SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 21, 2003
RADIOSHACK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-5571 75-1047710
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
100 Throckmorton Street, Suite 1800, Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (817) 415-3700
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No.
99.1 Press Release, dated October 21, 2003.
Item 12. Results of Operations and Financial Condition
On October 21, 2003, RadioShack Corporation (the "Company") issued a press
release reporting its results of operations for the second quarter of 2003. A
copy of the press release is attached hereto as Exhibit 99.1.
In the press release, the Company utilized a non-GAAP financial measure to
present the Company's free cash flow. The Company's management believes that
free cash flow is an appropriate indication of the Company's ability to fund
share repurchases, repay maturing debt, change dividend payments or fund other
uses of capital that management believes will enhance stockholder value.
Management does not intend the presentation of this non-GAAP financial measure
to be considered in isolation or as a substitute for measures prepared in
accordance with GAAP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized this 21st day of October, 2003.
RADIOSHACK CORPORATION
/s/ Mark C. Hill
------------------------------------------
Mark C. Hill
Senior Vice President - Chief
Administrative Officer, Corporate
Secretary and General Counsel
EXHIBIT INDEX
Exhibit No.
99.1 Press Release, dated October 21, 2003.
Exhibit 99.1
October 21, 2003
RSH-2003-048
For further information contact:
James M. Grant, Laura Moore,
Senior Director, Investor Relations Senior Vice President,
(817) 415-7833 Chief Communications Officer
Or (817) 415-3300
Leah M. King Media.relations@radioshack.com
Director, Investor Relations ------------------------------
(817) 415-2909
investor.relations@radioshack.com
---------------------------------
RadioShack Corporation Announces Third Quarter 2003 Financial Results
Net Income up 27%, E.P.S. up 36%
Fort Worth, Texas - RadioShack Corporation (NYSE: RSH) today announced third
quarter net income of $57 million or $0.34 per diluted share for the quarter
ended September 30, 2003, compared to net income of $45 million or $0.25 per
diluted share for the quarter ended September 30, 2002. Third quarter 2003
earnings per diluted share were favorably impacted by less than one cent from
the net effect of a litigation settlement and costs related to the
rationalization of certain manufacturing and installation businesses.
Comparable store sales for the third quarter 2003 were up 3% compared to the
prior year. Total sales in the third quarter 2003 were up 2% to $1,064 million,
compared to total sales of $1,047 million for the previous year. Wireless
communications department sales for the third quarter of 2003 were up 12%.
RadioShack drove increases in both total sales and gross margin percentage in
the same quarter for the first time in 19 quarters.
"RadioShack is clearly on the right track. Third quarter financials were the
result of striking a very prudent balance between sales and profitability," said
Leonard Roberts, chairman and chief executive officer of RadioShack Corporation.
"Our vendor initiatives, buying disciplines, and field execution are driving
higher profit and better returns for our shareholders."
Inventory turnover through the third quarter of 2003 was 2.6 times versus 2.4
times a year ago. Free cash flow(1) was $321 million for the nine-months ended
September 30, 2003, compared to $217 million in the prior year.
As for fourth quarter 2003 guidance, RadioShack anticipates generating diluted
earnings per share of $0.67 - $0.70.
Today at 9:00 a.m. ET, management will host a conference call for interested
investors followed by a question and answer period. The public is invited to
listen to the call live on the Internet at www.radioshackcorporation.com on the
Investor Relations page. The call will be replayed on the Web site until January
9, 2004 at 11:59 p.m. ET.
Statements made in this news release which are forward-looking statements
involve risks and uncertainties and are indicated by words such as
"anticipates," "approximately," and other similar words or phrases. These
uncertainties include, but are not limited to, economic conditions, product
demand, competitive products and pricing, availability of products, the
regulatory environment and other risks indicated in filings with the S.E.C. such
as RadioShack's most recent Form 10-K and 10-Q.
Fort Worth, Texas-based RadioShack Corporation (NYSE: RSH) is the nation's most
trusted consumer electronics specialty retailer of wireless communications,
electronic parts, batteries and accessories as well as other digital technology
products and services. With more than 7,000 outlets nationwide, it is estimated
that 94 percent of all Americans live or work within five minutes of a
RadioShack store or dealer. The company's knowledgeable sales associates and
brand position - "You've got questions. We've got answers.(R)" - support
RadioShack's mission to demystify technology in every neighborhood in America.
For more information on the company, visit the RadioShack Corporation Web site
at www.radioshackcorporation.com. For more information on RadioShack products
and services, visit its e-commerce Web site at www.radioshack.com.
--------
1 Free cash flow is defined as net cash from operating activities minus
additions to property, plant and equipment (a.k.a. capital expenditures) minus
dividends paid.
RADIOSHACK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
(In millions, except per share amounts)
Three Months Ended Increase/ Nine Months Ended Increase/
September 30, (Decrease) September 30, (Decrease)
----------------------- ------------ ----------------------- ------------
2003 2002 2003 vs 2002 2003 2002 2003 vs 2002
---------- ---------- ------------ ---------- ---------- ------------
Net sales and operating revenues $1,063.6 $1,047.0 $ 16.6 $3,158.9 $3,079.5 $ 79.4
Cost of products sold 530.9 525.6 5.3 1,577.6 1,528.3 49.3
---------- ---------- ------------ ---------- ---------- ------------
Gross profit 532.7 521.4 11.3 1,581.3 1,551.2 30.1
---------- ---------- ------------ ---------- ---------- ------------
Operating expenses:
Selling, general and
administrative 421.4 420.0 1.4 1,235.8 1,234.5 1.3
Depreciation and amortization 23.3 23.0 0.3 68.8 71.9 (3.1)
---------- ---------- ------------ ---------- ---------- ------------
Total operating expenses 444.7 443.0 1.7 1,304.6 1,306.4 (1.8)
---------- ---------- ------------ ---------- ---------- ------------
Operating income 88.0 78.4 9.6 276.7 244.8 31.9
Interest income 1.9 2.2 (0.3) 11.4 6.1 5.3
Interest expense (8.7) (11.3) 2.6 (28.1) (32.8) 4.7
Other income 8.9 3.1 5.8 12.0 30.8 (18.8)
---------- ---------- ------------ ---------- ---------- ------------
Income before income taxes 90.1 72.4 17.7 272.0 248.9 23.1
Provision for income taxes 33.0 27.5 5.5 100.8 94.6 6.2
---------- ---------- ------------ ---------- ---------- ------------
Net income $ 57.1 $ 44.9 $ 12.2 $ 171.2 $ 154.3 $ 16.9
========== ========== ============ ========== ========== ============
Net income per common share:
Basic $ 0.34 $ 0.25 $ 0.09 $ 1.01 $ 0.87 $ 0.14
========== ========== ============ ========== ========== ============
Diluted $ 0.34 $ 0.25 $ 0.09 $ 1.01 $ 0.83 $ 0.18
========== ========== ============ ========== ========== ============
Shares used in computing earnings per common
share:
Basic 166.1 172.1 (6.0) 168.8 174.4 (5.6)
========== ========== ============ ========== ========== ============
Diluted 167.6 178.0 (10.4) 169.4 181.0 (11.6)
========== ========== ============ ========== ========== ============
RADIOSHACK CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(In millions)
Sept. 30, Dec. 31, Sept. 30,
2003 2002 2002
------------ ------------ ------------
Assets
Cash and cash equivalents $ 558.2 $ 446.5 $ 365.4
Accounts and notes receivable, net 121.4 206.1 205.1
Inventories 914.6 971.2 1,118.8
Other current assets 91.3 83.1 92.8
------------ ------------ ------------
Total current assets 1,685.5 1,706.9 1,782.1
Property, plant and equipment, net 438.3 421.6 413.4
Other assets 95.5 99.4 121.0
------------ ------------ ------------
Total assets $2,219.3 $2,227.9 $2,316.5
============ ============ ============
Liabilities and Stockholders' Equity
Short-term debt $ 39.5 $ 36.0 $ 41.8
Accounts payable 409.8 312.6 433.1
Accrued expenses 265.3 318.7 308.0
Income taxes payable 150.2 160.9 142.2
------------ ------------ ------------
Total current liabilities 864.8 828.2 925.1
Long-term debt, excluding current
maturities 546.5 591.3 589.8
Other non-current liabilities 81.3 80.3 79.5
------------ ------------ ------------
Total liabilities 1,492.6 1,499.8 1,594.4
------------ ------------ ------------
Stockholders' equity 726.7 728.1 722.1
------------ ------------ ------------
Total liabilities and stockholders'
equity $2,219.3 $2,227.9 $2,316.5
============ ============ ============
RADIOSHACK CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(In millions)
Nine Months Ended
September 30,
2003 2002
---------- ----------
Cash flows from operating activities:
Net income $ 171.2 $ 154.3
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 68.8 71.9
Provision for credit losses and bad debts 0.5 3.9
Other items 15.4 12.3
Changes in operating assets and liabilities:
Receivables 77.6 69.0
Inventories 54.2 (169.0)
Other current assets (11.7) (5.4)
Accounts payable, accrued expenses and income
taxes payable 33.7 158.3
---------- ----------
Net cash provided by operating activities 409.7 295.3
---------- ----------
Cash flows from investing activities:
Additions to property, plant and equipment (88.6) (76.2)
Proceeds from sale of property, plant and equipment 0.3 8.3
Proceeds from sale of installation subsidiaries 4.7 -
Other investing activities (2.5) (0.1)
---------- ----------
Net cash used in investing activities (86.1) (68.0)
---------- ----------
Cash flows from financing activities:
Purchases of treasury stock (209.4) (247.9)
Sales of treasury stock to employee stock plans 27.1 30.8
Proceeds from exercise of stock options 6.4 7.8
Dividends paid - (2.2)
Changes in short-term borrowings, net (16.0) -
Additions to long-term borrowings - 32.1
Repayments of long-term borrowings (20.0) (83.9)
---------- ----------
Net cash used in investing activities (211.9) (263.3)
---------- ----------
Net increase (decrease) in cash and cash equivalents 111.7 (36.0)
Cash and cash equivalents, beginning of period 446.5 401.4
---------- ----------
Cash and cash equivalents, end of period $ 558.2 $ 365.4
========== ==========