News

TORONTO, November 12, 2014 — Tucows Inc. (NASDAQ:TCX, TSX:TC), a provider of network access, domain name and other Internet services, today announced it expects to commence within 30 days of this announcement a “modified Dutch auction” tender offer (the “Tender Offer”) to repurchase a number of shares of its common stock not to exceed an aggregate purchase price of $8.0 million. In accordance with rules of the Securities and Exchange Commission (“SEC”), Tucows may increase the number of shares accepted for payment in the offer by no more than 2 percent of the outstanding shares without amending or extending the tender offer. Tucows also announced that it has suspended its normal course issuer bid, which commenced in March 2014 and pursuant to which Tucows has repurchased 79,392 shares of common stock.

The Tender Offer will allow shareholders to indicate how many shares and at what price within the Company’s specified range they wish to tender. Tucows will select the lowest single per-share purchase price that will allow it to buy up to $8.0 million of its outstanding common stock at completion of the Tender Offer. The specified range is yet to be determined but is expected to be in the range of $16.00 to $18.00 per share. All shares purchased by the Company in the Tender Offer will be purchased at the same price and will be cancelled. The Company will not purchase stock below a shareholder’s indicated price, and in some cases, the Company may purchase shares at a price that is above a shareholder’s indicated price under the terms of the Tender Offer.

The Tender Offer will not be conditioned upon any minimum number of shares being tendered, but will be subject to customary conditions that will be described in the Tender Offer documents. The offer to purchase and related Tender Offer documents, which will be distributed to shareholders upon commencement of the Tender Offer, will also contain tendering instructions and a complete explanation of the Tender Offer’s terms and conditions.

Neither Tucows, its board of directors nor its agents is or will be making any recommendation to shareholders as to whether to tender or refrain from tendering their shares into the Tender Offer. Shareholders must decide whether to tender their shares and, if so, how many shares to tender and at what price or prices. In doing so, shareholders should carefully evaluate all of the information in the Tender Offer documents, when available, before making any decision with respect to the Tender Offer, and should consult their own financial and tax advisors.

Rawleigh Ralls, a director of Tucows, has advised Tucows that he expects to participate in the tender offer.

The Tender Offer described in this release has not yet commenced. This release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any shares of the Company’s common stock. The solicitation and offer to buy the Company’s common stock will only be made pursuant to the offer to purchase and related Tender Offer documents, which are expected to be distributed to shareholders within thirty days of this announcement. Shareholders will be able to obtain copies of the offer to purchase and related Tender Offer documents when available without charge through the SEC’s website at www.sec.gov or from the Company’s website at www.tucows.com. Shareholders are urged to carefully read these materials, when available, prior to making any decision with respect to the offer.

About Tucows

Tucows is a provider of network access, domain name and other Internet services. Ting (https://ting.com) is a mobile phone service provider dedicated to bringing clarity and control to US mobile phone users. OpenSRS (http://opensrs.com) manages over 13 million domain names and millions of value-added services through a global 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. 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 including statements regarding our expectations regarding our future financial results and, in particular, our expectations for Ting and its impact on our financial performance. 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, including the acceptance of Ting in the market. 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 is a registered trademark of Tucows Inc. or its subsidiaries. All other trademarks and service marks are the properties of their respective owners.

Contact:

Lawrence Chamberlain
TMX Equicom
(416) 815-0700 ext. 257
lchamberlain@tmxequicom.com

— Quarter Highlighted by Net Earnings of $0.24 Per Share, Continued Momentum at Ting —

TORONTO, November 12, 2014 – Tucows Inc. (NASDAQ:TCX, TSX:TC), a provider of network access, domain name and other Internet services, today reported its financial results for the third quarter ended September 30, 2014. All figures are in U.S. dollars.

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

3 Months Ended Sept. 30, 2014 (unaudited) 3 Months Ended Sept. 30, 2013 (unaudited) 9 Months Ended Sept. 30, 2014 (unaudited) 9 Months Ended Sept. 30, 2013 (unaudited)
Net revenue 38,874 35,637 108,865 96,795
Income before provision for income taxes and change in fair value of forward exchange contracts 4,072 3,565 7,462 4,944
Net income 2,691 2,593 4,515 3,258
Net earnings per common share¹ $0.24 $0.24 $0.40 $0.32
Net cash provided by (used in) operating activities 5,014 3,664 6,110 7,052

¹ Net earnings per common share reflects the 1-for-4 reverse split of common shares that became effective December 31, 2013.

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

Revenue Cost of Revenue
3 Months Ended Sept. 30, 2014 (unaudited) 3 Months Ended Sept. 30, 2013 (unaudited) 3 Months Ended Sept. 30, 2014 (unaudited) 3 Months Ended Sept. 30, 2013 (unaudited)
Domain Services
Wholesale
OpenSRS Domain Service 21,880 22,003 18,230 18,581
Value-Added Services 2,350 2,606 576 485
Total Wholesale 24,230 24,609 18,806 19,066
Retail 2,687 2,143 1,197 946
Portfolio¹ 2,208 4,167 189 660
Total Domain Services 29,125 30,919 20,192 20,672
Network Access Services (Ting) 9,749 4,718 5,794 3,597
 
Network, other costs - - 1,139 1,193
Network, depreciation and amortization costs - - 172 176
Total revenue/cost of revenue 38,874 35,637 27,297 25,638

¹Portfolio revenue for Q3 2014 and Q3 2013 includes the net amounts received from the previously announced confidential arrangements related to the Company’s withdrawal of its application under the ICANN New gTLD Program for .group, and .media and .marketing, respectively.

“In the third quarter we again saw the growing contribution from Ting in our financial results as our Domain Services businesses continued to deliver consistent, reliable performance,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “We achieved net earnings of $0.24 per share, bringing net earnings for the year-to-date to $0.40 per share, surpassing our total for the entire 2013 year. Consolidated gross margin increased to 26% from 21% a year earlier, excluding the Portfolio group, which benefited from atypical contributions in both quarters.”

“Ting continued its strong momentum in customer acquisition, adding almost 11,000 accounts and more than 17,000 devices.”

Net revenue for the third quarter of 2014 increased 9% to $38.9 million from $35.6 million for the third quarter of 2013.

Net income for the third quarter of 2014 was $2.7 million, or $0.24 per share, compared with $2.6 million, or $0.24 per share, for the third quarter of 2013. Net income for both the third quarters of 2013 and 2014 included the contribution of confidential arrangements related to the Company’s withdrawal of certain of its applications under the ICANN New gTLD Program.

Cash and cash equivalents at the end of the third quarter of 2014 were $13.6 million, compared with $14.2 million at the end of the second quarter of 2014 and $11.5 million at the end of the third quarter of 2013. During the third quarter of 2014, the Company generated cash flow from operating activities of $5.0 million, as well as $1.1 million from the proceeds of stock options. This was partially offset by the use of $5.4 million for the repayment in full of the Company’s bank loan and $1.1 million for the repurchase of shares under the Company’s ongoing share buyback program.

Conference Call

Tucows management will host a conference call today, Wednesday, November 12, 2014 at 5:00 p.m. (ET) to discuss the Company’s third quarter 2014 results. Participants can access the conference call by dialing 1-888-231-8191 or 647-427-7450 or via the Internet at http://www.tucows.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 21916055 followed by the pound key. The telephone replay will be available until Wednesday, November 19, 2014 at midnight. To access the archived conference call as an MP3 via the Internet, go to http://www.tucows.com/investors.

About Tucows

Tucows is a provider of network access, domain name and other Internet services. Ting (https://ting.com) is a mobile phone service provider dedicated to bringing clarity and control to US mobile phone users. OpenSRS (http://opensrs.com) manages over 13 million domain names and millions of value-added services through a global 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. 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 including statements regarding our expectations regarding our future financial results and, in particular, our expectations for Ting and its impact on our financial performance. 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, including the acceptance of Ting in the market. 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 is a registered trademark of Tucows Inc. or its subsidiaries. All other trademarks and service marks are the properties of their respective owners.

Contact:

Lawrence Chamberlain
TMX Equicom
(416) 815-0700 ext. 257
lchamberlain@tmxequicom.com

— Domain industry veterans form a “global supply chain supergroup,”
secure the first viable alternative to .com —

TORONTO, Nov. 10, 2014 – A newly formed entity owned by Radix, Tucows and Namecheap won the auction to operate the .online registry for an undisclosed amount.

In the past year, dozens of new generic top level domains (gTLDs) from .actor to .wtf have brought meaning to the letters after the dot for niche constituencies and content. Soon, domain registrants will have one broad, intuitive, uncluttered alternative to .com for almost any initiative online.

They will also have a registry operator that is up to the task.

Radix is poised to join the largest registries in the world with applications to operate 20 suffixes and a warchest of over $30 million to ensure its success.

Tucows (NASDAQ:TCX; TSX:TC) operates OpenSRS, the largest wholesale domain name registrar in the world, with over 14,000 resellers in 150 countries and 14 million domains under management.

Namecheap is one of the most popular retail domain name services in the world, with over four million domains under management, two million direct customers, best-in-class user interfaces and outstanding customer support.

Together, the three companies bring unparalleled domain name experience and global distribution. That is fitting for .online, which perhaps brings unparalleled global relevance and appeal.

“Online” is the most commonly used word to end domain names, with over 550K .com domain names today ending with the word “online.” In addition, the .online extension has been amongst the top most pre-registered names across registrars.

“.online is the one new gTLD that requires no explanation,” chanted Radix CEO Bhavin Turakhia, Tucows CEO Elliot Noss and Namecheap CEO Richard Kirkendall. On the count of three, the CEOs continued, “We are excited to leverage our joint capabilities to bring this exciting new generic to the global market.”

Each of Radix, Tucows and NameCheap will contribute $4 to $5 million to cover the cost of the auction and the initial funding of seed capital for the registry. Tucows will treat its contribution as an investment for the purposes of financial reporting.

.online is expected to be generally available for registrations in early 2015.

About Radix

Radix (Radix FZC), is an active participant in ICANN’s process to expand the internet naming system and introduce new, meaningful internet addresses. Radix is Asia’s largest new gTLD applicant under this program with applications to operate 20 suffixes including web, .music, .blog, and .shop. The company has invested over $30 Million in securing licenses to operate these new extensions and expects to play a large role in the global diversification of the internet namespace.

About Tucows
Tucows is a provider of network access, domain name and other Internet services. OpenSRS (http://opensrs.com) manages over fourteen million domain names and millions of value-added services through a global 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 (https://ting.com) is a mobile phone service provider dedicated to bringing clarity and control to US mobile phone users. More information can be found on Tucows’ corporate website (http://tucows.com).

About Namecheap

Namecheap is a Los Angeles-based ICANN-accredited domain registrar, founded in 2000 by CEO Richard Kirkendall. With over four million domains under management and two million direct customers, Namecheap is one of the top domain registrars and web hosting providers in the world. For more information, visit https://www.namecheap.com.

For further information:

Tucows Contact:
Lawrence Chamberlain
TMX Equicom
(416) 815-0700 ext. 257
lchamberlain@tmxequicom.com

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