Good afternoon, ladies and gentlemen. Welcome to Tucows, Inc.’s third quarter fiscal 2009 conference call. Earlier this afternoon, Tucows issued a news release reporting its financial results for the third quarter of fiscal 2009. The news release and financial statements are available on the company’s website at tucowsinc.com under the Investors heading. Please note that today’s call is being broadcast live over the Internet and will be archived for replay both by telephone and via the Internet, beginning approximately one hour following the completion of this call. Details or how to access the replays are available in today’s news release report to the third quarter financial results as well as at Tucows website. Before we begin today, let me remind you that the matters that the company will be discussing include forward-looking statements, and, as such, are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in the company’s documents filed with the SEC, specifically the most recent reports on Form 10-K and 10-Q. The company urges you to read its Securities filings for a full description of the risk factors applicable for its business. I would now like to turn the call over to Tucows President and Chief Executive Officer Mr. Elliot Noss. Please go ahead, sir.

Thank you, operator. Good afternoon, and thanks for joining us today. With me is Michael Cooperman, Tucows Chief Financial Officer. As per our usual format for these calls, I'll begin with a brief overview of our financial performance and some of the operational highlights for the third quarter of 2009. I'll then turn things over to Mike for a detailed review of our financial results, and then I'll return for some concluding comments before opening the call up to questions. Third quarter saw the continuation of our solid financial performance in 2009. Revenue totaled $20.5 million, up a couple of percentage points from both the third quarter of last year and the second quarter of this year. We've delivered a solid financial results, driven by our focus on strengthening the competitive position and improving our overall cost structure. Next, I'm pleased to report that in September, we've received the third and final payment related to the sale of our stake in Afilias which contributed $2 million in cash during the quarter. That brings the total compensation for our Afilias stake to over $7 million. In addition, cash EBITDA for Q3 was over $1.5 million, bringing cash EBITDA for the year-to-date to just over $5 million, that's before including the benefits of our successful Canadian dollar hedging strategy. It is now clearly the case, and, as I have noted in the past, 2009 looks a lot more like 2007 than 2008. Cash EBITDA is a non-GAAP measure, but I use it here as net income for the quarter includes a large gain in currency contracts and the one-time gain from Afilias sale. With cash flow from operations, there were balance sheet items, which had a negative impact of approximately $1.5 million and provisional payments made for 2009 income taxes in the…

Thanks, Elliot. Net revenue for the third quarter of fiscal 2009 was $20.5 million up slightly from $20.1 million for the third quarter of last year, and $20 million for the second quarter of this year. Year-over-year increase was achieved, despite the expected declines in email and other revenues, and was primarily the result of higher demand services and YummyName’s revenue. Cost of revenues before network costs for the quarter increased by just over 10% or $1.3 million to $13.6 million from $12.3 million for the same quarter of last year. Network costs for the quarter decreased by $781,000 or 32% to $1.7 million from $2.5 million for the third quarter of last year. The decrease is primarily attributable to the lower co-location costs stemming from the closure and relocation of our US-based co-location facilities completed in September of last year as well as the restructuring we implemented in November 2008. It was also attributable to lower network depreciation and amortization costs, which decreased by $300,000 compared to the same quarter last year, primarily as a result of certain of our older computer hardware being fully depreciated and not requiring replacement. Gross margin for the quarter decreased to 25% from 27% for the third quarter of last year, largely the result of a shift in sales mix to a higher proportion of domain registration services, as well as the impact of the 7% registry price increase that was levied by some of the domain registries in October of last year. Even negative impacts on gross margin were partially offset by the lower network costs that I discussed a moment ago. Gross margin from our OpenSRS service, which includes domain services, email services, and other wholesale services, was $4.2 million or 25% of net sales, compared to $4.7 million or 29%…

Thanks, Mike. At our year end call in February, I stated that we would be aggressive in returning capital to shareholders. As announced on our last call, we initiated our third modified Dutch auction tender. Under this offer, which commenced on August 20th, shareholders have the opportunity to tender their shares at a price ranging from $0.52 to $0.60 per share. Our intention was to repurchase up to 5 million shares. The resulting tenders by shareholders were such that we purchased just under 785,000 shares at $0.60 for a total dollar investment in our part of approximately $470,000. On the positive side, the results are indicative of the loyalty of our shareholders and their belief in our business going forward. Before the tender was first announced, our shares were trading in the mid $0.40 range. In aggregate, we've now purchased a total of 6.1 million shares through our Dutch tender offers this year, reducing our number of shares outstanding by more than 8%. Total shares outstanding now are just over 67 million. While we are not announcing another tender on this call, we are continuing to evaluate next steps here and most importantly, we remain committed to a strategy that returns capital to shareholders and is focused on seeing the value that Tucows best realize. Looking ahead to 2010, we expect to continue to grow our business and generate solid cash flow but we know that our results will be impacted by a few factors First for some time we have saying that direct navigation names are non-strategic and it was our objective to bring consistency to bulk sales of this class of names. We have been successful in this regard and now have regular bi-monthly disposition of these names under a subcontract for a consistent amount of money. In addition, in 2009 we were able to sell the bulk of our backlog of these names. This resulted in nearly a $1.5 million of revenue generated that will not be repeatable in 2010, much, but not all of this will be replaced by increased volume in the sale of brandable sales. Second, over a $1.5 million in revenue from email in 2009 arose from the three large media portal customers who moved as part of broader alliances. We do expect new customers to replace some of that revenue. Third the change in our tax status, as Mike had discussed on the two previous conference calls this year, in 2010 we will be fully taxable. We did have a low effective rate in 2009, however, that rate will increase significantly in 2010. In closing, we feel about the business. We expect growth to come from a number of different places and we continue to improve the efficiency of the business. We are looking forward to 2010. With that, I would like to open the call to questions. Operator?

(Operator Instructions). Your first question comes from Thanos Moschopoulos from BMO Capital Markets.

Just starting off with I guess the last point that was made on the tax rate, can you just remind us what tax rate, which we are looking for in 2010?

Roughly 34.5%.

Are you referring to that’s the reported tax rate on the income statement, right?

Sorry, I didn’t catch that, Thanos.

You are referring to the reported tax rate on the income statement, correct?

That’s right.

Elliot, you made a comment earlier about, you are seeing signs of an uptick, and in the past few quarters with downturn in the economy, we really haven’t seen much of an impact on your business, you have shown remarkable resilience during that time. So, how should we think about what impact or affects you will see as the economy starts to recover, where would that likely show up?

We think that that place where we did see a macro impact was in the broader domain name market. If you look at the registry results, that get reported, there were some pretty significant breaking of growth, or in some cases even decline in the registrations year-on-year and a couple of those quarters, but we were able to kind of keep growing into that. It certainly muted our growth, and you have seen very simple things. Unless some times the people had a comment on that, they have let them let go. That kind of activity is the margins. We really saw the start of October distinctly different from September, if that starts to pick up. So where that will live for us is in the new registrations and probably the renewal transactions as well. So we think it will help mostly around the domain registration results. It could help a little bit with email as well as our customers start to feel a little bit healthier about things. They could be more open to outsourcing and picking up new cost.

Just talking about sort of the use of cash going forward, you clearly have the Dutch auctions in recent quarters. Any thoughts or what's your current thinking as far as potential for dividend?

Well, I think I'll go back to my general statement there, which is I think that's not something we would in any way consider as long as we felt the stock was undervalued. I think still looking at where we are valued relative to, and I never liked that as you know, I never to like hope too much evaluations, but I'm still pretty comfortable that the stock is quite attractively valued.

Turning to the domain sales, I just want to be clear on the comments that you made about the non-repeatable business. So if you could just kind of elaborate on the comments you made there?

Sure. So over the couple of few years that we were sort of taking the [exit] from our expiry stream, we built up a bit of a backlog of those direct navigation names and you remember those are the names that are really valued on a multiple of revenue based on their traffic, not for in any way their value to a company who might want to name themselves or use the name line of business and we are really focused on those brandable names. Now through this year, we've been very successful at kind of selling our excess inventory that we had around direct navigation names. So now we are getting to the point where what we are really doing is, we are monetizing that inventory as it comes in. So, we kind of burden through some of that backlog or excess inventory. I mean you'd almost think about it, if we were a classic business, we had built up excess inventory in a certain line or certain goods that we then shows to run down on because it wasn't what we are emphasizing. At the same time underneath that the folks in the YummyNames business unit have really done a strong job building up around those brandable sales. So, the direct navigation sales that will still go on, but at a suddenly reduce rate to last year, around the number that I have talked about and we will be filling in with some of those brandables and I think over time you will continue to see growth around that business unit, but this is really, almost an inventory adjustment.

Okay, guys. That’s very clear. In the YummyNames revenues you had this quarter of the $1.8 million, how much would have been in bulk sales.

This quarter I want to say, Michael, correct me if I’m wrong. I’m going to say 350,000 or so, maybe 400,000. Well remember, when you are saying bulk I’m thinking now what I’ll call non-repeatable bulk. So, 350,000 to 400,000.

Okay. I got you. So, I mean rather large transactions.

Well, not really. We have a quite regular transaction stream that in the kind low six figures every month or really a transaction of every 60 days that includes a couple of those. That’s pretty regular and it does change a little bit, each 60 days period based on names that flow through, but we have now seen, I want to say three or four of those and they are pretty consistent transaction to transaction.

Okay. On the OpEx side, we should rethink about any significant changes there, now especially?

No, certainly as we are looking forward something we would actually started to do really in the last half of 2009 is to spend a little bit more money on marketing and when I say that, that’s primarily in terms of, not very many but a couple of few, and when you are really seeing that is as we’ve done so much of the platform work that we did, both in the OpenSRS business also in the Butterscotch and Hover business. Remember that works behind us and you kind of you have done the backend. Now, we can start to focus a little more on the sales and marketing side against the things that we’ve built and put in place. So it’s a little bit more of a spend but really, you’ve noticed a long time, what I say that its not really in very appreciable numbers.

(Operator Instructions) We have a question from David Shore from Research Capital.

Product wise may be you could layout sort of what the next, year or two, will there be additional things that would be interesting in the portfolio. Give us some thoughts on that?

I think that as we are looking forward, the things that we’re playing with on the roadmap, are things that really extend from domain names and emails. So we think that there are some additional pretty closely related services that we will be able to supplement with. I think that in other words what you would you hear there is, there is no kind of whole new category, that we see brining in but we do see some additional revenue opportunities through 2010 on some very closely related ancillary services. In addition, we are still big believers that there is some nice upside with the personal name service that we are really focusing on nailing that on the retail side of the business in Hover, and then taking what lessons we learned there, and to the extent that we are able to crack the code there rolling some of that learning back into wholesale. We think we've got an amazing service with that personal name service, that email address, that's first name and last name dot.com that are ORG. We think it's still a real opportunity, and it's right at the intersection of domain names and email. So we think there is a lot of opportunity than what we have in front of us.

As far as those of the things you'd be developing in-house I would assume?

That's right.

Any changes competitively, many guys being sort of more aggressively pricing or anything like that?

No. I think that there is probably two comments I'll make there. One, you've heard me talk in the past about the fact that we are more focused on the wholesale segment than really in our view any of our competitors on a company level. For Tucows, the company, wholesale services to hosting companies and ISPs is what we do at our core and we think that that focus. So competitively as others maybe have other things that are interesting them, that focus pays off and plays out well competitively. In terms of price, we really said about to try and be the low cost suppliers. So when I say low cost, I'm not talking about low price, but to be the most efficient and effective supplier in the industry and the one who can live with the [finest] oxygen and I think we have done a great job of getting ourselves there. So I hope that our competitors are worried more about us there than we are worried about them.

Your next question comes from Aram Fuchs from Fertilemind Capital.

I was wondering if you could be a little bit more specific on net increase in accounts payable, what was the purpose for it?

Are you talking about the payables?

Yes.

Do you mean the decrease in payables, like the use of cash in payables?

Right.

So there was a change in the ICANN contracts that created an incentive to significantly accelerate the payments and it was part of a number of changes in the new RAA or Registrar Accreditation Agreement with ICANN, and so it created a little bit of a change in the ICANN [theme], which is something that we passed along to our customers that we flow through on our pricing, and it required us to pretty significantly accelerate the payments. So that’s something where you catch up once and then you are in a pretty new steady stream cycle.

Then I was wondering retail declined a little bit sequentially and in the context of our statement of trying to crack the code in personal names in Hover. I was wondering how far along are you cracking that code and when do you think retail, I’m assuming that we would see that an increase in sales in retail, first, and then you could share what you did with your wholesale customers?

That’s right. So there is probably two comments I will comment there. One, the sequential number is not really a big dollar number that’s primarily driven by renewal patterns. Still overwhelmingly the revenue in that business is with most retail businesses that have been round a while as renewals. So that’s big driver there. In terms of the stuff we are doing for personal names, I am wondering if you would have seen this as an old Domain Direct customer, we’re doing things like learning how to cross-sell to domain holders, the personnel names. We are working on a number of places where we are going to enter into new affiliate relationships. That effort really started in earnest around July, August. So we are not seeing that yet. We are seeing a kind of learning and may be separately we can go into deeper dive on some of the boring details there, I think you would find some of it interesting. That will start to bear fruit in the coming months, but at this point its really about, kind of building that, here’s what a small tweak looks like. Some place you might see that Aram. Where you might have basically seen it, is in some of the things we are doing with the part pages.

Right, but there seems to have been, you don’t think this would be sort of step function, where once its done, you would see some sort of quick result worthwhile.

No I don’t think it would be step function at all, in fact I think it would be a slow and accelerating growth. Once you find kind of one vein you can mind then inside of that vein you can start to optimize conversions. Optimize copy, optimize landing pages, all of those various pieces. So I think its something that is more like a snowball, than a step function.

Right and then Butterscotch and the content business, can you just give little more detail on where you are getting sales in Butterscotch and how the base tucows.com business is doing there?

Sure. So there was a couple of things they were first of all before I talk about probably three comments I'll make. Well let me start with sales in Butterscotch, I think that we are now starting to see some progress around some of the corporate video work we've been doing. We had in the quarter, our first couple of repeat customers, large corporate customers that we've done some corporate video fort them, so they have come back to second time. We've added a couple of new customers. There again its very snowball like and Q3 is the worst quarter in the year especially in that business, that has the July, August month typically very bad for advertising. More impressively the traffic on the Butterscotch side both in terms of the site proper and the growth of its YouTube channel had been very, very impressive and one of the things that that's now its been a bit of a halo effect who have for the first time in the long time, we've actually seen the old tucows.com traffic start to tick up and that was a very encouraging sign for us. So if you have been watching or sort of looking at the site you will be seeing slightly more kind of cross traffic driving slightly more integration and that's really bearing fruit. The traffic driven from Tucows to Butterscotch and from Butterscotch to Tucows, been pushing it both ways has actually nearly tripled, kind of Q3 over Q1 and it’s a non insignificant number. I didn't want to sort to talk about in the body here of the call, I don't want to talk about traffic numbers because they don’t translate directly in to revenue so quickly, but we're really seeing impressive traffic growth there and in the ways that we would like to, which is kind of that core pieces of being to build this video business, using that base that all base of Tucows.com customer really does seems we are playing out well.

Are you seeing any synergy or pull-through from your wholesale customers and domains and email today and they want the video content for their customer service or any other type, please?

There has been a couple of very good discussions there and we have got the making of the first couple of deals there. One thing you will see there if you look in the Hover help section now, there is over a 100 almost a 150 Butterscotch like tutorials that are produced with the same people and that’s giving us great demo showcase for those wholesale customers and they see it and they like it. I think you will see our use of that internally and some of the synergies there accelerating. We think that we could doing a much better job on helping people to understand the benefit of personal names or premium names using video that we are doing today for example.

Mr. Noss. There are no further questions at this time. Please continue.

Great. Thanks everybody and we look forward to seeing you all next quarter.

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. You may now disconnect your lines.