News

Demand generation and assessment phase commences immediately. Construction to begin as soon as early 2017.

TORONTO, ON – SEPTEMBER 21, 2016 – Ting, a division of Tucows (NASDAQ: TCX, TSX: TC) is pleased to announce that Centennial, CO will be the next town to get crazy fast fiber Internet from Ting.

Ting Internet continues its commitment to bringing dedicated symmetrical gigabit fiber optic Internet infrastructure and the fastest Internet access to smaller towns and cities in the US. Centennial, CO, population 107,201 (2014 Census) will be the largest Ting town by population to date.

With the launch of the ting.com/centennial local page, demand assessment begins immediately. Pre-orders are being accepted in Centennial starting today.

“Centennial has been refreshing to work with”, said Elliot Noss, CEO of Tucows. “Centennial’s approach to partnering with Ting has been excellent. They have found a great balance between being business-friendly while deeply serving the needs of their citizens. They understand how these need not be in conflict.”

“Having Centennial as Ting Internet’s first Colorado market is an honor and one that we are very excited about. The critical infrastructure has been in place throughout the City, we just needed the opportunity to partner with an organization such as Ting to provide service to our residents and businesses,” says Centennial Mayor Cathy Noon. “I would like to recognize and thank Council Members Whelan, Piko and Lucas for serving on the fiber steering committee. Their leadership and guidance has led us to see the City’s dark fiber network become a reality.”

“Ting Internet in Centennial will enable faster and more affordable Internet services for both residents and businesses, just as the City’s Fiber Master Plan intended. Technology, and in particular connectivity to the Internet, has become essential to everyday life, so much so that we experience withdrawals when it is not there. Data connectivity needs to be efficient and readily available, and it is at its best when it, ‘just works’ and you don’t have to think even about it. Bringing such a high level of service to Centennial is what makes this collaboration with Ting so exciting,” says Mayor Pro Tem and District 4 Council Member Charles “C.J.” Whelan.

Pending demonstrated demand, network construction will begin in Centennial as soon as early 2017.

To get to the pre-order stage, a town passes a series of checks and balances: availability of a fiber backbone, population, density, local permitting and many other factors are considered before Ting Internet formally expresses its intent to bring crazy fast fiber Internet service to a town. With these boxes checked, Ting takes a gauge of demand on the ground by raising awareness of gigabit fiber Internet and then opening up to accept pre-orders.

“Pre-orders determine not just whether Ting Internet comes to a town, but they also impact where network construction begins,” said Adam Eisner, VP of Networks for Ting Internet.

Ting Internet pursues arrangements with MDUs (multiple dwelling units, buildings that normal people usually call apartments or condos) in Ting towns, including arrangements where Ting crazy fast fiber Internet is an included amenity for residents.

Elliot Noss and other members of the Ting executive team are always available for interviews and for commentary on fiber and Internet industry happenings.

Elliot Noss on why Ting chose Centennial, CO as the next Ting town: https://youtu.be/M3VI-0qymBU

Ting Media Contact
Andrew Moore-Crispin
1-844-275-1773
press@ting.com

Tucows Investor Contact
Lawrence Chamberlain
416-848-1457
lchamberlain@national.ca

Communications Director, City of Centennial
Sheri Chadwick
720-585-5555
schadwick@centennialco.gov

About Tucows

Tucows 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) manages nearly 15 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) 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, Ting, OpenSRS and Hover are registered trademarks of Tucows Inc. or its subsidiaries.

TORONTO, August 18, 2016 – Tucows Inc. (NASDAQ:TCX, TSX:TC) today announced that it has entered into a new, syndicated five-year secured credit agreement for up to US$75 million, inclusive of a $15 million accordion facility (the “2016 Credit Facility”), with Bank of Montreal (“BMO”) and Royal Bank of Canada (collectively, the “Lenders”). The 2016 Credit Facility will be used to support share repurchases, acquisitions and capital expenditures associated with the Company’s Fiber-to-the-Home program, as well as general working capital and general corporate requirements.

“As planned, this new expanded credit facility provides us with additional financial resources and flexibility to support the ongoing build out of fiber infrastructure for Ting Internet,” said Elliot Noss, President and Chief Executive Officer.

This new facility refinanced and replaced the Company’s current US$14 million credit facility with BMO.

About Tucows

Tucows 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) manages nearly 15 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) 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).

This release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding our expected use of proceeds from borrowings under the 2016 Credit Facility. 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® 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
NATIONAL Equicom
(416) 848-1457
lchamberlain@national.ca


– EPS Increases 86% Year-Over-Year to $0.39 –

TORONTO, August 8, 2016 – 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, 2016. 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
2016
(unaudited)
2015
(unaudited)
% Change 2016
(unaudited)
2015
(unaudited)
% Change
Net revenue 47,466 42,889 11% 93,077 83,357 12%
Net income 4,071 2,285 78% 8,509 5,119 66%
Net earnings per common share $0.39 $0.21 86% $0.80 $0.46 74%
Adjusted EBITDA1 7,112 4,349 64% 13,925 9,641 44%
Net cash provided by operating activities 2,173 2,236 -3% 7,727 5,173 49%

1. This Non-GAAP financial measure is described below and reconciled to GAAP net income in the accompanying table. Tucows has revised its definition of Adjusted EBITDA as detailed in the description below and the table reconciling Adjusted EBITDA to GAAP net income.

Summary of Revenues and Gross Margin
(In Thousands of US Dollars)

Revenue Gross Margin
3 Months Ended June 30 3 Months Ended June 30
2016
(unaudited)
2015
(unaudited)
2016
(unaudited)
2015
(unaudited)
Network Access Services:
Mobile Services 18,026 14,352 8,646 6,356
Other Services 972 1,066 443 564
Total Network Access Services 18,999 15,418 9,089 6,919
Domain Services:
Wholesale
Domain Services 21,699 21,287 4,053 3,542
Value Added Services 2,310 2,356 1,858 1,854
Total Wholesale 24,008 23,643 5,911 5,396
Retail 3,556 3,009 1,916 1,687
Portfolio 903 819 700 636
Total Domain Services 28,468 27,471 8,528 7,719
Network Expenses:
Network, other costs (1,405) (1,495)
Network, depreciation and amortization costs (362) (291)
Total Network Expenses (1,767) (1,786)
47,466 42,889 15,850 12,852

“Tucows delivered another solid quarter of financial performance, driven by growth in both Network Access and Domain Services as we continue to benefit from the significant operating leverage in our business,” said Elliot Noss, President and Chief Executive Officer.  “Overall revenue grew 11% year-over-year, while net income was 78% higher at $4.1 million, or $0.39 per share and adjusted EBITDA1 was up 64% to $7.1 million.”
“Ting Mobile powered another great financial quarter and the acquisition and successful integration of Melbourne IT’s international wholesale domain reseller channel punctuated another quarter of steady contribution from our Domain Services business. While these core services continue to drive earnings, in our Ting Internet service we are steadily gaining experience, serviceable addresses, brand awareness and glowing reviews in Charlottesville, Virginia and Westminster, Maryland and we are getting ready to begin construction in Holly Springs, North Carolina.”

“All in, it was a good quarter for both the present and the future.”

Net revenue for the second quarter of 2016 increased 11% to $47.5 million from $42.9 million for the second quarter of 2015.

Net income for the second quarter of 2016 increased to $4.1 million, or $0.39 per share, compared with $2.3 million, or $0.21 per share, for the second quarter of 2015. Adjusted EBITDA1 for the second quarter of 2016 increased to $7.1 million from $4.3 million for the second quarter of 2015.

Cash and cash equivalents at the end of the second quarter of 2016 was $5.9 million compared with $10.0 million at the end of the first quarter of 2016 and $15.3 million at the end of the second quarter of 2015. The decrease relative to the first quarter of 2016 was primarily the result of the purchase of 209,698 shares of common stock for $5.0 million under the Company’s open market share buyback program, further investment of $1.0 million in property and equipment, primarily for the continued build out of the Ting Internet footprint, and repayment of $0.2 million of its bank loan. These decreases were offset by cash provided by operating activities of $2.2 million.

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 disclose and discuss a non-GAAP financial measure, adjusted EBITDA, 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 current 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. 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 Company’s current adjusted EBITDA definition is the result of two revisions:

  • In response to the clarification guidance provided by the SEC Compliance & Disclosure Interpretations regarding Non-GAAP Measures, updated on May 17, 2016, the Company revised its definition of adjusted EBITDA to eliminate the adjustment for the effect of net deferred revenue. Prior to this quarter of 2016, the Company’s adjusted EBITDA definition included an adjustment which removed the effect of net deferred revenue, which comprised the change in deferred revenue, net of prepaid domain name registry and other Internet services fees.
  • As previously disclosed, in April 2016, as part of the Company’s assessment of its compensation program for 2016, the Company revised the definition of adjusted EBITDA to eliminate the adjustment for the effect of realized gains/losses from all foreign currency contracts, both hedged and unhedged as the Company believes it is able to manage realized gains/losses from all foreign currency contracts with proper planning and budgeting. The Company used this version of adjusted EBITDA definition in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016.

The current adjusted EBITDA definition will be used to assess Company performance for 2016 and future periods.

In accordance with the clarification guidance provided by the SEC Compliance & Disclosure Interpretations, Non-GAAP Measures updated on May 17, 2016, prior period Adjusted EBITDA amounts presented herein have been recast to reflect the above described revisions.

Conference Call

Tucows management will host a conference call today, Monday, August 8, 2016 at 8:00 a.m. (ET) to discuss the Company’s second quarter 2016 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 passcode 50279294 followed by the pound key. The telephone replay will be available until Monday, August 15, 2016 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 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) manages nearly 15 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) 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).

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 manage realized gains/losses from foreign currency contracts. 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® 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
NATIONAL Equicom
(416) 848-1457
lchamberlain@national.ca

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