Unassociated Document


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 July, 2007
Commission File Number 1-12090
 
 
GRUPO RADIO CENTRO, S.A.B. de C.V.
(Translation of Registrant’s name into English)
 
Constituyentes 1154, Piso 7
Col. Lomas Altas, México 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-__ .)
 




 
Grupo Radio Centro Reports Second Quarter and First Half 2007 Results

MEXICO CITY, July 25 /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 operations for the second quarter and first half ended June 30, 2007. All figures were prepared in accordance with the Financial Reporting Standards issued by the Mexican Board for Research and Development of Financial Information Standards and have been restated in constant pesos as of June 30, 2007.

Second Quarter Results
Broadcasting revenue for the second quarter of 2007 was Ps. 145,498,000, representing a decrease of 40.5% compared to Ps. 244,518,000 reported for the second quarter of 2006. This decrease was mainly attributable to a decrease in advertising expenditures by political parties, which purchased more airtime last year in connection with the July 2006 presidential and congressional elections.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the second quarter of 2007 were Ps. 100,808,000, representing a decrease of 21.1% compared to Ps. 127,781,000 reported for the second quarter of 2006. This decrease was primarily due to lower sales commissions to the Company's general sales force as a result of the decrease in broadcasting revenue, a smaller allowance for doubtful accounts than in the second quarter of 2006 (when the Company had a larger-than-usual reserve in connection with receivables that the Company ultimately sold in December 2006) and lower expenses relating to the Company's advertising and marketing campaigns than in the second quarter of 2006, when the political election season impacted the Company's advertising and marketing campaign expenses.
For the second quarter of 2007, the Company reported broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) of Ps. 44,690,000, a 61.7% decline compared to Ps. 116,737,000 reported for the second quarter of 2006. This decrease in broadcasting income was mainly attributable to the aforementioned decrease in broadcasting revenue.
Depreciation and amortization expenses for the second quarter of 2007 were Ps. 8,609,000, a 16.5% increase compared to Ps. 7,392,000 reported for the second quarter of 2006. Depreciation and amortization expenses were lower in the second quarter of 2006 than in the second quarter of 2007 primarily because the Company reduced depreciation and amortization expenses for the second quarter of 2006 to offset excess depreciation and amortization expenses recorded for the first quarter of 2006.
The Company's corporate, general and administrative expenses were Ps. 3,729,000 for the second quarter of 2007, a 7.3% increase compared to Ps. 3,474,000 reported for the second quarter of 2006.
The Company reported operating income of Ps. 32,352,000 for the second quarter of 2007, compared to operating income of Ps. 105,871,000 in the second quarter of 2006. This decrease was due to lower broadcasting revenue in the second quarter of 2007 compared to the second quarter of 2006, as described above.
 
The Company's comprehensive financing cost for the second quarter of 2007 was Ps. 2,505,000, compared to a comprehensive financing gain of Ps. 2,319,000 reported for the second quarter of 2006. This unfavorable change was mainly due to a loss on foreign currency exchange, net of Ps. 31,000 in the second quarter of 2007, compared to a gain of Ps. 3,785,000 in the second quarter of 2006. This gain in the second quarter of 2006 resulted from the impact of peso appreciation on the Company's US dollar-denominated contingent liability provision. The Company cancelled this provision in June 2006, as described below.
During the second quarter of 2007, other expenses, net were Ps. 9,260,000, a 37.6% decrease compared to Ps. 14,849,000 reported for the second quarter of 2006. This decrease was mainly attributable to lower legal expenses during the second quarter of 2007 compared to the second quarter of 2006.
In the second quarter of 2007, the Company reported income before extraordinary items and provisions for income tax and employee profit sharing of Ps. 20,587,000, a 77.9% decrease compared to Ps. 93,341,000 reported for the second quarter of 2006, mainly as a result of the decrease in broadcasting revenue described above.
For the second quarter of 2007, the Company reported income before provisions for income tax and employee profit sharing of Ps. 20,587,000, compared to Ps. 349,657,000 for the second quarter of 2006. In addition to higher broadcasting revenue, as described above, the 2006 period benefited from extraordinary income of Ps. 256,316,000, which resulted from the cancellation of the provision for a contingent liability recorded by the Company in 2003 in connection with arbitration proceedings. The Company cancelled the provision in June 2006 after a Mexican court set aside and refused to enforce in Mexico an arbitration award issued against the Company. The status of these arbitration proceedings is discussed below.
The Company recorded provisions for income tax and employee profit sharing of Ps. 4,977,000 for the second quarter of 2007, compared to Ps. 28,517,000 for the second quarter of 2006. This decrease in provisions was primarily due to lower taxable income for the second quarter of 2007 compared to the second quarter of 2006.
As a result of the foregoing, the Company's net income for the second quarter of 2007 was Ps. 15,610,000, compared to net income of Ps. 321,140,000 in the second quarter of 2006.

First Half Results
For the six months ended June 30, 2007, broadcasting revenue was Ps. 270,518,000, representing a 36.9% decrease compared to Ps. 428,388,000 reported for the same period of 2006. The decrease in broadcasting revenue was mainly attributable to a decrease in advertising expenditures by political parties, which purchased more airtime last year in connection with the July 2006 presidential and congressional elections.
The Company's broadcasting expenses (excluding depreciation, amortization and corporate, general and administrative expenses) for the first six months of 2007 were Ps. 207,770,000, a 10.3% decrease compared to Ps. 231,657,000 reported for the same period of 2006. This decrease was primarily due to the decrease in sales commissions to the Company's general sales force as a result of the decrease in broadcasting revenue, as well as the smaller allowance for doubtful accounts during the first six months of 2007 compared to the same period of 2006.
Broadcasting income (i.e., broadcasting revenue minus broadcasting expenses, excluding depreciation, amortization and corporate, general and administrative expenses) for the first six months of 2007 was Ps. 62,748,000, representing a decrease of 68.1% compared to Ps. 196,731,000 reported for the same period of 2006. This decrease was mainly attributable to the decrease in broadcasting revenue described above.
Depreciation and amortization expenses for the first six months of 2007 were Ps. 17,294,000, a decrease of 6.1% compared to Ps. 18,422,000 reported for the same period of 2006. This decrease resulted from the Company no longer recording depreciation on Company vehicles whose useful lives ended in the second quarter of 2006, which more than offset the increase in depreciation and amortization expenses in the second quarter of 2007 relative to the second quarter of 2006, described above.
 
 
The Company's corporate, general and administrative expenses for the first six months of 2007 were Ps. 7,074,000, a slight decrease compared to Ps. 7,239,000 reported for the same period of 2006.
As a result of the foregoing, the Company reported operating income of Ps. 38,380,000 for the first six months of 2007, a 77.6% decrease compared to Ps. 171,070,000 reported for the same period of 2006.
The Company's comprehensive cost of financing for the first six months of 2007 was Ps. 2,009,000, a 73.9% decrease compared to Ps. 7,711,000 reported for the same period of 2006. This favorable change was mainly due to a decrease in interest expense for the first six months of 2007 compared to the same period of 2006 as a result of the Company no longer recording interest on bank debt after paying off the remaining balance of its bank debt in May 2006. The favorable effect of this decrease was partially offset by a loss on net monetary position of Ps. 774,000 for the first six months of 2007, compared to a gain on net monetary position of Ps. 1,327,000 reported for the same period of 2006.
Other expenses, net for the first six months of 2007 were Ps. 19,937,000, a 17.7% decrease compared to Ps. 24,236,000 reported for the same period of 2006. This decrease was mainly attributed to lower legal expenses during the second quarter of 2007 compared to the same period of 2006.
For the first six months of 2007, the Company had income before extraordinary items and provisions for income tax and employee profit sharing of Ps. 16,434,000, an 88.2% decrease compared to Ps. 139,123,000 reported for the same period of 2006, mainly as a result of the decrease in broadcasting revenue described above.
For the first six months of 2007, the Company reported income before provisions for income tax and employee profit sharing of Ps. 16,434,000, compared to Ps. 395,439,000 reported for the same period of 2006. In addition to higher broadcasting revenue, the 2006 period benefited from extraordinary income of Ps. 256,316,000, which resulted from the cancellation in June 2006 of the provision for the contingent liability relating to the arbitration proceedings described below.
The Company recorded provisions for income tax and employee profit sharing of Ps. 3,711,000 for the first six months of 2007, compared to Ps. 38,992,000 for the same period of 2006.
As a result of the foregoing, the Company reported net income of Ps. 12,723,000 for the first half of 2007, compared to net income of  Ps. 356,447,000 for the same period of 2006.

Legal Proceedings
On January 30, 2007, the Mexican Supreme Court (Suprema Corte de Justicia de la Nacion) asked the Federal District's Thirteenth Circuit Court of Civil Matters to analyze again the procedure and to resolve the case as Indirect Amparo. The Federal District's Thirteenth Circuit Court of Civil Matters' June 2006 decision had ratified a lower court's ruling to set aside a 2004 arbitration award issued against the Company in an arbitration proceeding brought by Infored, S.A. de C.V. ("Infored") and Mr. Jose Gutierrez Vivo. The Company can give no assurance about the outcome of these proceedings or their duration.

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.B. DE C.V.
CONSOLIDATED UNAUDITED BALANCE SHEETS
as of June 30, 2007 and 2006
in Mexican Pesos ("Ps.") with purchasing power as of June 30, 2007
(figures in thousands of Ps. and U.S. dollars ("U.S. $")(1), except per Share and per ADS amounts)

   
June 30,
  
   
2007
 
2006
 
 
 
U.S. $(1)
 
Ps.
 
Ps.
  
ASSETS
              
Current assets:
              
Cash and temporary investments
    
4,320
    
46,941
    
87,100
  
                     
Accounts receivable:
                    
Broadcasting, net
    
16,996
    
184,684
    
254,081
  
Other
    
515
    
5,596
    
8,883
  
Income taxes recoverable
    
581
    
6,311
    
0
  
 
    
196,591
    
262,964
    
18,092
  
                     
Prepaid expenses
    
2,072
    
22,515
    
17,676
  
Total current assets
    
24,484
    
266,047
    
367,740
  
                     
Property and equipment, net
    
42,346
    
460,139
    
483,817
  
Deferred charges, net
    
358
    
3,895
    
10,693
  
Excess of cost over book value of
                    
net assets of subsidiaries, net
    
74,193
    
806,194
    
806,068
  
Other assets
    
303
    
3,288
    
3,352
  
Total assets
    
141,684
    
1,539,563
    
1,671,670
  
                     
LIABILITIES
                    
Current:
                    
Advances from customers
    
9,218
    
100,161
    
66,471
  
Suppliers and other accounts payable
    
5,713
    
62,077
    
53,700
  
Taxes payable
    
2,191
    
23,813
    
75,127
  
Total current liabilities
    
17,122
    
186,051
    
195,298
  
                     
Long-Term:
                    
Reserve for labor liabilities
    
4,936
    
53,636
    
48,956
  
Deferred taxes
    
472
    
5,134
    
24,619
  
Total liabilities
    
22,530
    
244,821
    
268,873
  
                     
SHAREHOLDERS' EQUITY
                    
Capital stock
    
101,186
    
1,099,494
    
1,220,506
  
Cumulative earnings
    
23,073
    
250,717
    
239,039
  
Reserve for repurchase of shares
    
3,924
    
42,640
    
41,303
  
Cumulative effect of
                    
deferred income taxes
    
(9,517
)
  
(103,411
)
  
(103,413
)
Effects from labor liabilities
    
(28
)
  
(302
)
  
(265
)
Surplus on restatement of capital
    
455
    
4,944
    
4,945
  
Minority interest
    
61
    
660
    
682
  
Total shareholders' equity
    
119,154
    
1,294,742
    
1,402,797
  
Total liabilities and
                   
stockholders' equity
    
141,684
    
1,539,563
    
1,671,670
  
 
(1)
Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps. 10.8661 per U.S. dollar, the noon buying rate for Mexican pesos on June 30, 2007.




GRUPO RADIO CENTRO, S.A.B. DE C.V.
CONSOLIDATED UNAUDITED STATEMENTS OF INCOME
for the three-month and six-month periods ended June 30, 2007 and 2006 expressed in Mexican Pesos ("Ps.") with purchasing power as of June 30, 2007 (figures in thousands of Ps. and U.S. dollars ("U.S. $")(1), except per Share and per ADS amounts)

 
  
2nd Quarter
 
Accumulated 6 months
 
 
 
2007
 
2006
 
2007
 
2006
 
 
 
U.S.$ (1)
 
Ps.
 
Ps.
 
U.S.$ (1)
 
Ps.
 
Ps.
  
                           
Broadcasting
                          
revenue (2)
    
13,390
    
145,498
    
244,518
    
24,896
    
270,518
    
428,388
 
Broadcasting expenses,
                                      
excluding depreciation,
                                      
amortization and
                                      
corporate expenses
    
9,277
    
100,808
    
127,781
    
19,121
    
207,770
    
231,657
 
Broadcasting
                                      
income
    
4,113
    
44,690
    
116,737
    
5,775
    
62,748
    
196,731
 
                                       
Depreciation and
                                      
amortization
    
792
    
8,609
    
7,392
    
1,592
    
17,294
    
18,422
 
Corporate, general
                                      
and administrative
                                      
expenses
    
343
    
3,729
    
3,474
    
651
    
7,074
    
7,239
 
Operating income
    
2,978
    
32,352
    
105,871
    
3,532
    
38,380
    
171,070
  
                                       
Comprehensive financing gain (cost):
                                      
Interest expense
    
(78
)
  
(847
)
  
(879
)
  
(125
)
  
(1,361
)
  
(9,581
)
Interest income (2)
    
(150
)
  
(1,627
)
  
(603
)
  
12
    
125
    
510
 
Gain (loss) on foreign
                                      
currency exchange, net
    
(3
)
  
(31
)
  
3,785
    
0
    
1
    
33
  
Gain (loss) on net
                                      
monetary position
    
0
    
0
    
16
    
(71
)
  
(774
)
  
1,327
 
 
    
(2,505
)
  
2,319
    
(184
)
  
(2,009
)
  
(7,711
)
  
(231
 ) 
                                       
Other expenses, net
    
(852
)
  
(9,260
)
  
(14,849
)
  
(1,835
)
  
(19,937
)
  
(24,236
)
Income before
                                      
extraordinary item
                                      
and provisions:
    
1,895
    
20,587
    
93,341
    
1,513
    
16,434
    
139,123
  
                                       
Extraordinary item
    
0
    
0
    
256,316
    
0
    
0
    
256,316
  
Income before
                                      
provisions
    
1,895
    
20,587
    
349,657
    
1,513
    
16,434
    
395,439
 
                                       
Provisions for income
                                      
tax & employee profit
                                      
sharing
    
458
    
4,977
    
28,517
    
342
    
3,711
    
38,992
  
Net income
    
1,437
    
15,610
    
321,140
    
1,171
    
12,723
    
356,447
  
                                       
Net income applicable to:
                                      
Majority interest
    
1,437
    
15,606
    
321,083
   
1,170
    
12,714
   
356,353
  
Minority interest
    
0
    
4
    
57
    
1
    
9
    
94
  
 
    
15,610
    
321,140
    
1,171
    
12,723
    
356,447
    
1,437
  
                                       
Net income (loss) per
                                      
Series A Share (3)
                      
0.045
    
0.486
    
2.588
 
Net income (loss) per
                                      
ADS (3)
                      
0.405
    
4.374
    
23.292
 
Weighted average common
                                      
shares outstanding
                                      
(000's) (3)
                            
162,592
    
162,722
 


(1)
Peso amounts have been translated into U.S. dollars, solely for the convenience of the reader, at the rate of Ps. 10.8661 per U.S. dollar, the noon buying rate for Mexican pesos on June 30, 2007.

(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 2007 and 2006 was Ps. 537,000 and Ps. 1,243,000, respectively. Interest earned and treated as broadcasting revenue for the six months ended June 30, 2007 and 2006 was Ps. 934,000 and Ps. 1,846,000, 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.
 
RI 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

SOURCE Grupo Radio Centro, S.A.B. de C.V.
-0-      07/25/2007
/CONTACT: RI Contacts, in Mexico: Pedro Beltran or Alfredo Azpeitia, both of Grupo Radio Centro, S.A.B. de C.V., +011-5255-5728-4800, Ext. 7018, aazpeitia@grc.com.mx; or in NY: Maria Barona or Peter Majeski, both of i-advize Corporate Communications, Inc., +1-212-406-3690, grc@i-advize.com.mx/
/First Call Analyst: /
/FCMN Contact: PMajeski@I-Advize.com /
/Web site: http://www.radiocentro.com.mx /
(RC)
 
 
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.B. de C.V.
 
(Registrant)
     
     
Date: July 26, 2007
By:
/s/ Pedro Beltrán Nasr
 
  
Name: Pedro Beltrán Nasr
 
  
Title: Chief Financial Officer