Maxcom Reports Results for the Second Quarter and First Half of 2009

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MedXtractor Corp	CSE:MXT	CSE	Common Stock

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MEXICO CITY, July 28 /PRNewswire-FirstCall/ -- Maxcom Telecomunicaciones, S.A.B. de C.V. ("Maxcom", or "the Company") (NYSE:MXT) (BMV: MAXCOM CPO), one of the leading integrated telecommunications companies in Mexico, today announced its unaudited financial and operating results for the quarter ended June 30, 2009. NOTE: The monetary amounts presented in these tables have been prepared in accordance with Mexican Financial Reporting Standards ("NIF" or "Mexican GAAP"). Figures are expressed in millions of current Mexican Pesos. Results | Second Quarter 2009 Financial Highlights: -- Second quarter 2009 revenues reached Ps. 645 million, sequentially, and in comparison to the first quarter revenue increased by 1%. -- Sequentially and in comparison to the first quarter of 2009, network operating costs decreased by 3% to reach Ps. 286 million in comparison to Ps. 295 million. -- EBITDA increased sequentially by 7% to reach Ps. 161 million in the second quarter in comparison to Ps. 150 million the first quarter of 2009. -- EBITDA margin increased sequentially from 24% in the first quarter of 2009 to 25% this reporting quarter. vs. % 2Q09 change Million Pesos 2Q09 1Q09 2Q08 1Q09 2Q08 YTD09 YTD08 % change Revenues 645 638 670 1% (4%) 1,282 1,294 (1%) EBITDA 161 150 204 7% (21%) 312 396 (21%) EBITDA Margin 25% 24% 30% 24% 31% Adj. EBITDA 162 151 208 7% (22%) 314 402 (22%) Adj. EBITDA Margin 25% 24% 31% 24% 31% Net Income (64) (115) 11 N.A. N.A. (179) 20 N.A. Operating Highlights: -- Total company Revenue Generating Units, or RGUs, increased to 485,913 or 11% in the second quarter of 2009 compared to the same period last year. The Company recorded RGU net adds of 8,162 in the quarter. -- Total company customer base decreased by 6% to reach 216,063 customers. -- When compared to the same period last year, voice RGUs (formerly voice lines in service) decreased by 1% to reach 360,968. Voice RGUs include residential voice, commercial voice, public telephony lines and wholesale lines. -- Data residential RGUs increased by 118% to 44,439. -- The number of coin operated public phones reached 40,328, an increase of 29% in comparison to those in the second quarter of 2008. -- The total mobile RGU base reached 54,755 units, which is 39% higher than the number registered in 2008. -- Pay TV number of RGUs reached 22,354 units, which is two times the number registered in 2008. -- Residential RGU per customer increased from 1.4 in the second quarter of 2008 to 1.6 in the second quarter of 2009. -- Commercial RGU per customer increased from 13.7 in the second quarter of 2008 to 16.8 in the second quarter of 2009. Operating Results 2Q09 2Q08 % Change Residential Customers 211,221 224,690 (6%) Voice 204,606 220,991 (7%) Data 39,945 17,272 131% Mobile 47,424 36,595 30% TV 22,354 11,217 99% Residential RGUs 341,041 305,379 12% Voice 220,104 235,387 (6%) Data 44,439 20,354 118% Mobile 54,144 38,421 41% TV 22,354 11,217 99% RGU per Residential Customer 1.6 1.4 Commercial Customers 4,800 5,756 (17%) Voice 4,511 5,501 (18%) Data 1,394 1,329 5% Mobile 57 99 (42%) Other 187 144 30% Commercial RGUs 80,544 78,766 2% Voice 76,536 74,399 3% Data 2,932 2,947 (1%) Mobile 611 1,094 (44%) Other 465 326 43% RGU per Commercial Customer 16.8 13.7 Public Telephony RGUs 40,328 31,292 29% Wholesale RGUs 24,000 23,970 0% Total RGUs 485,913 439,407 11% Voice RGUs (voice lines in service) 360,968 365,048 (1%) Total Number of Customers 216,063 230,498 (6%) Revenues Maxcom total revenues for the second quarter of 2009 were Ps. 645 million, a decrease of 4% over revenues of Ps. 670 million, recorded in the second quarter of 2008. In comparison to the first quarter of 2009, revenue increased by 1%. The following table is a breakdown of the sources of revenue for the Company. 2Q09 Weight % 1Q09 Weight % % change Residential Ps. 230 36% Ps. 238 37% (3%) Commercial 208 32% 185 29% 12% Public Telephony 115 18% 113 18% 2% Wholesale 88 14% 98 15% (10%) Other Revenue 4 0% 4 1% 0% Total Ps. 645 100% Ps. 638 100% 1% 2Q09 Weight % 2Q08 Weight % % change Residential Ps. 230 36% Ps. 272 41% (15%) Commercial 208 32% 203 30% 2% Public Telephony 115 18% 102 15% 13% Wholesale 88 14% 81 12% 9% Other Revenue 4 0% 12 2% (67%) Total Ps. 645 100% Ps. 670 100% (4%) Total revenues for the first six months ended June 30, 2009 were Ps. 1,282 million, a decrease of 1% over revenue of Ps. 1,294 million recorded in the same period of last year. The following table is a breakdown of the sources of revenue for the Company. YTD09 Weight % YTD08 Weight % % change Residential Ps. 468 36% Ps. 529 41% (12%) Commercial 393 31% 393 30% 0% Public Telephony 227 18% 196 15% 16% Wholesale 188 15% 153 12% 23% Other Revenue 6 0% 23 2% (74%) Total Ps. 1,282 100% Ps. 1,294 100% (1%) Residential Residential revenues represented 36% of the total during the second quarter, compared with 41% in the same quarter of 2008. Revenues in the residential business segment reached Ps. 230 million, a decrease of 15% or Ps. 42 million in comparison to Ps. 272 million in the second quarter of 2008. The Ps. 42 million decrease in revenues is the combination of a 6% decrease in lines, and: 1. the duration and the number of calls which are charged by the minute leading to a decrease in usage charges for mobile and long distance by approximately Ps. 25 million; 2. Installation charges for the quarter were lower by Ps. 18 million; and, 3. Local usage decreased by Ps. 12 million. However, and partially offsetting this decrease in revenue, recurrent charges increased by Ps. 13 million, due to a larger contribution of data, TV and mobile products. For the six months ended June 30, 2009 revenues from the residential business totaled Ps. 468 million, or 36% of total revenues from Ps. 529 million recorded in the same period of 2008. Residential RGU per customer increased from 1.4 in the second quarter of 2008 to 1.6 in the second quarter of this year. Although the Company has continued to increase the take rate year over year, the lower price point that is applied when bundling products continues to affect residential revenues. Commercial Commercial revenues represented 32% of the total during the second quarter of 2009, compared with 30% in the same quarter of 2008. Revenues in the Commercial Business reached Ps. 208 million, an increase of 2% in comparison to Ps. 203 million in the same period of 2008. The 2%, or Ps. 5 million, increase in revenues during the second quarter of 2008 is mainly explained by: 1. An increase in monthly recurrent charges of approximately Ps. 15 million; 2. An increase of Ps. 3 million in long distance usage; 3. A decrease of Ps. 10 million in local usage; and, 4. A decrease of Ps. 3 million in installation charges. For the six months ended June 30, 2009, revenues from the commercial business totaled Ps. 393 million, or 31% of total revenues, compared to Ps. 393 million recorded in the same period of 2008. In addition, RGU per commercial customer increased from 13.7 in the second quarter of 2008 to 16.8 in the second quarter of 2009. Public Telephony Public Telephony represented 18% of total revenues during the second quarter of 2009. Revenues in this business unit totaled Ps. 115 million, an increase of 13% when compared to Ps. 102 million in 2008. The increase in revenues is attributed to the 29% growth in the base of public telephones installed. However, and partially offsetting this, the growth in the number of public telephones has outpaced revenues due to a decrease in average revenue per unit. For the six months ended June 30, 2009, revenues from the public telephony business totaled Ps. 227 million, or 18% of total revenues, compared to Ps. 196 million recorded in the same period of 2008. Wholesale In 2009, Wholesale revenues increased by 9% to reach Ps. 88 million, in comparison to the Ps. 81 million registered during the same quarter in the previous year. The increase in the Wholesale Business revenues was mainly driven by a combination in the year over year exchange rate fluctuation, in addition to higher traffic and long distance termination. For the six months ended June 30, 2009 revenues from the wholesale business totaled Ps. 188 million, or 15% of total revenues, compared to Ps. 153 million recorded in the same period of 2008. Other Revenue Other revenues contributed marginally and reached Ps. 4 million, in comparison to Ps. 12 million or 2% of total revenues in the previous quarter. For the six months ended June 30, 2009, revenues from other businesses totaled Ps. 6 million, in comparison to Ps. 23 million recorded in the same period of 2008. Network Operation Cost Network Operation Costs in the second quarter of 2009 increased by 8% or Ps. 22 million to reach Ps. 286 million in comparison to Ps. 264 million last year. This increase was mainly due to a 10% increase in network operating services and an 11% increase in technical expenses. However, and partially offsetting this increase, installation expenses decreased by 17%. The Ps. 22 million increases in network operating services were mainly in: 1. Calling party pays interconnection; 2. Pay TV content; 3. Public telephony traffic on GSM networks; 4. The lease of circuits and ports; and, 5. Internet access capacity. However, these increases were offset by lower long distance interconnection costs. For the six months ended June 30, 2009, network operation costs totaled Ps. 581 million from Ps. 511 million, a 14% increase in comparison to the same period last year. SG&A SG&A expenses were Ps. 198 million in the second quarter of 2009, 2% below Ps. 202 million in the same period of 2008. The Ps. 4 million decrease was mainly driven by a reduction in marketing expenses, the company's stock option compensation plan, salaries and staff related costs, maintenance, insurance and external advisory expenses. These decreases were partially offset by higher bad debt expenses and leases. For the six months ended June 30, 2009, SG&A expenses totaled Ps. 390 million, 1% above Ps. 387 million reported in the same period last year. EBITDA and Adjusted EBITDA EBITDA for the second quarter of 2009 was Ps. 161 million, a 21% decrease from Ps. 204 million in the same period of last year. EBITDA Margin was 25% during the period, lower than 30% in the second quarter of 2008. For the six months ended June 30, 2009, EBITDA amounted to Ps. 312 million, 21% lower than the Ps. 396 million registered in the same period of 2008. EBITDA margin for the first six months of 2009 was 24%, lower than the 31% margin recorded in the same period of 2008. Adjusted EBITDA for the second quarter of 2009 was Ps. 162 million, 22% lower than Ps. 208 million in the same period of last year. Adjusted EBITDA Margin was 25% during the period, lower than 31% in the second quarter of 2008. For the six months ended June 30, 2009, Adjusted EBITDA amounted to Ps. 314 million, 22% lower than the Ps. 402 million registered in the same period of 2008. Adjusted EBITDA margin for the first six-month period of 2009 was 24%, lower than the 31% margin reported in the same period of 2008. Operating Income The Company recorded an operating loss for the second quarter of 2009 of Ps. 21 million which does not compare favorably with an operating income of Ps. 80 million for the same period of 2008. For the six months ended June 30, 2009 the company reported an operating loss of Ps. 47 million, in comparison to operating income of Ps. 150 million reported in the same period last year. Besides the operating results explained above, the operating loss during the quarter and the first six months of the year was also affected by the Ps. 58 million and Ps. 113 million increase in depreciation and amortization charges, respectively, directly related to the overall growth in the fixed assets base. Comprehensive Financial Result During the quarter, the Company registered a Comprehensive Financial Result of Ps. 11 million, a Ps. 32 million decrease when compared to Ps. 43 million in the same period of 2008. change change change change 2Q09 2Q08 Ps. % YTD09 YTD08 Ps. % Interest Expense 71 58 (13) (22%) 150 132 (18) (14%) Interest (Income) (2) (15) (13) (87%) (5) (39) (34) (87%) Exchange Rate (Gain) Loss - Net (58) - 58 N.A. 3 14 11 83% Total 11 43 32 74% 148 107 (41) (38%) The lower Comprehensive Financial Result was due to a net exchange rate gain in the second quarter of 2009 as a result of an actual cash benefit of Ps. 16 million for the payment on the interest of the senior notes related to the cross currency swap and of the Peso appreciation, mainly due to the US$ denominated liabilities of the company affected by exchange rate volatility quarter over quarter compared to a minimal exchange rate variation during the second quarter of 2008. At June 30, 2009 the exchange rate between the Mexican Peso and the United States Dollar was Ps. 13.2023, compared to Ps. 14.3317 at the end of March 31, 2009. However this decrease was partially offset by an increase of 60% or Ps. 26 million in the amount of net interest paid which increased from Ps. 43 million in the second quarter of 2008 to Ps. 69 million in the second quarter of 2009. For the six months ended June 30, 2009, comprehensive cost of financing for the Company reached Ps. 148 million when compared to Ps. 107 million recorded in the same period of 2008. Taxes The Company, taking a conservative stance, during the second quarter of 2009, recorded a valuation allowance of Ps. 21 million for the deferred tax benefits from previously recorded losses, due to a recent government announcement of an expected contraction of the economy, compared to Ps. 13 million in the second quarter of 2008. The Company is not subject to pay single rate corporate tax for this reporting quarter. For the six months ended June 30, 2009, the Company recorded income tax provisions related to recorded losses of Ps.41 million, compared to Ps. 7 million in the first six months of 2008 related to income tax. Net Income The Company posted a net loss during the second quarter of 2009 of Ps. 64 million, which compares to a net income of Ps. 11 million reported in the second quarter of 2008. For the six months ended June 30, 2009, the Company registered a net loss of Ps. 179 million in comparison to a net income of Ps. 20 million, in the same period of 2008. Liquidity and Capital Sources Millions of Pesos Quarter Ended Quarter Ended June 30, 2009 June 30, 2008 Resources from Operations and Working Capital (55) 66 CAPEX (229) (352) Free Cash Flow (284) (286) Financing Activities (139) (196) Cash and Cash Equivalents at the Start of the Period 1,630 2,287 Cash and Cash Equivalents at the End of the Period 1,207 1,805 For the Six For the Six Millions of Pesos Months Months Ended June Ended June 30, 2009 30, 2008 Resources from Operations and Working Capital 292 156 CAPEX (536) (714) Free Cash Flow (244) (558) Financing Activities (140) (177) Cash and Cash Equivalents at the Start of the Period 1,591 2,540 Cash and Cash Equivalents at the End of the Period 1,207 1,805 Capital Expenditures Capital Expenditures during the period totaled Ps. 229 million, lower than the Ps. 352 million recorded in the second quarter of 2008. Capital Expenditures were primarily used for telephone network systems, the build out of new clusters, and equipment for Maxcom's network expansion. Indebtedness On June 30, 2009 the Company reported its Indebtedness level at Ps. 2,656 million. The Company's leverage ratio measured by Debt/EBITDA, presented an increase, from 2.7 times in 2008 to 4.3 times in 2009. 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, Tehuacan, San Luis, and Queretaro, 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) 4770-1170 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. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEET Thousands of Mexican Pesos ("Ps.") As of June 30, 2008 2009 ASSETS CURRENT ASSETS: Cash and cash equivalents Ps. 1,805,477 Ps. 1,206,679 1,805,477 1,206,679 Accounts receivable: Customers, net of allowance 653,470 722,151 Value added tax refundable 154,480 164,623 Other sundry debtors 82,341 96,491 890,291 983,265 Inventory 34,360 26,159 Prepaid expenses 45,348 26,472 Total current assets 2,775,476 2,242,575 Frequency rights, net 77,048 63,196 Telephone network systems and equipment, net 4,663,048 4,809,215 Pre-operating expenses, net 66,623 40,666 Intangible assets, net 217,023 250,794 Financial instruments 10,227 55,439 Deposits 7,780 8,420 Deferred taxes - 188,977 Prepaid expenses long term 18,734 12,952 Other assets 6,357 6,357 Total assets Ps. 7,842,316 Ps. 7,678,591 LIABILITIES CURRENT LIABILITIES: Interest payable 9,913 12,726 Accounts payables and accrued expenses 548,027 517,835 Notes payables 4,849 2,453 Deferred income 2,537 2,337 Payroll and other taxes payable 52,575 55,438 Total current liabilities 617,901 590,789 LONG-TERM LIABILITIES: Senior notes, net 2,056,820 2,640,460 Notes payable 2,852 - Other accounts payable 9,556 12,748 Deferred taxes 86,671 - Pensions and post-retirement obligations 10,125 26,545 Other long term liabilities 67,658 84,356 Hedging valuation 13,315 263 Total liabilities Ps. 2,864,898 Ps. 3,355,161 SHAREHOLDERS' EQUITY Capital stock 5,410,244 5,410,244 Premium on capital stock 826,473 817,444 Accumulated deficit (1,267,466) (1,705,230) Net profit (loss) for the period 19,854 (178,844) Share repurchase program (11,687) (20,184) Total shareholders' equity Ps. 4,977,418 Ps. 4,323,430 Total liabilities and equity Ps. 7,842,316 Ps. 7,678,591 MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS Thousands of Mexican Pesos ("Ps.") 3 months ended June 30, 2008 % 2009 % TOTAL REVENUES Ps. 669,583 100% Ps. 644,644 100% Network operating services 224,734 34% 246,643 38% Technical expenses 32,519 5% 36,167 6% Installation expenses 6,648 1% 2,985 0% Cost of network operation 263,901 39% 285,795 44% GROSS PROFIT 405,682 61% 358,849 56% SG&A 201,858 30% 197,521 31% EBITDA 203,824 30% 161,328 25% Depreciation and amortization 123,768 182,013 Operating income (loss) 80,056 (20,685) Comprehensive (income) cost of financing: Interest expense 58,314 71,770 Interest (income), net (14,913) (2,234) Exchange (income) loss, net (31) (58,289) 43,370 11,247 Other (income) expense 12,316 10,973 INCOME (LOSS) BEFORE TAXES 24,370 (42,905) Taxes: Flat rate corporate tax 6,782 - Income tax 2,543 - Deffered income tax 3,553 20,710 Total tax 12,878 20,710 NET INCOME (LOSS) Ps. 11,492 Ps. (63,615) Adjusted EBITDA 208,209 162,209 % of revenue Adjusted EBITDA 31% 25% Weighted average basic shares 789,819 789,819 Weighted average fully diluted 832,548 829,337 Earnings per share basic 0.01 (0.08) Earnings per share diluted 0.01 (0.08) MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS Thousands of Mexican Pesos ("Ps.") 6 months ended June 30, 2008 % 2009 % TOTAL REVENUES Ps. 1,293,949 100% Ps. 1,282,192 100% Network operating services 434,057 34% 503,958 39% Technical expenses 65,686 5% 71,425 6% Installation expenses 11,390 1% 5,577 0% Cost of network operation 511,133 40% 580,960 45% GROSS PROFIT 782,816 60% 701,232 55% SG&A 386,986 30% 389,565 30% EBITDA 395,830 31% 311,667 24% Depreciation and amortization 245,651 358,200 Operating income (loss) 150,179 (46,533) Comprehensive (income) cost of financing: Interest expense 132,100 150,384 Interest (income), net (39,407) (5,232) Exchange (income) loss, net 13,887 2,416 106,580 147,568 Other (income) expense 17,041 26,165 INCOME (LOSS) BEFORE TAXES 26,558 (220,266) Taxes: Flat rate corporate tax 6,783 - Income tax 5,718 - Deffered income tax (5,797) (41,422) Total tax 6,704 (41,422) NET INCOME (LOSS) Ps. 19,854 Ps. (178,844) Adjusted EBITDA 401,750 313,558 % of revenue Adjusted EBITDA 31% 24% Weighted average basic shares 789,819 789,819 Weighted average fully diluted 832,548 829,337 Earnings per share basic 0.03 (0.23) Earnings per share diluted 0.02 (0.22) MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONDENSED CASH FLOW Thousands of Mexican Pesos ("Ps.") 3 months ended June 30, 6 months ended June 30, 2008 2009 2008 2009 Operating Activities: Income before taxes Ps. 24,368 Ps. (42,903) Ps. 26,557 Ps. (220,267) Items without cash flow (82,420) (225,880) (116,420) (67,200) Items related to investment activities 114,934 205,475 213,010 384,245 Items related to financing activities 61,465 99,068 148,663 179,933 Cash flow from income/loss before taxes 18,347 35,760 271,810 276,711 Cash flow from: Accounts receivables (56,136) 27,229 (136,226) (5,948) Inventory (6,302) 10,987 (1,111) 14,717 Accounts payables 6,017 (150,479) 45,038 3,003 Other assets and liabilities 13,845 21,166 (10,761) 3,532 Income taxes (9,325) - (12,500) - Cash flow from operation activities (51,901) (91,097) (115,560) 15,304 Net cash flow from operating activities 66,446 (55,337) 156,250 292,015 Cash flow from: Telephone network systems and equipment, net (352,177) (228,899) (714,130) (466,441) Other intangible assets - - - (70,000) Cash flow from capital expenditures (352,177) (228,899) (714,130) (536,441) Cash in excess/ (required) to be used in financing activities (285,731) (284,236) (557,880) (244,426) Cash flow from: Vendor financing (2,609) (828) (3,955) (1,901) Additional paid in capital (59,877) 881 (61,584) 1,001 Other financing activities (133,031) (139,505) (110,639) (139,400) Cash flow from financing activities (195,517) (139,452) (176,178) (140,300) Increase (decrease) in cash and temporary investments (481,248) (423,688) (734,058) (384,726) Cash and cash equivalents at beginning of the period 2,286,725 1,630,367 2,539,535 1,591,405 Cash and cash equivalents at the end of the period Ps.1,805,477 Ps.1,206,679 Ps.1,805,477 Ps.1,206,679 DATASOURCE: Maxcom Telecomunicaciones, S.A.B. de C.V. CONTACT: Juan-Carlos Sotomayor, Mexico City, Mexico, Maxcom, +011-52-55-4770-1170, Web site: http://www.maxcom.com/

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MXT MedXtractor Corp