RadioShack Expects Q4 Net Income to Increase
Jan 8, 2007
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RadioShack Corporation announced it expects fourth quarter 2006 net income to increase versus prior year fourth quarter net income of U.S. $51 million. The increased profitability is expected to be driven in part by improved margin and inventory management combined with reduced SG&A expenses.

The company projects fourth quarter 2006 comparable store sales to decrease by approximately 7.8 percent. An income statement reclassification relating to the sale of prepaid wireless airtime, due primarily to contract changes, negatively impacted comparable store sales by approximately 230 basis points but did not impact operating profit. Adjusted comparable store sales, excluding the impact of the reclassification, decreased by approximately 5.5 percent.

It estimates that its cash balance was approximately $450 million at Dec. 31, 2006, an improvement of approximately $225 million versus prior year. The improved cash position was primarily driven in the fourth quarter by favorable margins, SG&A expense control and working capital improvements including a reduction in inventory and capital expenditures.

The results contained in this release are based on preliminary estimates. The company is in the process of its normal year-end close and audit process; therefore, these numbers may change depending on the outcome of these processes. It is anticipated that the final audited results for the fourth quarter and full year will be released on or about Feb. 27, 2007.

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