News

TORONTO, March 15, 2016 – Tucows Inc. (NASDAQ:TCX) (TSX:TC), a global provider of network access, domain names and other Internet services, today announced that it has entered into a definitive agreement to acquire the international wholesale domain reseller channel of Melbourne IT Limited (ASX: MLB). The acquisition will add hundreds of resellers and approximately 1.6 million domains under management to Tucows’ OpenSRS wholesale domain business. Tucows will not acquire any of Melbourne IT’s operations and the transaction will be immediately accretive to earnings.

“This acquisition represents an excellent opportunity to acquire a loyal, profitable base of resellers that have the same core needs as our existing wholesale customers,” said David Woroch, Tucows’ EVP Domains. “Importantly, the scalability of our OpenSRS platform allows us to meaningfully expand our base of domains under management while adding minimally to our operating costs.”

As a Tucows reseller on the OpenSRS platform, the new customers will immediately have access to over 600 top level domains (TLDs), a wide range of SSL certificates, email services and plugins to all the most popular billing and automation solutions.

“Wholesale domain services for web hosting companies and ISPs has been a core component of the Tucows business for more than 16 years,” added Mr. Woroch.  “Today, we are one of the largest wholesale domain name registrars in the world and the step function growth from this transaction will allow us to even better leverage our platform as we continue to invest in the business.”

The financial terms of the transaction were not disclosed and are not considered to be material for Tucows.

Watch the video to learn more.

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 over thirteen 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).

Media Contact:
Gustavo Arruda
416-535-0123, ext. 1211
garruda@tucows.com

Investor Contact:
Lawrence Chamberlain
416-815-0700 ext. 25
lchamberlain@tmxequicom.com

For Ting Internet, Thinking Big Means Bringing the Best Internet to Small Towns

SANDPOINT, Idaho, March 02, 2016 — Further demonstrating its commitment to small but forward-thinking towns, Ting today announced plans to bring crazy fast fiber Internet to the Greater Sandpoint, ID area. The towns of Sandpoint, Dover, Ponderay and Kootenai can pre-order Ting Internet starting today at ting.com/sandpoint.

Pre-orders will impact not just when Ting comes to town but where the network build begins as well. This is the initial “demand assessment” phase and it commences just as soon as Ting finishes writing this press release.

Assuming sufficient demand for crazy fast fiber Internet exists, network construction would begin later in 2016.

“Internet speed and infrastructure is an issue that is on the national agenda,” said Elliot Noss, CEO of Ting and its parent company Tucows (NASDAQ:TCX) (TSX:TC). “While it’s obviously very important to get major metros connected with fast fiber Internet, Ting Internet is proving that the fastest Internet access available isn’t just for city centers. Smaller cities and towns need faster, more reliable Internet too. Maybe even more so.”

While the issue of outmoded, overburdened and unreliable Internet infrastructure is national, Ting is demonstrating that the solution can be local.

“Crazy fast fiber Internet” refers to “symmetrical gigabit” service. That translates to upload and download speeds of up to a gigabit (or 1,000 megabits) per second. To put that in context, everyone in a household that has “the gig” can be streaming video, gaming, video conferencing and browsing the Internet at the same time without getting in each other’s way. Gigabit fiber Internet access also facilitates healthcare, fosters education and stimulates economic development.

“We’re always happy to team up with towns and cities that get it,” said Adam Eisner, Director of Networks for Ting. “Gigabit fiber is the next generation of Internet access and it will power the next generation of ideas.”

Ting disrupted the mobile industry with its launch in 2012 offering shockingly fair pricing, usable interfaces and no-hold, no-transfer, live customer support. Ting Internet started in Charlottesville, VA in early 2015 before expanding to Westminster, MD later that year. In early 2016, Ting Internet began demand generation and assessment in Holly Springs, NC.

“If there’s one industry that needs Ting perhaps even more than mobile, it’s cable and Internet access,” said Noss. “For too long, people and businesses have had no choice, or at best the illusion of choice, as to who provides them with access. They have been held hostage by contracts and forced under bandwidth caps. We’re changing that.”

Ting Internet installation costs vary by location but are not more than $200 for a home or $400 for an individual business. The Ting Internet Box, which doubles as a high speed wireless router, costs $199 up front or $9/mo. Ting symmetrical gigabit Internet costs $89/mo. for a home or $139/mo. for a business. There is also a low cost, non-core offering for $19/mo. for 5/5 Mbps service.

Ting executives are available for interviews.

Media Contact
Jesse Simms
1-844-275-1773
press@ting.com

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

About Tucows

Tucows is a provider of network access, domain names and other Internet services. Ting delivers mobile phone service and fixed Internet access with outstanding customer support. OpenSRS 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 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).


– Record Fourth Quarter EPS of $0.29 Contributes to an 82% increase in 2015 EPS to $1.04 –

TORONTO, February 9, 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 fourth quarter ended December 31, 2015. All figures are in U.S. dollars.

Summary Financial Results

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

3 Months Ended December 31, 2015 (unaudited) 3 Months Ended December 31, 2014 (unaudited) 12 Months Ended December 31, 2015 (unaudited) 12 Months Ended December 31, 2014 (unaudited)
Net revenue 45,031 38,803 172,939 147,667
Adjusted EBITDA1 6,313 3,531 25,595 15,040
Net income2 3,095 1,859 11,374 6,374
Net earnings per common share $0.29 $0.16 $1.04 $0.57
Net cash provided by operating activities 1,475 2,767 13,432 8,877

1.This Non-GAAP financial measure is described below and reconciled to GAAP net income in the accompanying table.

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

Revenue Cost of Revenue
3 Months Ended December 31, 2015 (unaudited) 3 Months Ended December 31, 2014 (unaudited) 3 Months Ended December 31, 2015 (unaudited) 3 Months Ended December 31, 2014 (unaudited)
Domain Services
Wholesale
OpenSRS Domain Service 21,383 21,609 17,860 18,079
Value-Added Services 2,296 2,305 498 531
Total Wholesale 23,679 23,914 18,358 18,610
Retail 3,302 2,806 1,503 1,216
Portfolio 757 917 189 241
Total Domain Services 27,738 27,637 20,050 20,067
Network Access Services 17,293 11,166 9,188 6,755
Network, other costs 1,326 1,127
Network, depreciation and amortization costs 353 171
Total revenue/cost of revenue 45,031 38,803 30,917 28,120

“The fourth quarter marked a strong finish to a year that saw record performance across all of our key financial metrics,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “Fourth quarter revenue topped $45 million, bringing our total for the year to $173 million – up 17% from 2014. Our growing Network Access business contributed to 79% and 70% year-over-year Adjusted EBITDA growth for the quarter and the year, totalling $6.3 million and $25.6 million, respectively. Earnings per share for fourth quarter and the year grew 81% and 82%, respectively, from the prior year to $0.29 and $1.04.”

“Notably, for the first time, Network Access contributed more gross margin during the quarter than Domain Services, with Network Access gross margin for 2015 nearly doubling from the prior year as the number of Ting Mobile accounts and devices expanded by 36% and 37%, respectively, over the course of the year.”

“Our strong cash flows from operations, alongside the operating leverage in our business model, particularly with the success and growth in Ting Mobile over the past few years, are now enabling us to pursue our ambitions on Ting Internet, while still returning capital to shareholders. During 2015, we invested $23.6 million in the repurchase of 1.1 million of our shares through our Dutch tender and open market buyback program.”

Net revenue for the fourth quarter of 2015 increased 16% to $45.0 million from $38.8 million for the fourth quarter of 2014.

Adjusted EBITDA1 for the fourth quarter of 2015 increased 79% to $6.3 million from $3.5 million for the fourth quarter of 2014. Net income for the fourth quarter of 2015 increased to $3.1 million, or $0.29 per share, compared with $1.9 million, or $0.16 per share, for the fourth quarter of 2014.

Cash and cash equivalents at the end of the fourth quarter of 2015 were $7.7 million compared with $11.9 million at the end of the third quarter of 2015 and $8.3 million at the end of the fourth quarter of 2014. The decrease relative to the third quarter of 2015 is primarily the result of the Company’s use of $5.4 million during the fourth quarter of 2015 to repurchase 231,047 shares of its common stock under its ongoing share buyback program, the use of $1.3 million for withholding taxes paid on the net-exercise of stock options and the use of $0.9 million to acquire additional property and equipment, the majority of which was invested in expanding Ting Internet’s fiber footprint. These were partially offset by a $2 million excess tax benefit on share-based compensation expense and the generation of cash flow from operating activities during the quarter of $1.5 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 and to project our future earnings and cash flows, we typically disclose and discuss a non-GAAP financial measure, Adjusted EBITDA, on investor conference calls and related events that exclude non-cash and other charges as we believe that the non-GAAP information enhances investors’ overall understanding of our financial performance and the comparability of our operating results from period to period.

Adjusted EBITDA is one of the primary measures we use for planning and budgeting purposes, incentive compensation and to monitor and evaluate our financial and operating results. Since adjusted EBITDA is a non-GAAP financial performance measure, our calculation of adjusted EBITDA may be susceptible to varying calculations; 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 measure of discretionary cash available to invest in the growth of the business. See the Consolidated Statements of Cash Flows included in the attached financial statements. Non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions 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. However, the Company’s management compensates 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.

Adjusted EBITDA excludes depreciation expense, amortization of intangibles, income tax provision, interest expense, interest income, stock-based compensation, asset impairment, net deferred revenue, which comprises the change in deferred revenue, net of prepaid domain name registry and other Internet services fees, to reflect the material amount of cash we collect and pay for domain registrations and other Internet services at the time of activation, unrealized foreign exchange gain/loss from the translation of monetary accounts denominated in non U.S. dollars to U.S. dollars as well as the revaluation of foreign exchange contracts and our foreign denominated assets and liabilities and infrequently occurring items listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release.

Conference Call

Tucows management will host a conference call today, Thursday, February 9, 2016 at 5:00 p.m. (ET) to discuss the Company’s fourth quarter 2015 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 26560817 followed by the pound key. The telephone replay will be available until Thursday, February 16, 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 over thirteen 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, 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
NATIONAL Equicom
(416) 848-1457
lchamberlain@national.ca

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