Grupo Radio Centro Reports Results for Fourth Quarter and Year-End Results for the Period Ended December 31, 2010

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.

SOURCE Grupo Radio Centro, S.A.B. de C.V.