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CONFORMED
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 February, 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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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: February 27, 2006 By: /s/ Pedro Beltran Nasr
-------------------------
Name: Pedro Beltran Nasr
Title: Chief Financial Officer
2
GRUPO RADIO CENTRO REPORTS FOURTH QUARTER AND YEAR-END
RESULTS FOR THE PERIOD ENDED DECEMBER 31, 2005
MEXICO CITY, Feb. 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 operating results for the fourth
quarter and year ended December 31, 2005. All figures were prepared in
accordance with generally accepted accounting principles in Mexico and have
been restated in constant pesos as of December 31, 2005.
Fourth Quarter Results
Broadcasting revenue for the fourth quarter of 2005 totaled Ps. 182,938,000,
representing a decrease of 3.5% compared to the Ps. 189,511,000 reported for the
same period of 2004. This decrease was mainly attributable to the sale of less
airtime during the fourth 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 fourth quarter of
2005 were Ps. 103,257,000, representing an increase of 11.6% compared to the Ps.
92,490,000 reported for the same period of 2004. This increase was mainly
attributable to production expenses for promotional events during the fourth
quarter of 2005, an increase in the allowance for doubtful accounts and an
increase of a reserve to cover severance payments to the Company's terminated
employees in accordance with Bulletin D-3 "Labor Obligations".
For the fourth 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.
79,681,000, a 17.9% decrease compared to broadcasting income of Ps. 97,021,000
achieved during the same period of 2004. This decrease was due primarily to the
decrease in broadcasting revenue and the increase in broadcasting expenses
described above.
Depreciation and amortization for the fourth quarter of 2005 amounted to Ps.
9,220,000, a 66.6% decrease compared to the Ps. 27,598,000 reported for the same
period of 2004. This decrease was due to the fact that the Company did not
amortize goodwill in the fourth quarter of 2005 compared to the same period in
2004 as a result of the implementation of a new accounting principle in Mexico
(Bulletin B-7 "Business Acquisitions"). Bulletin B-7 provides that, as of
January 1, 2005, the Company no longer amortizes goodwill of an acquired entity,
but instead tests goodwill for impairment at least once a year.
For the fourth quarter of 2005, the Company's corporate, general and
administrative expenses were Ps. 8,315,000, an increase of 20.3% compared to the
Ps. 6,910,000 reported for the same period of 2004. This increase was primarily
due to higher sales commissions paid during the fourth quarter of 2005.
The Company reported operating income of Ps. 62,146,000 for the fourth
quarter of 2005 compared to operating income of Ps. 62,513,000 reported for the
same period of 2004. This decrease was primarily due to the decrease in
broadcasting revenue in the fourth quarter of 2005.
The Company's comprehensive financing cost for the fourth quarter of 2005
was Ps. 5,180,000 compared to comprehensive financing income of Ps. 90,000
reported for the same period of 2004. This unfavorable change was primarily
attributable to (i) a lower gain on net monetary position (Ps. 964,000 for the
fourth quarter of 2005 compared to Ps. 8,749,000 for the same period of 2004),
which resulted from lower inflation and a slight decrease in net monetary
liabilities during the fourth quarter of 2005 compared to the same period of
2004, and (ii) a decrease in foreign currency exchange gain, net, to Ps.
1,726,000 for the fourth quarter of 2005 from Ps. 3,052,000 for the same period
of 2004, which resulted from greater appreciation of the Peso against the U.S.
Dollar in the fourth quarter of 2004 compared to the same period of 2005. These
two factors were partially offset by lower interest expense reported for the
fourth quarter of 2005 compared for the same period of 2004, which was due
primarily to (i) the fact that the Company recorded less interest relating to a
contingent liability provision in the fourth quarter of 2005 compared to the
same period of 2004 and (ii) a decrease in the Company's total bank debt from
the fourth quarter of 2004 to the fourth quarter of 2005.
For the fourth quarter of 2005, other expenses, net, were Ps. 13,932,000, an
increase of 33.6% compared to the Ps. 10,426,000 reported for the same period of
2004. This increase was mainly attributable to the fact that the Company
recognized, in the fourth quarter of 2004, income from the reappraisal of
certain real estate assets of the Company.
For the fourth quarter of 2005, the Company reported income before
provisions for income tax and employee profit sharing of Ps. 43,034,000 compared
to income before provisions for income tax and employee profit sharing of Ps.
52,177,000 reported for the same period of 2004.
The Company recorded provisions for income tax and employee profit sharing
for the fourth quarter of 2005 of Ps. 8,039,000 compared to provisions for
income tax and employee profit sharing of Ps. 20,179,000 for the same period of
2004. This 60.2% decrease was primarily due to the the application of tax loss
carryforwards in the fourth quarter of 2005.
As a result of the foregoing, the Company's net income for the fourth
quarter of 2005 was Ps. 34,995,000, a 9.4% increase compared to net income of
Ps. 31,998,000 reported for same period of 2004.
Twelve-Month Results
For the year ended December 31, 2005, broadcasting revenue was Ps.
591,124,000, a 3.7% increase compared to the Ps. 569,992,000 reported for 2004.
This increase was mainly attributable to higher advertising expenditures by the
Company's clients, which purchased more airtime during the year ended December
31, 2005 compared to 2004.
The Company's broadcasting expenses (excluding depreciation, amortization
and corporate, general and administrative expenses) for the year ended December
31, 2005 were Ps. 385,120,000, a 3.6% decrease compared to the Ps. 399,410,000
reported for 2004. This reduction in broadcasting expenses was primarily
attributable to (i) 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, and (ii) lower costs for the production of
news programs produced by the Company during the year ended December 31, 2005
compared to 2004. These two factors were partially offset by an increase in the
allowance for doubtful accounts and an increase in a reserve covering severance
payments to the Company's terminated employees in accordance with Bulletin D-3
"Labor Obligations".
Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses,
excluding depreciation, amortization and corporate, general and administrative
expenses) for the year ended December 31, 2005 was Ps. 206,004,000, representing
an increase of 20.8% compared to the Ps. 170,582,000 reported for the same
period of 2004. This increase was attributable mainly to the increase in
broadcasting revenue and the decrease in broadcasting expenses described above.
For the year ended December 31, 2005, depreciation and amortization was Ps.
37,009,000, a decrease of 63.4% compared to the Ps. 101,135,000 reported for
2004. This decrease was due to the fact that the Company did not amortize
goodwill in 2005 compared to 2004 as a result of the implementation of a new
accounting principle in Mexico (Bulletin B-7 "Business Acquisitions"). Bulletin
B-7 provides that, as of January 1, 2005, the Company no longer amortizes
goodwill of an acquired entity, but instead tests goodwill for impairment at
least once a year.
The Company's corporate, general and administrative expenses for the year
ended December 31, 2005 totalled Ps. 20,968,000, a slight decrease compared to
the Ps. 22,120,000 reported for the same period of 2004.
As a result of the foregoing, the Company reported operating income of
Ps. 148,027,000 for 2005, an increase of 212.8% compared to operating income
of Ps. 47,327,000 reported for 2004.
The Company's comprehensive financing cost for the year ended December 31,
2005 was Ps. 13,226,000, a decrease of 29.6% compared to a comprehensive
financing cost of Ps. 18,781,000 for 2004. This favorable change is mainly
attributable to a loss on foreign currency exchange, net of Ps. 2,617,000
reported for 2004 compared to a gain on foreign currency exchange, net of Ps.
10,514,000 for 2005, which resulted from the appreciation of the Peso against
the U.S. Dollar in 2005. The effect of this difference was partially offset by a
gain on net monetary position of Ps. 6,239,000 for the year ended December 31,
2005 compared to a gain on net monetary position of Ps. 15,992,000 for 2004,
which resulted primarily from (i) a lower rate of inflation for 2005 compared to
the rate of inflation for 2004 and (ii) lower net monetary liabilities in 2005
compared to net monetary liabilities in 2004.
Other expenses, net for the year ended December 31, 2005 were Ps.
48,618,000, a 1.9% increase compared to Ps. 47,721,000 reported for 2004 due
primarily to higher consultant fees paid during the year ended December 31, 2005
compared to those paid during 2004.
For the year ended December 31, 2005, the Company reported income before
provisions for income tax and employee profit sharing of Ps. 86,183,000 compared
to a loss before provisions for income tax and employee profit sharing of Ps.
19,175,000 for 2004.
During 2005, the Company recorded provisions for income tax and employee
profit sharing of Ps. 21,256,000 compared to provisions for income tax and
employee profit sharing of Ps. 20,385,000 for 2004. This increase was primarily
due to the increase in taxable income for the year ended December 31, 2005
compared to 2004, which offset the effect of the Company's application of tax
loss carryforwards.
As a result of the foregoing, the Company reported net income of
Ps. 64,927,000 for the year ended December 31, 2005 compared to a net loss of
Ps. 39,560,000 for the same period of 2004.
Other Matters:
From December 31, 2004 to December 31, 2005, the Company's total bank debt
decreased from Ps. 175.5 million to Ps. 113.2 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 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.
GRUPO RADIO CENTRO, S.A. DE C.V.
CONSOLIDATED AUDITED BALANCE SHEETS
as of December 31, 2005 and 2004,
in Mexican Pesos ("Ps.") with purchasing power as of
December 31, 2005, (figures in thousands of Ps. and U.S. dollars
("U.S. $")(1), except per Share and per ADS amounts)
December 31,
------------------------------------------
2005 2004
--------------------------- ------------
U.S. $(1) Ps. Ps.
------------ ------------ ------------
ASSETS
Current assets:
Cash and temporary investments 8,200 87,147 22,434
Accounts receivable:
Broadcasting, net 18,064 191,987 176,239
Other 494 5,256 4,884
Income tax recoverable 1,089 11,569 16,056
19,647 208,812 197,179
Guarantee deposit 0 0 595
Prepaid expenses 978 10,390 12,812
Total current assets 28,825 306,349 233,020
Long-term accounts receivable 0 0 25,158
Property and equipment, net 44,730 475,396 505,245
Deferred charges, net 1,084 11,516 7,754
Excess of cost over book
value of subsidiaries 72,224 767,597 759,848
Other assets 303 3,220 3,327
Total assets 147,166 1,564,078 1,534,352
LIABILITIES
Current:
Notes payable 5,327 56,618 58,505
Advances from customers 5,439 57,810 54,756
Other accounts payable
and accrued expenses 3,112 33,073 33,517
Taxes payable 2,461 26,151 19,849
Contingent liability 23,165 246,198 251,223
Total current liabilities 39,504 419,850 417,850
Long-Term:
Deferred income tax 3,868 41,110 37,886
Notes payable 5,327 56,618 117,011
Reserve for labor obligations 4,203 44,673 26,139
Total liabilities 52,902 562,251 598,886
STOCKHOLDERS' EQUITY
Capital stock 109,647 1,165,327 1,164,417
Retained (deficit) earnings (10,511) (111,715) (176,672)
Provision for repurchase of shares 3,921 41,675 41,149
Accumulated effect of
deferred income tax (9,266) (98,476) (98,476)
Effect from labor obligations (24) (253) (207)
Surplus on restatement of capital 443 4,709 4,709
Minority interest 54 560 546
Total stockholders' equity 94,264 1,001,827 935,466
Total liabilities and
stockholders' equity 147,166 1,564,078 1,534,352
(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.628 per U.S. dollar,
the noon buying rate for Mexican pesos on December 30, 2005, as
published by the Federal Reserve Bank of New York.
GRUPO RADIO CENTRO, S.A. DE C.V.
CONSOLIDATED AUDITED STATEMENTS OF INCOME
for the three-month and twelve-month periods ended
December 31, 2005 and 2004, expressed in Mexican Pesos ("Ps.")
with purchasing power as of December 31, 2005,
(figures in thousands of Ps. and U.S. dollars ("U.S. $")(1),
except per Share and per ADS amounts)
4th Quarter Accumulated 12 months
------------------------------------ ------------------------------------
2005 2004 2005 2004
----------------------- ---------- ----------------------- ----------
U.S.$ U.S.$
(1) Ps. Ps. (1) Ps. Ps.
---------- ---------- ---------- ---------- ---------- ----------
Broadcasting
revenue (2) 17,213 182,938 189,511 55,619 591,124 569,992
Broadcasting
expenses,
excluding
depreciation,
amortization and
corporate expenses 9,716 103,257 92,490 36,236 385,120 399,410
Broadcasting income 7,497 79,681 97,021 19,383 206,004 170,582
Depreciation and
amortization 868 9,220 27,598 3,482 37,009 101,135
Corporate, general and
administrative
expenses 782 8,315 6,910 1,973 20,968 22,120
Operating income 5,847 62,146 62,513 13,928 148,027 47,327
Comprehensive
financing (cost):
Interest expense (665) (7,072) (11,861) (2,889) (30,704) (32,733)
Interest income (2) (75) (798) 150 68 725 577
Gain (loss) on
foreign currency
exchange, net 162 1,726 3,052 989 10,514 (2,617)
Gain (loss) on net
monetary position 91 964 8,749 587 6,239 15,992
(487) (5,180) 90 (1,245) (13,226) (18,781)
Other expenses, net (1,311) (13,932) (10,426) (4,575) (48,618) (47,721)
Income (loss) before
provisions 4,049 43,034 52,177 8,108 86,183 (19,175)
Provisions for income
tax & employee
profit sharing 756 8,039 20,179 2,000 21,256 20,385
Net income (loss) 3,293 34,995 31,998 6,108 64,927 (39,560)
Net income (loss) applicable to:
Majority interest 3,293 34,998 31,983 6,107 64,913 (39,555)
Minority interest 0 (3) 15 1 14 (5)
3,293 34,995 31,998 6,108 64,927 (39,560)
Net income (loss) per
Series A Share (3) 0.038 0.399 (0.243)
Net income (loss)
per ADS (3) 0.338 3.591 (2.190)
Weighted average common
shares outstanding (000's) (3) 162,657 162,560
(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.628 per U.S. dollar,
the noon buying rate for Mexican pesos on December 30, 2005, as
published by the Federal Reserve Bank of New York.
(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 2005 and 2004 was Ps. 2,527,000 and Ps.
982,000, respectively. Interest earned and treated as broadcasting
revenue for the years ended December 31, 2005 and 2004, was Ps.
4,069,000 and Ps. 2,909,000, 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- 02/27/2006
/CONTACT: IR, Pedro Beltran or Alfredo Azpeitia, both of Grupo Radio
Centro, S.A. de C.V., +011-5255-5728-4800, ext. 7018; or Maria Barona or Peter
Majeski, both of i-advize Corporate Communications, Inc., +1-212-406-3690, or
grc@i-advize.com.mx, for Grupo Radio Centro/
/Web site: http://www.radiocentro.com.mx /
(RC)