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 -
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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
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Total assets $ 104,137,186 $ 96,519,714
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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
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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)
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Total stockholders' equity 31,096,571 21,450,664
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Total liabilities and stockholders' equity $ 104,137,186 $ 96,519,714
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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