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Grupo Radio Centro Reports Fourth Quarter And Year-End Results For The Period Ended December 31, 2009

The Company recorded income taxes of Ps. 16,997,000 for the fourth quarter of 2009, compared to the Ps. 17,038,000 recorded for the fourth quarter of 2008.

As a result of the foregoing, the Company recorded net income for the fourth quarter of 2009 of Ps. 25,286,000, a 56.2% decline compared to net income of Ps. 57,693,000 in the fourth quarter of 2008.

Twelve-Month Results

For the year ended December 31, 2009, broadcasting revenue was Ps. 785,869,000, 6.9% higher than the Ps. 735,105,000 reported for the same period of 2008. The increase was mainly attributable to higher advertising expenditures by the Company's clients during 2009 compared to the same period in 2008 and to revenues from KXOS-FM.  

The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the year ended December 31, 2009 were Ps. 595,011,000, 31.5% higher than the Ps. 452,350,000 reported for the same period of 2008. This increase was primarily due to (i) broadcasting expenses incurred in connection with KXOS-FM, and (ii) higher sales commissions as a result of the increase in broadcasting revenue during 2009.

Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the year ended December 31, 2009 was Ps. 190,858,000, 32.5% lower than the Ps. 282,755,000 reported for the same period of 2008. This decrease was mainly attributable to the increase in broadcasting expenses, as described above.

Depreciation and amortization expenses for the year ended December 31, 2009 were Ps. 26,024,000, 18.0% lower than the Ps. 31,720,000 reported for the same period of 2008, as a result of a reduction in the Company's depreciable asset base.

The Company's corporate, general and administrative expenses for the year ended December 31, 2009 were Ps. 14,939,000, slightly higher than the Ps. 14,461,000 reported for the same period of 2008.

As a result of the foregoing, the Company recorded operating income of Ps. 149,895,000 for the year ended December 31, 2009, 36.6% lower than the Ps. 236,574,000 reported for the same period of 2008.

Other expenses, net, for the year ended December 31, 2009 were Ps. 66,495,000, 16.9% higher than the Ps. 56,880,000 reported for the same period of 2008. This increase was mainly attributable to legal expenses incurred in connection with the LMA.

The Company's comprehensive financing cost for the year ended December 31, 2009 was Ps. 40,615,000, compared to Ps. 7,678,000 reported for the same period of 2008. This increase was mainly due to (i) interest expense related to the Company's Ps. 200,000,000 loan obtained from Banco Inbursa, S.A. in March 2009 and (ii) a loss on net foreign exchange loss attributable to an appreciation of the peso against the U.S. dollar, which resulted in a decline in the peso value of the Company's U.S. dollar denominated loan to GRC-LA.  

For the year ended December 31, 2009, the Company recorded income before taxes of Ps. 42,785,000, compared to Ps. 172,016,000 reported for the same period of 2008, mainly due to the increases in broadcasting expenses and comprehensive financing cost, as described above.

The Company recorded income taxes of Ps. 38,342,000 for the year ended December 31, 2009, compared to Ps. 45,251,000 reported for the same period of 2008, primarily due to lower taxable income.

As a result of the foregoing, the Company recorded net income of Ps. 4,443,000 for the year ended December 31, 2009, compared to net income of Ps. 126,765,000 for the same period of 2008.

Recent Developments

The Company will undertake a capital reduction of GRC-LA by returning the capital contributions of certain members of the Aguirre family, who own the control of the Company.  The Company had previously sold a 49% equity stake in GRC-LA, for the same amount of this capital reduction, to those Aguirre family members.  As a result of the capital reduction, the Company will become the sole shareholder of GRC-LA.

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