MXT MedXtractor Corp

MEXICO CITY, Oct. 23 /PRNewswire-FirstCall/ -- Maxcom Telecomunicaciones, S.A.B. de C.V. ("Maxcom," or "the Company") (NYSE: MXT; BMV: MAXCOMCPO.MX), one of the leading integrated telecommunications companies in Mexico, today announced its unaudited financial and operating results for the quarter ended September 30, 2008. The company announced today that the Board of Directors has appointed Eduardo Vazquez Arroyo as acting Chief Executive Officer effective immediately. NOTE: The monetary amounts presented in these tables have been prepared in accordance with Mexican Financial Reporting Standards ("NIF" or "Mexican GAAP"). Figures for the year 2008 are expressed in millions of historical Mexican pesos, as explained in section "Adoption of New Accounting Standards." Figures for the year 2007 are expressed in millions of Mexican pesos of purchasing power at December 31, 2007. Monetary amounts may vary due to rounding. Results | Third Quarter 2008 Financial Highlights: -- Third quarter 2008 revenues reached Ps. 717 million and increased by Ps. 100 million or 16% in comparison to the third quarter of 2007. -- EBITDA increased by 23% to reach Ps. 222 million in comparison to the third quarter of 2007. -- EBITDA Margin increased by 182 basis points to 31% this reporting quarter, when compared to the same period last year. -- The Company posted Net Income during the third quarter of Ps. 10 million, which compares favorably to a net loss of Ps. 8 million reported in the third quarter of 2007. 3Q08 3Q07 VAR% YTD08 YTD07 VAR% Million Pesos Revenues 717 617 16% 2,011 1,727 16% EBITDA 222 180 23% 618 488 27% EBITDA Margin 31% 29% 31% 28% Adj. EBITDA 223 184 21% 625 498 26% Adj. EBITDA Margin 31% 30% 31% 29% Net Income 10 (8) N.A. 30 (25) N.A. Pesos Earnings per Share Basic 0.01 - - 0.04 - - Earnings per Share Diluted 0.01 - - 0.04 - - Operating Highlights: -- Total company Revenue Generating Units or RGUs, increased to 476,216 or 38% in the third quarter of 2008 compared to the same period last year. The Company recorded RGU net adds of 36,809 in the quarter. -- Total company customer base increased by 11% to reach 234,670 customers. -- Voice RGUs (formerly voice lines in service) increased 15% to reach 375,191. Voice RGUs include residential voice, commercial voice, public telephony lines and wholesale lines. -- Data residential RGUs increased by 109% to 25,783. -- The Company added 16,210 mobile RGUs to its residential and commercial business divisions during the third quarter, which brought the mobile RGU base to 55,725. -- Pay TV number of RGUs reached 16,161. The Company recorded TV net adds of 4,944 in the quarter. -- 2,259 public telephones were installed during the quarter bringing the number of coin operated phones to 33,551. -- Residential RGU per customer increased from 1.1 in the third quarter of 2007 to 1.5 in the third quarter of 2008. -- Commercial RGU per customer increased from 11.1 in the third quarter of 2007 to 14.9 in the third quarter of 2008. Operating Results 3Q08 3Q07 VAR% Residential Customers 228,984 204,517 12% Voice 223,709 203,207 10% Data 22,399 10,446 114% Mobile 52,535 N.A. N.A. TV 16,211 3,340 385% Residential RGUs 334,399 232,663 44% Voice 237,486 216,981 9% Data 25,783 12,342 109% Mobile 54,969 N.A. N.A. TV 16,161 3,340 384% RGU per Residential Customer 1.5 1.1 Commercial Customers 5,629 6,034 (7%) Voice 5,385 5,930 (9%) Data 1,408 1,245 13% Mobile 101 N.A. N.A. Other 165 105 57% Commercial RGUs 83,786 67,002 25% Voice 79,674 63,839 25% Data 3,006 2,939 2% Mobile 756 N.A. N.A. Other 350 244 43% RGU per Commercial Customer 14.9 11.1 Public Telephony RGUs 33,551 25,967 29% Wholesale RGUs 24,480 19,006 29% Total RGUs 476,216 344,658 38% Voice RGUs (voice lines in service) 375,191 325,793 15% Total Number of Customers 234,670 210,551 11% Revenues Maxcom total revenues for the third quarter of 2008 were Ps. 717 million, an increase of 16% over revenues of Ps. 617 million, recorded in the third quarter of 2007. The following table is a breakdown of the sources of revenue for the Company. 3Q08 Weight % 3Q07 Weight % VAR% Residential Ps. 292 41% Ps. 228 37% 28% Commercial 213 30% 182 29% 17% Public Telephony 113 16% 108 18% 5% Wholesale 95 13% 92 15% 3% Other Revenue 4 0% 7 1% (43%) Total Ps. 717 100% Ps. 617 100% 16% Total revenues for the nine months ended September 30, 2008 were Ps. 2,011 million, an increase of 16% over revenue of Ps. 1,727, million recorded in the same period of last year. The following table is a breakdown of the sources of revenue for the Company. YTD08 Weight % YTD07 Weight % VAR% Residential Ps. 821 41% Ps. 661 38% 24% Commercial 605 30% 455 26% 33% Public Telephony 309 15% 290 17% 7% Wholesale 249 12% 293 17% (15%) Other Revenue 27 2% 28 2% (4%) Total Ps. 2,011 100% Ps. 1,727 100% 16% Residential Residential revenues represented 41% of the total during the third quarter, compared with 37% in the same quarter of 2007. Revenues in the residential business segment reached Ps. 292 million, an increase of 28% in comparison to Ps. 228 million in the third quarter of 2007. The 28% increase in revenues is directly related to the 44% increase in RGUs and was mainly driven by: 1. An increase in the number of mobile RGUs to reach 54,969, and an increase in the number of pay TV RGUs to reach 16,161. The Company continues to successfully upsell to its existing and new client base the products that were launched late September and December 2007 respectively; 2. An increase in the number of data RGUs which increased by 109% to reach 25,783. Customers that had previously declined broadband are revisiting their decision once they have decided on a double play with pay TV; and, 3. A 9% increase in voice RGUs (formerly voice lines in service) in the residential business segment to reach 237,486. In addition, the increase in revenues is due to an agreement with Megacable to sell Maxcom's share in approximately 10,000 subscribers of our Toluca and Queretaro operations, for voice termination under the original triple play agreements. The Company entered into commercial agreements with Telemedia in Queretaro and Cablenet in Toluca during 2005 in order to provide voice termination for triple-play customers, which has now been transferred to Megacable. However, Megacable acquired these 2 companies during 2005 and 2008, respectively. Megacable and Maxcom mutually agreed to terminate the strategic alliance, and as part of the transaction, approximately 10,000 subscribers were sold to Megacable. It is important to highlight that this transaction does not include any transfer of infrastructure since it belongs in its entirety to Megacable. As part of the agreement, Maxcom will continue to provide different services in all of the cities in which it operates. For the nine months ended September 30, 2008 revenues from the residential business totaled Ps. 821 million, and increased by 24% from Ps. 661 million recorded in the same period of 2007. The takeup of products and upselling has improved the RGU per customer in the residential business from 1.1 in the third quarter of 2007 to 1.5 RGUs per customer in the third quarter of 2008. Commercial Commercial revenues represented 30% of the total during the third quarter of 2008, and represented 29% in the in the third quarter of 2007. Revenues in Commercial Business reached Ps. 213 million, an increase of 17% in comparison to Ps. 182 million in the same period of 2007. The 17% or Ps. 31 million increase in revenues during the third quarter of 2008 is mainly explained by an increase in the average revenue per customer that the company recorded and a 25% increase in the number of RGUs. The increase in RGUs was mainly driven by: 1. A higher number of data RGUs in the quarter to reach 3,006; 2. A higher number of voice RGUs (formerly voice lines in service) which have increased by 25% to 79,674; and, 3. The higher number of RGUs from other value added-services that the Company provides, including: firewall protection, IT outsourcing, hosting and other services. It is important to highlight that the number of customers decreased by 7% in comparison to the third quarter of 2007. As in the previous quarter the Company continues to filter clients that had only one or two commercial voice lines. However, although the number of customers is declining, the Company has been successful in increasing its voice lines per customer numbers from 10.8 lines per customer in the third quarter of 2007 to 14.8 lines per customer in the third quarter of 2008. For the nine months ended September 30, 2008 revenues from the commercial business totaled Ps. 605 million, or a 33% increase when compared to Ps. 455 million recorded in the same period of 2007. In addition, RGU per commercial customer increased from 11.1 in the third quarter of 2007 to 14.9 in the third quarter of 2008. Public Telephony Public Telephony represented 16% of total revenues during the third quarter of 2008. Revenues in this business unit totaled Ps. 113 million, an increase of 5% when compared to Ps. 108 million in 2007. The increase in revenues is attributed to the 29% growth in the base of public telephones installed. However and partially offsetting this revenue growth, as the number of public telephones continues to grow, the average revenue per public telephone tends to decline. For the nine months ended September 30, 2008 revenues from the public telephony business totaled Ps. 309 million, an increase of 7% when compared to Ps. 290 million recorded in the same period of 2007. Wholesale In the third quarter of 2008, Wholesale revenues increased by 3% to reach Ps. 95 million, in comparison to the Ps. 92 million registered during the same quarter in the previous year. The increase in the Wholesale Business revenues was mainly driven by an increase in long distance termination and CPPN traffic due to better call completion through Maxcom's network. For the nine months ended September 30, 2008 revenues from the wholesale business decreased from Ps. 293 million recorded in the nine months of 2007 to Ps. 249 million. Other Revenue Other revenue represented less than 1% of total revenues and reached Ps. 4 million, in comparison to Ps. 7 million or also less than 1% of total revenues in the previous quarter. Other revenues are primarily comprised of lease of microwave frequencies and CPE sales. For the nine months ended September 30, 2008 revenues from other businesses totaled Ps. 27 million, or 2% of total revenues from Ps. 28 million recorded in the same period of 2007, or 2% of total revenues. Network Operation Cost Network Operation Costs in the third quarter of 2008 increased 12% or Ps. 30 million to reach Ps. 284 million in comparison to Ps. 254 million in the previous year, and was mainly due to a 14% increase in network operating services and an increase in technical expenses of 4%. However and partially offsetting this increase, installation expenses decreased by 34% due to a reduction in the cost per single line installed and several promotional offers with the Company's bundled products. The increases in network operating services were mainly in: 1. The amounts paid for pay TV content and the cost of the Company's mobile services; 2. The amounts paid for connection to internet services; 3. Higher costs in long distance interconnection; 4. The lease of circuits and ports; and, 5. The amounts paid to carriers for calling party pays. For the nine months ended September 30, 2008 network operation costs totaled Ps. 795 million from Ps. 725 million, a 10% increase in comparison to the same period last year. Gross margin for the third quarter of 2008 was 60%, the same as the gross margin recorded in the same period of 2007. For the nine months ended September 30, 2008 gross margin was 60%, 244 basis points higher than the 58% gross margin recorded in the same period of 2007. SG&A SG&A expenses were Ps. 212 million in the third quarter of 2008, 15% above Ps. 184 million in the same period of 2007. The Ps. 28 million increase was mainly driven by higher bad debt expenses as a result of the deteriorating economic environment in Mexico, higher external advisory expenses, salaries and staff related costs, wages and benefits as a result of an increasing headcount specifically in the residential and commercial sales forces which have increased as a result of the increased coverage areas. In addition, to an increase in sales commissions and marketing expenses, among others. These increases were partially offset by lower insurance costs and stock option compensation. For the nine months ended September 30, 2008 SG&A expenses totaled Ps. 599 million, 16% above Ps. 514 million reported in the same period last year. EBITDA and Adjusted EBITDA EBITDA for the third quarter of 2008 was Ps. 222 million, a 23% increase from Ps. 180 million in the same period of last year. EBITDA Margin was 31% during the period, 181 basis points higher than 29% in the third quarter of 2007. For the nine months ended September 30, 2008, EBITDA amounted to Ps. 618 million, 27% higher than the Ps. 488 million registered in the same period of 2007. EBITDA margin for the nine months of 2008 was 31%, 246 basis points higher than the 28% margin recorded in the same period of 2007. Adjusted EBITDA for the third quarter of 2008 was Ps. 223 million, 21% higher than Ps. 184 million in the same period of last year. Adjusted EBITDA Margin was 31% during the period, 135 basis points higher than in the third quarter of 2007. For the nine months ended September 30, 2008, Adjusted EBITDA amounted to Ps. 625 million, 26% higher than the Ps. 498 million registered in the same period of 2007. Adjusted EBITDA margin for the nine month period of 2008 was 31%, 224 basis points higher than the 29% margin reported in the same period of 2007. Operating Income Operating Income for the third quarter of 2008 was Ps. 81 million, 10% higher than Ps. 74 million in the previous year. Operating margin for the third quarter was 11%. For the nine months ended September 30, 2008, operating income for the Company reached Ps. 231 million, 25% higher than the result registered in the same period of 2007 of Ps. 185 million. Comprehensive Financial Result During the quarter, the Company registered a Comprehensive Financial Result of Ps. 69 million, a Ps. 36 million increase when compared to Ps. 33 million in the same period of 2007. 3Q08 3Q07 VAR Ps. VAR% Net Interest Expense 24 52 (28) (54%) Exchange Rate (Gain) Loss - Net 44 (13) 31 N.A. Monetary Position Gain (Loss) - (33) 33 N.A. Total 68 33 36 109% YTD08 YTD07 VAR Ps. VAR% Net Interest Expense 117 145 (28) (19%) Exchange Rate (Gain) Loss - Net 58 (6) 64 N.A. Monetary Position Gain (Loss) - (38) 38 N.A. Total 175 101 74 73% The higher Comprehensive Financial Result was due to a net exchange rate loss of Ps. 44 million in the third quarter of 2008, compared to a net exchange rate gain of Ps. 13 million recognized in the same period of last year, mainly due to the US dollar cash position of the company. At September 30, 2008 the exchange rate between the Mexican Peso and the United States Dollar was Ps. 10.7919, compared to Ps. 10.9203 at the end of September 30, 2007. The Company recorded a decrease of Ps. 28 million on the amount of net interest expense when compared to the same quarter of 2007. While the amount of interest expense increased due to the overall amount of debt in a year over year basis (The Company reopened its Senior Notes on September 5, 2007 for an additional US$25 million), the capitalization of interest cost on telecommunications network infrastructure build out partially offset this increase. For the nine months ended September 30, 2008, comprehensive cost of financing for the Company reached Ps. 175 million when compared to Ps. 101 million recorded in the same period of 2007. As a result of the change in the accounting standards in Mexico (see "Adoption of New Accounting Standards"), inflationary accounting (NIF B-10) is not required in a low-inflation environment. As of the third quarter of 2008 the Company prepared its financial statements in terms of historical Mexican pesos. Therefore, the comprehensive financial result will no longer be affected by the results in monetary position. In this case the company recorded a monetary position loss of Ps. 33 million in the third quarter of 2007 which does not compare to the third quarter of 2008. Taxes During the first quarter of 2008 and according to the latest tax reform in Mexico, asset tax was replaced with the flat corporate tax (Impuesto Empresarial a Tasa Unica). The IETU is calculated on a cash-flow basis, with the base determined by reducing taxable revenue (mainly income derived from the sale of goods, the rendering of independent services and the leasing of tangible goods) with specific deductions. Since Capex is deductible, the Company is able to minimize tax payments given the aggressive Capex plan for 2008. The Company recorded Ps. 8 million in taxes during the third quarter 2008, compared to Ps. 43 million in the third quarter of 2007. For the nine months ended September 30, 2008, the Company recorded Ps. 15 million in taxes, which compare to Ps. 101 million recorded in the same period of 2007. While Asset Tax, IETU and Income Tax represent cash outflows, Deferred Income Tax is a non-cash item. 3Q08 3Q07 YTD08 YTD07 Asset Tax - 6 - 20 IETU - - 7 - Income Tax 4 2 9 4 Deferred Income Tax 4 36 (2) 76 Total Taxes 8 43 15 101 Net Income The company posted net income during the third quarter of 2008 of Ps. 10 million, which compares favorably to net loss of Ps. 8 million reported in the third quarter of 2007. For the nine months ended September 30, 2008, the company registered a net income of Ps. 30 million in comparison to a net loss of Ps. 25 million, in the same period of 2007. Liquidity and Capital Sources Quarter Ended Quarter Ended Millions of Pesos September 30, 2008 September 30, 2007 Resources from Operations and Working Capital 99 (1) CAPEX (400) (274) Free Cash Flow (301) (275) Financing Activities 19 365 Cash and Cash Equivalents at the Start of the Period 1,805 160 Cash and Cash Equivalents at the End of the Period 1,523 250 For the Nine Months For the Nine Months Millions of Pesos Ended September 30, 2008 Ended September 30, 2007 Resources from Operations and Working Capital 255 185 CAPEX (1,114) (939) Free Cash Flow (859) (754) Financing Activities (158) 241 Cash and Cash Equivalents at the Start of the Period 2,540 763 Cash and Cash Equivalents at the End of the Period 1,523 250 Capital Expenditures Capital Expenditures during the period totaled Ps. 400 million, higher than the Ps. 275 million recorded in the third quarter of 2007. Capital Expenditures were primarily used for telephone network systems, the build out of new clusters, and equipment for Maxcom's network expansion. For the nine months ended September 30, 2008 the Company recorded Ps. 1,114 million which is greater than the Ps. 939 million recorded in the same period of last year. Indebtedness At September 30, 2008 the Company reported its indebtedness level at Ps. 2,237 million. The Company's leverage ratio measured by Total Debt/EBITDA, presented a decrease, from 3.6 times in 2007 to 2.7 times in 2008. In addition, Net Debt/EBITDA ratio presented an even more important profile reduction from 3.3 times in 2007 to 0.9 times in 2008, as a result of the cash proceeds from the Company's initial public offering. As a reminder in May 2007, the Company entered into a currency swap transaction to minimize the exchange rate risks related to the coupon payments with respect to US$150 million aggregate principal amount of the senior secured notes due 2014, for payments during the period from June 2008 to December 2010. In addition, the Company's cash position is almost entirely in US dollars which further reduce the risk with currency fluctuations. Adoption of New Accounting Standards B-10: As of January 1, 2008, the company has adopted the changes to "Inflationary Effects", B-10 in accordance with the Mexican Financial Standards ("NIF") which establishes the rules for the recognition of inflationary effects in the country; furthermore, it incorporates changes such as, reclassifying accumulated results for non-monetary assets and has the possibility of choosing between the INPC (national consumer price index) and the value of UDIs. It has been determined that the country does not face an inflationary environment, and therefore the company as of January 1, 2008 will suspend the recognition of these inflationary effects in its financial information. Consequently, the financial information corresponding to the period ended September 30, 2007 is expressed in Millions of Mexican Pesos of purchasing power at December 31, 2007 (date on which bulletin B-10 was still in effect) and the financial information for September 30, 2008 is in current Mexican Pesos. 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, 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. 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 involve 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 Thousand Mexican Pesos ("Ps.") and US Dollars ("$") As of September As of September 30, 2007 30, 2008 Pesos US Dollars Pesos US Dollars ASSETS CURRENT ASSETS: Cash and cash equivalents Ps. 234,397 $21,720 Ps. 1,523,372 $141,159 Restricted cash 15,289 1,417 - - 249,686 23,137 1,523,372 141,159 Accounts receivable: Customers, net of allowance 543,266 50,340 703,834 65,219 Value added tax refundable 193,926 17,970 187,297 17,355 Other sundry debtors 46,584 4,317 68,498 6,347 783,776 72,627 959,629 88,921 Inventory 28,281 2,621 40,330 3,737 Prepaid expenses 31,715 2,939 51,886 4,808 Total current assets 1,093,458 101,324 2,575,217 238,625 Restricted cash long term - - - - Frequency rights, net 82,513 7,646 75,106 6,959 Telephone network systems and equipment, net 3,971,399 367,998 4,915,424 455,473 Pre-operating expenses, net 71,093 6,588 61,201 5,671 Intangible assets, net 194,383 18,012 217,875 20,189 Financial instruments 14,645 1,357 5,995 556 Retirement obligations - - - - Deposits 6,524 605 8,359 775 Prepaid expenses long term 22,925 2,124 17,457 1,618 Other assets 6,357 589 6,357 589 Total assets Ps. 5,463,297 $506,243 Ps. 7,882,991 $730,455 LIABILITIES CURRENT LIABILITIES: Interest payable 74,854 6,936 72,816 6,747 Accounts payables and accrued expenses 497,345 46,087 447,852 41,500 Bank financing - - - - Senior notes, net - - - - Notes payables 8,397 778 4,602 426 Commercial paper - - - - Deferred income 1,940 180 2,628 244 Payroll and other taxes payable 31,033 2,876 46,316 4,292 Total current liabilities 613,569 56,857 574,214 53,209 LONG-TERM LIABILITIES: Senior notes, net 2,218,801 205,599 2,158,380 200,000 Bank financing 108,702 10,073 - - Notes payable 9,370 868 1,666 154 Other accounts payable 9,708 900 12,414 1,150 Deferred taxes 161,130 14,931 88,433 8,194 Pensions and postretirement obligations 10,812 1,002 10,824 1,003 Other long term liabilities 68,285 6,327 65,905 6,107 Financial instruments - - - - Total liabilities Ps. 3,200,377 $296,557 Ps. 2,911,836 $269,817 SHAREHOLDERS' EQUITY Capital stock 3,328,141 308,392 5,410,244 501,325 Premium on capital stock 263,497 24,416 820,123 75,994 Accumulated deficit (1,303,664) (120,800) (1,267,466) (117,446) Net loss for the period (25,054) (2,322) 29,735 2,755 Share repurchase program - (21,481) (1,990) Total shareholders' equity (deficit) Ps. 2,262,920 $209,686 Ps. 4,971,155 $460,638 Total liabilities and equity Ps. 5,463,297 $506,243 Ps. 7,882,991 $730,455 NOTES TO FINANCIAL STATEMENTS: Financial statements for 2007 are reported in Mexican pesos of purchasing power as of December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps. 10.7919 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS Thousand Mexican Pesos ("Ps.") and US Dollars ("$") 3 months ended 3 months ended as of September as of September 30, 2007 30, 2008 US US Pesos Dollars % Pesos Dollars % TOTAL REVENUES Ps. 617,302 $57,200 100% Ps. 717,496 $66,485 100% Network operating services 213,383 19,773 35% 243,765 22,588 34% Technical expenses 35,409 3,281 6% 36,808 3,411 5% Installation expenses 4,854 450 1% 3,202 297 0% Cost of network operation 253,646 23,504 41% 283,775 26,296 40% GROSS PROFIT 363,656 33,696 59% 433,721 40,189 60% SG&A 184,063 17,056 30% 211,975 19,642 30% EBITDA 179,593 16,640 29% 221,746 20,547 31% Depreciation and amortization 106,070 9,829 140,967 13,062 Operating income (loss) 73,523 6,811 80,779 7,485 Comprehensive (income) cost of financing: *Interest expense 59,376 5,502 34,490 3,196 **Interest (income), net (7,443) (690) (10,229) (948) Exchange (income) loss, net 13,461 1,247 44,244 4,100 Gain on net monetary position (32,646) (3,025) - - 32,748 3,034 68,505 6,348 Other (income) expense 5,642 523 (5,530) (512) INCOME (LOSS) BEFORE TAXES 35,132 3,254 17,804 1,649 Taxes: Asset tax 5,591 518 - - Flat rate corporate tax - - - - Income tax 1,753 162 3,767 349 Deferred income tax 35,509 3,290 4,157 385 Total tax 42,853 3,970 7,924 734 NET INCOME (LOSS) Ps. (7,721) $(716) Ps. 9,880 $915 *Adjusted EBITDA 183,863 17,037 223,373 20,698 % of revenue Adjusted EBITDA 30% 30% 31% 31% Weighted average basic shares 560,176 789,819 Weighted average fully diluted 606,144 829,576 Earnings per share basic (0.01) 0.01 Earnings per share diluted (0.01) 0.01 NOTES TO FINANCIAL STATEMENTS: * Interest related to Senior Notes, Banks and Vendor Financing ** Interest Income net Financial statements for 2007 are reported in Mexican pesos of purchasing power as of December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps. 10.7919 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS Thousand of Mexican Pesos ("Ps.") and US Dollars ("$") 9 months ended 9 months ended on September 30, on September 30, 2007 2008 US US Pesos Dollars % Pesos Dollars % TOTAL REVENUES Ps. 1,726,783 $160,007 100% Ps. 2,011,445 $186,385 100% Network operating services 608,334 56,369 35% 677,822 62,808 34% Technical expenses 102,368 9,486 6% 102,494 9,497 5% Installation expenses 13,833 1,282 1% 14,592 1,352 1% Cost of network operation 724,535 67,137 42% 794,908 73,657 40% GROSS PROFIT 1,002,248 92,870 58% 1,216,537 112,728 60% SG&A 514,491 47,674 30% 598,961 55,501 30% EBITDA 487,757 45,196 28% 617,576 57,227 31% Depreciation and amortization 302,428 28,024 386,618 35,825 Operating income (loss) 185,329 17,172 230,958 21,402 Comprehensive (income) cost of financing: *Interest expense 174,851 16,202 166,590 15,437 **Interest (income), net (29,959) (2,776) (49,636) (4,599) Exchange (income) loss, net (5,551) (514) 58,131 5,387 Gain on net monetary position (38,144) (3,535) - - 101,197 9,377 175,085 16,225 Other (income) expense 8,507 788 11,510 1,067 INCOME (LOSS) BEFORE TAXES 75,625 7,007 44,363 4,110 Taxes: Asset tax 20,409 1,891 - - Flat rate corporate tax - - 6,783 629 Income tax 3,890 360 9,485 879 Deferred income tax 76,380 7,078 (1,640) (152) Total tax 100,679 9,329 14,628 1,356 NET INCOME (LOSS) Ps. (25,054) $(2,322) Ps. 29,735 $2,754 *Adjusted EBITDA 498,025 46,148 625,123 57,925 % of revenue Adjusted EBITDA 29% 29% 31% 31% Weighted average basic shares 560,176 789,819 Weighted average fully diluted 606,144 829,576 Earnings per share basic (0.04) 0.04 Earnings per share diluted (0.04) 0.04 NOTES TO FINANCIAL STATEMENTS: * Interest related to Senior Notes, Banks and Vendor Financing ** Interest Income net Financial statements for 2007 are reported in Mexican pesos of purchasing power as of December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps. 10.7919 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION Thousand of Mexican Pesos ("Ps.") and US Dollars ("$") 3 months 3 months 3 months ended ended ended as of as of as of September September September 30, 2007 30, 2008 30, 2008 Pesos Pesos US Dollars Operating activities: Net income (loss) Ps. (25,054) Ps. 29,735 $2,755 Depreciation and amortization 93,024 140,547 13,023 Long term obligations 1,129 3,556 330 Deferred income tax 31,282 1,762 163 Stock Options 10,268 7,547 699 Subtotal 110,649 183,147 16,970 Net change in operation: Resources provided by operation activities (114,587) (11,659) (1,080) Financing activities: Senior notes 331,316 151,148 14,006 Notes payables (3,703) (1,433) (133) Commercial paper - - - Bank financing 108,702 - - Capital stock 11,397 (33,750) (3,127) Resources provided by financing activities 447,712 115,965 10,746 Investing activities: Frequency rights - - - Telephone network systems and equipment, net (242,064) (381,610) (35,361) Preoperating expenses - - - Intangible assets (14,324) (4,801) (445) Resources used in investing activities (256,388) (386,411) (35,806) Cash and cash equivalents: Increase / (decrease) in cash equivalents 76,737 (282,105) (26,140) Cash at beginning 157,660 1,805,477 167,299 Cash at end Ps. 234,397 Ps. 1,523,372 $141,159 Financial statements for 2007 are reported in Mexican pesos of purchasing power as of December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps. 10.7919 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION Thousand of Mexican Pesos ("Ps.") and US Dollars ("$") 9 months 9 months 9 months ended on ended on ended on September September September 30, 2007 30, 2008 30, 2008 Pesos Pesos US Dollars Operating activities: Net income (loss) Ps. (25,054) Ps. 29,735 2,755 Depreciation and amortization 276,186 393,342 36,448 Long term obligations 3,917 4,750 440 Deferred income tax 74,571 (4,035) (374) Stock Options 10,268 7,547 699 Subtotal 339,888 431,339 39,968 Net change in operation: Resources provided by operation activities 75,045 126,550 11,727 Financing activities: Senior notes 446,395 46,784 4,335 Notes payables (63,015) (6,505) (603) Commercial paper (155,639) - - Bank financing 108,702 - - Capital stock 793 (75,487) (6,995) Resources provided by financing activities 337,236 (35,208) (3,263) Investing activities: Frequency rights 51 - - Telephone network systems and equipment, net (886,895) (1,074,185) (99,536) Preoperating expenses - - - Intangible assets (30,331) (32,183) (2,982) Resources used in investing activities (917,175) (1,106,368) (102,518) Cash and cash equivalents: Increase / (decrease) in cash equivalents (504,894) (1,015,026) (94,054) Cash at beginning 739,291 2,538,398 235,213 Cash at end Ps. 234,397 Ps. 1,523,372 141,159 Financial statements for 2007 are reported in Mexican pesos of purchasing power as of December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps. 10.7919 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONDENSED CASH FLOW In Thousand Mexican Pesos ("Ps.") 3 months 3 months ended ended as of as of September September 30, 2007 30, 2008 US Dollars Operating Activities: Income before taxes Ps. 36,685 Ps. 17,807 $1,650 Items without cash flow 320,955 89,984 8,338 Items related to investment activities 104,395 138,461 12,830 Items related to financing activities 62,075 34,490 3,196 Cash flow from income/loss before taxes 524,110 280,742 26,014 Cash flow from: Accounts receivables (409,679) (99,343) (9,205) Inventory 5,614 (5,960) (552) Accounts payable (136,409) (108,296) (10,035) Other assets and liabilities 20,966 (19,706) (1,826) Income taxes (13,126) (6,162) (571) Cash flow from operation activities (532,634) (239,467) (22,189) Net cash flow from operating activities (8,524) 41,275 3,825 Cash flow from capital expenditures (274,711) (399,815) (37,048) Cash in excess/(required) to be used in financing activities (283,235) (358,540) (33,223) Cash flow from: Senior notes 249,146 - - Bank financing 108,702 - - Vendor financing (4,480) (1,752) (162) Capital stock - - - Additional paid in capital (96) (7,977) (739) Other financing activities 11,293 28,848 2,673 Cash flow from financing activities 364,565 19,119 1,772 Increase (decrease) in cash and temporary investments 81,330 (339,421) (31,451) Exchange effects on cash and cash equivalents 7,911 57,316 5,311 Cash and cash equivalents at beginning of the period 160,445 1,805,477 167,299 Cash and cash equivalents at the end of the period Ps. 249,686 Ps. 1,523,372 $141,159 Financial statements for 2007 are reported in Mexican pesos of purchasing power as of December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps. 10.7919 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONDENSED CASH FLOW In Thousand Mexican Pesos ("Ps.") 9 months 9 months ended on ended on September September US 30, 2007 30, 2008 Dollars Operating Activities: Income before taxes Ps. 77,178 Ps. 44,364 $4,111 Items without cash flow 104,410 229,560 21,272 Items related to investment activities 278,571 346,704 32,126 Items related to financing activities 177,550 166,590 15,437 Cash flow from income/loss before taxes 637,709 787,218 72,945 Cash flow from: Accounts receivables (332,607) (347,223) (32,174) Inventory 7,618 (7,017) (650) Accounts payables (35,351) (63,258) (5,862) Other assets and liabilities (78,143) (22,065) (2,045) Income taxes (27,662) (18,663) (1,729) Cash flow from operation activities (466,145) (458,226) (42,460) Net cash flow from operating activities 171,564 328,992 30,485 Cash flow from capital expenditures (938,875) (1,114,178) (103,242) Cash in excess/(required) to be used in financing activities (767,311) (785,186) (72,757) Cash flow from: Senior notes 232,262 - - Bank financing 108,702 - - Vendor financing (19,475) (5,707) (529) Capital stock 660 (7) (1) Additional paid in capital (27) (75,481) (6,994) Other financing activities (80,982) (76,791) (7,116) Cash flow from financing activities 241,140 (157,986) (14,639) Increase (decrease) in cash and temporary investments (526,171) (943,172) (87,396) Exchange effects on cash and cash equivalents 13,104 (72,991) (6,763) Cash and cash equivalents at beginning of the period 762,753 2,539,535 235,319 Cash and cash equivalents at the end of the period Ps. 249,686 Ps. 1,523,372 $141,159 Financial statements for 2007 are reported in Mexican pesos of purchasing power as of December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps. 10.7919 per US$1.00. DATASOURCE: Maxcom Telecomunicaciones, S.A.B. de C.V. CONTACT: Juan-Carlos Sotomayor, Maxcom Telecomunicaciones, +011-52-55-1163-1104, Web site: http://www.maxcom.com/

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