Grupo Radio Centro Reports Fourth Quarter and Year-End Results for the Period Ended December 31, 2009
MEXICO CITY, Feb. 24 /PRNewswire-FirstCall/ -- 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, 2009. All figures were prepared in accordance with the Mexican Financial Reporting Standards ("MFRS") issued by the Mexican Board for Research and Development of Financial Information Standards.
Fourth Quarter Results
Broadcasting revenue for the fourth quarter of 2009 was Ps. 260,873,000, an increase of 12.8% compared to Ps. 231,342,000 reported for the fourth quarter of 2008. This increase was mainly attributable to higher advertising expenditures by the Company's clients in Mexico during the fourth quarter of 2009 compared to the same period of 2008, as well as broadcasting revenue from the Los Angeles radio station KXOS-FM. The Company began to sell advertising time on KXOS-FM in April 2009 pursuant to a local marketing agreement (the "LMA") with Emmis Communications Corporation.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the fourth quarter of 2009 were Ps. 172,883,000, 38.5% higher than the Ps. 124,842,000 reported for the fourth quarter of 2008. This increase was primarily due to (i) broadcasting expenses incurred in connection with KXOS-FM, and (ii) higher commissions paid to the Company's sales force due to higher broadcasting revenue in the fourth quarter of 2009 compared to the same period of 2008.
For the fourth quarter of 2009, the Company reported broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) of Ps. 87,990,000, 17.4% lower than the Ps. 106,500,000 reported for the fourth quarter of 2008. This decrease in broadcasting income was mainly attributable to the increase in broadcasting expenses, as described above.
Depreciation and amortization expenses for the fourth quarter of 2009 were Ps. 6,466,000, 18.6% lower than the Ps. 7,944,000 reported for the fourth quarter of 2008, as a result of a reduction in the Company's depreciable asset base.
The Company's corporate, general and administrative expenses for the fourth quarter of 2009 were Ps. 4,574,000, a slight increase compared to Ps. 4,461,000 reported for the fourth quarter of 2008.
The Company reported operating income of Ps. 76,950,000 for the fourth quarter of 2009, 18.2% lower than the Ps. 94,095,000 reported for the fourth quarter of 2008. This decrease was due to higher broadcasting expenses during the fourth quarter of 2009 compared to the fourth quarter of 2008, as described above.
During the fourth quarter of 2009, other expenses, net, were Ps. 20,695,000, compared to other expenses, net, of Ps. 17,539,000 reported for the fourth quarter of 2008. This increase was mainly attributable to expenses related to charity campaigns conducted by the Company during the fourth quarter of 2009.
The Company's comprehensive financing cost for the fourth quarter of 2009 was Ps. 13,972,000, compared to Ps. 1,825,000 reported for the fourth quarter of 2008. This increase was primarily due to (i) a loss on net foreign currency exchange of Ps. 7,092,000 attributable to an appreciation of the peso against the U.S. dollar, which resulted in a decline in the peso value of a U.S. dollar denominated loan from the Company to GRC-LA, LLC ("GRC-LA"), a U.S. subsidiary that manages the KXOS-FM pursuant to the LMA, and (ii) interest expense related to a Ps. 200,000,000 loan obtained by the Company from Banco Inbursa, S.A. in March 2009.
For the fourth quarter of 2009, the Company recorded income before taxes of Ps. 42,283,000, compared to Ps. 74,731,000 reported for the fourth quarter of 2008, primarily as a result of higher broadcasting expenses during the fourth quarter of 2009, as described above.
The Company recorded income taxes of Ps. 16,997,000 for the fourth quarter of 2009, compared to the Ps. 17,038,000 recorded for the fourth quarter of 2008.
As a result of the foregoing, the Company recorded net income for the fourth quarter of 2009 of Ps. 25,286,000, a 56.2% decline compared to net income of Ps. 57,693,000 in the fourth quarter of 2008.
Twelve-Month Results
For the year ended December 31, 2009, broadcasting revenue was Ps. 785,869,000, 6.9% higher than the Ps. 735,105,000 reported for the same period of 2008. The increase was mainly attributable to higher advertising expenditures by the Company's clients during 2009 compared to the same period in 2008 and to revenues from KXOS-FM.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the year ended December 31, 2009 were Ps. 595,011,000, 31.5% higher than the Ps. 452,350,000 reported for the same period of 2008. This increase was primarily due to (i) broadcasting expenses incurred in connection with KXOS-FM, and (ii) higher sales commissions as a result of the increase in broadcasting revenue during 2009.
Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the year ended December 31, 2009 was Ps. 190,858,000, 32.5% lower than the Ps. 282,755,000 reported for the same period of 2008. This decrease was mainly attributable to the increase in broadcasting expenses, as described above.
Depreciation and amortization expenses for the year ended December 31, 2009 were Ps. 26,024,000, 18.0% lower than the Ps. 31,720,000 reported for the same period of 2008, as a result of a reduction in the Company's depreciable asset base.
The Company's corporate, general and administrative expenses for the year ended December 31, 2009 were Ps. 14,939,000, slightly higher than the Ps. 14,461,000 reported for the same period of 2008.
As a result of the foregoing, the Company recorded operating income of Ps. 149,895,000 for the year ended December 31, 2009, 36.6% lower than the Ps. 236,574,000 reported for the same period of 2008.
Other expenses, net, for the year ended December 31, 2009 were Ps. 66,495,000, 16.9% higher than the Ps. 56,880,000 reported for the same period of 2008. This increase was mainly attributable to legal expenses incurred in connection with the LMA.
The Company's comprehensive financing cost for the year ended December 31, 2009 was Ps. 40,615,000, compared to Ps. 7,678,000 reported for the same period of 2008. This increase was mainly due to (i) interest expense related to the Company's Ps. 200,000,000 loan obtained from Banco Inbursa, S.A. in March 2009 and (ii) a loss on net foreign exchange loss attributable to an appreciation of the peso against the U.S. dollar, which resulted in a decline in the peso value of the Company's U.S. dollar denominated loan to GRC-LA.
For the year ended December 31, 2009, the Company recorded income before taxes of Ps. 42,785,000, compared to Ps. 172,016,000 reported for the same period of 2008, mainly due to the increases in broadcasting expenses and comprehensive financing cost, as described above.
The Company recorded income taxes of Ps. 38,342,000 for the year ended December 31, 2009, compared to Ps. 45,251,000 reported for the same period of 2008, primarily due to lower taxable income.
As a result of the foregoing, the Company recorded net income of Ps. 4,443,000 for the year ended December 31, 2009, compared to net income of Ps. 126,765,000 for the same period of 2008.
Recent Developments
The Company will undertake a capital reduction of GRC-LA by returning the capital contributions of certain members of the Aguirre family, who own the control of the Company. The Company had previously sold a 49% equity stake in GRC-LA, for the same amount of this capital reduction, to those Aguirre family members. As a result of the capital reduction, the Company will become the sole shareholder of GRC-LA.
Separately, the Company's Board of Directors recommended that at the next shareholders' meeting during March, 2010 the payment of a dividend of Ps. 100 million, or Ps. 0.614535380433443 per share. If approved, the dividend will be paid approximately 10 days following the shareholders' meeting.
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 or 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.
GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED AUDITED BALANCE SHEETS
as of December 31, 2009 and 2008
(figures in thousands of Mexican pesos ("Ps.") and
U.S. dollars ("U.S.$")(1)
December 31,
2009 2008
U.S. $(1) Ps. Ps.
-------------------- ---------
ASSETS
Current assets:
Cash and temporary investments 13,442 175,537 93,054
Accounts receivable:
Broadcasting, net 23,333 304,701 301,101
Other 526 6,863 6,225
Income taxes recoverable 0 0 3,007
Prepaid expenses 9,036 117,996 38,179
Deferred taxes 0 0 0
Total current assets 46,337 605,097 441,566
Property and equipment, net 35,220 459,941 465,034
Prepaid expenses 2,042 26,662 0
Deferred charges, net 233 3,039 4,850
Excess of cost over book value
of net assets of subsidiaries, net 63,472 828,863 828,863
Other assets 257 3,353 3,325
Total assets 147,561 1,926,955 1,743,638
LIABILITIES
Current:
Notes payable 3,209 41,903 0
Advances from customers 13,439 175,502 142,543
Suppliers and other accounts
payable 6,450 84,230 67,388
Taxes payable 4,326 56,494 18,859
Total current liabilities 27,424 358,129 228,790
Long-Term:
Notes payable 9,955 130,000 0
Reserve for labor liabilities 5,044 65,871 60,276
Deferred taxes 1,262 16,476 21,782
Total liabilities 43,685 570,476 310,848
SHAREHOLDERS' EQUITY
Capital stock 86,564 1,130,410 1,130,410
Cumulative earnings 16,556 216,204 257,818
Reserve for repurchase of shares 3,357 43,837 43,837
Accumulated Effect by Conversion (14) (183) 0
Minority interest (2,587) (33,789) 725
Total shareholders' equity 103,876 1,356,479 1,432,790
Total liabilities and
Shareholders' equity 147,561 1,926,955 1,743,638
(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 13.0587 per U.S. dollar,
the rate on December 31, 2009.
GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED AUDITED STATEMENTS OF INCOME
for the three-month and twelve-month periods ended
December 31, 2009 and 2008
(figures in thousands of Mexican pesos ("Ps.") and
U.S. dollars ("U.S.$")(1), except per Share and per ADS amounts)
4th Quarter Accumulated 12 months
2009 2008 2009 2008
U.S.$(1) Ps. Ps. U.S.$(1) Ps. Ps.
Broadcasting
revenue(2) 19,977 260,873 231,342 60,180 785,869 735,105
Broadcasting expenses,
excluding depreciation,
amortization and
corporate, general
and administrative
expenses 13,239 172,883 124,842 45,564 595,011 452,350
Broadcasting income 6,738 87,990 106,500 14,616 190,858 282,755
Depreciation and
amortization 495 6,466 7,944 1,993 26,024 31,720
Corporate, general and
administrative
expenses 350 4,574 4,461 1,144 14,939 14,461
Operating income 5,893 76,950 94,095 11,479 149,895 236,574
EBITDA 6,388 83,416 102,039 13,471 175,919 268,294
Other income
(expenses), net (1,585) (20,695) (17,539) (5,092) (66,495) (56,880)
Comprehensive
financing cost:
Interest expense (516) (6,738) (2,276) (1,802) (23,528) (8,376)
Interest income(2) (11) (142) (34) 4 53 228
Gain (loss) on
foreign currency
exchange, net (543) (7,092) 485 (1,313) (17,140) 470
(Loss) Gain on net
monetary position 0 0 0 0 0 0
(1,070) (13,972) (1,825) (3,111) (40,615) (7,678)
Income before
extraordinary item
and income taxes: 3,238 42,283 74,731 3,276 42,785 172,016
Extraordinary item 0 0 0 0 0 0
Income before income
taxes 3,238 42,283 74,731 3,276 42,785 172,016
Income taxes 1,302 16,997 17,038 2,936 38,342 45,251
Net (loss) income 1,936 25,286 57,693 340 4,443 126,765
Net (loss) income
applicable to:
Majority interest 3,301 43,109 57,673 4,471 58,386 126,720
Minority interest (1,365) (17,823) 20 (4,131) (53,943) 45
1,936 25,286 57,693 340 4,443 126,765
Net income per Series
A Share(3) 0.027 0.3588 0.7787
Net income per ADS(3) 0.247 3.2292 7.0083
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. 13.0587 per U.S. dollar,
the rate on December 31, 2009.
(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 2009 and
2008 was Ps. 1,799,000 and Ps. 2,130,000, respectively. Interest
earned and treated as broadcasting revenue for the twelve months ended
December 31, 2009 and 2008 was Ps. 5,419,000 and Ps. 6,510,000,
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.
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