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| 8-K - RADIOSHACK CORPORATION FORM8-K SEPTEMBER 30, 2009 - RS Legacy Corp | form8k093009.htm |
Exhibit 99.1
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PRESS RELEASE
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RSH-2009-024
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RadioShack
Corporation Announces
Financial
Results for the Third Quarter 2009
Fort Worth, Texas,
October 26, 2009 – RadioShack Corporation (NYSE: RSH) today announced net income
for the third quarter ended September 30, 2009, of $37.4 million, or $0.30 per
diluted share, compared with net income of $49.1 million, or $0.38 per diluted
share, reported for the third quarter ended September 30, 2008.
Operating income
for the third quarter was $69.4 million, or 7.0 percent of sales, compared with
$84.9 million, or 8.3 percent of sales, last year.
Total net sales and
operating revenues were down 3.1 percent to $990.0 million compared with
$1,021.9 million for the same period last year. Comparable same-store
sales for company-operated stores and kiosks decreased 2.9 percent during the
third quarter compared with the third quarter of 2008.
Cash and cash
equivalents as of September 30, 2009 were $856.7 million compared with $824.1
million for September 30, 2008. Inventories of $737.4 million were
$56.2 million higher than at the end of the third quarter of last
year.
Commenting on the
financial results, Jim Gooch, Executive Vice President and Chief Financial
Officer, said, “Our financial performance improved in the latter part of the
quarter, primarily driven by our strong mobility business combined with an
economy showing some signs of potential stabilization.”
Capital
expenditures for the first nine months of 2009 totaled $62.1
million. The Company continues to estimate that capital expenditures
for the full year of 2009 will be in the range of $75 million to $100
million.
“Two key strategic
efforts continue to be primary areas of focus for the organization,” said Julian
C. Day, Chairman and Chief Executive Officer. “First, the launch of
the ‘THE SHACK’ brand platform was a success, and we will continue to refine and
invest in this positioning. Second, the introduction of T-Mobile in
our company-operated stores and Verizon Wireless in our Sam’s Club Kiosks
further enhances our mobility proposition. Together with AT&T and
Sprint, we now offer a broader range of choices to fit consumers’
needs.”
Third
Quarter Results
Net Sales and Operating
Revenues
Total net sales and
operating revenues in the third quarter of 2009 decreased $31.9 million to
$990.0 million compared with $1,021.9 million for the same period last year. The
3.1 percent decrease was attributable to a 3.5 percent decrease
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1
in
the sales generated by company-operated stores; a 17.8 percent decrease in kiosk
sales; and a 13.5 percent increase in other sales. The decrease in
kiosk sales is primarily due to a 17.1% sales gain in our continuing kiosks
being offset by declines resulting from a reduced number of
locations. Other sales were up for the quarter primarily due to the
addition of sales generated by RadioShack de Mexico which was acquired in
December 2008 which was partially offset by a 15.7 percent decline in dealer
sales and a 5.1 percent decrease in online sales during the third
quarter.
Third quarter
comparable store sales for company-operated stores and kiosks decreased 2.9
percent, compared with the third quarter of 2008. This decrease was
driven primarily by sales declines in digital-to-analog converter boxes, laptop
computers, batteries, wireless accessories, and GPS products. These sales
declines were substantially offset by increased sales in our Sprint Nextel
postpaid wireless business, increased sales of prepaid wireless handsets and
airtime, the addition of T-Mobile as a postpaid wireless carrier, and increased
sales of netbooks.
Gross
Profit
Consolidated gross
profit for the third quarter of 2009 was $471.1 million, or 47.6 percent of
sales, compared with $477.4 million, or 46.7 percent of sales, for the third
quarter last year. The increase of 90 basis points in our gross
margin rate was primarily driven by a change in our sales mix away from lower
margin products such as converter boxes, laptops and GPS into higher margin
products such as postpaid and prepaid wireless.
Selling, General and
Administrative
Consolidated
selling, general and administrative expenses (“SG&A”) for the third quarter
of 2009 were $380.7 million, or 38.5 percent of sales, compared with $370.4
million, or 36.2 percent of sales, for the third quarter last
year. The increase in SG&A for the third quarter was primarily
due to increased compensation expense, legal settlements and advertising expense
related to our new brand creative platform, “THE SHACK,” partially offset by
reductions in product specific promotional activities. The increase to
compensation expense was driven by incentive compensation paid on increased
wireless sales, additional employee headcount across our stores, and the full
consolidation of our Mexican subsidiary in 2009.
First
Nine Months Results
Net Sales and Operating
Revenues
Total net sales and
operating revenues for the first nine months ended September 30, 2009, were
$2,957.8 million compared with $2,965.8 million for the same time period last
year. The decrease was attributable to a 1.0 percent decrease in
company-operated stores, decreases in kiosk operations of 10.5 percent, and a
13.7 percent decrease in sales to independent dealers. These decreases were
partially offset by sales generated from RadioShack de Mexico which was acquired
in December 2008 and an online sales increase of 13.8 percent.
Comparable
same-store sales for company-operated stores and kiosks for the first nine
months of 2009 decreased 0.7 percent compared with 2008. The decrease
in comparable store sales was primarily due to sales declines in wireless
accessories, GPS products, digital music players, and digital cameras, but was
partially offset by increased sales in our Sprint Nextel postpaid wireless
business, sales of netbook computers, increased sales of prepaid wireless
handsets and airtime, increased sales of digital-to-analog converter boxes in
the first quarter of 2009 and increased sales of digital televisions and
television antennas in the first half of 2009.
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Gross
Profit
Consolidated gross
profit for the first nine months of 2009 was $1,383.5 million, or 46.8 percent
of sales, compared with $1,396.4 million, or 47.1 percent of sales, last
year. The decrease of 30 basis points in our gross margin rate was
primarily driven by a change in our sales mix towards lower margin
products.
Selling, General and
Administrative
Consolidated
selling, general and administrative expenses for the first nine months of 2009
were $1,082.2 million, or 36.6 percent of sales, compared with consolidated
selling, general and administrative expenses for the first nine months of 2008
of $1,108.2 million, or 37.4 percent of sales. The decrease in
SG&A expense for the first nine months of 2009 resulted primarily from
decreased advertising expense in the first half of 2009.
In
addition, SG&A expense for the first nine months of 2008 included a net
charge of $12.1 million associated with the amended lease for our corporate
headquarters and a benefit of $5.1 million related to a sales and use tax
settlement.
Operating
Income
Operating income
for the first nine months of 2009 was $237.2 million, or 8.0 percent of sales,
compared with operating income for the first nine months of 2008 of $220.4
million, or 7.4 percent of sales.
Forward-Looking
Statements
This press release
contains “forward-looking statements,” as referenced in the Private Securities
Litigation Reform Act of 1995 (“the Act”), and those statements are intended to
be subject to the protection of the safe harbor for forward looking statements
in the Act. These forward-looking statements reflect management’s
current views and projections regarding future economic conditions, retail
industry environments and company performance. Certain important
factors could cause actual results to differ materially from those in the
forward looking statements. These factors include, but are not
limited to, sales performance, economic conditions, unemployment rates, product
demand, consumer spending, expense levels, availability and cost of capital,
legal and regulatory changes, competitive activity, interest rates, the value of
the U.S. dollar and other currencies, pandemics, acts of terrorism, war, changes
in the company’s financial condition, availability of products, theft,
transmission or unauthorized disclosure of customer, employee or company
information, and other risks associated with the company’s vendors and service
providers, the regulatory environment and factors affecting the retail category
in general. Additional information regarding these and other factors
is described in the company’s filings with the SEC, including its most recent
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and its Current
Report on Form 8-K filed on August 11, 2008.
About
RadioShack Corporation
RadioShack
Corporation (NYSE: RSH), headquartered in Fort Worth, Texas, is one of the
nation's most experienced and trusted consumer electronics specialty retailers,
offering innovative products and services from leading brands. Our
knowledgeable, helpful sales associates are committed to enhancing the in-store
shopping experience by listening to our customers, offering advice, and
partnering with them to find the best technology solutions that fit their
needs. Operating from convenient and accessible neighborhood and mall
locations, the company has approximately 4,470 company-operated stores; almost
1,300 dealer outlets; over 450 wireless phone kiosks throughout the U.S.; and
approximately 200 company-operated stores in Mexico. For more
information on RadioShack Corporation, or to purchase items online, visit www.RadioShack.com.
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RADIOSHACK
CORPORATION AND SUBSIDIARIES
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Consolidated
Statements of Income (Unaudited)
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(In
millions, except per share amounts)
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Three
Months Ended
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Nine
Months Ended
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September
30,
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September
30,
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2009
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2008
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2009
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2008
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Net
sales and operating revenues
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$ | 990.0 | $ | 1,021.9 | $ | 2,957.8 | $ | 2,965.8 | ||||||||
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Cost of
products sold (includes depreciation
amounts of $2.4 million, $3.0 million,
$7.2
million, and $8.1 million,
respectively)
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518.9 | 544.5 | 1,574.3 | 1,569.4 | ||||||||||||
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Gross
profit
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471.1 | 477.4 | 1,383.5 | 1,396.4 | ||||||||||||
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Operating
expenses:
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Selling, general and
administrative
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380.7 | 370.4 | 1,082.2 | 1,108.2 | ||||||||||||
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Depreciation and
amortization
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20.5 | 21.5 | 63.1 | 66.0 | ||||||||||||
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Impairment of long-lived
assets
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0.5 | 0.6 | 1.0 | 1.8 | ||||||||||||
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Total
operating expenses
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401.7 | 392.5 | 1,146.3 | 1,176.0 | ||||||||||||
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Operating
income
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69.4 | 84.9 | 237.2 | 220.4 | ||||||||||||
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Interest
income
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0.9 | 3.9 | 3.9 | 10.9 | ||||||||||||
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Interest
expense
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(11.2 | ) | (9.3 | ) | (33.8 | ) | (23.1 | ) | ||||||||
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Other
loss
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(1.6 | ) | (0.1 | ) | (1.6 | ) | (2.2 | ) | ||||||||
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Income
before income taxes
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57.5 | 79.4 | 205.7 | 206.0 | ||||||||||||
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Income tax
expense
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20.1 | 30.3 | 76.4 | 76.7 | ||||||||||||
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Net
income
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$ | 37.4 | $ | 49.1 | $ | 129.3 | $ | 129.3 | ||||||||
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Net
income per share:
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Basic and diluted
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$ | 0.30 | $ | 0.38 | $ | 1.03 | $ | 0.99 | ||||||||
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Shares used
in computing net income
per share:
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Basic
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125.5 | 128.4 | 125.4 | 130.3 | ||||||||||||
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Diluted
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126.3 | 128.8 | 125.8 | 130.4 | ||||||||||||
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RADIOSHACK
CORPORATION AND SUBSIDIARIES
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Consolidated
Balance Sheets (Unaudited)
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(In
millions)
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||||||||||||
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September
30,
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December
31,
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September
30,
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(In millions, except
for share amounts)
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2009
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2008
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2008
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Assets
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Current
assets:
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Cash and cash
equivalents
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$ | 856.7 | $ | 814.8 | $ | 824.1 | ||||||
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Accounts and notes receivable,
net
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228.7 | 241.9 | 192.1 | |||||||||
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Inventories
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737.4 | 636.3 | 681.2 | |||||||||
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Other current assets
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100.2 | 98.6 | 116.4 | |||||||||
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Total current
assets
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1,923.0 | 1,791.6 | 1,813.8 | |||||||||
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Property,
plant and equipment, net
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286.5 | 306.4 | 278.6 | |||||||||
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Other assets,
net
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137.6 | 156.0 | 122.2 | |||||||||
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Total
assets
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$ | 2,347.1 | $ | 2,254.0 | $ | 2,214.6 | ||||||
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Liabilities
and Stockholders’ Equity
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Current
liabilities:
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Short-term debt
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$ | 62.8 | $ | 39.3 | $ | 35.9 | ||||||
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Accounts payable
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283.6 | 206.4 | 248.2 | |||||||||
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Accrued expenses and other current
liabilities
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290.0 | 367.3 | 330.8 | |||||||||
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Income taxes payable
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4.5 | 24.2 | 20.0 | |||||||||
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Total current
liabilities
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640.9 | 637.2 | 634.9 | |||||||||
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Long-term
debt
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624.9 | 659.5 | 649.8 | |||||||||
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Other
non-current liabilities
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81.3 | 96.5 | 99.1 | |||||||||
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Total
liabilities
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1,347.1 | 1,393.2 | 1,383.8 | |||||||||
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Total stockholders’
equity
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1,000.0 | 860.8 | 830.8 | |||||||||
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Total
liabilities and stockholders’ equity
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$ | 2,347.1 | $ | 2,254.0 | $ | 2,214.6 | ||||||
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RADIOSHACK
CORPORATION AND SUBSIDIARIES
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Consolidated
Statements of Cash Flows (Unaudited)
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(In
millions)
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Nine
Months Ended
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September
30,
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(In
millions)
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2009
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2008
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Cash
flows from operating activities:
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Net income
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$ | 129.3 | $ | 129.3 | ||||
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Adjustments to reconcile net income to
net cash
provided by operating
activities:
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Depreciation and
amortization
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70.3 | 74.1 | ||||||
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Amortization of discount on convertible
notes
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10.2 | 1.9 | ||||||
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Impairment of long-lived
assets
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1.0 | 1.8 | ||||||
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Stock option compensation
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7.0 | 7.9 | ||||||
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Net change in liability for unrecognized
tax benefits
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(4.9 | ) | 3.7 | |||||
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Deferred income taxes
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13.3 | 0.6 | ||||||
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Other non-cash items
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6.8 | 10.1 | ||||||
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Provision for credit losses and bad
debts
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0.2 | 0.4 | ||||||
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Changes in operating assets and
liabilities:
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Accounts and notes
receivable
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14.0 | 64.7 | ||||||
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Inventories
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(89.1 | ) | 8.3 | |||||
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Other current assets
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1.8 | (8.5 | ) | |||||
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Accounts payable, accrued expenses,
income taxes
payable and other
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(36.3 | ) | (119.0 | ) | ||||
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Net cash
provided by operating activities
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123.6 | 175.3 | ||||||
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Cash
flows from investing activities:
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||||||||
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Additions to property, plant and
equipment
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(62.1 | ) | (45.0 | ) | ||||
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Proceeds from sale of property, plant
and equipment
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0.2 | 0.5 | ||||||
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Other investing
activities
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-- | 1.0 | ||||||
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Net cash used
in investing activities
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(61.9 | ) | (43.5 | ) | ||||
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Cash
flows from financing activities:
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Changes in short-term borrowings and
outstanding checks
in excess of cash balances,
net
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23.4 | (20.2 | ) | |||||
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Repayments of borrowings
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(43.2 | ) | (5.0 | ) | ||||
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Purchases of treasury
stock
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-- | (111.4 | ) | |||||
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Issuance of convertible
notes
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-- | 375.0 | ||||||
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Convertible notes issuance
costs
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-- | (9.4 | ) | |||||
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Purchase of convertible notes
hedges
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-- | (86.3 | ) | |||||
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Sale of common stock
warrants
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-- | 39.9 | ||||||
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Net cash
(used in) provided by financing activities
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(19.8 | ) | 182.6 | |||||
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Net
increase in cash and cash equivalents
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41.9 | 314.4 | ||||||
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Cash and cash
equivalents, beginning of period
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814.8 | 509.7 | ||||||
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Cash and cash
equivalents, end of period
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$ | 856.7 | $ | 824.1 | ||||
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Investor
Contact:
|
Media
Contact:
|
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Martin O.
Moad
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Wendy
Dominguez
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Vice
President and Controller
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Media
Relations
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(817)415-2383
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(817)415-3300
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Investor.Relations@RadioShack.com
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Media.Relations@RadioShack.com
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