GRUPO RADIO CENTRO SAB DE CV 
By MEXICO CITY, Feb. 21, 2012 /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 for the year ended December 31, 2011. All figures were prepared in accordance with International Financial Reporting Standards (IFRS).
Fourth Quarter Results
The Company's broadcasting revenue for the fourth quarter of 2011 totaled Ps. 314,186,000, a 2.4% increase compared to the Ps. 306,908,000 reported for the fourth quarter of 2010. This increase was mainly attributable to higher advertising expenditures by the Company's clients in Mexico, who purchased more airtime during the fourth quarter of 2011 compared to the same period of 2010.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the fourth quarter of 2011 totaled Ps. 205,778,000, a 7.8% increase compared to the Ps. 190,895,000 reported for the fourth quarter of 2010. This increase was primarily due to: (i) higher broadcasting expenses for the Los Angeles radio station KXOS-FM, (ii) increased promotional expenses, and (iii) the depreciation of the Mexican peso against the U.S. Dollar, which increased our operating costs payable in U.S. dollars, including those payable to Comercializadora Siete de Mexico, S.A. de C.V., in each case, in the fourth quarter of 2011 compared to the same period of 2010.
The Company's broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the fourth quarter of 2011 totaled Ps. 108,408,000, a 6.6% decrease compared to the Ps. 116,013,000 reported for the fourth quarter of 2010. This decrease was mainly attributable to the increase in broadcasting expenses described above.
The Company's depreciation and amortization expenses for the fourth quarter of 2011 totaled Ps. 7,442,000, a 29.6% increase compared to the Ps. 5,744,000 reported for the fourth quarter of 2010, as a result of a correction made during the third quarter of 2011 to the calculation of the depreciation expenses related to certain assets.
The Company's corporate, general and administrative expenses in the fourth quarter of 2011 totaled Ps. 4,574,000, the same amount reported for the fourth quarter of 2010.
The Company's operating income for the fourth quarter of 2011 totaled Ps. 96,392,000, an 8.8% decrease compared to the Ps. 105,695,000 reported for the fourth quarter of 2010. This decrease was mainly due to the increase in broadcasting expenses described above.
The Company's other expenses, net, for the fourth quarter of 2011 totaled Ps. 16,293,000, a decrease of 23.4% compared to the Ps. 21,271,000 reported for the fourth quarter of 2010. This decrease was due to the reclassification under IFRS of certain tax benefits from other income to income taxes for the fourth quarter of 2010.
The Company's comprehensive financing cost in the fourth quarter of 2011 totaled Ps. 2,387,000, a 70.2% decrease compared to the Ps. 8,015,000 reported in the fourth quarter of 2010. This decrease was primarily attributable to a reduction in the interest expense paid in the fourth quarter of 2011 from Ps. 7,906,000 in fourth quarter of 2010 to Ps. 2,620,000 as a result of a reduction in the principal amount of the Company's loan with Banco Inbursa, S.A
The Company's income before income taxes for the fourth quarter of 2011 totaled Ps. 77,712,000, a 1.7% increase compared to the Ps. 76,409,000 reported for the fourth quarter of 2010.
As a result of certain tax benefits received related to the re-evaluation of the tax treatment of the broadcast time that it grants to the Mexican government in payment of broadcasting taxes and the aforementioned reclassification of tax benefits, the Company recorded an income tax benefit of Ps. 67,594,000 in the fourth quarter of 2011, as compared to income taxes of Ps. 12,669,000 recorded in the fourth quarter of 2010.
As a result of the foregoing, the Company's net income in the fourth quarter of 2011 totaled Ps. 145,306,000, a significant increase compared to the Ps. 63,740,000 of net income recorded for the fourth quarter of 2010.
Twelve-Month Results
The Company's broadcasting revenue for the year ended December 31, 2011 totaled Ps. 988,598,000, representing an 8.9% increase compared to the Ps. 907,925,000 reported for the same period of 2010. This increase was mainly attributable to higher advertising expenditures by the Company's clients, who purchased more airtime during the period ended December 31, 2011 compared to the same period of 2010.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the year ended December 31, 2011 totaled Ps. 719,294,000, a 4.0% increase compared to the Ps. 691,434,000 reported in the same period of 2010. This increase was primarily due to (i) increased promotional expenses, (ii) higher commissions paid to the Company's sales force and to advertising agencies due to higher broadcasting revenues, and (iii) the depreciation of the Mexican peso against the U.S. Dollar, which increased our operating costs payable in U.S. dollars, including those payable to Comercializadora Siete de Mexico, S.A. de C.V., in each case, for the year ended December 31, 2011 compared to the same period in 2010.
The Company's broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the year ended December 31, 2011 totaled Ps. 269,304,000, a 24.4% increase compared to the Ps. 216,491,000 reported for the same period of 2010. This increase was mainly attributable to the aforementioned increase in broadcasting revenue.
The Company's depreciation and amortization expenses for the year ended December 31, 2011 totaled Ps. 24,967,000, a slight increase compared to the Ps. 23,861,000 reported for the same period of 2010.
The Company's corporate, general and administrative expenses for the year ended December 31, 2011 totaled Ps. 14,939,000, the same amount reported for the year ended December 31, 2010.
As a result of the foregoing, the Company recorded operating income of Ps. 229,398,000 for the year ended December 31, 2011, a 29.1% increase compared to the Ps. 177,691,000 reported for the same period of 2010.
The Company's other expenses, net, for the year ended December 31, 2011 totaled Ps. 60,077,000, a 4.2% increase compared to the Ps. 57,661,000 reported for the same period of 2010. This increase was mainly attributable to an increase in legal expenses incurred in 2011 related to the arbitral proceeding.
The Company's comprehensive cost of financing for the year ended December 31, 2011 totaled Ps. 18,064,000, a 30.8% decrease compared to the Ps. 26,116,000 reported for the same period of 2010. This decrease was mainly due to a decrease in interest expense from Ps. 26,345,000 for the year ended December 31, 2010 to Ps. 17,886,000 in the same period of 2011 as a result of the reduction in the annual interest rate of the Company's loan with Banco Inbursa, S.A. from 13% through March 18, 2010 to 9.5% thereafter combined with a reduction in the principal amount of such loan.
The Company's income before income taxes for the year ended December 31, 2011 totaled Ps. 151,257,000, a 61.1% increase compared to Ps. 93,914,000 recorded for the same period of 2010. This increase was mainly due to the aforementioned increase in broadcasting income.
As a consequence of the reclassification under IFRS of certain tax benefits from other income to income taxes and the impact of the reevaluation of the tax treatment of the portion of the broadcast time that it grants to the Mexican government, the Company recorded an income tax benefit for the year ended December 31, 2011 of 24,250,000, as compared to income taxes of Ps. 42,663,000 recorded for the year ended December 31, 2010.
As a result of the foregoing, the Company recorded net income of Ps. 175,507,000 for the year ended December 31, 2011, a significant increase when compared to the net income of Ps. 51,251,000 reported for the same period of 2010.
Company Description
Grupo Radio Centro owns and/or operates 15 radio stations. Of these 15 radio stations, 12 are located in Mexico City, two stations are located in Guadalajara and Monterrey, and one station is located 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
i-advize Corporate Communications,
Grupo Radio Centro, S.A.B. de C.V. 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, 2011 and 2010
(figures in thousands of Mexican pesos ("Ps.") and U.S.
dollars ("U.S. $") (1)
--------------------------------------------------------
December 31,
------------
2011 2010
U.S. $(1) Ps. Ps.
--------- --- ---
ASSETS
------
Current assets:
Cash and cash
equivalents 8,674 121,255 143,443
----- ------- -------
Accounts
receivable:
Broadcasting
receivables -Net 21,541 301,118 308,143
Other receivables 598 8,365 6,490
Recoverable taxes 1,459 20,389 0
----- ------ ---
23,598 329,872 314,633
Prepaid expenses 2,512 35,108 32,368
----- ------ ------
Total current
assets 34,784 486,235 490,444
Property and
equipment 32,655 456,475 438,717
Deferred income
taxes 0 0 7,239
Intangible and
other assets 382 5,349 6,326
Goodwill 59,295 828,863 828,863
------ ------- -------
Total assets 127,116 1,776,922 1,771,589
======= ========= =========
LIABILITIES
-----------
Current
liabilities:
Current portion of
long-term debt 2,914 40,736 41,064
Deferred revenue 7,323 102,365 139,751
Accounts payable
and accrued
expenses 4,034 56,394 57,483
Taxes payable 2,766 38,672 67,806
Total current
liabilities 17,037 238,167 306,104
Long-term:
Long-term debt 3,578 50,000 90,000
Employee benefits 5,739 80,222 79,944
----- ------ ------
Total liabilities 26,354 368,389 476,048
------ ------- -------
SHAREHOLDERS'
EQUITY
-------------
Common stock 75,827 1,059,962 1,059,962
Retained earnings 22,439 313,667 203,171
Reserve for
repurchase of
shares 2,145 29,989 29,989
Other
comprehensive
income 328 4,590 2,105
--- ----- -----
Equity
attributable to
owners of the
Company 100,739 1,408,208 1,295,227
Non-controlling
Interest 23 325 314
--- --- ---
Total equity 100,762 1,408,533 1,295,541
------- --------- ---------
Total liabilities
and stockholders'
equity 127,116 1,776,922 1,771,589
======= ========= =========
(1) Peso amounts have been translated into U.S. dollars,
solely for the convenience of the reader, at the rate of
Ps. 13.9787 per U.S.
dollar, the rate on December 31, 2011.
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, 2011 and 2010
(figures in thousands of Mexican pesos ("Ps.") and U.S. dollars ("U.S. $")(1), except per Share
and per ADS amounts)
------------------------------------------------------------------------------------------------
4th Quarter Accumulated 12 months
----------- ---------------------
2011 2010 2011 2010
U.S.$ (1) Ps. Ps. U.S.$ (1) Ps. Ps.
--------- --- --- --------- --- ---
Broadcasting revenue (2) 22,476 314,186 306,908 70,722 988,598 907,925
Broadcasting expenses, excluding
depreciation,
amortization and corporate,
general and administrative
expenses 14,721 205,778 190,895 51,456 719,294 691,434
------ ------- ------- ------ ------- -------
Broadcasting income 7,755 108,408 116,013 19,266 269,304 216,491
Depreciation and
amortization 532 7,442 5,744 1,786 24,967 23,861
Corporate, general and
administrative expenses 327 4,574 4,574 1,069 14,939 14,939
--- ----- ----- ----- ------ ------
Operating income 6,896 96,392 105,695 16,411 229,398 177,691
Other expenses, net (1,166) (16,293) (21,271) (4,298) (60,077) (57,661)
Comprehensive financing cost:
Interest expense (187) (2,620) (7,906) (1,280) (17,886) (26,345)
Interest income (2) 1 18 (56) 1 20 446
Income (Loss) on foreign
currency exchange, net 15 215 (53) (14) (198) (217)
(171) (2,387) (8,015) (1,293) (18,064) (26,116)
---- ------ ------ ------ ------- -------
Income before income taxes 5,559 77,712 76,409 10,820 151,257 93,914
Income taxes (4,835) (67,594) 12,669 (1,735) (24,250) 42,663
------ ------- ------ ------ ------- ------
Net income 10,394 145,306 63,740 12,555 175,507 51,251
Net income applicable to:
Majority interest 10,393 145,299 63,737 12,554 175,496 51,243
Minority interest 1 7 3 1 11 8
10,394 145,306 63,740 12,555 175,507 51,251
====== ======= ====== ====== ======= ======
Net income per Series A Share (3) 0.077 1.0786 0.3149
Net income per ADS (3) 0.694 9.7074 2.8341
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. 13.9787 per U.S. dollar,
the rate on December 31, 2011.
(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 2011 and 2010 was Ps. 1,218,000
and Ps. 1,590,000, respectively. Interest earned and treated as broadcasting revenue for the
twelve months ended December 31, 2011 and
2010 was Ps. 3,456,000 and Ps. 5,058,000, 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.
