Everytime I look at this, I want to add puts
Touting in PR increased net and 418 mil increase in cash. But that was created with 310 less in inventory + 100 less in receivables + 17 in other current assets
Viola!! That's 437 million added in their account
So they have NO inventory, closing stores, sharply reduced ad placements, SSS down 9%+, less incentives to shop there, competition coming out of the wazoo, and the home electronics biz is in the pits.
RSH stock- "You've got questions, we've got no answers"
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RadioShack Corporation Announces Significant Improvement in Net Income and Cash Balance
Fort Worth, Texas, April 30, 2007 - RadioShack Corporation (NYSE: RSH) today announced net income of $42.5 million or $0.31 per diluted share for the quarter ended March 31, 2007 versus net income of $8.4 million or $0.06 per diluted share for the quarter ended March 31, 2006. First quarter net income was favorably impacted by improved gross margin, a reduction in selling, general and administrative (SG&A) expenses and an increase in interest income when compared to the prior year period.
The results for the quarter were impacted by two unusual items. The negative impact of costs related to employee separations included in SG&A expenses ($8.5 million pre-tax) was more than offset by an increase to gross profit ($14.0 million pre-tax) associated with the recapture of federal telecommunications excise tax. The prior year period’s results included a charge for impairment of fixed assets which reduced the company’s 2006 first quarter pre-tax income by $8.9 million. The items noted above increased earnings per share in the March 2007 quarter by $0.02 and decreased earnings per share in the March 2006 quarter by $0.04.
RadioShack’s cash balance increased by $418 million at the end of first quarter of 2007 to $463 million from $45 million at the end of first quarter of 2006. The increase in cash was driven by improved working capital management and cash generated from net income partially offset by cash used in share repurchases of $45.2 million under the company’s share repurchase program. As of March 31, 2007, $163 million remained available for share repurchase under the repurchase program.
First quarter 2007 comparable store sales were down 9.2% versus the prior year. Total sales decreased in the first quarter of 2007 to $992 million, down 14.5%, from total sales of $1,160 million for the previous year. The declines in the postpaid wireless business continue to impact both the comparable store and total sales results. In addition, total sales were impacted by 506 fewer company-operated stores and kiosks when compared to last year.
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“We took the opportunity earlier this year to warn that same store sales numbers for the first quarter were likely to be challenging, given the highly promotional nature of our business in the first quarter last year. And so it proved. Nonetheless, against this background we were able to produce financial results which reflected steady improvement in our operating economics,” stated Julian C. Day, chairman and chief executive officer.
First quarter 2007 gross margin rate was 52.0% versus 48.3% for the same period of the previous year, an increase of 370 basis points. The increase was driven primarily by improved inventory management, improved product mix and to a lesser extent the federal telecommunications excise tax benefit mentioned above.
SG&A expenses were $412 million in the first quarter of 2007, down $84 million or 16.9% versus the prior year. The decrease was due to cost reductions in payroll, advertising and outside services, partially offset by the costs associated with the employee separations discussed above.
Free cash flow 1 improved significantly when compared to last year’s first quarter. RadioShack generated $37 million in free cash flow in the first quarter of 2007 versus a cash use of $310 million in the first quarter of 2006. The increase in cash generation was a result of improved inventory management and more prudent capital expenditures, combined with higher net income.
“We are encouraged by our progress, both in improvement of gross margin and management of SG&A expenses, resulting in a significant increase in both net income and cash balance,” stated Jim Gooch, chief financial officer. “While we recognize and are focused on our top-line sales challenges, particularly in the wireless business, we will continue to bring a disciplined approach to the management of our business, with the goals of improving profitability, strengthening our balance sheet and driving cash flow.”
RadioShack Corporation filed today with the SEC its Form 10-Q for the quarter ended March 31, 2007.
Forward-Looking Statements
This press release contains forward-looking statements, as referenced in the Private Securities Litigation Reform Act of 1995 (“the Act”). These forward-looking statements are indicated by words such as “anticipate,” “intention,” “expect” and other similar words or phrases. These forward-looking statements reflect management’s current views and projections regarding economic conditions, retail industry environments and company performance. Factors that could significantly change results include, but are not limited
1 Free cash flow, a non-GAAP financial measure, is defined as net cash from operating activities minus additions to property, plant, and equipment (a.k.a. capital expenditures) minus dividends paid. See reconciliation of net cash from operating activities to free cash flow on page 7.
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to, sales performance, economic conditions, product demand, expense levels, competitive activity, interest rates, changes in the company’s financial condition, availability of products, 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 and quarterly report on Form 10-Q.
About RadioShack Corporation
RadioShack Corporation (NYSE: RSH) is one of the nation’s most experienced and trusted consumer electronics specialty retailers. The company has a presence through more than 6,000 company-operated stores and dealer outlets in the United States, over 100 RadioShack locations in Mexico and nearly 800 wireless phone kiosks. RadioShack’s dedicated force of knowledgeable and helpful sales associates has been consistently recognized by several independent groups as providing the best customer service in the consumer electronics and wireless industries. Operating from convenient and comfortable neighborhood and mall locations, RadioShack stores deliver personalized product and service solutions within a few short minutes of where most Americans either live or work. For more information on RadioShack Corporation, or to purchase items online, visit www.radioshack.com .
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