EXHIBIT 1
NEWS RELEASE
FOR IMMEDIATE RELEASE
---------------------
James G. Gingerich October 25, 2001
Executive Vice President and Chief Financial Officer IT-02-010
(905) 760-9706
INTERTAN REPORTS FISCAL FIRST QUARTER EARNINGS PER SHARE OF
$0.14 BEFORE RESTRUCTURING
LOCAL CURRENCY SALES UP 2% WITH A COMPARABLE-STORE INCREASE OF 1%
Also Announces Another 10% Share Buyback
TORONTO, Oct. 25, 2001--InterTAN, Inc. (NYSE: ITN; TSE: ITA), a leading consumer
electronics retailer of both private label and nationally branded products,
today reported its results for the first fiscal quarter of the year ending June
30, 2002, and further reported that it has now completed the share buyback
announced on August 16 and is now announcing an additional repurchase of
2,600,000 shares, about 10% of outstanding shares, subject to appropriate market
conditions and obtaining applicable securities regulators' approval.
Sales at RadioShack Canada for the quarter in U.S. dollars were $90,365,000.
Measured in local currency, this represented an increase over the prior year of
2%. Computed on the same basis, comparable store sales increased by 1%. Had
sales of computer hardware been even with the last year's first financial
quarter, the Company would have reported a local currency sales increase of 5%.
The sales comparison in U.S. dollars was adversely affected by a 4% decline in
the value of the Canadian dollar over the first quarter of fiscal year 2001.
Excluding the effects of a previously announced restructuring charge, net income
for the quarter was $4,039,000 or $0.14 per diluted share. Last year, excluding
the results of its former subsidiary in Australia, net income was $4,498,000, or
$0.16 per diluted share. The effect of the restructuring charge on earnings this
year was $0.07 per diluted share. The Company expects that the action taken
which resulted in this charge will produce an annualized savings of more than
$0.03 per diluted share, beginning with its upcoming third fiscal quarter.
Including the restructuring charge, net income for the quarter was $1,856,000,
or $0.07 per diluted share. A year ago, net income, including the results of the
Company's former and now divested subsidiary in Australia, was $5,325,000, or
$0.18 per diluted share.
The table below compares the U.S. dollar sales, operating income and net income
for the three months ended September 30, 2001 with the comparable prior year
period, excluding the restructuring charge and related tax effects and the
results of the Australian subsidiary:
Three months ended
(U.S. dollars in thousands, except Canadian sales and September 30
------------------------
per share amounts) 2001 2000
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Sales and other operating revenues $ 90,365 $ 119,951
Adjustments
Sales of Australian subsidiary - (27,092)
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Canadian sales, in U.S. dollars $ 90,365 $ 92,859
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Canadian sales, in Canadian dollars $ 139,768 $ 137,619
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Operating income $ 3,250 $ 9,337
Adjustments
Restructuring charge 3,213 -
Income of Australian subsidiary - (1,237)
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Comparable operating income $ 6,463 $ 8,100
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Net income $ 1,856 $ 5,325
Adjustments
Restructuring charge 3,213 -
Effect of restructuring charge on income taxes (1,030) -
Income of Australian subsidiary - (827)
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Comparable net income $ 4,039 $ 4,498
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Diluted earnings per share $ 0.07 $ 0.18
========= =========
Comparable diluted earnings per share $ 0.14 $ 0.16
========= =========
The Company also reported that it had completed a stock buy-back program
announced in August. Under this program, the Company purchased 2,800,000 common
shares at an aggregate cost of $23,145,000, or $8.27 per share, including
commissions. While this program had no measurable effect on earnings per share
for the quarter, its benefits will be apparent in future periods.
"While we are happy to be reporting EPS at the higher end of the guidance range,
we are not satisfied with the rate of first quarter growth," said Brian E. Levy,
President and Chief Executive Officer. "Over the past seven months, we have
crafted a number of very specific sales and marketing initiatives intended for
rollout during the holiday season. That rollout, and a series of significant
launches of new consumer technologies are now underway, and we have every
intention and resolve to produce significantly better results during the second
quarter. We are already encouraged by sales and margin trends thus far in
October and believe the actions we have taken will result in the Company
achieving positive comparable earnings growth in the second quarter. We are also
glad to report the swift completion of our third share buyback program and the
initiation of our fourth share repurchase, all of which we feel benefits our
shareholders," Levy concluded.
InterTAN, Inc., headquartered in Toronto, operates through approximately 900
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.
InterTAN will announce its October sales results on November 8, 2001.
Certain information disclosed in this press release, including, among others,
statements regarding the impact of the Company's new sales and marketing
initiatives and the launch of new consumer technologies on the Company's future
results 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 acceptance, demand and preferences, product availability,
development of new technology, global political and economic conditions, and
other risks indicated in filings with the Securities and Exchange Commission
such as InterTAN's previously filed periodic reports, including its Form 10-K
for the 2001 fiscal year.
-tables follow-
Consolidated Statements of Operations
(U.S. dollars in thousands, except per share data)
(Unaudited)
Three months ended
September 30
2001 2000
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Net sales and operating revenues $ 90,365 $ 119,951
Other income 11 59
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90,376 120,010
Operating costs and expenses:
Cost of products sold 54,862 72,202
Selling, general and administrative expenses 27,702 36,879
Depreciation and amortization 1,349 1,592
Restructuring charge 3,213 -
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87,126 110,673
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Operating income 3,250 9,337
Foreign currency transaction gains (losses) 139 (126)
Interest income 726 434
Interest expense (104) (124)
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Income before income taxes 4,011 9,521
Income taxes 2,155 4,196
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Net income $ 1,856 $ 5,325
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Basic net income per average common share $ 0.07 $ 0.19
Diluted net income per average common share $ 0.07 $ 0.18
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Average common shares outstanding 27,835 28,032
Average common shares outstanding assuming dilution 28,308 28,950
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Consolidated Balance Sheets
(U.S. dollars in thousands, except share amounts)
(Unaudited)
September 30 June 30 September 30
2001 2001 2000
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Assets
Current Assets
Cash and short-term investments $ 55,299 $ 86,233 $ 10,302
Accounts receivable, less allowance for doubtful accounts 21,390 12,598 22,132
Inventories 88,519 90,394 140,103
Other current assets 2,651 1,151 1,499
Deferred income taxes 2,196 2,290 2,248
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Total current assets 170,055 192,666 176,284
Property and equipment, less accumulated depreciation
and amortization 19,660 19,817 24,061
Other assets 13 16 28
Deferred income taxes 2,907 3,031 2,445
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Total Assets $ 192,635 $ 215,530 $ 202,818
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Liabilities and Stockholders' Equity
Current Liabilities
Short-term bank borrowings $ - $ - $ 6,655
Accounts payable 13,490 20,034 35,000
Accrued expenses 16,971 13,650 13,882
Income taxes payable 21,242 24,913 25,343
Deferred service contract revenue - current portion 5,418 5,507 5,756
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Total current liabilities 57,121 64,104 86,636
Deferred service contract revenue - non current portion 4,490 4,599 4,887
Other liabilities 2,245 2,518 5,851
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Total liabilities 63,856 71,221 97,374
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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,
31,495,255, 31,225,048 and 30,638,135, respectively, issued 31,495 31,225 30,638
Additional paid-in capital 153,820 151,744 147,303
Common stock in treasury, at cost, 5,010,168, 3,101,818
and 3,027,150 shares, respectively (51,079) (35,405) (34,529)
Retained earnings (deficit) 15,608 13,752 (4,450)
Accumulated other comprehensive loss (21,065) (17,007) (33,518)
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Total stockholders' equity 128,779 144,309 105,444
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Commitments and contingencies
Total Liabilities and Stockholders' Equity $ 192,635 $ 215,530 $ 202,818
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