Company reports fifth consecutive quarter of positive cash flow from operations
Summary Financial Results
(Numbers in Thousands, Except Per Share Data)
|Three months ended
December 31, 2002
|Three months ended
December 31, 2001
December 31, 2002
December 31, 2001
|Net Income (Loss)||1,385||(2,687)||1,867||(13,413)|
|Net Income (Loss)/Share||0.02||(0.04)||0.03||(0.24)|
|Cash Flow from Operations||410||362||3,438||(6,064)|
TORONTO, CANADA, February 12, 2003 – Tucows Inc. (OTCBB: TCOW), a leading provider of outsourced Internet services to ISPs and web hosting companies worldwide, today reported its results for the fourth quarter and year ended December 31, 2002. The Company demonstrated strong operational and financial performance for both the quarter and year ended December 31, 2002, achieving:
For the quarter ended December 31, 2002:
- net revenue of $8.8 million;
- positive cash flow from operations of $410,000; and
- net income of $1.4 million.
For the year ended December 31, 2002:
- year-over-year revenue growth of 17%;
- year-over-year deferred revenue growth of 7%;
- positive cash flow from operations of $3.4 million; and
- net income of $1.9 million.
“The fourth quarter marked a solid finish to a year in which our operational successes and financial discipline resulted in strong revenue growth and positive operating cash flow,” said Elliot Noss, president and chief executive officer, Tucows Inc. “Tucows has built a recognized and trusted brand in doing what we do best – simplifying complex business processes and managing data for ISPs and web hosting companies. Having achieved our short-term financial goals and strengthened our balance sheet, we are now focused on leveraging our business model to provide our customers with additional high value service offerings and to deliver sustained profitability and value for our shareholders.”
For the fourth quarter of fiscal 2002, net revenue was $8.8 million compared to $8.0 million (excluding $1.8 million in revenue from products and services that were disposed of in fiscal 2002), for the fourth quarter of fiscal 2001.
Net income (on a U.S. GAAP basis) for the quarter was $1.4 million, or $0.02 per share, compared to a net loss of $2.7 million, or a net loss of $0.04 per share, for the same quarter last year. Net income for the current quarter includes $1.1 million ($1.8 million for the year), being a gain on the disposition of eLibrary subscription assets, as well as a gain of $140,000 (net loss of $260,000 for the year) due to the change in fair value of forward contracts.
For the year ended December 31, 2002, revenue was $37.0 million, an increase of 17% from $31.6 million for the year ended December 31, 2001. Net income (on a U.S. GAAP basis) for fiscal 2002 was $1.9 million, or $0.03 per share, compared to a net loss of $13.4 million, or a net loss of $0.24 per share, for fiscal 2001.
Deferred revenue at December 31, 2002, was $24.4 million, an increase of 7% from $22.7 million at December 31, 2001 (which included deferred revenue of $2.4 million from lines of business that were disposed of in fiscal 2002); relatively unchanged from $24.2 million at the end of the third quarter of fiscal 2002.
Cash and restricted cash at the end of the fiscal year increased to $9.8 million from $8.5 million at the end of the third quarter of this year. This increase in cash and restricted cash is primarily the result of positive cash flow from operations of $410,000 and proceeds from the disposal of eLibrary subscription assets of approximately $1.1 million for the quarter ($1.8 million for the year).
Domain names registered, renewed and transferred-in for the fourth quarter totaled approximately 661,000. Total active domain names under management at the end of the fourth quarter increased by approximately 82,000 to 3.43 million.
Tucows will host a conference call on Wednesday, February 12, 2003, at 5:00 p.m. (ET) to discuss its fourth quarter and year-end fiscal 2002 results. Participants can access the conference call via the Internet at www.tucows.com by clicking on “About Tucows” and then on “Investor Relations.”
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 416-695-5800 or 1-800-408-3053 and enter the pass code 1361879. The telephone replay will be available until Wednesday, February 19, 2003, at midnight. To access the archived conference call via the Internet, go to www.tucows.com and click on
“About Tucows” and then on “Investor Relations.”
Tucows Inc. is a leading provider of outsourced Internet services to ISPs and web hosting companies worldwide. An ICANN-accredited registrar, Tucows provides domain name registration services for generic and country code top-level domains (TLDs), plus digital certificates and email services. Tucows also distributes software and other digital content through its integrated network of affiliates and offers more than 30,000 software titles in libraries located around the world. For more information, please visit: http://www.tucows.com.
This news release contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding the continued growth and success of Tucows’ business, the ability to further develop and achieve commercial success for the company’s business strategy and the deployment of the company’s resources. Such 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. More information about potential factors that could affect Tucows 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.
Consolidated Balance Sheets
Consolidated Statements of Operations
| Three months ended
| Year ended
|Cost of revenues||5,462,628
|Sales and marketing (*)||939,062||1,087,377||3,770,913||6,380,102|
|Technical operations and development||842,196||998,495||3,725,966||5,052,569|
|General and administrative(*)||1,032,431||1,162,881||4,263,025||4,012,969|
|Depreciation of property and equipment||402,249||740,906||2,675,836||3,202,948|
|Loss on write-off of property and equipment||-||130,000||-||130,000|
|Amortization of intangible assets||-||467,700||222,222||3,656,846|
|Write-down of intangible assets||-||1,325,378||-||1,325,378|
| (Gain) loss on change in fair value of forward
|Total operating expenses||3,075,739
|Income (loss) from operations||222,007||(2,708,644)||(979,747)||(13,276,843)|
|Other income (expenses)|
|Interest income (expense), net||41,893||21,264||102,057||(135,920)|
| Gain on disposal of Electric Library
| Gain on disposal of Liberty Registry
Management Services Inc.
|Loss on disposal of Eklektix Inc.||-||-||(44,304)||-|
|Write down of investment in bigchalk.com||-||-||(1,013,335)||-|
|Total other income (expenses)||
|Income (loss) before provision for income taxes||1,385,380||(2,687,380)||1,866,831||(13,412,763)|
|Provision for income taxes||-||-||-||-|
|Net income (loss) for the period||$||1,385,380
|Basic and diluted earnings (loss) per share||$||0.02||$||(0.04)||$||0.03||$||(0.24)|
| Shares used in computing basic and diluted
earnings (loss) per common share
|(*) Stock-based compensation has been included in operating expenses as follows:|
|Sales and marketing||$||27,708||$||27,708||$||109,926||$||109,926|
|General and administrative||$||13,303||$||13,304||$||52,777||$||52,778|