RadioShack says it may need more capital
NEW YORK (AP) — RadioShack says it may need more capital to help complete its turnaround efforts.
CEO Joseph Magnacca said in a statement on Thursday that the consumer electronics company is actively exploring options for overhauling its balance sheet and is in advanced talks with "a number of parties."
RadioShack Corp. is also working with its lenders, bondholders, shareholders and landlords to try to find a long-term solution. Magnacca said this could include debt restructuring, consolidating stores and other measures to help lower costs.
Details of a recapitalization are not yet finalized. Magnacca said the Fort Worth, Texas company is reviewing several alternatives, some that would need consent from its lenders.
RadioShack has been working on turning around its business for the past 18 months. The company's efforts have included cutting costs, renovating and closing stores, and shuffling management. It reported another quarterly loss on Thursday on lower revenue.
RadioShack has struggled to find its place in the evolving retail and technology landscape. It's sought to remake itself, focusing on wireless devices and accessories, but growth in that business is slowing as more people have smartphones and see fewer reasons to upgrade. The company says it is working on becoming less dependent on its mobility business.
The retailer is trying to update its image and remain competitive against online and discount retailers. It is working on adding new products, including private-brand and exclusive items such as those from new partnerships.
For its second quarter, RadioShack reported on Thursday that it lost $137.4 million, or $1.35 per share, for the period ended Aug. 2. That compares with a loss of $52.2 million, or 51 cents per share, a year ago.
Stripping out certain items, loss from continuing operations was $1 per share.
Revenue dropped 22 percent to $673.8 million from $861.4 million.
Analysts surveyed by FactSet expected a loss of 66 cents per share on revenue of $735.9 million.
Magnacca said the quarter's performance was mostly hurt by the postpaid mobility business, as consumers were relatively unenthused about the current handset assortment and were waiting for announcements on new devices. There were also intense promotional efforts by wireless carriers, he added.
Sales at stores open at least a year declined 20 percent on softer traffic and the weak performance of the mobility business. This figure is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.
RadioShack's shares rose 11 cents to $1.04 in morning trading Thursday. Its shares are down more than 73 percent from a year ago.