RadioShack Corporation Reports Fourth-Quarter and Full-Year 2011 Results
FORT WORTH, Texas, Feb. 21, 2012 // PRNewswire // -- RadioShack Corp. (NYSE: RSH), a leading national retailer of innovative mobile and technology products, services and accessories, today reported results for the fourth quarter ended Dec. 31, 2011, in line with the Company's pre-announcement of earnings on Jan. 30, 2012.
Total net sales and operating revenues from continuing operations for the 2011 fourth quarter increased 5.9% to $1.39 billion, compared to $1.31 billion for the 2010 fourth quarter. Net income for the 2011 fourth quarter was $11.9 million, or $0.12 per diluted share, compared with net income of $57.0 million, or $0.51 per diluted share, for the fourth quarter ended Dec. 31, 2010.
RadioShack ended the fourth quarter with a cash balance of $591.7 million. Inventories stood at $744.4 million at the end of the quarter, up $20.7 million compared to the end of the 2010 fourth quarter, reflecting increased investment in mobility products.
Jim Gooch, president and chief executive officer of RadioShack Corp., said, "The final results for our fourth quarter are in line with the preliminary range we issued in January. Despite our gross margin challenges, we have a strong balance sheet, are making progress in our mobility business, and expect to advance our business improvement initiatives in 2012."
RadioShack will discuss the quarter and the outlook for 2012 via a live Internet webcast of its investor conference call at 8:30 a.m. EST today. The Internet broadcast may be accessed from the investor relations home page of the RadioShack corporate website at http://IR.RadioShackCorporation.com.
The increase in total net sales and operating revenues for the 2011 fourth quarter was driven by a $93.4 million increase in other sales, reflecting the rollout of the Company's Target Mobile centers to 1,496 locations by Dec. 31, 2011, compared to 850 locations at Dec. 31, 2010. This increase was partially offset by a $16.3 million decrease in sales generated by U.S. RadioShack company-operated stores.
Comparable store sales for company-operated stores and Target Mobile centers increased 2.2 percent during the 2011 fourth quarter. The increase was primarily attributable to higher postpaid wireless sales of AT&T Wireless and Verizon Wireless products and services. Tablet devices also contributed to the increase in comparable store sales. These increases were partially offset by a decline in Sprint and T-Mobile postpaid wireless sales, in addition to lower sales of digital cameras and digital music players.
Consolidated gross profit for the 2011 fourth quarter was $482.4 million, or 34.8 percent of net sales, compared with $537.0 million, or 41.0 percent of net sales, for the 2010 fourth quarter. The fourth-quarter gross margin decline reflects a shift in mix within mobility sales toward certain lower margin smartphones and mobile devices; a higher percentage of mobility sales in the overall revenue mix, driven largely by the Company's expansion of Target Mobile centers; and the impact of a more promotional holiday season.
Consolidated selling, general and administrative ("SG&A") expenses for the 2011 fourth quarter were $431.1 million, or 31.1 percent of net sales, compared with $420.9 million, or 32.1 percent of net sales, for the 2010 fourth quarter. The increase in SG&A expenses in the fourth quarter resulted primarily from higher compensation expense to support the additional 646 Target Mobile centers in operation at the end of 2011 compared to the end of 2010. These higher expenses were partially offset by lower incentive compensation and rent and occupancy costs.
The fourth-quarter 2011 operating income was $30.5 million, compared with fourth-quarter 2010 operating income of $96.9 million.
Total net sales and operating revenues for 2011 (12 months ended Dec. 31, 2011) increased 2.6 percent to $4.38 billion, compared to 2010 (12 months ended Dec. 31, 2010). Comparable store sales for company-operated stores and Target Mobile centers decreased 2.2 percent in 2011, compared to 2010.
Consolidated gross profit for 2011 included one-time charges of $3.9 million associated with a T-Mobile inventory valuation charge and our China manufacturing plant closure. Excluding one-time items, gross profit would have been $1.81 billion, or 41.5 percent of net sales, compared to $1.91 billion, or 44.9 percent of net sales, in 2010.
Consolidated SG&A expenses for 2011 were $1.58 billion, and included one-time charges of $32.9 million relating to the wireless carrier transition in the third quarter and the China manufacturing plant closure. Excluding one-time items, SG&A expenses would have been $1.54 billion, or 35.3 percent of net sales, compared to $1.48 billion, or 34.8 percent of net sales, for the same period of 2010.
Operating income for 2011 was $155.1 million, and included one-time items totaling $37.4 million, compared to operating income of $350.2 million for 2010.
Net income for 2011 was $72.2 million, or $0.70 per diluted share. Net income in 2011 included the following one-time items:
Excluding one-time items, net income for 2011 would have been $98.4 million, or $0.95 per diluted share, compared with net income of $206.1 million, or $1.68 per diluted share, for the same period last year.
RadioShack will host a live Internet webcast of its investor conference call at 8:30 a.m. EST 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. EST today and will remain available until midnight on March 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 94408578.
Shareholders may obtain a hard copy of RadioShack's fiscal 2011 complete audited financial statements free of charge by calling RadioShack Shareholder Services at (817) 415-3021, or by writing to Shareholder Services, Mail Stop CF4-324, 300 RadioShack Circle, Fort Worth, TX, 76102.
Management measures and reports RadioShack's financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). In this release, RadioShack highlights certain items that have significantly impacted the Company's financial results and uses non-GAAP financial measures to help investors understand the financial impact of these items. Information concerning the reconciliation of non-GAAP financial measures to their comparable GAAP financial measures is included in the supplemental financial tables attached to this release.
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 new 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. In addition, the declaration of dividends and the dividend rate are at the sole discretion of RadioShack Corporation's board of directors, and plans for future dividends may be revised by the board at any time. RadioShack's dividend could be adversely affected by, among other things, changes in RadioShack's financial position, results of operations, capital expenditures, cash flows, and applicable tax laws. 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.
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. The Shack® 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 34,000 people globally, including a team of friendly and helpful sales experts who have been recognized for delivering the best customer service in the wireless industry. 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 visit www.radioshack.com. RadioShack® and The Shack® are registered trademarks licensed by RadioShack Corporation.
View Original for Full Data Table
Sales for the U.S. RadioShackcompany-operated stores segment decreased $16.3 million to $1,124.0 million in the 2011 fourth quarter when compared with the same period last year. The table below provides a breakdown of sales drivers for U.S.RadioShack company-operated stores in the 2011 fourth quarter compared to the same period last year for each product platform.
View Original for Full Data Table
This release contains some non-GAAP financial measures that exclude the impact of the certain one-time costs from a financial measure computed in accordance with GAAP. Management believes that these non-GAAP financial measures are an additional way of viewing aspects of RadioShack's business that, when viewed together with RadioShack's financial results computed in accordance with GAAP, provide a more complete understanding of RadioShack's historical financial performance, greater transparency of underlying profit trends and greater comparability of results across periods. These non-GAAP financial measures are not intended to be a substitute for the corresponding GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
SOURCE RadioShack Corporation
RadioShack, the neighborhood electronics convenience store, is a leading national retailer of innovative personal and home technology products and services, and power supply needs.