6-K 1 y60359e6-k.txt MAXCOM TELECOMMUNICATIONS, INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE MONTH OF MAY , 2002 ________________________ MAXCOM TELECOMUNICACIONES, S.A. DE C.V. (Exact name of Registrant as specified in its Charter) MAXCOM TELECOMMUNICATIONS, INC. (Translation of Registrant's name into English) ________________________ Guillermo Gonzalez Camarena No. 2000 Colonia Centro de Ciudad Santa Fe Mexico, DF 01210 (Address of Registrant's principal executive offices) ________________________ Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F __x__ Form 40-F ____ Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes _____ No __x__ If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): ______ EXHIBIT 1 [MAXCOM LOGO] For more information contact: MAXCOM TELECOMUNICACIONES, S.A. DE C.V. CITIGATE DEWE ROGERSON Mexico City, Mexico New York, NY Jose-Antonio Solbes Lucia Domville (5255) 5147-1125 (212) 419-4166 investor.relations@maxcom.com lucia.domville@citigatedr-ny.com MAXCOM TELECOMUNICACIONES ANNOUNCES ----------------------------------- FIRST QUARTER 2002 UNAUDITED RESULTS ------------------------------------ - Solid Balance Sheet after Debt Restructuring and US$66.2 million New Equity - 57% increase in revenues, 1Q02 vs. 1Q01 - Lines in service grew 201%, 1Q02 vs. 1Q01 - 302% increase in paid customer base, 1Q02 vs. 1Q01 - 60% reduction in EBITDA loss, 1Q02 vs. 1Q01 - Received regulatory approval to increase our neutral capital structure up to 95% - Hired new Vice President of Sales to strengthen senior management team Mexico City, Mexico, May 6, 2002 -- Maxcom Telecomunicaciones, S.A. de C.V., a facilities-based telecommunications provider (CLEC) using a "smart build" approach to focus on small - and medium -sized businesses and residential customers in the Mexican territory, today announced its unaudited results for the first quarter of 2002. LINES: ------ The number of lines in service at the end of 1Q02 increased 201% to 85,339 lines from 28,352 lines at the end of 1Q01, and 9% when compared to 77,981 lines in service at the end of 4Q01. During 1Q02, 17,259 new lines were installed, a 187% increase compared to 6,024 new installed lines during 1Q01 and 32% less when compared to 25,407 lines installed during 4Q01. 50% of these installations were in new clusters built during the last three months. During 1Q02, 2,400 lines (0.9% monthly avg.) represented the voluntary churn; another 5,812 lines (2.4% monthly avg.) represented the involuntary churn. Most of the involuntary disconnections were from lines sold in old clusters built before April 2001 under aggressive promotion plans. Additionally, 1,110 lines were disconnections from high usage customers, in line with our strategy of not retaining this kind of low margin customers. Inventory of constructed lines at the end of the quarter was 37,816 lines: of which 12,685 lines were from clusters built more than one-year ago; and, the remaining lines are from new clusters. "In spite of a very tight capital conservation environment instituted at Maxcom while the debt restructuring and capital raising efforts where underway, we were able to cautiously reinitiate our expansion with the addition of 14,000 new lines during the quarter. We managed to accomplish this by controlling our operating expenses and with the help of some of our very supportive vendors and suppliers", said Fulvio Del Valle, President and Chief Executive Officer of Maxcom, and he added "with the hiring of Cesar Castillo as Vice President of Sales and Commercial Operations, besides strengthening the management team, we will reinforce the sales activity focusing on business lines while consolidating our residential segments". CUSTOMERS: ---------- Total customers grew 302% to 53,059 at the end of 1Q02, from 13,208 at the end of 1Q01; and 12% when compared to 47,196 customers as of December 31, 2001, reflecting the Company's continued effort to strengthen and diversify its customer base. The growth in number of customers by region was: (i) in Mexico City, 411% increase from 1Q01 and 9% increase from 4Q01; and (ii) in Puebla, 249% increase from 1Q01 and 15% increase from 4Q01. The growth in number of customers by segment was: (i) business customers, 42% increase from 1Q01 and 15% increase from 4Q01; and (ii) residential customers, 367% increase from 1Q01 and 12% increase from 4Q01. REVENUES: --------- Revenues for 1Q02 increased 57% to Ps$103.6 million from Ps$65.9 million reported in 1Q01. The net change in revenue reflects: a 201% increase of lines in service partially offset by a 29% decrease in the total business ARPU, from US$126 in 1Q01 to US$89 in 1Q02. The decrease in ARPU was primarily the result of a combination of a 73% reduction in revenues from high usage customers and a change in mix from 60/40 business to residential in 1Q01 to 28/72 line mix in 1Q02. On the positive side, however, Maxcom continues to show improvement in its core small and medium size enterprise market where it experienced a 29% growth in ARPU between 1Q01 and 1Q02. Revenues for 1Q02 decreased 10% from Ps$114.9 million reported in 4Q01. The net change in revenue reflects: (i) 9% increase of lines in service; (ii) 8% decrease in the total business ARPU, from US$97 in 4Q01 to US$89 in 1Q02, basically driven by a 26% reduction in revenues from high usage customers; and, (iii) 25% reduction in residential ARPU, from US$44 in 4Q01 to US$33 in 1Q02, as a consequence of lower installation charges due to a 32% decrease in installed lines in 1Q02 when compared to 4Q01. "We continued to focus on maximizing our revenues while keeping a very tight control on expenses in order to utilize our limited capital on the best capex alternatives based on our time-to-revenue and time-to-profitability approaches. This in turn will support the revenue stream required for EBITDA breakeven" said Eloisa Martinez, Chief Financial Officer of Maxcom. COST OF NETWORK OPERATION: -------------------------- Cost of Network Operation in 1Q02 was Ps$44.5 million, an 89% increase when compared to Ps$23.6 million in 1Q01. This increase was mainly generated by: (i) Ps$14.4 million or 61% increase in network operating services and technical expenses due to a 201% growth in lines in service; and, (ii) the inclusion of installation expenses and cost of disconnected lines in the amount of Ps$6.5 million (on a pro forma basis, these costs would have been Ps$5.9 million in 1Q01). Cost of Network Operation decreased 17% when compared to Ps$53.7 million in 4Q01. This net decrease was mainly generated by: (i) lower installation expenses of Ps$7.6 million due to a 32% decrease in installed lines; (ii) Ps$6.7 million higher inventory reserve in 4Q01; (iii) 11% decrease in reselling costs due to a shift towards more competitive carriers' tariffs; and, (iv) higher maintenance expenses and interconnections costs, driven by the growth in lines in service. SG&A: ----- SG&A expenses were Ps$93.2 million in 1Q02 and Ps$127.8 million in 1Q01. The 27% net decrease was mainly originated by: (i) non-recurrent extraordinary expenses in 1Q01 of Ps$50.4 million related to consulting and executive recruiting fees, one-time executive compensation and incentive expenses, labor related taxes and bad debt provisioning; (ii) lower marketing expenses by Ps$4.2 million as the company decided to put on hold most of its marketing projects during the restructuring process, partially offset by: (i) higher leasing costs of Ps$4.6 million; (ii) higher bad debt provisioning of Ps$4.6 million; (iii) severance payments of Ps$3.5 million; (iv) Ps$3.7 million higher sales commissions; (v) net increase in labor by Ps$2.5 million; and, (vi) higher maintenance expense of Ps$1.1 million. SG&A decreased Ps$19.2 million or 17%, from Ps$112.4 million in 4Q01. The net decrease was mainly originated by: (i) Ps$13.1 million lower salaries and benefits as a result of February 02 headcount reduction; (ii) Ps$2.8 million lower sales commissions; (iii) Ps$2.9 million lower marketing expenses; and, (iv) higher bad debt provisioning of Ps$3.4 million as a result of the involuntary churn of the quarter. EBITDA: ------- EBITDA for 1Q02 was a negative Ps$34.1 million which compares favorably with a negative Ps$85.5 million reported in 1Q01 and negative Ps$51.1 million in 4Q01. EBITDA margin improved from a negative 130% in 1Q01 and negative 44% in 4Q01, to a negative 33% in 1Q02. Even though during the month of March 02, EBITDA was still negative Ps$7.7 million, it was 56% better than February 02 EBITDA; 15% better than January 02 EBITDA and 32% better than the 1Q02 average. This improvement is in line with the Company's expectations to achieve positive EBITDA margins between the end of 2Q02 and the beginning of 3Q02. CAPITAL EXPENDITURES: --------------------- Capital Expenditures for 1Q02 were Ps$59.1 million, a 138% increase when compared to Ps$24.8 million in 1Q01 and a 44% decrease when compared to Ps$105.1 million in 4Q01. CASH POSITION: Maxcom's Cash position at the end of the first quarter of 2002 was Ps$241.0 million, Ps$54.6 million in Cash and Cash Equivalents and Ps$186.4 million in Restricted Cash (deposited into an escrow account to guarantee April 1, 2002 coupon for the Series B Senior Notes due 2007), compared to Ps$1,016.7 million in Cash and Cash Equivalents, and Ps$599.7 million in Restricted Cash at the end of 1Q01, and compared to Ps$174.6 million in Cash and Cash Equivalents, and Ps$189.0 million in Restricted Cash at the end of 4Q01. EXCHANGE OFFER AND PRIVATE EQUITY INVESTMENT: On April 29, 2002, Maxcom successfully concluded the exchange offer for 94.3% of its Series B Senior Notes and the US$66.2 million Private Equity Investment. The following table sets forth Maxcom's cash and cash equivalents and capitalization on a consolidated basis as of March 31, 2002, as adjusted to give effect to the consummation of the exchange offer and the private equity investment. Please refer to the Offering Circular dated March 14, 2002, for further details on the adjustments. Actual As Adjusted ---------------------- ------------------------- Pesos Dollars Pesos Dollars --------- --------- --------- ----------- Thousands of constant March 31, 2002 Pesos and Thousands of U.S. Dollars Cash and cash equivalents Ps. 54,615 $ 6,052 Ps. 612,837 $ 67,910 Restricted cash 186,404 20,656 186,404 20,656 --------- ---------- ------------- ---------- Total Cash 241,019 $ 26,708 Ps. 799,241 $ 88,565 ========= ========== ============= ========== Long term debt: New Notes Ps. 1,489,725 $ 165,079 Old Notes Ps. 2,417,293 $ 267,865 140,687 15,590 --------- ---------- ------------- ---------- Total Debt Ps. 2,417,293 $ 267,865 Ps. 1,630,411 $ 180,669 Shareholders Equity: Capital stock and additional paid in Capital 1,090,825 120,876 2,490,897 276,021 Accumulated Deficit (1,423,038) (157,690) (1,471,520) (163,062) ------------- ---------- ----------- ----------- Total Shareholders' equity (332,213) (36,813) 1,019,377 112,959 Total Capitalization Ps. 2,085,080 $ 231,052 $ 2,649,788 Ps. 293,628 ============= ========== =========== =========== # # # A conference call will be held to discuss 1Q02 unaudited results on Tuesday, May 7, 2002 at 11:00 a.m. New York City time / 10:00 a.m. Mexico City time. To participate, please dial + (913) 981-5501, confirmation code # 147820 ten minutes prior to the start of the call. Maxcom Telecomunicaciones, S.A. 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 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 and data services in Mexico City and the City of Puebla. # # # (Tables and Financial statements to follow)

LINES 1Q01 4Q01 1Q02 vs. 1Q01 vs. 4Q01 ----------------------------------------------------------------------------- MEXICO CITY Business Lines 13,548 18,290 18,972 40% 4% Residential Lines 3,406 23,583 25,516 649% 8% ----------------------------------------------------------------------------- PUEBLA Business Lines 3,476 4,331 4,950 42% 14% Residential Lines 7,922 31,777 35,901 353% 13% ----------------------------------------------------------------------------- TOTAL 28,352 77,981 85,339 201% 9% ----------------------------------------------------------------------------- CUSTOMERS 1Q01 4Q01 1Q02 vs. 1Q01 vs. 4Q01 ----------------------------------------------------------------------------- Business 2,639 3,267 3,741 42% 15% Residential 10,569 43,929 49,318 367% 12% ----------------------------------------------------------------------------- TOTAL 13,208 47,196 53,059 302% 12% ----------------------------------------------------------------------------- Mexico City 4,285 20,059 21,884 411% 9% Puebla 8,923 27,137 31,175 249% 15% -----------------------------------------------------------------------------

TRAFFIC 1Q01 4Q01 1Q02 ---------------------------------------------------------------------------------------------------- Million Minutes Jan Feb Mar Total Oct Nov Dec Total Jan Feb Mar Total ---------------------------------------------------------------------------------------------------- Inbound 79.3 56.0 59.8 195.1 54.5 53.4 50.8 158.8 58.5 52.4 54.2 165.0 Outbound 53.2 56.3 61.8 171.3 70.4 69.4 63.0 202.8 72.5 71.5 77.3 221.3 Outbound Local 96% 95% 95% 95% 96% 95% 94% 95% 94% 95% 95% 95% Outbound LD 4% 5% 5% 5% 4% 5% 6% 5% 6% 5% 5% 5% ----------------------------------------------------------------------------------------------------

ARPU (US$) 1Q01 4Q01 1Q02 ------------------------------------------------------- Business Monthly Charges $ 28.85 $30.93 $26.93 Usage $ 97.03 $60.09 $57.28 Subtotal $125.87 $91.02 $84.22 Non-recurring $ 0.39 $ 5.73 $ 4.79 Total Business $126.26 $96.75 $89.00 ------------------------------------------------------- Residential Monthly Charges $17.95 $21.22 $19.38 Usage $15.52 $14.20 $12.00 Subtotal $33.47 $35.42 $31.38 Non-recurring $ 0.32 $ 8.88 $ 1.21 Total Residential $33.79 $44.29 $32.59 ------------------------------------------------------- Company Monthly Charges $24.69 $24.13 $21.47 Usage $65.89 $27.96 $24.51 Subtotal $90.58 $52.09 $45.97 Non-recurring $ 0.36 $ 7.93 $ 2.19 Total Company $90.95 $60.03 $48.17 -------------------------------------------------------

MAXCOM TELECOMUNICACIONES, S.A. DE C.V. CONSOLIDATED BALANCE SHEET (Thousands of Mexican pesos "Ps" with purchasing power as of March 31, 2002 and thousands of US Dollars "$")

March 31, 2001 (*) December 31, 2001 March 31, 2002 ------------------------- ------------------------ ------------------------ Pesos US Dollars Pesos US Dollars Pesos US Dollars ------------ --------- ----------- --------- ----------- --------- ASSETS CURRENT ASSETS: Cash and cash equivalents Ps 1,016,664 $ 112,659 Ps 174,571 $ 19,345 Ps 54,615 $ 6,052 Restricted cash 599,663 66,450 188,954 20,938 186,404 20,656 ------------ --------- ----------- --------- ----------- --------- 1,616,327 179,108 363,525 40,283 241,019 26,708 Accounts receivable: Customers, net of allowance of Ps 25,810 26,981 2,990 58,555 6,489 60,002 6,649 Value added tax refundable 17,778 1,970 13,962 1,547 20,303 2,250 Other sundry debts 6,012 666 12,429 1,377 9,905 1,098 ------------ --------- ----------- --------- ----------- --------- 50,771 5,626 84,947 9,413 90,210 9,996 Inventory 11,662 1,292 28,842 3,196 25,007 2,771 Prepaid expenses 12,399 1,374 10,422 1,155 12,491 1,384 ------------ --------- ----------- --------- ----------- --------- Total current assets 1,691,160 187,401 487,735 54,047 368,728 40,859 Frecuency rights, Net 110,632 12,259 106,044 11,751 104,514 11,581 Telephone network systems & Equipment, Net 1,149,652 127,395 1,384,634 153,434 1,386,622 153,654 Preoperating expenses, Net 247,316 27,406 224,408 24,867 216,766 24,020 Intangible Assets, Net 319,740 35,431 302,977 33,573 323,118 35,805 Other assets 6,982 774 31,672 3,510 29,882 3,311 ------------ --------- ------------ --------- ------------ --------- Total assets Ps 3,525,482 $ 390,665 Ps 2,537,469 $ 281,182 Ps 2,429,631 $ 269,232 ============ ========= ============ ========= ============ ========= LIABILITIES CURRENT LIABILITIES: Current Maturities of Long Term Debt Ps 2,876 $ 319 Ps -- $ -- Ct Global Telecomm 1,382 153 (0) (0) Interest Payable 216,185 23,956 Ps 100,279 $ 11,112 180,206 19,969 Accrued expenses and other accounts payable 121,960 13,515 140,941 15,618 141,113 15,637 Customers deposits 5,411 600 3,797 421 1,796 199 Payroll and other taxes payable 11,802 1,308 17,725 1,964 21,435 2,375 ------------ --------- ----------- --------- ----------- --------- Total current liabilities 359,615 39,850 262,743 29,115 344,551 38,180 LONG-TERM LIABILITIES: Senior notes, net 2,906,846 322,113 2,467,932 273,476 2,417,293 267,865 Loans and notes payable 624 69 -- -- 0 0 ------------ --------- ----------- --------- ----------- --------- Total liabilities Ps 3,267,085 $ 362,032 Ps 2,730,675 $ 302,591 Ps 2,761,843 $ 306,045 ============ ========= ============ ========= ============ ========= SHAREHOLDERS' EQUITY Capital stock 1,217,164 134,876 987,337 109,409 987,337 109,409 Additional paid-in capital 129,717 14,374 103,488 11,468 103,488 11,468 Accumulated deficit (880,377) (97,556) (623,399) (69,080) (1,284,030) (142,286) Net loss for the period (208,106) (23,061) (660,631) (73,206) (139,007) (15,404) ------------ --------- ----------- --------- ----------- --------- Total shareholders' equity Ps 258,397 $ 28,633 Ps (193,206) $ (21,410) Ps (332,213) $ (36,813) ============ ========= =========== ========= =========== ========= Ps 3,525,482 $ 390,665 Ps2,537,469 $ 281,182 Ps2,429,631 $ 269,232 ============ ========= =========== ========= =========== =========

MAXCOM TELECOMUNICACIONES, S.A. DE C.V. CONSOLIDATED STATEMENT OF OPERATIONS YEAR 2001 AND 2002 QUATERLY PERIODS (Thousands of Mexican pesos "Ps" with purchasing power as of March 31, 2002 and thousands of US Dollars "$")

January 1 to October 1 to January 1 to March 31, 2001 (*) December 31, 2001 March 31, 2002 ----------------------------------- ------------------------------ --------------------------- Pesos US Dollars % Pesos US Dollars % Pesos US Dollars % ------------ --------- --- -------- -------- --- ---------- --------- --- REVENUES Ps 65,859 $ 7,298 100% Ps 114,989 $ 12,742 100% Ps103,554 $ 11,475 100% Network operating services 15,945 1,767 24% 25,326 2,806 22% 26,583 2,946 26% Technical expenses 7,624 845 12% 15,007 1,663 13% 11,336 1,256 11% Installation expenses -- -- 0% 13,377 1,482 12% 6,540 725 6% ------------ --------- -------- -------- ---------- --------- Cost of Network Operation 23,569 2,612 36% 53,710 5,952 47% 44,460 4,927 43% GROSS PROFIT 42,290 4,686 64% 61,279 6,790 53% 59,094 6,548 57% SG&A 127,820 14,164 194% 112,421 12,458 98% 93,176 10,325 90% ------------ --------- -------- -------- ---------- --------- EBITDA (85,530) (9,478) -130% (51,142) (5,667) -44% (34,082) (3,777) -33% Depreciation and amortization 61,692 6,836 76,781 8,508 69,919 7,748 ------------ --------- -------- -------- ---------- --------- Operating Loss (147,223) (16,314) (127,923) 14,175) (104,001) (11,525) Comprehensive (Income) Cost of Financing: Interest expenses 112,193 12,432 96,290 10,670 91,380 10,126 Interest income (25,411) (2,816) (21,849) (2,421) (2,339) (259) Early extinguishment of debt -- -- (122,645) (13,591) -- -- Exchange (income) loss, net (13,351) (1,479) (102,408) (11,348) (29,755) (3,297) Gain on net monetary position (12,946) (1,435) (22,681) (2,513) (26,656) (2,954) ------------ --------- -------- -------- ---------- --------- 60,485 6,702 (173,293) (19,203) 32,629 3,616 Non-recurring charges 399 44 549 61 660 73 Extraordinary Items 2000 -- -- 26,739 2,963 -- -- Special expenses -- -- 6,806 754 -- -- Asset Reserve 2001 -- -- 5,769 639 -- -- ------------ --------- -------- -------- ---------- --------- -- -- 39,314 4,356 -- -- INCOME (LOSS) BEFORE TAXES (208,106) (23,061) 5,508 610 (137,290) (15,213) Provisions for: Asset Tax -- -- 759 84 1,540 171 Income Tax & Profit Sharing -- -- -- -- 177 20 Total Provisions -- -- 759 84 1,717 190 ------------ --------- -------- -------- ---------- --------- NET INCOME (LOSS) Ps(208,106) $ (23,061) Ps 4,749 $ 526 Ps(139,007) $(15,404) ============ ========= ======== ======== ========== ========

--------- (*) NOTES TO FINANCIAL STATEMENTS: 1Q01 results include the following reclassifications (as reported in 2Q01) to normalize and make comparable numbers with 1Q02 results. 1) Consolidated Balance Sheet: a) Sundry debtors in 1Q01 were reclassified from "Other assets" into "Other sundry debtors". b) Guaranty deposits in 1Q01 were reclassified from "Prepaid expenses" into "Other assets". c) Intangible assets in 1Q01 were reclassified from "Other assets" and "Telephone network systems & equipment" into "Intangible assets". 2) Consolidated Statement of Operations: a) Technical expenses. In 1Q01 technical expenses were included in "SG&A", now they were reclassified into "Cost of Network Operations". SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized. MAXCOM TELECOMUNICACIONES, S.A. DE C.V. By: /s/ GONZALO ALARCON ITURBIDE ---------------------------- Name: Gonzalo Alarcon Iturbide Title: General Counsel Date: May 7, 2002