-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W2fkzeXwIgd3PXp30VxmxDqCATyrraFr+bGMTwE6oChljmfwcRFy7m2gG63bP66l R8QH5SVSypBDPQLed10lZg== 0000902561-04-000178.txt : 20040429 0000902561-04-000178.hdr.sgml : 20040429 20040429104518 ACCESSION NUMBER: 0000902561-04-000178 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040416 FILED AS OF DATE: 20040429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TV AZTECA SA DE CV CENTRAL INDEX KEY: 0001023025 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14464 FILM NUMBER: 04762919 BUSINESS ADDRESS: STREET 1: PERIFERICO SUR NO 4121 STREET 2: COL FUENTES DEL PEDREGAL CITY: 14141 MEXICO DF STATE: O5 BUSINESS PHONE: 5254201313 MAIL ADDRESS: STREET 1: PERIFERICO SUR STREET 2: 4121 COLONIA FUENTES DEL PEDREGAL CITY: MEXICO CITY STATE: NM ZIP: 14141 FORMER COMPANY: FORMER CONFORMED NAME: COMMERCIAL MEXICAN HOLDING DATE OF NAME CHANGE: 19960917 6-K 1 form6k_palmese042804.txt FORM 6-K FORM 6-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of April 2004 Commission File Number 3337776 TV Azteca, S.A. de C.V. (Translation of registrant's name into English) Periferico Sur, No. 4121, Col. Fuentes del Pedregal, 14141 Mexico D.F., Mexico (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____ NOTE: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____ NOTE: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________ 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. TV Azteca, S.A. de C.V. ----------------------- (Registrant) Date: April 29, 2004 By: /s/ OTHON FRIAS CALDERON -------------------------- Name: Othon Frias Calderon Title: Attorney-in-fact EX-99 2 form6k_ex99palmese042804.txt PRESS RELEASE TV AZTECA FIRST QUARTER EBITDA UP 8% TO A RECORD OF PS.601 MILLION (US$54 MILLION) --Net Sales Increase 8%, to All-Time High Level for a 1Q-- --136% Growth in Net Income-- FOR IMMEDIATE RELEASE MEXICO CITY, APRIL 27, 2004--TV Azteca, S.A. de C.V. (NYSE: TZA; BMV: TVAZTCA), one of the two largest producers of Spanish language television programming in the world, announced today all-time high first quarter net sales of Ps.1,539 million (US$138 million), up 8% from the same period of 2003. First quarter EBITDA was Ps.601 million (US$54 million), 8% above the same period a year ago. EBITDA represents a six-year record high for a first quarter. EBITDA margin for the quarter was 39%, the same as the prior year period. "Our solid fundamentals translate into robust profitability and ongoing tangible benefits for our stakeholders," said Pedro Padilla, Chief Executive Officer of TV Azteca. "In adherence to our plan for uses of cash, shareholders approved cash distributions of US$55 million for this year. During the quarter we also fully amortized our US$125 million note due February 15, and we expect further capital structure improvements in coming quarters." The company's plan for uses of cash entails reducing TV Azteca's debt by approximately US$250 million, and making cash distributions to shareholders above US$500 million by 2008. FIRST QUARTER RESULTS Net sales grew 8% to an all-time high level of Ps.1,539 million (US$138 million), up from Ps.1,422 million (US$127 million) for the same quarter of 2003. Total costs and expenses rose 8% to Ps.938 million (US$84 million), from Ps.865 million (US$78 million) for the same period of last year. As a result, the company reported EBITDA of Ps.601 million (US$54 million), 8% higher than Ps.557 million (US$50 million) in the first quarter of 2003, and a six-year record. Net income for the quarter was Ps.183 million (US$16 million), 136% higher than net income of Ps.78 million (US$7 million) for the same period of 2003. Millions of pesos1 and dollars 2 except percentages and per share amounts. -------------------------------------------------------------------------- 1Q 2003 1Q 2004 CHANGE US$ % -------------------------------------------------------------------------- NET SALES Pesos Ps. 1,422 PS. 1,539 US$ US$ 127 US$ 138 10 +8% EBITDA(3) Pesos Ps. 557 PS. 601 US$ US$ 50 US$ 54 4 +8% NET INCOME Pesos Ps. 78 PS. 183 US$ US$ 7 US$ 16 9 +136% INCOME PER ADS(4) Pesos Ps. 0.41 PS. 0.96 US$ US$ 0.04 US$ 0.09 0.05 +136% -------------------------------------------------------------------------- (1) Pesos of constant purchasing power as of March 31, 2004. (2) Conversion based on the exchange rate of Ps.11.15 per US dollar as of March 31, 2004. (3) EBITDA is Profit Before Depreciation and Amortization under Mexican GAAP. (4) Calculated based on 191 million ADSs outstanding as of March 31, 2004. NET SALES "Our compelling programming grid effectively reached the target audiences of our domestic clients, which was fundamental in achieving our 8% overall sales growth during the quarter," said Mario San Roman, Chief Operating Officer of TV Azteca. "Throughout the three month period our sales force experienced consistent advertising demand, and was successful in closing sizeable ad contracts for major brands in Mexico." First quarter net revenue also includes sales from Azteca America--the company's wholly-owned broadcasting network focused on the U.S. Hispanic market--of Ps.65 million (US$6 million), compared with Ps.3 million (US$0.3 million) of the same period a year ago. Azteca America revenue is composed of Ps.38 million (US$3 million) in sales from the Los Angeles station KAZA-TV, and Ps.27 million (US$2 million) from network sales. During the quarter, TV Azteca also reported sales of programming abroad of Ps.36 million (US$3 million), compared with Ps.42 million (US$4 million) of the first quarter of the prior year. The primary programs sold abroad during the quarter were the company's novelas Mirada de Mujer el Regreso, sold mostly in Central America, and La Hija del Jardinero, sold in Europe and Latin America. During the first quarter, TV Azteca reported content and advertising sales to Todito.com of Ps.70 million (US$6 million), and Ps.32 million (US$3 million) in 2 advertising sales to Unefon. In the first quarter of 2003, sales to Todito and Unefon were Ps.38 million (US$3 million) and Ps.29 million (US$3 million), respectively. In accordance with the terms of the advertising contract between Unefon and TV Azteca, during the first quarter Unefon paid to TV Azteca in cash the Ps.35 million (US$3 million) of advertising purchases placed within the prior three month period. During the quarter, barter sales were Ps.52 million (US$5 million), compared with Ps.24 million (US$2 million) in the same period of the prior year. Inflation adjustment of advertising advances was Ps.51 million (US$5 million), compared with Ps.34 million (US$3 million) for the first quarter of 2003. COSTS AND EXPENSES The 8% increase in first quarter costs and expenses resulted from the combined effect of a 12% increase in programming, production and transmission costs to Ps.665 million (US$60 million), from Ps.593 million (US$53 million) in the prior year period, and constant administration and selling expense at Ps.273 million (US$24 million). "Strategic production efforts at the Los Angeles station and Azteca America Network to optimally capture growing ad opportunities contributed to cost increases during the quarter," commented Carlos Hesles, Chief Financial Officer of TV Azteca. "The specific content production significantly boosts loyalty from target audiences within entire key day parts, resulting in superior revenue and solid prospects for sustained sales and profitability expansion." "Adding to the initiatives to capture U.S. Hispanic opportunities, not present in the prior year, we experienced difficult comparables domestically," added Mr. Hesles. "A year ago we substituted a prime-time novela with La Academia, our musical reality show, with the costs of its facilities fully amortized in prior periods, whereas this quarter we built a standard programming grid, which included an additional prime-time novela, and its associated costs." Congruent with the growing production efforts, TV Azteca increased its overall number of hours of internally produced programming during the quarter, to 2,093 from 1,960 in the same period of the previous year. The constant administration and selling expense at TV Azteca reflects controlled personnel, travel, services and operating expenses, despite increased domestic and international operations. 3 EBITDA AND NET INCOME The 8% increase in first quarter net sales, combined with the 8% growth in costs and expenses, resulted in EBITDA of Ps.601 million (US$54 million), up 8% from Ps.557 million (US$50 million) a year ago. First quarter net income increased 136% to Ps.183 million (US$16 million) from Ps.78 million (US$7 million). The increase was primarily influenced by a Ps.23 million (US$2 million) exchange gain following a 1% peso appreciation against the dollar during the quarter, compared with a Ps.96 million (US$9 million) exchange loss resulting from a 3% depreciation of the peso in the same quarter of 2003. During the quarter, the company recorded other expenses of Ps.102 million (US$9 million), compared with Ps.85 million (US$8 million) a year ago. Other expenses for the quarter were primarily composed of Ps.35 million (US$3 million) of charitable donations, Ps.36 million (US$3 million) of advisory fees, Ps.26 million (US$2 million) from the recognition of 50% of the net loss of Todito.com in TV Azteca's financial statements, and Ps.5 million (US$0 million) of the net effect of the recognition of gains from Monarcas, TV Azteca's soccer team, and other expenses. Loss on monetary position was Ps.44 million (US$4 million) compared with a loss of Ps.14 million (US$1 million) for the same period of 2003. The rise in monetary loss is explained by an increase in the company's net asset monetary position. GENERATION AND USES OF CASH "Our sound financial results translated into robust free cash generation during the quarter, which is a solid step towards our goal of US$150 million in free cash creation for the full year 2004," Mr. Hesles added. As was previously detailed, on March 10 TV Azteca collected US$17 million in cash from the 2001 credit support agreement in favor of Unefon. The remaining debt from Unefon to TV Azteca under the credit agreement, after the cash payment, is US$10 million. The company noted it has been released from any outstanding contingent liability related to the credit support agreement. Adhering to the timetable of the company's plan for uses of cash, during the quarter, TV Azteca fully amortized its US$125 million 101/8% note due February 15, 2004. The payment was composed of US$60 million from TV Azteca's cash position and US$65 million of unsecured financing obtained from financial institutions, on market terms. The company noted the solid fundamentals together with its strict adherence to the plan for uses of cash results in overall debt reduction, which translates into stronger capital structure, benefiting both shareholders and noteholders. 4 On April 15, the company's shareholders approved US$55 million in cash distributions to be paid during 2004. A payment of US$33 million is scheduled to be made on May 13, and another of approximately US$22 million on November 11. DEBT OUTSTANDING As of March 31, 2004, the company's total outstanding debt was Ps.6,056 million (US$543 million). TV Azteca's cash balance was Ps.1,975 million (US$177 million), resulting in net debt of Ps.4,081 million (US$366 million). The total debt to last twelve months (LTM) EBITDA ratio was 1.7 times, and net debt to EBITDA was 1.2 times. LTM EBITDA to net interest expense ratio was 6.1 times. The company noted that excluding--for analytical purposes--US$120 million debt due 2069, total debt was Ps.4,720 million (US$423 million), and total debt to EBITDA ratio was 1.4 times. COMPANY PROFILE TV Azteca is one of the two largest producers of Spanish language television programming in the world, operating two national television networks in Mexico, Azteca 13 and Azteca 7, through more than 300 owned and operated stations across the country. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing US Hispanic market, and Todito.com, an Internet portal for North American Spanish speakers. Except for historical information, the matters discussed in this press release are forward-looking statements and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Risks that may affect TV Azteca are identified in its Form 20-F and other filings with the US Securities and Exchange Commission. INVESTOR RELATIONS: Bruno Rangel Omar Avila 5255 3099 9167 5255 3099 0041 jrangelk@tvazteca.com.mx oavila@tvazteca.com.mx MEDIA RELATIONS: Tristan Canales Daniel McCosh 5255 3099 5786 5255 3099 0059 tcanales@tvazteca.com.mx dmccosh@tvazteca.com.mx (financial tables follow) 5 TV AZTECA, S.A. DE C.V. AND SUBSIDIARIES CONSOLIDATED RESULTS OF OPERATIONS* (MILLIONS OF MEXICAN PESOS OF MARCH 31, 2004 PURCHASING POWER)
FIRST QUARTER OF: FIRST QUARTER OF: -------------------- ----------------------- 2003 2004 2003 2004 CHANGE -------- -------- ------- ------- -------------- MILLIONS OF US DOLLARS ** ----------------------------------------- NET REVENUE PS 1,422 PS 1,539 US$ 127 100% US$ 138 100% US$ 10 8% Programming, production and transmission costs 593 665 53 42% 60 43% 6 12% Sales and administrative expenses 273 273 24 19% 24 18% -- 0% -------- -------- ------- ------- ------- EBITDA 557 601 50 39% 54 39% 4 8% Depreciation and amortization 88 97 8 9 1 -------- -------- ------- ------- ------- OPERATING PROFIT 469 504 42 33% 45 33% 3 7% -------- -------- ------- ------- ------- Other expense -Net (85) (102) (8) (9) (2) -------- -------- ------- ------- ------- Comprehensive financing cost: Interest expense (187) (184) (17) (16) 0 Other financing expense (10) (16) (1) (1) (1) Interest income 47 49 4 4 0 Exchange (loss) gain -Net (96) 23 (9) 2 11 Loss on monetary position (14) (44) (1) (4) (3) -------- -------- ------- ------- ------- Net comprehensive financing cost (260) (172) (23) (15) 8 -------- -------- ------- ------- ------- INCOME BEFORE PROVISION FOR INCOME TAX 123 230 11 9% 21 15% 10 87% Provision for income tax (45) (47) (4) (4) (0) -------- -------- ------- ------- ------- NET INCOME PS 78 PS 183 US$ 7 5% US$ 16 12% US$ 9 135% ======== ======== ======= ======= ======= -------- -------- ------- ------- ------- NET INCOME OF MINORITY STOCKHOLDERS PS 0 PS - US$ 0 US$ - US$ (0) ======== ======== ======= ======= ======= -------- -------- ------- ------- ------- NET INCOME OF MAJORITY STOCKHOLDERS PS 78 PS 183 US$ 7 5% US$ 16 12% US$ 9 136% ======== ======== ======= ======= ======= END OF PERIOD EXCHANGE RATE PS 10.76 PS 11.15
* Mexican GAAP. ** The U.S. dollar figures represent the Mexican peso amounts as of March 31, 2004 expressed as of March 31, 2004 purchasing power, translated at the exchange rate of Ps. 11.15 per U.S. dollar. 6 TV AZTECA, S.A. DE C.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS* (MILLIONS OF MEXICAN PESOS OF MARCH 31, 2004 PURCHASING POWER)
AT MARCH 31, AT MARCH 31, ---------------------- ---------------------- 2003 2004 2003 2004 CHANGE --------- --------- --------- --------- ---------------- MILLIONS OF US DOLLARS** % ----------------------------------- ---- CURRENT ASSETS: Cash and cash equivalents Ps 1,857 Ps 1,975 US$ 166 US$ 177 US$ 11 Accounts receivable 4,375 4,275 392 383 (9) Other current assets 1,078 1,084 97 97 1 TOTAL CURRENT ASSETS 7,310 7,334 655 658 2 0% Accounts receivable from Unefon 2,175 1,753 195 157 (38) Investment in Azteca America 1,215 1,440 109 129 20 Exhibition rights 1,392 1,025 125 92 (33) Property, plant and equipment-Net 2,368 2,180 212 195 (17) Television concessions-Net 3,945 3,915 354 351 (3) Invesment in Todito 315 195 28 17 (11) Other assets 948 830 85 74 (11) Invesment in Unefon 1,830 -- 164 -- (164) Invesment in Cosmofrecuencias 374 -- 34 -- (34) Goodwill -Net 667 591 60 53 (7) TOTAL LONG TERM ASSETS 15,229 11,929 1,365 1,069 (296) -22% --------- --------- --------- --------- -------- TOTAL ASSETS Ps 22,539 Ps 19,263 US$ 2,021 US$ 1,727 US$ (294) -15% ========= ========= ========= ========= ======== CURRENT LIABILITIES: Short-term debt Ps 519 Ps 776 US$ 47 US$ 70 US$ 23 Guaranteed senior notes 1,402 -- 126 -- (126) Other current liabilities 1,549 1,174 139 105 (34) TOTAL CURRENT LIABILITIES 3,470 1,950 311 175 (136) -44% LONG-TERM DEBT: Guaranteed senior notes 3,365 3,346 302 300 (2) Bank loans 37 598 3 54 50 TOTAL LONG-TERM DEBT 3,402 3,944 305 354 49 OTHER LONG TERM LIABILITIES: American Tower Corporation (due 2019) 1,343 1,336 120 120 (1) Advertising advances 4,400 4,592 394 412 17 4% Unefon advertising advance 2,236 2,072 200 186 (15) Todito advances 500 266 45 24 (21) Other long term liabilities 201 126 18 11 (7) Deferred income tax payable 27 206 2 18 16 TOTAL OTHER LONG-TERM LIABILITIES 8,707 8,598 781 771 (10) -1% --------- --------- --------- --------- -------- TOTAL LIABILITIES 15,579 14,492 1,397 1,299 (97) -7% TOTAL STOCKHOLDERS' EQUITY 6,960 4,771 624 428 (196) -31% --------- --------- --------- --------- -------- TOTAL LIABILITIES AND EQUITY Ps 22,539 Ps 19,263 US$ 2,021 US$ 1,727 US$ (294) -15% ========= ========= ========= ========= ======== End of period exchange rate Ps 10.76 Ps 11.15
* Mexican GAAP. ** The U.S. dollar figures represent Mexican peso amounts as of March 31, 2004, expressed as of March 31, 2004 purchasing power, translated at the exchange rate of Ps. 11.15 per U.S. dollar. 7 TV AZTECA, S.A. DE C.V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION MILLIONS OF MEXICAN PESOS OF MARCH 31, 2004 PURCHASING POWER FIRST QUARTER ENDED MARCH 31, ----------------------------- 2003 2004 -------- -------- OPERATIONS: - ----------- Net income Ps 79 Ps 183 Charges (credits) to results of operation not affecting resources: Amortization of goodwill 11 10 Depreciation 77 87 Equity in affiliates (37) (19) Deferred income tax - 22 Net change in accounts receivable, inventories, exhibition rights, related parties, accounts payable and accrued expenses 549 1,284 Unefon advertising advances (32) (36) Todito advertising, programming, and services advances (53) (59) Advertising advances (295) (388) -------- -------- Resources provided by operations 299 1,084 -------- -------- INVESTMENT: - ----------- Acquisition of property, machinery and equipment - Net (76) (65) -------- -------- Resources used in investing activities (76) (65) -------- -------- FINANCING: - ---------- Guaranteed senior notes 101 (1,502) Bank loans - Net 62 (76) Stock options exercised - 14 -------- -------- Resources provided by (used in) financing activities 163 (1,564) -------- -------- Increase (decrease) in cash and cash equivalents 386 (545) Cash and cash equivalents at beginning of period 1,471 2,520 -------- -------- Cash and cash equivalents at end of period Ps 1,857 Ps 1,975 -------- -------- 8 -----END PRIVACY-ENHANCED MESSAGE-----