6-K 1 v237860_6k.htm FORM 6-K Unassociated Document
 
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, 2011 Commission File Number 1-12090
 
GRUPO RADIO CENTRO, S.A.B. de C.V.
(Translation of Registrant’s name into English)
 
Constituyentes 1154, Piso 7
Col. Lomas Altas, México 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 o
 
(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 o   No x
 
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82-                                .)
 
 
 

 
 
For Immediate Release

October 21, 2011

Grupo Radio Centro Reports Results for the Third Quarter and First Nine Months of 2011

 
Mexico City, October 21, 2011 - 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 third quarter and nine months ended September 30, 2011. All figures were prepared in accordance with International Financial Reporting Standards (IFRS).

Third Quarter Results

The Company’s broadcasting revenue in third quarter 2011 totaled Ps. 255,215,000, a 12.9% increase compared to the Ps. 226,147,000 reported in third quarter 2010. This increase was mainly attributable to higher advertising expenditures by the Company’s clients in Mexico who purchased more airtime during the third quarter 2011 compared to the same period in 2010.

The Company’s broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) in third quarter 2011 totaled Ps. 175,318,000, a 1.6% increase compared to the Ps. 172,511,000 reported in third quarter 2010.  This increase was mainly attributable to: (i) higher promotion and advertising expenses and (ii) higher commissions paid to the Company’s sales force and advertising agencies due to higher broadcasting revenue, in each case, incurred during the third quarter 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) in third quarter 2011 totaled Ps. 79,897,000, a 49.0% increase compared to the Ps. 53,636,000 reported in third quarter 2010.  This increase was attributable to the increase in broadcasting revenue described above.

The Company’s depreciation and amortization expenses in third quarter 2011 totaled Ps. 6,337,000, an 8.7% increase compared to the Ps. 5,828,000 reported in third quarter 2010.  This increase was due to a correction in the amortization expenses in the third quarter 2011 compared to the same period in 2010.

The Company’s corporate, general and administrative expenses in third quarter 2011 totaled Ps. 2,808,000, the same amount reported in the third quarter 2010.
 
 
 

 
 
Grupo Radio Centro, S.A.B. de C.V.
Third Quarter 2011 Results
 
The Company’s operating income in third quarter 2011 totaled Ps. 70,752,000, a 57.2% increase compared to the Ps. 45,000,000 reported in third quarter 2010.  This increase was mainly due to the increase in broadcasting income described above.

The Company’s other expenses, net, in third quarter 2011 totaled Ps. 12,581,000, a 26.8% increase compared to the Ps. 9,925,000 reported in third quarter 2010. This increase was mainly attributable to a decrease in tax credits combined with an increase in legal expenses, in each case, during the third quarter 2011 compared to the same period in 2010.

The Company’s comprehensive financing cost in third quarter 2011 totaled Ps. 5,293,000, a slight increase compared to the Ps. 5,261,000 reported in third quarter 2010.

The Company’s income before income taxes in third quarter 2011 totaled Ps. 52,878,000, a 77.4% increase compared to the Ps. 29,814,000 reported in third quarter 2010.

The Company’s income taxes totaled Ps. 21,768,000 in third quarter 2011, a 22.1% increase compared to the Ps. 17,827,000 reported in third quarter 2010.  This increase was due to an increase in taxable income during third quarter 2011 compared to the same period in 2010.

As a result of the foregoing, the Company’s net income in third quarter 2011 totaled Ps. 31,110,000, more than double than the Ps. 11,987,000 reported in the third quarter 2010.

Nine-Month Results

The Company’s broadcasting revenue in the nine months ended September 30, 2011 totaled Ps. 674,412,000, a 12.2% increase compared to the Ps. 601,017,000 reported in the same period 2010. This increase was mainly attributable to an increase in advertising expenditures by the Company’s clients who purchased more airtime during the first nine months of 2011 than the same period in 2010.

The Company’s broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) in the first nine months 2011 totaled Ps. 513,516,000, a 2.6% increase compared to the Ps. 500,539,000 reported in the same period 2010. This increase was primarily due to (i) higher research and promotion costs, and (ii) higher commissions paid to the Company’s sales force and to advertising agencies due to higher broadcasting revenue in the first nine months 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) in the first nine months of 2011 totaled Ps. 160,896,000, a 60.1% increase compared to the Ps. 100,478,000 reported in the same period 2010.

The Company’s depreciation and amortization expenses in the first nine months 2011 totaled Ps. 17,525,000, a 3.3% decrease compared to the Ps. 18,117,000 reported in the same period 2010. This decrease was due to a reduction in the amount of depreciable assets in the first nine months 2011 compared to the same period in 2010.

The Company’s corporate, general and administrative expenses in the first nine months 2011 totaled Ps. 10,365,000, the same amount reported in the same period 2010.
 
 
 

 
 
Grupo Radio Centro, S.A.B. de C.V.
Third Quarter 2011 Results
 
As a result of the foregoing, the Company recorded operating income of Ps. 133,006,000 in the first nine months 2011, an 84.7% increase compared to the Ps. 71,996,000 reported in the same period 2010.

The Company’s other expenses, net, for the first nine months 2011 totaled Ps. 43,784,000, a 20.3% increase compared to the Ps. 36,390,000 reported in the same period 2010. This increase was mainly attributable to a decrease in tax credits combined with an increase in legal expenses in the first nine months 2011 compared to the same period in 2010.

The Company’s comprehensive cost of financing in the first nine months 2011 totaled Ps. 15,677,000, a decrease of 13.4% compared to the Ps. 18,101,000 reported in the same period 2010. This decrease was mainly attributable to a reduction in the principal amount of the Company’s loan with Banco Inbursa, S.A., combined with a reduction in the annual interest rate of the loan, from 13% through March 18, 2010 to 9.5% thereafter.

The Company’s income before income taxes in the first nine months 2011 totaled Ps. 73,545,000, a significant increase compared to the Ps. 17,505,000 reported in the same period 2010.  This increase was mainly due to the aforementioned increase in broadcasting revenue.

The Company’s income taxes in the first nine months 2011 totaled Ps. 43,344,000, a 44.5% increase compared to the Ps. 29,994,000 recorded in the same period 2010.  This increase was mainly due to an increase in taxable income during the first nine months 2011 compared to the same period in 2010.

As a result of the foregoing, the Company recorded net income of Ps. 30,201,000 during the first nine months 2011, compared to a net loss of Ps. 12,489,000 in the same period in 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 Organización Radio Centro radio stations, the Company also operates Grupo RED radio stations and Organización Impulsora de Radio (OIR), a radio network that acts as the national sales representative for, and provides programming to 110 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 México: In NY:
Pedro Beltrán / Alfredo AzpeitiaMaria 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.
Third Quarter 2011 Results
 
GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED UNAUDITED BALANCE SHEETS
as of September 30, 2011 and 2010
(figures in thousands of  Mexican pesos ("Ps.") and U.S. dollars ("U.S. $") (1)
 
   
September 30,
 
   
2011
   
2010
 
      U.S.$(1)    
Ps.
   
Ps.
 
ASSETS
                   
Current assets:
                   
  Cash and temporary investments
    10,093       135,463       38,656  
                         
Accounts receivable:
                       
  Broadcasting, net
    18,846       252,946       235,483  
  Other
    669       8,976       10,695  
  Income taxes recoverable
    133       1,782       0  
      19,648       263,704       246,178  
                         
Prepaid expenses
    2,534       34,009       65,337  
  Total current assets
    32,275       433,176       350,171  
                         
Property and equipment, net
    31,875       427,820       442,565  
Deferred charges, net
    277       3,723       5,526  
Excess of cost over book value of net assets of subsidiaries, net
    61,755       828,863       828,863  
Other assets
    253       3,404       3,338  
Total assets
    126,435       1,696,986       1,630,463  
                         
LIABILITIES
                       
Current:
                       
  Notes payable
    3,039       40,792       71,305  
  Advances from customers
    7,494       100,581       57,413  
  Suppliers and other accounts payable
    4,859       65,219       65,478  
  Taxes payable
    2,671       35,845       29,501  
     Total current liabilities
    18,063       242,437       223,697  
                         
Long-Term:
                       
  Notes payable
    4,470       60,000       100,000  
  Reserve for labor liabilities
    4,646       62,361       67,841  
  Deferred taxes
    1,776       23,842       19,545  
     Total liabilities
    28,955       388,640       411,083  
                         
SHAREHOLDERS' EQUITY
                       
Capital stock
    78,974       1,059,962       1,059,962  
Cumulative earnings
    6,352       85,256       (3,701 )
Reserve for repurchase of shares
    2,234       29,989       29,989  
Effect from Initial Adoption of IFRS
    9,896       132,821       132,821  
Controlling Interest
    97,456       1,308,028       1,219,071  
Non-controlling Interest
    24       318       309  
     Total shareholders'  equity
    97,480       1,308,346       1,219,380  
     Total liabilities and Shareholders' equity
    126,435       1,696,986       1,630,463  
                         
                         
(1) Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps. 13.4217 per U.S. dollar, the rate on September 30, 2011.
 
 
 
 

 
 
Grupo Radio Centro, S.A.B. de C.V.
Third Quarter 2011 Results
 
GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED UNAUDITED STATEMENTS OF INCOME
for the three-month and nine-month periods ended September 30, 2011 and 2010
(figures in thousands of  Mexican pesos ("Ps.") and U.S. dollars ("U.S. $")(1), except per Share and per ADS amounts)
 
   
3rd Quarter
   
Accumulated 9 months
 
   
2011
   
2010
   
2011
   
2010
 
   
U.S.$(1)
   
Ps.
   
Ps.
   
U.S.$(1)
   
Ps.
   
Ps.
 
                                     
Broadcasting revenue (2)
    19,015       255,215       226,147       50,248       674,412       601,017  
Broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses
    13,062       175,318       172,511       38,260       513,516       500,539  
Broadcasting income
    5,953       79,897       53,636       11,988       160,896       100,478  
                                                 
Depreciation and amortization
    472       6,337       5,828       1,306       17,525       18,117  
Corporate, general and administrative expenses
    209       2,808       2,808       772       10,365       10,365  
Operating income
    5,272       70,752       45,000       9,910       133,006       71,996  
                                                 
Other expenses, net
    (937 )     (12,581 )     (9,925 )     (3,262 )     (43,784 )     (36,390 )
                                                 
Comprehensive financing cost:
                                               
  Interest expense
    (365 )     (4,895 )     (5,227 )     (1,137 )     (15,266 )     (18,439 )
  Interest income (2)
    0       0       (44 )     0       2       502  
  (Loss) on foreign currency exchange, net
    (30 )     (398 )     10       (31 )     (413 )     (164 )
      (395 )     (5,293 )     (5,261 )     (1,168 )     (15,677 )     (18,101 )
                                                 
Income (loss)  before income taxes
    3,940       52,878       29,814       5,480       73,545       17,505  
                                                 
  Income taxes
    1,622       21,768       17,827       3,229       43,344       29,994  
Net income (loss)
    2,318       31,110       11,987       2,251       30,201       (12,489 )
                                                 
Net income (loss)  applicable to:
                                               
  Majority interest
    2,318       31,109       11,987       2,251       30,197       (12,494 )
  Minority interest
    0       1       0       0       4       5  
      2,318       31,110       11,987       2,251       30,201       (12,489 )
                                                 
Net income  per Series A Share (3)
                            0.047       0.6335       0.1881  
Net income  per ADS (3)
                            0.425       5.7015       1.6929  
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. 13.4217 per U.S. dollar, the rate on September 30, 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 third quarter of 2011 and 2010 was Ps. 1,215,000 and Ps. 1,126,000, respectively. Interest earned and treated as broadcasting revenue for the nine months ended September 30, 2011 and 2010 was Ps. 2,238,000 and Ps. 3,468,000, 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.
 
 
 

 
 
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.B. de C.V.
(Registrant)
 
       
Date:     October 21, 2011
By:
/s/ Pedro Beltrán Nasr   
  Name:      Pedro Beltrán Nasr  
  Title:  Chief Financial Officer