Tucows Inc.
Consolidated Balance Sheets
(Dollar amounts in U.S. dollars)
June 30 December 31,
2009 2008
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(unaudited) (unaudited)
Assets
Current assets:
Cash and cash equivalents $ 7,423,056 $ 5,427,467
Accounts receivable 3,464,428 3,200,362
Prepaid expenses and deposits 3,163,266 2,274,043
Derivative instrument assets 49,245 -
Prepaid domain name registry and ancillary
services fees, current portion 31,494,579 29,212,610
Deferred tax asset, current portion 590,000 590,000
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Total current assets 46,184,574 40,704,482
Prepaid domain name registry and ancillary
services fees, long-term portion 12,195,903 11,855,971
Property and equipment 2,354,702 3,072,958
Deferred financing charges 58,400 78,500
Deferred tax asset, long-term portion 2,410,000 2,410,000
Intangible assets 19,431,471 20,206,996
Goodwill 17,990,807 17,990,807
Investment 100,000 200,000
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Total assets $ 100,725,857 $ 96,519,714
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,257,992 $ 1,633,830
Accrued liabilities 2,003,789 2,000,146
Customer deposits 3,171,708 3,319,241
Derivative instrument liabilities - 1,974,919
Loan payable, current portion 3,114,242 2,624,242
Deferred revenue, current portion 40,508,091 37,985,821
Accreditation fees payable, current portion 553,447 510,548
Income taxes payable 835,398 -
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Total current liabilities 52,444,667 50,048,747
Deferred revenue, long-term portion 16,392,525 16,201,804
Accreditation fees payable, long-term portion 188,780 187,374
Loan payable, long-term portion 1,063,004 3,235,125
Deferred tax liability, long-term portion 5,396,000 5,396,000
Stockholders' equity:
Preferred stock - no par value, 1,250,000
shares authorized; none issued and
outstanding - -
Common stock - no par value, 250,000,000
shares authorized; 68,969,320 shares
issued and outstanding at June 30, 2009
and 73,073,782 shares issued and
outstanding at December 31, 2008 14,408,078 15,198,358
Additional paid-in capital 47,851,137 48,714,676
Deficit (37,018,334) (42,462,370)
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Total stockholders' equity 25,240,881 21,450,664
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Total liabilities and stockholders'
equity $ 100,725,857 $ 96,519,714
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Tucows Inc.
Consolidated Statements of Operations
(Dollar amounts in U.S. dollars)
Three months ended June 30, Six months ended June 30,
2009 2008 2009 2008
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(unaudited) (unaudited)
Net revenues $ 20,022,119 $ 20,450,329 $ 40,113,543 $ 39,161,536
Cost of revenues:
Cost of revenues
((*)) 14,386,048 13,663,097 28,171,446 26,813,029
Depreciation of
property and
equipment 488,680 816,260 941,389 1,642,097
Amortization of
intangible assets 29,199 31,941 58,398 105,398
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Total cost of
revenues 14,903,927 14,511,298 29,171,233 28,560,524
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Gross profit 5,118,192 5,939,031 10,942,310 10,601,012
Expenses:
Sales and
marketing ((*)) 1,339,167 1,730,736 2,692,343 3,426,868
Technical
operations and
development ((*)) 1,175,355 1,573,741 2,279,494 3,139,595
General and
administrative ((*)) 1,592,325 1,551,858 3,462,221 3,091,290
Depreciation of
property and
equipment 79,227 58,861 165,632 119,931
Amortization of
intangible assets 360,540 376,954 721,080 762,115
(Gain)/loss in
fair value of
forward exchange
contracts (1,938,821) (225,640) (2,024,164) 29,793
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Total expenses 2,607,793 5,066,510 7,296,606 10,569,592
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Income from
operations 2,510,399 872,521 3,645,704 31,420
Other income
(expenses):
Interest income
(expense), net (62,334) (166,421) (125,796) (376,405)
Other income 2,613,204 1,532,765 2,613,204 1,532,765
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Total other
income (expenses) 2,550,870 1,366,344 2,487,408 1,156,360
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Income before
provision for
income taxes 5,061,269 2,238,865 6,133,112 1,187,780
Income tax expense 581,651 30,000 689,076 61,134
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Net income for
the period $ 4,479,618 $ 2,208,865 $ 5,444,036 1,126,646
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Basic earnings per
common share $ 0.08 $ 0.03 $ 0.08 0.02
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Shares used in
computing basic
earnings per common
share 68,923,313 73,899,695 70,778,950 73,894,119
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Diluted earnings
per common share $ 0.07 $ 0.03 $ 0.08 0.01
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Shares used in
computing diluted
earnings per
common share 69,092,946 75,348,108 70,785,712 75,439,926
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((*)) Stock-based
compensation has
been included in
expenses as follows:
Cost of revenues $ 3,367 $ 4,800 $ 8,367 9,100
Sales and marketing $ 15,057 $ 13,000 $ 29,957 31,300
Technical
operations and
development $ 11,121 $ 8,000 $ 21,721 28,700
General and
administrative $ 53,193 $ 47,200 $ 71,893 76,100
Tucows Inc.
Consolidated Statements of Operations
(Dollar amounts in U.S. dollars)
Three months ended June 30, Six months ended June 30,
2009 2008 2009 2008
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Cash provided by (unaudited) (unaudited)
(used in):
Operating activities:
Net income for
the period $ 4,479,618 $ 2,208,865 $ 5,444,036 $ 1,126,646
Items not involving
cash:
Depreciation
of property
and equipment 567,907 875,121 1,107,021 1,762,028
Amortization of
deferred
financing charges 9,700 12,700 20,100 26,200
Amortization of
intangible assets 389,739 408,895 779,478 867,513
Gain on disposal
of investment
in Afilias (2,010,395) - (2,010,395) -
Gain on sale of
customer
relationships - (1,121,065) - (1,121,065)
Disposal of
domain names 974 - 1,947 -
Unrealized
(gain)/loss in
the fair value
of forward
contracts (1,938,821) (225,640) (2,024,164) 29,793
Stock-based
compensation 82,738 73,000 131,938 145,200
Change in non-cash
operating working
capital:
Accounts
receivable 252,927 350,043 (264,066) 283,923
Prepaid expenses
and deposits (310,655) (244,926) (889,223) (105,237)
Prepaid fees for
domain name
registry and
ancillary
services fees (496,502) (1,176,196) (2,621,901) (3,706,797)
Accounts payable 561,228 682,896 380,407 249,069
Accrued liabilities (125,130) (159,226) 3,643 (691,064)
Customer deposits 161,969 119,589 (147,533) 18,999
Deferred revenue 249,615 798,720 2,712,991 3,777,654
Accreditation fees
payable (34,302) (22,696) 44,305 34,120
Income taxes payable 750,216 - 835,398 -
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Net cash provided
by operating
activities 2,590,826 2,580,080 3,503,982 2,696,982
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Financing activities:
Proceeds received
on exercise of
stock options 25,422 9,450 25,422 9,450
Repurchase of
common stock - - (1,811,179) -
Repayment of loan
payable (1,203,560) (7,478,560) (1,682,121) (7,957,120)
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Net cash used in
financing
activities (1,178,138) (7,469,110) (3,467,878) (7,947,670)
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Investing activities:
Cost of domain names
acquired - (2,524) (5,900) (8,944)
Additions to property
and equipment (102,770) (1,084,209) (145,010) (1,295,740)
Sale of customer
relationships - 1,421,730 - 1,421,730
Proceeds on disposal
of investment in
Afilias 2,110,395 - 2,110,395 -
Decrease in cash
held in escrow - (5,366) - (12,765)
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Net cash provided
by investing
activities 2,007,625 329,631 1,959,485 104,281
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Increase (decrease)
in cash and cash
equivalents 3,420,313 (4,559,399) 1,995,589 (5,146,407)
Cash and cash
equivalents,
beginning of period 4,002,743 7,506,468 5,427,467 8,093,476
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Cash and cash
equivalents, end
of period $ 7,423,056 $ 2,947,069 $ 7,423,056 $ 2,947,069
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Supplemental cash
flow information:
Interest paid $ 62,508 $ 192,900 $ 128,029 $ 452,237
Supplementary
disclosure of
non-cash investing
activity:
Property and
equipment acquired
during the period
not yet paid for $ 250,734 $ 663,767 $ 250,734 $ 663,767