MEXICO CITY, Feb. 11 /PRNewswire-FirstCall/ -- Maxcom Telecomunicaciones, S.A.B. de C.V. ("Maxcom", or "the Company") (NYSE: MXT) (BMV: MAXCOM) (BMV: CPO) , one of the leading integrated telecommunications companies in Mexico, today announced its unaudited financial and operating results for the full year ended December 31, 2007.
The monetary amounts presented in these tables and throughout this document are expressed in millions of Mexican pesos of purchasing power at December 31, 2007, unless otherwise specified, and they have been prepared in accordance with Mexican Financial Reported Standards ("NIF" or "Mexican GAAP"). Monetary amounts may vary due to rounding.
Million pesos 2007 2006 Var % REVENUES 2,346 1,742 35% EBITDA 670 457 47% EBITDA Margin 29% 26% Net Income 61 (29) N.A. (in pesos) Earnings per share basic 0.11 -- -- Earnings per share diluted 0.10 -- -- FINANCIAL HIGHLIGHTS: - Full year 2007 revenues of Ps. 2,346 which increased by Ps. 604 or 35% - Full year 2007 EBITDA of Ps. 670 which increased by Ps. 213 or 47% - EBITDA margin increased by 300 basis points in the year to reach 29% - The Company recorded Net Income of Ps. 61 which increased by Ps. 90 OPERATING HIGHLIGHTS: - Total company Revenue Generating Units(1) or RGU's, increased to 360,942 or by 27% in 2007 - Total number of Wholesale RGU's increased by 128% - Total number of Public Telephony RGU's increased by 48% - Total number of Commercial RGU's increased by 27% - Total number of Residential RGU's increased by 20% Million pesos 4Q07 4Q06 Var % REVENUES 619 495 25% EBITDA 183 134 37% EBITDA Margin 30% 27% Net Income 86 6 1413% FINANCIAL HIGHLIGHTS: - Fourth quarter revenues of Ps. 619 which increased by Ps. 124 or 25% - EBITDA of Ps. 183 in the quarter which increased by Ps. 49 or 36% - EBITDA margin increased by 300 basis points to reach 30% in the quarter - The Company recorded Net Income for the quarter of Ps 86 which increased by Ps 80 or 14x
REVENUE GENERATING UNITS
The following table is expressed in Revenue Generating Units or RGU's. RGU is related to the sources of revenue, which may not always be the same as subscriber numbers. One person may subscribe to two different services thereby accounting for only one subscriber but for two RGU's.
Revenue Generating Unit is separately a telephony subscriber, broadband internet subscriber, mobile subscriber or paid television subscriber. A home or business may contain one or more RGU's. For example, a subscriber to our paid TV services, broadband internet, mobile telephony service and residential telephony service would constitute four RGU's
The term RGU represents an individual service subscriber who generates recurrent revenue for the Company. During the year 2007 Maxcom added a total of 76,454 revenue generating units. As of December 31, 2007, Maxcom reported a total of 360,942 RGU's, an increase of 27% in comparison to the same period last year.
RGU's % of YE 2007 RGU's % of YE 2006 RGU Cust 2007 Total Customers 2006 Total Customers Var % Var % Residential 242,888 67% 209,418 201,911 71% 181,488 20% 15% Commercial 70,749 20% 6,116 55,922 20% 5,342 27% 14% Public Telephony 24,910 7% N.A. 16,815 6% N.A. 48% -- Wholesale 22,395 6% N.A. 9,840 3% N.A. 128% -- Total 360,942 100% 215,534 284,488 100% 186,830 27% 15%
REVENUES
Maxcom total revenues for the full year 2007 were Ps. 2,346, an increase of 35% over revenues of Ps. 1,742, recorded the previous year. The following table is a breakdown of the sources of revenue for the Company.
2007 % of Total 2006 % of Total Var. % Residential Ps. 898 38% Ps. 686 39% 31% Commercial 649 28% 496 28% 31% Public Telephony 386 16% 253 15% 53% Wholesale 376 16% 262 15% 44% Other Revenue 37 2% 45 3% (18%) Total Ps. 2,346 100% Ps. 1,742 100% 35%
Total revenues for the fourth quarter were Ps. 619, an increase of 25% over revenues of Ps. 495, recorded in the fourth quarter of 2006. The following table is a breakdown of the sources of revenue for the Company.
4Q07 % of Total 4Q06 % of Total Var. % Residential Ps. 237 38% Ps. 181 36% 31% Commercial 193 31% 133 27% 45% Public Telephony 96 16% 78 16% 23% Wholesale 83 13% 90 18% (8%) Other Revenue 10 2% 13 3% (23%) Total Ps. 619 100% Ps. 495 100% 25%
RESIDENTIAL
The residential business includes subscribers that are connected to our network and have the capability of receiving one or more of our services, thereby having the possibility to generate several RGU's for the company. In this case they may request, residential telephony service, broadband internet services, paid television services and mobile services.
The following table is a breakdown of RGU's for the residential business. 2007 % of Total 2006 % of Total Var. % Voice 218,564 90% 193,469 96% 13% Data 15,213 6% 8,442 4% 80% TV 5,991 2% - - N.A. Mobile 3,120 2% - - N.A. Total 242,888 100% 201,911 100% 20%
Residential revenues represented 38% of total revenues during the year, compared with 39% in the previous year of 2006. Revenues in the residential business reached Ps. 898, an increase of 31% in comparison to Ps. 686 in 2006. The increase was mainly driven by the introduction of mobile services, residential Paid TV RGU's, followed by data, and voice in comparison to 2006. For the fourth quarter period ended December 31, 2007 revenues from residential service totaled Ps. 237, or 38% of total revenues, from Ps. 181 recorded in the same period in 2006.
COMMERCIAL
The commercial business includes subscribers that are connected to our network and have the capability of receiving one or more of our services, thereby having the possibility to generate several RGU's for the company. In this case they may request, commercial telephony service, broadband internet services, mobile and other value-added services that the Company provides.
The following table is a breakdown of RGU's for the commercial business. 2007 % of Total 2006 % of Total Var. % Voice 66,194 94% 53,247 95% 24% Data 3,041 4% 2,675 5% 14% Mobile 1,215 2% - - N.A. Other Services 299 0% - - N.A. Total 70,749 100% 55,922 100% 27%
Commercial revenues represented 28% of total revenues during 2007. Revenues in the commercial business totaled Ps. 649, an increase of 31% in comparison to Ps. 496 in the year 2006. This increase in revenues was mainly explained by higher number of RGU's from other services, mobile services, voice lines and data services in comparison to 2006. For the fourth quarter ended December 31, 2007 revenues from commercial service totaled Ps. 193, or 31% of total revenues, from Ps. 133 recorded in the same period in 2006.
PUBLIC TELEPHONY
The public telephony business allows the company to install coin-operated public telephones in different cities around the country. Each public telephone in service accounts for one RGU.
The following table is a breakdown of RGU's for the public telephony business. 2007 % of Total 2006 % of Total Var. % Public Telephones 24,910 100% 16,815 100% 48%
Public Telephony represented 16% of total revenues during the year 2007 in comparison with 15% in the previous year. Revenues in this business totaled Ps. 386, an increase of 53% compared to Ps. 253 in 2006. The growth in the public telephony business was primarily driven by the increase in number of public telephones, which grew 48%. For the fourth quarter ended December 31, 2007 revenues from public telephony totaled Ps. 96, or 16% of total revenues, from Ps. 78 in the same period the year before.
WHOLESALE
The wholesale business includes lines in service for our long distance, high usage customers and carriers. Each line in service accounts for one RGU.
The following table is a breakdown of RGU's for the wholesale business. 2007 % of Total 2006 of Total Var. % RGU's 22,395 100% 9,840 100% 128%
In 2007, Wholesale revenues totaled Ps. 376, an increase of 44% or Ps. 262 in comparison to the same period of 2006. This year over year increase in the wholesale business was mainly driven by the increase in the long distance termination business lines in service. For the fourth quarter ended December 31, 2007 revenues from Wholesale totaled Ps. 83, or 13% of total revenues, from Ps. 90 in the same period the year before.
OTHER REVENUES
Revenue from other services accounted for 2% or Ps. 37 of total revenues in 2007, a decrease from the Ps. 45 recorded in the same period last year. Other revenues are primarily comprised of lease of microwave frequencies and CPE sales.
NETWORK OPERATION COSTS
Network Operation Costs in 2007 increased 44% to reach Ps. 977 in comparison to Ps. 677 in the previous year. The Ps. 300 increase was mainly driven by higher: (i) operating costs related to a higher number of public phones in service, (ii) long distance interconnections fees, (iii) leases of circuits and ports, (iv) calling party pays interconnection fees, (v) cost of paid TV operations, and (vi) internet service costs. These increases were partially offset by lower: (i) other service cost such as CATV and mobile wireless operations, (ii) technical expense and (iii) installation expenses and cost of disconnected lines. For the fourth quarter period ended December 31, 2007 network operations costs totaled Ps. 252 from Ps. 204 or a 24% increase in comparison to the same period last year.
SG&A
SG&A expenses were Ps. 698 in 2007, 15% above Ps. 608 in the same period of 2006. The Ps. 90 increase was mainly driven by higher: (i) salaries, wages and benefits as a result of an increasing headcount; (ii) bad debt reserve; (iii) marketing and advertising expenses; (iv) general and corporate expenses and (v) number of leases. These increases were partially offset by lower: (i) sales commissions; and (ii) external advisory expenses. For the fourth quarter period ended December 31, 2007, SG&A expenses totaled Ps. 184, 17% above Ps. 157 reported in the same period last year.
EBITDA
EBITDA for the year 2007 was Ps. 670, 47% higher than Ps. 457 in the previous year. EBITDA margin was 29% during the period, three hundred basis points higher than 26% in the same period of 2006. For the fourth quarter ended December 31, 2007, EBITDA amounted to Ps. 183, 37% higher than the Ps. 134 registered in the same period of 2006. EBITDA margin for the fourth quarter of 2007 was 30%, three hundred basis points higher than the 27% margin reported in the fourth quarter of 2006.
OPERATING INCOME
Operating income for 2007 was Ps. 300, 91% higher than Ps. 157 in the previous year. For fourth quarter ended December 31, 2007, operating income for the company reached Ps. 115 when compared to the result registered in the same period of 2006 of Ps. 61, or 89% higher.
COMPREHENSIVE FINANCIAL RESULT
In the year 2007, the Company registered a comprehensive financial result of Ps. 127, a Ps. 19 increase in relation to the Ps. 107 seen in 2006.
2007 2006 Var Ps. Var % Net interest paid 177 127 50 39% Exchange rate (gain) loss - net (25) 1 (26) N.A. Monetary position (gain) loss (25) (21) (4) 19% Total 127 107 20 19%
The higher comprehensive financial result is due to an increase of 39%, or Ps. 50, on the amount of net interest paid, which rose from Ps. 127 in 2006 to Ps. 177 in 2007 which is mainly the result of an increase in total amount of Maxcom's net market debt.
However and partially offsetting this increase, the Company recorded: 1. A net exchange rate gain of Ps. 25 in 2007, compared to a net exchange rate loss of Ps. 1 recognized in the same period of last year. The exchange rate gain for 2007 is the result of fluctuations in the parity between the Mexican Peso and the United States Dollar and its respective impact on the Company's monetary positions denominated in foreign currency; and, 2. A Ps. 25 gain in the net monetary position, as a result of a net liability monetary position that was positively impacted by inflation.
TAX PROVISIONS
The Company registered Ps. 46 in deferred income tax provisions during 2007, compared to Ps. 60 in 2006. Under "NIF" or Mexican GAAP, Bulletin D-4 (deferred taxes, NIF) stipulates that after a careful analysis of certain balance sheet items it is necessary to determine the fiscal implications of future periods, which are recorded as deferred income tax provisions. Total taxes paid including asset tax and income tax for the year 2007 were Ps. 50. For the fourth quarter ended December 31, 2007, the company registered (Ps. 23) in tax provisions, compared to Ps. 12 in the same period of 2006. All registered tax provisions are non-cash items except for the asset tax provision.
NET INCOME
The Company posted a net income during the year of Ps. 61, which compares favorably to the net loss of Ps. 29 reported in 2006. This net gain is mainly explained by a higher level of income before taxes in 2007 of Ps. 158 in comparison to Ps. 31 in the prior year. For the fourth quarter period ended December 31, 2007, the company registered a net income of Ps. 86 in comparison to a net income of Ps. 6, in the same period of 2006.
LIQUIDITY AND CAPITAL RESOURCES
Operating activities generated resources of Ps. 235, which resulted mainly from consolidated net income, non-cash items (such as depreciation and amortization), and resources generated by Net Change in Working Capital.
Liquidity and Capital Resources (million pesos) December 31, December 31, 2007 2006 Resources from operations and Working Capital 235 88 CAPEX (1,252) (1,042) Free Cash Flow (1,017) (954) Financing Activities(2) 2,816 1,452 Cash and Cash Equivalents at the Start of the Period 739 241 Cash and Cash Equivalents at the End of the Period 2,538 739
CAPITAL EXPENDITURES
Capital expenditures during the period totaled Ps. 1,252, 20% above Ps. 1,042 recorded in 2006. Capital expenditures were primarily required for telephone network systems and equipment for Maxcom's network.
INDEBTEDNESS
At December 31, 2007 the Company reported its indebtedness level at Ps. 2,197. The Company's leverage ratio measured by Debt/EBITDA, presented a profile reduction, from the level of 4.2 times in 2006 and reaching 3.3 times in 2007. In addition, Net Debt/EBITDA presented an even more important profile reduction as a result of the recent initial public offering which yielded cash resources for the Company's expansion.
RELEVANT EVENTS
On October 19, 2007, the Company made its global initial public offering of 14,141,516 American Depositary Shares (ADSs) in the United States and 19,515,152 Ordinary Participation Certificates (CPOs) in Mexico (in both cases including the primary and secondary portions as well as the exercise of the over allotment). Approximately 14% of the ADSs and the CPOs were sold by existing Maxcom shareholders. Each ADS represents seven CPOs, while each CPO represents three Series "A" common shares. After giving effect to this offering, the Company has 789,818,829 Series "A" shares outstanding, and 834,734,070 on a fully diluted basis.
PUBLIC FLOAT Series "A" Common Shares ADS's(3) 14,141,516 296,971,836 38% Maxcom CPO(4) 19,515,152 58,545,456 7% Subtotal 355,517,292 45% Total Shares Outstanding 789,818,829 100%
The ADSs, trading under symbol "MXT" on the New York Stock Exchange (NYSE), were initially priced at US$17.50 per ADS. The CPOs, trading under symbol "MAXCOM CPO" in the Mexican Stock Exchange (BMV), were initially priced at Ps$27.10. The over-allotment option was fully exercised for both the ADSs and CPOs. Maxcom's initial public offering resulted in gross proceeds of approximately US$253.8 million, including only primary portion.
ABOUT MAXCOM
Maxcom Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico City, Mexico, is a facilities-based telecommunications provider using a "smart- build" approach to deliver last-mile connectivity to micro, small and medium- sized businesses and residential customers in the Mexican territory. Maxcom launched commercial operations in May 1999 and is currently offering local, long distance, data, value-added, CATV and IP-based services on a full basis in greater metropolitan Mexico City, Puebla, Queretaro and Toluca, and on a selected basis in several cities in Mexico. The information contained in this press release is the exclusive responsibility of Maxcom Telecomunicaciones, S.A.B. de C.V. and has not been reviewed by the Mexican National Banking and Securities Commission (CNBV) or any other authority. The registration of the securities described in this press release before the National Registry of Securities (Registro Nacional de Valores) held by the CNBV, shall it be the case, does not imply a certification of the investment quality of the securities or of Maxcom's solvency. The trading of these securities by an investor will be made under such investor's own responsibility.
For more information contact: Juan-Carlos Sotomayor Mexico City, Mexico (52 55) 1163 1104 investor.relations@maxcom.com Lucia Domville New York City, NY (646) 284-9416 ldomville@hfgcg.com
This document may include forward-looking statements that involve risks and uncertainties that are detailed from time to time in the U.S. Securities and Exchange Commission filings of the Company. Words such as "estimate," "project," "plan," "believe," "expect," "anticipate," "intend," and similar expressions may identify such forward-looking statements. The Company wants to caution readers that any forward-looking statements in this document or made by the company's management involves risks and uncertainties that may change based on various important factors not under the Company's control. These forward-looking statements represent the Company's judgment as of the date of this document. The Company disclaims, however, any intent or obligation to update these forward-looking statements.
APPENDIX (1) MAXCOM REVENUE GENERATING UNITS FOR THE FIRST THRU FOURTH QUARTER OF 2007
REVENUE GENERATING UNITS
The following table is expressed in Revenue Generating Units or RGU's. RGU is related to the sources of revenue, which may not always be the same as subscriber numbers. One person may subscribe to two different services thereby accounting for only one subscriber but for two RGU's.
Revenue Generating Unit is separately a telephony subscriber, broadband internet subscriber, mobile subscriber or digital cable television subscriber. A home or business may contain one or more RGU's. For example, a subscriber to our paid TV services, broadband internet, mobile telephony service and residential telephony service would constitute four RGU's.
The term RGU represents an individual service subscriber who generates recurrent revenue for the Company.
1Q 2007 % 2Q 2007 % 3Q 2007 % 4Q 2007 % Residential 208,674 70% 217,056 69% 232,663 68% 242,888 67% Commercial 60,680 20% 66,632 21% 67,022 19% 70,749 20% Public Telephony 20,102 7% 24,415 8% 25,967 7% 24,910 7% Wholesale 9,840 3% 8,610 3% 19,006 6% 22,395 6% Total 299,296 100% 316,713 100% 344,658 100% 360,942 100% (1) For a full definition of Revenue Generating Unit (RGU) please see section Revenue Generating Units. (2) Includes capital stock increase resulting from recent IPO and market debt placements (3) ADS to common share ratio of 21 (4) Maxcom CPO to common share ratio of 3. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. UNAUDITED CONSOLIDATED BALANCE SHEET Amounts in thousands of Mexican pesos ("Ps") in purchasing power as of December 31, 2007 and thousands of U.S. dollars ("$") (1) December 31, 2006 December 31, 2007 Pesos US Dollars Pesos US Dollars ASSETS CURRENT ASSETS: Cash and cash equivalents Ps 739,291 $68,036 Ps 2,538,398 $233,605 Restricted Cash 23,462 2,159 1,137 105 762,753 70,195 2,539,535 233,710 Accounts receivable: Customers, net of allowance 333,948 30,733 517,254 47,602 Value added tax refundable 110,823 10,199 198,583 18,275 Other sundry debtors 40,739 3,749 54,676 5,031 485,510 44,681 770,513 70,908 Inventory 35,790 3,294 33,249 3,060 Prepaid expenses 65,740 6,050 61,630 5,671 Total current assets 1,349,793 124,220 3,404,927 313,349 Frequency rights, Net 88,373 8,132 80,930 7,448 Telephone network systems & Equipment, Net 3,301,437 303,826 4,189,311 385,536 Pre-operating expenses, Net 98,339 9,050 77,902 7,169 Intangible assets, Net 190,248 17,509 208,437 19,182 Retirement obligations 15,068 1,387 17,650 1,624 Deposits 5,973 550 6,943 639 Other assets 16,929 1,557 36,479 3,359 Total assets Ps 5,066,160 $466,231 Ps 8,022,579 $738,306 LIABILITIES CURRENT LIABILITIES: Interest Payable Accrued expenses and other accounts payable 527,602 48,554 513,595 47,265 Senior notes, net 130,785 12,036 -- -- Notes payables 38,931 3,583 8,087 744 Commercial paper 155,639 14,323 -- -- Customers deposits 2,734 252 2,801 258 Payroll and other taxes payable 27,369 2,519 67,182 6,183 Total current liabilities 883,060 81,267 591,665 54,450 LONG-TERM LIABILITIES: Senior notes, net 1,701,353 156,573 2,184,412 201,028 Notes payable 41,851 3,851 4,686 431 Other accounts payable 27,238 2,507 26,068 2,399 Deferred taxes 88,951 8,186 143,457 13,202 Seniority Premiums and Postretirement Obligations 21,756 2,002 26,582 2,446 Other long term liabilities 9,915 912 52,106 4,795 Hedging Valuation 15,121 1,392 -- -- Total liabilities Ps 2,789,245 $256,690 Ps 3,028,976 $278,751 SHAREHOLDERS' EQUITY Capital stock 3,327,482 306,223 5,410,251 497,897 Premium on capital stock 253,096 23,292 826,459 76,058 Accumulated deficit (1,274,397) (117,281) (1,303,664) (119,974) Net (loss) income for the year (29,266) (2,693) 60,557 5,574 Total shareholders' equity Ps 2,276,915 $209,541 Ps 4,993,603 $459,555 Total liabilities and equity Ps 5,066,160 $466,231 Ps 8,022,579 $738,306 NOTES TO FINANCIAL STATEMENTS: Financial statements are reported in period-end pesos as of December 31, 2007 to adjust for the inter-period effect of inflation. (1) For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps.10.8662 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. UNAUDITED CONSOLIDATED INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2007 Amounts in thousands of Mexican pesos ("Ps") in purchasing power as of December 31, 2007 and thousands of U.S. dollars ("$") (1) Year ended December 31, 2006 Pesos US Dollars % REVENUES Ps 1,741,692 $160,286 100% Network operating services 546,031 50,250 31% Technical expenses 113,398 10,436 7% Installation expenses 17,549 1,615 1% Cost of Network Operation 676,978 62,301 39% GROSS PROFIT 1,064,714 97,985 61% SG&A 607,505 55,908 35% EBITDA 457,209 42,077 26% Depreciation and amortization 300,467 27,652 Operating Income 156,742 14,425 Comprehensive Cost of Financing: *Interest expense (144,032) (13,255) **Interest income, net 16,766 1,543 Exchange (loss) income, net (1,419) (131) Gain on net monetary position 21,503 1,979 (107,182) (9,864) Other expenses (18,776) (1,728) INCOME BEFORE TAXES 30,784 2,833 Taxes: Asset Tax -- -- Income Tax (414) (38) Deferred Income Tax Provision (59,636) (5,488) Total Tax Provisions (60,050) (5,526) NET INCOME (LOSS) FOR THE YEAR Ps (29,266) $(2,693) *Adjusted EBITDA Ps 473,191 $43,547 27% NOTES TO FINANCIAL STATEMENTS: * Interest related to Senior Notes, Banks and Vendor Financing ** Interest Income net Financial statements are reported in period-end pesos as of December 31, 2007 to adjust for the inter-period effect of inflation. (1) For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps$10.8662 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. UNAUDITED CONSOLIDATED INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2007 Amounts in thousands of Mexican pesos ("Ps") in purchasing power as of December 31, 2007 and thousands of U.S. dollars ("$") (1) Year ended December 31, 2007 Pesos US Dollars % REVENUES Ps 2,345,719 $215,873 100% Network operating services 821,868 75,635 35% Technical expenses 136,452 12,557 6% Installation expenses 18,659 1,717 1% Cost of Network Operation 976,979 89,909 42% GROSS PROFIT 1,368,740 125,964 58% SG&A 698,257 64,260 30% EBITDA 670,483 61,704 29% Depreciation and amortization 370,227 34,071 Operating Income 300,256 27,633 Comprehensive Cost of Financing: *Interest expense (232,912) (21,435) **Interest income, net 55,793 5,135 Exchange (loss) income, net 25,247 2,323 Gain on net monetary position 25,231 2,322 (126,641) (11,655) Other expenses (16,076) (1,480) INCOME BEFORE TAXES 157,539 14,498 Taxes: Asset Tax (39,272) (3,614) Income Tax (11,428) (1,052) Deferred Income Tax Provision (46,282) (4,259) Total Tax Provisions (96,982) (8,925) NET INCOME (LOSS) FOR THE YEAR Ps 60,557 $5,573 *Adjusted EBITDA Ps 681,964 $62,760 29% NOTES TO FINANCIAL STATEMENTS: * Interest related to Senior Notes, Banks and Vendor Financing ** Interest Income net Financial statements are reported in period-end pesos as of December 31, 2007 to adjust for the inter-period effect of inflation. (1) For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps$10.8662 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. UNAUDITED CONSOLIDATED INCOME STATEMENT FOR THE THREE-MONTH PERIODS ENDED DECEMBER 31, 2006 AND 2007 Amounts in thousands of Mexican pesos ("Ps") in purchasing power as of December 31, 2007 and thousands of U.S. dollars ("$") (1) Three-month period ended on December 31, 2006 Pesos US Dollars % REVENUES Ps 495,195 $45,573 100% Network operating services 169,298 15,580 34% Technical expenses 29,740 2,737 6% Installation expenses 4,774 439 1% Cost of Network Operation 203,812 18,756 41% GROSS PROFIT 291,383 26,817 59% SG&A 157,319 14,478 32% EBITDA 134,064 12,339 27% Depreciation and amortization 72,712 6,692 Operating Income 61,352 5,647 Comprehensive Cost of Financing: *Interest expense 57,333 5,277 **Interest income, net (4,677) (430) Exchange income, net (21,576) (1,985) Gain (loss) on net monetary position (6,625) (610) 24,455 2,252 Other expenses 19,496 1,794 INCOME BEFORE TAXES 17,401 1,601 Provisions for: Asset tax -- -- Income tax & deferred tax 11,742 1,080 Total Tax Provisions 11,742 1,080 NET INCOME FOR THE PERIOD Ps 5,659 $521 *Adjusted EBITDA Ps 137,353 $12,640 28% % of revenue Adjusted EBITDA 28% 28% NOTES TO FINANCIAL STATEMENTS: * Interest related to Senior Notes, Banks and Vendor Financing ** Interest Income net Financial statements are reported in period-end pesos as of December 31, 2007 to adjust for the inter-period effect of inflation. (1) For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps.10.8662 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. UNAUDITED CONSOLIDATED INCOME STATEMENT FOR THE THREE-MONTH PERIODS ENDED DECEMBER 31, 2006 AND 2007 Amounts in thousands of Mexican pesos ("Ps") in purchasing power as of December 31, 2007 and thousands of U.S. dollars ("$") (1) Three-month period ended on December 31, 2007 Pesos US Dollars % REVENUES Ps 618,937 $56,960 100% Network operating services 213,534 19,651 35% Technical expenses 34,083 3,136 6% Installation expenses 4,825 444 1% Cost of Network Operation 252,442 23,231 41% GROSS PROFIT 366,495 33,729 59% SG&A 183,766 16,912 30% EBITDA 182,729 16,817 30% Depreciation and amortization 67,799 6,239 Operating Income 114,930 10,578 Comprehensive Cost of Financing: *Interest expense 58,061 5,344 **Interest income, net (25,834) (2,378) Exchange income, net (19,696) (1,812) Gain (loss) on net monetary position 12,913 1,188 25,444 2,342 Other expenses 7,570 697 INCOME BEFORE TAXES 81,916 7,539 Provisions for: Asset tax 18,863 1,736 Income tax & deferred tax (22,560) (2,077) Total Tax Provisions (3,697) (341) NET INCOME FOR THE PERIOD Ps 85,613 $7,880 *Adjusted EBITDA Ps 183,942 $16,928 30% % of revenue Adjusted EBITDA 30% 30% NOTES TO FINANCIAL STATEMENTS: * Interest related to Senior Notes, Banks and Vendor Financing ** Interest Income net Financial statements are reported in period-end pesos as of December 31, 2007 to adjust for the inter-period effect of inflation. (1) For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps.10.8662 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2007 Amounts in thousands of Mexican pesos ("Ps") in purchasing power as of December 31, 2007 and thousands of U.S. dollars ("$") (1) Year ended on December Year ended on December 31, 2006 31, 2007 Operating Activities: Net Income (loss) for the year Ps. (29,266) $(2,693) Ps. 60,557 $5,573 Depreciation & amortization 300,467 27,652 370,227 34,071 Labor obligations upon retirement 4,642 427 2,244 207 Deferred income tax 60,051 5,526 46,282 4,260 Stock option plan 15,982 1,471 12,762 1,174 Other non-cash items 17,671 1,626 (359) (33) Subtotal 369,547 34,009 491,713 45,252 Net change in: Account receivables net (251,021) (23,101) (285,003) (26,229) Inventory (19,160) (1,763) 2,541 234 Prepaid expenses 18,414 1,695 4,110 378 Liabilities and other assets, net (29,881) (2,750) 22,055 2,030 Resources provided by operating activities 87,899 8,089 235,416 21,665 Financing Activities: Senior notes and bank financing 1,087,776 100,106 172,599 15,884 Capital stock increase 364,276 33,524 2,643,369 243,265 Resources provided by financing activities 1,452,052 133,630 2,815,968 259,149 Investing Activities: Telephone network system and equipment (1,130,118) (104,003) (1,194,154) (109,896) Intangible assets 190,425 17,525 (54,256) (4,993) Other assets (1,011) (93) (3,867) (356) Telereunion Investment (101,173) (9,311) -- -- Resources used in investing activities (1,041,877) (95,882) (1,252,277) (115,245) Cash and cash equivalents: Increase in cash and cash equivalents 498,074 45,837 1,799,107 165,569 Cash and cash equivalents at the beginning of the year 241,218 22,199 739,291 68,036 Cash and cash equivalents at the end of the year Ps. 739,292 $68,036 Ps. 2,538,398 $233,605 NOTES TO FINANCIAL STATEMENTS: Financial statements are reported in period-end pesos as of December 31, 2007 to adjust for the inter-period effect of inflation. (1) For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps$10.8662 per US$1.00. Website: http://www.maxcom.com/
