SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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December 19, 2001 (Date of earliest event reported)
December 21, 2001 (Date of Report)
RADIOSHACK CORPORATION
(Exact name of registrant as specified in charter)
Delaware 1-5571 75-1047710
(State or other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
100 Throckmorton Street, Suite 1800, Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (817) 415-3700
Item 5. OTHER EVENTS
On December 19, 2001 RadioShack Corporation issued a press release set
forth below. The title, first, fourth, fifth, sixth, seventh, eighth, ninth,
eleventh and fourteenth paragraphs of that press release set forth below are
filed and incorporated herein by reference.
Item 9. REGULATION FD DISCLOSURE
The second, third, tenth, twelfth and thirteenth paragraphs of the
press release set forth below are not filed but are furnished pursuant to
Regulation FD.
FOR IMMEDIATE RELEASE
RADIOSHACK ANNOUNCES MOVES TO STRENGTHEN AND RESTRUCTURE ASSET BASE
Company to Convene Conference Call This Morning
Fort Worth, Texas---December 19, 2001---RadioShack Corporation (NYSE: RSH)
reported today that it will recognize charges of approximately $124 million
pretax in its fiscal fourth quarter 2001. The move will be made in an effort to
strengthen the quality of the Company's assets and enhance its return on
invested capital. The components and approximate size of the charges include a
loss of $45 million on the sale of a fixed asset; an impairment charge of
long-lived assets of $40 million; non-strategic inventory write-downs of
approximately $26 million; an $8 million provision related to the closing of 35
underperforming stores; and $5 million in other charges comprised principally of
the commercial installation business.
"The cash impact of this write-off is less than $10 million and puts RadioShack
squarely on the path to achieve its long-term strategic objective which is to
lead the specialty retail category in shareholder return," said Michael D.
Newman, chief financial officer of RadioShack Corporation. "These actions better
align the Company's assets with operations and merchandise initiatives in order
to execute its anchor growth strategy in 2002 and beyond."
The Company's anchor growth strategy is an operating business model refined in
2001 to serve as a roadmap for RadioShack to deliver long-term earnings per
share gains of 13% - 15%. It is predicated upon comparatively higher growth
rates of its core, anchor businesses: accessories, batteries, and parts; and
wireless communications.
RadioShack will recognize a loss of $45 million on the sale of its Charles D.
Tandy Center headquarters. The financial impact of the sale will be accretive to
earnings in 2002. The Company will leaseback the office space until it begins
its move into its new headquarters facility, also in downtown Fort Worth, late
in 2004. By 2005, the Company expects the move to reduce operating expenses,
improve earnings and substantially enhance workplace efficiency.
RadioShack also will incur an impairment charge associated with its RadioShack
Installation Services business (a.k.a. AmeriLink). The Company will write-off
the majority of its $45 million in goodwill under SFAS 121.
Additionally, RadioShack will take an inventory charge of approximately $26
million which will be included in cost of goods sold primarily for exiting
certain non-strategic product categories such as commercial electronic parts,
car stereo, security systems and pagers.
The Company will also take an $8 million expense to SG&A primarily for lease
obligations and furniture, fixtures and equipment on 35 unprofitable stores
slated for early closure. The charges are unusual because the Company does not
normally close stores prior to the expiration of leases. This move is consistent
with RadioShack's commitment to measuring the performance of its assets,
including stores, based on return on invested capital.
Lastly, RadioShack will recognize about $5 million in other restructuring
charges. This relates primarily to a strategic decision to exit the Company's
unprofitable national commercial installation business. The Company will focus
the resources of RadioShack Installation Services primarily on the residential
market.
The moves, all totaled, are expected to negatively impact fourth quarter 2001
earnings per share (EPS) by approximately $0.50.
"We view all of these as unusual charges that do not impact our fourth quarter
EPS forecast for continuing operations of $0.66," Newman said.
The Company's fourth quarter tax rate is likely to be approximately 61%. The
restructuring costs will lower RadioShack's pretax income without lowering its
tax-affected income thereby creating the higher rate.
RadioShack will convene a conference call for investors and media today at 9:00
a.m. EST. The dial in number is 719-457-2643, access code 509244. The call will
also be available at www.radioshackcorporation.com. Click the audio link. The
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call will remain on RadioShack's corporate Web site until December 26, 2001.
RadioShack Corporation is one of the nation's largest and most trusted consumer
electronics retailers and offers both on- and off-line shopping convenience.
With over 7,300 stores and dealers, RadioShack sells more wireless telephones,
telecommunications products and electronic parts and accessories than any other
retailer. It is estimated that 94 percent of Americans live or work within five
minutes of a RadioShack store or dealer. For more information, visit the
RadioShack corporate Web site at www.radioshackcorporation.com.
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Statements made in this press release which are forward-looking statements
involve risks and uncertainties and are indicated by words such as
"anticipation," "enhanced," "expected" and other similar words or phrases. These
uncertainties include, but are not limited to, economic conditions, product
demand, competitive products and pricing, availability of products, the
regulatory environment, and other risks indicated in filings with the Securities
and Exchange Commission such as RadioShack's most recent Form 10-K and 10-Q.
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For further information contact: Laura Moore,
James M. Grant,
Senior Director, Investor Relations Senior Vice President,
(817) 415-7833 Public Relations and Corporate Communications
(817) 415-3300
Or media.relations@radioshack.com
Leah M. King ------------------------------
Director, Investor Relations
(817) 415-2909
investor.relations@radioshack.com
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END OF PRESS RELEASE TEXT
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized this 21st day of December, 2001.
RADIOSHACK CORPORATION
(Registrant)
Date December 21, 2001 /s/ Mark C. Hill
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Mark C. Hill
Senior Vice President, Corporate Secretary
and General Counsel