Tuesday, February 24, 2009

Grupo Radio Centro Reports Fourth Quarter and Year-End Results for the Period Ended December 31, 2008

MEXICO CITY, Feb. 23 /PRNewswire-FirstCall/ -- 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 operation for the fourth quarter and year ended December 31, 2008. All figures were prepared in accordance with the Mexican Financial Reporting Standards ("MFRS") issued by the Mexican Board for Research and Development of Financial Information Standards.

Fourth Quarter Results

Broadcasting revenue for the fourth quarter of 2008 was Ps. 231,342,000, representing an increase of 15.0% compared to the Ps. 201,177,000 reported in the fourth quarter of 2007. This increase was mainly attributable to higher advertising expenditures by the Company's clients, who purchased more airtime in the fourth quarter of 2008 compared to the same period of 2007. This was a result of a highly competitive environment, in which the Company sought to gain market share by offering attractive sales packages, as well as increasing the size of the Company's sales force.

The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the fourth quarter of 2008 were Ps. 124,842,000, representing an increase of 17.9% compared to the Ps. 105,869,000 reported in the fourth quarter of 2007. This increase was primarily due to increased expenses related to expanded advertising campaigns undertaken by the Company during the fourth quarter of 2008 and higher sales commissions paid to the Company's sales force as a result of the increase in advertising sales. In addition, we had an increase in costs payable in U.S. dollars due to the depreciation of the Mexican peso against the U.S. dollar in the fourth quarter of 2008, specifically with regard to the five-year renewal of our agreement to operate XHFO-FM and the rental payments related to such operation.

For the fourth quarter of 2008, the Company reported broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) of Ps. 106,500,000, an 11.7% increase compared to the Ps. 95,308,000 reported in the fourth quarter of 2007. This increase in broadcasting income was mainly attributable to the increase in broadcasting revenue described above.

Depreciation and amortization expenses for the fourth quarter of 2008 were Ps. 7,944,000, a 2.9% increase compared to the Ps. 7,720,000 reported in the fourth quarter of 2007.

The Company's corporate, general and administrative expenses were Ps. 4,461,000 in the fourth quarter of 2008, a decrease of 6.8% compared to the Ps. 4,789,000 reported in the fourth quarter of 2007.

The Company reported operating income of Ps. 94,095,000 in the fourth quarter of 2008, a 13.6% increase compared to the Ps. 82,799,000 in operating income reported in the fourth quarter of 2007. This increase was due to the increased broadcasting revenue during the fourth quarter 2008 compared to the fourth quarter of 2007, as described above.

During the fourth quarter of 2008, other expenses, net, were Ps. 17,539,000, a 27.6% increase compared to the Ps. 13,743,000 reported in the fourth quarter of 2007. This increase was mainly attributable to higher legal expenses during the fourth quarter of 2008 compared to the same period of 2007.

The Company's comprehensive financing cost in the fourth quarter of 2008 was Ps. 1,825,000 compared to the Ps. 679,000 reported in the fourth quarter of 2007. This increase was mainly attributable to higher fees payable in U.S. dollars under our undrawn credit facility in the fourth quarter of 2008 compared to the fourth quarter of 2007

For the fourth quarter of 2008, the Company reported income before taxes of Ps. 74,731,000, an increase of 9.3% compared to the Ps. 68,377,000 reported in the fourth quarter of 2007, primarily from the increase in broadcasting income during the fourth quarter of 2008, as described above.

The Company recorded income taxes of Ps. 17,038,000 in the fourth quarter of 2008, a decrease of 25.7% compared to the Ps. 22,923,000 recorded in the fourth quarter of 2007 due to certain fiscal deductions taken for tax purposes.

As a result of the foregoing, the Company's net income for the fourth quarter of 2008 was Ps. 57,693,000, an increase of 26.9% compared to net income of Ps. 45,454,000 reported in the fourth quarter of 2007.

Twelve-Month Results

For the year ended December 31, 2008, broadcasting revenue was Ps. 735,105,000, representing a 12.3% increase compared to the Ps. 654,760,000 reported in the same period of 2007. The increase in broadcasting revenue was mainly attributable to an increase in advertising expenditures by the Company's clients, who purchased more airtime during 2008 than 2007. This was the result of a highly competitive environment, in which the Company sought to gain market share by offering attractive sales packages, as well as increasing the size of its sales force.

The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the year ended December 31, 2008 were Ps. 452,350,000, an increase of 7.2% compared to the Ps. 421,970,000 reported in 2007. This increase was primarily due to (i) expenses related to extensive advertising campaigns undertaken by the Company; (ii) higher sales commissions to the Company's sales force, as a result of the increase in broadcasting revenues; and (iii) higher expenses related to the Company's market research in 2008 compared to 2007.

Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the year ended December 31, 2008 was Ps. 282,755,000, an increase of 21.5% compared to the Ps. 232,790,000 reported 2007. This increase was mainly attributable to the increase in broadcasting revenue, as described above.

Depreciation and amortization expenses for the year ended December 31, 2008 were Ps. 31,720,000, a decrease of 5.8% compared to the Ps. 33,687,000 reported in 2007. This decrease was due to the Company no longer recording depreciation on certain Company assets whose useful lives have ended.

The Company's corporate, general and administrative expenses for the year ended December 31, 2008 were Ps. 14,461,000, a 2.1% decrease compared to the Ps. 14,774,000 reported in 2007.

As a result of the foregoing, the Company reported operating income of Ps. 236,574,000 for the year ended December 31, 2008, a 28.3% increase compared to the Ps. 184,329,000 reported in 2007.

Other expenses, net, for the year ended December 31, 2008 were Ps. 56,880,000, a 24.2% increase compared to the Ps. 45,806,000 reported in 2007. This increase was mainly attributable to higher legal expenses during 2008 compared to 2007.

The Company's comprehensive financing cost for 2008 was Ps. 7,678,000, a 31.2% increase compared to the Ps. 5,850,000 reported in 2007. This increase was mainly due to fees paid in connection with the amendment of the Company's credit facility in 2008. The increase in comprehensive financing cost was partially offset by the fact that the Company did not record a loss on its net monetary position in 2008 (due to a change in MFRS regarding inflation accounting), as compared to a loss on net monetary position of Ps. 3,477,000 recorded in 2007.

For the year ended December 31, 2008, the Company reported income before taxes of Ps. 172,016,000, a 29.7% increase compared to the Ps. 132,673,000 reported in 2007, mainly due to an increase in broadcasting revenue, as described above.

The Company recorded income taxes of Ps. 45,251,000 for the year ended December 31, 2008, compared to Ps. 41,554,000 recorded in 2007, primarily due to higher taxable income.

As a result of the foregoing, the Company reported net income of Ps. 126,765,000 for the year ended December 31, 2008, an increase of 39.1% compared to net income of Ps. 91,119,000 reported in 2007.

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 or 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 Mexico:
    Pedro Beltran/Alfredo Azpeitia
    Grupo Radio Centro, S.A.B. de C.V.
    Tel: (5255) 5728-4800 Ext. 7018
    aazpeitia@grc.com.mx

    In NY:
    Maria Barona/Peter Majeski
    i-advize Corporate Communications, Inc.
    Tel: (212) 406-3690
    grc@i-advize.com.mx.



                      GRUPO RADIO CENTRO, S.A.B. DE C.V.
                     CONSOLIDATED AUDITED BALANCE SHEETS
                     as of December 31, 2008 and 2007 (1)
              (figures in thousands of Mexican pesos ("Ps.") and
                         U.S. dollars ("U.S. $") (2)

                                         December 31,
                                         2008           2007
                               U.S. $(2)      Ps.         Ps.
             ASSETS
    Current assets:
      Cash and temporary
       investments                6,727     93,054    167,011

    Accounts receivable:
      Broadcasting, net          21,768    301,101    195,707
      Other                         450      6,225      4,663
      Prepaid taxes                 217      3,007          0
                                 22,435    310,333    200,370

    Prepaid expenses              2,760     38,179     33,360
      Total current assets       31,922    441,566    400,741

    Property and equipment, net  33,620    465,034    461,555
    Deferred charges, net           351      4,850      6,047
    Excess of cost over book
     value of net assets of
     subsidiaries, net           59,924    828,863    828,863
    Other assets                    240      3,325      3,239
          Total assets          126,057  1,743,638  1,700,445

          LIABILITIES
    Current:
      Advances from customers    10,305    142,543    124,418
      Suppliers and other
       accounts payable           4,872     67,388     55,420
      Taxes payable               1,363     18,859     50,847
         Total current
          liabilities            16,540    228,790    230,685

    Long-Term:
      Reserve for labor
       liabilities                4,358     60,276     58,605
      Deferred taxes              1,575     21,782      5,130
          Total liabilities      22,473    310,848    294,420

      SHAREHOLDERS' EQUITY
    Capital stock                81,724  1,130,410  1,130,410
    Cumulative earnings          18,639    257,818    231,098
    Reserve for repurchase of
     shares                       3,169     43,837     43,837
    Majority shareholders'
     equity                     103,532  1,432,065  1,405,345
    Minority interest                52        725        680
         Total shareholders'
          equity                103,584  1,432,790  1,406,025
     Total liabilities and
      shareholders' equity      126,057  1,743,638  1,700,445

(1) Amounts for the fourth quarter 2007 are expressed in Mexican pesos with purchasing power as of December 31, 2007. As a result of a change in MFRS for periods beginning in 2008, we have not prepared 2008 amounts using inflation accounting or re-expressed 2007 amounts as of December 31, 2008.

(2) Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps. 13.832 per U.S. dollar, the noon buying rate for Mexican pesos on December 31, 2008 as published by Federal Reserve Bank of New York.


                      GRUPO RADIO CENTRO, S.A.B. DE C.V.
                  CONSOLIDATED AUDITED STATEMENTS OF INCOME
              for the three-month and twelve-month periods ended
                        December 31, 2008 and 2007 (1)
       (figures in thousands of  Mexican pesos ("Ps.") and U.S. dollars
             ("U.S. $")(2), except per Share and per ADS amounts)

                                 4th Quarter          Accumulated 12 months
                                 2008        2007          2008        2007
                        U.S.$ (2)    Ps.      Ps.   U.S.$ (1)  Ps.      Ps.

    Broadcasting revenue
     (3)                   16,725  231,342  201,177  53,145  735,105  654,760
    Broadcasting expenses,
     excluding
     depreciation,
     amortization and
     corporate, general
     and administrative
     expenses               9,026  124,842  105,869  32,703  452,350  421,970
    Broadcasting income     7,699  106,500   95,308  20,442  282,755  232,790

    Depreciation and
     amortization             574    7,944    7,720   2,293   31,720   33,687
    Corporate, general and
     administrative
     expenses                 323    4,461    4,789   1,045   14,461   14,774
    Operating income        6,802   94,095   82,799  17,104  236,574  184,329

    Other expenses, net    (1,268) (17,539) (13,743) (4,112) (56,880) (45,806)

    Comprehensive
     financing cost:
      Interest expense       (165)  (2,276)    (755)   (606)  (8,376)  (2,767)
      Interest income (3)      (2)     (34)     (85)     16      228      399
      (Loss) Gain on
       foreign currency
       exchange, net           35      485      (12)     34      470       (5)
      (Loss) Gain on net
       monetary position (4)    0        0      173       0        0   (3,477)
                             (132)  (1,825)    (679)   (556)  (7,678)  (5,850)

    Income before
     income taxes:          5,402   74,731   68,377  12,436  172,016  132,673

      Income taxes          1,232   17,038   22,923   3,271   45,251   41,554
    Net income              4,170   57,693   45,454   9,165  126,765   91,119

    Net income applicable
     to:
      Majority interest     4,169   57,673   45,443   9,162  126,720   91,098
      Minority interest         1       20       11       3       45       21
                            4,170   57,693   45,454   9,165  126,765   91,119

    Net income per Series
     A Share (5)                                     0.0563   0.7790   0.5598
    Net income per ADS (5)                           0.5067   7.0110   5.0382
    Weighted average
     common shares
     outstanding (000's) (5)                                 162,725  162,725

    (1)  Amounts for the fourth quarter 2007 are expressed in Mexican pesos
    with purchasing power as of December 31, 2007. As a result of a change in
    MFRS for periods beginning in 2008, we have not prepared 2008 amounts
    using inflation accounting or re-expressed 2007 amounts as of December 31,
    2008.

    (2)  Peso amounts have been translated into U.S. dollars, solely for the
    convenience of the reader, at the rate of Ps. 13.832 per U.S. dollar, the
    noon buying rate for Mexican pesos on December 31, 2008, as published by
    Federal Reserve Bank of New York.

    (3)  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 2008 and 2007 was Ps. 2,130,000 and Ps. 1,848,000, respectively.
    Interest earned and treated as broadcasting revenue for the twelve months
    ended December 31, 2008 and 2007 was Ps. 6,510,000 and Ps. 3,333,000,
    respectively.

    (4) As a result of a change in MFRS for periods beginning in 2008, we will
    no longer use inflation accounting unless the economic environment is
    "inflationary", as defined by MFRS. Since the economic environment was not
    inflationary in the fourth quarter 2008, we have not reported gain (loss)
    on net monetary position for this period.

    (5) 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.

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