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Moscow CableCom Reports Q2

Moscow CableCom reports 117.2% increase in Q2 revenue

August 30, 2006

3 Min Read

NEW YORK -- Moscow CableCom Corp. (Nasdaq: MOCC) today announced results of operations for the three and six months ended June 30, 2006. The Company is still in the process of reviewing certain aspects of its accounting for deferred income taxes and expects to complete this evaluation process within a few days.

The Company has released certain unaudited financial data for the three month and six-month periods ended June 30, 2006, as presented in the accompanying financial data schedule:

For the three months ended June 30, 2006, the Company recorded total revenues of $5,216,000 from which it recognized gross margin of $1,186,000, or 22.7% of revenues. In the second quarter of 2005, the Company recorded total revenues of $2,401,000, from which it recognized gross margin of $777,000, or 32.4% of revenues. For the six months ended June 30, 2006, the Company recorded total revenues of $9,325,000 from which it recognized gross margin of $2,437,000, or 26.1% of revenues. For the first six months of 2005, the Company had recorded total revenues of $4,632,000, from which it recognized gross margin of $1,520,000, or 32.8% of revenues. This progress is the direct result of accelerated expansion of the Company's hybrid fiber coaxial network in Moscow, Russia, and of aggressive sales and marketing efforts, which have resulted in increased subscriber levels, particularly for pay television and Internet access services.

The increases in revenue were realized through increased subscriber numbers for the Company's Internet and pay TV services; a direct result of growth experienced by AKADO, Moscow CableCom's wholly-owned operating company in Moscow, Russia. As of June 30, 2006, AKADO had 56,264 active subscribers for its Internet access services; a 62.6% increase year-to-date, and a 166.6% increase year-over-year. The number of active subscribers for AKADO's pay television services increased to 30,450, which is a year-to-date increase of 95.0%, and year-over-year growth of 375.4%.

The increases in subscribers spanned throughout AKADO's growing hybrid fiber-coaxial network in Moscow, which has been expanded by 63.0% year-to-date and reaches 135.5% more homes than a year earlier, to reach 531,274 homes and businesses as of June 30, 2006.

Mikhail Smirnov, the Company's Chief Executive Officer stated, "During our second quarter, we successfully demonstrated our ability to grow our homes passed network at an accelerated rate. During the quarter, we increased our reach within Moscow by 33.2% from March 2006 levels by growing at a rate of over 50,000 new homes a month in the last two months of the quarter- a rate we have managed to continue into July. Our active Internet subscriber base grew by 21.1% during the quarter, compared to 10.35% growth from a smaller base in the second quarter of 2005. We have been able to successfully deploy the resources provided by the $10 million of additional proceeds from the Renova Media term loan and we began to use the proceeds from our $20 million private equity placement in May to finance this expansion. These proceeds, combined with our aggressive marketing efforts, continue to produce strong subscriber growth."

The Company also announced that on August 23, 2006, it had received a Nasdaq Staff Determination letter indicating that, as a result of the delay in filing the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2006, the Company was no longer in compliance with the continued listing requirements as set forth in Marketplace Rule 4310(c)(14), and that its common stock is, therefore, subject to potential delisting from The Nasdaq Stock Market. If the Company is unable to cure this noncompliance through the filing of its Form 10-Q by the end of the day August 30, 2006, it expects to request a hearing before a Nasdaq Listing Qualifications Panel to review the Staff Determination.

Moscow CableCom Corp. (Nasdaq: MOCC)

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