Tucows Inc.
Consolidated Balance Sheets
(Dollar amounts in U.S. dollars)
March 31, December 31,
2010 2009
(unaudited) (unaudited)
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Assets
Current assets:
Cash and cash equivalents $ 5,181,896 $ 9,632,394
Accounts receivable 3,697,545 2,822,045
Prepaid expenses and deposits 2,860,624 2,498,922
Derivative instrument asset, current
portion 2,185,688 2,107,825
Prepaid domain name registry and ancillary
services fees, current portion 33,750,000 31,596,236
Income taxes recoverable 358,000 674,000
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Total current assets 48,033,753 49,331,422
Derivative instrument asset, long-term
portion 140,913 112,553
Prepaid domain name registry and ancillary
services fees, long-term portion 12,588,320 12,126,515
Property and equipment 1,779,999 1,986,768
Deferred financing charges 33,600 41,000
Deferred tax asset, long-term portion 4,102,929 3,907,476
Intangible assets 18,213,439 18,656,353
Goodwill 17,990,807 17,990,807
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Total assets $102,883,760 $104,152,894
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,738,878 $1,547,863
Accrued liabilities 1,763,176 1,889,980
Customer deposits 3,895,116 3,624,317
Loan payable, current portion 2,741,564 3,220,125
Deferred revenue, current portion 42,837,249 40,211,766
Accreditation fees payable, current portion 594,968 530,656
Deferred tax liability, current portion 1,102,929 907,476
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Total current liabilities 54,673,880 51,932,183
Derivative instrument liability, long-term
portion 7,958 15,708
Deferred revenue, long-term portion 16,677,922 16,098,812
Accreditation fees payable, long-term portion 169,705 169,620
Deferred tax liability, long-term portion 4,840,000 4,840,000
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; 59,792,816 shares
issued and outstanding as of March 31,
2010 and 67,080,353 shares issued and
outstanding as of December 31, 2009 12,579,210 14,030,384
Additional paid-in capital 43,587,383 47,287,351
Deficit (29,652,298) (30,221,164)
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Total stockholders' equity 26,514,295 31,096,571
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Total liabilities and stockholders' equity $102,883,760 $104,152,894
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Tucows Inc.
Consolidated Statements of Operations
(Dollar amounts in U.S. dollars)
Three months ended March 31,
2010 2009
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(unaudited)
Net revenues $ 20,445,153 $ 20,091,424
Cost of revenues:
Cost of revenues(*) 14,924,874 13,785,398
Depreciation of property and equipment 310,058 392,947
Amortization of intangible assets 74,802 29,199
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Total cost of revenues 15,309,734 14,207,544
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Gross profit 5,135,419 5,883,880
Expenses:
Sales and marketing(*) 1,862,336 1,353,176
Technical operations and development(*) 1,243,013 1,104,139
General and administrative(*) 815,580 1,869,896
Depreciation of property and equipment 43,889 82,453
Amortization of intangible assets 360,540 360,540
Gain in fair value of forward exchange
contracts (113,973) (85,343)
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Total expenses 4,211,385 4,684,861
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Income from operations 924,034 1,199,019
Other income:
Interest income (expense), net (39,168) (63,462)
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Total other income (39,168) (63,462)
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Income before provision for income taxes 884,866 1,135,557
Provision for income taxes 316,000 107,425
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Net income for the period $ 568,866 $ 1,028,132
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Basic earnings per common share $ 0.01 $ 0.01
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Shares used in computing basic earnings per
common share 61,265,903 72,655,213
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Diluted earnings per common share $ 0.01 $ 0.01
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Shares used in computing diluted earnings
per common share 63,338,084 72,657,604
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(*)Stock-based compensation has been
included in expenses as follows:
Cost of revenues $ 3,628 $ 5,000
Sales and marketing $ 15,686 $ 14,900
Technical operations and development $ 14,581 $ 10,600
General and administrative $ 22,734 $ 18,700
Tucows Inc.
Consolidated Statements of Cash Flows
(Dollar amounts in U.S. dollars)
Three months ended March 31,
2010 2009
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Cash provided by (used in): (unaudited)
Operating activities:
Net income for the period $ 568,866 $ 1,028,132
Items not involving cash:
Depreciation of property and equipment 353,947 475,400
Amortization of deferred financing charges 7,400 10,400
Amortization of intangible assets 435,342 389,739
Disposal of domain names 7,572 973
Unrealized gain in the fair value of
forward contracts (113,973) (85,343)
Stock-based compensation 56,629 49,200
Change in non-cash operating working capital:
Accounts receivable (875,500) (516,993)
Prepaid expenses and deposits (361,702) (578,568)
Prepaid fees for domain name registry and
ancillary services fees (2,615,569) (2,125,399)
Income taxes recoverable/payable 316,000 85,182
Accounts payable 186,569 (180,821)
Accrued liabilities (126,804) 128,773
Customer deposits 270,799 (309,502)
Deferred revenue 3,204,593 2,463,376
Accreditation fees payable 64,397 78,607
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Net cash provided by operating activities 1,378,566 913,156
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Financing activities:
Proceeds received on exercise of stock
options 4,501 -
Repurchase of common stock (5,212,272) (1,811,179)
Repayment of loan payable (478,561) (478,561)
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Net cash used in financing activities (5,686,332) (2,289,740)
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Investing activities:
Cost of domain names acquired - (5,900)
Additions to property and equipment (142,732) (2,240)
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Net cash used in investing activities (142,732) (8,140)
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Decrease in cash and cash equivalents (4,450,498) (1,384,724)
Cash and cash equivalents, beginning of
period 9,632,394 5,427,467
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Cash and cash equivalents, end of period $ 5,181,896 $ 4,042,743
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Supplemental cash flow information:
Interest paid $ 65,521 $ 39,276
Supplementary disclosure of non-cash
investing activity:
Property and equipment acquired during the
period not yet paid for $ 2,784 $ 98,040