Tucows (NASDAQ:TCX, TSX:TC) reported earnings for the third quarter of 2014 after the market closed.
Net revenue for the third quarter of 2014 increased 9% to $38.9 million from $35.6 million for the third quarter of 2013.
Net income for the third quarter of 2014 was $2.7 million, or $0.24 per share, compared with $2.6 million, or $0.24 per share, for the third quarter of 2013.
Net income for both the third quarters of 2013 and 2014 included the contribution of confidential arrangements related to the Company’s withdrawal of certain of its applications under the ICANN New gTLD Program.
Cash and cash equivalents at the end of the third quarter of 2014 were $13.6 million, compared with $14.2 million at the end of the second quarter of 2014 and $11.5 million at the end of the third quarter of 2013.
During the third quarter of 2014, the Company generated cash flow from operating activities of $5.0 million, as well as $1.1 million from the proceeds of stock options.
This was partially offset by the use of $5.4 million for the repayment in full of the Company’s bank loan and $1.1 million for the repurchase of shares under the Company’s ongoing share buyback program.”
Tucows.com also announced it expects to commence within 30 days of this announcement a “modified Dutch auction” tender offer (the “Tender Offer”) to repurchase a number of shares of its common stock not to exceed an aggregate purchase price of $8.0 million.
In accordance with rules of the Securities and Exchange Commission (“SEC”), Tucows may increase the number of shares accepted for payment in the offer by no more than 2 percent of the outstanding shares without amending or extending the tender offer. Tucows also announced that it has suspended its normal course issuer bid, which commenced in March 2014 and pursuant to which Tucows has repurchased 79,392 shares of common stock.
The Tender Offer will allow shareholders to indicate how many shares and at what price within the Company’s specified range they wish to tender.
Tucows will select the lowest single per-share purchase price that will allow it to buy up to $8.0 million of its outstanding common stock at completion of the Tender Offer.
The specified range is yet to be determined but is expected to be in the range of $16.00 to $18.00 per share.
All shares purchased by the Company in the Tender Offer will be purchased at the same price and will be cancelled.
The Company will not purchase stock below a shareholder’s indicated price, and in some cases, the Company may purchase shares at a price that is above a shareholder’s indicated price under the terms of the Tender Offer.
The Tender Offer will not be conditioned upon any minimum number of shares being tendered, but will be subject to customary conditions that will be described in the Tender Offer documents. The offer to purchase and related Tender Offer documents, which will be distributed to shareholders upon commencement of the Tender Offer, will also contain tendering instructions and a complete explanation of the Tender Offer’s terms and conditions.
