EXHIBIT 1
NEWS RELEASE
FOR IMMEDIATE RELEASE
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James G. Gingerich August 16, 2001
Executive Vice President and Chief Financial Officer IT-01-021
(905) 760-9706
INTERTAN ANNOUNCES ONGOING FULL YEAR EARNINGS-PER-SHARE UP 9%
Also Announces Strategic Direction, Corporate Restructuring, Share Buyback
TORONTO, August 16, 2001--InterTAN, Inc. (NYSE: ITN; TSE: ITA), a leading
consumer electronics retailer of private label and nationally branded products,
today reported its fourth quarter and full year results for the fiscal year
ended June 30, 2001 and outlined its ongoing strategy.
Following a strategic review reflecting a concern by the Board that InterTAN's
share price did not reflect a fair valuation of the Company, as previously
announced, the Company successfully divested its Australian subsidiary. InterTAN
Australia was sold because its of lack of critical mass in that marketplace and
geographic remoteness, and the Company's desire to focus on its core Canadian
business. The divestiture provided net cash proceeds of about US$48 million.
Following its extensive strategic review over the past several months, the
Company has determined not to pursue a sale of its Canadian business because it
believes that, in light of its available strategic opportunities and current
conditions in both the retail electronics industry and the capital markets,
enhanced shareholder value will be better achieved through operation as an
independent company. Accordingly, the Board has determined that funds from the
sale of InterTAN Australia and the Company's healthy ongoing cash flows will be
redeployed to take full advantage of growth opportunities within its strong and
profitable Canadian business, as well as to repurchase up to 2.8 million shares,
about 10% of its outstanding common shares from time to time and subject to
applicable regulatory requirements. The Company expects to take a charge of
6(cent) to 8(cent) per share during its first fiscal quarter of 2002 for costs
associated with restructuring the Company's organization to better reflect its
singular Canadian focus and the investigation of strategic alternatives.
"We are eager to reap the results of the energies our team has put forth in
planning many imaginative strategies to bring out the best from InterTAN's
unique position in the marketplace. Canadians know us as the most convenient
place to seek advice and solutions to their technology needs. Accordingly, we'll
be adding at least 30 new outlets in fiscal 2002," commented Brian E. Levy,
President and Chief Executive Officer. " Canadians indicate that three of the
most wanted items on their electronic shopping lists are digital cameras, DVD
players and next generation gaming devices. Each of these categories, as well as
other popular emerging end products prompt consumer demand for the over 500 new
accessory products we're currently placing in our stores and for which we're so
well known. We'll be piloting an intriguing new department in selected high
volume stores, and our new inventory allocation algorithms are facilitating more
aggressive assortments in high potential end products. We'll be releasing our
largest catalog ever this fall; coupled with superb creative in the works and
our most comprehensive field training and rewards package yet, I think our team
will be operating at peak energy to reap opportunities in the Canadian
marketplace," Levy continued.
Including the results of its former Australian subsidiary and the gain on
disposal and related income taxes, and certain other income tax adjustments, the
Company reported net income of $4,633,000, or $0.16 per diluted share, for the
fourth quarter of fiscal year 2001 compared with net income of $4,745,000, or
$0.16 per diluted share, during the fourth quarter of fiscal year 2000. For the
fourth quarter, excluding the gain on the sale of its Australian subsidiary and
related income taxes, as well as the results of that subsidiary for the quarter
together with certain other tax adjustments, the Company reported net income of
$3,125,000 or $0.11 per diluted common share. This compares with net income of
$4,213,000 or $0.14 per diluted common share, when the results of the Australian
subsidiary are removed from the prior year quarter.
Computed on the same basis, net income for fiscal year 2001 as a whole was
$20,979,000 or $0.73 per diluted share, compared with net income of $20,336,000,
or $0.67 per diluted common share, during fiscal year 2000. Including the
results of its former Australian subsidiary, the gain on disposal and related
income taxes, and certain other tax adjustments, the Company reported net income
for fiscal year 2001 of $23,527,000, or $0.82 per diluted share, compared with
net income $25,120,000, or $0.82 per diluted share, during fiscal year 2000.
As previously announced, during the fourth quarter, the Company sold its
Australian subsidiary, recording a gain, before income taxes, of $4,101,000. The
provision for income taxes for the quarter included $1,281,000 relating to the
sale of the Australian subsidiary and certain other tax adjustments. For the
quarter, InterTAN Australia reported a loss of $1,312,000, compared with net
income of $532,000 during the prior year quarter. For the year as a whole, the
Australian subsidiary reported a net loss of $272,000, compared to net income of
$4,784,000 during fiscal year 2000.
The table below compares the U.S. dollar sales, operating income and net income
for the three months and year ended June 30, 2001 with the comparable prior year
periods, excluding the results of the Australian subsidiary in those periods and
the gain on disposal of that subsidiary and related income taxes together with
certain other tax adjustments:
Three months ended Year ended
(U.S. dollars in thousands, except June 30 June 30
per share amounts) ------------------------- -------------------------
2001 2000 2001 2000
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Sales and other operating revenues $ 81,229 $ 102,444 $ 468,756 $ 484,218
Adjustments
Sales of Australian subsidiary (5,834) (26,498) (86,403) (120,056)
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Canadian sales $ 75,395 $ 75,946 $ 382,353 $ 364,162
========= ========= ========= =========
Operating income $ 7,173 $ 7,848 $ 41,417 $ 44,005
Adjustments
Gain on sale of Australian subsidiary (4,101) -- (4,101) --
(Income) loss of Australian subsidiary 1,583 (691) 14 (6,777)
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Comparable operating income $ 4,655 $ 7,157 $ 37,330 $ 37,228
========= ========= ========= =========
Net income $ 4,633 $ 4,745 $ 23,527 $ 25,120
Adjustments
Gain on sale of Australian subsidiary (4,101) -- (4,101) --
(Income) loss of Australian subsidiary 1,312 (532) 272 (4,784)
Income taxes on sale of Australian subsidiary
and other tax adjustments 1,281 1,281
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Comparable net income $ 3,125 $ 4,213 $ 20,979 $ 20,336
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Diluted earnings per share $ 0.16 $ 0.16 $ 0.82 $ 0.82
========= ========= ========= =========
Comparable diluted earnings per share $ 0.11 $ 0.14 $ 0.73 $ 0.67
========= ========= ========= =========
Sales at the Company's Canadian subsidiary for the quarter, measured in local
currency, increased by 3%. For the year as a whole, Canadian sales, measured in
local currency, increased by 8%.
"While we certainly devoted significant time and attention to the evaluation of
alternative structures, over the last several months we have been busy crafting
an aggressive operating plan for the coming fiscal year. We believe that our
combination of multiple new initiatives, some of which are already in the early
stages of rollout, and several new product and service launches, capitalizes on
Canadians' worldwide lead in broadband penetration, internet usage, and appetite
for digital technologies," commented Brian E. Levy, President and Chief
Executive Officer.
"We think that the impact of customers' deferral of some purchase decisions in
light of Microsoft's announced fall product introductions, combined with Intel's
recent Pentium 4 pricing, will be a stimulus to demand during the buildup to the
holiday selling season. In the meanwhile, we continue to post strong growth in
other key categories - digital accessories and software, satellite, and
wireless, in addition to our traditional top-of-mind accessory business. We
expect the launch of interactive television services, receivers with integrated
personal video recording, and a whole host of new channels in the satellite
industry, coupled with the introduction of new next generation wireless
technology and new handsets, to further stimulate consumer attention to
RadioShack Canada, as the market leader in retail distribution for those
compelling
products. Further, our new catalog will feature the deepest
assortment yet of the accessory products for which we're known best," concluded
Levy.
InterTAN, Inc., headquartered in Toronto, operates through approximately 880
company retail stores and dealer outlets in Canada under the trade name
RadioShack(R) and Rogers AT&T Wireless Communications Express (R). The Company's
Australian subsidiary was sold effective April 30, 2001.
A conference call during which senior management will discuss today's
announcements and the current state of the business will be held today at 9:00
a.m. EDT. This call will be simultaneously webcast on the Internet at
www.InterTAN.com. InterTAN will announce its August sales results on September
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7, 2001.
Certain information disclosed in this press release, including, among others,
statements relating to beliefs concerning shareholder value, plans to open new
sales outlets or regarding the ability of new products, services, strategies and
technologies and the Company's new catalog to stimulate growth, constitutes
forward-looking statements that involve risks and uncertainties. Important
factors that could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, consumer demand and
preferences, product availability, the development of new products, availability
of locations suitable for new stores, general economic conditions, and other
risks indicated in InterTAN's filings with the Securities and Exchange
Commission such as InterTAN's previously filed periodic reports, including its
Form 10-K for the 2000 fiscal year.
- Table follows -
InterTAN, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended Twelve Months Ended
(U.S. dollars in thousands, except June 30 June 30
per share data) ------------------------ ------------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Net sales and operating revenues $ 81,229 $ 102,444 $ 468,756 $ 484,218
Other income (expense) 29 (93) 138 125
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81,258 102,351 468,894 484,343
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Operating costs and expenses:
Cost of products sold 48,206 58,459 280,953 280,999
Selling, general and administrative
expenses 28,505 34,484 144,268 153,336
Depreciation and amortization 1,475 1,560 6,357 6,003
Gain on disposal of Australian
subsidiary (4,101) -- (4,101) --
--------- --------- --------- ---------
74,085 94,503 427,477 440,338
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Operating income 7,173 7,848 41,417 44,005
Foreign currency transaction
gains (losses) (85) 83 (353) (209)
Interest income 820 744 1,737 2,418
Interest expense (142) (174) (873) (587)
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Income before income taxes 7,766 8,501 41,928 45,627
Provision for income taxes 3,133 3,756 18,401 20,507
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Net income (loss) $ 4,633 $ 4,745 $ 23,527 $ 25,120
========= ========= ========= =========
Basic net income (loss) per
average common share $ 0.17 $ 0.16 $ 0.84 $ 0.85
Diluted net income (loss) per
average common share $ 0.16 $ 0.16 $ 0.82 $ 0.82
Average common shares outstanding 28,033 28,936 27,937 29,658
Average common shares outstanding
assuming dilution 28,742 29,817 28,664 30,501
InterTAN, Inc.
CONSOLIDATED BALANCE SHEETS
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(U.S. dollars in thousands,
except per share data) June 30, 2001 June 30, 2000
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Assets
Current Assets:
Cash and short-term investments $ 86,233 $ 44,750
Accounts receivable, less allowance for doubtful accounts 12,598 12,803
Inventories 90,394 121,894
Other current assets 1,151 1,235
Deferred income taxes 2,290 2,295
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Total current assets 192,666 182,977
Property and equipment, less accumulated
depreciation and amortization 19,817 22,587
Other assets 16 29
Deferred income taxes 3,031 2,483
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Total Assets $ 215,530 $ 208,076
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Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 20,034 $ 26,174
Accrued expenses 13,650 16,821
Income taxes payable 24,913 30,137
Deferred service contract revenue - current portion 5,507 5,383
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Total current liabilities 64,104 78,515
Deferred service contract revenue - non-current portion 4,599 4,735
Other liabilities 2,518 6,050
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71,221 89,300
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Stockholders' Equity
Preferred stock, no par value, 1,000,000 shares
authorized, none issued or outstanding -- --
Common stock, $1 par value, 40,000,000 shares
authorized, 31,225,048 and 30,498,315 issued 31,225 30,498
Additional paid-in capital 151,744 146,214
Retained earnings (deficit) 13,752 (9,775)
Accumulated other comprehensive loss (17,007) (29,461)
Common stock in treasury, at cost, 3,101,818
and 1,789,815 shares, respectively (35,405) (18,700)
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Total stockholders' equity 144,309 118,776
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Commitments and contingent liabilities
Total Liabilities and Stockholders' Equity $ 215,530 $ 208,076
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