|
[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
75-1047710
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(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Mail Stop CF3-201, 300 RadioShack Circle, Fort Worth, Texas
|
76102
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(Address of principal executive offices)
|
(Zip Code)
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(Registrant's telephone number, including area code) (817) 415-3011
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Large accelerated filer [ X ]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [ ]
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TABLE OF CONTENTS
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Page
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PART I – FINANCIAL INFORMATION
|
|||
Consolidated Financial Statements (Unaudited)
|
3
|
||
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
22
|
||
Quantitative and Qualitative Disclosures about Market Risk
|
29
|
||
Controls and Procedures
|
29
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||
PART II – OTHER INFORMATION
|
|||
Legal Proceedings
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29
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||
Unregistered Sales of Equity Securities and Use of Proceeds
|
30
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||
Exhibits
|
30
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||
31
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32
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Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions, except per share amounts)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Net sales and operating revenues
|
$ | 1,031.8 | $ | 1,002.0 | $ | 2,991.1 | $ | 2,956.0 | ||||||||
Cost of products sold (includes depreciation amounts of
$1.9 million, $1.9 million, $5.5 million and $5.8 million, respectively)
|
589.9 | 549.0 | 1,662.7 | 1,579.3 | ||||||||||||
Gross profit
|
441.9 | 453.0 | 1,328.4 | 1,376.7 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling, general and administrative
|
411.4 | 352.5 | 1,146.3 | 1,062.9 | ||||||||||||
Depreciation and amortization
|
19.2 | 18.3 | 55.8 | 57.4 | ||||||||||||
Impairment of long-lived assets
|
0.7 | 2.4 | 1.7 | 3.1 | ||||||||||||
Total operating expenses
|
431.3 | 373.2 | 1,203.8 | 1,123.4 | ||||||||||||
Operating income
|
10.6 | 79.8 | 124.6 | 253.3 | ||||||||||||
Interest income
|
1.4 | 0.8 | 2.2 | 2.1 | ||||||||||||
Interest expense
|
(12.6 | ) | (10.4 | ) | (33.2 | ) | (31.0 | ) | ||||||||
Other loss
|
-- | -- | (4.1 | ) | -- | |||||||||||
(Loss) income from continuing operations before income taxes
|
(0.6 | ) | 70.2 | 89.5 | 224.4 | |||||||||||
Income tax (benefit) expense
|
(0.9 | ) | 27.4 | 34.3 | 86.8 | |||||||||||
Income from continuing operations
|
0.3 | 42.8 | 55.2 | 137.6 | ||||||||||||
Discontinued operations, net of income taxes
|
-- | 3.2 | 5.1 | 11.5 | ||||||||||||
Net income
|
$ | 0.3 | $ | 46.0 | $ | 60.3 | $ | 149.1 | ||||||||
Basic net income per share:
|
||||||||||||||||
Income per share from continuing operations
|
$ | 0.00 | $ | 0.35 | $ | 0.53 | $ | 1.11 | ||||||||
Income per share from discontinued operations
|
-- | 0.03 | 0.05 | 0.09 | ||||||||||||
Net income per share (basic)
|
$ | 0.00 | $ | 0.38 | $ | 0.58 | $ | 1.20 | ||||||||
Diluted net income per share:
|
||||||||||||||||
Income per share from continuing operations
|
$ | 0.00 | $ | 0.35 | $ | 0.53 | $ | 1.09 | ||||||||
Income per share from discontinued operations
|
-- | 0.02 | 0.05 | 0.09 | ||||||||||||
Net income per share (diluted)
|
$ | 0.00 | $ | 0.37 | $ | 0.58 | $ | 1.18 | ||||||||
Shares used in computing net income
per share:
|
||||||||||||||||
Basic
|
100.2 | 121.0 | 103.4 | 124.2 | ||||||||||||
Diluted
|
100.7 | 123.1 | 104.2 | 126.4 |
(In millions, except share amounts)
|
September 30,
2011
|
December 31,
2010
|
September 30,
2010
|
|||||||||
Assets
|
||||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
$ | 667.7 | $ | 569.4 | $ | 720.3 | ||||||
Accounts and notes receivable, net
|
250.3 | 377.5 | 258.3 | |||||||||
Inventories
|
790.6 | 723.7 | 759.1 | |||||||||
Other current assets
|
106.3 | 108.1 | 113.4 | |||||||||
Total current assets
|
1,814.9 | 1,778.7 | 1,851.1 | |||||||||
Property, plant and equipment, net
|
273.4 | 274.3 | 264.4 | |||||||||
Goodwill, net
|
37.4 | 41.2 | 40.7 | |||||||||
Other assets, net
|
82.3 | 81.2 | 86.3 | |||||||||
Total assets
|
$ | 2,208.0 | $ | 2,175.4 | $ | 2,242.5 | ||||||
Liabilities and Stockholders’ Equity
|
||||||||||||
Current liabilities:
|
||||||||||||
Current maturities of long-term debt
|
$ | -- | $ | 308.0 | $ | 308.7 | ||||||
Accounts payable
|
344.6 | 272.4 | 318.1 | |||||||||
Accrued expenses and other current liabilities
|
290.8 | 318.0 | 279.2 | |||||||||
Income taxes payable
|
8.7 | 9.7 | 11.4 | |||||||||
Total current liabilities
|
644.1 | 908.1 | 917.4 | |||||||||
Long-term debt, excluding current maturities
|
666.4 | 331.8 | 327.9 | |||||||||
Other non-current liabilities
|
98.0 | 93.0 | 87.6 | |||||||||
Total liabilities
|
1,408.5 | 1,332.9 | 1,332.9 | |||||||||
Commitments and contingencies
|
||||||||||||
Stockholders’ equity:
|
||||||||||||
Preferred stock, no par value, 1,000,000
shares authorized:
|
||||||||||||
Series A junior participating, 300,000 shares designated and none issued
|
-- | -- | -- | |||||||||
Common stock, $1 par value, 650,000,000 shares authorized;
146,033,000, 146,033,000, and 191,033,000 shares issued, respectively
|
146.0 | 146.0 | 191.0 | |||||||||
Additional paid-in capital
|
142.1 | 147.3 | 75.7 | |||||||||
Retained earnings
|
1,562.8 | 1,502.5 | 2,473.0 | |||||||||
Treasury stock, at cost; 46,195,000, 40,260,000,
and 77,207,000 shares, respectively
|
(1,040.3 | ) | (949.0 | ) | (1,825.1 | ) | ||||||
Accumulated other comprehensive loss
|
(11.1 | ) | (4.3 | ) | (5.0 | ) | ||||||
Total stockholders’ equity
|
799.5 | 842.5 | 909.6 | |||||||||
Total liabilities and stockholders’ equity
|
$ | 2,208.0 | $ | 2,175.4 | $ | 2,242.5 |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
(In millions)
|
2011
|
2010
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 60.3 | $ | 149.1 | ||||
Adjustments to reconcile net income to net cash
|
||||||||
provided by operating activities:
|
||||||||
Depreciation and amortization
|
61.7 | 63.8 | ||||||
Amortization of discounts on long-term debt
|
12.2 | 11.1 | ||||||
Impairment of long-lived assets
|
1.7 | 3.1 | ||||||
Stock-based compensation
|
4.0 | 8.7 | ||||||
Other non-cash items
|
7.4 | 9.3 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts and notes receivable
|
126.9 | 65.5 | ||||||
Inventories
|
(69.4 | ) | (79.1 | ) | ||||
Other current assets
|
5.7 | (2.2 | ) | |||||
Accounts payable, accrued expenses, income taxes payable and other
|
52.5 | (72.5 | ) | |||||
Net cash provided by operating activities
|
263.0 | 156.8 | ||||||
Cash flows from investing activities:
|
||||||||
Additions to property, plant and equipment
|
(62.9 | ) | (46.7 | ) | ||||
Proceeds from sale of property, plant and equipment
|
0.1 | 0.1 | ||||||
Net cash used in investing activities
|
(62.8 | ) | (46.6 | ) | ||||
Cash flows from financing activities:
|
||||||||
Issuance of long-term notes
|
322.5 | -- | ||||||
Long-term notes issuance costs
|
(7.2 | ) | -- | |||||
Repayments of borrowings
|
(306.8 | ) | -- | |||||
Payments to purchase treasury stock
|
(101.4 | ) | (300.0 | ) | ||||
Changes in cash overdrafts
|
(11.6 | ) | (0.5 | ) | ||||
Proceeds from exercise of stock options
|
2.6 | 2.4 | ||||||
Net cash used in financing activities
|
(101.9 | ) | (298.1 | ) | ||||
Net increase (decrease) in cash and cash equivalents
|
98.3 | (187.9 | ) | |||||
Cash and cash equivalents, beginning of period
|
569.4 | 908.2 | ||||||
Cash and cash equivalents, end of period
|
$ | 667.7 | $ | 720.3 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Numerator:
|
||||||||||||||||
Income from continuing operations
|
$ | 0.3 | $ | 42.8 | $ | 55.2 | $ | 137.6 | ||||||||
Discontinued operations, net of taxes
|
-- | 3.2 | 5.1 | 11.5 | ||||||||||||
Net income
|
$ | 0.3 | $ | 46.0 | $ | 60.3 | $ | 149.1 | ||||||||
Denominator:
|
||||||||||||||||
Weighted-average common shares outstanding
|
100.2 | 121.0 | 103.4 | 124.2 | ||||||||||||
Dilutive effect of stock-based awards
|
0.5 | 2.1 | 0.8 | 2.2 | ||||||||||||
Weighted average shares for diluted net income per share
|
100.7 | 123.1 | 104.2 | 126.4 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Employee stock options (1)
|
6.4 | 1.8 | 2.3 | 1.8 | ||||||||||||
Warrants to purchase common stock (1)
|
15.5 | 15.5 | 15.5 | 15.5 | ||||||||||||
Convertible debt instruments (2)
|
15.5 | 15.5 | 15.5 | 15.5 |
(1)
|
These common stock equivalents were excluded because their exercise prices ($36.60 per share for the warrants) exceeded the average market price of our common stock during these periods, and the effect of their inclusion would be antidilutive. These securities could be dilutive in future periods.
|
(2)
|
These common stock equivalents were excluded because the conversion price ($24.25 per share) exceeded the average market price of our common stock during these periods, and the effect of their inclusion would be antidilutive. These securities could be dilutive in future periods.
|
Basis of Fair Value Measurements
|
||||||||||||||||
Fair Value
of Assets
|
Quoted Prices
in Active
Markets for
Identical Items
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
(In millions)
|
||||||||||||||||
As of December 31, 2010
|
||||||||||||||||
Derivatives Not Designated as
Hedging Instruments:
|
||||||||||||||||
Interest rate swaps (1) (2)
|
$ | 1.9 | -- | $ | 1.9 | -- | ||||||||||
As of September 30, 2010
|
||||||||||||||||
Derivatives Not Designated as
Hedging Instruments:
|
||||||||||||||||
Interest rate swaps (1) (2)
|
$ | 3.1 | -- | $ | 3.1 | -- |
(1)
|
These interest rate swaps served as economic hedges on our 2011 Notes and expired in May 2011.
|
(2)
|
Included in other current assets
|
·
|
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities
|
·
|
Level 2: Inputs, other than quoted prices, that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active
|
·
|
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions
|
September 30, 2011
|
December 31, 2010
|
|||||||||||||||
(In millions)
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
||||||||||||
Total debt
|
$ | 666.4 | $ | 671.0 | $ | 639.8 | $ | 713.1 |
Basis of Fair Value Measurements
|
||||||||||||||||
Fair Value
of Assets
(Liabilities)
|
Quoted Prices
in Active
Markets for
Identical Items
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
(In millions)
|
||||||||||||||||
Three Months Ended September 30, 2011
|
||||||||||||||||
Long-lived assets held and used
|
$ | 0.4 | -- | -- | $ | 0.4 | ||||||||||
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(In millions)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
U.S. RadioShack company-operated stores
|
$ | 846.3 | $ | 894.3 | $ | 2,539.3 | $ | 2,667.9 | ||||||||
Other
|
185.5 | 107.7 | 451.8 | 288.1 | ||||||||||||
$ | 1,031.8 | $ | 1,002.0 | $ | 2,991.1 | $ | 2,956.0 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(In millions)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
U.S. RadioShack company-operated stores (1)
|
$ | 95.6 | $ | 146.1 | $ | 384.7 | $ | 471.4 | ||||||||
Other (2)
|
0.9 | 10.5 | (3.6 | ) | 30.0 | |||||||||||
96.5 | 156.6 | 381.1 | 501.4 | |||||||||||||
Unallocated (3)
|
(85.9 | ) | (76.8 | ) | (256.5 | ) | (248.1 | ) | ||||||||
Operating income
|
10.6 | 79.8 | 124.6 | 253.3 | ||||||||||||
Interest income
|
1.4 | 0.8 | 2.2 | 2.1 | ||||||||||||
Interest expense
|
(12.6 | ) | (10.4 | ) | (33.2 | ) | (31.0 | ) | ||||||||
Other loss
|
-- | -- | (4.1 | ) | -- | |||||||||||
(Loss) income from continuing operations before income taxes
|
$ | (0.6 | ) | $ | 70.2 | $ | 89.5 | $ | 224.4 |
(1)
|
Includes a charge to earnings of $23.4 million for both the three and nine month periods ended September 30, 2011, related to a payment to T-Mobile in conjunction with our transition from offering T-Mobile wireless handsets to offering Verizon wireless handsets.
|
(2)
|
Includes a net loss on the closing of our Chinese manufacturing plant of $0.8 million and $11.0 million for the three and nine month periods ended September 30, 2011, respectively.
|
(3)
|
The unallocated category included in operating income relates to our overhead and corporate expenses that are not allocated to our operating segments for management reporting purposes. Unallocated costs include corporate departmental expenses such as labor and benefits, advertising, insurance, distribution, and information technology costs, plus certain unusual or infrequent gains or losses.
|
(In millions)
|
RadioShack
Corporation
(Parent Co.)
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||
Net sales and operating revenues
|
$ | 993.6 | $ | 996.2 | $ | 29.1 | $ | (987.1 | ) | $ | 1,031.8 | |||||||||
Cost of products sold
|
646.0 | 910.7 | 20.3 | (987.1 | ) | 589.9 | ||||||||||||||
Gross profit
|
347.6 | 85.5 | 8.8 | -- | 441.9 | |||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Selling, general and administrative
|
371.3 | 30.3 | 9.8 | -- | 411.4 | |||||||||||||||
Depreciation and amortization
|
17.2 | 1.6 | 0.4 | -- | 19.2 | |||||||||||||||
Impairment of long-lived assets
|
0.7 | -- | -- | -- | 0.7 | |||||||||||||||
Total operating expenses
|
389.2 | 31.9 | 10.2 | -- | 431.3 | |||||||||||||||
Operating (loss) income
|
(41.6 | ) | 53.6 | (1.4 | ) | -- | 10.6 | |||||||||||||
Interest income
|
1.0 | 2.4 | 1.5 | (3.5 | ) | 1.4 | ||||||||||||||
Interest expense
|
(16.1 | ) | -- | -- | 3.5 | (12.6 | ) | |||||||||||||
(Loss) income from continuing operations
before income taxes
|
(56.7 | ) | 56.0 | 0.1 | -- | (0.6 | ) | |||||||||||||
Income tax (benefit) expense
|
(22.0 | ) | 20.7 | 0.4 | -- | (0.9 | ) | |||||||||||||
Equity in earnings of subsidiaries,net of income taxes
|
35.0 | (0.5 | ) | -- | (34.5 | ) | -- | |||||||||||||
Income (loss) from continuing operations
|
0.3 | 34.8 | (0.3 | ) | (34.5 | ) | 0.3 | |||||||||||||
Discontinued operations, net of income taxes
|
-- | -- | -- | -- | -- | |||||||||||||||
Net income (loss)
|
$ | 0.3 | $ | 34.8 | $ | (0.3 | ) | $ | (34.5 | ) | $ | 0.3 |
(In millions)
|
RadioShack
Corporation
(Parent Co.)
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||
Net sales and operating revenues
|
$ | 1,022.7 | $ | 987.5 | $ | 34.2 | $ | (1,042.4 | ) | $ | 1,002.0 | |||||||||
Cost of products sold
|
648.8 | 920.1 | 22.5 | (1,042.4 | ) | 549.0 | ||||||||||||||
Gross profit
|
373.9 | 67.4 | 11.7 | -- | 453.0 | |||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Selling, general and administrative
|
338.3 | 4.8 | 9.4 | -- | 352.5 | |||||||||||||||
Depreciation and amortization
|
17.7 | -- | 0.6 | -- | 18.3 | |||||||||||||||
Impairment of long-lived assets
|
0.7 | 1.7 | -- | -- | 2.4 | |||||||||||||||
Total operating expenses
|
356.7 | 6.5 | 10.0 | -- | 373.2 | |||||||||||||||
Operating income
|
17.2 | 60.9 | 1.7 | -- | 79.8 | |||||||||||||||
Interest income
|
0.2 | 2.7 | 1.5 | (3.6 | ) | 0.8 | ||||||||||||||
Interest expense
|
(14.0 | ) | -- | -- | 3.6 | (10.4 | ) | |||||||||||||
Income from continuing operations
before income taxes
|
3.4 | 63.6 | 3.2 | -- | 70.2 | |||||||||||||||
Income tax expense
|
1.7 | 24.7 | 1.0 | -- | 27.4 | |||||||||||||||
Equity in earnings of subsidiaries, net of income taxes
|
44.3 | 1.8 | -- | (46.1 | ) | -- | ||||||||||||||
Income from continuing operations
|
46.0 | 40.7 | 2.2 | (46.1 | ) | 42.8 | ||||||||||||||
Discontinued operations, net of income taxes
|
-- | 3.2 | -- | -- | 3.2 | |||||||||||||||
Net income
|
$ | 46.0 | $ | 43.9 | $ | 2.2 | $ | (46.1 | ) | $ | 46.0 |
(In millions)
|
RadioShack
Corporation
(Parent Co.)
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||
Net sales and operating revenues
|
$ | 2,949.1 | $ | 2,693.0 | $ | 102.9 | $ | (2,753.9 | ) | $ | 2,991.1 | |||||||||
Cost of products sold
|
1,870.4 | 2,473.0 | 73.2 | (2,753.9 | ) | 1,662.7 | ||||||||||||||
Gross profit
|
1,078.7 | 220.0 | 29.7 | -- | 1,328.4 | |||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Selling, general and administrative
|
1,031.7 | 74.9 | 39.7 | -- | 1,146.3 | |||||||||||||||
Depreciation and amortization
|
50.7 | 3.0 | 2.1 | -- | 55.8 | |||||||||||||||
Impairment of long-lived assets
|
1.7 | -- | -- | -- | 1.7 | |||||||||||||||
Total operating expenses
|
1,084.1 | 77.9 | 41.8 | -- | 1,203.8 | |||||||||||||||
Operating (loss) income
|
(5.4 | ) | 142.1 | (12.1 | ) | -- | 124.6 | |||||||||||||
Interest income
|
1.3 | 7.6 | 4.3 | (11.0 | ) | 2.2 | ||||||||||||||
Interest expense
|
(44.2 | ) | -- | -- | 11.0 | (33.2 | ) | |||||||||||||
Other loss
|
(4.1 | ) | -- | -- | -- | (4.1 | ) | |||||||||||||
(Loss) income from continuing operations
before income taxes
|
(52.4 | ) | 149.7 | (7.8 | ) | -- | 89.5 | |||||||||||||
Income tax (benefit) expense
|
(22.6 | ) | 55.3 | 1.6 | -- | 34.3 | ||||||||||||||
Equity in earnings of subsidiaries,net of income taxes
|
90.1 | (10.6 | ) | -- | (79.5 | ) | -- | |||||||||||||
Income (loss) from continuing operations
|
60.3 | 83.8 | (9.4 | ) | (79.5 | ) | 55.2 | |||||||||||||
Discontinued operations, net of
income taxes
|
-- | 5.1 | -- | -- | 5.1 | |||||||||||||||
Net income (loss)
|
$ | 60.3 | $ | 88.9 | $ | (9.4 | ) | $ | (79.5 | ) | $ | 60.3 |
(In millions)
|
RadioShack
Corporation
(Parent Co.)
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||
Net sales and operating revenues
|
$ | 2,988.4 | $ | 2,560.5 | $ | 100.7 | $ | (2,693.6 | ) | $ | 2,956.0 | |||||||||
Cost of products sold
|
1,826.7 | 2,375.3 | 70.9 | (2,693.6 | ) | 1,579.3 | ||||||||||||||
Gross profit
|
1,161.7 | 185.2 | 29.8 | -- | 1,376.7 | |||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Selling, general and administrative
|
1,020.1 | 14.9 | 27.9 | -- | 1,062.9 | |||||||||||||||
Depreciation and amortization
|
54.7 | 1.0 | 1.7 | -- | 57.4 | |||||||||||||||
Impairment of long-lived assets
|
1.4 | 1.7 | -- | -- | 3.1 | |||||||||||||||
Total operating expenses
|
1,076.2 | 17.6 | 29.6 | -- | 1,123.4 | |||||||||||||||
Operating income
|
85.5 | 167.6 | 0.2 | -- | 253.3 | |||||||||||||||
Interest income
|
0.7 | 7.3 | 4.4 | (10.3 | ) | 2.1 | ||||||||||||||
Interest expense
|
(41.3 | ) | -- | -- | 10.3 | (31.0 | ) | |||||||||||||
Income from continuing operations
before income taxes
|
44.9 | 174.9 | 4.6 | -- | 224.4 | |||||||||||||||
Income tax expense
|
19.3 | 66.0 | 1.5 | -- | 86.8 | |||||||||||||||
Equity in earnings of subsidiaries, net of income taxes
|
123.5 | 1.8 | -- | (125.3 | ) | -- | ||||||||||||||
Income from continuing operations
|
149.1 | 110.7 | 3.1 | (125.3 | ) | 137.6 | ||||||||||||||
Discontinued operations, net of
income taxes
|
-- | 11.5 | -- | -- | 11.5 | |||||||||||||||
Net income
|
$ | 149.1 | $ | 122.2 | $ | 3.1 | $ | (125.3 | ) | $ | 149.1 |
(In millions)
|
RadioShack
Corporation
(Parent Co.)
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||
Assets
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 144.9 | $ | 500.4 | $ | 22.4 | $ | -- | $ | 667.7 | ||||||||||
Accounts and notes receivable, net
|
214.7 | 30.1 | 5.5 | -- | 250.3 | |||||||||||||||
Inventories
|
701.1 | 66.7 | 22.8 | -- | 790.6 | |||||||||||||||
Other current assets
|
102.3 | 1.5 | 2.5 | -- | 106.3 | |||||||||||||||
Intercompany receivables
|
-- | 239.7 | -- | (239.7 | ) | -- | ||||||||||||||
Intercompany notes receivable
|
-- | 1,166.5 | -- | (1,166.5 | ) | -- | ||||||||||||||
Total current assets
|
1,163.0 | 2,004.9 | 53.2 | (1,406.2 | ) | 1,814.9 | ||||||||||||||
Property, plant and equipment, net
|
243.6 | 22.5 | 7.3 | -- | 273.4 | |||||||||||||||
Goodwill, net
|
2.9 | 0.5 | 34.0 | -- | 37.4 | |||||||||||||||
Other assets, net
|
58.0 | 14.2 | 10.1 | -- | 82.3 | |||||||||||||||
Investment in subsidiaries
|
1,996.6 | 64.9 | -- | (2,061.5 | ) | -- | ||||||||||||||
Total assets
|
$ | 3,464.1 | $ | 2,107.0 | $ | 104.6 | $ | (3,467.7 | ) | $ | 2,208.0 | |||||||||
Liabilities and Stockholders’ Equity
|
||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Accounts payable
|
279.3 | $ | 54.2 | $ | 11.1 | $ | -- | $ | 344.6 | |||||||||||
Accrued expenses and other current liabilities
|
242.7 | 40.2 | 7.9 | -- | 290.8 | |||||||||||||||
Income taxes payable
|
7.7 | -- | 1.0 | -- | 8.7 | |||||||||||||||
Intercompany payables
|
232.5 | -- | 7.2 | (239.7 | ) | -- | ||||||||||||||
Intercompany notes payable
|
1,166.5 | -- | -- | (1,166.5 | ) | -- | ||||||||||||||
Total current liabilities
|
1,928.7 | 94.4 | 27.2 | (1,406.2 | ) | 644.1 | ||||||||||||||
Long-term debt
|
666.4 | -- | -- | -- | 666.4 | |||||||||||||||
Other non-current liabilities
|
69.5 | 27.1 | 1.4 | -- | 98.0 | |||||||||||||||
Total liabilities
|
2,664.6 | 121.5 | 28.6 | (1,406.2 | ) | 1,408.5 | ||||||||||||||
Stockholders’ equity
|
799.5 | 1,985.5 | 76.0 | (2,061.5 | ) | 799.5 | ||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 3,464.1 | $ | 2,107.0 | $ | 104.6 | $ | (3,467.7 | ) | $ | 2,208.0 |
(In millions)
|
RadioShack
Corporation
(Parent Co.)
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||
Assets
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 109.7 | $ | 427.4 | $ | 32.3 | $ | -- | $ | 569.4 | ||||||||||
Accounts and notes receivable, net
|
314.7 | 57.9 | 4.9 | -- | 377.5 | |||||||||||||||
Inventories
|
650.1 | 42.9 | 30.7 | -- | 723.7 | |||||||||||||||
Other current assets
|
100.0 | 3.0 | 5.1 | -- | 108.1 | |||||||||||||||
Intercompany receivables
|
-- | 134.0 | 9.9 | (143.9 | ) | -- | ||||||||||||||
Intercompany notes receivable
|
-- | 1,224.8 | -- | (1,224.8 | ) | -- | ||||||||||||||
Total current assets
|
1,174.5 | 1,890.0 | 82.9 | (1,368.7 | ) | 1,778.7 | ||||||||||||||
Property, plant and equipment, net
|
247.3 | 17.3 | 9.7 | -- | 274.3 | |||||||||||||||
Goodwill, net
|
2.9 | 0.5 | 37.8 | -- | 41.2 | |||||||||||||||
Other assets, net
|
59.9 | 10.9 | 10.4 | -- | 81.2 | |||||||||||||||
Investment in subsidiaries
|
1,911.6 | 81.7 | -- | (1,993.3 | ) | -- | ||||||||||||||
Total assets
|
$ | 3,396.2 | $ | 2,000.4 | $ | 140.8 | $ | (3,362.0 | ) | $ | 2,175.4 | |||||||||
Liabilities and Stockholders’ Equity
|
||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Current maturities of long-term debt
|
$ | 308.0 | $ | -- | $ | -- | $ | -- | $ | 308.0 | ||||||||||
Accounts payable
|
203.1 | 33.5 | 35.8 | -- | 272.4 | |||||||||||||||
Accrued expenses and other current liabilities
|
267.0 | 40.8 | 10.2 | -- | 318.0 | |||||||||||||||
Income taxes payable
|
8.3 | -- | 1.4 | -- | 9.7 | |||||||||||||||
Intercompany payables
|
143.9 | -- | -- | (143.9 | ) | -- | ||||||||||||||
Intercompany notes payable
|
1,224.8 | -- | -- | (1,224.8 | ) | -- | ||||||||||||||
Total current liabilities
|
2,155.1 | 74.3 | 47.4 | (1,368.7 | ) | 908.1 | ||||||||||||||
Long-term debt, excluding current maturities
|
331.8 | -- | -- | -- | 331.8 | |||||||||||||||
Other non-current liabilities
|
66.8 | 26.0 | 0.2 | -- | 93.0 | |||||||||||||||
Total liabilities
|
2,553.7 | 100.3 | 47.6 | (1,368.7 | ) | 1,332.9 | ||||||||||||||
Stockholders’ equity
|
842.5 | 1,900.1 | 93.2 | (1,993.3 | ) | 842.5 | ||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 3,396.2 | $ | 2,000.4 | $ | 140.8 | $ | (3,362.0 | ) | $ | 2,175.4 |
(In millions)
|
RadioShack
Corporation
(Parent Co.)
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||
Assets
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 97.7 | $ | 600.7 | $ | 21.9 | $ | -- | $ | 720.3 | ||||||||||
Accounts and notes receivable, net
|
234.4 | 20.1 | 3.8 | -- | 258.3 | |||||||||||||||
Inventories
|
690.8 | 44.5 | 23.8 | -- | 759.1 | |||||||||||||||
Other current assets
|
106.8 | 3.3 | 3.3 | -- | 113.4 | |||||||||||||||
Intercompany receivables
|
-- | 224.4 | 6.8 | (231.2 | ) | -- | ||||||||||||||
Intercompany notes receivable
|
-- | 1,003.9 | -- | (1,003.9 | ) | -- | ||||||||||||||
Total current assets
|
1,129.7 | 1,896.9 | 59.6 | (1,235.1 | ) | 1,851.1 | ||||||||||||||
Property, plant and equipment, net
|
248.4 | 6.9 | 9.1 | -- | 264.4 | |||||||||||||||
Goodwill, net
|
2.9 | 0.5 | 37.3 | -- | 40.7 | |||||||||||||||
Other assets, net
|
60.3 | 15.2 | 10.8 | -- | 86.3 | |||||||||||||||
Investment in subsidiaries
|
1,866.1 | 79.9 | -- | (1,946.0 | ) | -- | ||||||||||||||
Total assets
|
$ | 3,307.4 | $ | 1,999.4 | $ | 116.8 | $ | (3,181.1 | ) | $ | 2,242.5 | |||||||||
Liabilities and Stockholders’ Equity
|
||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Current maturities of long-term debt
|
$ | 308.7 | $ | -- | $ | -- | $ | -- | $ | 308.7 | ||||||||||
Accounts payable
|
226.0 | 76.5 | 15.6 | -- | 318.1 | |||||||||||||||
Accrued expenses and other current liabilities
|
228.2 | 41.9 | 9.1 | -- | 279.2 | |||||||||||||||
Income taxes payable
|
10.2 | -- | 1.2 | -- | 11.4 | |||||||||||||||
Intercompany payables
|
231.2 | -- | -- | (231.2 | ) | -- | ||||||||||||||
Intercompany notes payable
|
1,003.9 | -- | -- | (1,003.9 | ) | -- | ||||||||||||||
Total current liabilities
|
2,008.2 | 118.4 | 25.9 | (1,235.1 | ) | 917.4 | ||||||||||||||
Long-term debt, excluding current maturities
|
327.9 | -- | -- | -- | 327.9 | |||||||||||||||
Other non-current liabilities
|
61.7 | 25.9 | -- | -- | 87.6 | |||||||||||||||
Total liabilities
|
2,397.8 | 144.3 | 25.9 | (1,235.1 | ) | 1,332.9 | ||||||||||||||
Stockholders’ equity
|
909.6 | 1,855.1 | 90.9 | (1,946.0 | ) | 909.6 | ||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 3,307.4 | $ | 1,999.4 | $ | 116.8 | $ | (3,181.1 | ) | $ | 2,242.5 |
(In millions)
|
RadioShack
Corporation
(Parent Co.)
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||
Net cash provided by (used in) operating activities
|
$ | 152.9 | $ | 133.3 | $ | (23.2 | ) | $ | -- | $ | 263.0 | |||||||||
Cash flows from investing activities:
|
||||||||||||||||||||
Additions to property, plant and equipment
|
(49.0 | ) | (12.9 | ) | (1.0 | ) | -- | (62.9 | ) | |||||||||||
Proceeds from sale of property, plant and
equipment
|
0.1 | -- | -- | -- | 0.1 | |||||||||||||||
Dividends received from subsidiary
|
1.5 | -- | -- | (1.5 | ) | -- | ||||||||||||||
Net cash used in investing activities
|
(47.4 | ) | (12.9 | ) | (1.0 | ) | (1.5 | ) | (62.8 | ) | ||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||
Issuance of long-term notes
|
322.5 | -- | -- | -- | 322.5 | |||||||||||||||
Long-term notes issuance costs
|
(7.2 | ) | -- | -- | -- | (7.2 | ) | |||||||||||||
Repayments of borrowings
|
(306.8 | ) | -- | -- | -- | (306.8 | ) | |||||||||||||
Purchases of treasury stock
|
(101.4 | ) | -- | -- | -- | (101.4 | ) | |||||||||||||
Changes in cash overdrafts
|
(11.6 | ) | -- | -- | -- | (11.6 | ) | |||||||||||||
Proceeds from exercise of stock options
|
2.6 | -- | -- | -- | 2.6 | |||||||||||||||
Payments of dividends
|
-- | -- | (1.5 | ) | 1.5 | -- | ||||||||||||||
Change in intercompany receivable/payable
|
31.6 | (47.4 | ) | 15.8 | -- | -- | ||||||||||||||
Net cash (used in) provided by financing activities
|
(70.3 | ) | (47.4 | ) | 14.3 | 1.5 | (101.9 | ) | ||||||||||||
Net increase (decrease) in cash and cash
equivalents
|
35.2 | 73.0 | (9.9 | ) | -- | 98.3 | ||||||||||||||
Cash and cash equivalents, beginning of period
|
109.7 | 427.4 | 32.3 | -- | 569.4 | |||||||||||||||
Cash and cash equivalents, end of period
|
$ | 144.9 | $ | 500.4 | $ | 22.4 | $ | -- | $ | 667.7 |
(In millions)
|
RadioShack
Corporation
(Parent Co.)
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||
Net cash provided by (used in) operating activities
|
$ | 29.5 | $ | 133.2 | $ | (5.9 | ) | $ | -- | $ | 156.8 | |||||||||
Cash flows from investing activities:
|
||||||||||||||||||||
Additions to property, plant and equipment
|
(42.7 | ) | (2.8 | ) | (1.2 | ) | -- | (46.7 | ) | |||||||||||
Proceeds from sale of property, plant and
equipment
|
0.1 | -- | -- | -- | 0.1 | |||||||||||||||
Dividends received from subsidiary
|
1.7 | -- | -- | (1.7 | ) | -- | ||||||||||||||
Net cash used in investing activities
|
(40.9 | ) | (2.8 | ) | (1.2 | ) | (1.7 | ) | (46.6 | ) | ||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||
Payment to purchase treasury stock
|
(300.0 | ) | -- | -- | -- | (300.0 | ) | |||||||||||||
Changes in cash overdrafts
|
(0.5 | ) | -- | -- | -- | (0.5 | ) | |||||||||||||
Proceeds from exercise of stock options
|
2.4 | -- | -- | -- | 2.4 | |||||||||||||||
Payments of dividends
|
-- | -- | (1.7 | ) | 1.7 | -- | ||||||||||||||
Change in intercompany receivable/payable
|
329.4 | (331.7 | ) | 2.3 | -- | -- | ||||||||||||||
Net cash provided by (used in) financing activities
|
31.3 | (331.7 | ) | 0.6 | 1.7 | (298.1 | ) | |||||||||||||
Net increase (decrease) in cash and cash
equivalents
|
19.9 | (201.3 | ) | (6.5 | ) | -- | (187.9 | ) | ||||||||||||
Cash and cash equivalents, beginning of period
|
77.8 | 802.0 | 28.4 | -- | 908.2 | |||||||||||||||
Cash and cash equivalents, end of period
|
$ | 97.7 | $ | 600.7 | $ | 21.9 | $ | -- | $ | 720.3 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Reconciliation of adjusted EBITDA from continuing
operations to income from continuing operations
|
||||||||||||||||
Adjusted EBITDA from continuing operations(1)
|
$ | 31.7 | $ | 100.0 | $ | 185.9 | $ | 316.5 | ||||||||
Interest expense, net of interest income
|
(11.2 | ) | (9.6 | ) | (31.0 | ) | (28.9 | ) | ||||||||
Income tax benefit (expense)
|
0.9 | (27.4 | ) | (34.3 | ) | (86.8 | ) | |||||||||
Depreciation and amortization
|
(21.1 | ) | (20.2 | ) | (61.3 | ) | (63.2 | ) | ||||||||
Other loss
|
-- | -- | (4.1 | ) | -- | |||||||||||
Income from continuing operations
|
$ | 0.3 | $ | 42.8 | $ | 55.2 | $ | 137.6 |
(1)
|
Adjusted EBITDA from continuing operations (“Adjusted EBITDA”), a non-GAAP financial measure, is defined as earnings from continuing operations before interest, taxes, depreciation, and amortization. Our calculation of Adjusted EBITDA is also adjusted for other income or loss and cumulative effects of changes in accounting principles, if applicable. The comparable financial measure to Adjusted EBITDA under GAAP is income from continuing operations. Adjusted EBITDA is used by management to evaluate the operating performance of our business for comparable periods. Adjusted EBITDA should not be used by investors or others as the sole basis for formulating investment decisions, as it excludes a number of important items. We compensate for this limitation by using GAAP financial measures as well in managing our business. In the view of management, Adjusted EBITDA is an important indicator of operating performance because Adjusted EBITDA excludes the effects of financing and investing activities by eliminating the effects of interest, depreciation costs, and other losses.
|
Sep. 30,
2011
|
June 30,
2011
|
March 31,
2011
|
Dec. 31,
2010
|
Sep. 30,
2010
|
||||||
U.S. RadioShack company-operated stores
|
4,461
|
4,463
|
4,467
|
4,486
|
4,475
|
|||||
Kiosks (1) (2)
|
1,490
|
1,481
|
1,304
|
1,267
|
945
|
|||||
Mexico RadioShack company-operated stores
|
211
|
211
|
212
|
211
|
206
|
|||||
Dealer and other outlets
|
1,123
|
1,142
|
1,175
|
1,219
|
1,244
|
|||||
Total number of retail locations
|
7,285
|
7,297
|
7,158
|
7,183
|
6,870
|
(1)
|
In February 2009, we signed a contract extension with Sam’s Club through March 31, 2011, with a transition period ending June 30, 2011, to operate kiosks in certain Sam’s Club stores. As of June 30, 2011, we had transitioned to Sam’s Club all of the remaining kiosks operated by the Company in Sam’s Club stores.
|
(2)
|
In the third quarter of 2010 we signed a multi-year agreement with Target Corporation to operate wireless kiosks in certain Target stores. In August 2010, we began opening Target Mobile centers with the objective of operating kiosks in the majority of Target stores nationwide by mid-2011. We operated 1,490, 1,481, 887, 850, and 528 Target Mobile centers at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010, and September 30, 2010, respectively.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
U.S. RadioShack company-operated stores
|
$ | 846.3 | $ | 894.3 | $ | 2,539.3 | $ | 2,667.9 | ||||||||
Other
|
185.5 | 107.7 | 451.8 | 288.1 | ||||||||||||
Consolidated net sales and operating revenues
|
$ | 1,031.8 | $ | 1,002.0 | $ | 2,991.1 | $ | 2,956.0 | ||||||||
Consolidated net sales and operating revenues increase
|
3.0 | % | 6.7 | % | 1.2 | % | 5.0 | % | ||||||||
Comparable store sales(1) (decrease) increase
|
(4.0 | %) | 6.4 | % | (4.1 | %) | 5.4 | % |
(1)
|
Comparable store sales include the sales of U.S. and Mexico RadioShack company-operated stores as well as kiosks with more than 12 full months of recorded sales. Sales from discontinued operations have been excluded from these calculations for all periods presented.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Gross profit
|
$ | 441.9 | $ | 453.0 | $ | 1,328.4 | $ | 1,376.7 | ||||||||
Gross margin
|
42.8 | % | 45.2 | % | 44.4 | % | 46.6 | % | ||||||||
Gross profit (decrease) increase
|
(2.5 | %) | 0.9 | % | (3.5 | %) | 4.4 | % |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(In millions)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Selling, general and administrative expense
|
$ | 411.4 | $ | 352.5 | $ | 1,146.3 | $ | 1,062.9 | ||||||||
As a percent of net sales and operating revenues
|
39.9 | % | 35.2 | % | 38.3 | % | 36.0 | % | ||||||||
Selling, general and administrative expense increase (decrease)
|
16.7 | % | (2.9 | %) | 7.8 | % | 3.4 | % |
Nine Months Ended
September 30,
|
Year Ended
December 31,
|
|||||||||||
(In millions)
|
2011
|
2010
|
2010
|
|||||||||
Net cash provided by operating activities
|
$ | 263.0 | $ | 156.8 | $ | 155.0 | ||||||
Less:
|
||||||||||||
Additions to property, plant and equipment
|
62.9 | 46.7 | 80.1 | |||||||||
Dividends paid
|
-- | -- | 26.5 | |||||||||
Free cash flow
|
$ | 200.1 | $ | 110.1 | $ | 48.4 |
September 30,
|
December 31,
|
September 30,
|
||||||||||||||||||||||
2011
|
2010
|
2010
|
||||||||||||||||||||||
(In millions)
|
Dollars
|
Percent
|
Dollars
|
Percent
|
Dollars
|
Percent
|
||||||||||||||||||
Current maturities of long-term debt
|
$ | -- | -- | % | $ | 308.0 | 20.8 | % | $ | 308.7 | 20.0 | % | ||||||||||||
Long-term debt, excluding current
maturities
|
666.4 | 45.5 | 331.8 | 22.4 | 327.9 | 21.2 | ||||||||||||||||||
Total debt
|
666.4 | 45.5 | 639.8 | 43.2 | 636.6 | 41.2 | ||||||||||||||||||
Stockholders’ equity
|
799.5 | 54.5 | 842.5 | 56.8 | 909.6 | 58.8 | ||||||||||||||||||
Total capitalization
|
$ | 1,465.9 | 100.0 | % | $ | 1,482.3 | 100.0 | % | $ | 1,546.2 | 100.0 | % |
Period
|
Total Number
of Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (1)
|
Approximate
Dollar Value of Shares
That May Yet Be
Purchased Under
the Plans or Programs (1)
|
||||||||||||
July 1 – 31, 2011
|
-- | $ | -- | -- | $ | -- | ||||||||||
August 1 – 31, 2011
|
-- | $ | -- | -- | $ | -- | ||||||||||
September 1 – 30, 2011
|
140 | (2) | $ | 11.78 | -- | $ | -- | |||||||||
Total
|
140 | -- |
(1)
|
RadioShack announced a $200 million share repurchase program on July 24, 2008, which had no stated expiration date. On August 20, 2009, we announced a $200 million increase in this share repurchase program. In August 2010, our Board of Directors approved an increase in this share repurchase program from $400 million to $610 million, with $500 million available for share repurchases under this program at that time. Although no share repurchase program expired during the period covered by the table, as of September 30, 2011, no further amount remained for share repurchases under any program authorized by our Board of Directors.
|
(2)
|
Shares acquired by RadioShack for tax withholdings upon vesting of restricted stock awards, which were not repurchased pursuant to a share repurchase program.
|
RADIOSHACK CORPORATION
|
||
October 25, 2011
|
By:
|
/s/ Dorvin D. Lively
|
Dorvin D. Lively
|
||
Executive Vice President - Chief Financial Officer and Chief Administrative Officer
|
||
(principal financial officer)
|
||
October 25, 2011
|
By:
|
/s/ Martin O. Moad
|
Martin O. Moad
|
||
Vice President and Corporate Controller
|
||
(principal accounting officer)
|
||
Exhibit
Number
|
Description
|
3.1
|
Certificate of Amendment of Restated Certificate of Incorporation of RadioShack Corporation(1) dated May 18, 2000 (filed as Exhibit 3a to RadioShack’s Form 10-Q filed on August 11, 2000, and incorporated herein by reference).
|
3.2
|
Restated Certificate of Incorporation of RadioShack Corporation(1) dated July 26, 1999 (filed as Exhibit 3a(i) to RadioShack’s Form 10-Q filed on August 11, 1999, and incorporated herein by reference).
|
3.3
|
Certificate of Elimination of Series C Conversion Preferred Stock of RadioShack Corporation(1) dated July 26, 1999 (filed as Exhibit 3a(ii) to RadioShack’s Form 10-Q filed on August 11, 1999, and incorporated herein by reference).
|
3.4
|
Amended Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred Stock of RadioShack Corporation(1) dated July 26, 1999 (filed as Exhibit 3a(iii) to RadioShack’s Form 10-Q filed on August 11, 1999, and incorporated herein by reference).
|
3.5
|
Certificate of Designations of Series B TESOP Convertible Preferred Stock dated June 29, 1990 (filed as Exhibit 4A to RadioShack's Form S-8 for the RadioShack Corporation Incentive Stock Plan, Reg. No. 33-51603, filed on November 12, 1993, and incorporated herein by reference).
|
3.6
|
RadioShack Corporation Bylaws, amended and restated as of May 19, 2011 (filed as Exhibit 3.1 to RadioShack’s Form 8-K filed on May 23, 2011, and incorporated herein by reference).
|
4.1
|
Indenture, dated as of May 3, 2011, by and among RadioShack Corporation, the Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee (filed as Exhibit 4.1 to RadioShack’s Form 8-K filed on May 4, 2011, and incorporated herein by reference).
|
4.2
|
Form of Senior Notes due 2019 (included in Exhibit 4.1 to RadioShack’s Form 8-K filed on May 4, 2011, and incorporated by reference).
|
4.3
|
Registration Rights Agreement, dated as of May 3, 2011, by and among RadioShack Corporation, the Guarantors named therein, and the Initial Purchasers named therein (filed as Exhibit 4.3 to RadioShack’s Form 8-K filed on May 4, 2011, and incorporated herein by reference).
|
10.1
|
Employment Offer Letter to Dorvin D. Lively from RadioShack Corporation, dated July 27, 2011 (filed as Exhibit 10.70 to RadioShack’s Registration Statement on Form S-4 filed on September 27, 2011, and incorporated herein by reference).
|
10.2
|
First Amendment to Credit Agreement, dated as of September 1, 2011, among RadioShack Corporation, the Facility Guarantors thereunder, the Lenders party thereto, and Bank of America, N.A., as Administrative Agent and Collateral Agent for itself and the other Lenders (filed as Exhibit 10.1 to RadioShack’s Form 8-K filed on September 1, 2011, and incorporated herein by reference).
|
31(a) (2)
|
Rule 13a-14(a) Certification of the principal executive officer of RadioShack Corporation.
|
31(b) (2)
|
Rule 13a-14(a) Certification of the principal financial officer of RadioShack Corporation.
|
32 (2)(3)
|
Section 1350 Certification of the chief executive officer and chief financial officer of RadioShack Corporation.
|
101.INS
|
XBRL Instance Document (2)(4)
|
101.SCH
|
XBRL Taxonomy Extension Schema Document (2)(4)
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (2)(4)
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document (2)(4)
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
Document (2)(4)
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (2)(4)
|
(1)
|
RadioShack Corporation was known as Tandy Corporation until May 18, 2000.
|
(2)
|
Filed with this report.
|
(3)
|
This certification shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
|
(4)
|
The XBRL-related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates such information by reference.
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of RadioShack Corporation;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: October 25, 2011
|
By
|
/s/
|
James F. Gooch
|
||
James F. Gooch
|
|||||
President and Chief Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of RadioShack Corporation;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: October 25, 2011
|
By
|
/s/
|
Dorvin D. Lively
|
||
Dorvin D. Lively
|
|||||
Executive Vice President—Chief Financial Officer and Chief Administrative Officer
|
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Consolidated Statements Of Income (Parenthetical) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Consolidated Statements Of Income [Abstract] | ||||
Cost of products sold, depreciation | $ 1.9 | $ 1.9 | $ 5.5 | $ 5.8 |
Segment Reporting (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Segment Reporting Information |
|
Document And Entity Information | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Oct. 14, 2011 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | RADIOSHACK CORP | |
Entity Central Index Key | 0000096289 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 99,837,330 |
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Net Income Per Share | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | NOTE 6 – NET INCOME PER SHARE
Basic net income per share is computed based on the weighted average number of common shares outstanding for each period presented. Diluted net income per share reflects the potential dilution that would have occurred if securities or other contracts to issue common stock were exercised, converted, or resulted in the issuance of common stock that would have then shared in our earnings.
The following table reconciles the numerator and denominator used in the basic and diluted net income per share calculations for the periods presented:
The following table includes common stock equivalents that were not included in the calculation of diluted net income per share for the periods presented:
|
Indebtedness And Borrowing Facilities (2019 Notes) (Details) (USD $) | 0 Months Ended | |
---|---|---|
Sep. 27, 2011 | May 03, 2011
2019 Notes [Member] | |
Debt Instrument [Line Items] | ||
Senior unsecured notes | $ 325,000,000 | |
Debt instrument, issuance date | May 3, 2011 | |
Maturity date | May 15, 2019 | |
Fixed interest rate | 6.75% | |
Interest payable terms | semi-annually on May 15 and November 15 of each year, beginning November 15, 2011 | |
Debt instrument, date of first required payment | November 15, 2011 | |
Net proceeds from sale of senior unsecured notes | 315,300,000 | |
Senior unsecured notes original issuance discount | $ 2,500,000 | |
Effective annual interest rate | 6.875% | |
Exchange offer, expiration date | November 8, 2011 |
Commitments And Contingencies (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | |
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2011 | Sep. 30, 2011
T-Mobile [Member] | Jun. 30, 2011
T-Mobile [Member] | |
Loss Contingencies [Line Items] | ||||
Number of putative class action lawsuits | 4 | 4 | ||
Inventory valuation loss | $ 2,600,000 | |||
Civil penalty for violation of the act maximum first time violation | 250 | 250 | ||
Civil penalty for violation of act, each subsequent transaction | 1,000 | 1,000 | ||
Earnings charge related to vendor transition | 23,400,000 | 23,400,000 | 23,400,000 | |
Loss contingency, estimated reasonably possible loss amount | $ 41,000,000 | $ 41,000,000 |
Discontinued Operations (Narrative) (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Jun. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Discontinued Operations [Abstract] | |||||
Gain (loss) associated with closing of kiosks | $ 0 | ||||
Net sales and operating revenues from discontinued operations | 0 | 49.8 | 62.9 | 148.9 | |
Pretax income from discontinued operations | $ 0 | $ 5.2 | $ 8.4 | $ 18.8 |
Segment Reporting | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | NOTE 11 – SEGMENT REPORTING
The U.S. RadioShack company-operated stores segment consists solely of our 4,461 U.S. company-operated retail stores, all operating under the RadioShack brand name. Our kiosk operations consist of our network of 1,490 kiosks located in Target stores. We previously elected to separately present the results of our kiosk operations; however, in conjunction with the reclassification of our Sam's Club kiosks to discontinued operations, we have included the results of our remaining kiosks with those of our other business activities that do not meet the quantitative thresholds for separate disclosure. We evaluate the performance of our segments based on operating income, which is defined as sales less cost of products sold and certain direct operating expenses, including labor, rent, and occupancy costs. Asset balances by segment have not been included in the table below, as these are managed on a company-wide level and are not fully allocated to segments for management reporting purposes. Amounts in the other category reflect our business activities that are not separately reportable, which include sales through our kiosks, sales to our independent dealers, sales generated by our www.radioshack.com website and our Mexican subsidiary, sales to commercial customers, and sales to other third parties through our global sourcing and manufacturing operations.
Revenue by reportable segment is as follows:
Operating income by reportable segment and the reconciliation to income from continuing operations before income taxes are as follows:
|
Discontinued Operations | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | NOTE 2 – DISCONTINUED OPERATIONS
We account for closed stores or kiosks as discontinued operations when the operations and cash flows of a store or kiosk being disposed of are eliminated from ongoing operations and we do not have any significant continuing involvement in its operations. In reaching the determination as to whether the cash flows of a store or kiosk will be eliminated from our ongoing operations, we consider whether it is likely that customers will migrate to our other retail locations in the same geographic market.
All of our remaining kiosks located in Sam's Club stores were transitioned to Sam's Club by June 30, 2011. We determined that the cash flows from these kiosks were eliminated from our ongoing operations. Therefore, these operations were reclassified from the kiosks segment to discontinued operations in the second quarter. The operating results of these kiosks are presented in the consolidated statements of income as discontinued operations, net of income taxes, for all periods presented.
We incurred no significant gain or loss associated with the transition of these kiosks to Sam's Club. We redeployed substantially all of our Sam's Club kiosk employees to nearby RadioShack stores or Target Mobile centers, and we redistributed our Sam's Club kiosk inventory to our remaining retail channels. Net sales and operating revenues related to these discontinued operations were zero for the third quarter and $62.9 million for the first nine months of 2011, compared with $49.8 million and $148.9 million, respectively, for the same periods last year. Income before income taxes for these discontinued operations was zero for the third quarter and $8.4 million for the first nine months of 2011, compared with $5.2 million and $18.8 million, respectively, for the same periods last year. We anticipate that the results of our discontinued operations will be insignificant in future periods. |
Derivative Financial Instruments | 9 Months Ended |
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Sep. 30, 2011 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | NOTE 8 – DERIVATIVE FINANCIAL INSTRUMENTS
We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments under the FASB accounting guidance on the accounting for derivative instruments and hedging activities. We do not hold or issue derivative financial instruments for trading or speculative purposes. To qualify for hedge accounting, derivatives must meet defined correlation and effectiveness criteria, be designated as a hedge, and result in cash flows and financial statement effects that substantially offset those of the position being hedged.
By using these derivative instruments, we expose ourselves, from time to time, to credit risk and market risk. Credit risk is the potential failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. We minimize this credit risk by entering into transactions with high quality counterparties and do not anticipate significant losses due to our counterparties' nonperformance. Market risk is the adverse effect on the value of a financial instrument that results from a change in the rate or value of the underlying item being hedged. We minimize this market risk by establishing and monitoring internal controls over our hedging activities, which include policies and procedures that limit the types and degree of market risk that may be undertaken.
Interest Rate Swap Agreements: We previously used interest rate-related derivative instruments to manage our exposure to fluctuations of interest rates. In June and August 2003, we entered into interest rate swap agreements with underlying notional amounts of debt of $100 million and $50 million, respectively, and both matured in May 2011. These swaps effectively converted a portion of our long-term fixed rate debt to a variable rate. We entered into these agreements to balance our fixed versus floating rate debt portfolio to continue to take advantage of lower short-term interest rates. Under these agreements, we contracted to pay a variable rate of LIBOR plus a markup and to receive an annual fixed rate of 7.375%.
The final measurement date on these contracts was February 15, 2011. Therefore, the cash flows from the contracts were fixed through their expiration dates and ceased fluctuating with interest rate changes after that date. We held these instruments until their maturities in May 2011. Changes in fair value of these instruments were recorded in earnings as an adjustment to interest expense. These adjustments resulted in increases in interest expense of zero for the third quarter and $1.9 million for the first nine months of 2011, compared with $0.7 million and $2.2 million, respectively, for the same periods last year.
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Supplemental Guarantor Financial Information | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Supplemental Guarantor Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Guarantor Financial Information | NOTE 13 – SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
The obligation to pay principal and interest on the 2019 Notes is jointly and severally guaranteed on a full and unconditional basis by all of the guarantors under the 2016 Credit Facility. On the issue date, the 2019 Notes were guaranteed by all of our wholly-owned domestic subsidiaries except Tandy Life Insurance Company. Refer to Note 3 – Indebtedness and Borrowing Facilities for additional information on the 2019 Notes and the corresponding exchange offer.
The following condensed consolidating financial information represents the financial information of RadioShack Corporation, its guarantor subsidiaries, and its non-guarantor subsidiaries prepared on the equity basis of accounting. Earnings of subsidiaries are, therefore, reflected in the parent company's investment accounts and earnings. The elimination entries primarily eliminate investments in subsidiaries and intercompany balances and transactions. The non-guarantor subsidiaries are comprised of the foreign subsidiaries of the Company and Tandy Life Insurance Company. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the guarantor or non-guarantor subsidiaries operated as independent entities.
Condensed Consolidating Statements of Income (unaudited)
For the Three Months Ended September 30, 2011
Condensed Consolidating Statements of Income (unaudited)
For the Three Months Ended September 30, 2010
Condensed Consolidating Statements of Income (unaudited)
For the Nine Months Ended September 30, 2011
Condensed Consolidating Statements of Income (unaudited)
For the Nine Months Ended September 30, 2010
Condensed Consolidating Balance Sheets (unaudited)
At September 30, 2011
Condensed Consolidating Balance Sheets (unaudited)
At December 31, 2010
Condensed Consolidating Balance Sheets (unaudited)
At September 30, 2010
Condensed Consolidating Statements of Cash Flows (unaudited)
For the Nine Months Ended September 30, 2011
Condensed Consolidating Statements of Cash Flows (unaudited)
For the Nine Months Ended September 30, 2010
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Fair Value Measurements | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | NOTE 9 – FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The FASB's accounting guidance utilizes a fair value hierarchy that prioritizes the inputs to the valuation techniques used to measure fair value into three broad levels:
The fair values of our interest rate swaps are the estimated amounts we would have received to settle the agreements. Other financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and long-term debt. With the exception of long-term debt, the financial statement carrying amounts of these items approximate their fair values due to their short-term nature. Estimated fair values for long-term debt have been determined using recent trading activity and/or bid/ask spreads.
Carrying amounts and the related estimated fair value of our debt financial instruments are as follows:
The fair value of our 2.5% convertible notes due in 2013 was $363.4 million at September 30, 2011, compared with $400.7 million at December 31, 2010. The fair value of the 2019 Notes was $306.6 million at September 30, 2011. The fair value of the 2011 Notes was $311.4 million at December 31, 2010.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
For the three months ended September 30, 2011, long-lived assets held and used in certain locations of our U.S. RadioShack company-operated stores segment with a total carrying value of $1.1 million were written down to their fair value of $0.4 million, resulting in an impairment charge of $0.7 million that was included in earnings for the period. The inputs used to calculate the fair value of these long-lived assets included the projected cash flows and a risk-adjusted rate of return that we estimated would be used by a market participant in valuing these assets.
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Net Income Per Share (Common Stock Equivalents That Were Not Included In The Calculation Of Diluted Net Income Per Share) (Details) (USD $) In Millions, except Per Share data | 3 Months Ended | 9 Months Ended | ||||||||||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||
Exercise price of warrants | 36.60 | 36.60 | ||||||||||
Conversion price | 24.25 | 24.25 | ||||||||||
Employee Stock Options [Member] | ||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||
Common stock equivalents not included in the calculation of diluted net income per share | 6.4 | [1] | 1.8 | [1] | 2.3 | [1] | 1.8 | [1] | ||||
Warrants To Purchase Common Stock [Member] | ||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||
Common stock equivalents not included in the calculation of diluted net income per share | 15.5 | [1] | 15.5 | [1] | 15.5 | [1] | 15.5 | [1] | ||||
Convertible Debt Instruments [Member] | ||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||
Common stock equivalents not included in the calculation of diluted net income per share | 15.5 | [2] | 15.5 | [2] | 15.5 | [2] | 15.5 | [2] | ||||
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Comprehensive Income (Loss) | 9 Months Ended |
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Sep. 30, 2011 | |
Comprehensive Income (Loss) [Abstract] | |
Comprehensive Income | NOTE 7 – COMPREHENSIVE INCOME (LOSS)
Comprehensive loss was $9.9 million for the third quarter and comprehensive income was $53.5 million for the first nine months of 2011, compared with comprehensive income of $47.3 million and $150.6 million, respectively, for the same periods last year. In addition to net income, the other components of comprehensive income, all net of tax, were foreign currency translation adjustments and pension adjustments. |
Consolidated Statements Of Cash Flows (USD $) In Millions | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Cash flows from operating activities: | ||
Net income | $ 60.3 | $ 149.1 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 61.7 | 63.8 |
Amortization of discounts on long-term debt | 12.2 | 11.1 |
Impairment of long-lived assets | 1.7 | 3.1 |
Stock-based compensation | 4.0 | 8.7 |
Other non-cash items | 7.4 | 9.3 |
Changes in operating assets and liabilities: | ||
Accounts and notes receivable | 126.9 | 65.5 |
Inventories | (69.4) | (79.1) |
Other current assets | 5.7 | (2.2) |
Accounts payable, accrued expenses, income taxes payable and other | 52.5 | (72.5) |
Net cash provided by operating activities | 263.0 | 156.8 |
Cash flows from investing activities: | ||
Additions to property, plant and equipment | (62.9) | (46.7) |
Proceeds from sale of property, plant and equipment | 0.1 | 0.1 |
Net cash used in investing activities | (62.8) | (46.6) |
Cash flows from financing activities: | ||
Issuance of long-term notes | 322.5 | |
Long-term notes issuance costs | (7.2) | |
Repayments of borrowings | (306.8) | |
Payments to purchase treasury stock | (101.4) | (300.0) |
Changes in cash overdrafts | (11.6) | (0.5) |
Proceeds from exercise of stock options | 2.6 | 2.4 |
Net cash used in financing activities | (101.9) | (298.1) |
Net increase (decrease) in cash and cash equivalents | 98.3 | (187.9) |
Cash and cash equivalents, beginning of period | 569.4 | 908.2 |
Cash and cash equivalents, end of period | $ 667.7 | $ 720.3 |
Indebtedness And Borrowing Facilities | 9 Months Ended |
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Sep. 30, 2011 | |
Indebtedness And Borrowing Facilities [Abstract] | |
Indebtedness And Borrowing Facilities | NOTE 3 – INDEBTEDNESS AND BORROWING FACILITIES
2016 Credit Facility: On January 4, 2011, we terminated our $325 million credit facility and entered into a five-year, $450 million revolving credit agreement ("2016 Credit Facility") with a group of lenders with Bank of America, N.A., as administrative and collateral agent. The 2016 Credit Facility expires on January 4, 2016. The 2016 Credit Facility may be used for general corporate purposes and the issuance of letters of credit. This facility is collateralized by substantially all of the Company's inventory, accounts receivable, cash and cash equivalents, and certain other personal property, and is guaranteed by certain of our domestic subsidiaries.
Borrowings under the 2016 Credit Facility are subject to a borrowing base of certain collateralized assets and bear interest at a bank's prime rate plus 1.25% to 1.75% or LIBOR plus 2.25% to 2.75%. The applicable rates in these ranges are based on the aggregate average availability under the facility.
The 2016 Credit Facility also contains a $150 million sub-limit for the issuance of standby and commercial letters of credit. The issuance of letters of credit reduces the amount available under the facility. Letter of credit fees are 2.25% to 2.75% for standby letters of credit and 1.125% to 1.375% for commercial letters of credit.
We pay commitment fees to the lenders at an annual rate of 0.50% of the unused amount of the facility. As of September 30, 2011, no borrowings had been made under the facility, and letters of credit totaling $29.1 million had been issued.
The 2016 Credit Facility contains affirmative and negative covenants that, among other things, restrict certain payments, including dividends and share repurchases. Also, we will be subject to a minimum consolidated fixed charge coverage ratio if our unused amount under the facility is less than the greater of 12.5% of the maximum borrowing amount and $45.0 million.
We are generally free to pay dividends and repurchase shares as long as the current and projected unused amount under the facility is greater than 17.5% of the maximum borrowing amount and the minimum consolidated fixed charge coverage ratio is maintained. We may pay dividends and repurchase shares without regard to the Company's consolidated fixed charge coverage ratio as long as the current and projected unused amount under the facility is greater than 75% of the maximum borrowing amount and cash on hand is used for the dividends or share repurchases.
2019 Notes: On May 3, 2011, we sold $325 million aggregate principal amount of senior unsecured notes due May 15, 2019 ("2019 Notes") in a private offering to qualified institutional buyers. The obligation to pay principal and interest on the 2019 Notes is jointly and severally guaranteed on a full and unconditional basis by all of the guarantors under the 2016 Credit Facility. On the issue date, the 2019 Notes were guaranteed by all of our wholly-owned domestic subsidiaries except Tandy Life Insurance Company. The 2019 Notes will pay interest at a fixed rate of 6.75% per year. Interest will be paid on a semi-annual basis on May 15 and November 15 of each year, beginning November 15, 2011. Net proceeds from the sale of the 2019 Notes were $315.3 million, after an initial issuance discount of approximately $2.5 million and other transaction costs. The effective annualized interest rate of the 2019 Notes after giving effect to the original issuance discount is 6.875%.
The 2019 Notes and the guarantees are the Company's and the guarantors' general unsecured senior obligations and, therefore, will be subordinated to all of the Company's and the guarantors' existing and future secured debt to the extent of the assets securing that debt. In addition, the 2019 Notes will be effectively subordinated to all of the liabilities of our subsidiaries that are not guaranteeing the 2019 Notes, to the extent of the assets of those subsidiaries.
The 2019 Notes contain covenants that could, in certain circumstances, limit our ability to issue additional debt, repurchase shares of our common stock, make certain other restricted payments, make investments, or enter into certain other transactions. At September 30, 2011, we were in compliance with these covenants.
On September 27, 2011, the Company and the guarantors filed a registration statement on Form S-4 with the SEC to register the issuance of new notes (the "Exchange Notes") in partial fulfillment of obligations in the registration rights agreement entered into by the Company, the guarantors, and the initial purchasers of the 2019 Notes. The Exchange Notes are identical in all material respects to the 2019 Notes except that the issuance of the Exchange Notes has been registered under the Securities Act, and as a result certain registration rights and special interest rate provisions that apply to the 2019 Notes do not apply to the Exchange Notes. Unless extended, the exchange offer will expire on November 8, 2011.
2011 Notes: In March 2011, we redeemed all of our 7.375% notes that would have matured on May 15, 2011 ("2011 Notes"). The redemption of these notes resulted in a loss on extinguishment of debt of $4.1 million, which was classified as other loss on our consolidated statements of income. |
Segment Reporting (Schedule Of Segment Reporting Information) (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||||||||||||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net sales and operating revenues | $ 1,031.8 | $ 1,002.0 | $ 2,991.1 | $ 2,956.0 | ||||||||||
Operating income | 10.6 | 79.8 | 124.6 | 253.3 | ||||||||||
Interest income | 1.4 | 0.8 | 2.2 | 2.1 | ||||||||||
Interest expense | (12.6) | (10.4) | (33.2) | (31.0) | ||||||||||
Other loss | (4.1) | |||||||||||||
(Loss) income from continuing operations before income taxes | (0.6) | 70.2 | 89.5 | 224.4 | ||||||||||
Charge to earnings | 23.4 | 23.4 | ||||||||||||
Plant closing costs | 11.0 | |||||||||||||
U.S. RadioShack Company-Operated Stores [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net sales and operating revenues | 846.3 | 894.3 | 2,539.3 | 2,667.9 | ||||||||||
Operating income | 95.6 | [1] | 146.1 | [1] | 384.7 | [1] | 471.4 | [1] | ||||||
All Other Segments [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net sales and operating revenues | 185.5 | 107.7 | 451.8 | 288.1 | ||||||||||
Operating income | 0.9 | [2] | 10.5 | [2] | (3.6) | [2] | 30.0 | [2] | ||||||
Operating Segments Subtotal [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Operating income | 96.5 | 156.6 | 381.1 | 501.4 | ||||||||||
Unallocated Amount To Segment [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Operating income | (85.9) | [3] | (76.8) | [3] | (256.5) | [3] | (248.1) | [3] | ||||||
Chinese Manufacturing Operations [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Plant closing costs | $ 0.8 | $ 11.0 | ||||||||||||
|
Net Income Per Share (Schedule Of Basic And Diluted Net Income Per Share Calculation) (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Numerator: | ||||
Income from continuing operations | $ 0.3 | $ 42.8 | $ 55.2 | $ 137.6 |
Discontinued operations, net of taxes | 3.2 | 5.1 | 11.5 | |
Net income | $ 0.3 | $ 46.0 | $ 60.3 | $ 149.1 |
Denominator: | ||||
Weighted-average common shares outstanding | 100.2 | 121.0 | 103.4 | 124.2 |
Dilutive effect of stock-based awards | 0.5 | 2.1 | 0.8 | 2.2 |
Weighted average shares for diluted net income per share | 100.7 | 123.1 | 104.2 | 126.4 |
Share Repurchases | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Share Repurchases [Abstract] | |
Share Repurchases | NOTE 4 – SHARE REPURCHASES
During the second quarter of 2011, we paid $101.4 million to purchase 6.3 million shares of our common stock in open market purchases. These purchases completed our $610 million share repurchase authorization.
On August 23, 2010, we entered into an accelerated share repurchase ("ASR") program with two investment banks to repurchase shares of our common stock under our approved share repurchase program. Under the ASR program, the number of shares to be repurchased was based generally on the daily volume weighted average price of our common stock during the term of the ASR program. On August 24, 2010, we paid $300 million to the investment banks in exchange for an initial delivery of 11.7 million shares to us, subject to a 30%, or $90 million, holdback. At the conclusion of the ASR program, we could have received additional shares, or we could have been required to pay additional cash or shares (at our option), based on the daily volume weighted average price of our common stock over a period beginning after the effective date of the ASR agreements and ending on or before November 19, 2010. In November 2010 at the conclusion of the ASR program, we received an additional 3.2 million shares.
At September 30, 2010, the ASR program was accounted for as an initial treasury stock transaction and a forward stock purchase contract. The initial repurchase of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share on the effective date of the agreements. The forward stock purchase contracts were classified as equity instruments under the Financial Accounting Standards Board's ("FASB") accounting guidance for "Contracts in Entity's Own Equity," and were deemed to have a fair value of zero at the effective date.
As of September 30, 2010, based on the daily volume weighted average price of our common stock since the effective date of the agreements, the investment banks would have been required to deliver an additional 3.8 million shares to us. As of September 30, 2010, the $90 million holdback was recorded as a reduction in additional paid-in capital on our consolidated balance sheet. |
Supplemental Guarantor Financial Information (Condensed Consolidating Statements Of Income) (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Supplemental Guarantor Financial Information [Line Items] | ||||
Net sales and operating revenues | $ 1,031.8 | $ 1,002.0 | $ 2,991.1 | $ 2,956.0 |
Cost of products sold | 589.9 | 549.0 | 1,662.7 | 1,579.3 |
Gross profit | 441.9 | 453.0 | 1,328.4 | 1,376.7 |
Selling, general and administrative | 411.4 | 352.5 | 1,146.3 | 1,062.9 |
Depreciation and amortization | 19.2 | 18.3 | 55.8 | 57.4 |
Impairment of long-lived assets | 0.7 | 2.4 | 1.7 | 3.1 |
Total operating expenses | 431.3 | 373.2 | 1,203.8 | 1,123.4 |
Operating (loss) income | 10.6 | 79.8 | 124.6 | 253.3 |
Interest income | 1.4 | 0.8 | 2.2 | 2.1 |
Interest expense | (12.6) | (10.4) | (33.2) | (31.0) |
Other loss | (4.1) | |||
(Loss) income from continuing operations before income taxes | (0.6) | 70.2 | 89.5 | 224.4 |
Income tax (benefit) expense | (0.9) | 27.4 | 34.3 | 86.8 |
Income (loss) from continuing operations | 0.3 | 42.8 | 55.2 | 137.6 |
Discontinued operations, net of income taxes | 3.2 | 5.1 | 11.5 | |
Net income (loss) | 0.3 | 46.0 | 60.3 | 149.1 |
RadioShack Corporation [Member] | ||||
Supplemental Guarantor Financial Information [Line Items] | ||||
Net sales and operating revenues | 993.6 | 1,022.7 | 2,949.1 | 2,988.4 |
Cost of products sold | 646.0 | 648.8 | 1,870.4 | 1,826.7 |
Gross profit | 347.6 | 373.9 | 1,078.7 | 1,161.7 |
Selling, general and administrative | 371.3 | 338.3 | 1,031.7 | 1,020.1 |
Depreciation and amortization | 17.2 | 17.7 | 50.7 | 54.7 |
Impairment of long-lived assets | 0.7 | 0.7 | 1.7 | 1.4 |
Total operating expenses | 389.2 | 356.7 | 1,084.1 | 1,076.2 |
Operating (loss) income | (41.6) | 17.2 | (5.4) | 85.5 |
Interest income | 1.0 | 0.2 | 1.3 | 0.7 |
Interest expense | (16.1) | (14.0) | (44.2) | (41.3) |
Other loss | (4.1) | |||
(Loss) income from continuing operations before income taxes | (56.7) | 3.4 | (52.4) | 44.9 |
Income tax (benefit) expense | (22.0) | 1.7 | (22.6) | 19.3 |
Equity in earnings of subsidiaries, net of income taxes | 35.0 | 44.3 | 90.1 | 123.5 |
Income (loss) from continuing operations | 0.3 | 46.0 | 60.3 | 149.1 |
Discontinued operations, net of income taxes | ||||
Net income (loss) | 0.3 | 46.0 | 60.3 | 149.1 |
Guarantor Subsidiaries [Member] | ||||
Supplemental Guarantor Financial Information [Line Items] | ||||
Net sales and operating revenues | 996.2 | 987.5 | 2,693.0 | 2,560.5 |
Cost of products sold | 910.7 | 920.1 | 2,473.0 | 2,375.3 |
Gross profit | 85.5 | 67.4 | 220.0 | 185.2 |
Selling, general and administrative | 30.3 | 4.8 | 74.9 | 14.9 |
Depreciation and amortization | 1.6 | 3.0 | 1.0 | |
Impairment of long-lived assets | 1.7 | 1.7 | ||
Total operating expenses | 31.9 | 6.5 | 77.9 | 17.6 |
Operating (loss) income | 53.6 | 60.9 | 142.1 | 167.6 |
Interest income | 2.4 | 2.7 | 7.6 | 7.3 |
(Loss) income from continuing operations before income taxes | 56.0 | 63.6 | 149.7 | 174.9 |
Income tax (benefit) expense | 20.7 | 24.7 | 55.3 | 66.0 |
Equity in earnings of subsidiaries, net of income taxes | (0.5) | 1.8 | (10.6) | 1.8 |
Income (loss) from continuing operations | 34.8 | 40.7 | 83.8 | 110.7 |
Discontinued operations, net of income taxes | 3.2 | 5.1 | 11.5 | |
Net income (loss) | 34.8 | 43.9 | 88.9 | 122.2 |
Non-Guarantor Subsidiaries [Member] | ||||
Supplemental Guarantor Financial Information [Line Items] | ||||
Net sales and operating revenues | 29.1 | 34.2 | 102.9 | 100.7 |
Cost of products sold | 20.3 | 22.5 | 73.2 | 70.9 |
Gross profit | 8.8 | 11.7 | 29.7 | 29.8 |
Selling, general and administrative | 9.8 | 9.4 | 39.7 | 27.9 |
Depreciation and amortization | 0.4 | 0.6 | 2.1 | 1.7 |
Total operating expenses | 10.2 | 10.0 | 41.8 | 29.6 |
Operating (loss) income | (1.4) | 1.7 | (12.1) | 0.2 |
Interest income | 1.5 | 1.5 | 4.3 | 4.4 |
(Loss) income from continuing operations before income taxes | 0.1 | 3.2 | (7.8) | 4.6 |
Income tax (benefit) expense | 0.4 | 1.0 | 1.6 | 1.5 |
Income (loss) from continuing operations | (0.3) | 2.2 | (9.4) | 3.1 |
Discontinued operations, net of income taxes | ||||
Net income (loss) | (0.3) | 2.2 | (9.4) | 3.1 |
Eliminations [Member] | ||||
Supplemental Guarantor Financial Information [Line Items] | ||||
Net sales and operating revenues | (987.1) | (1,042.4) | (2,753.9) | (2,693.6) |
Cost of products sold | (987.1) | (1,042.4) | (2,753.9) | (2,693.6) |
Interest income | (3.5) | (3.6) | (11.0) | (10.3) |
Interest expense | 3.5 | 3.6 | 11.0 | 10.3 |
Equity in earnings of subsidiaries, net of income taxes | (34.5) | (46.1) | (79.5) | (125.3) |
Income (loss) from continuing operations | (34.5) | (46.1) | (79.5) | (125.3) |
Discontinued operations, net of income taxes | ||||
Net income (loss) | $ (34.5) | $ (46.1) | $ (79.5) | $ (125.3) |
Indebtedness And Borrowing Facilities (2011 Notes) (Details) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Mar. 31, 2011
2011 Notes [Member] | Sep. 30, 2011
2011 Notes [Member] | |
Debt Instrument [Line Items] | ||||||
Fixed interest rate | 7.375% | |||||
Long-term notes maturity date | May 15, 2011 | |||||
Loss on extinguishment on debt | $ (4.1) | $ 4.1 |
Comprehensive Income (Loss) (Narrative) (Details) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Comprehensive Income (Loss) [Abstract] | ||||
Comprehensive income | $ (9.9) | $ 47.3 | $ 53.5 | $ 150.6 |
Subsequent Event (Details) (USD $) In Millions, except Per Share data | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|---|
Oct. 25, 2011 | Jun. 30, 2011 | Sep. 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | |
Subsequent Events [Abstract] | |||||
Dividend declared | $ 0.50 | ||||
Dividend paid | $ 0.25 | ||||
Divided record date | Nov. 25, 2011 | ||||
Dividend payable date | Dec. 15, 2011 | ||||
Repurchase authorization, amount | $ 610 | $ 200 | |||
Common stock expected to be repurchased during the next twelve months, value | $ 200 |
Plant Closure (Narrative) (Details) (USD $) In Millions, unless otherwise specified | 9 Months Ended |
---|---|
Sep. 30, 2011
employees | |
Plant Closure [Abstract] | |
Plant closing costs | $ 11.0 |
Compensation expense for severance packages | 7.5 |
Number of plant employees terminated | 1,500 |
Foreign currency exchange loss | 1.5 |
Inventory valuation loss, accelerated depreciation and other general and administrative costs recorded during period | $ 2.0 |
Subsequent Events | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12 – SUBSEQUENT EVENTS
On October 25, 2011, we announced that our Board of Directors declared an increase in the annual dividend on the Company's common stock to $0.50 per share in 2011, compared with $0.25 per share paid in 2010, and changed the annual dividend payout to a quarterly payout. The annual cash dividend of $0.50 per share for 2011 is payable on December 15, 2011, to stockholders of record at the close of business on November 25, 2011, after which the Company expects dividends will be paid on a quarterly basis beginning in the first quarter of 2012. The board also approved an authorization for a total share repurchase of $200 million of the Company's common stock to be executed through open market or private transactions. The Company expects to repurchase $200 million of the Company's common stock during the next 12 months. |
Plant Closure | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Plant Closure [Abstract] | |
Plant Closure | NOTE 5 – PLANT CLOSURE
During the second quarter of 2011 we ceased production operations in our Chinese manufacturing plant. Since production operations ceased, we have continued to acquire inventory similar to that previously produced by this facility from alternative product sourcing channels. In conjunction with the plant closing, we incurred total costs of $11.0 million for the first nine months of 2011. We incurred $7.5 million in compensation expense for severance packages for the termination of approximately 1,500 employees. We recorded a foreign currency exchange loss of $1.5 million related to the reversal of our foreign currency cumulative translation adjustment, which is classified as a selling, general and administrative expense. The remaining $2.0 million related to an inventory valuation loss, accelerated depreciation, and other general and administrative costs. Substantially all of these costs were incurred in the second quarter of 2011. Future costs to manage the liquidation, which are not expected to be significant, will be expensed as incurred and will include compensation expense such as retention bonuses for the remaining employees, rent expense, and professional fees. |
Net Income Per Share (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Net Income Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Basic And Diluted Net Income Per Share Calculation |
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Common Stock Equivalents That Were Not Included In The Calculation Of Diluted Net Income Per Share |
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Segment Reporting (Narrative) (Details) | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
U.S. RadioShack Company-Operated Stores [Member] | |
Segment Reporting Information [Line Items] | |
Number of retail locations | 4,461 |
Kiosks [Member] | |
Segment Reporting Information [Line Items] | |
Number of retail locations | 1,490 |
Share Repurchases (Narrative) (Details) (USD $) In Millions, unless otherwise specified | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
---|---|---|---|---|---|
Aug. 24, 2010 | Nov. 30, 2010 | Jun. 30, 2011 | Sep. 30, 2011 | Sep. 30, 2010 | |
Share Repurchases [Abstract] | |||||
Share repurchases, value | $ 101.4 | ||||
Share repurchases, shares | 6.3 | ||||
Repurchase authorization, amount | 610 | 200 | |||
Payment to investment banks | 300 | ||||
Initial delivery of shares by investment bank | 11.7 | ||||
Initial delivery holdback, percentage | 30.00% | ||||
Initial delivery holdback | 90 | 90 | |||
Additional shares delivered | 3.2 | ||||
Additional shares delivered interim estimate | 3.8 | ||||
Equity instruments fair value | $ 0 |
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 |
---|---|---|---|
Consolidated Balance Sheets [Abstract] | |||
Preferred stock, no par value | |||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Series A junior participating, shares designated | 300,000 | 300,000 | 300,000 |
Series A junior participating, shares issued | 0 | 0 | 0 |
Common stock, par value | $ 1 | $ 1 | $ 1 |
Common stock, shares authorized | 650,000,000 | 650,000,000 | 650,000,000 |
Common stock, shares issued | 146,033,000 | 146,033,000 | 191,033,000 |
Treasury stock, shares | 46,195,000 | 40,260,000 | 77,207,000 |
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Measured At Fair Value On Recurring Basis |
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Carrying Amounts And Related Estimated Fair Value Of Debt Instruments |
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Assets And Liabilities Measured At Fair Value On A Nonrecurring Basis |
|
Supplemental Guarantor Financial Information (Condensed Consolidating Statements Of Cash Flows) (Details) (USD $) In Millions | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Supplemental Guarantor Financial Information [Line Items] | ||
Net cash provided by (used in) operating activities | $ 263.0 | $ 156.8 |
Additions to property, plant and equipment | (62.9) | (46.7) |
Proceeds from sale of property, plant and equipment | 0.1 | 0.1 |
Net cash used in investing activities | (62.8) | (46.6) |
Issuance of long-term notes | 322.5 | |
Long-term notes issuance costs | (7.2) | |
Repayments of borrowings | (306.8) | |
Purchases of treasury stock | (101.4) | (300.0) |
Changes in cash overdrafts | (11.6) | (0.5) |
Proceeds from exercise of stock options | 2.6 | 2.4 |
Net cash (used in) provided by financing activities | (101.9) | (298.1) |
Net increase (decrease) in cash and cash equivalents | 98.3 | (187.9) |
Cash and cash equivalents, beginning of period | 569.4 | 908.2 |
Cash and cash equivalents, end of period | 667.7 | 720.3 |
RadioShack Corporation [Member] | ||
Supplemental Guarantor Financial Information [Line Items] | ||
Net cash provided by (used in) operating activities | 152.9 | 29.5 |
Additions to property, plant and equipment | (49.0) | (42.7) |
Proceeds from sale of property, plant and equipment | 0.1 | 0.1 |
Dividends received from subsidiary | 1.5 | 1.7 |
Net cash used in investing activities | (47.4) | (40.9) |
Issuance of long-term notes | 322.5 | |
Long-term notes issuance costs | (7.2) | |
Repayments of borrowings | (306.8) | |
Purchases of treasury stock | (101.4) | (300.0) |
Changes in cash overdrafts | (11.6) | (0.5) |
Proceeds from exercise of stock options | 2.6 | 2.4 |
Change in intercompany receivable/payable | 31.6 | 329.4 |
Net cash (used in) provided by financing activities | (70.3) | 31.3 |
Net increase (decrease) in cash and cash equivalents | 35.2 | 19.9 |
Cash and cash equivalents, beginning of period | 109.7 | 77.8 |
Cash and cash equivalents, end of period | 144.9 | 97.7 |
Guarantor Subsidiaries [Member] | ||
Supplemental Guarantor Financial Information [Line Items] | ||
Net cash provided by (used in) operating activities | 133.3 | 133.2 |
Additions to property, plant and equipment | (12.9) | (2.8) |
Net cash used in investing activities | (12.9) | (2.8) |
Issuance of long-term notes | ||
Long-term notes issuance costs | ||
Repayments of borrowings | ||
Purchases of treasury stock | ||
Changes in cash overdrafts | ||
Proceeds from exercise of stock options | ||
Change in intercompany receivable/payable | (47.4) | (331.7) |
Net cash (used in) provided by financing activities | (47.4) | (331.7) |
Net increase (decrease) in cash and cash equivalents | 73.0 | (201.3) |
Cash and cash equivalents, beginning of period | 427.4 | 802.0 |
Cash and cash equivalents, end of period | 500.4 | 600.7 |
Non-Guarantor Subsidiaries [Member] | ||
Supplemental Guarantor Financial Information [Line Items] | ||
Net cash provided by (used in) operating activities | (23.2) | (5.9) |
Additions to property, plant and equipment | (1.0) | (1.2) |
Net cash used in investing activities | (1.0) | (1.2) |
Issuance of long-term notes | ||
Long-term notes issuance costs | ||
Repayments of borrowings | ||
Purchases of treasury stock | ||
Changes in cash overdrafts | ||
Proceeds from exercise of stock options | ||
Payments of dividends | (1.5) | (1.7) |
Change in intercompany receivable/payable | 15.8 | 2.3 |
Net cash (used in) provided by financing activities | 14.3 | 0.6 |
Net increase (decrease) in cash and cash equivalents | (9.9) | (6.5) |
Cash and cash equivalents, beginning of period | 32.3 | 28.4 |
Cash and cash equivalents, end of period | 22.4 | 21.9 |
Eliminations [Member] | ||
Supplemental Guarantor Financial Information [Line Items] | ||
Net cash provided by (used in) operating activities | ||
Additions to property, plant and equipment | ||
Proceeds from sale of property, plant and equipment | ||
Dividends received from subsidiary | (1.5) | (1.7) |
Net cash used in investing activities | (1.5) | (1.7) |
Purchases of treasury stock | ||
Changes in cash overdrafts | ||
Proceeds from exercise of stock options | ||
Payments of dividends | 1.5 | 1.7 |
Change in intercompany receivable/payable | ||
Net cash (used in) provided by financing activities | 1.5 | 1.7 |
Net increase (decrease) in cash and cash equivalents | ||
Cash and cash equivalents, beginning of period | ||
Cash and cash equivalents, end of period |
Supplemental Guarantor Financial Information (Tables) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Supplemental Guarantor Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statements Of Income |
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Condensed Consolidating Balance Sheets |
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Condensed Consolidating Statements Of Cash Flows |
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Basis Of Presentation | 9 Months Ended |
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Sep. 30, 2011 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | NOTE 1 – BASIS OF PRESENTATION
Throughout this report, the terms "our," "we," "us," "Company," and "RadioShack" refer to RadioShack Corporation, including its subsidiaries. We prepared the accompanying unaudited interim consolidated financial statements, which include the accounts of RadioShack Corporation and all majority-owned domestic and foreign subsidiaries, in accordance with the rules of the Securities and Exchange Commission ("SEC"). Accordingly, we did not include all of the information and footnotes required by generally accepted accounting principles ("GAAP") for complete financial statements. In management's opinion, all adjustments of a normal recurring nature considered necessary for a fair statement are included. However, our operating results for the three and nine month periods ended September 30, 2011 and 2010, do not necessarily indicate the results you might expect for the full year. For further information, refer to our consolidated financial statements and management's discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2010. Our consolidated financial statements and management's discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K were recast on Exhibit 99.1 attached to our Current Report on Form 8-K dated September 27, 2011, for the presentation of discontinued operations and our updated segments as discussed elsewhere in this Quarterly Report on Form 10-Q. |
Commitments And Contingencies | 9 Months Ended |
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Sep. 30, 2011 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | NOTE 10 – COMMITMENTS AND CONTINGENCIES
FASB Accounting Standards Codification Topic 450 - Contingencies ("ASC 450") governs our disclosure and recognition of loss contingencies, including pending claims, lawsuits, disputes with third parties, investigations and other actions that are incidental to the operation of our business. ASC 450 uses the following defined terms to describe the likelihood of a future loss: probable – the future event or events are likely to occur, remote – the chance of the future event or events is slight, and reasonably possible – the chance of the future event or events occurring is more than remote but less than likely. ASC 450 also contains certain requirements with respect to how we accrue for and disclose information concerning our loss contingencies. We accrue for a loss contingency when we conclude that the likelihood of a loss is probable and the amount of the loss can be reasonably estimated. When the reasonable estimate of the loss is within a range of amounts, and no amount in the range constitutes a better estimate than any other amount, we accrue for the amount at the low end of the range. We adjust our accruals from time to time as we receive additional information, but the loss we incur may be significantly greater than or less than the amount we have accrued. We disclose loss contingencies if there is at least a reasonable possibility that a loss has been incurred. No accrual or disclosure is required for losses that are remote.
Brookler v. RadioShack Corporation: In February 26, 2006, plaintiffs filed a putative class action in Los Angeles Superior Court, Brookler v. RadioShack Corporation, claiming that we violated California's wage and hour laws relating to meal periods. The case was originally certified as a class action in February 2006. Our first Motion for Decertification of the class was denied in August 2007. After a favorable decision at the California Court of Appeals in the similar case of Brinker Restaurant Corporation v. Superior Court, we again sought decertification of the class. Based on the California Court of Appeals decision in Brinker, the trial court granted our second motion for class decertification in October 2008. The plaintiffs in Brookler appealed this ruling. Due to the unsettled nature of California law regarding the obligations of employers in respect of meal periods, we and the Brookler plaintiffs requested that the California Court of Appeals stay its ruling on the plaintiffs' appeal of the class decertification ruling pending the California Supreme Court's decision in Brinker. The appellate court denied this joint motion and then heard oral arguments in the case on August 5, 2010. On August 26, 2010, the California Court of Appeals reversed the trial court's decertification of the class, and our Petition for Rehearing was denied on September 14, 2010. On September 28, 2010, we filed a Petition for Review with the California Supreme Court, which granted review and placed the case on hold pending its decision in Brinker. On October 4, 2011, the California Supreme Court scheduled oral arguments to be heard in Brinker on November 8, 2011. The outcome of this case is uncertain and the ultimate resolution of it could have a material adverse effect on our consolidated financial statements in the period in which the resolution is recorded.
Ordonez v. RadioShack Corporation: In May 2010, Daniel Ordonez, on behalf of himself and all other similarly situated current and former employees, filed a Complaint against the Company in the Los Angeles Superior Court. In July 2010, Mr. Ordonez filed an Amended Complaint alleging, among other things, that we failed to provide required meal periods, provide required rest breaks, pay overtime compensation, pay minimum wages, and maintain required records. In September 2010 we removed the case to the United States District Court for the Central District of California. The putative class in Ordonez consists of all current and former non-exempt employees for a period within the four (4) years preceding the filing of the case. The claims raised in Ordonez are similar to the claims raised in Brookler as discussed above, and we have been informed that the Ordonez parties are preparing a Stipulation and Order to Stay Proceedings pending the decision of the California Supreme Court in Brinker. Should the court fail to grant the parties' Stipulation and Order to Stay Proceedings, the parties intend to request a continuance of the hearing date and briefing schedule with respect to class certification. The outcome of this case is uncertain and the ultimate resolution of it could have a material adverse effect on our consolidated financial statements in the period in which the resolution is recorded.
Song-Beverly Credit Card Act: In November 2010, RadioShack received service of process with respect to the first of four putative class action lawsuits filed in California (Sosinov v. RadioShack, Los Angeles Superior Court; Bitter v. RadioShack, Federal District Court, Central District of California; Moreno v. RadioShack, Federal District Court, Southern District of California; and Grant v. RadioShack, San Francisco Superior Court). The plaintiffs in all of these cases seek damages under California's Song-Beverly Credit Card Act (the "Act"). Plaintiffs claim that under one section of the Act, retailers are prohibited from recording certain personal identification information regarding their customers while processing credit card transactions unless certain statutory exceptions are applicable. The Act provides that any person who violates this section is subject to a civil penalty not to exceed $250 for the first violation and $1,000 for each subsequent violation. In each of the cases, plaintiffs allege that we violated the Act by asking them for personal identification information while processing a credit card transaction and then recording it. These cases are in an early stage and discovery has just begun. We are defending them, but are unable to reasonably estimate the loss, if any.
Redman v. RadioShack Corporation: On September 26, 2011, Scott D.H. Redman filed a putative class action lawsuit against the Company in the United States District Court for the Northern District of Illinois. Mr. Redman claims that we violated certain provisions of the Fair and Accurate Credit Transactions Act of 2003, which amended the Fair Credit Reporting Act, by printing the expiration date of our customers' credit cards on transaction receipts. This case is at the earliest stage of litigation, and discovery has not begun. We are still gathering information to evaluate these claims, our defenses, and the likelihood and amount of a loss, if any.
T-Mobile: We previously notified T-Mobile that it had breached its agreement with us through which we offered T-Mobile wireless products and services in our U.S. company-operated stores. We ceased offering T-Mobile wireless products and services in our U.S. company-operated stores on September 14, 2011, and began offering Verizon Wireless ("Verizon") products and services in our U.S. company-operated stores on September 15, 2011. In conjunction with this transition, we recognized a $2.6 million inventory valuation loss with respect to T-Mobile wireless handsets we had on hand at June 30, 2011, which was classified as additional cost of products sold. Furthermore, in conjunction with this transition, we incurred an additional charge to earnings of $23.4 million in the third quarter of 2011 relating to a payment to T-Mobile.
Additional Disclosure: For certain loss contingencies, we are currently able to estimate the reasonably possible loss or range of loss, including reasonably possible loss amounts in excess of our accruals, and we estimated that the aggregate of these amounts could be up to $41 million. Probable and reasonably possible losses that we are currently unable to estimate are not included in this amount. In future periods, we may recognize a loss for all, part, or none of this amount.
We are currently unable to estimate the reasonably possible loss or range of loss in respect of certain loss contingencies. Some cases remain in an early stage, with few or no substantive legal decisions by the court defining the scope of the claims, the class (if any), or the potential damages. In addition, in some cases we are not able to estimate the amount of the loss, due to a significant unresolved question of law that is expected to have a significant impact on the probability or amount of loss when resolved. As these matters develop and we receive additional information, we may be able to estimate reasonably possible losses or range of loss for these matters.
Our evaluation of our loss contingencies involves subjective assessments, assumptions, and judgments, and actual losses incurred in future periods may differ significantly from our estimates. Accordingly, although occasional adverse resolutions may occur and negatively affect our consolidated financial statements in the period of the resolution, we believe that the ultimate resolution of our loss contingencies for which we have not accrued losses will not materially adversely affect our financial condition. |
Derivative Financial Instruments (Narrative) (Details) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | ||||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Feb. 15, 2011
June 2003 Interest Rate Swap [Member] | Jun. 30, 2003
June 2003 Interest Rate Swap [Member] | Sep. 30, 2011
June 2003 Interest Rate Swap [Member] | Feb. 15, 2011
August 2003 Interest Rate Swap [Member] | Aug. 31, 2003
August 2003 Interest Rate Swap [Member] | Sep. 30, 2011
August 2003 Interest Rate Swap [Member] | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||||
Interest rate swap agreements with underlying notional amounts of debt | $ 100 | $ 50 | ||||||||
Interest rate swap agreements, maturity date | May 31, 2011 | May 31, 2011 | ||||||||
Interest rate swap agreements, fixed rate | 7.375% | 7.375% | ||||||||
Final interest rate swap measurement date | Feb. 15, 2011 | Feb. 15, 2011 | ||||||||
Increases in interest expense | $ 0 | $ 0.7 | $ 1.9 | $ 2.2 |
Discontinued Operations (Policy) | 9 Months Ended |
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Sep. 30, 2011 | |
Discontinued Operations [Abstract] | |
Discontinued Operations, Policy | We account for closed stores or kiosks as discontinued operations when the operations and cash flows of a store or kiosk being disposed of are eliminated from ongoing operations and we do not have any significant continuing involvement in its operations. In reaching the determination as to whether the cash flows of a store or kiosk will be eliminated from our ongoing operations, we consider whether it is likely that customers will migrate to our other retail locations in the same geographic market. |
Consolidated Statements Of Income (USD $) In Millions, except Per Share data | 3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Consolidated Statements Of Income [Abstract] | ||||
Net sales and operating revenues | $ 1,031.8 | $ 1,002.0 | $ 2,991.1 | $ 2,956.0 |
Cost of products sold (includes depreciation amounts of $1.9 million, $1.9 million, $5.5 million and $5.8 million, respectively) | 589.9 | 549.0 | 1,662.7 | 1,579.3 |
Gross profit | 441.9 | 453.0 | 1,328.4 | 1,376.7 |
Operating expenses: | ||||
Selling, general and administrative | 411.4 | 352.5 | 1,146.3 | 1,062.9 |
Depreciation and amortization | 19.2 | 18.3 | 55.8 | 57.4 |
Impairment of long-lived assets | 0.7 | 2.4 | 1.7 | 3.1 |
Total operating expenses | 431.3 | 373.2 | 1,203.8 | 1,123.4 |
Operating income | 10.6 | 79.8 | 124.6 | 253.3 |
Interest income | 1.4 | 0.8 | 2.2 | 2.1 |
Interest expense | (12.6) | (10.4) | (33.2) | (31.0) |
Other loss | (4.1) | |||
(Loss) income from continuing operations before income taxes | (0.6) | 70.2 | 89.5 | 224.4 |
Income tax (benefit) expense | (0.9) | 27.4 | 34.3 | 86.8 |
Income from continuing operations | 0.3 | 42.8 | 55.2 | 137.6 |
Discontinued operations, net of income taxes | 3.2 | 5.1 | 11.5 | |
Net income | $ 0.3 | $ 46.0 | $ 60.3 | $ 149.1 |
Basic net income per share: | ||||
Income per share from continuing operations | $ 0.00 | $ 0.35 | $ 0.53 | $ 1.11 |
Income per share from discontinued operations | $ 0.03 | $ 0.05 | $ 0.09 | |
Net income per share (basic) | $ 0.00 | $ 0.38 | $ 0.58 | $ 1.20 |
Diluted net income per share: | ||||
Income per share from continuing operations | $ 0.00 | $ 0.35 | $ 0.53 | $ 1.09 |
Income per share from discontinued operations | $ 0.02 | $ 0.05 | $ 0.09 | |
Net income per share (diluted) | $ 0.00 | $ 0.37 | $ 0.58 | $ 1.18 |
Shares used in computing net income per share: | ||||
Basic | 100.2 | 121.0 | 103.4 | 124.2 |
Diluted | 100.7 | 123.1 | 104.2 | 126.4 |
Fair Value Measurements (Carrying Amounts And Related Estimated Fair Value Of Debt Instruments) (Details) (USD $) In Millions, unless otherwise specified | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011
2013 Convertible Notes [Member] | Dec. 31, 2010
2013 Convertible Notes [Member] | Sep. 30, 2011
2019 Notes [Member] | May 03, 2011
2019 Notes [Member] | Mar. 31, 2011
2011 Notes [Member] | Dec. 31, 2010
2011 Notes [Member] |
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Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||
Long-term debt including current maturities, Carrying Amount | $ 666.4 | $ 639.8 | ||||||
Long-term debt including current maturities, Fair Value | 671.0 | 713.1 | ||||||
Interest rate of debt instrument | 2.50% | 6.75% | 7.375% | |||||
Fair values of debt instruments | $ 363.4 | $ 400.7 | $ 306.6 | $ 311.4 |