RadioShack Reports Financial Results for Third Quarter 2012

         RadioShack Reports Financial Results for Third Quarter 2012

PR Newswire

FORT WORTH, Texas, Oct. 23, 2012

FORT WORTH, Texas, Oct. 23, 2012 /PRNewswire/ -- RadioShack Corporation (NYSE:
RSH) reports results for the third quarter ended September 30, 2012.

THIRD QUARTER SUMMARY

  oTotal net sales and operating revenue of $1.00 billion, compared to $1.03
    billion last year. Comparable store sales were down 1.6%.
  oConsolidated gross profit of $360 million, or 36% of net sales, compared
    with $442 million last year. Gross profit dollar performance was
    negatively impacted by a decline in post-paid units sold versus the prior
    year. Gross margin rate declined in the third quarter and was negatively
    impacted by the mix of smart phones at a lower margin rate.
  oConsolidated selling, general and administrative (SG&A) expenses were $385
    million, or 39% of net sales, compared with $411 million last year.
    Excluding one-time items including a contract termination and severance
    costs, SG&A costs declined $11 million or 3% versus the prior year.
  oNet loss of $47 million, or $0.47 per diluted share, compared to net
    income of $0.3 million last year. Excluding one-time items in SG&A and
    impairment charges, net loss would have been $33 million or $0.33 per
    diluted share.
  oThe company continues to have a strong balance sheet and total liquidity
    of $938 million. Since the last earnings release, the company completed
    $175 million of new financing.

Note: All comparisons are versus the same period of the prior fiscal year
unless otherwise noted.

Dorvin D. Lively, interim chief executive officer of RadioShack Corp., said,
"Overall, our business performed below expectations. I am most disappointed
in our post-paid mobility business where we saw a continued decline in margin
performance. However, I am pleased with the progress we are making in
improving and driving growth in our high-margin Signature platform, which
generated its third consecutive quarter of sales growth and our pre-paid
mobility business, which included the launch of the RadioShack branded line of
phones. Importantly, we took action to reduce our overall SG&A cost structure
during the quarter.

"Over the past three months, we executed our plan to raise new capital and
achieved our goal of raising $175 million of new financing. The proceeds of
this financing along with existing cash will be used to repay the 2013
Convertible Notes. We believe this strikes the right balance of maintaining
liquidity necessary to ensure smooth operations of our company and
deleveraging the balance sheet. Our financial position and balance sheet are
strong, and our liquidity exceeds $900 million.

"Going forward, we will continue to be focused on stabilizing the
profitability of our business. The key to this effort is the gross margin and
profitability of our mobility business and more specifically our post-paid
business. We have a focused set of initiatives that we believe will accomplish
this goal, however, it will take some time to fully address the challenges
this business faces."

CASH, LIQUIDITY AND CAPITAL SPENDING

The company ended the third quarter with total liquidity of $938 million,
including cash and cash equivalents of $546 million and $392 million of
available under its $450 million asset-based revolving credit facility that
expires in January 2016.

The company has completed its goal of completing $175 million of new financing
with a blended interest rate of approximately 9%. This financing will be used
to refinance approximately one-half of the $375 million of Convertible Bonds
coming due in August of 2013. On August 8^th, the company completed a new $50
million term loan with Bank of America/Merrill Lynch as an extension of the
existing ABL facility. On September 27^th, the company completed a new $100
million term loan with Wells Fargo secured by a second lien on the ABL
facility collateral and other specific assets. Subsequent to the end of the
third quarter, the company completed $25 million term loan on October 19^th as
an extension of the existing ABL facility further secured by real estate.

During the quarter, the company repurchased $88 million of the 2013
Convertible Notes due August 1, 2013 for a total purchase price of $85
million.

The company's total debt stands at $749 million at September 30, 2012. The
2013 Convertible Notes, which originally had a par value of $375 million and
currently have a remaining aggregate principal amount of $287 million at
September 30, 2012. The balance of the company's debt comes due between 2016
and 2019.

Capital spending totaled $17 million in the third quarter compared to $21
million last year. Year-to-date capital spending is $18 million lower than
prior year.

CONFERENCE CALL

RadioShack will host a live webcast of its investor conference call at 9 a.m.
EDT today. The Internet broadcast may be accessed from the investor relations
home page of the RadioShack corporate website at
http://IR.RadioShackCorporation.com.

An archived replay of the conference call will be available in the investor
relations section of the corporate website, radioshackcorporation.com. A
telephone replay will be available beginning at approximately 11 a.m. EDT
today and will remain available until midnight EDT on November 6, 2012. The
telephone replay can be accessed by calling toll-free at (888) 286-8010, or
via toll call at (617) 801-6888. The replay pass code is 21842452.

For more information about product platform performance, refer to the
RadioShack Corporation Quarterly Report on Form 10-Q filed with the Securities
and Exchange Commission on October 23, 2012.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements, as referenced in the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements reflect management's current views and projections regarding
economic conditions, the retail industry environment and company performance.
These statements can be identified by the fact that they include words like
"anticipate," "believe," "estimate," "expect," "intend," "project,"
"guidance," "plan," "outlook" and other words with similar meaning. We
specifically disclaim any duty to update any of the information set forth in
this press release, including any forward-looking statements. These
statements involve a number of risks and uncertainties that could cause our
actual results to differ materially from the results discussed in our
forward-looking statements. Factors that could cause our actual results to
differ materially from the results discussed in our forward-looking statements
include, but are not limited to, our ability to execute and the effectiveness
of our 2012 initiatives; the underperformance or loss of certain of our
important vendors, such as our wireless carrier providers, or breaches by them
of our agreements with them; difficulties associated with our transition to an
outsourced arrangement for the production of products we previously
manufactured at our Chinese manufacturing plant; an adverse impact on our
sales or profitability due to our transition to such an outsourced
arrangement; an adverse impact on our sales or profitability due to changes
wireless carrier providers make to their customer credit requirements,
frequency of upgrade eligibility, or other operational matters, and the
timing, completeness, and accuracy of information we receive about such
changes; a decline in our gross margin due to customer demand for lower
margin mobile devices, such as smartphones and tablets; difficulties
associated with profitably operating our Target Mobile centers; overall sales
performance; economic conditions; product demand; expense levels; competitive
activity; interest rates; changes in the company's financial condition;
availability of products and services and other risks associated with the
company's vendors and service providers; the regulatory environment; and other
factors affecting the retail category in general. Additional information
regarding these and other factors is included in the company's filings with
the SEC, including its most recent Annual Report on Form 10-K for the year
ended Dec. 31, 2011.

ABOUT RADIOSHACK CORPORATION

RadioShack (NYSE: RSH) is a leading national retailer of innovative mobile
technology products and services, as well as products related to personal and
home technology and power supply needs. RadioShack^® offers consumers a
targeted assortment of wireless phones and other electronic products and
services from leading national brands, exclusive private brands and major
wireless carriers, all within a comfortable and convenient shopping
environment. RadioShack employs approximately 32,000 knowledgeable and
helpful sales experts globally. RadioShack's retail network includes
approximately 4,700 company-operated stores in the United States and Mexico,
1,500 wireless phone centers in the United States, and approximately 1,100
dealer and other outlets worldwide. For more information on RadioShack
Corporation, please visit www.radioshackcorporation.com; to purchase items
online, please visitwww.radioshack.com. RadioShack^® is a registered
trademark licensed by RadioShack Corporation.



RADIOSHACK CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (unaudited)


                        Three Months Ended          Nine Months Ended
                        September 30,               September 30,
(In millions, except    2012          2011          2012          2011
per share amounts)
Net sales and operating $  1,000.2  $  1,031.8  $  2,961.7  $  2,991.1
revenues
Cost of products sold   640.3         589.9         1,847.0       1,662.7
Gross profit            359.9         441.9         1,114.7       1,328.4
Operating expenses:
 Selling, general and 384.6         411.4         1,120.4       1,146.3
administrative
 Depreciation and     17.6          19.2          54.5          55.8
amortization
 Impairment of
long-lived assets and   16.5          0.7           18.0          1.7

goodwill
Total operating         418.7         431.3         1,192.9       1,203.8
expenses
Operating (loss) income (58.8)        10.6          (78.2)        124.6
Interest income         0.5           1.4           1.3           2.2
Interest expense        (13.2)        (12.6)        (39.2)        (33.2)
Other loss              (0.6)         --            (0.6)         (4.1)
(Loss) income from
continuing operations   (72.1)        (0.6)         (116.7)       89.5
before income taxes
Income tax (benefit)    (25.0)        (0.9)         (40.6)        34.3
expense
(Loss) income from      (47.1)        0.3           (76.1)        55.2
continuing operations
Discontinued
operations, net of      --            --            --            5.1
income taxes
Net (loss) income       $          $        $          $    
                        (47.1)        0.3           (76.1)        60.3
Basic and diluted net
(loss) income per
share:
 (Loss) income per
share from             $          $        $          $     
                        (0.47)       0.00          (0.76)       0.53
 continuing
operations
 Income per share
from discontinued       --            --            --            0.05

 operations
 Net (loss) income    $          $        $          $     
per share               (0.47)       0.00          (0.76)       0.58
Shares used in
computing net (loss)
income

 per share:
 Basic                100.1         100.2         100.1         103.4
 Diluted              100.1         100.7         100.1         104.2
Comprehensive (loss)    $          $         $          $    
income                  (44.6)        (9.9)         (70.9)        53.5



RADIOSHACK CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (unaudited)


(In millions)                  September 30,  December 31,     September 30,
                               2012           2011             2011
Assets
Current assets:
 Cash and cash equivalents   $         $           $     
                               546.1         591.7           667.7
 Accounts and notes          349.2          360.6            250.3
receivable, net
 Inventories                 851.1          744.4            790.6
 Other current assets        174.0          116.1            106.3
 Total current assets     1,920.4        1,812.8          1,814.9
Property, plant and equipment, 241.0          270.2            273.4
net
Goodwill, net                  36.9           37.0             37.4
Other assets, net              39.0           55.1             82.3
Total assets                   $          $            $    
                               2,237.3        2,175.1          2,208.0
Liabilities and Stockholders'
Equity
Current liabilities:
 Current maturities of       $         $         $       
long-term debt                 275.2         --               --
 Accounts payable            386.2          348.2            344.6
 Accrued expenses and other  286.1          315.4            299.5
current liabilities
 Total current liabilities 947.5          663.6            644.1
Long-term debt, excluding      474.0          670.6            666.4
current maturities
Other non-current liabilities  153.4          87.6             98.0
 Total liabilities        1,574.9        1,421.8          1,408.5
 Stockholders' equity     662.4          753.3            799.5
Total liabilities and          $          $            $    
stockholders' equity           2,237.3        2,175.1          2,208.0



RADIOSHACK CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)


                                             Nine Months Ended
                                             September 30,
(In millions)                                2012              2011
Cash flows from operating activities:
 Net (loss) income                         $     (76.1)  $     60.3
 Adjustments to reconcile net (loss)
income to net cash
 provided by operating activities:
  Depreciation and amortization        60.7              61.7
  Amortization of discounts on         12.8              12.2
long-term debt
  Impairment of long-lived assets and  18.0              1.7
goodwill
 Stock-based compensation             6.0               4.0
 Other non-cash items                 12.5              7.4
 Changes in operating assets and
liabilities:
 Accounts and notes receivable           102.8             126.9
 Inventories                             (104.0)           (69.4)
 Other current assets                    (35.3)            5.7
 Accounts payable                        74.1              84.5
 Accrued expenses and other              (39.1)            (32.0)
Net cash provided by operating activities    32.4              263.0
Cash flows from investing activities:
 Additions to property, plant and          (44.5)            (62.9)
equipment
 Changes in restricted cash                (26.5)            --
 Other investing activities                0.1               0.1
Net cash used in investing activities        (70.9)            (62.8)
Cash flows from financing activities:
 Net proceeds from issuance of long-term   150.0             322.5
debt
 Payments of debt issuance costs           (5.9)             (7.2)
 Principal amount of long-term debt        (88.1)            (306.8)
repayments
 Payments of dividends                     (24.9)            --
 Changes in cash overdrafts                (38.2)            (11.6)
 Purchases of treasury stock               --                (101.4)
 Proceeds from exercise of stock options   --                2.6
Net cash used in financing activities        (7.1)             (101.9)
Net (decrease) increase in cash and cash     (45.6)            98.3
equivalents
Cash and cash equivalents, beginning of      591.7             569.4
period
Cash and cash equivalents, end of period     $    546.1    $    667.7



RADIOSHACK CORPORATION AND SUBSIDIARIES

Segment Reporting (unaudited)


                               Three Months Ended          Nine Months Ended
                               September 30,               September 30,
(In millions)                  2012          2011          2012      2011
Net sales and operating
revenues:
U.S. RadioShack                $          $          $        $ 
company-operated stores        814.4         846.3         2,420.4  2,539.3
Other                          185.8         185.5         541.3     451.8
                               $  1,000.2  $  1,031.8  $        $ 
                                                           2,961.7  2,991.1
Operating income:
U.S. RadioShack                $         $         $      $   
company-operated stores        62.1          95.6          225.4     384.7
Other                          (15.4)        0.9           (13.9)    (3.6)
                               46.7          96.5          211.5     381.1
Unallocated                    (105.5)       (85.9)        (289.7)   (256.5)
Operating (loss) income        (58.8)        10.6          (78.2)    124.6
Interest income                0.5           1.4           1.3       2.2
Interest expense               (13.2)        (12.6)        (39.2)    (33.2)
Other loss                     (0.6)         --            (0.6)     (4.1)
(Loss) income from continuing  $          $         $       $    
operations before income taxes (72.1)        (0.6)         (116.7)   89.5



SOURCE RadioShack Corporation

Website: http://www.radioshackcorporation.com
Contact: Bruce Bishop, Analyst and Investor Contact, +1-817-415-3400,
Bruce.Bishop@RadioShack.com; or Media Relations, News Media Contact,
+1-817-415-3300, Media.Relations@RadioShack.com
 
Press spacebar to pause and continue. Press esc to stop.