Plans to close up to 1,100 underperforming stores in the U.S.
Strong sales growth in Concept Stores
Completed new five-year financing totaling $835 million in the fourth quarter
FORT WORTH, Texas - March 4, 2014 // PRNewswire // - RadioShack Corporation (NYSE: RSH) today reported results for the fourth quarter ended December 31, 2013.
Joseph C. Magnacca, chief executive officer, said, "Our fourth quarter financial results were driven by a holiday season characterized by lower store traffic, intense promotional activity particularly in consumer electronics, a very soft mobility marketplace and a few operational issues. Even in this environment, we're continuing to make progress on the five pillars of our turnaround plan: repositioning the brand, revamping the product assortment, reinvigorating the stores, operational efficiency and financial flexibility.
"Our brand equity remains strong, reflected in the sales growth we're seeing in our new Concept Stores which redefine the RadioShack store experience," Mr. Magnacca added. "We have also been encouraged by the positive response to our new brand positioning around "Do It Together," which we kicked off with our award winning Super Bowl commercial. Importantly, our key hires during the fourth quarter in merchandising, global sourcing, planning and allocation and, more recently, our new chief financial officer, round out our new leadership team as we continue to re-build the business."
Mr. Magnacca continued, "Our focus on the brand, our operations, and the in-store experience has been unfolding in parallel with a strategic review of our store footprint. Over the past few months, we have undertaken a comprehensive review of our portfolio from many angles – location, area demographics, lease life and financial performance – in order to consolidate our store base into fewer locations while maintaining a strong presence in each market. The result of that review is our plan to close up to 1,100 underperforming stores. We will continue to have a strong, unmatched presence across the U.S. with over 4,000 stores including over 900 dealer franchise locations.
"Without minimizing the challenges ahead, we have a detailed strategic path to profitability based upon the five pillars of our turnaround," Mr. Magnacca concluded. "Our entire team is focused on execution as we work to improve our performance in the coming year."
Note: All comparisons are versus the same period of the prior fiscal year unless otherwise noted.
FULL YEAR SUMMARY
The Company ended the fourth quarter with total liquidity of $554.3 million at December 31, 2013, including $179.8 million in cash and cash equivalents and $374.5 million of availability under our 2018 Credit Agreement. Other than letters of credit of $55.0 million at December 31, 2013, the Company has not otherwise used the availability under the 2018 Credit Agreement. The Company's total debt was $614 million at December 31, 2013, which matures between 2018 and 2019.
As previously announced, the Company has aligned its fiscal yearend to a traditional 52-week retail calendar, with the fiscal year ending on the Saturday closest to January 31st. This is the format used by the majority of retailers today. Changing the Company's yearend will benefit the investment community as it will allow for easier comparability between the Company and its peers. It will also allow the management team to more efficiently track and measure the Company's performance during the year.
As a result of this change, the Company will have a stub period between January 1, 2014, and February 1, 2014, that will be identified as Fiscal Year 2014 which will be reported separately in the Form 10-Q for the first quarter of Fiscal 2015. Fiscal Year 2015 will run from February 2, 2014, through January 31, 2015.
RadioShack will host a live webcast of its investor conference call at 10 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 1 p.m. EDT today and will remain available until midnight EDT on March 18, 2014. 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 13147362.
For more information about performance, refer to the RadioShack Corporation Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 4, 2014.
Adjusted gross profit, adjusted operating loss and adjusted net loss have each been adjusted to exclude specifically identified expenses in the reconciliation of non-GAAP financial measures. In addition, a calculation of adjusted EBITDA has been included. We believe that providing comparisons for these measures, adjusted for the items shown in the accompanying reconciliations, provides useful information to the reader in assessing our operating performance. These non-GAAP measures are used by management to evaluate the operating performance of the business for comparable periods, however, they are not intended to replace the comparable GAAP measures.
The adjustments to net loss and net loss per share in the 2013 fourth quarter relate to inventory reserves of $10.1 million and fixed asset impairment charges of $11.2 million related to our proposed store closure program, goodwill impairment of $23.7 million related to the Company's operations in Mexico, fixed asset impairment charges of $5.9 million related to other stores and a $10.6 million loss on extinguishment of debt related to our refinancing that took place in December 2013. The adjustment of $3.4 million to net loss in the 2012 fourth quarter is related to fixed asset impairments.
For the year ended December 31, 2013, additional adjustments include inventory losses related to the removal of products from our inventory assortment in the third quarter of 2013 of $46.6 million, other fixed asset impairment charges of $6.6 million and a $0.3 million loss on extinguishment of debt related to the repurchase of a portion of the 2013 Convertible Notes. For the year ended December 31, 2012, additional adjustments include goodwill of $3.0 million, fixed asset impairment charges of $3.3 million and debt extinguishment charges of $0.6 million. In each case, adjusted net loss reflects the related income tax effect of the adjustment.
Reconciliations of these non-GAAP measures to comparable measures calculated in accordance with GAAP are provided in the accompanying schedules.
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 initiatives, including our strategic turnaround plan and our proposed store closure program; 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, 2013.
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 27,500 knowledgeable and helpful sales experts globally. RadioShack's retail network includes approximately 4,300 company-operated stores in the United States, 274 company-operated stores in Mexico, and approximately 950 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® is a registered trademark licensed by RadioShack Corporation.
Bruce Bishop
(817) 415-3400
Bruce.Bishop@RadioShack.com
Media Relations
(817) 415-3300
Media.Relations@RadioShack.com
View Original for Full Data Table
View Original for Full Data Table
View Original for Full Data Table
View Original for Full Data Table
View Original for Full Data Table
View Original for Full Data Table
View Original for Full Data Table
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.