MOCC Moscow Cablecom (MM)

Revenues Increase 125.1% over 2005 NEW YORK, May 4 /PRNewswire-FirstCall/ -- Moscow CableCom Corp. (NASDAQ:MOCC) today announced results of its operations for the three months and year ended December 31, 2006. For the year ended December 31, 2006, the Company recorded total revenues of $23,866,000, which represents an increase of 125.1% from the $10,603,000 of revenues reported for the year ended December 31, 2005. For the year ended December 31, 2006, the Company incurred a net loss applicable to common shares of $21,338,000, or $1.93 per share, basic and diluted, as compared to a net loss applicable to common shares of $21,758,000, or $2.46 per share, basic and diluted, for the year ended December 31, 2005. The 2005 results include the recognition of a non-cash beneficial conversion feature charge of $10,781,000 relating to the 4,500,000 shares of Series B Convertible Preferred Stock issued in January 2005, which contributed $1.21 to the reported per share loss. The 2006 loss per share is based on 11,080,000 weighted average shares outstanding for the period; while the loss per share for 2005 is based on 8,842,000 weighted average shares outstanding. Neither calculation includes the 4,500,000 outstanding shares of Series B Convertible Preferred Stock that are convertible into the Company's Common Stock on a share-for-share basis. For the three months ended December 31, 2006, the Company recorded total revenues of $8,696,000, which represents an increase of 144.3% from the $3,560,000 of revenues recorded for the three months ended December 31, 2005. For the three months ended December 31, 2006, the Company incurred a net loss applicable to common shares of $8,252,000, or $0.60 per share, basic and diluted, as compared to a net loss applicable to common shares of $3,572,000, or $0.40 per share, basic and diluted, for the three months ended December 31, 2005. The 2006 three month loss per share is based on 13,803,000 weighted average shares outstanding for the period, while the loss per share for the three months ended December 31, 2005 is based on 8,861,000 weighted average shares outstanding. Neither calculation includes the 4,500,000 outstanding shares of Series B Convertible Preferred Stock that are convertible into the Company's Common Stock on a share-for-share basis. The Company's progress for the year and the fourth quarter is the direct result of accelerated expansion of the Company's hybrid fiber coaxial network in Moscow, Russia, as well as enhanced sales and marketing efforts, which have resulted in increased subscriber levels, particularly for pay television and Internet access services. The following table presents network and subscriber base growth through December 31, 2006: December 31, 2006 December 31, 2005 Change Homes Passed 782,249 325,954 140.0 % Active Subscribers: Terrestrial television 173,558 85,994 101.8 % Digital cable television 65,310 15,618 318.2 % Internet 98,106 34,600 183.5 % Penetration levels: Terrestrial television 22.2 % 26.4 % Digital cable television 8.3 % 4.8 % Internet 12.5 % 10.6 % Mikhail Smirnov, the Company's Chief Executive Officer stated, "We expanded our hybrid-fiber coaxial network by 140.0% during the year and by 14.8% during the fourth quarter. This resulted in an increase of service revenues from our Internet, digital cable television and terrestrial services by 137.6% for the year over the service revenues reported for 2005, and an increase of 49.7% for the fourth quarter of 2006 over the third quarter 2006. We expect to increase our market penetration in existing areas, where we are presently marketing our services, as well as in areas of Moscow to be accessed in the coming months." As previously announced, the Company entered into an Agreement and Plan of Merger on February 21, 2007, pursuant to which Renova Media Enterprises Ltd., a Bahamas corporation and the single largest stockholder of the Company, would acquire, through the merger of its wholly-owned subsidiary with and into the Company, all of the equity interests of the Company which it does not directly own. The consummation of the merger is subject to the satisfaction of certain conditions set forth in the merger agreement. Concurrently with the execution of the merger agreement, the Company and its wholly-owned subsidiary, ZAO ComCor-TV ("CCTV"), entered into a bridge facility agreement with RME Finance LTD, a wholly-owned subsidiary of Renova Media Enterprises ("RME Finance"). Pursuant to the bridge facility agreement, RME Finance has agreed, subject to the terms and conditions therein, to make available up to $45,000,000 of unsecured, subordinated debt financing to CCTV. As of April 30, 2007, CCTV has borrowed a total of $15 million from RME Finance pursuant to the bridge facility agreement. The full texts of the merger agreement and the bridge facility agreement were filed with the U.S. Securities and Exchange Commission in the Company's Current Report on Form 8-K on February 23, 2007 and the descriptions of the merger agreement and the bridge facility agreement in this press release are qualified by the terms and conditions of these agreements. About Moscow CableCom Moscow CableCom Corp (NASDAQ:MOCC) is the US-based parent of CCTV, a Moscow, Russia-based company that provides access to cable television and Internet services under the brand name "AKADO." AKADO is in the process of expanding its hybrid fiber-coaxial network in Moscow to provide residential and business customers with comprehensive broadband services in digital cable TV and radio, along with high-speed data transmission and Internet access. The Company has licenses to provide its services to 1.5 million homes and businesses in Moscow, through its proprietary agreements for use of the Moscow Fiber Optic Network, the largest high-speed data transmission network in Moscow. For more information on Moscow CableCom Corp. and AKADO, visit: http://www.moscowcablecom.com/ and http://www.akado.ru/. Availability of Information Regarding the Proposed Merger with Renova Media In connection with the proposed merger, the Company will file an Information Statement with the Securities Exchange Commission ("SEC"). In addition, the Company and Renova Media will file with the SEC a Transaction Statement on Schedule 13E-3. The parties will also make certain other SEC filings regarding the transaction. These documents will contain important information about the transaction. The Company and Renova Media urge investors to read these documents when they become available. Copies of these filings will be available, free of charge, on the SEC's website (http://www.sec.gov/). Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 This press release may contain "forward-looking statements," as the phrase is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended including, but not limited to those regarding the merger between the Company and Renova Media, and the bridge facility agreement among the Company, CCTV and RME Finance. All forward-looking statements contained in this press release are subject to various risks and uncertainties that could materially affect these matters including, without limitation, the risk that the transaction contemplated by the merger agreement will not be consummated on the terms announced or at all. These statements may contain words such as "expects," "anticipates," "plans," believes," "projects" and words of similar meaning. These statements also relate to our future business and financial performance, including AKADO's development, its ability to attract new subscribers, to continue to expand its network, to achieve positive cash flow and our ability to raise funds for AKADO's development. These statements are based on management's best assessment of Moscow CableCom's and AKADO's strategic and financial position and of future market conditions and trends and involve substantial risks and uncertainties. The actual outcome may differ materially from these statements. Certain factors that could cause actual results to differ materially from those discussed in any forward-looking statements, including lack of operating history of AKADO, liquidity difficulties, developments in the marketplace for cable services in Moscow, Russia, technological changes, operating in the Russian Federation, including general economic, political, social and tax conditions and legislative and regulatory matters affecting the cable industry, and changes in generally accepted accounting principles are described in the our Annual Report on Form 10-K for the year ended December 31, 2006 and other public filings made by us with the Securities and Exchange Commission, which descriptions are incorporated herein by reference. There may be other risks that we have not described that may adversely affect our business and financial condition. We disclaim any obligation to update developments of these risks or to announce publicly any revision to any of the forward-looking statements contained in this release or any of our related public filings with the SEC, or to make corrections to reflect future events or developments. MOSCOW CABLECOM CORP. Consolidated Balance Sheets (in thousands, except per share data) December 31, December 31, 2006 2005 Assets Current assets: Cash and cash equivalents $ 3,536 $ 5,442 Marketable securities (Note 4) 4,802 3,322 Trade receivables, less allowance for doubtful accounts of $206 and $111 193 252 Inventories, net 2,639 1,237 Taxes receivable 6,648 3,523 Deferred income taxes 547 398 Prepaid expenses and other current assets 6,453 1,845 Total current assets 24,818 16,019 Property, plant and equipment, net 58,347 26,912 Construction in progress and advances 15,739 9,563 Prepaid pension expense 3,230 5,111 Intangible assets, net 4,596 4,850 Goodwill 4,775 4,409 Investment in Institute for Automated Systems 7,210 7,128 Other assets 511 716 Total assets $119,226 $ 74,708 Liabilities and Stockholders' Equity Current liabilities: Current maturities of long-term debt $497 $598 Payable to affiliate 731 531 Accounts payable and accrued liabilities 13,150 4,849 Deferred revenue, current 115 354 Total current liabilities 14,493 6,332 Note payable to shareholder 32,100 20,211 Long-term debt, less current maturities 2,555 1,773 Other long-term obligations 923 720 Deferred revenue, noncurrent 677 380 Deferred income taxes 2,179 2,911 Total liabilities 52,927 32,327 Commitments and contingencies Stockholders' equity : Series A cumulative convertible preferred stock, no par value; 800,000 shares authorized; 149,962 shares and 150,144 shares issued and outstanding, respectively; liquidation preference $18.75 per share 2,789 2,792 Series B convertible preferred stock, $.01 par value, 25,000,000 shares authorized 4,500,000 shares issued and outstanding; liquidation preference up to $5.00 per share until January 2009 45 45 Common stock, $.01 par value; 40,000,000 shares authorized; 13,927,365 shares and 8,860,746 shares, respectively, issued and outstanding 139 89 Treasury stock, at cost, 24,500 shares (180) (180) Additional paid-in capital 111,458 66,243 Accumulated deficit (47,946) (26,608) Accumulated other comprehensive loss (6) - Total stockholders' equity 66,299 42,381 Total liabilities and stockholders' equity $119,626 $ 74,708 MOSCOW CABLECOM CORP. Consolidated Statements of Operations (in thousands, except per share data) Ten-month Year ended Year ended period ended December 31, December 31, December 31, 2006 2005 2004 Sales and revenues: Subscription revenue, connection fees and equipment sales $23,640 $10,373 $ 5,752 Other 226 230 380 Total revenue 23,866 10,603 6,132 Cost of sales: Services from related party 5,129 2,454 1,310 Salaries and benefits 3,285 1,348 1,143 Depreciation and amortization 6,059 2,177 1,451 Other 3,691 2,510 1,279 Total cost of sales 18,164 8,489 5,183 Gross margin 5,702 2,114 949 Operating expenses: Salaries and benefits 13,533 6,489 2,851 Depreciation 1,077 441 349 General and administrative 13,347 5,582 3,626 Total operating expenses 27,957 12,512 6,826 Operating loss (22,255) (10,398) (5,877) Other income (expense): Equity in losses of Institute for Automated Systems (490) (457) (347) Investment income and other income 836 1,127 677 Interest expense (3,294) (2,452) (317) Foreign currency transactions (loss) gain 4,305 (107) 20 Loss from operations before income taxes (20,898) (12,287) (5,844) Income tax (expense) benefit (215) 1,535 168 Losses of subsidiaries prior to consolidation - - 525 Net loss (21,113) (10,752) (5,151) Preferred dividends (225) (225) (190) Beneficial conversion feature - (10,781) - Loss applicable to Common Stockholders (21,338) $(21,758) $(5,341) Loss per common share: BASIC AND DILUTED: $(1.93) $(2.46) $(0.62) DATASOURCE: Moscow CableCom Corp. CONTACT: Tate Fite, Chief Financial Officer of Moscow CableCom Corp., +011-7-495-737-5177, ; or Barbara Cano of Breakstone Group International, +1-646-452-2334, , for Moscow CableCom Corp. Web site: http://www.moscowcablecom.com/ http://www.akado.ru/

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