Monday, January 08, 2007

Radio Shack: Improved Net Income, Lower Sales

RadioShack announces projected net income improvement for Q4 and year-end cash increase of approx $225 mln vs. prior year (16.81 )
www.briefing.com, Jan 8

Co announces it expects Q406 net income to increase versus prior year Q4 net income of $51 mln. The increased profitability is expected to be driven in part by improved margin and inventory management combined with reduced SG&A expenses. RadioShack projects Q406 comparable store sales to decrease by approx 7.8%. An income statement reclassification relating to the sale of prepaid wireless airtime, due primarily to contract changes, negatively impacted comparable store sales by approximately 230 basis points but did not impact operating profit. Adjusted comparable store sales, excluding the impact of the reclassification, decreased by approx 5.5%. RadioShack estimates that its cash balance was approximately $450 mln at December 31, 2006, an improvement of approx $225 mln versus prior year. The improved cash position was primarily driven in Q4 by favorable margins, SG&A expense control and working capital improvements including a reduction in inventory and capital expenditures.