News

– Ting Continues Strong Momentum in Customer Growth –

TORONTO, February 12, 2014 – Tucows Inc. (NASDAQ:TCX, TSX:TC), a global provider of domain names and other Internet services, today reported its financial results for the fourth quarter ended December 31, 2013. All figures are in U.S. dollars.

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

3 Months Ended Dec. 31, 2013 (unaudited) 3 Months Ended Dec. 31, 2012 (unaudited) 12 Months Ended Dec. 31, 2013 (unaudited) 12 Months Ended Dec. 31, 2012 (unaudited)
Net revenue 33,139 29,791 129,935 114,727
Income before provision for income taxes and change in fair value of forward exchange contracts 1,532 789 6,476 5,745
Net income 923 429 4,180 4,424
Net earnings per common share¹ $0.08 $0.04 $0.40 $0.39
Net cash provided by operating activities 1,651 2,022 8,703 6,343

¹ Net earnings per common share reflects the 1-for-4 reverse split of common shares that became effective December 31, 2013. As a result of the reverse split, 10,900,842 shares and 11,064,045 shares were used in computing net earnings per common share for the 3 months ended December 31, 2013 and 2012, respectively, and 10,468,250 shares and 11,458,216 shares were used in computing net earnings per common share for the 12 months ended December 31, 2013 and 2012, respectively.

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

Revenue Cost of Revenue
3 Months Ended Dec. 31, 2013 (unaudited) 3 Months Ended Dec. 31, 2012 (unaudited) 3 Months Ended Dec. 31, 2013 (unaudited) 3 Months Ended Dec. 31, 2012 (unaudited)
Wholesale
Domain Services 21,595 22,391 17,949 18,893
Value-Added Services 2,417 2,705 548 456
Total Wholesale 24,012 25,096 18,497 19,349
 
Retail 8,027 3,628 4,966 2,454
Portfolio ¹ 1,100 1,067 143 201
 
Network, other costs - - 1,120 1,296
Network, depreciation and amortization costs - - 175 187
Total revenue/cost of revenue 33,139 29,791 24,901 23,487

“Our financial results for the fourth quarter once again underscore not only the consistency and reliability in our business but also our continued ability to generate sustainable growth,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “In the domains component of our business, we continue to see solid performance from both our Wholesale and Portfolio services, while our retail channel, Hover, delivered another quarter of 20%-plus year-over-year top-line growth.”

“For the seventh straight quarter, Ting set new records for net adds, adding more than 12,000 accounts and 18,000 devices. We ended the year with over 48,000 accounts and 74,000 devices and, in January, surpassed the 50,000 accounts and 80,000 devices milestone. Ting continues to be on track to positively contribute to EBITDA for 2014, although our priority will continue to be aggressive investment in customer acquisition and customer satisfaction to ultimately drive even greater long-term value for shareholders.”

Net revenue for the fourth quarter of 2013 increased 11% to $33.1 million from $29.8 million for the fourth quarter of 2012.
Net income for the fourth quarter of 2013 was $0.9 million, or $0.08 per share (based on the number of shares post-reverse split), compared with $0.4 million, or $0.04 per share (based on the number of shares post-reverse split), for the fourth quarter of 2012. Net income for the fourth quarter of 2013 included a loss on foreign exchange contracts of $0.3 million compared with a loss on foreign exchange contracts of $0.1 million in the fourth quarter of 2012. Net income for the fourth quarter of 2013 also included the incremental investment of approximately $1.3 million for the acquisition and support of Ting customers as compared to the fourth quarter of 2012.

Deferred revenue at the end of the fourth quarter of 2013 was $70.0 million, a decrease of 1% from $71.0 million at the end of the fourth quarter of 2012 and a decrease of 3% from $72.0 million at the end of the third quarter of 2013.

Cash and cash equivalents at the end of the fourth quarter of 2013 were $12.4 million compared with $11.5 million at the end of the third quarter of 2013 and $6.4 million at the end of the fourth quarter of 2012. The increase in cash and cash equivalents of $0.9 million when compared to the third quarter of 2013 resulted from the generation of $1.7 million in cash flow from operations, which was partially offset by the use of $0.6 million for principal repayments under the Company’s credit facility and investment of $0.2 million in equipment purchases.

Conference Call

Tucows management will host a conference call today, Wednesday, February 12, 2014 at 5:00 p.m. (ET) to discuss the Company’s fourth quarter 2013 results. Participants can access the conference call via the Internet at http://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 46588159 followed by the pound key. The telephone replay will be available until Wednesday, February 19, 2014 at midnight. To access the archived conference call as an MP3 via the Internet, go to http://tucows.com/investors.

About Tucows

Tucows is a global Internet services company. OpenSRS (http://opensrs.com) manages over fourteen million domain names and millions of value-added services through a 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. YummyNames (http://yummynames.com) owns and operates premium domain names that generate revenue through advertising or resale. 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

Hey, Let’s All Get Together to End Mass Surveillance

Being able to conduct our private online affairs privately is important.

If you don’t need any further convincing, jump down to find out why online privacy matters to us, what we’re doing to help protect it and how you can help.

Perhaps our opening statement seems weird and anachronistic, seeing as we live in a world where people are increasing both the amount of information they share, and the speed at which they share it.

Here’s why we think online privacy is important.

Privacy gives us the space as individuals to find and define our sense of self, and for organizations and companies to innovate and experiment.

Mass surveillance strips us all of the opportunity to choose what information we share, when, where and with whom. The choice between what’s public and what’s private is now in the hands of those that control the data.

Over the past eight months, the details of various national mass surveillance programs have been brought to light. We find the broad and unmitigated power that’s being entrusted to bodies like the National Security Agency (NSA) truly frightening.

We are pretty upset about it. We think you should be pretty upset about it too.

These mass surveillance programs undermine trust in our governments and in the corporations that provide access to and services on the Internet. Most importantly, it undermines trust in the Internet itself. It is the Internet that brings us together and allows us to share in each other’s experiences.

Why it matters to us

For OpenSRS: There is a crisis of faith in the organizations that govern the Internet. That, consequently, undermines how our business operates. The policies and procedures that are part of running the Internet infrastructure businesses depend on requires global trust in the organizations that develop and enforce them. Perhaps these organizations, like the Internet Corporation for Assigned Names and Numbers (ICANN), are too closely connected to the US government, but can they become more global without benefitting those that would seek to control, censor and undermine the Internet?

For Ting: We’ve tried very hard to build a unique service. We’re open and transparent in our pricing and in how we interact with our customers. After years of gouging and poor customer service, it’s no wonder that there is a general lack of trust in mobile service providers. Now, though, it’s also clear that some companies have been providing warrantless, wholesale data access to surveillance programs. Customers are now concerned that we’re providing their phone records and meta-data to these programs without notification or due process. Though we haven’t received any law enforcement requests for user information, these concerns are understandable.

What we’re doing about it

We’re trying to raise awareness through this post and by participating in The Day We Fight Back. We’re also raising money for the Electronic Frontier Foundation (EFF).

  • Hover will be donating $1 for every domain transferred to Hover on February 11.
  • Ting will be donating $1 up to $10,000 for everyone that shares this post from the Ting blog using the sharing tools there.

What You can do About It:

Here’s the great bit. Just over a year ago, citizens joined together online to defeat some rather heinous digital communications legislation. We know that individual voices matter, and we’ve seen the change they can bring.

If you’re American: Use the banner at the bottom of this post to contact your legislator and let them know that mass surveillance is unacceptable.

If you’re Canadian: Sign the petition hosted by OpenMedia. Or you can find and contact your member of parliament. Now is an excellent time to ask for increased oversight of the Communications Security Establishment (CSE).

Global citizens: Visit The Day We Fight Back and tweet, Facebook, or G+ your support for ending programs of mass surveillance.



TORONTO, Feb. 3, 2014 – On the two year anniversary of its launch, shockingly likeable mobile phone service Ting, a division of Tucows Inc. (NASDAQ: TCX; TSX: TC), surprised its customers with a big drop in data pricing.

The new rates are on display at ting.com/rates and the changes are detailed at ting.com/blog.

Current customers do not need to move to a new plan. New customers do not need to come from any particular provider. There is no requirement to buy a new device or make any particular commitment. Ting is simply dropping their usage-based pricing for current and incoming customers alike.

The deepest cut was made to the unit pricing on the heaviest data usage. That went from 2.25¢ per megabyte to just 1.5¢, a significant benefit to small businesses, families and data-hungry individuals.

“After two years of fantastic growth, we are in a position to provide even greater cost savings to our customers,” explained Elliot Noss, CEO of Tucows. “We are thrilled to be able to do so. People love saving money and we love making customers happy.”

Ting has now surpassed 50,000 accounts and 80,000 devices on the service.

Ting customers will begin enjoying the new rates in their next billing period that begins after today. Others are strongly encouraged to calculate their potential savings at ting.com/calculator.

About Ting

Ting has no contracts, no overage penalties and no hidden fees. Minutes, megabytes and messages are each billed separately and customers only pay for the usage levels they actually hit. Businesses and families can have unlimited devices on one account and share usage for even greater savings. Active devices on an account cost just $6 per month. Ting offers a clear, usable website and smart, accessible people that are empowered to solve problems. Ting’s wireless network services are provided on the Nationwide Sprint Network.

About Tucows

Tucows is a global Internet services company. OpenSRS (http://opensrs.com) manages over fourteen million domain names and millions of value-added services through a 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. YummyNames (http://yummynames.com) owns and operates premium domain names that generate revenue through advertising or resale. More information can be found on Tucows’ corporate website (http://tucows.com).

For further information:

Jesse Simms
416-535-0123 x1209
press@ting.com
https://ting.com

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