Tucows Inc. News

Tucows Inc. reports financial results for second quarter 2010

Tucows — Wed, 11 Aug 2010 20:08:55 +0000

TORONTO, Aug. 11 – Tucows Inc. (NYSE AMEX:TCX, TSX:TC), a global provider of domain names, email and other Internet services, today reported its financial results for the second quarter ended June 30, 2010. All figures are in U.S. dollars.

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

    -------------------------------------------------------------------------
                 3 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended
                  June 30, 2010  June 30, 2009  June 30, 2010  June 30, 2009
                     (unaudited)    (unaudited)    (unaudited)    (unaudited)
    -------------------------------------------------------------------------
    Net revenue          20,847         20,022         41,292         40,114
    -------------------------------------------------------------------------
    Net (loss)
     income for
     the period            (772)         4,379           (203)         5,407
    -------------------------------------------------------------------------
    Net (loss)
     earnings per
     common share         (0.01)          0.06          (0.00)          0.08
    -------------------------------------------------------------------------
    Net cash
     provided by
     operating
     activities           1,173          2,591          2,552          3,504
    -------------------------------------------------------------------------

         Summary of Revenue and Cost of Revenue before Network Costs
                     (Numbers in Thousands of US Dollars)

    -------------------------------------------------------------------------
                               Revenue                  Cost of Revenue
    -------------------------------------------------------------------------
                 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended
                  June 30, 2010  June 30, 2009  June 30, 2010  June 30, 2009
                     (unaudited)    (unaudited)    (unaudited)    (unaudited)
    -------------------------------------------------------------------------
    OpenSRS:
    -------------------------------------------------------------------------
    Domain
     Services            15,749         14,738         13,090         11,944
    -------------------------------------------------------------------------
    Email Services          581            874            117            153
    -------------------------------------------------------------------------
    Other Services        1,085          1,092            400            411
    -------------------------------------------------------------------------
    Total OpenSRS
     Services            17,415         16,704         13,607         12,508
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    YummyNames            1,632          1,455            254            251
    -------------------------------------------------------------------------
    Hover                 1,111          1,259            350            475
    -------------------------------------------------------------------------
    Butterscotch            689            604             25              1
    -------------------------------------------------------------------------
    Total                20,847         20,022         14,236         13,235
    -------------------------------------------------------------------------

“Our second quarter results continue to demonstrate the consistency of our business,” said Elliot Noss, President and CEO of Tucows. “Revenue from our core revenue drivers, domain registrations through OpenSRS and domain sales through YummyNames, was up on a year-over-year basis. Meanwhile, two of our growth opportunities, Hover and Butterscotch, continued to trend favorably across key metrics. The reliable performance of our core offerings allowed us to invest in our emerging units, positioning us for solid performance in the future while supporting our goal of returning capital to shareholders.”

Net revenue for the second quarter of 2010 increased 4.1% to $20.8 million from $20.0 million for the second quarter of 2009.

Net loss for the second quarter of 2010 was $0.8 million, or $0.01 per share, compared with net income of $4.4 million, or $0.06 per share, for the second quarter of 2009. Net loss and net loss from operations for the second quarter of 2010 were negatively impacted by a mark to market loss on foreign exchange of $1.9 million. Net income and net income from operations for the second quarter of 2009 were positively impacted by a mark to market gain on foreign exchange of $1.9 million. Additionally, net income for the second quarter of 2009 included other income of $2.0 million related to the sale of the Company’s equity stake in Afilias and $0.6 million related to patents that the Company assigned to a third party.

Deferred revenue at the end of the second quarter of fiscal 2010 was $60.0 million, an increase of 5.5% from $56.9 million at the end of the second quarter of fiscal 2009 and 0.9% from $59.5 million in the first quarter of 2010.

Cash and cash equivalents at the end of the second quarter of 2010 were $4.1 million compared with $7.4 million at the end of the second quarter of 2009 and $5.2 million at the end of first quarter of 2010. The decrease in cash compared with the first quarter of 2010 is primarily the result of the use of $1.7 million for the repurchase of common stock under the Company’s current open market share repurchase program that was initiated in February 2010, as well as the repayment of $0.5 million of the Company’s bank loan. This use of funds was partially offset by cash flow from operating activities for the second quarter of 2010 of $1.2 million. Cash flow from operating activities, before changes in non-cash operating working capital, for the second quarter of 2010 was $2.0 million, which was partially offset by the use of $0.8 million for changes in non-cash operating working capital.

During the second quarter of 2010, the Company repurchased an additional 2,453,300 common shares under its open market stock repurchase plan, which commenced in February 2010. During the first half of 2010, the Company repurchased an aggregate of 9,750,770 common shares (including shares purchased in its modified Dutch auction tender offer earlier this year), representing 14.5% of the Company’s outstanding common shares at the end of 2009. Since January 2009, the Company has repurchased a total of 15,825,006 shares representing 21.7% of the Company’s total shares outstanding at the end of 2008.

Conference Call

Tucows management will host a conference call today, Wednesday, August 11, 2010, at 5:00 p.m. (ET) to discuss the second quarter fiscal 2010 results. Participants can access the conference call via the Internet at http://tucowsinc.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 1-800-642-1687 and enter the pass code 90444604 followed by the pound key. The telephone replay will be available until Wednesday, August 18, 2010 at midnight. To access the archived conference call as an MP3 via the Internet, go to http://tucowsinc.com/investors.

About Tucows

Tucows is a global Internet services company. OpenSRS manages over ten million domain names and millions of email boxes through a reseller network of over 10,000 web hosts and ISPs. Hover is the easiest way for individuals and small businesses to manage their domain names and email addresses. YummyNames owns premium domain names that generate revenue through advertising or resale. Butterscotch.com is an online video network building on the foundation of Tucows.com. More information can be found at http://tucowsinc.com.

TUCOWS is a registered trademark of Tucows Inc. or its subsidiaries. All other trademarks and service marks are the properties of their respective owners.

Tucows second quarter investment community conference call is Wednesday, August 11, 2010 at 5:00 p.m. (ET)

Tucows — Fri, 30 Jul 2010 12:01:56 +0000

TORONTO, July 30 – Tucows Inc. (NYSE AMEX:TCX, TSX:TC), a global provider of domain names, email and other Internet services, plans to report its second quarter fiscal 2010 financial results via news release on Wednesday, August 11, 2010 at approximately 4:00 p.m. (ET). Tucows management will host a conference call the same day at 5:00 p.m. (ET) to discuss the results and the outlook for the company.

Participants can access the conference call via the Internet at http://tucowsinc.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 1-800-642-1687 and enter the pass code 90444604 followed by the pound key. The telephone replay will be available until Wednesday, August 18, 2010 at midnight. To access the archived conference call as an MP3 via the Internet, go to http://tucowsinc.com/investors.

About Tucows

For further information: Lawrence Chamberlain, The Equicom Group for Tucows Inc., (416) 815-0700 ext. 257, lchamberlain@equicomgroup.com

Celebrating the Domain Pioneers at the .com Gala

James Koole — Thu, 27 May 2010 12:35:35 +0000

Last night in San Francisco, California, VeriSign celebrated the .com 25 – the people and companies that, over the past 25 years, helped shape the web as we know it. This was part of the 25YearsOf.com celebration. In addition to the .com 25, Verisign also recognized a select group of Domain Pioneers. We’re proud that Tucows, and Elliot Noss, Tucows President and CEO, were on that select list of those recognized as pioneering people and companies in the domain name space.

VeriSign visited our Toronto offices a few weeks back to give Elliot the opportunity to talk about how the Internet has impacted his life, and about where he sees things heading in the future:

The Internet is people

Look back all the way back to 1994, when Tucows.com software library launched in Flint, Michigan, you’ll see that there was a focus within Tucows around the idea that the Internet is made up not of wires and routers, but of people.

Tucows.com used a network of thousands and thousands of mirrors – mostly Internet Service Providers – who provided a local copy of the Tucows software library to their customers as an additional feature on top of an Internet connection. In 1999 Tucows extended this network of relationships by adding domain name registrations to the mix through OpenSRS. We leveraged the existing relationships that we had in the Tucows network to build out a global network of domain sellers who used the OpenSRS backend to power sales and management of domain names to their customers.

These days much is made of Web 2.0 and the social qualities of the Internet. But the truth is that the Internet has always been a synergy of technology and people. Without the physical interconnections, the Internet wouldn’t exist and conversely, without the Internet, many of these social connections wouldn’t be possible.

What was originally a way to connect computer networks to computer networks quickly morphed into a way to interconnect the billions of people on planet earth with each other at the speed of light. Mobile, ubiquitous Internet access leads to a more social Internet which empowers people through the Internet.

This generation of kids who grew up with the Internet have come to expect to be able to access it on demand, wherever they might be. They forge relationships with each other via the web, they communicate via the web and they seem to be constantly connected to each other via the web.

Much thanks goes to VeriSign for putting together the 25YearsOf.com initiative. We’re honoured to be recognized as part of this select group of Pioneers. It’s a testament to vision that both Elliot and Tucows as a whole share–that the Internet is more than a vast physical network but that it is an extension, and an extender of social interactions between people that makes the world wide web so incredible and powerful.

Tucows Inc. reports financial results for first quarter 2010

Tucows — Wed, 12 May 2010 20:11:22 +0000

TORONTO, May 12 – Tucows Inc. (NYSE AMEX:TCX, TSX:TC), a global provider of domain names, email and other Internet services, today reported its financial results for the first quarter ended March 31, 2010. All figures are in U.S. dollars.

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

                                               3 Months Ended  3 Months Ended
                                                   Mar. 31,       Mar. 31,
                                                     2010           2009
                                                  (unaudited)    (unaudited)

    Net Revenue                                        20,445         20,091
    Net Income (Loss)                                     569          1,028
    Net Income (Loss)/Share                              0.01           0.01
    Cash Flow from Operations                           1,379            913

         Summary of Revenue and Cost of Revenue before Network Costs
                     (Numbers in Thousands of US Dollars)

                                      Revenue             Cost of Revenue

                             3 Months     3 Months     3 Months    3 Months
                               Ended        Ended        Ended       Ended
                              Mar. 31,     Mar. 31,     Mar. 31,    Mar. 31,
                                2010         2009         2010        2009
                            (unaudited)  (unaudited)  (unaudited) (unaudited)
    OpenSRS:
    Domain Services            15,403       14,202       12,616       11,355
    Email Services                638        1,122          107          180
    Other Services              1,094        1,094          387          389
    -------------------------------------------------------------------------
    Total OpenSRS Services     17,135       16,418       13,110       11,924

    YummyNames                  1,711        1,865          203          185
    Hover                       1,130        1,301          400          513
    Butterscotch                  469          507           19            7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total                      20,445       20,091       13,732       12,629

“Our results for the first quarter of fiscal 2010 underscore the consistency in our business, anchored by the OpenSRS Domain Service, which grew 9% year-over-year in both transactions and revenue,” said Elliot Noss, President and CEO of Tucows. “We are experiencing growth both in the number of new OpenSRS customers as well as the speed at which these customers roll our service out to their customers. Our ability to consistently and reliably generate cash flow from operations continues to support our ability to return capital to our shareholders. Since implementing our open market share purchase program in February 2010, we have repurchased an additional 956,000 shares, and since the beginning of the year we have repurchased a total of 7.3 million shares, or 11% of our total shares outstanding as of the end of 2009.”

Net revenue for the first quarter of 2010 increased 1.8% to $20.4 million from $20.1 million for the first quarter of 2009.

Net income for the first quarter of 2010 was $0.6 million, or $0.01 per share, compared with $1.0 million, or $0.01 per share, for the first quarter of 2009. Net income for the first quarter of 2010 benefitted from a pre-tax gain on foreign exchange of $0.7 million (inclusive of a mark-to-market gain of $0.1 million) compared to a pre-tax loss on foreign exchange of $0.7 million (inclusive of a mark-to-market gain of $0.1 million) for the first quarter of 2009.

Deferred revenue at the end of the first quarter of fiscal 2010 was $59.5 million, an increase of 5.1% from $56.7 million at the end of the first quarter of fiscal 2009 and an increase of 5.7% from $56.3 million at the end of the fourth quarter of fiscal 2009.

Cash and cash equivalents at the end of the first quarter of fiscal 2010 were $5.2 million compared with $4.0 million at the end of the first quarter of fiscal 2009 and $9.6 million at the end of the fourth quarter of fiscal 2009. The decrease in cash compared with the fourth quarter of 2009 is primarily the result of the use of $5.2 million for the repurchase of common stock under the Company’s modified “Dutch auction” tender offer, which concluded in January 2010 and the current open market share repurchase program that was initiated in February 2010, as well as the repayment of $0.5 million of the Company’s bank loan. This use of funds was partially offset by cash flow from operations for the first quarter of 2010 of $1.4 million.

Conference Call

Tucows will host a conference call today, Wednesday, May 12, 2010 at 5:00 p.m. ET to discuss the Company’s first quarter fiscal 2010 results. To access the conference call via the Internet, go to http://tucowsinc.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 1-416-849-0833 or 1-800-642-1687 and enter the pass code 72055618. The telephone replay will be available until Wednesday, May 19, 2010 at midnight. To access the archived conference call as an MP3 via the Internet, go to http://tucowsinc.com/investors.

About Tucows

This news release contains, in addition to historical information, forward-looking statements related to such matters as our business, including the price per share at which Tucows will purchase shares and the level of under subscription. Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks, which could cause actual results to differ materially from those described in the forward-looking statements. Information about 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 included in this document are based on information available to Tucows as of the date of this document, and except to the extent Tucows may be required to update such information under any applicable securities laws, 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.

OpenSRS Reveals Proven Revenue Stream For Web 2.0 Companies at Web 2.0 Expo San Francisco

Tucows — Tue, 04 May 2010 12:00:18 +0000

Presentation Outlines Namespaces and Revenue Models

TORONTO, May 4 – Tucows Inc. (NYSE AMEX: TCX, TSX:TC), through its wholesale reseller services group OpenSRS, will present a seminar at Web 2.0 Expo San Francisco on Tuesday, May 4, 2010 at 11:10 A.M. (PDT), that will encourage providers of web-based, online publishing and presence services to consider domain names as part of their approach to namespaces.

In a presentation entitled, “My Name is URL-Namespaces & Revenue Models,” Ken Schafer, Executive Vice President of Products, Tucows Inc., will discuss the opportunity companies have to enhance the user experience and generate significant revenue by offering a domain name, or web address, as an option with any service that helps users establish a presence online. Prior to joining Tucows in 2006, Schafer spent 12 years developing new Internet strategies for dozens of companies, including Sony Music Canada.

“Service providers need to think a little bit more about the web addresses they give their end users,” said Schafer. “Right now they tend to think of it as an afterthought or maybe as a marketing tool. One thing that they’re really missing is the fact that those web addresses could be a real revenue opportunity.”

Schafer explains that Web 2.0 companies don’t have to choose between delivering a great user experience and generating revenue. “We all know that for Web 2.0 companies, revenue models can really be elusive at times,” Schafer said. “This is something that people can be really excited about bringing to their businesses. It’s an opportunity for them to quickly integrate a new revenue stream and for their customers to share information more easily and to build online identities.”

This marks the first time that OpenSRS is sponsoring and attending Web 2.0 Expo San Francisco.

About Tucows

Tucows is a global Internet services company. OpenSRS manages over 10 million domain names and millions of email boxes through a reseller network of over 10,000 web hosts and ISPs. Hover is the easiest way for individuals and small businesses to manage their domain names and email addresses. YummyNames owns premium domain names that generate revenue through advertising or resale. Butterscotch.com is an online video network building on the foundation of Tucows.com. More information can be found at http://tucowsinc.com.

About Web 2.0 Expo

Web 2.0 Expo, co-produced by O’Reilly Media, Inc. and UBM TechWeb, showcases the latest Web 2.0 business models, development paradigms and design strategies for the builders of the next-generation Web. This annual multi-track conference brings together people, ideas, connections, contacts, products, and companies to foster stronger Web 2.0 communities. Web 2.0 Expo events occur in San Francisco and New York and feature influential keynotes and speakers, detailed workshops, a Launch Pad start-up program, an Expo show floor, a Web2Open unconference and rich networking events. For more information, please visit: http://www.web2expo.com.

TUCOWS is a registered trademark of Tucows Inc. or its subsidiaries. All other trademarks and service marks are the properties of their respective owners.

Web 2.0 Expo
www.web2expo.com

Seminar: My Name is URL – Namespaces & Revenue Models
http://www.web2expo.com/webexsf2010/public/schedule/detail/14079
http://www.blip.tv/file/3475392/

OpenSRS
www.opensrs.com

Tucows
www.tucowsinc.com

For further information: Le Quan Truong, Director of Marketing, OpenSRS, Tel: (416) 575-9382, ltruong@tucows.com

Tucows first quarter investment community conference call is Wednesday, May 12, 2010 at 5:00 p.m. (ET

Tucows — Fri, 30 Apr 2010 14:19:44 +0000

TORONTO, April 30 – Tucows Inc. (TSX: TC, AMEX: TCX) plans to report its first quarter fiscal 2010 financial results via news release on Wednesday, May 12, 2010 at approximately 4:00 p.m. (ET). Tucows management will host a conference call the same day at 5:00 p.m. (ET) to discuss the results and the outlook for the company.

Participants can access the conference call via the Internet at http://tucowsinc.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 1-800-642-1687 and enter the pass code 72055618 followed by the pound key. The telephone replay will be available until Wednesday, May 19, 2010 at midnight. To access the archived conference call as an MP3 via the Internet, go to http://tucowsinc.com/investors.

About Tucows

For further information: Lawrence Chamberlain, The Equicom Group for Tucows Inc., (416) 815-0700 ext. 257, lchamberlain@equicomgroup.com

Domain registrar Tucows Inc. reaches milestone 10,000,000 domains under management

Tucows — Tue, 30 Mar 2010 21:19:16 +0000

TORONTO, March 30 – Tucows Inc. (NYSE AMEX:TCX, TSX:TC) today celebrated a significant milestone, surpassing 10 million domain names under management.

The rise to 10 million was led by Tucows’ wholesale services group, OpenSRS. OpenSRS provides domain name registration services through a reseller network of over 10,000 web hosting companies, ISPs, Internet consultants, and other service providers in over 100 countries.

“We owe a lot to our network of resellers who helped us get to this 10 million name milestone,” said Dave Woroch, EVP of Sales, Tucows Inc. “Over the past ten years, we’ve been focused on ensuring their success so that they, in turn, can focus on their customers’ success. Our approach has clearly paid dividends for everyone involved.”

Leveraging its large and diverse channel of resellers, and more importantly, the close relationships those resellers have with millions of Internet users, OpenSRS has eclipsed well known retail registrars such as Network Solutions, 1&1 and Register.com. In fact, the “10 Million Club” includes only three members, Tucows, Enom and GoDaddy.

“Domain registrations are the foundation of our business and our reseller network gives us incredible reach worldwide,” explained Tucows CEO Elliot Noss. “Thanks to our wholesale model, we are able to tap into both growth markets, and also established segments that deliver consistent growth over the long-term.”

Mitch Haber, VP of Product Management at The Endurance International Group, an OpenSRS reseller, offered his congratulations. “OpenSRS is a true partner. Their platform is solid and their support team is among the best in the industry. They have played a key role in our success and we look forward to working with them toward the next 10 million domains under management.”

The more than 10 million domain names under management includes domain names managed under Tucows’ ICANN accreditation, as well as names Tucows manages for other registrars under their own accreditations.

About Tucows

TUCOWS is a registered trademark of Tucows Inc. or its subsidiaries. All other trademarks and service marks are the properties of their respective owners.

For further information: Lawrence Chamberlain, The Equicom Group for Tucows Inc., (416) 815-0700 ext. 257, lchamberlain@equicomgroup.com

Tucows Updates Details Related to Normal Course Issuer Bid

Tucows — Mon, 01 Mar 2010 15:30:12 +0000

TORONTO, March 1 – Tucows Inc. (NYSE AMEX: TCX, TSX:TC) today updated certain details related to its previously announced normal course issuer bid.

As previously announced on February 16, 2010, Tucows’ Board of Directors approved a stock buyback program to repurchase up to $10 million of Tucows common stock. Tucows has the option to repurchase its shares of common stock either through the facilities of the NYSE AMEX or TSX Stock Exchange.

On February 23, 2010, Lacuna Ventures GP LLLP and Rawleigh Hazen Ralls IV, insiders of the Company, filed Form 4′s on EDGAR announcing that they had sold a portion of their holdings in Tucows in the open market.

In the press release of February 16, 2010 Tucows included a statement that it does not intend to purchase its shares from its management team or other insiders.

Although it is still Tucows’ intent not to purchase shares from its management team or other insiders, sales by such persons through the facilities of NYSE AMEX or the TSX may occur if the circumstances of any such person or entity changes or any such person or entity makes a decision unrelated to these normal course purchases. The benefits to any such person or entity whose shares are purchased would be the same as the benefits available to all other holders whose shares are purchased by Tucows in connection with the normal course issuer bid.

OTHER THAN AS REFERENCED ABOVE, NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

About Tucows

Tucows is a global Internet services company. OpenSRS manages over 9 million domain names and millions of email boxes through a reseller network of over 10,000 web hosts and ISPs. Hover is the easiest way for individuals and small businesses to manage their domain names and email addresses. YummyNames owns premium domain names that generate revenue through advertising or resale. Butterscotch.com is an online video network building on the foundation of Tucows.com. More information can be found at http://tucowsinc.com.

This news release contains, in addition to historical information, forward-looking statements related to such matters as the timing and total number of shares to be purchased under the proposed buyback program, Tucows’ use of block purchases and Tucows’ intent not to purchase shares from its management team or other insiders. Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks, which could cause actual results to differ materially from those described in the forward-looking statements. Information about 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 included in this document are based on information available to Tucows as of the date of this document and, except to the extent Tucows may be required to update such information under any applicable securities laws, 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.

For further information: Lawrence Chamberlain, The Equicom Group for Tucows Inc., (416) 815-0700 ext. 257, lchamberlain@equicomgroup.com

Tucows Updates Details Related to Normal Course Issuer Bid Through TSX

Tucows — Wed, 24 Feb 2010 12:00:57 +0000

TORONTO, Feb. 24 – Tucows Inc. (NYSE AMEX: TCX, TSX:TC) today updated certain details related to its previously announced normal course issuer bid through the facilities of the TSX.

TSX has accepted a notice filed by Tucows of its intention to renew its normal course issuer bid commencing February 26, 2010 and ending February 25, 2011, to repurchase up to 3,854,000 (previously 3,748,000) shares of its common stock, which amount represents approximately 10% of the public float of Tucows.

As previously announced on February 16, 2010, Tucows’ Board of Directors approved a stock buyback program to repurchase up to $10 million of Tucows common stock. Tucows has the option to repurchase its shares of common stock either through the facilities of the TSX or the NYSE AMEX Stock Exchange.

For purposes of any repurchases made on the TSX, Tucows may only purchase up to a maximum of 1,890 shares in any daily trading session, which number represents 25% of the average daily trading volume on the TSX over the six month period ending January 31, 2010, unless the block purchase exception is relied upon. As of February 16, 2010 there were 60,726,783 common shares outstanding. All shares purchased by Tucows under the normal course issuer bid will be cancelled.

The timing and exact number of common shares purchased will be at Tucows’ discretion and will depend on available cash and market conditions. Tucows may suspend or discontinue the repurchases at any time, including in the event Tucows would be deemed to be making an acquisition of its own shares under Rule 13e-3 of the Securities Exchange Act of 1934, as amended. Subject to applicable securities laws and stock exchange rules, all purchases will occur through the open market and may be in large block purchases. Tucows does not intend to purchase its shares from its management team or other insiders.

During Tucows’ previous normal course issuer bid, which ended May 11, 2009, Tucows repurchased 849,760 common shares at a weighted average price of $0.32 per share. Based on market conditions, as well as Tucows’ preference to repurchase shares via its modified Dutch auction tender offer that was in effect for a portion of this normal course issuer bid, Tucows made no repurchases of common shares under this normal course issuer bid during the 12-month period ended February 22, 2010. During that same 12-month period ended February 22, 2010, Tucows purchased 12.4 million common shares via four separate modified Dutch auction tender offers, one of which occurred during the term of the previous normal course issuer bid.

OTHER THAN AS REFERENCED ABOVE, NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

About Tucows

TUCOWS is a registered trademark of Tucows Inc. or its subsidiaries. All other trademarks and service marks are the properties of their respective owners.

For further information: Lawrence Chamberlain, The Equicom Group for Tucows Inc., (416) 815-0700 ext. 257, lchamberlain@equicomgroup.com

Tucows Inc. reports financial results for the fourth quarter of 2009

Tucows — Tue, 16 Feb 2010 21:40:35 +0000

TORONTO, Feb. 16 – Tucows Inc. (NYSE AMEX:TCX, TSX:TC), a global provider of domain names, email and other Internet services, today reported its financial results for the fourth quarter and the year ended December 31, 2009. All figures are in U.S. dollars.

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

    -------------------------------------------------------------------------
                             3 Months     3 Months    12 Months    12 Months
                                Ended        Ended        Ended        Ended
                              Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
                                 2009         2008         2009         2008
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)
    -------------------------------------------------------------------------
    Net Revenue                20,330       19,159       80,939       78,468
    -------------------------------------------------------------------------
    Net Income (Loss)           1,746        1,019       12,241        2,075
    -------------------------------------------------------------------------
    Net Income (Loss)/Share      0.03         0.01         0.18         0.03
    -------------------------------------------------------------------------
    Cash Flow from
     Operations                 2,880         (229)       6,466        2,361
    -------------------------------------------------------------------------

         Summary of Revenue and Cost of Revenue before Network Costs
                     (Numbers in Thousands of US Dollars)

    -------------------------------------------------------------------------
                                    Revenue               Cost of Revenue
    -------------------------------------------------------------------------
                             3 Months     3 Months     3 Months     3 Months
                                Ended        Ended        Ended        Ended
                              Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
                                 2009         2008         2009         2008
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)
    -------------------------------------------------------------------------
    OpenSRS:
    -------------------------------------------------------------------------
    Domain Services
     (Traditional Domain
     Registration)             15,211       14,138       12,578       11,398
    -------------------------------------------------------------------------
    Email Services                799        1,122          110           95
    -------------------------------------------------------------------------
    Other Services              1,130        1,137          410          403
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total OpenSRS Services     17,140       16,397       13,098       11,896
    -------------------------------------------------------------------------

    YummyNames (Domain
     Portfolio Services)        1,521          854          193          174
    -------------------------------------------------------------------------
    Hover (Retail Services)     1,208        1,436          443          571
    -------------------------------------------------------------------------
    Butterscotch (Content
     Services)                    461          472           12           14
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total                      20,330       19,159       13,746       12,655
    -------------------------------------------------------------------------

“The fourth quarter saw the continued solid financial performance we delivered throughout 2009,” said Elliot Noss, President and CEO of Tucows. “The consistently strong performance of our OpenSRS wholesale business combined with the work we have undertaken to revitalize other parts of our business contributed to record revenue of $81 million amidst a very challenging economic environment. We are confident that 2010 will bring continued top-line growth complemented by continued operational efficiency.”

“At the same time, we remain committed to returning value to our shareholders. Over the last thirteen months we have repurchased more than 17% of Tucows’ outstanding shares.”

Net revenue for the fourth quarter of 2009 increased 6.1% to $20.3 million from $19.2 million for the fourth quarter of 2008.

Net income for the fourth quarter of 2009 was $1.7 million, or $0.03 per share, compared with $1.0 million, or $0.01 per share, for the fourth quarter of 2008. Net income for the fourth quarter of 2009 benefitted from a gain on foreign exchange of $0.5 million (inclusive of a mark-to-market gain of $0.3 million) compared to a loss on foreign exchange of $2.2 million (inclusive of a mark-to-market loss of $1.4 million) for the fourth quarter of 2008. Net income for the fourth quarter of 2009 also benefited from an income tax recovery of $0.5 million. Net income for the fourth quarter of 2008 included other income of $3.2 million generated by the sale of the Company’s equity position in Afilias.

Deferred revenue at the end of the fourth quarter of fiscal 2009 was $56.3 million, an increase of 4% from $54.2 million at the end of the fourth quarter of fiscal 2008 and a slight decrease from $56.5 million at the end of the third quarter of fiscal 2009.

Cash and cash equivalents at the end of the fourth quarter of fiscal 2009 were $9.6 million compared with $5.4 million at the end of the fourth quarter of fiscal 2008 and $8.2 million at the end of the third quarter of fiscal 2009. The increase in cash compared with the second quarter of 2009 is primarily the result of cash flow from operations for the fourth quarter of $2.9 million, which was partially offset by the repayment of $479,000 of the Company’s bank loan and the use of $534,000 for the repurchase of shares under the Company’s modified “Dutch auction” tender offer, which concluded in October 2009.

Conference Call

Tucows will host a conference call today, Tuesday, February 16, 2010 at 5:00 p.m. ET to discuss the Company’s fourth quarter fiscal 2009 results. To access the conference call via the Internet, go to http://tucowsinc.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 1-800-642-1687 and enter the pass code 53582860. The telephone replay will be available until Tuesday, February 23, 2010 at midnight. To access the archived conference call as an MP3 via the Internet, go to http://tucowsinc.com/investors.

About Tucows

                                 Tucows  Inc.
                         Consolidated Balance Sheets
                       (Dollar amounts in U.S. dollars)

                                                 December 31,    December 31,
                                                     2009            2008
                                                -------------- --------------
                                                  (unaudited)     (unaudited)

    Assets

    Current assets:
      Cash and cash equivalents                 $   9,632,394  $   5,427,467
      Accounts receivable                           2,822,045      3,200,362
      Prepaid expenses and deposits                 2,498,922      2,274,043
      Derivative instrument assets, current
       portion                                      2,107,825              -
      Prepaid domain name registry and
       ancillary services fees, current portion    31,596,236     29,212,610
      Deferred tax asset, current portion                   -        590,000
      Income taxes recoverable                        674,000              -
                                                -------------- --------------
        Total current assets                       49,331,422     40,704,482

    Derivative instrument assets, long-term
     portion                                           96,845              -
    Prepaid domain name registry and ancillary
     services fees, long-term portion              12,126,515     11,855,971
    Property and equipment                          1,986,768      3,072,958
    Deferred financing charges                         41,000         78,500
    Deferred tax asset, long-term portion           3,907,476      2,410,000
    Intangible assets                              18,656,353     20,206,996
    Goodwill                                       17,990,807     17,990,807
    Investment                                              -        200,000
                                                -------------- --------------
      Total assets                              $ 104,137,186  $  96,519,714
                                                -------------- --------------
                                                -------------- --------------

    Liabilities and Stockholders' Equity

    Current liabilities:
      Accounts payable                          $   1,547,863  $   1,633,830
      Accrued liabilities                           1,889,980      2,000,146
      Customer deposits                             3,624,317      3,319,241
      Derivative instrument liabilities                     -      1,974,919
      Loan payable, current portion                 3,220,125      2,624,242
      Deferred revenue, current portion            40,211,766     37,985,821
      Deferred tax liability, current portion         907,476              -
      Accreditation fees payable, current
       portion                                        530,656        510,548
                                                -------------- --------------
        Total current liabilities                  51,932,183     50,048,747

    Deferred revenue, long-term portion            16,098,812     16,201,804
    Accreditation fees payable, long-term
     portion                                          169,620        187,374
    Loan payable, long-term portion                         -      3,235,125
    Deferred tax liability, long-term portion       4,840,000      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; 67,068,253 shares
       issued and outstanding as of December 31,
       2009 and 73,073,782 shares issued and
       outstanding as of December 31, 2008         14,030,384     15,198,358
      Additional paid-in capital                   47,287,351     48,714,676
      Deficit                                     (30,221,164)   (42,462,370)
                                                -------------- --------------
        Total stockholders' equity                 31,096,571     21,450,664
                                                -------------- --------------
    Total liabilities and stockholders' equity  $ 104,137,186  $  96,519,714
                                                -------------- --------------
                                                -------------- --------------

                                 Tucows  Inc.
                    Consolidated Statements of Operations
                       (Dollar amounts in U.S. dollars)

                              Three months ended           Year ended
                                 December 31,              December 31,
                              2009         2008         2009         2008
                         ------------ ------------ -----------  ------------
                                 (unaudited)               (unaudited)

    Net revenues         $ 20,329,540 $ 19,159,149 $ 80,939,212 $ 78,467,880

    Cost of revenues:
      Cost of
       revenues(*)       14,993,792   13,819,760   57,936,106   54,614,036
      Depreciation of
       property and
       equipment              256,357      472,311    1,673,191    2,909,853
      Amortization of
       intangible assets       29,199       29,199      116,796      163,796
                         ------------ ------------ ------------ ------------
        Total cost of
         revenues          15,279,348   14,321,270   59,726,093   57,687,685
                         ------------ ------------ ------------ ------------

    Gross profit            5,050,192    4,837,879   21,213,119   20,780,195

    Expenses:
      Sales and
       marketing (*)      1,550,937    1,536,504    5,812,007    6,668,884
      Technical operations
       and development (*)1,128,879    1,505,596    4,550,704    6,172,428
      General and
       administrative (*)   950,749    2,003,748    5,558,921    6,809,601
      Depreciation of
       property and equipment  35,915       86,428      266,251      263,745
      Loss on disposition of
       property and equipment     524            -       40,893      498,529
      Amortization of
       intangible assets      360,540      360,540    1,442,160    1,483,195
      (Gain)/loss in fair
       value of forward
       exchange contracts    (277,195)   1,419,555   (4,179,589)   1,974,919
                         ------------ ------------ ------------ ------------
        Total expenses      3,750,349    6,912,371   13,491,347   23,871,301
                         ------------ ------------ ------------ ------------

    Income from operations  1,299,843   (2,074,492)   7,721,772   (3,091,106)

    Other income
     (expenses):
      Interest income
       (expense), net         (46,471)    (116,647)    (225,140)    (583,911)
      Other income                  -    3,239,950    4,493,190    5,870,960
                         ------------ ------------ ------------ ------------
        Total other income
         (expenses)           (46,471)   3,123,303    4,268,050    5,287,049
                         ------------ ------------ ------------ ------------

    Income before
     provision for income
     taxes                  1,253,372    1,048,811   11,989,822    2,195,943

    Income tax (recovery)
     expense                 (493,005)      30,000     (251,384)     121,134
                         ------------ ------------ ------------ ------------
    Net income for the
     period              $  1,746,377 $  1,018,811 $ 12,241,206 $  2,074,809
                         ------------ ------------ ------------ ------------
                         ------------ ------------ ------------ ------------

    Basic earnings
     (loss) per common
     share               $       0.03 $       0.01 $       0.18 $       0.03
                         ------------ ------------ ------------ ------------
                         ------------ ------------ ------------ ------------

    Shares used in
     computing basic
     earnings per common
     share                 67,076,782   73,559,276   69,145,001   73,817,347
                         ------------ ------------ ------------ ------------
                         ------------ ------------ ------------ ------------

    Diluted earnings
     (loss) per common
     share                $      0.03  $      0.01  $      0.17  $      0.03
                         ------------ ------------ ------------ ------------
                         ------------ ------------ ------------ ------------

    Shares used in
     computing diluted
     earnings per common
     share                 68,860,034   72,274,490   70,356,013   74,830,217
                         ------------ ------------ ------------ ------------
                         ------------ ------------ ------------ ------------

    (*) Stock-based
     compensation has
     been included in
     expenses as follows:
      Cost of revenues   $      3,730 $      5,100 $     15,957 $     19,700
      Sales and
       marketing         $     16,018 $     15,700 $     58,782 $     64,200
      Technical
       operations and
       development       $     15,186 $     10,900 $     49,302 $     52,700
      General and
       administrative    $     28,579 $     22,600 $    171,220 $    151,200

                                 Tucows  Inc.
                    Consolidated Statements of Cash Flows
                       (Dollar amounts in U.S. dollars)

                              Three months ended           Year ended
                                 December 31,              December 31,
                              2009         2008         2009         2008
                         ------------ ------------ -----------  ------------
                                 (unaudited)               (unaudited)

    Cash provided by
     (used in):
    Operating activities:
    Net income for the
     period              $  1,746,377 $  1,018,811 $ 12,241,206 $  2,074,809
    Items not involving
     cash:
      Depreciation of
       property and
       equipment              292,272      558,739    1,939,442    3,173,598
      Loss on disposition
       of property and
       equipment                  524            -       40,893      498,529
      Amortization of
       deferred financing
       charges                  8,300       11,300       37,500       49,700
      Amortization of
       intangible assets      389,739      389,739    1,558,956    1,646,991
      Reduction of
       deferred tax
       liability              (59,000)           -     (556,000)           -
      Gain on sale of
       customer relationships       -      (49,546)           -   (2,091,995)
      Disposal of domain
       names                    2,866        5,030        5,462        5,030
      Unrealized (gain)/loss
       in the fair value of
       forward contracts     (277,195)   1,419,555   (4,179,589)   1,974,919
      Stock-based
       compensation            63,513       54,300      295,261      287,800
      Gain on disposal of
       investment in Afilias        -   (3,090,404)  (3,890,395)  (3,090,404)
    Change in non-cash
     operating working
      capital:
      Accounts receivable   1,107,837      456,205      378,317      221,818
      Prepaid expenses and
       deposits               244,583      321,694     (224,879)     858,086
      Prepaid fees for
       domain name registry
       and ancillary
       services fees          (65,694)    (346,502)  (2,654,170)  (4,829,254)
      Income taxes
       receivable/payable    (674,000)           -     (674,000)           -
      Accounts payable        424,977     (557,655)    (172,583)    (789,425)
      Accrued liabilities       1,553     (420,176)    (110,166)  (1,288,941)
      Customer deposits      (140,003)     200,149      305,076       51,457
      Deferred revenue       (191,381)    (193,558)   2,122,953    3,574,397
      Accreditation fees
       payable                  4,811       (6,878)       2,354       33,487
                         ------------ ------------ ------------ ------------
    Net cash provided by
     (used in) operating
     activities             2,880,079     (229,197)   6,465,638    2,360,602
                         ------------ ------------ ------------ ------------

    Financing activities:
      Proceeds received on
       exercise of stock
       options                      -            -       25,422        9,450
      Repurchase of
       common stock          (534,467)    (272,444)  (2,915,981)    (272,444)
      Repayment of loan
       payable               (478,560)    (478,560)  (2,639,242)  (8,914,241)
                         ------------ ------------ ------------ ------------
      Net cash used in
       financing
       activities          (1,013,027)    (751,004)  (5,529,801)  (9,177,235)
                         ------------ ------------ ------------ ------------

    Investing activities:
      Cost of domain names
       acquired                (7,875)      (4,705)     (13,775)      (8,944)
      Additions to
       property and
       equipment             (381,238)    (191,140)    (807,530)  (2,113,904)
      Proceeds on
       disposition of
       property and
       equipment                    -            -            -       66,039
      Acquisition of
       Innerwise Inc.,
       net of cash acquired         -     (500,000)           -     (500,000)
      Proceeds on disposal
       of investment in Afilias     -    3,244,141    4,090,395    3,244,141
      Sale of customer
       relationships                -       49,546            -    2,392,660
      Decrease in cash
       held in escrow               -    1,088,793            -    1,070,632
                         ------------ ------------ ------------ ------------
      Net cash provided by
       (used in) investing
       activities            (389,113)   3,686,635    3,269,090    4,150,624
                         ------------ ------------ ------------ ------------

    Increase (decrease)
     in cash and cash
     equivalents            1,477,939    2,706,434    4,204,927   (2,666,009)

    Cash and cash
     equivalents,
     beginning of period    8,154,455    2,721,033    5,427,467    8,093,476
                         ------------ ------------ ------------ ------------
    Cash and cash
     equivalents, end of
     period              $  9,632,394 $  5,427,467 $  9,632,394 $  5,427,467
                         ------------ ------------ ------------ ------------
                         ------------ ------------ ------------ ------------

    Supplemental cash
     flow information:
      Interest paid      $     46,604 $    78,431  $   227,616  $    630,729

    Supplementary
     disclosure of
     non-cash investing
     activity:

      Property and
       equipment
       acquired during
       the period not
       yet paid for      $     93,594 $      6,979 $    93,594  $      6,979

For further information: Lawrence Chamberlain, The Equicom Group for Tucows Inc., (416) 815-0700 ext. 257, lchamberlain@equicomgroup.com.