ended
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Cash provided by: |
|
(unaudited) |
|
(unaudited) |
Operating activities: |
|
|
|
|
|
|
|
|
Net income for the
period |
$ |
5,346 |
|
$ |
3,440 |
|
$ |
12,698 |
|
$ |
11,128 |
|
Items not
involving cash: |
|
|
|
|
|
|
|
|
Depreciation of property and equipment |
|
1,445 |
|
|
978 |
|
|
4,007 |
|
|
2,614 |
|
Loss on
write off of property and equipment |
|
- |
|
|
8 |
|
|
- |
|
|
17 |
|
Amortization of debt discount and issuance costs |
|
72 |
|
|
57 |
|
|
211 |
|
|
204 |
|
Amortization of intangible assets |
|
2,296 |
|
|
2,245 |
|
|
6,953 |
|
|
6,070 |
|
Impairment of indefinite life intangible asset |
|
- |
|
|
2 |
|
|
- |
|
|
2 |
|
Change in
capitalized contract costs |
|
(29 |
) |
|
- |
|
|
21 |
|
|
- |
|
Deferred
income taxes (recovery) |
|
(369 |
) |
|
(1,445 |
) |
|
(861 |
) |
|
(3,011 |
) |
Excess
tax benefits on share-based compensation expense |
|
(191 |
) |
|
(444 |
) |
|
(532 |
) |
|
(2,615 |
) |
Amortization of deferred rent |
|
(5 |
) |
|
- |
|
|
(9 |
) |
|
6 |
|
Loss on
disposal of domain names |
|
5 |
|
|
8 |
|
|
70 |
|
|
25 |
|
Other
income |
|
- |
|
|
(129 |
) |
|
(171 |
) |
|
(386 |
) |
Loss
(gain) on change in the fair value of forward contracts |
|
(30 |
) |
|
1 |
|
|
13 |
|
|
(37 |
) |
Stock-based compensation |
|
711 |
|
|
203 |
|
|
1,904 |
|
|
834 |
|
Change in
non-cash operating working capital: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
685 |
|
|
533 |
|
|
847 |
|
|
(332 |
) |
Inventory |
|
108 |
|
|
(643 |
) |
|
(196 |
) |
|
(1,739 |
) |
Prepaid
expenses and deposits |
|
874 |
|
|
202 |
|
|
(368 |
) |
|
(2,169 |
) |
Prepaid
domain name registry and ancillary services fees |
|
4,229 |
|
|
3,084 |
|
|
15,777 |
|
|
570 |
|
Income
taxes recoverable |
|
(137 |
) |
|
2,225 |
|
|
293 |
|
|
1,815 |
|
Accounts
payable |
|
778 |
|
|
(644 |
) |
|
1,048 |
|
|
(4,682 |
) |
Accrued
liabilities |
|
107 |
|
|
981 |
|
|
465 |
|
|
994 |
|
Customer
deposits |
|
(1,049 |
) |
|
(1,905 |
) |
|
(3,370 |
) |
|
1,163 |
|
Deferred
revenue |
|
(3,559 |
) |
|
(1,425 |
) |
|
(12,090 |
) |
|
7,543 |
|
Accreditation fees payable |
|
(73 |
) |
|
(50 |
) |
|
(169 |
) |
|
(200 |
) |
Net cash
provided by operating activities |
|
11,214 |
|
|
7,282 |
|
|
26,541 |
|
|
17,814 |
|
|
|
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
|
|
|
|
Proceeds
received on exercise of stock options |
|
23 |
|
|
68 |
|
|
62 |
|
|
173 |
|
Payment
of tax obligations resulting from net exercise of stock
options |
|
(116 |
) |
|
(117 |
) |
|
(404 |
) |
|
(1,438 |
) |
Proceeds
received on loan payable |
|
- |
|
|
- |
|
|
2,500 |
|
|
86,998 |
|
Repayment
of loan payable |
|
(4,387 |
) |
|
(4,573 |
) |
|
(15,212 |
) |
|
(15,403 |
) |
Payment
of loan payable costs |
|
(4 |
) |
|
(16 |
) |
|
(8 |
) |
|
(620 |
) |
Net cash
(used in) provided by financing activities |
|
(4,484 |
) |
|
(4,638 |
) |
|
(13,062 |
) |
|
69,710 |
|
|
|
|
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
|
|
|
|
Additions
to property and equipment |
|
(7,003 |
) |
|
(2,859 |
) |
|
(19,439 |
) |
|
(9,461 |
) |
Acquisition of a portion of the minority interest in Ting Virginia,
LLC |
|
- |
|
|
- |
|
|
(1,200 |
) |
|
(2,000 |
) |
Acquisition of Enom Incorporated, net of cash |
|
- |
|
|
- |
|
|
- |
|
|
(76,237 |
) |
Acquisition of intangible assets |
|
(113 |
) |
|
(2,384 |
) |
|
(114 |
) |
|
(2,384 |
) |
Net cash
used in investing activities |
|
(7,116 |
) |
|
(5,243 |
) |
|
(20,753 |
) |
|
(90,082 |
) |
|
|
|
|
|
|
|
|
|
Decrease in cash and
cash equivalents |
|
(386 |
) |
|
(2,599 |
) |
|
(7,274 |
) |
|
(2,558 |
) |
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period |
|
11,161 |
|
|
15,146 |
|
|
18,049 |
|
|
15,105 |
|
Cash and cash
equivalents, end of period |
$ |
10,775 |
|
$ |
12,547 |
|
$ |
10,775 |
|
$ |
12,547 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information: |
|
|
|
|
|
|
|
|
Interest
paid |
$ |
919 |
|
$ |
870 |
|
$ |
2,781 |
|
$ |
2,717 |
|
Income
taxes paid, net |
$ |
1,793 |
|
$ |
1,308 |
|
$ |
5,370 |
|
$ |
6,313 |
|
|
|
|
|
|
|
|
|
|
Supplementary
disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Property
and equipment acquired during the period not yet paid for |
$ |
382 |
|
$ |
186 |
|
$ |
382 |
|
$ |
186 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net income to
Adjusted EBITDA |
(In Thousands of US
Dollars) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
|
|
2018
(unaudited) |
|
2017
(unaudited) |
|
2018 (unaudited) |
|
2017
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Net income for the
period |
$ |
5,346 |
|
$ |
3,440 |
|
|
12,698 |
$ |
11,128 |
|
|
Depreciation of property and equipment |
|
1,445 |
|
|
978 |
|
|
4,007 |
|
2,614 |
|
|
Amortization of intangible assets |
|
2,296 |
|
|
2,245 |
|
|
6,953 |
|
6,070 |
|
|
Impairment of intangible assets |
|
- |
|
|
2 |
|
|
- |
|
2 |
|
|
Interest expense, net |
|
914 |
|
|
864 |
|
|
2,761 |
|
2,703 |
|
|
Provision for income taxes |
|
1,370 |
|
|
1,823 |
|
|
3,781 |
|
2,781 |
|
|
Stock-based compensation |
|
711 |
|
|
203 |
|
|
1,904 |
|
834 |
|
|
Unrealized loss (gain) on change in fair value of
forward contracts |
|
(35 |
) |
|
1 |
|
|
7 |
|
(37 |
) |
|
Unrealized loss (gain) on foreign exchange
revaluation of foreign denominated monetary assets and
liabilities |
|
(269 |
) |
|
(427 |
) |
|
191 |
|
(761 |
) |
|
Acquisition and other costs1 |
|
80 |
|
|
239 |
|
|
1,123 |
|
748 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
11,858 |
|
$ |
9,368 |
|
|
33,425 |
$ |
26,082 |
|
|
|
|
|
|
|
|
|
|
|
|
1Acquisition and other costs represents
transaction-related expenses, transitional expenses, such as
duplicative post-acquisition expenses, primarily related to our
acquisition of eNom in January 2017. Expenses include severance or
transitional costs associated with department, operational or
overall company restructuring efforts, including geographic
alignments. |
|
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 realize synergies from the
Enom acquisition and our expectation for growth of Ting Internet.
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, Ting, OpenSRS, Enom and Hover are registered trademarks
of Tucows Inc. or its subsidiaries.
Contact:Lawrence ChamberlainLoderock
Advisors(416) 519-4196lawrence.chamberlain@loderockadvisors.com
Tucows (TSX:TC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Tucows (TSX:TC)
Historical Stock Chart
From Apr 2023 to Apr 2024