It has come to the attention of Tucows Inc., that in its press
release c4584 transmitted at 4:00 p.m. eastern on August 12, 2009,
in the Consolidated Statements of Operations, interest income
expense - net and other income for the 6-month period ended June
30, 2008 were incorrectly stated. As a result, certain other line
items for the same period in the Consolidated Statements of
Operations and the Consolidated Statements of Cash Flows were
incorrectly stated. Also, in the Consolidated Statements of
Operations, stock-based compensation - sales and marketing for the
6- month period ended June 30, 2008 was incorrectly stated.
Corrected press release follows: TORONTO, Aug. 12
/PRNewswire-FirstCall/ -- Tucows Inc., (NYSE AMEX:TCX, TSX:TC) a
global provider of domain names, email and other Internet services,
today reported its financial results for the second quarter of 2009
ended June 30, 2009. All figures are in U.S. dollars. "We're
pleased that the strong performance of our OpenSRS wholesale
business has contributed to another quarter of solid financial
results amidst generally weak economic conditions," said Elliot
Noss, President and CEO of Tucows. "Even as our industry started to
show signs of the economic downturn for the first time, our strong
competitive position allowed us to achieve year-over-year growth in
domain registrations during the quarter. Our other services are
also performing within plan, positioning us well for the remainder
of the year." Summary Financial Results (Numbers in Thousands of US
Dollars, Except Per Share Data)
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3 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended Jun.
30, 2009 Jun. 30, 2008 Jun. 30, 2009 Jun. 30, 2008 (unaudited)
(unaudited) (unaudited) (unaudited)
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Net Revenue $20,022 $20,450 $40,114 $39,162
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Net Income 4,480 2,209 5,444 1,127
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Net Income/Share 0.07 0.03 0.08 0.02
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Cash Flow from Operations 2,591 2,580 3,504 2,697
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Summary of Revenue and Cost of Revenue before Network Costs
(Numbers in Thousands of US Dollars)
-------------------------------------------------------------------------
Revenue Cost of Revenue
-------------------------------------------------------------------------
3 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended Jun.
30, 2009 Jun. 30, 2008 Jun. 30, 2009 Jun. 30, 2008 (unaudited)
(unaudited) (unaudited) (unaudited)
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OpenSRS: Domain Services (Traditional Domain Registration) $14,737
$13,269 $11,944 $10,505
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Email Services 874 1,551 153 (24)
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Other Services 1,092 1,137 411 415
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Total OpenSRS Services 16,703 15,957 12,508 10,896
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YummyNames (Domain Portfolio Services) 1,456 1,873 251 181
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Hover (Retail Services) 1,259 2,046 475 577
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Butterscotch (Content Services) 604 574 1 6
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-------------------------------------------------------------------------
Total $20,022 $20,450 $13,235 $11,660
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Net revenue for the second quarter of 2009 was $20.0 million
compared with $20.5 million for the second quarter of 2008. Net
income for the second quarter of 2009 was $4.5 million, or $0.07
per share, compared with $2.2 million, or $0.03 per share, for the
second quarter of 2008. Net income for the second quarter of 2009
benefitted from other income of $2.0 million related to the sale of
the Company's equity stake in Afilias and $0.6 million related to
patents that the Company assigned to a third party that continues
to commercialize them, while net income for the second quarter of
2008 benefited from other income of $1.5 million related to the
sale of the Company's retail hosting assets. Net income for the
second quarter of 2009 also benefited from a gain on foreign
exchange of $1.6 million (inclusive of a mark to market gain of
$1.9 million) compared to a gain on foreign exchange of $0.2
million (inclusive of a mark to market gain of $0.2 million) for
the second quarter of 2008. The benefits for the second quarter in
2009 were partially offset by a provision for current income taxes
of $0.8 million, before recognizing a refundable research and
development tax credit in Canada of $0.2 million. Deferred revenue
at the end the second quarter of fiscal 2009 was $56.9 million, an
increase of 4.6% from $54.4 million at the end of the second
quarter of fiscal 2008 and a slight increase from $56.7 million at
the end of the first quarter of fiscal 2009. Cash and cash
equivalents at the end of the second quarter of fiscal 2009 was
$7.4 million compared with $2.9 million at the end of the second
quarter of fiscal 2008 and $4.0 million at the end of the first
quarter of fiscal 2009. This increase in cash compared with the
first quarter of 2009 is primarily the result of the generation of
cash flow from operations of $2.6 million and the receipt of an
additional $2.1 million payment from the sale of the Company's
equity stake in Afilias last year, which were partially offset by
the repayment of $1.2 million of the Company's bank loan.
Conference Call Tucows will host a conference call tomorrow,
Thursday, August 13, 2009 at 5:00 p.m. ET to discuss the Company's
second quarter fiscal 2009 results. To access the conference call
via the Internet, go to http://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
416-640-1917 or 1-877-289-8525 and enter the pass code 21311901
followed by the pound key. The telephone replay will be available
until Thursday, August 20, 2009 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 manages over 8 million domain
names and millions of email boxes through a reseller network of
over 9,000 web hosts and ISPs. Hover is the easiest way for
individuals and small businesses to manage their domain names and
email addresses. YummyNames owns premium domain names that generate
revenue through advertising or resale. Butterscotch.com is an
online video network building on the foundation of Tucows.com. More
information can be found at http://tucowsinc.com/. This news
release contains, in addition to historical information,
forward-looking statements related to such matters as our business,
including statements regarding the expected expiration date, the
number of shares to be purchased and the purchase price per share.
Such statements are based on management's current expectations and
are subject to a number of uncertainties and risks, which 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 included in this document are based on
information available to Tucows as of the date of this document,
and Tucows assumes no obligation to update such forward-looking
statements. TUCOWS is a registered trademark of Tucows Inc. or its
subsidiaries. All other trademarks and service marks are the
properties of their respective owners. Tucows Inc. Consolidated
Balance Sheets (Dollar amounts in U.S. dollars) June 30 December
31, 2009 2008 ------------- ------------- (unaudited) (unaudited)
Assets Current assets: Cash and cash equivalents $ 7,423,056 $
5,427,467 Accounts receivable 3,464,428 3,200,362 Prepaid expenses
and deposits 3,163,266 2,274,043 Derivative instrument assets
49,245 - Prepaid domain name registry and ancillary services fees,
current portion 31,494,579 29,212,610 Deferred tax asset, current
portion 590,000 590,000 ------------- ------------- Total current
assets 46,184,574 40,704,482 Prepaid domain name registry and
ancillary services fees, long-term portion 12,195,903 11,855,971
Property and equipment 2,354,702 3,072,958 Deferred financing
charges 58,400 78,500 Deferred tax asset, long-term portion
2,410,000 2,410,000 Intangible assets 19,431,471 20,206,996
Goodwill 17,990,807 17,990,807 Investment 100,000 200,000
------------- ------------- Total assets $ 100,725,857 $ 96,519,714
------------- ------------- ------------- ------------- Liabilities
and Stockholders' Equity Current liabilities: Accounts payable $
2,257,992 $ 1,633,830 Accrued liabilities 2,003,789 2,000,146
Customer deposits 3,171,708 3,319,241 Derivative instrument
liabilities - 1,974,919 Loan payable, current portion 3,114,242
2,624,242 Deferred revenue, current portion 40,508,091 37,985,821
Accreditation fees payable, current portion 553,447 510,548 Income
taxes payable 835,398 - ------------- ------------- Total current
liabilities 52,444,667 50,048,747 Deferred revenue, long-term
portion 16,392,525 16,201,804 Accreditation fees payable, long-term
portion 188,780 187,374 Loan payable, long-term portion 1,063,004
3,235,125 Deferred tax liability, long-term portion 5,396,000
5,396,000 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; 68,969,320
shares issued and outstanding at June 30, 2009 and 73,073,782
shares issued and outstanding at December 31, 2008 14,408,078
15,198,358 Additional paid-in capital 47,851,137 48,714,676 Deficit
(37,018,334) (42,462,370) ------------- ------------- Total
stockholders' equity 25,240,881 21,450,664 -------------
------------- Total liabilities and stockholders' equity $
100,725,857 $ 96,519,714 ------------- ------------- -------------
------------- Tucows Inc. Consolidated Statements of Operations
(Dollar amounts in U.S. dollars) Three months ended June 30, Six
months ended June 30, 2009 2008 2009 2008 -------------
------------ ------------ ------------- (unaudited) (unaudited) Net
revenues $ 20,022,119 $ 20,450,329 $ 40,113,543 $ 39,161,536 Cost
of revenues: Cost of revenues (*) 14,386,048 13,663,097 28,171,446
26,813,029 Depreciation of property and equipment 488,680 816,260
941,389 1,642,097 Amortization of intangible assets 29,199 31,941
58,398 105,398 ------------- ------------ ------------
------------- Total cost of revenues 14,903,927 14,511,298
29,171,233 28,560,524 ------------- ------------ ------------
------------- Gross profit 5,118,192 5,939,031 10,942,310
10,601,012 Expenses: Sales and marketing (*) 1,339,167 1,730,736
2,692,343 3,426,868 Technical operations and development (*)
1,175,355 1,573,741 2,279,494 3,139,595 General and administrative
(*) 1,592,325 1,551,858 3,462,221 3,091,290 Depreciation of
property and equipment 79,227 58,861 165,632 119,931 Amortization
of intangible assets 360,540 376,954 721,080 762,115 (Gain)/loss in
fair value of forward exchange contracts (1,938,821) (225,640)
(2,024,164) 29,793 ------------- ------------ ------------
------------- Total expenses 2,607,793 5,066,510 7,296,606
10,569,592 ------------- ------------ ------------ -------------
Income from operations 2,510,399 872,521 3,645,704 31,420 Other
income (expenses): Interest income (expense), net (62,334)
(166,421) (125,796) (376,405) Other income 2,613,204 1,532,765
2,613,204 1,532,765 ------------- ------------ ------------
------------- Total other income (expenses) 2,550,870 1,366,344
2,487,408 1,156,360 ------------- ------------ ------------
------------- Income before provision for income taxes 5,061,269
2,238,865 6,133,112 1,187,780 Income tax expense 581,651 30,000
689,076 61,134 ------------- ------------ ------------
------------- Net income for the period $ 4,479,618 $ 2,208,865 $
5,444,036 1,126,646 ------------- ------------ ------------
------------- ------------- ------------ ------------ -------------
Basic earnings per common share $ 0.08 $ 0.03 $ 0.08 0.02
------------- ------------ ------------ ------------- -------------
------------ ------------ ------------- Shares used in computing
basic earnings per common share 68,923,313 73,899,695 70,778,950
73,894,119 ------------- ------------ ------------ -------------
------------- ------------ ------------ ------------- Diluted
earnings per common share $ 0.07 $ 0.03 $ 0.08 0.01 -------------
------------ ------------ ------------- ------------- ------------
------------ ------------- Shares used in computing diluted
earnings per common share 69,092,946 75,348,108 70,785,712
75,439,926 ------------- ------------ ------------ -------------
------------- ------------ ------------ ------------- (*)
Stock-based compensation has been included in expenses as follows:
Cost of revenues $ 3,367 $ 4,800 $ 8,367 9,100 Sales and marketing
$ 15,057 $ 13,000 $ 29,957 31,300 Technical operations and
development $ 11,121 $ 8,000 $ 21,721 28,700 General and
administrative $ 53,193 $ 47,200 $ 71,893 76,100 Tucows Inc.
Consolidated Statements of Operations (Dollar amounts in U.S.
dollars) Three months ended June 30, Six months ended June 30, 2009
2008 2009 2008 ------------- ------------ ------------
------------- Cash provided by (unaudited) (unaudited) (used in):
Operating activities: Net income for the period $ 4,479,618 $
2,208,865 $ 5,444,036 $ 1,126,646 Items not involving cash:
Depreciation of property and equipment 567,907 875,121 1,107,021
1,762,028 Amortization of deferred financing charges 9,700 12,700
20,100 26,200 Amortization of intangible assets 389,739 408,895
779,478 867,513 Gain on disposal of investment in Afilias
(2,010,395) - (2,010,395) - Gain on sale of customer relationships
- (1,121,065) - (1,121,065) Disposal of domain names 974 - 1,947 -
Unrealized (gain)/loss in the fair value of forward contracts
(1,938,821) (225,640) (2,024,164) 29,793 Stock-based compensation
82,738 73,000 131,938 145,200 Change in non-cash operating working
capital: Accounts receivable 252,927 350,043 (264,066) 283,923
Prepaid expenses and deposits (310,655) (244,926) (889,223)
(105,237) Prepaid fees for domain name registry and ancillary
services fees (496,502) (1,176,196) (2,621,901) (3,706,797)
Accounts payable 561,228 682,896 380,407 249,069 Accrued
liabilities (125,130) (159,226) 3,643 (691,064) Customer deposits
161,969 119,589 (147,533) 18,999 Deferred revenue 249,615 798,720
2,712,991 3,777,654 Accreditation fees payable (34,302) (22,696)
44,305 34,120 Income taxes payable 750,216 - 835,398 -
------------- ------------ ------------ ------------- Net cash
provided by operating activities 2,590,826 2,580,080 3,503,982
2,696,982 ------------- ------------ ------------ -------------
Financing activities: Proceeds received on exercise of stock
options 25,422 9,450 25,422 9,450 Repurchase of common stock - -
(1,811,179) - Repayment of loan payable (1,203,560) (7,478,560)
(1,682,121) (7,957,120) ------------- ------------ ------------
------------- Net cash used in financing activities (1,178,138)
(7,469,110) (3,467,878) (7,947,670) ------------- ------------
------------ ------------- Investing activities: Cost of domain
names acquired - (2,524) (5,900) (8,944) Additions to property and
equipment (102,770) (1,084,209) (145,010) (1,295,740) Sale of
customer relationships - 1,421,730 - 1,421,730 Proceeds on disposal
of investment in Afilias 2,110,395 - 2,110,395 - Decrease in cash
held in escrow - (5,366) - (12,765) ------------- ------------
------------ ------------- Net cash provided by investing
activities 2,007,625 329,631 1,959,485 104,281 -------------
------------ ------------ ------------- Increase (decrease) in cash
and cash Increase (decrease) in cash and cash equivalents 3,420,313
(4,559,399) 1,995,589 (5,146,407) Cash and cash equivalents,
beginning of period 4,002,743 7,506,468 5,427,467 8,093,476
------------- ------------ ------------ ------------- Cash and cash
equivalents, end equivalents, end of period $ 7,423,056 $ 2,947,069
$ 7,423,056 $ 2,947,069 ------------- ------------ ------------
------------- ------------- ------------ ------------ -------------
Supplemental cash flow information: Interest paid $ 62,508 $
192,900 $ 128,029 $ 452,237 Supplementary disclosure of non-cash
investing activity: Property and equipment acquired during the
period not yet paid for $ 250,734 $ 663,767 $ 250,734 $ 663,767
DATASOURCE: Tucows Inc. CONTACT: Lawrence Chamberlain, The Equicom
Group for Tucows Inc., (416) 815-0700 ext. 257,
Copyright