2023 Q4 TCX results financial statements.pdf

Consolidated Balance Sheets

(Dollar amounts in thousands of U.S. dollars)

December 31, 2023 December 31, 2022
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 92,687 $ 23,496
Restricted cash 3,639 -
Accounts receivable, net of allowance for doubtful accounts of $511 as of December 31, 2023 and $699 as of December 31, 2022 22,206 18,404
Contract asset, current portion 1,417 5,159
Inventory 6,786 7,284
Prepaid expenses and deposits 17,387 17,005
Derivative instrument asset, current portion 2,277 1,903
Deferred costs of fulfillment, current portion 95,649 94,198
Income taxes recoverable 709 2,471
Total current assets 242,757 169,920
Contract asset, long-term portion - 2,328
Deferred costs of fulfillment, long-term portion 15,419 16,476
Investment 2,012 2,012
Secured notes reserve funds receivable 8,652 -
Property and equipment 339,644 281,495
Right of use operating lease asset 27,467 20,489
Contract costs, long-term portion 2,581 1,827
Intangible assets 29,484 39,790
Goodwill 130,410 130,410
Total assets $ 798,426 $ 664,747
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 12,676 $ 17,171
Accrued liabilities 35,356 22,653
Customer deposits 19,335 15,783
Derivative instrument liability, current portion - 389
Operating lease liability, current portion 5,397 4,642
Deferred revenue, current portion 126,733 122,894
Accreditation fees payable, current portion 609 809
Income taxes payable 1,235 2,248
Other current liabilities - 1,600
Total current liabilities 201,341 188,189
Deferred revenue, long-term portion 21,350 22,237
Accreditation fees payable, long-term portion - 142
Operating lease liability, long-term portion 18,255 12,438
Syndicated revolver 210,354 238,930
Notes payable 222,895 -
Redeemable preferred shares 111,390 90,434
Deferred tax liability 2,966 15,720
Stockholders' equity:
Common stock - no par value, 250,000,000 shares authorized; 10,903,405 shares issued and outstanding as of December 31, 2022 34,373 31,868
Additional paid-in capital 14,072 8,106
Retained earnings (40,298) 55,899
Accumulated other comprehensive income (loss) 1,728 784
Total stockholders' equity 9,875 96,657
Total liabilities and stockholders' equity $ 798,426 $ 664,747

Consolidated Statements of Operations and Comprehensive Income

(Dollar amounts in thousands of U.S. dollars)

Three months ended December 31, Twelve months ended December 31,
2023 2022 2023 2022
(unaudited) (unaudited)
Net revenues $ 86,958 $ 78,909 $ 339,337 $ 321,142
Cost of revenues:
Direct cost of revenues 51,506 49,245 202,256 196,268
Network, other costs 7,584 4,245 28,222 17,433
Network, depreciation of property and equipment 9,533 7,969 35,864 27,589
Network, amortization of intangible assets 371 378 1,506 1,512
Network, impairment of property and equipment 143 62 4,822 92
Total cost of revenues 69,137 61,899 272,670 242,894
Gross profit 17,821 17,010 66,667 78,248
Expenses:
Sales and marketing (*) $ 18,363 $ 14,553 $ 67,415 $ 53,937
Technical operations and development (*) 4,904 3,974 19,118 14,187
General and administrative (*) 8,170 8,838 33,896 30,845
Depreciation of property and equipment 128 155 567 598
Loss on disposition of property and equipment - - - 461
Amortization of intangible assets 2,357 2,488 9,323 9,882
Total expenses 33,922 30,008 130,319 109,910
Income from operations (16,101) (12,998) (63,652) (31,662)
Other income (expenses):
Interest expense, net (12,651) (5,901) (41,771) (14,456)
Loss on debt extinguishment - - (14,680) -
Income earned on sale of transferred assets 4,062 4,498 17,033 18,507
Other expense - (50) - (177)
Total other income (expenses) (8,589) (1,453) (39,418) 3,874
Income before provision for income taxes (24,690) (14,451) (103,070) (27,788)
Provision for income taxes (1,316) (1,006) (6,873) (217)
Net income for the period (23,374) (13,445) (96,197) (27,571)
Other comprehensive income, net of tax
Unrealized income (loss) on hedging activities 1,667 928 1,830 418
Net amount reclassified to earnings (79) 132 (886) 23
Other comprehensive income net of tax expense (recovery) 1,588 1,060 944 441
Comprehensive income, net of tax for the period $ (21,786) $ (12,385) $ (95,253) $ (27,130)
Basic earnings per common share $ (2.14) $ (1.25) $ (8.85) $ (2.56)
Shares used in computing basic earnings per common share 10,899,916 10,765,595 10,864,086 10,758,691
(*) Stock-based compensation has been included in expenses as follows:
Network expenses $ 151 $ 201 $ 575 $ 503
Sales and marketing $ 567 $ 877 $ 2,493 $ 2,006
Technical operations and development $ 229 $ 545 $ 899 $ 952
General and administrative $ 581 $ 1,580 $ 4,167 $ 4,138

Consolidated Statements of Cash Flows

(Dollar amounts in thousands of U.S. dollars) Three months ended December 31, Twelve months ended December 31,

Three months ended December 31, Twelve months ended December 31,
2023 2022 2023 2022
(unaudited) (unaudited)
Cash provided by:
Operating activities:
Net income for the period $ (23,374) $ (13,445) $ (96,197) $ (27,571)
Items not involving cash:
Depreciation of property and equipment 9,661 8,124 36,431 28,187
Impairment of property and equipment 143 62 4,822 92
Amortization of debt discount and issuance costs 1,060 203 3,331 685
Amortization of intangible assets 2,728 2,866 10,829 11,394
Net amortization contract costs (142) (140) (754) (748)
Accretion of contingent consideration 50 50 248 248
Deferred income taxes (recovery) (3,659) (3,584) (13,040) (6,981)
Excess tax benefits on share-based compensation expense - (35) - (193)
Net Right of use operating assets/Operating lease liability (89) (126) (406) (897)
Loss on disposal of domain names 2 - 5 7
Accretion of redeemable preferred shares 4,916 2,646 14,163 3,896
Loss on debt extinguishment - - 14,680 -
Write off of debt discount and issuance cost - - 277 -
Loss (gain) on change in the fair value of forward contracts - (161) 1,624 281
Amortization of discontinued cash flow hedge - (507) (1,144) (761)
Stock-based compensation 1,528 3,203 8,134 7,599
Remeasurement of contingent consideration - (400) - (400)
Change in non-cash operating working capital:
Accounts receivable 1,983 (3,686) (3,802) (3,825)
Contract payments 1,893 575 6,070 (6,709)
Inventory 865 (1,396) 361 (4,007)
Prepaid expenses and deposits 2,012 1,622 (382) 3,981
Deferred costs of fulfillment 1,570 1,252 (394) 2,037
Income taxes recoverable 145 929 734 3,355
Accounts payable 114 (195) (5,319) 6,754
Accrued liabilities 8,751 6,039 9,044 7,411
Customer deposits 595 1,010 3,552 (1,191)
Deferred revenue (1,671) (2,001) 2,952 (2,667)
Accreditation fees payable (28) (4) (342) (101)
Net cash provided by operating activities 9,003 2,901 (4,771) 19,876
Financing activities:
Proceeds received on exercise of stock options - 288 - 1,096
Proceeds from issuance of notes payable - - 227,258 -
Redeemable preferred shares redemption - 27,500 (45,718) 87,500
Proceeds from redeemable preferred shares - - 35,000 -
Deferred notes payable financing costs (63) - (6,738) -
Deferred preferred financing costs - (262) 145 (1,016)
Proceeds received on syndicated revolver - - 52,382 48,300
Repayment of syndicated revolver (11,530) (18) (80,182) (748)
Deferred syndicate revolver issued (157) (62) (1,711) -
Contingent consideration for acquisitions - - (1,600) (3,125)
Net cash (used in) provided by financing activities (11,750) 27,446 178,836 132,007
Investing activities:
Additions to property and equipment (14,579) (36,692) (92,055) (136,710)
Acquisition of intangible assets (113) (665) (528) (782)
Net cash used in investing activities (14,692) (37,357) (92,583) (137,492)
(Decrease) increase in cash and cash equivalents (17,439) (7,010) 81,482 14,391
Cash and cash equivalents, restricted cash, and restricted cash 122,417 30,506 23,496 9,105
Cash and cash equivalents, restricted cash and restricted cash 104,978 23,496 104,978 23,496
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash 92,687 23,496 92,687 23,496
Restricted cash included in funds held for trustee 3,639 - 3,639 -
Restricted cash included in secured notes reserve funds receivable 8,652 - 8,652 -
Total Cash and cash equivalents, restricted cash, and restricted cash 104,978 23,496 104,978 23,496
Supplemental cash flow information:
Interest paid $ 4,832 $ 3,251 $ 24,736 $ 10,289
Income taxes paid, net $ 1,587 $ 1,355 $ 4,929 $ 3,883
Supplementary disclosure of non-cash investing and financing activities:
Property and equity acquired during the period not yet paid for $ 6,948 $ 501 $ 6,948 $ 501

(In Thousands of U.S. Dollars) (unaudited)

(unaudited) Three months ended December 31, Twelve months ended December 31,
(unaudited) 2023(unaudited) 2022(unaudited) 2023(unaudited) 2022(unaudited)
Net Income for the Period $ (23,374) $ (13,445) $ (96,197) $ (27,571)
Less:
Provision for income taxes (1,316) (1,006) (6,873) (217)
Depreciation of property and equipment 9,661 8,124 36,431 28,187
Impairment and loss on disposition of property and equipment 143 62 4,822 553
Amortization of intangible assets 2,728 2,866 10,829 11,394
Interest expense, net 12,651 5,901 41,771 14,456
Loss on debt extinguishment - - 14,680 -
Accretion of contingent consideration - 50 - 248
Stock-based compensation 1,528 3,203 8,134 7,599
Unrealized loss(gain)on foreign exchange revaluation of foreign denominated monetary assets and liabilities (316) (166) (62) 281
Acquisition and other costs ^1 849 1,111 1,916 2,660
Adjusted EBITDA $ 2,554 $ 6,700 $ 15,451 $ 37,590