GRUPO RADIO CENTRO SAB DE CV 
By MEXICO CITY, Feb. 28, 2011 /PRNewswire/ -- Grupo Radio Centro, S.A.B. de C.V. (NYSE: RC, BMV: RCENTRO-A) (the "Company"), one of Mexico's leading radio broadcasting companies, announced today its results of operations for the fourth quarter and year ended December 31, 2010. All figures were prepared in accordance with the Financial Reporting Standards issued by the Mexican Board for Research and Development of Financial Information Standards.
Fourth Quarter Results
Broadcasting revenue in the fourth quarter 2010 was Ps. 306,908,000, a 17.6% increase compared to the Ps. 260,873,000 reported in the fourth quarter 2009. This increase was mainly attributable to higher advertising expenditures by the Company's clients in Mexico during the fourth quarter 2010 compared to the same period 2009.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) in the fourth quarter 2010 were Ps. 187,574,000, an 8.5% increase compared to the Ps. 172,883,000 reported in the fourth quarter 2009. This increase was primarily due to (i) higher commissions paid to the Company's sales force due to higher broadcasting revenue in the fourth quarter 2010 compared to the same period in 2009, (ii) research and advertising expenses made during the fourth quarter of 2010, and (iii) production costs of talk shows . This increase was partially offset by a decrease in broadcasting expenses from the Los Angeles radio station KXOS-FM.
For the fourth quarter 2010, the Company recorded broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) of Ps. 119,334,000, a 35.6% increase compared to the Ps. 87,990,000 reported in the fourth quarter 2009. This increase was mainly attributable to the increase in broadcasting revenue, as described above.
Depreciation and amortization expenses in the fourth quarter 2010 were Ps. 5,744,000, a slight decrease compared to the Ps. 6,466,000 reported in the fourth quarter 2009, as a result of a reduction in the amount of depreciable assets.
The Company's corporate, general and administrative expenses were Ps. 4,574,000 in both the fourth quarter of 2009 and 2010.
The Company recorded operating income of Ps. 109,016,000,000 in the fourth quarter 2010, a 41.7% increase compared to the Ps. 76,950,000 in operating income reported in the fourth quarter 2009. This increase was due to increased broadcasting revenue during the fourth quarter 2010 compared to the fourth quarter 2009 as described above.
During the fourth quarter 2010, other expenses, net, were Ps. 6,118,000, a 70.4% decrease compared to the Ps. 20,695,000 reported in the fourth quarter 2009. This decrease was mainly attributable to a reduction of the reserve for labor liabilities in 2010.
The Company's comprehensive financing cost in the fourth quarter 2010 was Ps. 8,015,000, compared to Ps. 13,972,000 in the fourth quarter 2009. This change was primarily due to a Ps. 7,092,000 loss on net foreign currency exchange in the fourth quarter 2009, which was attributable to a decline in the peso value of a U.S. dollar denominated loan from the Company to GRC LA, LLC, our U.S. subsidiary compared to a Ps. 53,000 loss on the loan due to a relatively lower appreciation of the peso against the U.S. dollar in the fourth quarter 2010.
During the fourth quarter 2010, the Company recorded income before taxes of Ps. 94,883,000, compared to income before taxes of Ps. 42,283,000 reported in the fourth quarter 2009, which was primarily attributable to an increase in operating income, as well as a decrease in other expenses, net, and in the Company's comprehensive financing cost during the fourth quarter 2010, as described above.
The Company recorded income taxes of Ps. 21,984,000 in the fourth quarter 2010, an increase of 29.3% compared to the Ps. 16,997,000 recorded in the fourth quarter 2009. This increase was due to higher taxable income in the fourth quarter 2010 than the fourth quarter 2009.
As a result of the foregoing, the Company recorded net income in the fourth quarter 2010 of Ps. 72,899,000, a 188.3% increase compared to a net income of Ps. 25,286,000 in the fourth quarter 2009.
Twelve-Month Results
For the year ended December 31, 2010, broadcasting revenue was Ps. 907,925,000, a 15.5% increase compared to the Ps. 785,869,000 reported in the same period 2009. The increase was mainly attributable to an increase in advertising expenditures by the Company's clients, who purchased more airtime during 2010 than the comparable period in 2009, as well as to revenues from the Los Angeles radio station KXOS-FM during 2010.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the year ended December 31, 2010 were Ps. 688,113,000, a 15.6% increase compared to the Ps. 595,011,000 reported in the same period 2009. This increase was primarily due to (i) broadcasting expenses incurred in connection with KXOS-FM beginning in April 2009, resulting in a comparison between twelve months for the 2010 period and eight and a half months for the 2009 period, (ii) higher sales commissions due to the increase in broadcasting revenue, and (iii) expenses related to the Company's mass media advertising campaigns.
Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the year ended December 31, 2010 was Ps. 219,812,000, a 15.2% increase compared to the Ps. 190,858,000 reported in the same period 2009.
Depreciation and amortization expenses for the year ended December 31, 2010 were Ps. 23,861,000, an 8.3% decrease compared to the Ps. 26,024,000 reported in the same period 2009. This decrease was due to a reduction in the amount of depreciable assets.
The Company's corporate, general and administrative expenses for the year ended December 31, 2010 were Ps. 14,939,000, the same amount reported in 2009.
As a result of the foregoing, the Company recorded operating income of Ps. 181,012,000 for the year ended December 31, 2010, a 20.8% increase compared to the Ps. 149,895,000 reported in the same period 2009.
Other expenses, net, for the year ended December 31, 2010 were Ps. 42,508,000, a 36.1% decrease compared to the Ps. 66,495,000 reported in the same period 2009. This decrease was mainly attributable to legal expenses incurred in 2009 related to contractual agreements for the Los Angeles radio station, as well as revenue from tax credits during the third quarter 2010 and to a reduction of the reserve for labor liabilities in the fourth quarter 2010.
The Company's comprehensive cost of financing for the year ended December 31, 2010 was Ps. 26,116,000, compared to Ps. 40,615,000 in the same period 2009. This change was primarily due to a lower loss on net foreign currency exchange from Ps. 17,140,000 in the year ended December 31, 2009 to a Ps. 217,000 loss on net foreign currency exchange in the year ended December 31, 2010.
For the year ended December 31, 2010, the Company recorded income before taxes of Ps. 112,388,000 compared to income before taxes of Ps. 42,785,000 in the same period 2009, mainly due to the increase in broadcasting revenue and to the aforementioned decrease in the Company's other expenses, net, and comprehensive cost of financing.
The Company recorded income taxes of Ps. 51,978,000 for the year ended December 31, 2010, compared to Ps. 38,342,000 recorded in the same period 2009.
As a result of the foregoing, the Company recorded net income of Ps. 60,410,000 for the year ended December 31, 2010, a significant increase compared to the net income of Ps. 4,443,000 reported for 2009.
Company Description
Grupo Radio Centro owns and/or operates 15 radio stations. Of these 15 radio stations, 12 are located in Mexico City, two AM stations, in Guadalajara and Monterrey, and one FM station in Los Angeles. The Company's principal activities are the production and broadcasting of musical and entertainment programs, talk shows, news and special events programs. Revenue is primarily derived from the sale of commercial airtime. In addition to the Organizacion Radio Centro radio stations, the Company also operates Grupo RED radio stations and Organizacion Impulsora de Radio (OIR), a radio network that acts as the national sales representative for, and provides programming to, 108 Grupo Radio Centro-affiliated radio stations throughout Mexico.
Note on Forward Looking Statements
This release may contain projections or other forward-looking statements related to Grupo Radio Centro that involve risks and uncertainties. Readers are cautioned that these statements are only predictions and may differ materially from actual future results or events. Readers are referred to the documents filed by Grupo Radio Centro with the United States Securities and Exchange Commission, specifically the most recent filing on Form 20-F, which identifies important risk factors that could cause actual results to differ from those contained in the forward-looking statements. All forward-looking statements are based on information available to Grupo Radio Centro on the date hereof, and Grupo Radio Centro assumes no obligation to update such statements.
IR Contacts
In Mexico: In NY:
Pedro Beltran / Alfredo Azpeitia Maria Barona / Peter Majeski
Grupo Radio Centro, S.A.B. de C.V. i-advize Corporate Communications, Inc.
Tel: (5255) 5728-4800 Ext. 4910 Tel: (212) 406-3690
aazpeitia@grc.com.mx grc@i-advize.com.mx
GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED AUDITED BALANCE SHEETS
as of December 31, 2010 and 2009
(figures in thousands of Mexican pesos ("Ps.") and U.S. dollars
("U.S. $") (1)
December 31,
------------
2010 2009
U.S.
$(1) Ps. Ps.
----- --- ---
ASSETS
------
Current assets:
Cash and temporary investments 11,608 143,443 175,537
------ ------- -------
Accounts receivable:
Broadcasting, net 24,937 308,143 304,701
Other 525 6,490 6,863
25,462 314,633 311,564
Prepaid expenses 2,619 32,368 117,996
----- ------ -------
Total current assets 39,689 490,444 605,097
Property and equipment, net 35,324 436,499 459,941
Prepaid expenses 0 0 26,662
Deferred charges, net 415 5,128 3,039
Excess of cost over book value of net
assets of subsidiaries, net 67,076 828,863 828,863
Other assets 276 3,416 3,353
--- ----- -----
Total assets 142,780 1,764,350 1,926,955
======= ========= =========
LIABILITIES
-----------
Current:
Notes payable 3,323 41,064 41,903
Advances from customers 11,309 139,751 175,502
Suppliers and other accounts payable 4,652 57,483 84,230
Taxes payable 6,283 77,644 56,494
Total current liabilities 25,567 315,942 358,129
Long-Term:
Notes payable 7,283 90,000 130,000
Reserve for labor liabilities 4,778 59,042 65,871
Deferred taxes 713 8,814 16,476
--- ----- ------
Total liabilities 38,341 473,798 570,476
------ ------- -------
SHAREHOLDERS' EQUITY
--------------------
Capital stock 91,479 1,130,410 1,130,410
Cumulative earnings 9,387 115,991 216,021
Reserve for repurchase of shares 3,548 43,837 43,837
Minority interest 25 314 (33,789)
--- --- -------
Total shareholders' equity 104,439 1,290,552 1,356,479
------- --------- ---------
Total liabilities and Shareholders'
equity 142,780 1,764,350 1,926,955
======= ========= =========
(1) Peso amounts have been translated into U.S. dollars, solely for
the convenience of the reader, at the rate of Ps. 12.3571 per U.S.
dollar, the rate on December 31, 2010.
GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED AUDITED STATEMENTS OF INCOME
for the three-month and twelve-month periods ended December 31,
2010 and 2009
(figures in thousands of Mexican pesos ("Ps.") and U.S. dollars
("U.S. $")(1), except per Share and per ADS amounts)
4th Quarter
-----------
2010 2009
U.S.$
(1) Ps. Ps.
------ --- ---
Broadcasting revenue (2) 24,837 306,908 260,873
Broadcasting expenses, excluding
depreciation,
amortization and corporate, general and
administrative expenses 15,179 187,574 172,883
------ ------- -------
Broadcasting income 9,658 119,334 87,990
Depreciation and amortization 465 5,744 6,466
Corporate, general and administrative
expenses 370 4,574 4,574
--- ----- -----
Operating income 8,823 109,016 76,950
Other expenses, net (495) (6,118) (20,695)
Comprehensive financing cost:
Interest expense (640) (7,906) (6,738)
Interest income (2) (5) (56) (142)
(Loss) on foreign currency exchange, net (4) (53) (7,092)
(649) (8,015) (13,972)
---- ------ -------
Income (loss) before income taxes 7,679 94,883 42,283
Income taxes 1,779 21,984 16,997
----- ------ ------
Net income (loss) 5,900 72,899 25,286
Net income (loss) applicable to:
Majority interest 5,900 72,896 43,109
Minority interest 0 3 (17,823)
-------
5,900 72,899 25,286
===== ====== ======
Net income per Series A Share (3)
Net income per ADS (3)
Weighted average common shares outstanding
(000's) (3)
Accumulated 12 months
---------------------
2010 2009
U.S.$
(1) Ps. Ps.
----- --- ---
Broadcasting revenue (2) 73,474 907,925 785,869
Broadcasting expenses, excluding
depreciation,
amortization and corporate, general and
administrative expenses 55,686 688,113 595,011
------ ------- -------
Broadcasting income 17,788 219,812 190,858
Depreciation and amortization 1,931 23,861 26,024
Corporate, general and administrative
expenses 1,209 14,939 14,939
----- ------ ------
Operating income 14,648 181,012 149,895
Other expenses, net (3,440) (42,508) (66,495)
Comprehensive financing cost:
Interest expense (2,132) (26,345) (23,528)
Interest income (2) 36 446 53
(Loss) on foreign currency exchange, net (18) (217) (17,140)
(2,114) (26,116) (40,615)
------ ------- -------
Income (loss) before income taxes 9,094 112,388 42,785
Income taxes 4,206 51,978 38,342
----- ------ ------
Net income (loss) 4,888 60,410 4,443
Net income (loss) applicable to:
Majority interest 4,887 60,402 58,386
Minority interest 1 8 (53,943)
4,888 60,410 4,443
===== ====== =====
Net income per Series A Share (3) 0.030 0.3711 0.3588
Net income per ADS (3) 0.270 3.3399 3.2292
Weighted average common shares outstanding
(000's) (3) 162,725 162,725
(1) Peso amounts have been translated into U.S. dollars, solely for
the convenience of the reader, at the rate of Ps. 12.3571 per U.S.
dollar, the rate on December 31, 2010.
(2) Broadcasting revenue for a particular period includes (as a
reclassification of interest income) interest earned on funds
received by the Company pursuant to advance sales of commercial air
time to the extent that the underlying funds were earned by the
Company during the period in question. Advances from advertisers are
recognized as broadcasting revenue only when the corresponding
commercial air time has been transmitted. Interest earned and
treated as broadcasting revenue for the fourth quarter of 2010 and
2009 was Ps. 1,590,000 and Ps. 1,799,000, respectively. Interest
earned and treated as broadcasting revenue for the twelve months
ended December 31, 2010 and 2009 was Ps. 5,058,000 and Ps.
5,419,000, respectively.
(3) Earnings per share calculations are made for the last twelve
months as of the date of the income statement, as required by the
Mexican Stock Exchange.
SOURCE Grupo Radio Centro, S.A.B. de C.V.
