Radioshack says may have to sell assets if results don't improve
(Reuters) - Electronics retailer RadioShack Corp (RSH.N) reported lower fourth-quarter sales and said it may have to close stores or sell assets to improve liquidity if business does not pick up by 2014, sending its shares down 6 percent before the bell.
The results underlined the tough task facing new Chief Executive Joseph Magnacca in trying to transform the struggling electronics chain into a specialist retailer of mobile devices.
Despite its ubiquitous presence in the United States, analysts say RadioShack has not done enough to rebrand itself as a destination for mobile phones or to cater to younger customers, who would rather shop online from the likes of Amazon.com Inc (AMZN.O) or at stores run by phone companies.
The company said in a regulatory filing on Tuesday that its cash and cash equivalents fell to $535.7 million at the end of 2012 from $591.7 million a year ago, as it posted a loss of $139.4 million for the year. (r.reuters.com/qak36t)
RadioShack said liquidity may be hurt further in 2013 as it may have to issue letters of credit under a 2016 credit facility. The company said that if operations during the year are significantly worse than 2012, it may have to either borrow against the facility or issue additional letters of credit.
The company reported a net loss of $63.3 million, or 63 cents per share, in the fourth quarter ended December 31, compared with a profit of $11.9 million, or 12 cents per share, a year earlier.
Excluding a $67 million charge to increase a valuation allowance related to deferred tax assets, the company reported earnings of 4 cents per share. Sales fell 7 percent to $1.29 billion.
Analysts on average had expected a loss of 5 cents per share on revenue of $1.36 billion, according to Thomson Reuters I/B/E/S.
Comparable-store sales fell 7 percent.
RadioShack shares closed at $3.06 on the New York Stock Exchange on Monday.