TORONTO, May 7 /CNW/ – Tucows Inc., (AMEX:TCX, TSX:TC) a leading provider of Internet services to web hosting companies and ISPs worldwide, today announced its financial results for its first quarter ended March 31, 2008. All figures are in U.S. dollars…
"The results of the quarter were right in line with expectations. We are seeing the positive impact of the domain price reduction with an 18% year/year improvement in renewals among other positives. We expect traditional domain name registration to contribute favorably to gross margin in the remainder of the year. In addition, the migration of our email customers to our enhanced platform is nearing completion and we expect to realize considerable cost savings during the second half of the year," said Elliot Noss, President and CEO of Tucows. "While the strength of the Canadian dollar, last year’s price reduction for domain registrations and cost burden of carrying multiple email platforms held down our bottom line results this quarter, the positives noted above, combined with the anticipated continued growth in our domain portfolio business, will place us in an excellent position to achieve our stated goal of growing revenue, profitability and cash flow in 2008." Summary Financial Results (Numbers in Thousands of US Dollars, Except Per Share Data) ————————————————————————- 3 Months 3 Months Ended Ended March 31, March 31, 2008 2007 ————————————————————————- Net Revenue $ 18,711 $ 17,771 ————————————————————————- EBITDA 504 1,971 ————————————————————————- Adjusted Net Income 953 2,442 ————————————————————————- Net (Loss)/Income (1,082) 750 ————————————————————————- Net (Loss) Income/Share (0.01) 0.01 ————————————————————————- Cash Flow from Operations $ 117 $ 1,165 ————————————————————————- Summary of Revenue and Cost of Revenue (Numbers in Thousands of US Dollars) ————————————————————————- Revenue Cost of Revenue ————————————————————————- Three Months Three Months Three Months Three Months Ended Ended Ended Ended March 31, March 31, March 31, March 31, 2008 2007 2008 2007 ————————————————————————- Traditional Domain Registration Services $ 12,871 $ 11,901 $ 9,936 $ 8,731 ————————————————————————- Domain Portfolio Services 905 637 178 100 ————————————————————————- Email Services 1,575 2,133 107 205 ————————————————————————- Retail Services 1,641 1,207 567 406 ————————————————————————- Other Services 1,719 1,893 412 407 ————————————————————————- Total $ 18,711 $ 17,771 $ 11,200 $ 9,849 ————————————————————————- >> Net revenue for the first quarter of fiscal 2008 increased 5% to $18.7 million from $17.8 million for the first quarter of fiscal 2007. Adjusted Net Income for the first quarter of 2008 was $1.0 million, compared to $2.4 million for the corresponding quarter of last year. Net loss for the first quarter of 2008 was $1.1 million, or $0.01 per share, compared with net income of $0.7 million, or $0.01 per share, for the first quarter of 2007. Deferred revenue at the end the first quarter of fiscal 2008 was $53.6 million, an increase of 12% from $48.0 million at the end of the first quarter of 2007 and an increase of 6% from $50.6 million at the end of the fourth quarter of fiscal 2007. Cash and restricted cash at the end of the first quarter of fiscal 2008 was $7.5 million compared to $8.1 million at the end of the fourth quarter of fiscal 2007 and $6.6 million at the end of the first quarter of fiscal 2007. Cash flow from operations of was $0.1 million during the first quarter of fiscal 2008. EBITDA and Adjusted Net Income To assist financial statement users in an assessment of the Company’s historical performance and to project its future earnings and cash flows, the Company has included earnings before interest, taxes, depreciation and amortization (EBITDA). EBITDA is presented because it is an important supplemental measure of performance frequently used by securities analysts, investors and other interested parties in the evaluation of companies. Other companies may calculate EBITDA differently. EBITDA is not a measurement of financial performance under generally accepted accounting principles (GAAP) and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to Net Income as indicators of operating performance or any other measures of performance derived in accordance with (GAAP). Because EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business. See the Consolidated Statements of Cash Flows included in the attached financial statements. As a non-GAAP performance measure, EBITDA, has certain material limitations as follows:
