RadioShack Reports Financial Results for Third Quarter 2013

         RadioShack Reports Financial Results for Third Quarter 2013

Concept Store Initiative to be Rolled Out More Broadly in Coming Months

Acceleration of Strategic Decisions on Merchandise Assortment Impacted Cost of
Products Sold

New Financing Commitments Obtained to Provide Additional Financial Flexibility

PR Newswire

FORT WORTH, Texas, Oct. 22, 2013

FORT WORTH, Texas, Oct. 22, 2013 /PRNewswire/ --RadioShack Corporation (NYSE:
RSH) today reported results for the third quarter ended September 30, 2013,
including total net sales and operating revenues of $805 million and net loss
of $112 million. The Company also announced that it has received commitments
for $835 million of a new five-year debt financing. The Company continues to
address significant legacy issues as it engineers a comprehensive operational
turnaround driven by the Company's five pillars: reposition the brand, revamp
the product assortment, reinvigorate the store experience, operational
efficiency and financial flexibility.

(Logo:http://photos.prnewswire.com/prnh/20130716/LA47690LOGO)

Joseph C. Magnacca, chief executive officer, said, "We are moving forward
quickly and as planned with our turnaround efforts. As we have said, we expect
our work to take several quarters and during that time our results will vary
quarter to quarter as we make strategic changes to improve our long-term
financial performance. This quarter reflects our strategic decision to
accelerate the improvements to the product assortment in our stores by
removing duplicate and unproductive inventory. The lower inventory valuations
for these products and projected disposal costs resulted in an expected
increase to our cost of products sold this quarter."

Mr. Magnacca continued: "We have an aggressive plan to reinvigorate our store
experience this fall in nearly all of our stores. This plan builds upon the
sales improvement we've seen in three concept stores and two brand statement
stores. By the end of the year, we will have over 100 concept and brand
statement stores open. In addition, we are currently contemporizing our stores
by significantly re-merchandising inventory in a more logical manner and
improving presentation. Our entire store base of nearly 4,300 stores will see
improvements from these changes which are being implemented in the early part
of the fourth quarter."

"We are pleased with the recently obtained commitments for new financing. We
are on track to achieve the Company's previously stated objective to
supplement liquidity and enhance financial flexibility for the continued
execution of our operational turnaround."

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

"We strongly believe our new retail and consumer-centric strategy has us
heading in the right direction. We've made significant progress in the third
quarter and will continue to focus on execution during the all-important
holiday selling season," Mr. Magnacca concluded.

THIRD QUARTER SUMMARY

  oTotal net sales and operating revenues were $805 million, compared to $898
    million last year. The decline was driven by an 8.4% decrease in
    comparable store sales due to reduced sales for each of the Company's
    product platforms. The Company continued to see increased sales of prepaid
    mobile phones in the mobility platform and in certain signature categories
    including portable speakers, Apple Lightning compatible cables and
    adaptors during the period.
  oGross profit was $243 million, compared with $341 million last year. Gross
    margin was 30.1% of net sales, compared to 38.0% last year. Gross profit
    and gross margin performance were negatively impacted by approximately $47
    million as a result of the Company's decision to accelerate the
    merchandise assortment changes by removing duplicate and unproductive
    products. Additionally, gross profit was negatively impacted by lower
    sales and decreased gross profit in the postpaid wireless business.
  oSelling, general and administrative (SG&A) expenses were $343 million, or
    42.6% of net sales, compared with $354 million last year. The decrease was
    driven by fewer stores in operation and lower severance costs versus last
    year.
  oOperating loss was $118 million, compared to a $34 million loss last year.
  oNet loss was $112 million, or $1.11 per diluted share, compared to net
    loss of $47 million last year.
  oThe Company continues to have a strong balance sheet and total liquidity
    of $613 million as of September 30, 2013.

CASH, LIQUIDITY AND CAPITAL SPENDING

The Company ended the third quarter with total liquidity of $613 million,
including cash and cash equivalents of $316.4 million and $296.2 million of
available credit under the asset-based revolving credit facility that expires
in January 2016.

The Company's total debt was $499 million at September 30, 2013. On August 1,
2013, the Company repaid the $214 million remaining aggregate principal
balance of the 2013 Convertible Notes at maturity. The balance of the
Company's debt matures between 2016 and 2019.

Capital spending totaled $14.9 million in the third quarter compared to $16.8
million last year.

Subsequent to the end of the quarter, the Company obtained financing
commitments from a consortium of lenders led by GE Capital, Corporate Finance;
CIT Corporate Finance; RBS Citizens, N.A.; and Salus Capital Partners. These
commitments total $835 million including a new $585 million senior secured ABL
credit facility and a new $250 million secured term loan. The new debt
facilities will be used to refinance the Company's existing $450 million ABL
credit facility, $75 million of term loans and $100 million second lien term
loan. The Company expects the new financings will provide approximately $175
million of incremental liquidity. The Company expects the new debt facilities
will be closed in the fourth quarter. The new financings are subject to
customary closing conditions.

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 5, 2013. 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 68578415.

For more information about performance, refer to the RadioShack Corporation
Quarterly Report on Form 10-Q filed with the Securities and Exchange
Commission on October 22, 2013.

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 2013
initiatives; our ability to complete the new debt financings on the terms
contemplated by the commitments in the fourth quarter of 2013 or at all; 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;
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, 2012.

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 30,000 knowledgeable and helpful
sales experts globally. RadioShack's retail network includes approximately
4,300 company-operated stores in the United States, over 270 company-operated
stores in Mexico, and approximately 1,000 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.

Analyst and Investor Contact: News Media Contact:
Bruce Bishop                  Media Relations
(817) 415-3400                (817) 415-3300
Bruce.Bishop@RadioShack.com   Media.Relations@RadioShack.com



RADIOSHACK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (unaudited)
                                 Three Months Ended     Nine Months Ended
                                 September 30,          September 30,
(In millions, except per share   2013        2012       2013        2012
amounts)
Net sales and operating          $ 805.4     $ 898.0    $ 2,498.9   $ 2,659.9
revenues
Cost of products sold              562.7       557.2      1,605.1     1,608.8
Gross profit                       242.7       340.8      893.8       1,051.1
Operating expenses:
Selling, general and               343.3       354.0      1,018.1     1,036.3
administrative
Depreciation and amortization      15.0        16.0       47.0        49.5
Impairment of long-lived assets    2.4         4.8        6.6         6.3
and goodwill
Total operating expenses           360.7       374.8      1,071.7     1,092.1
Operating loss                     (118.0)     (34.0)     (177.9)     (41.0)
Interest income                    0.3         0.5        1.0         1.3
Interest expense                   (11.5)      (13.2)     (40.6)      (39.2)
Other loss                         --          (0.6)      (0.3)       (0.6)
Loss from continuing operations    (129.2)     (47.3)     (217.8)     (79.5)
before income taxes
Income tax benefit                 (16.8)      (15.9)     (17.2)      (27.2)
Loss from continuing operations    (112.4)     (31.4)     (200.6)     (52.3)
Discontinued operations, net of    --          (15.7)     (8.2)       (23.8)
income taxes
Net loss                         $ (112.4)   $ (47.1)   $ (208.8)   $ (76.1)
Basic and diluted net loss per
share:
Loss per share from continuing   $ (1.11)    $ (0.31)   $ (1.99)    $ (0.52)
operations
Loss per share from                --          (0.16)     (0.08)      (0.24)
discontinued operations
Net loss per share               $ (1.11)    $ (0.47)   $ (2.07)    $ (0.76)
Shares used in computing net
loss per share:
Basic and diluted                  101.0       100.1      100.7       100.1
Comprehensive loss               $ (113.2)   $ (44.6)   $ (208.9)   $ (70.9)



RADIOSHACK CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited)
                                    September 30,  December 31,  September 30,
(In millions)                       2013           2012          2012
Assets
Current assets:
Cash and cash equivalents           $  316.4       $  535.7      $  546.1
Accounts and notes receivable, net     201.6          452.5         349.2
Inventories                            707.7          908.3         851.1
Other current assets                   105.2          85.4          174.0
Total current assets                   1,330.9        1,981.9       1,920.4
Property, plant and equipment, net     203.2          239.0         241.0
Goodwill, net                          36.1           36.6          36.9
Other assets, net                      36.9           41.6          39.0
Total assets                        $  1,607.1     $  2,299.1    $  2,237.3
Liabilities and Stockholders'
Equity
Current liabilities:
Current maturities of long-term     $  1.0         $  278.7      $  275.2
debt
Accounts payable                       282.1          435.6         386.2
Accrued expenses and other current     217.4          263.9         261.3
liabilities
Total current liabilities              500.5          978.2         922.7
Long-term debt, excluding current      498.3          499.0         474.0
maturities
Other non-current liabilities          214.3          223.2         178.2
Total liabilities                      1,213.1        1,700.4       1,574.9
Total stockholders' equity             394.0          598.7         662.4
Total liabilities and               $  1,607.1     $  2,299.1    $  2,237.3
stockholders' equity



RADIOSHACK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited)
                                                     Nine Months Ended
                                                     September 30,
(In millions)                                        2013        2012
Cash flows from operating activities:
Net loss                                             $ (208.8)   $ (76.1)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization                          54.9        60.7
Amortization of discounts on long-term debt            7.1         12.8
Impairment of long-lived assets and goodwill           6.6         18.0
Stock-based compensation                               5.9         6.0
Other non-cash items                                   4.2         11.1
Changes in assets and liabilities:
Accounts and notes receivable                          252.2       102.8
Inventories                                            200.3       (104.0)
Other current assets                                   (10.7)      (35.3)
Accounts payable                                       (76.6)      74.1
Accrued expenses and other                             (59.5)      (37.7)
Net cash provided by operating activities              175.6       32.4
Cash flows from investing activities:
Additions to property, plant and equipment             (26.6)      (44.5)
Proceeds from sale of property, plant and equipment    6.5         --
Changes in restricted cash                             (6.8)       (26.5)
Other investing activities                             (3.0)       0.1
Net cash used in investing activities                  (29.9)      (70.9)
Cash flows from financing activities:
Principal amount of long-term debt repayments          (286.9)     (88.1)
Net proceeds from issuance of long-term debt           --          150.0
Payments of debt issuance costs                        --          (5.9)
Payments of dividends                                  --          (24.9)
Changes in cash overdrafts                             (78.1)      (38.2)
Net cash used in financing activities                  (365.0)     (7.1)
Net decrease in cash and cash equivalents              (219.3)     (45.6)
Cash and cash equivalents, beginning of period         535.7       591.7
Cash and cash equivalents, end of period             $ 316.4     $ 546.1



RADIOSHACK CORPORATION AND SUBSIDIARIES
Segment Reporting (unaudited)
                                Three Months Ended      Nine Months Ended
                                September 30,           September 30,
(In millions)                   2013        2012        2013        2012
Net sales and operating
revenues:
U.S. RadioShack                 $ 733.9     $ 814.4     $ 2,272.7   $ 2,420.4
company-operated stores
Other                             71.5        83.6        226.2       239.5
                                $ 805.4     $ 898.0     $ 2,498.9   $ 2,659.9
Operating income (loss):
U.S. RadioShack                 $ (26.5)    $ 62.1      $ 74.1      $ 225.4
company-operated stores
Other                             1.6         10.1        13.2        24.5
                                  (24.9)      72.2        87.3        249.9
Unallocated                       (93.1)      (106.2)     (265.2)     (290.9)
Operating loss                    (118.0)     (34.0)      (177.9)     (41.0)
Interest income                   0.3         0.5         1.0         1.3
Interest expense                  (11.5)      (13.2)      (40.6)      (39.2)
Other loss                        --          (0.6)       (0.3)       (0.6)
Loss from continuing            $ (129.2)   $ (47.3)    $ (217.8)   $ (79.5)
operations before income taxes



SOURCE RadioShack Corporation

Website: http://www.radioshack.com
 
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