Tucows Inc. (NASDAQ:TCX, TSX:TC), a provider of network access,
domain names and other Internet services, today reported its
financial results for the fourth quarter ended December 31, 2019.
All figures are in U.S. dollars.
Summary Financial
Results(In Thousands of US Dollars, Except Per
Share Data)
|
3 Months Ended December 31 |
12 Months Ended December 31 |
2019(Unaudited) |
2018(Unaudited) |
%Change |
2019(Unaudited) |
2018(Unaudited) |
%Change |
Net revenue |
85,946 |
85,612 |
0.4% |
337,145 |
346,013 |
-3% |
Net income |
5,778 |
4,436 |
30% |
15,398 |
17,135 |
-10% |
Basic Net earnings per common share |
0.55 |
0.42 |
31% |
1.45 |
1.62 |
-10% |
Adjusted EBITDA1,2 |
16,155 |
16,623 |
-3% |
51,905 |
50,054 |
4% |
Net cash provided by operating activities |
13,196 |
10,668 |
24% |
40,381 |
37,209 |
9% |
- This Non-GAAP financial measure is
described below and reconciled to GAAP net income in the
accompanying table.
- Adjusted EBITDA for the three-month
and 12-month periods ended December 31, 2019 reflect the impact of
the purchase price accounting adjustment related to the fair value
write down of deferred revenue from the Ascio acquisition on March
18, 2019, which lowered Adjusted EBITDA by $0.5 million and $2.5
million, respectively.
Summary of Revenues and Gross
profit(In Thousands of US Dollars)
|
Revenue |
Gross Profit |
|
3 Months endedDecember 31 |
3 Months endedDecember 31 |
|
2019(Unaudited) |
2018(Unaudited) |
2019(Unaudited) |
2018(Unaudited) |
Network Access Services: |
Mobile Services |
21,140 |
22,511 |
9,445 |
11,093 |
Other Services |
3,029 |
2,320 |
2,062 |
1,429 |
Total Network Access Services |
24,169 |
24,831 |
11,507 |
12,522 |
Domain Services: |
Wholesale |
|
|
|
|
Domain Services |
46,622 |
43,396 |
9,085 |
7,752 |
Value Added Services |
4,809 |
4,180 |
4,128 |
3,438 |
Total Wholesale |
51,431 |
47,576 |
13,213 |
11,190 |
|
|
|
|
|
Retail |
8,648 |
8,880 |
4,682 |
4,475 |
Portfolio |
1,698 |
4,325 |
1,526 |
3,900 |
Total Domain Services |
61,777 |
60,781 |
19,421 |
19,565 |
Network Expenses: |
Network, other costs |
- |
- |
(2,156) |
(2,256) |
Network, depreciation and amortization costs |
- |
- |
(2,727) |
(2,100) |
Total Network expenses |
- |
- |
(4,883) |
(4,356) |
|
|
|
|
|
Total |
85,946 |
85,612 |
26,045 |
27,731 |
“Our fourth quarter results were once again
demonstrative of the consistency in the Tucows business. Continuing
strong cash generation from our Domains and Ting Mobile businesses
contributed to record cash from operations for the year of $40
million to support investment in our outsized Ting Internet growth
opportunity,” said Elliot Noss, President and Chief Executive
Officer, Tucows Inc.
Mr. Noss added, “2019 was a year in which we
took meaningful steps to position each of our businesses for
long-term success. In our Domains business, we focused on
strengthening the quality of the wholesale customer base to
maximize gross profit of that channel, which expanded 15% over the
prior year, as we made steady progress on our platform work to
support future growth. In our Ting Mobile business, we announced
positive changes to our service provider agreements that further
enhance our already very compelling offering and provide much
improved economics, setting the stage for better long-term
prospects for our mobile business. And at Ting Internet, we
invested more than $32 million in our network build, growing the
number of passed homes by more than 60% and expanding our customer
base by 46%, while adding four new towns that expanded our
potential serviceable addresses by 74%. Tucows remains very well
positioned to capitalize the greatest opportunity in telecom in a
couple of generations.”
Financial Results
Net revenue for the fourth quarter of 2019
increased 0.4% to $85.9 million from $85.6 million for the fourth
quarter of 2018.
Net income for the fourth quarter of 2019
increased 30% to $5.8 million, or $0.55 per share from $4.4
million, or $0.42 per share, for the fourth quarter of
2018.
Adjusted EBITDA1 for the fourth quarter of 2019
decreased 3% to $16.2 million from $16.6 million for the fourth
quarter of 2018. Adjusted EBITDA for the fourth quarter of 2019
reflects the impact of the purchase price accounting adjustment
related to the fair value write down of deferred revenue from the
Ascio acquisition, which lowered Adjusted EBITDA by $0.5
million.
Cash and cash equivalents at the end of the
fourth quarter of 2019 was $20.4 million compared with $12.0
million at the end of the third quarter of 2019 and $12.6 million
at the end of the fourth quarter of 2018.
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 transition 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 endedDecember 31 |
12 months endedDecember 31 |
|
2019(unaudited) |
2018(unaudited) |
2019(unaudited) |
2018(unaudited) |
Net income for the period |
5,778 |
4,436 |
15,398 |
17,135 |
Depreciation of property and equipment |
2,516 |
1,716 |
8,961 |
5,722 |
Loss on disposition of property and equipment |
- |
- |
73 |
- |
Amortization of intangible assets |
2,870 |
2,290 |
10,333 |
9,243 |
Interest expense, net |
1,220 |
926 |
4,769 |
3,687 |
Provision for income taxes |
2,964 |
5,239 |
9,173 |
9,020 |
Stock-based compensation |
836 |
670 |
2,876 |
2,574 |
Unrealized loss (gain) on change in fair value of forward
contracts |
(109) |
194 |
(313) |
207 |
Unrealized loss (gain) on foreign exchange revaluation of foreign
denominated monetary assets and liabilities |
(180) |
749 |
(581) |
940 |
Acquisition and transition costs* |
260 |
403 |
1,216 |
1,526 |
|
|
|
|
|
Adjusted EBITDA |
16,155 |
16,623 |
51,905 |
50,054 |
*Acquisition and other costs represent transaction-related
expenses, transitional expenses, such as duplicative
post-acquisition expenses, primarily related to the Company’s
acquisition of Enom in January 2017 and Ascio in March 2019.
Expenses include severance or transitional costs associated with
department, operational or overall company restructuring efforts,
including geographic alignments. |
Conference CallConcurrent with
the dissemination of this news release, management’s pre-recorded
commentary 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 six days (until Tuesday,
February 18), 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 Tuesday, February 25 at approximately 4:00 p.m. ET. All
questions will receive a response, however, questions of a more
specific nature 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), Enom (http://www.enom.com) and Ascio
(http://ascio.com) combined manage approximately 24 million domain
names and millions of value-added services through a global
reseller network of over 36,000 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) |
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
2019 |
|
|
2018 * |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
20,393 |
|
|
$ |
12,637 |
|
Accounts receivable |
|
|
14,564 |
|
|
|
10,837 |
|
Inventory |
|
|
3,457 |
|
|
|
3,775 |
|
Prepaid expenses and deposits |
|
|
13,478 |
|
|
|
15,472 |
|
Derivative instrument asset, current portion |
|
|
731 |
|
|
|
- |
|
Prepaid domain name registry and ancillary services fees, current
portion |
|
|
91,252 |
|
|
|
87,782 |
|
Income taxes recoverable |
|
|
1,800 |
|
|
|
1,423 |
|
Total current assets |
|
|
145,675 |
|
|
|
131,926 |
|
|
|
|
|
|
Prepaid domain name registry and ancillary services fees, long-term
portion |
|
|
17,915 |
|
|
|
18,745 |
|
Property and equipment |
|
|
82,121 |
|
|
|
48,065 |
|
Right of use operating lease asset |
|
|
11,335 |
|
|
|
- |
|
Contract costs |
|
|
1,400 |
|
|
|
1,390 |
|
Intangible assets |
|
|
57,654 |
|
|
|
49,395 |
|
Goodwill |
|
|
109,818 |
|
|
|
90,054 |
|
Total assets |
|
$ |
425,918 |
|
|
$ |
339,575 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
6,671 |
|
|
$ |
8,445 |
|
Accrued liabilities |
|
|
9,373 |
|
|
|
5,899 |
|
Customer deposits |
|
|
14,074 |
|
|
|
11,919 |
|
Derivative instrument liability |
|
|
- |
|
|
|
1,276 |
|
Deferred rent, current portion |
|
|
- |
|
|
|
21 |
|
Operating lease liability, current portion |
|
|
1,413 |
|
|
|
- |
|
Loan payable, current portion |
|
|
- |
|
|
|
18,400 |
|
Deferred revenue, current portion |
|
|
123,101 |
|
|
|
116,734 |
|
Accreditation fees payable, current portion |
|
|
952 |
|
|
|
985 |
|
Income taxes payable |
|
|
1,324 |
|
|
|
1,668 |
|
Total current liabilities |
|
|
156,908 |
|
|
|
165,347 |
|
|
|
|
|
|
Deferred revenue, long-term portion |
|
|
26,202 |
|
|
|
26,960 |
|
Accreditation fees payable, long-term portion |
|
|
216 |
|
|
|
250 |
|
Deferred rent, long-term portion |
|
|
- |
|
|
|
116 |
|
Operating lease liability, long-term portion |
|
|
9,424 |
|
|
|
- |
|
Loan payable, long-term portion |
|
|
113,503 |
|
|
|
46,201 |
|
Deferred tax liability |
|
|
25,471 |
|
|
|
20,925 |
|
|
|
|
|
|
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;
10,585,159 shares issued and outstanding as of December 31, 2019
and 10,627,988 shares issued and outstanding as of December 31,
2018 |
|
|
16,633 |
|
|
|
15,823 |
|
Additional paid-in capital |
|
|
880 |
|
|
|
3,953 |
|
Retained earnings |
|
|
76,208 |
|
|
|
60,810 |
|
Accumulated other comprehensive income (loss) |
|
|
473 |
|
|
|
(810 |
) |
Total stockholders' equity |
|
|
94,194 |
|
|
|
79,776 |
|
Total liabilities and stockholders' equity |
|
$ |
425,918 |
|
|
$ |
339,575 |
|
|
|
|
|
|
*The Company has initially applied ASC 2016-02 (Topic 842) using
the modified retrospective method. Under this method, the
comparative information is not restated. |
|
|
Tucows Inc. |
|
|
Consolidated Statements of Operations and Comprehensive
Income |
|
|
(Dollar amounts in thousands of U.S. dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2019 |
|
2018 * |
|
2019 |
|
2018 * |
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
85,946 |
|
|
$ |
85,612 |
|
|
$ |
337,145 |
|
|
$ |
346,013 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
Cost of revenues |
|
55,018 |
|
|
53,525 |
|
|
217,579 |
|
|
232,103 |
|
Network expenses (*) |
|
2,156 |
|
|
2,256 |
|
|
9,190 |
|
|
9,846 |
|
Depreciation of property and equipment |
|
2,405 |
|
|
1,601 |
|
|
8,475 |
|
|
5,298 |
|
Amortization of intangible assets |
|
322 |
|
|
499 |
|
|
1,124 |
|
|
1,996 |
|
Total cost of revenues |
|
59,901 |
|
|
57,881 |
|
|
236,368 |
|
|
249,243 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
26,045 |
|
|
27,731 |
|
|
100,777 |
|
|
96,770 |
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Sales and marketing (*) |
|
7,904 |
|
|
8,434 |
|
|
34,270 |
|
|
33,063 |
|
Technical operations and development (*) |
|
1,566 |
|
|
2,091 |
|
|
9,717 |
|
|
8,748 |
|
General and administrative (*) |
|
4,062 |
|
|
4,804 |
|
|
17,880 |
|
|
17,710 |
|
Depreciation of property and equipment |
|
111 |
|
|
115 |
|
|
486 |
|
|
424 |
|
Loss on disposition of property and equipment |
|
- |
|
|
- |
|
|
73 |
|
|
- |
|
Amortization of intangible assets |
|
2,548 |
|
|
1,791 |
|
|
9,209 |
|
|
7,247 |
|
Loss (gain) on currency forward contracts |
|
(108 |
) |
|
232 |
|
|
(198 |
) |
|
254 |
|
Total expenses |
|
16,083 |
|
|
17,467 |
|
|
71,437 |
|
|
67,446 |
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
9,962 |
|
|
10,264 |
|
|
29,340 |
|
|
29,324 |
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
Interest expense, net |
|
(1,220 |
) |
|
(926 |
) |
|
(4,769 |
) |
|
(3,687 |
) |
Other income, net |
|
- |
|
|
337 |
|
|
- |
|
|
518 |
|
Total other income (expenses) |
|
(1,220 |
) |
|
(589 |
) |
|
(4,769 |
) |
|
(3,169 |
) |
|
|
|
|
|
|
|
|
|
Income before provision for income taxes |
|
8,742 |
|
|
9,675 |
|
|
24,571 |
|
|
26,155 |
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
2,964 |
|
|
5,239 |
|
|
9,173 |
|
|
9,020 |
|
Net income before redeemable non-controlling interest |
|
5,778 |
|
|
4,436 |
|
|
15,398 |
|
|
17,135 |
|
|
|
|
|
|
|
|
|
|
Redeemable non-controlling interest |
|
- |
|
|
- |
|
|
- |
|
|
(26 |
) |
|
|
|
|
|
|
|
|
|
Net income attributable to redeemable non-controlling interest |
- |
|
|
- |
|
|
- |
|
|
26 |
|
Net income for the period |
|
5,778 |
|
|
4,436 |
|
|
15,398 |
|
|
17,135 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
Unrealized income (loss) on hedging activities |
|
487 |
|
|
(910 |
) |
|
1,101 |
|
|
(1,022 |
) |
Net amount reclassified to earnings |
|
15 |
|
|
136 |
|
|
182 |
|
|
212 |
|
Other comprehensive income (loss) net of tax (expense) recovery of
($161) and $241 for the three months ended December 31, 2019 and
December 31, 2018, ($412) and $259 for the years ended December 31,
2019 and December 31, 2018 |
|
502 |
|
|
(774 |
) |
|
1,283 |
|
|
(810 |
) |
|
|
|
|
|
|
|
|
|
Comprehensive income, net of tax for the period |
|
$ |
6,280 |
|
|
$ |
3,662 |
|
|
$ |
16,681 |
|
|
$ |
16,325 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
|
$ |
0.55 |
|
|
$ |
0.42 |
|
|
$ |
1.45 |
|
|
$ |
1.62 |
|
|
|
|
|
|
|
|
|
|
Shares used in computing basic earnings per common share |
|
10,577,080 |
|
|
10,621,181 |
|
|
10,623,799 |
|
|
10,604,722 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
|
$ |
0.54 |
|
|
$ |
0.41 |
|
|
$ |
1.43 |
|
|
$ |
1.59 |
|
|
|
|
|
|
|
|
|
|
Shares used in computing diluted earnings per common share |
|
10,693,430 |
|
|
10,791,940 |
|
|
10,772,812 |
|
|
10,794,170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Stock-based compensation has been included in expenses as
follows: |
|
|
|
|
|
|
|
|
Network expenses |
|
$ |
82 |
|
|
$ |
70 |
|
|
$ |
307 |
|
|
$ |
223 |
|
Sales and marketing |
|
$ |
395 |
|
|
$ |
287 |
|
|
$ |
1,251 |
|
|
$ |
1,025 |
|
Technical operations and development |
|
$ |
168 |
|
|
$ |
135 |
|
|
$ |
596 |
|
|
$ |
636 |
|
General and administrative |
|
$ |
191 |
|
|
$ |
179 |
|
|
$ |
722 |
|
|
$ |
690 |
|
|
|
|
|
|
|
|
|
|
*The Company has initially applied ASC 2016-02 (Topic 842) using
the modified retrospective method. Under this method, the
comparative information is not restated. |
|
|
Tucows Inc. |
|
|
Consolidated Statements of Cash Flows |
|
|
(Dollar amounts in thousands of U.S. dollars) |
|
|
|
|
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2019 |
|
2018 * |
|
2019 |
|
2018 * |
|
|
|
|
|
|
|
|
|
Cash provided by: |
|
(unaudited) |
|
(unaudited) |
Operating activities: |
|
|
|
|
|
|
|
|
Net income for the period |
|
$ |
5,778 |
|
|
$ |
4,436 |
|
|
$ |
15,398 |
|
|
$ |
17,135 |
|
Items not involving cash: |
|
|
|
|
|
|
|
|
Depreciation of property and equipment |
|
2,516 |
|
|
1,716 |
|
|
8,961 |
|
|
5,722 |
|
Loss on write off of property and equipment |
|
- |
|
|
- |
|
|
142 |
|
|
- |
|
Amortization of debt discount and issuance costs |
|
65 |
|
|
70 |
|
|
297 |
|
|
281 |
|
Amortization of intangible assets |
|
2,870 |
|
|
2,290 |
|
|
10,333 |
|
|
9,243 |
|
Net amortization contract costs |
|
(2 |
) |
|
(7 |
) |
|
(10 |
) |
|
14 |
|
Deferred income taxes (recovery) |
|
(456 |
) |
|
1,899 |
|
|
1,285 |
|
|
1,038 |
|
Excess tax benefits on share-based compensation expense |
|
156 |
|
|
(165 |
) |
|
(634 |
) |
|
(697 |
) |
Amortization of deferred rent |
|
- |
|
|
(5 |
) |
|
- |
|
|
(14 |
) |
Net Right of use operating assets/Operating lease liability |
|
(27 |
) |
|
- |
|
|
(32 |
) |
|
- |
|
Loss on disposal of domain names |
|
43 |
|
|
271 |
|
|
115 |
|
|
341 |
|
Other income |
|
- |
|
|
(258 |
) |
|
- |
|
|
(429 |
) |
Loss (gain) on change in the fair value of forward contracts |
|
(109 |
) |
|
194 |
|
|
(313 |
) |
|
207 |
|
Stock-based compensation |
|
836 |
|
|
670 |
|
|
2,876 |
|
|
2,574 |
|
Change in non-cash operating working capital: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
(1,095 |
) |
|
692 |
|
|
(3,015 |
) |
|
1,539 |
|
Inventory |
|
446 |
|
|
(635 |
) |
|
318 |
|
|
(831 |
) |
Prepaid expenses and deposits |
|
6,147 |
|
|
(918 |
) |
|
2,904 |
|
|
(1,286 |
) |
Prepaid domain name registry and ancillary services fees |
|
3,924 |
|
|
4,699 |
|
|
7,678 |
|
|
20,476 |
|
Income taxes recoverable |
|
1,210 |
|
|
2,398 |
|
|
(89 |
) |
|
2,691 |
|
Accounts payable |
|
1,556 |
|
|
(877 |
) |
|
(1,222 |
) |
|
171 |
|
Accrued liabilities |
|
(4,945 |
) |
|
(978 |
) |
|
2,329 |
|
|
(513 |
) |
Customer deposits |
|
(846 |
) |
|
34 |
|
|
27 |
|
|
(3,336 |
) |
Deferred revenue |
|
(4,838 |
) |
|
(4,798 |
) |
|
(6,900 |
) |
|
(16,888 |
) |
Accreditation fees payable |
|
(33 |
) |
|
(60 |
) |
|
(67 |
) |
|
(229 |
) |
Net cash provided by operating activities |
|
13,196 |
|
|
10,668 |
|
|
40,381 |
|
|
37,209 |
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
Proceeds received on exercise of stock options |
|
83 |
|
|
50 |
|
|
395 |
|
|
112 |
|
Payment of tax obligations resulting from net exercise of stock
options |
|
(4 |
) |
|
(41 |
) |
|
(548 |
) |
|
(445 |
) |
Repurchase of common stock |
|
- |
|
|
- |
|
|
(4,986 |
) |
|
- |
|
Proceeds received on loan payable |
|
12,000 |
|
|
4,500 |
|
|
57,371 |
|
|
7,000 |
|
Repayment of loan payable |
|
(3,530 |
) |
|
(4,384 |
) |
|
(8,130 |
) |
|
(19,596 |
) |
Payment of loan payable costs |
|
(2 |
) |
|
- |
|
|
(641 |
) |
|
(8 |
) |
Net cash (used in) provided by financing activities |
|
8,547 |
|
|
125 |
|
|
43,461 |
|
|
(12,937 |
) |
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Additions to property and equipment |
|
(12,913 |
) |
|
(8,480 |
) |
|
(44,070 |
) |
|
(27,919 |
) |
Acquisition of a portion of the minority interest in Ting Virginia,
LLC |
|
- |
|
|
- |
|
|
- |
|
|
(1,200 |
) |
Acquisition of Ascio Technologies Inc. (net of cash of $1,437) |
|
(426 |
) |
|
- |
|
|
(28,450 |
) |
|
- |
|
Acquisition of intangible assets |
|
- |
|
|
(451 |
) |
|
(3,566 |
) |
|
(565 |
) |
Net cash used in investing activities |
|
(13,339 |
) |
|
(8,931 |
) |
|
(76,086 |
) |
|
(29,684 |
) |
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents |
|
8,404 |
|
|
1,862 |
|
|
7,756 |
|
|
(5,412 |
) |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period |
|
11,989 |
|
|
10,775 |
|
|
12,637 |
|
|
18,049 |
|
Cash and cash equivalents, end of period |
|
$ |
20,393 |
|
|
$ |
12,637 |
|
|
$ |
20,393 |
|
|
$ |
12,637 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
1,224 |
|
|
$ |
931 |
|
|
$ |
4,785 |
|
|
$ |
3,712 |
|
Income taxes paid, net |
|
$ |
1,818 |
|
|
$ |
1,742 |
|
|
$ |
7,941 |
|
|
$ |
7,112 |
|
|
|
|
|
|
|
|
|
|
Supplementary disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
|
|
|
Property and equipment acquired during the period not yet paid
for |
|
$ |
548 |
|
|
$ |
1,462 |
|
|
$ |
548 |
|
|
$ |
1,462 |
|
|
|
|
|
|
|
|
|
|
*The Company has initially applied ASC 2016-02 (Topic 842) using
the modified retrospective method. Under this method, the
comparative information is not restated. |
Reconciliation of Net income to Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
(In Thousands of U.S. Dollars) |
|
Three months ended December 31, |
|
Year ended December 31, |
(unaudited) |
|
2019 (unaudited) |
|
2018 (unaudited) |
|
2019 (unaudited) |
|
2018 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Net income for the period |
|
$ |
5,778 |
|
|
$ |
4,436 |
|
|
$ |
15,398 |
|
|
$ |
17,135 |
|
Depreciation of property and equipment |
|
2,516 |
|
|
1,716 |
|
|
8,961 |
|
|
5,722 |
|
Loss on disposition of property and equipment |
|
- |
|
|
- |
|
|
73 |
|
|
- |
|
Amortization of intangible assets |
|
2,870 |
|
|
2,290 |
|
|
10,333 |
|
|
9,243 |
|
Interest expense, net |
|
1,220 |
|
|
926 |
|
|
4,769 |
|
|
3,687 |
|
Provision for income taxes |
|
2,964 |
|
|
5,239 |
|
|
9,173 |
|
|
9,020 |
|
Stock-based compensation |
|
836 |
|
|
670 |
|
|
2,876 |
|
|
2,574 |
|
Unrealized loss (gain) on change in fair value of forward
contracts |
|
(109 |
) |
|
194 |
|
|
(313 |
) |
|
207 |
|
Unrealized loss (gain) on foreign exchange revaluation of foreign
denominated monetary assets and liabilities |
|
(180 |
) |
|
749 |
|
|
(581 |
) |
|
940 |
|
Acquisition and other costs1 |
|
260 |
|
|
403 |
|
|
1,216 |
|
|
1,526 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
16,155 |
|
|
$ |
16,623 |
|
|
$ |
51,905 |
|
|
$ |
50,054 |
|
|
|
|
|
|
|
|
|
|
|
|
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 and Ascio in March 2019. 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 expectations 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, Ascio and Hover are
registered trademarks of Tucows Inc. or its subsidiaries.
Contact:Lawrence Chamberlain(416) 519-4196 |
lawrence.chamberlain@loderockadvisors.com
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