Tucows Reports Continuing Strong Financial Results for Second Quarter 2018
August 08 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 second quarter ended June 30, 2018. All
figures are in U.S. dollars.
Summary Financial
Results(In Thousands of US Dollars, Except Per
Share Data)
|
3 Months Ended June 30 |
6 Months Ended June 30 |
2018(Unaudited) |
2017(Unaudited) |
% Change |
2018(Unaudited) |
2017(Unaudited) |
% Change |
Net revenue |
81,087 |
84,223 |
-4 |
% |
176,882 |
153,791 |
15 |
% |
Net income |
3,608 |
5,242 |
-31 |
% |
7,352 |
7,686 |
-4 |
% |
Basic Net earnings per common share |
0.34 |
0.50 |
-32 |
% |
0.69 |
0.73 |
-5 |
% |
Adjusted EBITDA1 |
11,188 |
10,374 |
8 |
% |
21,567 |
16,711 |
29 |
% |
Net cash provided by operating activities |
5,754 |
8,131 |
-29 |
% |
15,327 |
10,534 |
46 |
% |
- 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 ended June 30 |
3 Months endedJune 30 |
|
2018(Unaudited) |
2017(Unaudited) |
2018(Unaudited) |
2017(Unaudited) |
Network Access Services: |
Mobile Services |
22,411 |
20,379 |
10,433 |
|
9,677 |
|
Other Services |
1,895 |
1,248 |
605 |
|
302 |
|
Total Network Access Services |
24,306 |
21,627 |
11,038 |
|
9,979 |
|
|
|
|
|
|
Domain Services: |
Wholesale |
|
|
|
|
Domain Services |
42,540 |
48,550 |
6,696 |
|
6,101 |
|
Value Added Services |
4,601 |
5,415 |
3,853 |
|
4,800 |
|
Total Wholesale |
47,141 |
53,965 |
10,549 |
|
10,901 |
|
|
|
|
|
|
Retail |
8,477 |
7,663 |
4,031 |
|
3,115 |
|
Portfolio |
1,163 |
968 |
968 |
|
783 |
|
Total Domain Services |
56,781 |
62,596 |
15,548 |
|
14,799 |
|
|
|
|
|
|
Network Expenses: |
Network, other costs |
- |
- |
(2,701 |
) |
(2,261 |
) |
Network, depreciation and amortization costs |
- |
- |
(1,727 |
) |
(1,169 |
) |
Total Network expenses |
- |
- |
(4,428 |
) |
(3,430 |
) |
|
|
|
|
|
Total revenue/gross margin |
81,087 |
84,223 |
22,158 |
|
21,348 |
|
|
|
|
|
|
|
|
“The second quarter once again saw solid performances from each
of our businesses,” said Elliot Noss, President and Chief Executive
Officer, Tucows Inc. “The domains business delivered consistent
results outside of the expected in quarter impact of the transfer
of 2.65 million very low margin names in the first quarter of this
year. Ting Mobile delivered increases in year-over-year revenue and
margin as we work towards the next phase of customer growth.
Finally, Ting Internet continued its steady progress from network
builds and expansions across the footprint to serviceable
addresses, to subscriber activations, to dependable recurring
monthly revenue.”
Financial Results
Net revenue for the second quarter of 2018 was $81.1 million
compared to $84.2 million for the second quarter of 2017, with the
decrease due primarily to the bulk transfer of 2.65 million very
low margin domain names during the first quarter of 2018, which was
partially offset by the continued growth of Ting Mobile.
Net income for the second quarter of 2018 was $3.6 million, or
$0.34 per share, down from $5.2 million, or $0.50 per share, for
the second quarter of 2017. Net income for the second quarter
of 2018 includes acquisition and transaction costs of $0.8 million
related to geographic headcount and operational alignments.
Adjusted EBITDA1 for the second quarter of 2018 increased 8% to
$11.2 million from $10.4 million for the second quarter of
2017.
Cash and cash equivalents at the end of the second quarter of
2018 was $11.2 million compared with $16.6 million at the end of
the first quarter of 2018 and $15.1 million at the end of the
second 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 June 30 |
6 months ended June 30 |
|
2018(unaudited) |
2017(unaudited) |
2018(unaudited) |
2017(unaudited) |
Net income for the period |
3,608 |
5,242 |
|
7,352 |
7,686 |
|
Depreciation of property and equipment |
1,330 |
879 |
|
2,562 |
1,636 |
|
Amortization of intangible assets |
2,326 |
2,063 |
|
4,657 |
3,825 |
|
Interest expense, net |
951 |
970 |
|
1,847 |
1,838 |
|
Provision for income taxes |
1,228 |
1,083 |
|
2,411 |
958 |
|
Stock-based compensation |
615 |
313 |
|
1,193 |
631 |
|
Unrealized loss (gain) on change in fair value of forward
contracts |
46 |
(20 |
) |
43 |
(38 |
) |
Unrealized loss (gain) on foreign exchange revaluation of foreign
denominated monetary assets and liabilities |
282 |
(283 |
) |
459 |
(334 |
) |
Acquisition and transition costs* |
802 |
127 |
|
1,043 |
509 |
|
|
|
|
|
|
Adjusted EBITDA |
11,188 |
10,374 |
|
21,567 |
16,711 |
|
*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 CallBeginning this quarter, Tucows
is evolving the format of its quarterly conference calls.
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 Company’s web site
at http://www.tucows.com/investors/financials. In lieu of the
usual question and answer period on past calls, for the next seven
days (until Wednesday, August 15), shareholders and analysts 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 Wednesday, August 22 at 9:00 a.m. ET. Questions that are
more specific will be responded to directly. All questions will
receive a response.
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 24 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) |
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2018 |
|
2017 |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
11,161 |
|
|
$ |
18,049 |
Accounts
receivable |
|
|
12,214 |
|
|
|
12,376 |
Inventory |
|
|
3,248 |
|
|
|
2,944 |
Prepaid
expenses and deposits |
|
|
15,428 |
|
|
|
14,186 |
Prepaid
domain name registry and ancillary services fees, current
portion |
|
|
94,754 |
|
|
|
103,302 |
Income
taxes recoverable |
|
|
3,137 |
|
|
|
3,004 |
Total
current assets |
|
|
139,942 |
|
|
|
153,861 |
|
|
|
|
|
Prepaid
domain name registry and ancillary services fees, long-term
portion |
|
|
20,701 |
|
|
|
23,701 |
Property and
equipment |
|
|
34,538 |
|
|
|
24,620 |
Contract
costs |
|
|
1,354 |
|
|
|
- |
Intangible assets |
|
|
53,693 |
|
|
|
58,414 |
Goodwill |
|
|
90,054 |
|
|
|
90,054 |
Total
assets |
|
$ |
340,282 |
|
|
$ |
350,650 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
7,340 |
|
|
$ |
7,026 |
Accrued
liabilities |
|
|
6,770 |
|
|
|
6,412 |
Customer
deposits |
|
|
12,934 |
|
|
|
15,255 |
Derivative instrument liability |
|
|
337 |
|
|
|
- |
Deferred
rent, current portion |
|
|
21 |
|
|
|
21 |
Loan
payable, current portion |
|
|
17,721 |
|
|
|
18,290 |
Deferred
revenue, current portion |
|
|
122,976 |
|
|
|
129,155 |
Accreditation fees payable, current portion |
|
|
1,099 |
|
|
|
1,175 |
Income
taxes payable |
|
|
1,477 |
|
|
|
1,226 |
Total
current liabilities |
|
|
170,675 |
|
|
|
178,560 |
|
|
|
|
|
Derivative instrument
liability, long-term portion (note 5) |
|
|
27 |
|
|
|
- |
Deferred revenue,
long-term portion |
|
|
29,075 |
|
|
|
31,427 |
Accreditation fees payable, long-term portion |
|
|
269 |
|
|
|
289 |
Deferred
rent, long-term portion |
|
|
126 |
|
|
|
130 |
Loan
payable, long-term portion |
|
|
51,012 |
|
|
|
58,634 |
Deferred
Gain |
|
|
258 |
|
|
|
429 |
Deferred
tax liability |
|
|
19,577 |
|
|
|
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; 10,603,366
shares issued and outstanding as of June 30, 2018 and 10,583,879
shares issued and outstanding as of December 31, 2017 |
|
|
15,548 |
|
|
|
15,368 |
Additional paid-in capital |
|
|
2,931 |
|
|
|
2,167 |
Retained
earnings |
|
|
51,027 |
|
|
|
42,676 |
Accumulated other comprehensive income |
|
|
(243 |
) |
|
|
- |
Total
stockholders' equity |
|
|
69,263 |
|
|
|
60,211 |
Total liabilities and
stockholders' equity |
|
$ |
340,282 |
|
|
$ |
350,650 |
|
|
|
|
|
|
Tucows
Inc. |
Consolidated Statements of
Operations |
(Dollar amounts in thousands of U.S.
dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
81,087 |
|
$ |
84,223 |
|
$ |
176,882 |
|
$ |
153,791 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
Cost of
revenues |
|
54,501 |
|
|
59,445 |
|
|
123,473 |
|
|
108,756 |
|
Network
expenses (*) |
|
2,701 |
|
|
2,261 |
|
|
5,275 |
|
|
4,604 |
|
Depreciation of property and equipment |
|
1,228 |
|
|
714 |
|
|
2,359 |
|
|
1,305 |
|
Amortization of intangible assets |
|
499 |
|
|
455 |
|
|
998 |
|
|
836 |
|
Total
cost of revenues |
|
58,929 |
|
|
62,875 |
|
|
132,105 |
|
|
115,501 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
22,158 |
|
|
21,348 |
|
|
44,777 |
|
|
38,290 |
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Sales and
marketing (*) |
|
7,852 |
|
|
7,447 |
|
|
16,217 |
|
|
14,667 |
|
Technical
operations and development (*) |
|
2,355 |
|
|
1,798 |
|
|
4,450 |
|
|
3,492 |
|
General
and administrative (*) |
|
4,256 |
|
|
3,285 |
|
|
8,786 |
|
|
6,742 |
|
Depreciation of property and equipment |
|
102 |
|
|
165 |
|
|
203 |
|
|
331 |
|
Loss on
disposition of property and equipment |
|
- |
|
|
2 |
|
|
- |
|
|
2 |
|
Amortization of intangible assets |
|
1,827 |
|
|
1,608 |
|
|
3,659 |
|
|
2,989 |
|
Loss
(gain) on currency forward contracts |
|
52 |
|
|
(27 |
) |
|
49 |
|
|
(61 |
) |
Total
expenses |
|
16,444 |
|
|
14,278 |
|
|
33,364 |
|
|
28,162 |
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
5,714 |
|
|
7,070 |
|
|
11,413 |
|
|
10,128 |
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
Interest
expense, net |
|
(951 |
) |
|
(970 |
) |
|
(1,847 |
) |
|
(1,838 |
) |
Other
income, net |
|
73 |
|
|
225 |
|
|
197 |
|
|
354 |
|
Total
other income (expenses) |
|
(878 |
) |
|
(745 |
) |
|
(1,650 |
) |
|
(1,484 |
) |
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes |
|
4,836 |
|
|
6,325 |
|
|
9,763 |
|
|
8,644 |
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
1,228 |
|
|
1,083 |
|
|
2,411 |
|
|
958 |
|
Net income before
redeemable non-controlling interest |
|
3,608 |
|
|
5,242 |
|
|
7,352 |
|
|
7,686 |
|
|
|
|
|
|
|
|
|
|
Redeemable
non-controlling interest |
|
- |
|
|
(117 |
) |
|
(26 |
) |
|
(243 |
) |
|
|
|
|
|
|
|
|
|
Net income attributable
to redeemable non-controlling interest |
|
- |
|
|
117 |
|
|
26 |
|
|
243 |
|
Net income for the
period |
|
3,608 |
|
|
5,242 |
|
|
7,352 |
|
|
7,686 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income, net of tax |
|
|
|
|
|
|
|
|
Unrealized income (loss) on hedging activities |
|
(273 |
) |
|
143 |
|
|
(256 |
) |
|
329 |
|
Net
amount reclassified to earnings |
|
13 |
|
|
(17 |
) |
|
13 |
|
|
(98 |
) |
Other
comprehensive income (loss) net of tax of $84 and and $71 for the
three months ended June 30, 2018 and June 30, 2017, $78 and
$131 for the six months ended June 30, 2018 and June 30,
2017 |
|
(260 |
) |
|
126 |
|
|
(243 |
) |
|
231 |
|
|
|
|
|
|
|
|
|
|
Comprehensive income,
net of tax for the period |
$ |
3,348 |
|
$ |
5,368 |
|
$ |
7,109 |
|
$ |
7,917 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share |
$ |
0.34 |
|
$ |
0.50 |
|
$ |
0.69 |
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
|
Shares
used in computing basic earnings per common share |
|
10,597,228 |
|
|
10,528,219 |
|
|
10,592,994 |
|
|
10,501,407 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share |
$ |
0.33 |
|
$ |
0.49 |
|
$ |
0.68 |
|
$ |
0.71 |
|
|
|
|
|
|
|
|
|
|
Shares used in
computing diluted earnings per common share |
|
10,803,007 |
|
|
10,793,031 |
|
|
10,797,017 |
|
|
10,785,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Stock-based
compensation has been included in expenses as follows: |
|
|
|
|
|
|
|
|
Network
expenses |
$ |
28 |
|
$ |
3 |
|
$ |
84 |
|
$ |
8 |
|
Sales and
marketing |
$ |
245 |
|
$ |
61 |
|
$ |
431 |
|
$ |
120 |
|
Technical
operations and development |
$ |
174 |
|
$ |
58 |
|
$ |
351 |
|
$ |
119 |
|
General
and administrative |
$ |
168 |
|
$ |
191 |
|
$ |
327 |
|
$ |
384 |
|
|
|
|
|
|
|
|
|
|
|
Tucows
Inc. |
Consolidated Statements of Cash
Flows |
(Dollar amounts in thousands of U.S.
dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended June
30, |
|
Six months ended June
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Cash provided by: |
|
(unaudited) |
|
(unaudited) |
Operating activities: |
|
|
|
|
|
|
|
|
Net
income for the period |
$ |
3,608 |
|
$ |
5,242 |
|
$ |
7,352 |
|
$ |
7,686 |
|
Items not
involving cash: |
|
|
|
|
|
|
|
|
Depreciation of property and equipment |
|
1,330 |
|
|
879 |
|
|
2,562 |
|
|
1,636 |
|
Loss on
write off of property and equipment |
|
- |
|
|
9 |
|
|
- |
|
|
9 |
|
Amortization of debt discount and issuance costs |
|
69 |
|
|
80 |
|
|
139 |
|
|
147 |
|
Amortization of intangible assets |
|
2,326 |
|
|
2,064 |
|
|
4,657 |
|
|
3,825 |
|
Change in
capitalized contract costs |
|
25 |
|
|
- |
|
|
50 |
|
|
- |
|
Deferred
income taxes (recovery) |
|
(445 |
) |
|
(2,885 |
) |
|
(492 |
) |
|
(1,565 |
) |
Excess
tax benefits on share-based compensation expense |
|
(197 |
) |
|
(1,182 |
) |
|
(341 |
) |
|
(2,171 |
) |
Amortization of deferred rent |
|
(4 |
) |
|
1 |
|
|
(4 |
) |
|
5 |
|
Loss on
disposal of domain names |
|
28 |
|
|
7 |
|
|
65 |
|
|
18 |
|
Other
income |
|
(42 |
) |
|
(128 |
) |
|
(171 |
) |
|
(257 |
) |
Loss
(gain) on change in the fair value of forward contracts |
|
46 |
|
|
(163 |
) |
|
43 |
|
|
(301 |
) |
Stock-based compensation |
|
615 |
|
|
313 |
|
|
1,193 |
|
|
631 |
|
Change in
non-cash operating working capital: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
471 |
|
|
(905 |
) |
|
162 |
|
|
(864 |
) |
Inventory |
|
(350 |
) |
|
(1,267 |
) |
|
(304 |
) |
|
(1,096 |
) |
Prepaid
expenses and deposits |
|
(717 |
) |
|
1,186 |
|
|
(1,242 |
) |
|
(2,371 |
) |
Prepaid
domain name registry and ancillary services fees |
|
204 |
|
|
2,976 |
|
|
11,548 |
|
|
(2,513 |
) |
Income
taxes recoverable |
|
165 |
|
|
2,513 |
|
|
430 |
|
|
(147 |
) |
Accounts
payable |
|
(1,862 |
) |
|
(592 |
) |
|
270 |
|
|
(4,038 |
) |
Accrued
liabilities |
|
(401 |
) |
|
(1,818 |
) |
|
358 |
|
|
13 |
|
Customer
deposits |
|
(46 |
) |
|
3,152 |
|
|
(2,321 |
) |
|
3,068 |
|
Deferred
revenue |
|
1,067 |
|
|
(1,273 |
) |
|
(8,531 |
) |
|
8,968 |
|
Accreditation fees payable |
|
(136 |
) |
|
(78 |
) |
|
(96 |
) |
|
(149 |
) |
Net cash
provided by operating activities |
|
5,754 |
|
|
8,131 |
|
|
15,327 |
|
|
10,534 |
|
|
|
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
|
|
|
|
Proceeds
received on exercise of stock options |
|
32 |
|
|
85 |
|
|
39 |
|
|
105 |
|
Payment
of tax obligations resulting from net exercise of stock
options |
|
(141 |
) |
|
(609 |
) |
|
(288 |
) |
|
(1,322 |
) |
Proceeds
received on loan payable |
|
2,500 |
|
|
- |
|
|
2,500 |
|
|
86,998 |
|
Repayment
of loan payable |
|
(6,253 |
) |
|
(4,572 |
) |
|
(10,825 |
) |
|
(10,830 |
) |
Payment
of loan payable costs |
|
- |
|
|
(13 |
) |
|
(4 |
) |
|
(604 |
) |
Net cash
(used in) provided by financing activities |
|
(3,862 |
) |
|
(5,109 |
) |
|
(8,578 |
) |
|
74,347 |
|
|
|
|
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
|
|
|
|
Additions
to property and equipment |
|
(7,319 |
) |
|
(2,909 |
) |
|
(12,436 |
) |
|
(6,602 |
) |
Acquisition of a portion of the minority interest in Ting Virginia,
LLC |
|
- |
|
|
- |
|
|
(1,200 |
) |
|
(2,000 |
) |
Acquisition of Enom Incorporated, net of cash |
|
- |
|
|
- |
|
|
- |
|
|
(76,238 |
) |
Acquisition of intangible assets |
|
- |
|
|
- |
|
|
(1 |
) |
|
- |
|
Net cash
used in investing activities |
|
(7,319 |
) |
|
(2,909 |
) |
|
(13,637 |
) |
|
(84,840 |
) |
|
|
|
|
|
|
|
|
|
Decrease in cash and
cash equivalents |
|
(5,427 |
) |
|
113 |
|
|
(6,888 |
) |
|
41 |
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period |
|
16,588 |
|
|
15,033 |
|
|
18,049 |
|
|
15,105 |
|
Cash and cash
equivalents, end of period |
$ |
11,161 |
|
$ |
15,146 |
|
$ |
11,161 |
|
$ |
15,146 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information: |
|
|
|
|
|
|
|
|
Interest
paid |
$ |
961 |
|
$ |
975 |
|
$ |
1,862 |
|
$ |
1,848 |
|
Income
taxes paid, net |
$ |
2,240 |
|
$ |
2,663 |
|
$ |
3,577 |
|
$ |
5,006 |
|
|
|
|
|
|
|
|
|
|
Supplementary
disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Property
and equipment acquired during the period not yet paid for |
$ |
258 |
|
$ |
232 |
|
$ |
258 |
|
$ |
232 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net income to Adjusted
EBITDA |
(Dollar amounts in thousands of U.S.
dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended June
30, |
|
Six months ended June
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Net income for the
period |
$ |
3,608 |
$ |
5,242 |
|
$ |
7,352 |
$ |
7,686 |
|
Depreciation of property and equipment |
|
1,330 |
|
879 |
|
|
2,562 |
|
1,636 |
|
Amortization of intangible assets |
|
2,326 |
|
2,063 |
|
|
4,657 |
|
3,825 |
|
Interest
expense, net |
|
951 |
|
970 |
|
|
1,847 |
|
1,838 |
|
Provision for income taxes |
|
1,228 |
|
1,083 |
|
|
2,411 |
|
958 |
|
Stock-based compensation |
|
615 |
|
313 |
|
|
1,193 |
|
631 |
|
Unrealized loss (gain) on change in fair value of forward
contracts |
|
46 |
|
(20 |
) |
|
43 |
|
(38 |
) |
Unrealized loss (gain) on foreign exchange revaluation of foreign
denominated monetary assets and liabilities |
|
282 |
|
(283 |
) |
|
459 |
|
(334 |
) |
Acquisition and other costs1 |
|
802 |
|
127 |
|
|
1,043 |
|
509 |
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
11,188 |
$ |
10,374 |
|
$ |
21,567 |
$ |
16,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
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