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Home >> RadioShack Reports Net Loss, Lower Sales
Fort Worth, Texas — RadioShack reported a net loss, slightly lower sales, and lower comp sales in the fourth quarter, and a net loss for the year, ended Dec. 31.
Total net sales and operating revenue were $1.3 billion, compared with $1.4 billion last year. Comp-store sales were down 7 percent, driven by a decline in the mobility and consumer electronics platforms, the chain said.
There was a net loss of $63 million, including the non-cash valuation allowance for deferred tax assets, compared with net income of $12 million last year. Operating income was $17 million, compared with $31 million last year.
Dorvin Lively, executive VP, chief financial officer and chief administrative officer of RadioShack, said in a statement, “Overall, the fourth quarter continued to be impacted by challenges similar to those of the first three quarters of the year. The most significant contributing factor to the decline in our performance was the postpaid wireless business, which saw a decline in transaction volume across the year, combined with a lower margin rate.”
But, Lively noted, “I am pleased with the progress we have made in improving other aspects of our business. The gross margin rate for all of our business, excluding mobility, was flat with 2011, with significant improvement in our consumer electronics business. We have improved and strengthened our high-margin signature platform, which generated sales growth in each quarter of 2012. Additionally, our no-contract phone and tablet businesses generated sales and gross profit improvement."
For the full year there was a net loss of $139 million, including the non-cash valuation allowance for deferred tax assets, compared with net income of $72 million last year.
Total net sales and operating revenue were $4.3 billion, compared with $4.4 billion last year. Comp-store sales were down 3.5 percent.
Operating loss was $61 million, compared with operating income of $155 million last year.
Lively said RadioShack has taken “a number of significant steps to better position the company for the transformation of our business,” such as $175 million in new financing, ending the Target Mobile locations, and reported “liquidity of $926 million at year end”.
He added that with the addition of new CEO Joe Magnacca “and other new senior executives, we now have a strong management team in place focused on rebuilding the business and leading the company into the future.”
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