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Securities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant To Rule 13a-16 or 15d-16
of The Securities Exchange Act of 1934
For the month of October, 2006 Commission File Number 1-12090
GRUPO RADIO CENTRO, S.A. de C.V.
(Translation of Registrant's name into English)
Constituyentes 1154, Piso 7
Col. Lomas Altas, Mexico D.F. 11954
(Address of principal office)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.) (Check One)
Form 20-F [X] Form 40-F [ ]
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing information to the Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.) (Check
One)
Yes [ ] No [X]
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b). 82- .)
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GRUPO RADIO CENTRO REPORTS RESULTS FOR THIRD QUARTER AND
FIRST NINE MONTHS OF 2006
MEXICO CITY, Oct. 23 /PRNewswire-FirstCall/ -- Grupo Radio Centro, S.A. 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 third quarter and nine months ended September 30, 2006. All figures were
prepared in accordance with the Financial Information Standards issued by the
Mexican Board for Research and Development of Financial Standards and have
been restated in constant Pesos as of September 30, 2006.
Third Quarter Results
Broadcasting revenue for the third quarter of 2006 was Ps. 182,073,000,
representing an increase of 8.3% compared to the Ps. 168,170,000 reported for
the same period of 2005. This increase was mainly attributable to higher
advertising expenditures by the Company's clients, which purchased more airtime
compared to the same period of 2005.
The Company's broadcasting expenses (excluding depreciation, amortization
and corporate, general and administrative expenses) for the third quarter of
2006 were Ps. 116,835,000, representing an increase of 15.0% compared to the Ps.
101,577,000 reported for the same period of 2005. This increase was primarily
due to increases in the third quarter of 2006 in (i) the allowance for doubtful
accounts, (ii) expenses related to the increase in broadcasting revenue, such as
commissions paid to the Company's sales force and outside agents and (iii)
expenses related to additional advertising and marketing campaigns conducted by
the Company during the third quarter of 2006.
For the third quarter of 2006, the Company reported broadcasting income
(i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation,
amortization and corporate, general and administrative expenses) of Ps.
65,238,000, a decrease of 2.0% compared to the Ps. 66,593,000 reported for the
same period of 2005. This decrease was mainly attributable to the increase in
broadcasting expenses, which offset the increase in broadcasting revenue.
Depreciation and amortization for the third quarter of 2006 amounted to
Ps. 9,047,000, representing a slight increase compared to the Ps. 8,904,000
reported for the same period of 2005.
For the third quarter of 2006, the Company's corporate, general and
administrative expenses were Ps. 3,271,000, an increase of 2.6% compared to
the Ps. 3,187,000 reported for the same period of 2005.
The Company reported operating income of Ps. 52,920,000 for the third
quarter of 2006 compared to the Ps. 54,502,000 reported for the same period of
2005. This decrease was mainly attributable to the increase in broadcasting
expenses in the third quarter of 2006.
The comprehensive financing cost for the third quarter of 2006 was Ps.
355,000 compared to the Ps. 4,429,000 recorded for the same period of 2005. This
decrease is principally the result of the reduction in interest expense for the
third quarter of 2006 compared to the same period of 2005, which resulted from
(i) the Company no longer recording interest related to the contingent liability
recorded by the Company in 2003 and (ii) the Company no longer recording
interest on bank debt after paying off all of its bank debt on May 17, 2006.
During the third quarter of 2006, other expenses, net, totaled Ps.
17,731,000, a 23.0% increase compared to the Ps. 14,418,000 reported in the same
period of 2005. This increase was mainly attributable to higher expenses related
to the Company's corporate governance compliance and higher legal expenses
during the third quarter of 2006 compared to the same period of 2005.
The Company reported income before extraordinary item and provisions for
income tax and employee profit sharing of Ps. 34,834,000 for the third quarter
of 2006, which represents a decrease of 2.3% compared to Ps. 35,655,000 reported
during the same period of 2005.
In the third quarter of 2006, the Company recorded extraordinary income of
Ps. 3,016,000 as a result of the inflation adjustment in the third quarter of
2006 to the extraordinary income that was recorded in June 2006 in connection
with the reversal of the provision for the contingent liability.
For the third quarter of 2006, the Company reported income before
provisions for income tax and employee profit sharing of Ps. 37,850,000
compared to the Ps. 35,655,000 reported for the same period of 2005. The
Company recorded provisions for income tax and employee profit sharing for the
third quarter of 2006 of Ps. 8,415,000 compared to the Ps. 7,923,000 recorded
for the same period of 2005.
As a result of the foregoing, the Company's net income for the third
quarter of 2006 totaled Ps. 29,435,000, compared to the Ps. 27,732,000
reported for same period of 2005.
Nine Months Results
For the nine months ended September 30, 2006, broadcasting revenue was Ps.
593,550,000, a 40.3% increase compared to the Ps. 422,964,000 reported for the
same period of 2005. This increase was mainly attributable to the increase in
advertising expenditures by political parties in connection with the
presidential and congressional elections that took place on July 2, 2006 as well
as higher advertising expenditures by the Company's clients compared to the same
period of 2005.
The Company's broadcasting expenses (excluding depreciation, amortization
and corporate, general and administrative expenses) reported for the nine months
ended September 30, 2006 were Ps. 340,076,000, a 15.0% increase compared to the
Ps. 295,705,000 reported for the same period of 2005. This increase was
primarily due to increases during 2006 in (i) the allowance for doubtful
accounts, (ii) sales commissions paid to the Company's sales force, outside
agents and affiliated stations in connection with increased sales of airtime and
(iii) expenses related to additional advertising and marketing campaigns
conducted by the Company during 2006.
Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses,
excluding depreciation, amortization and corporate, general and administrative
expenses) for the nine months ended September 30, 2006, was Ps. 253,474,000, an
increase of 99.2% compared to the Ps. 127,259,000 reported for the same period
of 2005. This increase was mainly attributable to the increase in broadcasting
revenue, which more than offset the increase in broadcasting expenses.
Depreciation and amortization for the nine months ended September 30, 2006
totaled Ps. 26,742,000, a decrease of 7.1% compared to the Ps. 28,795,000
reported for the same period of 2005. This decrease was mainly attributable to
the Company no longer recording in the second quarter of 2006 the depreciation
of a part of the Company vehicles whose useful lives ended in the second quarter
of 2006.
The Company's corporate, general and administrative expenses for the nine
months ended September 30, 2006 were Ps. 9,498,000, an increase of 0.3% compared
to the Ps. 9,474,000 reported for the same period of 2005.
As a result of the foregoing, the Company reported operating income of Ps.
217,234,000 for the nine months ended September 30, 2006, which more than
doubled the Ps. 88,990,000 of operating income reported for the same period of
2005.
The Company's comprehensive cost of financing for the nine months ended
September 30, 2006 was Ps. 7,762,000, a decrease of 6.9% compared to the Ps.
8,337,000 recorded for the same period of 2005. This decrease reflects the
decrease in interest expense during 2006 compared to the same period of 2005,
which resulted from (i) the cancellation of interest recorded through June 2006
on the provision for the contingent liability recorded by the Company in 2003
and (ii) the Company no longer recording interest on bank debt after paying off
all of its bank debt on May 17, 2006.
Other expenses, net for the nine months ended September 30, 2006 were Ps.
41,008,000, a 14.1% increase compared to the Ps. 35,942,000 reported for the
same period of 2005. This increase was mainly attributable to higher expenses
related to the Company's corporate governance compliance and higher legal
expenses during 2006 compared to 2005.
For the nine months ended September 30, 2006, the Company reported income
before extraordinary item and provisions for income tax and employee profit
sharing of Ps. 168,464,000, a substantial increase from the Ps. 44,711,000
reported for the same period of 2005.
For the nine months ended September 30, 2006, the Company recorded
extraordinary income of Ps. 249,214,000, which resulted from the reversal of the
Ps. 260,050,000 provision for the contingent liability recorded by the Company
in 2003 less accumulated foreign exchange loss and interest recorded by the
Company in 2006 in relation to the provision. The Company reversed the provision
for the contingent liability after a Mexican court set aside and refused to
enforce in Mexico the arbitration award issued against the Company in an
arbitration proceeding.
For the nine months ended September 30, 2006, the Company reported income
before provisions for income tax and employee profit sharing of Ps. 417,678,000
compared to the Ps. 44,711,000 reported for the same period of 2005. During the
nine months ended September 30, 2006, the Company recorded provisions for income
tax and employee profit sharing of Ps. 45,867,000 compared to the Ps. 13,695,000
reported for the same period in 2005. This increase was primarily due to the
increase in taxable income during the first nine months of 2006 compared to the
same period of 2005.
As a result of the foregoing, the Company had net income of
Ps. 371,811,000 for the nine months ended September 30, 2006 compared to net
income of Ps. 31,016,000 for the same period of 2005.
Other Matters
During the third quarter the Company paid out Ps. 120 million in cash in
the form of a capital dividend to its shareholders in two installments: the
first in August and the second in October. This was the result of a return of
capital of the Company.
Company Description:
Grupo Radio Centro owns and/or operates 14 radio stations. Of these 14 radio
stations, Grupo Radio Centro operates 11 in Mexico City. 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, Grupo Radio
Centro-affiliated radio stations.
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.
CONSOLIDATED UNAUDITED STATEMENTS OF INCOME for the three-month
and nine-month periods ended September 30, 2006 and
2005 expressed in Mexican Pesos ("Ps.") with purchasing power as of
September 30, 2006
(figures in thousands of Ps. and U.S. dollars ("U.S. $")(1),
except per Share and per ADS amounts)
3rd Quarter Accumulated 9 months
--------------------------------------- ---------------------------------------
2006 2005 2006 2005
------------------------- ----------- ------------------------- -----------
U.S.$ U.S.$
(1) Ps. Ps. (1) Ps. Ps.
----------- ----------- ----------- ----------- ----------- -----------
Broadcasting revenue
(2) 16,529 182,073 168,170 53,885 593,550 422,964
Broadcasting expenses,
excluding
depreciation,
amortization and
corporate expenses 10,607 116,835 101,577 30,873 340,076 295,705
Broadcasting income 5,922 65,238 66,593 23,012 253,474 127,259
Depreciation and
amortization 821 9,047 8,904 2,428 26,742 28,795
Corporate, general and
administrative
expenses 297 3,271 3,187 862 9,498 9,474
Operating income 4,804 52,920 54,502 19,722 217,234 88,990
Comprehensive financing gain (cost):
Interest expense (21) (228) (7,839) (856) (9,431) (24,487)
Interest income (2) 13 146 1,296 58 636 1,578
Gain (loss) on
foreign currency
exchange, net 1 7 (53) 4 39 9,106
Gain (loss) on net
monetary position (25) (280) 2,167 90 994 5,466
(32) (355) (4,429) (704) (7,762) (8,337)
Other expenses, net (1,610) (17,731) (14,418) (3,723) (41,008) (35,942)
Income (loss) before
extraordinary item
and provisions: 3,162 34,834 35,655 15,295 168,464 44,711
Extraordinary item 274 3,016 0 22,625 249,214 0
Income (loss) before
provisions 3,436 37,850 35,655 37,920 417,678 44,711
Provisions for income
tax & employee profit
sharing 764 8,415 7,923 4,164 45,867 13,695
Net income (loss) 2,672 29,435 27,732 33,756 371,811 31,016
Net income (loss) applicable to:
Majority interest 2,674 29,456 27,738 33,750 371,742 30,998
Minority interest (2) (21) (6) 6 69 18
2,672 29,435 27,732 33,756 371,811 31,016
Net income (loss) per
Series A Share (3) 0.227 2.506 0.398
Net income (loss) per
ADS (3) 2.043 22.554 3.582
Weighted average
common shares
outstanding (000's) (3) 162,520 162,601
(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 11.0152 per U.S. dollar,
the noon buying rate for Mexican pesos on September 30, 2006.
(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 third quarter of 2006 and 2005 was Ps. 1,171,000 and Ps.
463,000, respectively. Interest earned and treated as broadcasting
revenue for the nine months ended September 30, 2006 and 2005 was Ps.
2,943,000 and Ps. 1,598,000, 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
GRUPO RADIO CENTRO, S.A. DE C.V.
CONSOLIDATED UNAUDITED BALANCE SHEETS
as of September 30, 2006 and 2005
in Mexican Pesos ("Ps.") with purchasing power as of September 30, 2006
(figures in thousands of Ps. and U.S. dollars ("U.S. $")(1), except per Share
and per ADS amounts)
September 30,
------------------------------------------
2006
--------------------------- 2005
U.S. $(1) Ps. Ps.
------------ ------------ ------------
ASSETS
Current assets:
Cash and temporary
investments 10,091 111,157 146,328
Accounts receivable:
Broadcasting, net 20,144 221,893 167,515
Other 924 10,178 5,577
Income taxes recoverable 0 0 0
21,068 232,071 173,092
Prepaid expenses 919 10,125 10,435
Total current assets 32,078 353,353 329,855
Property and equipment, net 42,053 463,221 490,358
Deferred charges, net 960 10,571 12,637
Excess of cost over book
value of net assests of
subsidiaries, net 71,150 783,734 775,838
Other assets 292 3,220 3,337
Total assets 146,533 1,614,099 1,612,025
LIABILITIES
Current:
Notes payable 0 0 58,668
Advances from customers 7,981 87,915 79,360
Suppliers and other
accounts payable 4,161 45,836 47,386
Taxes payable 7,783 85,733 27,129
Reduction in Fixed
Capital Stock Payable 4,548 50,097 0
Contingent liability 0 0 253,238
Total current
liabilities 24,473 269,581 465,781
Long-Term:
Notes payable 0 0 88,002
Reserve for labor
liabilities 4,989 54,958 41,551
Deferred taxes 1,777 19,573 29,451
Total liabilities 31,239 344,112 624,785
SHAREHOLDERS' EQUITY
Capital stock 96,845 1,066,765 1,189,604
Cumulative (deficit)
earnings 23,393 257,681 (149,600)
Reserve for repurchase of
shares 3,713 40,900 42,402
Cumulative effect of
deferred income taxes (9,128) (100,549) (100,549)
Effects from labor
liabilities (23) (258) 0
Surplus on restatement of
capital 436 4,808 4,808
Minority interest 58 640 575
Total shareholders'
equity 115,294 1,269,987 987,240
Total liabilities and
stockholders' equity 146,533 1,614,099 1,612,025
(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 11.0152 per U.S. dollar,
the noon buying rate for Mexican pesos on September 30, 2006.
IR Contacts:
In Mexico,
Pedro Beltran or Alfredo Azpeitia
Grupo Radio Centro, S.A. de C.V.
5255-5728-4800, ext. 7018
aazpeitia@grc.com.mx
In New York
Maria Barona or Peter Majeski
i-advize Corporate Communications, Inc.
1-212-406-3690
grc@advize.com.mx
SOURCE Grupo Radio Centro, S.A. de C.V.
-0- 10/23/2006
/CONTACT: Investors, in Mexico, Pedro Beltran or Alfredo Azpeitia, both of
Grupo Radio Centro, S.A. de C.V., +011-5255-5728-4800, ext. 7018, or
aazpeitia@grc.com.mx; or in New York, Maria Barona or Peter Majeski, both of
i-advize Corporate Communications, Inc., +1-212-406-3690, or
grc@advize.com.mx, for Grupo Radio Centro/
/Web site: http://www.radiocentro.com.mx /
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Grupo Radio Centro, S.A. de C.V.
(Registrant)
Date: October 23, 2006 By: /s/ Pedro Beltran Nasr
-------------------------
Name: Pedro Beltran Nasr
Title: Chief Financial Officer