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Note 14 - Segment Reporting
 6 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
14. Segment Reporting: 

 

(a)  We are organized and managed based on two operating segments which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate and are described as follows:

 

1.     Network Access Services - This segment derives revenue from the sale of mobile phones, telephony services, high speed Internet access, billing solutions to individuals and small businesses primarily through the Ting website. Revenues are generated in the United States. 

 

2.     Domain Services – This segment includes wholesale and retail domain name registration services, value added services and portfolio services. The Company primarily earns revenues from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations; the sale of retail Internet domain name registration and email services to individuals and small businesses; and by making its portfolio of domain names available for sale or lease. Domain Services revenues are attributed to the country in which the contract originates, primarily Canada and the United States.

 

The Chief Executive Officer (the “CEO”) is the chief operating decision maker and regularly reviews the operations and performance by segment. The CEO reviews gross profit as (i) a key measure of performance for each segment and (ii) to make decisions about the allocation of resources. Sales and marketing expenses, technical operations and development expenses, general and administrative expenses, depreciation of property and equipment, amortization of intangibles assets, impairment of indefinite life intangible assets, gain on currency forward contracts and other expense net are organized along functional lines and are  not included in the measurement of segment profitability. Total assets and total liabilities are centrally managed and are  not reviewed at the segment level by the CEO. The Company follows the same accounting policies for the segments as those described in Notes 2 – Basis of Presentation, 3 – Recent Accounting Pronouncements, and 11 - Revenue.

 

Information by reportable segments (with the exception of disaggregated revenue, which is discussed in Note 11 – Revenue), which is regularly reported to the chief operating decision maker is as follows (Dollar amounts in thousands of US dollars): 
 
  Network Access Services  Domain Services  Consolidated Totals 
Three Months Ended June 30, 2020            
             
Net Revenues $21,981  $60,141  $82,122 
             
Cost of revenues            
Cost of revenues  10,325   41,465   51,790 
Network expenses  605   1,880   2,485 
Depreciation of property and equipment  2,584   446   3,030 
Amortization of intangible assets  21   305   326 
Impairment of Property Plant and Equipment  1,525   -   1,525 
Total cost of revenues  15,060   44,096   59,156 
Gross Profit  6,921   16,045   22,966 
             
Expenses:            
Sales and marketing          9,218 
Technical operations and development          3,067 
General and administrative          5,465 
Depreciation of property and equipment          125 
Amortization of intangible assets          2,504 
Impairment of definite life intangible assets          1,431 
Loss (gain) on currency forward contracts          (381)
Income from operations          1,537 
Other income (expenses), net          (931)
Income before provision for income taxes         $606 

 

  

Network Access Services

  

Domain Services

  

Consolidated Totals

 

Three Months Ended June 30, 2019

            
             

Net Revenues

 $23,630  $60,487  $84,117 
             

Cost of revenues

            

Cost of revenues

  11,762   43,111   54,873 

Network expenses

  516   1,869   2,385 

Depreciation of property and equipment

  1,656   382   2,038 

Amortization of intangible assets

  12   302   314 

Total cost of revenues

  13,946   45,664   59,610 

Gross Profit

  9,684   14,823   24,507 
             

Expenses:

            

Sales and marketing

          8,856 

Technical operations and development

          2,752 

General and administrative

          4,796 

Depreciation of property and equipment

          134 

Amortization of intangible assets

          2,251 

Loss (gain) on currency forward contracts

          (31)

Income from operations

          5,749 

Other income (expenses), net

          (1,314)

Income before provision for income taxes

         $4,435 

 

  

Network Access Services

  

Domain Services

  

Consolidated Totals

 

Six Months Ended June 30, 2020

            
             

Net Revenues

 $46,437  $119,670  $166,107 
             

Cost of revenues

            

Cost of revenues

  21,898   83,080   104,978 

Network expenses

  1,143   3,758   4,901 

Depreciation of property and equipment

  4,998   909   5,907 

Amortization of intangible assets

  48   632   680 
Impairment of Property Plant and Equipment  1,525   -   1,525 

Total cost of revenues

  29,612   88,379   117,991 

Gross Profit

  16,825   31,291   48,116 
             

Expenses:

            

Sales and marketing

          18,203 

Technical operations and development

          5,818 

General and administrative

          10,206 

Depreciation of property and equipment

          238 

Amortization of intangible assets

          5,451 
Impairment of definite life intangible assets          1,431 

Loss (gain) on currency forward contracts

          60 

Income from operations

          6,709 

Other income (expenses), net

          (2,168)

Income before provision for income taxes

         $4,541 

 

  

Network Access Services

  

Domain Services

  

Consolidated Totals

 

Six Months Ended June 30, 2019

            
             

Net Revenues

 $46,882  $116,188  $163,070 
             

Cost of revenues

            

Cost of revenues

  23,574   83,231   106,805 

Network expenses

  1,038   3,742   4,780 

Depreciation of property and equipment

  3,109   730   3,839 

Amortization of intangible assets

  23   465   488 

Total cost of revenues

  27,744   88,168   115,912 

Gross Profit

  19,138   28,020   47,158 
             

Expenses:

            

Sales and marketing

          17,597 

Technical operations and development

          5,275 

General and administrative

          9,244 

Depreciation of property and equipment

          258 

Amortization of intangible assets

          4,117 

Loss (gain) on currency forward contracts

          (110)

Income from operations

          10,777 

Other income (expenses), net

          (2,286)

Income before provision for income taxes

         $8,491 

 

 

(b)           The following is a summary of the Company’s property and equipment by geographic region (Dollar amounts in thousands of US dollars): 
 
  June 30, 2020  December 31, 2019 
         
Canada $1,112  $2,319 
United States  100,137   79,758 
Europe  43   44 
  $101,292  $82,121 

 

(c)           The following is a summary of the Company’s amortizable intangible assets by geographic region (Dollar amounts in thousands of US dollars): 
 
  June 30, 2020  December 31, 2019 
         
Canada $2,885  $5,207 
United States  37,552   40,137 
  $40,437  $45,344 

 

(d)           The following is a summary of the Company’s deferred tax asset, net of valuation allowance, by geographic region (Dollar amounts in thousands of US dollars): 
 
  June 30, 2020  December 31, 2019 
         
Canada $340  $- 
  $340  $- 

 

(e)           Valuation and qualifying accounts (Dollar amounts in thousands of US dollars):
 
Allowance for doubtful accounts Balance at beginning of period  Charged to costs and expenses  Write-offs during period  Balance at end of period 
                 
Six Months Ended June 30, 2020 $131  $83  $-  $214 
Twelve months ended December 31, 2019 $132  $(1) $-  $131