RadioShack Posts Wider Loss In Q2, Seeks Additional Capital - Update

(RTTNews) - Consumer electronic goods retailer RadioShack Corp. (RSH) Thursday reported a sharply wider loss for the second quarter, as comparable store sales fell 20 percent due to traffic declines and soft performance in mobility business. The result also reflected severance and impairments of fixed assets and goodwill.

Joseph Magnacca, chief executive officer of the company said, "For the past 18 months we have been working hard on our turnaround plan. While we are advancing on many fronts, we may need additional capital in order to complete our work. As a result, we are actively exploring options for overhauling our balance sheet and are in advanced discussions with a number of parties."

The company noted that in order to make significant reductions in its cost structure, it may require a debt restructuring, store base consolidation program, and other measures.

For the second quarter ended August 2, the company's net loss widened to $137.4 million or $1.35 per share from $52.2 million or $0.51 per share last year.

On an adjusted basis, loss per share from continuing operations was $1.00, while the firm posted $0.62 per share a year ago.

Total net sales and operating revenues for the quarter declined to $673.8 million from $861.4 million last year.

Comparable store sales fell 20 percent due to traffic declines and soft performance in mobility business, the firm said.

According to Magnacca, postpaid mobility business drove the majority of the weak performance this quarter due to lackluster consumer interest in current handset assortment, consumers waiting for an iconic handset launch this fall, and intense promotional activities by wireless carriers.

Sales in the mobility platform fell 30.4 percent.

Impairment of long-lived assets and goodwill totaled $20.6 million, up from $2.8 million in the same quarter last year.

RSH closed Wednesday's trading at $0.9310. In the pre-market activity on Thursday, the shares are down 8.70 percent.