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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, 2005 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
2005
MEXICO CITY, Oct. 27 /PRNewswire-FirstCall/ -- Grupo Radio Centro, S.A. de
C.V. (NYSE: RC) (BMV: RCENTRO-A) (the "Company"), Mexico's leading radio
broadcasting company, announced today its results of operations for the third
quarter and nine months ended September 30, 2005. All figures were prepared in
accordance with generally accepted accounting principles in Mexico and have
been restated in constant pesos as of September 30, 2005.
Third Quarter Results
Broadcasting revenue for the third quarter of 2005 was Ps. 161,150,000,
representing an increase of 18.1% compared to Ps. 136,430,000 reported for the
same period of 2004. This increase was mainly attributable to higher advertising
expenditures by the Company's principal clients during the third quarter of 2005
compared to the same period of 2004.
The Company's broadcasting expenses (excluding depreciation, amortization
and corporate, general and administrative expenses) for the third quarter of
2005 were Ps. 95,600,000, representing a decrease of 1.0% compared to Ps.
96,531,000 reported for the same period of 2004. This decrease was mainly
attributable to lower costs for the production of the Company's news programs
during the third quarter of 2005 compared to the same period of 2004.
For the third quarter of 2005, the Company reported broadcasting income
(i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation,
amortization and corporate, general and administrative expenses) of Ps.
65,550,000, representing an increase of 64.3% compared to broadcasting income of
Ps. 39,899,000 reported for the same period in 2004. This increase was mainly
attributable to the increase in broadcasting revenue described above.
Depreciation and amortization for the third quarter of 2005 amounted to Ps.
8,504,000, a 65.7% decrease compared to Ps. 24,788,000 reported for the same
period of 2004. This decrease was due to the implementation of a new accounting
principle in Mexico (Bulletin B-7 "Adquisicion de Negocios"). As a result, the
Company no longer amortizes goodwill as of January 1, 2005, but instead tests
goodwill for impairment at least once a year.
For the third quarter of 2005, the Company's corporate, general and
administrative expenses were Ps. 4,603,000 compared to Ps. 2,625,000 reported
for the same period of 2004. The difference was due to the fact that the amount
of revenue-based compensation paid to the Company's executives during 2004 was
lower than usual.
The Company reported operating income of Ps. 52,443,000 for the third
quarter of 2005 compared to operating income of Ps. 12,486,000 reported for the
same period of 2004. The significant increase in operating income resulted
primarily from (i) higher advertising expenditures by the Company's principal
clients during the third quarter of 2005 compared to the same period of 2004 and
(ii) the implementation of a new accounting principle that eliminates
amortization of goodwill.
The Company's comprehensive financing cost for the third quarter of 2005 was
Ps. 4,257,000 compared to a comprehensive financing cost of Ps. 84,000 reported
for the same period of 2004. This unfavorable change was primarily attributable
to (i) a gain on net monetary position of Ps. 2,076,000 for the third quarter of
2005 compared to a Ps. 5,778,000 gain on net monetary position for the same
period of 2004, which resulted from lower inflation and a slight decrease in net
monetary liabilities during the third quarter of 2005 compared to the same
period of 2004, and (ii) higher interest expense reported for the third quarter
of 2005 compared to the same period of 2004, which resulted from the accrual of
interest on a contingent liability provision that the Company began recording in
the fourth quarter of 2004. These two factors were partially offset by an
increase in interest income resulting from higher balances in the Company's
interest-bearing cash accounts during the third quarter of 2005 compared to the
same period of 2004.
For the third quarter of 2005, other expenses, net were Ps. 13,817,000, a
decrease of 5.8% compared to Ps. 14,669,000 reported for the same period of
2004. This decrease was mainly attributable to lower legal expenses during the
third quarter of 2005 compared to the same period of 2004.
For the third quarter of 2005, the Company reported income before provisions
for income tax and employee profit sharing of Ps. 34,369,000 compared to a loss
before provisions for income tax and employee profit sharing of Ps. 2,267,000
reported for the same period of 2004.
The Company recorded a provision for income tax and employee profit sharing
for the third quarter of 2005 of Ps. 7,621,000 compared to a provision for
income tax and employee profit sharing of Ps. 3,070,000 for the same period of
2004.
As a result of the foregoing, the Company's net income for the third
quarter 2005 was Ps. 26,748,000 compared to a net loss of Ps. 5,337,000
reported for same period of 2004.
Nine Months Results
For the nine months ended September 30, 2005, broadcasting revenue was Ps.
408,186,000, a 7.3% increase compared to Ps. 380,481,000 reported for the same
period of 2004. This increase was mainly attributable to higher advertising
expenditures by the Company's principal clients during the nine months ended
September 30, 2005 compared to the same period of 2004.
The Company's broadcasting expenses (excluding depreciation, amortization
and corporate, general and administrative expenses) for the nine months ended
September 30, 2005 were Ps. 281,863,000, a 8.2% decrease compared to Ps.
306,920,000 reported for the same period of 2004. This decrease in broadcasting
expenses was primarily attributable to lower news programming production costs,
which resulted from the termination of news programming produced for the Company
by a third party at the end of the first quarter of 2004, as well as lower costs
for the production of news programs produced by the Company during the nine
months ended September 30, 2005 compared to the same period of 2004.
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, 2005 was Ps. 126,323,000,
representing an increase of 71.7% compared to Ps. 73,561,000 reported for the
same period of 2004. This increase was mainly attributable to the increase in
broadcasting revenue described above combined with the decrease in broadcasting
expenses described above.
For the nine months ended September 30, 2005, depreciation and amortization
was Ps. 27,789,000, a decrease of 62.2% compared to Ps. 73,537,000 reported for
the same period of 2004. This decrease was due to the implementation of a new
accounting principle in Mexico (Bulletin B-7 "Adquisicion de Negocios"). As a
result, the Company no longer amortizes goodwill as of January 1, 2005, but
instead tests goodwill for impairment at least once a year.
The Company's corporate, general and administrative expenses for the nine
months ended September 30, 2005 were Ps. 12,653,000, a decrease of 16.8%
compared to Ps. 15,210,000 reported for the same period of 2004. This decrease
was mainly due to (i) the Company recording the compensation of an executive
officer in costs of personnel (which is included in broadcasting expenses)
during the second and third quarter of 2005 instead of in corporate, general and
administrative expenses, the effect of which offset the increase in corporate,
general and administrative expenses during the third quarter of 2005 compared to
the same period of 2004, described above, and, to a lesser extent, (ii) lower
fees paid by the Company to a third party that ceased production of news
programs for the Company at the end of the first quarter of 2004.
As a result of the foregoing, the Company reported operating income of Ps.
85,881,000 for the nine months ended September 30, 2005 compared to an operating
loss of Ps. 15,186,000 reported for the same period of 2004.
The Company's comprehensive financing cost for the nine months ended
September 30, 2005 was Ps. 8,046,000, a decrease of 57.4% compared to a
comprehensive financing cost of Ps. 18,871,000 for the same period of 2004. This
favorable change is mainly attributable to a gain on foreign currency exchange,
net of Ps. 8,788,000 reported for the nine months ended September 30, 2005
compared to a loss on foreign currency exchange, net of Ps. 5,669,000 for the
same period of 2004, which resulted from the appreciation of the Peso against
the U.S. Dollar. The gain on foreign currency exchange, net for the nine months
ended September 30, 2005 was partially offset by (i) an increase in interest
expense resulting from the accrual of interest on a contingent liability
provision that the Company began recording in the fourth quarter of 2004 and
(ii) a gain on net monetary position of Ps. 5,275,000 for the nine months ended
September 30, 2005 compared to a gain on net monetary position of Ps. 7,243,000
for the same period of 2004.
Other expenses, net, for the nine months ended September 30, 2005 were Ps.
34,686,000, a 7.0% decrease compared to Ps. 37,295,000 reported for the same
period of 2004. This decrease is mainly attributable to lower legal expenses
during the nine months ended September 30, 2005 compared to the same period of
2004.
For the nine months ended September 30, 2005, the Company reported income
before provisions for income tax and employee profit sharing of Ps. 43,149,000
compared to a loss before provisions for income tax and employee profit sharing
of Ps. 71,352,000 reported for the same period in 2004. During the nine months
ended September 30, 2005, the Company recorded a provision for income tax and
employee profit sharing of Ps. 13,217,000 compared to a provision for income tax
and employee profit sharing of Ps. 206,000 for the same period in 2004.
As a result of the foregoing, the Company had net income of Ps. 29,932,000
for the nine months ended September 30, 2005 compared to a net loss of Ps.
71,558,000 for the same period of 2004.
Other Matters:
From September 30, 2004 to September 30, 2005, the Company's total bank
debt decreased from Ps. 205.7 million to Ps. 141.5 million as a result of
scheduled payments.
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 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.
GRUPO RADIO CENTRO, S.A. DE C.V.
CONSOLIDATED UNAUDITED BALANCE SHEETS
as of September 30, 2005 and 2004
in Mexican Pesos ("Ps.") with purchasing power as of September 30, 2005
(figures in thousands of Ps. and U.S. dollars ("U.S. $")(1), except per Share
and per ADS amounts)
September 30,
---------------------------------------
2005 2004
------------------------- -----------
U.S. $(1) Ps. Ps.
----------- ----------- -----------
ASSETS
Current assets:
Cash and temporary investments 13,016 141,216 63,587
Accounts receivable:
Broadcasting, net 14,900 161,662 126,425
Other 496 5,382 8,590
Income tax recoverable 0 0 24,945
15,396 167,044 159,960
Guarantee deposit 0 0 2,392
Prepaid expenses 928 10,070 9,276
Total current assets 29,340 318,330 235,215
Property and equipment, net 43,617 473,225 492,645
Deferred charges, net 1,124 12,196 14,961
Excess of cost over book value of
subsidiaries 69,011 748,730 766,638
Other assets 297 3,220 3,343
Total assets 143,389 1,555,701 1,512,802
LIABILITIES
Current:
Notes payable 5,218 56,618 58,766
Advances from customers 7,059 76,587 46,503
Other accounts payable and accrued
expenses 4,215 45,732 44,544
Taxes payable 2,413 26,181 14,531
Contingent liability 22,525 244,390 248,900
Total current liabilities 41,430 449,508 413,244
Long-Term:
Deferred income tax 2,620 28,422 27,466
Notes payable 7,828 84,927 146,916
Reserve for labor obligations 3,696 40,099 31,838
Total liabilities 55,574 602,956 619,464
STOCKHOLDERS' EQUITY
Capital stock 105,815 1,148,039 1,146,820
Retained (deficit) earnings (13,307) (144,373) (201,891)
Provision for repurchase of shares 3,772 40,920 40,281
Accumulated effect of deferred
income tax (8,944) (97,036) (97,036)
Surplus on restatement of capital 428 4,640 4,640
Minority interest 51 555 524
Total stockholders' equity 87,815 952,745 893,338
Total liabilities and stockholders'
equity 143,389 1,555,701 1,512,802
(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.8495 per U.S. dollar, the
noon buying rate for Mexican pesos on September 30, 2005.
GRUPO RADIO CENTRO, S.A. DE C.V.
CONSOLIDATED UNAUDITED STATEMENTS OF INCOME
For the three-month and nine-month periods ended September 30, 2005 and 2004
Expressed in Mexican Pesos ("Ps.") with purchasing power as of September 30,
2005 (figures in thousands of Ps. and U.S. dollars ("U.S. $")(1), except per
Share and per ADS amounts)
3rd Quarter Accumulated 9 months
--------------------------------------- ---------------------------------------
2005 2004 2005 2004
------------------------- ----------- ------------------------- -----------
U.S.$ U.S.$
(1) Ps. Ps. (1) Ps. Ps.
----------- ----------- ----------- ----------- ----------- -----------
Broadcasting revenue(2) 14,853 161,150 136,430 37,623 408,186 380,481
Broadcasting expenses,
excluding depreciation,
amortization and corporate
expenses 8,811 95,600 96,531 25,979 281,863 306,920
Broadcasting income 6,042 65,550 39,899 11,644 126,323 73,561
Depreciation and
amortization 784 8,504 24,788 2,561 27,789 73,537
Corporate general and
administrative expenses 424 4,603 2,625 1,166 12,653 15,210
Operating income (loss) 4,834 52,443 12,486 7,917 85,881 (15,186)
Comprehensive financing
(cost):
Interest expense (690) (7,491) (5,991) (2,178) (23,632) (20,872)
Interest income(2) 115 1,250 148 140 1,523 427
Gain (loss) on foreign
currency exchange, net (8) (92) (19) 810 8,788 (5,669)
Gain (loss) on net monetary
position 191 2,076 55,778 486 5,275 7,243
(392) (4,257) (84) (742) (8,046) (18,871)
Other expenses, net (1,274) (13,817) (14,669) (3,197) (34,686) (37,295)
Income (loss) before
provisions: 3,168 34,369 (2,267) 3,978 43,149 (71,352)
Provisions for income tax
& employee profit sharing 702 7,621 3,070 1,218 13,217 206
Net income (loss) 2,466 26,748 (5,337) 2,760 29,932 (71,558)
Net income (loss) applicable to:
Majority interest 2,467 26,754 (5,329) 2,758 29,915 (71,538)
Minority interest (1) (6) (8) 2 17 (20)
2,466 26,748 (5,337) 2,760 29,932 (71,558)
Net (loss) income per Series A Share(3) 0.035 0.384 (2.383)
Net (loss) income per ADS(3) 0.315 3.456 (21.447)
Weighted average common
shares outstanding (000's)(3) 162,602 162,606
1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.8495 per U.S. dollar, the
noon buying rate for Mexican pesos on September 30, 2005.
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 2005 and 2004
was Ps. 441,000 and Ps. 542,000, respectively. Interest earned and treated
as broadcasting revenue for the nine months ended September 30, 2005 and
2004 was Ps. 1,542,000 and Ps. 1,927,000, 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. de C.V.
-0- 10/27/2005
/CONTACT: In Mexico: Pedro Beltran, or Alfredo Azpeitia, both of Grupo
Radio Centro, S.A. de C.V., 5255-5728-4800 Ext. 7018, aazpeitia@grc.com.mx; In
NY: Maria Barona, or Peter Majeski, both of i-advize Corporate Communications,
Inc. for Grupo Radio Centro, +1-212-406-3690, grc@i-advize.com.mx/
/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 28, 2005 By: /s/ Pedro Beltran Nasr
-------------------------
Name: Pedro Beltran Nasr
Title: Chief Financial Officer