Exhibit 99.1
[ICON] GRUPO
RADIO
CENTRO
Earnings
Release
IR Contacts:
In Mexico:
Pedro Beltran / Alfredo Azpeitia.
Grupo Radio Centro, S.A. de C.V.
Tel: 5255-57-28-48 81 or
5255-57 28-49-11
In New York:
Maria Barona
Bianca Hirani
i-advize Corporate
Communications, Inc.
Tel: (212) 406-3690
Email: grc@i-advize.com
[LOGO] NYSE [SEAL] Mexico
For Immediate Release
July 22, 2003
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GRUPO RADIO CENTRO ANNOUNCES
SECOND QUARTER AND FIRST HALF RESULTS FOR 2003
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Mexico City, July 22, 2003 - Grupo Radio Centro, S.A. de C.V. (BMV: RCENTRO-A,
NYSE: RC) (the "Company"), Mexico's leading radio broadcasting company,
announced today its results of operations for the second quarter and first half
ended June 30, 2003. All figures were prepared in accordance with generally
accepted accounting principles in Mexico and have been restated in constant
pesos as of June 30, 2003.
Second Quarter Results
For the three months ended June 30, 2003, broadcasting revenue was Ps.
255,617,000, a 40.3% increase compared to Ps. 182,139,000 reported during the
same period of 2002. This increase was mainly due to advertising expenditures
from political parties in connection with the congressional elections that took
place on July 6, 2003.
The Company's broadcasting expenses (excluding depreciation, amortization and
corporate, general and administrative expenses) for the three months ended June
30, 2003 were Ps. 130,960,000, essentially unchanged from Ps. 131,169,000
reported for the same period of 2002.
Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses,
excluding depreciation, amortization and corporate, general and administrative
expenses) for the three months ended June 30, 2003 was Ps. 124,657,000, an
increase of 144.6% compared to Ps. 50,970,000 reported for the same period of
2002, mainly as a result of the increase in broadcasting revenue.
Depreciation and amortization for the second quarter of 2003 amounted to Ps.
27,199,000, compared to Ps. 24,170,000 reported for the same period of 2002.
This rise was mainly due to the accelerated amortization of goodwill associated
with the purchase of one of the Company's subsidiaries that was discontinued
during the second quarter of 2003.
Grupo Radio Centro, S.A. de C.V.
Second Quarter 2003 Results
Page 2 of 4
The Company's corporate, general and administrative expenses for the three
months ended June 30, 2003 were Ps. 17,195,000, compared to Ps. 12,043,000
reported for the same period of 2002. This 42.8% increase was attributable to
higher corporate and administrative fees paid to Infored relating to the
variable expenses for the production of the Monitor radio news program as a
result of the increase in broadcasting revenues during the second quarter of
2003.
The Company's operating income for the second quarter of 2003 was Ps.
80,263,000, an increase of 443.9% compared to Ps. 14,757,000 reported for the
same period of 2002. This growth resulted from the increase in broadcasting
income as a result of the increase in broadcasting revenue.
The Company's comprehensive financing cost for the three months ended June 30,
2003 was Ps. 6,981,000, a decrease of 83.0% compared to comprehensive financing
cost of Ps. 41,064,000 reported for the same period in 2002. This favorable
change is primarily attributable to a substantial decrease in foreign exchange
loss, net, from Ps. 37,599,000 during the second quarter of 2002 to Ps. 218,000
in the second quarter of 2003, mainly as a result of the conversion of the
Company's U.S. dollar-denominated bank loans to Mexican peso-denominated bank
loans during the fourth quarter of 2002.
Other expenses, net, for the three months ended June 30, 2003 were Ps.
17,256,000, compared to Ps. 15,081,000 reported for the same period of 2002.
This 14.4% increase is primarily attributable to expenses related to the
exchange of certain ordinary participation certificates of the Company for
underlying Series A shares of the Company and the amendment of the trust
arrangements relating to the Company's ordinary participation certificates,
which took place on June 29, 2003 and to severance payments resulting from a
personnel reduction in the second quarter of 2003.
For the second quarter of 2003, the Company's income before provisions for
income tax and employee profit sharing was Ps. 56,026,000, compared to the
Company's loss before provisions of Ps. 41,388,000 reported for the same period
in 2002. Due to the loss before provisions during the second quarter of 2002,
the Company recorded no provisions for income tax and employee profit sharing
compared to provisions for income tax and employee profit sharing of Ps.
2,050,000 for the same period in 2003.
As a result of the foregoing, the Company reported net income for the second
quarter of 2003 of Ps. 53,976,000, compared to a net loss of Ps. 41,388,000
reported for the same period of 2002.
First Half Results
For the six months ended June 30, 2003, broadcasting revenue was Ps.
443,585,000, a 44.8% increase compared to Ps. 306,285,000 reported for the same
period of 2002. This increase was mainly attributable to higher advertising
expenditures from political parties, which rose in connection with the
congressional elections that took place on July 6, 2003.
The Company's broadcasting expenses (excluding depreciation, amortization and
corporate, general and administrative expenses) during the first half of 2003
were Ps. 241,949,000, a 5.5% decrease compared to Ps. 255,985,000 reported for
the same period of 2002. This decrease in broadcasting expenses is primarily
attributable to lower operating expenses in connection with the cancellation of
unprofitable programming, and a reduction in personnel expenses during the
second quarter of 2003 compared with the same period of 2002.
Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses,
excluding depreciation, amortization and corporate, general and administrative
expenses) during the first half of 2003 was Ps.
Grupo Radio Centro, S.A. de C.V.
Second Quarter 2003 Results
Page 3 of 4
201,636,000, which more than quadrupled the broadcasting income of Ps.
50,300,000 reported for the same period of 2002. This increase is mainly
attributable to greater broadcasting revenue and, to a lesser extent, the
reduction in broadcasting expenses.
Depreciation and amortization during the first half of 2003 was Ps. 55,435,000,
an increase of 14.4% compared to Ps. 48,439,000 reported for the same period of
2002. This increase is mainly due to the factors mentioned above for the second
quarter of 2003.
The Company's corporate, general and administrative expenses during the first
half of 2003 were Ps. 28,425,000, an increase of 22.7% compared to Ps.
23,166,000 reported for the same period of 2002. This increase is mainly due to
the factors mentioned for the second quarter of 2003.
As a result of the increase in broadcasting income, the Company reported
operating income of Ps. 117,776,000 for the first half of 2003, compared to an
operating loss of Ps. 21,305,000 reported for the same period of 2002.
The Company's comprehensive financing cost for the first half of 2003 was Ps.
19,506,000, a reduction of 48.9% compared to comprehensive financing cost of Ps.
38,170,000 for the same period of 2002. This reduction is mainly attributable to
a decrease in foreign exchange loss, net, from Ps. 33,130,000 for the first half
of 2002 to Ps. 7,110,000 for the same period of 2003, resulting from the
conversion of the Company's U.S. dollar-denominated bank loans to Mexican
peso-denominated bank loans during the fourth quarter of 2002. This favorable
change was partially offset by an increase in interest expense resulting from an
increase in interest rates.
Other expenses, net, for the first half of 2003 were Ps. 34,377,000, a 13.3%
increase compared to Ps. 30,348,000 reported for the same period of 2002. This
increase is attributable to the factors mentioned above in connection with the
second quarter.
For the first half of 2003, the Company reported income before provisions for
income tax and employee profit sharing of Ps. 63,893,000, compared to a loss
before provisions for income tax and employee profit sharing of Ps. 89,823,000
reported for the same period in 2002. During the first half of 2002, the Company
recorded no provisions for income tax and employee profit sharing principally
due to the loss before provisions during this period compared to the provisions
for income tax and employee profit sharing of Ps. 2,050,000 for the same period
in 2003.
As a result of the foregoing, the Company had net income of Ps. 61,843,000 for
the first half of 2003 compared to a net loss of Ps. 89,823,000 for the first
half of 2002.
Company Description:
Grupo Radio Centro owns and/or operates 14 radio stations, 11 of which are
located 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. The Company also operates a radio network, Organizacion
Impulsora de Radio, which acts as the national sales representative for, and
provides programming to, Grupo Radio Centro-affiliated radio stations.
Grupo Radio Centro, S.A. de C.V.
Second Quarter 2003 Results
Page 4 of 4
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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.
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GRUPO RADIO CENTRO, S.A. DE C.V.
CONSOLIDATED UNAUDITED BALANCE SHEETS
as of June 30, 2003 and 2002
in Mexican Pesos ("Ps.") with purchasing power as of June 30, 2003
(figures in thousands of Ps. and U.S. dollars ("U.S. $")(1),
except per Share and per ADS amounts)
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---------------------------------------------------------
June 30
---------------------------------------------------------
2003 2002
U.S. $(1) Ps. Ps.
------------------------------------- -----------------
ASSETS
Current assets:
Cash and temporary investments 12,487 130,875 61,812
----------------- ----------------- -----------------
Accounts receivable:
Broadcasting, net 22,272 233,428 137,837
Other 893 9,355 6,680
Income tax recoverable 0 0 7,161
----------------- ----------------- -----------------
23,165 242,783 151,678
Guarantee deposit 660 6,915 7,207
Prepaid expenses 1,672 17,524 17,825
----------------- ----------------- -----------------
Total current assets 37,984 398,097 238,522
Prepaid expenses 9,544 100,025 114,500
Property and equipment 44,733 468,835 501,927
Deferred charges 1,624 17,023 15,541
Guarantee deposit 385 4,034 11,411
Excess of cost over book value of subsidiaries 74,615 782,023 865,199
Other assets 299 3,140 4,222
----------------- ----------------- -----------------
Total assets 169,184 1,773,177 1,751,322
================= ================= =================
LIABILITIES
Current:
Notes payable 12,348 129,421 185,510
Advances from customers 9,638 101,014 81,430
Other accounts payable and accrued expenses 5,719 59,934 96,029
Taxes payable 5,540 58,060 5,755
----------------- ----------------- -----------------
Total current liabilities 33,245 348,429 368,724
Long-Term:
Deferred income tax 4,395 46,065 81,997
Notes payable 11,365 119,112 202,184
Reserve for labor obligations 2,642 27,693 22,166
----------------- ----------------- -----------------
Total liabilities 51,647 541,299 675,071
----------------- ----------------- -----------------
STOCKHOLDERS' EQUITY
Capital stock 99,701 1,044,947 1,044,932
Retained earnings 22,275 233,461 77,975
Provision for repurchase of shares 3,536 37,057 37,072
Accumulated effect of deferred income tax (8,425) (88,300) (88,260)
Surplus on restatement of capital 403 4,222 4,059
Minority interest 47 491 473
----------------- ----------------- -----------------
Total stockholders' equity 117,537 1,231,878 1,076,251
----------------- ----------------- -----------------
Total liabilities and stockholders' equity 169,184 1,773,177 1,751,322
================= ================= =================
(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.4808 per U.S. dollar, the
noon buying rate for Mexican pesos on June 30, 2003.
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GRUPO RADIO CENTRO, S.A. DE C.V.
CONSOLIDATED UNAUDITED STATEMENTS OF INCOME
for the three-month and six-month periods
ended June 30, 2003 and 2002 expressed
in Mexican Pesos ("Ps.") with purchasing power as of June 30, 2003
(figures in thousands of Ps. and U.S. dollars ("U.S. $")(1),
except per Share and per ADS amounts)
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-----------------------------------------------------------------------------------
2nd Quarter First Half
---------------------------------------- -----------------------------------------
2003 2002 2003 2002
U.S.$ (1) Ps. Ps. U.S.$ (1) Ps. Ps.
-------------------------- ------------ -------------------------- -------------
Broadcasting revenue (2) 24,389 255,617 182,139 42,324 443,585 306,285
Broadcasting expenses, excluding depreciation,
amortization and corporate expenses 12,495 130,960 131,169 23,085 241,949 255,985
------------ ------------- ------------ ------------ ------------ -------------
Broadcasting income 11,894 124,657 50,970 19,239 201,636 50,300
------------ ------------- ------------ ------------ ------------ -------------
Depreciation and amortization 2,595 27,199 24,170 5,289 55,435 48,439
Corporate general and administrative expenses 1,641 17,195 12,043 2,712 28,425 23,166
------------ ------------- ------------ ------------ ------------ -------------
Operating (loss) income 7,658 80,263 14,757 11,238 117,776 (21,305)
------------ ------------- ------------ ------------ ------------ -------------
Comprehensive financing cost:
Interest expense (628) (6,587) (4,956) (1,374) (14,401) (9,861)
Interest income (2) 18 190 714 62 650 803
Foreign exchange loss, net (21) (218) (37,599) (678) (7,110) (33,130)
Gain (loss) on monetary position (35) (366) 777 129 1,355 4,018
------------ ------------- ------------ ------------ ------------ -------------
(666) (6,981) (41,064) (1,861) (19,506) (38,170)
Other expenses, net (1,646) (17,256) (15,081) (3,280) (34,377) (30,348)
------------ ------------- ------------ ------------ ------------ -------------
Income (loss) before the following provisions 5,346 56,026 (41,388) 6,097 63,893 (89,823)
Provisions for income tax & employee profit
sharing 196 2,050 0 196 2,050 0
------------ ------------- ------------ ------------ ------------ -------------
Net (loss) income 5,150 53,976 (41,388) 5,901 61,843 (89,823)
Net (loss) income applicable to:
Majority interest 5,150 53,977 (41,391) 5,901 61,841 (89,824)
Minority interest 0 (1) 3 0 2 1
------------ ------------- ------------ ------------ ------------ -------------
5,150 53,976 (41,388) 5,901 61,843 (89,823)
============ ============= ============ ============ ============ =============
Net income for the LTM per Series A Share (3) $0.090 0.946 (0.491)
Net income for the LTM per ADS (3) $0.812 8.514 (4.419)
Weighted average common shares outstanding
for the LTM (000's) (3) 162,725 163,819
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(1) Peso amounts have been translated into U.S. dollars, solely for the
convenience of the reader, at the rate of Ps. 10.4808 per U.S. dollar, the
noon buying rate for Mexican pesos on June 30, 2003.
(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 second quarter
of 2003 and 2002 was Ps. 144,000 and Ps. 147,000, respectively. Interest
earned and treated as broadcasting revenue for the six months ended June
30, 2003 and 2002 was Ps. 248,000 and Ps. 315,000, 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.
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