RadioShack Corporation (
Q3 2011 Earnings Conference Call
October 25, 2011 16:30 ET
Molly Salky – IR
Jim Gooch – President and CEO
Dorvin Lively – EVP, CFO and Chief Administrative Officer
Matthew Fassler – Goldman Sachs
Chris Horvers – JPMorgan
Patrick Palfrey – RBC Capital Markets
Greg Milech – ISI
Dan Wewer – Raymond James
Michael Lasser – UBS
David Schick – Stifel Nicolaus
Alan Rifkin – Barclays
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Good day, ladies and gentlemen, and welcome to the Third Quarter 2011 RadioShack Corporation’s Earnings Conference Call. My name is (Anisia) and I will be your operator for today. At this time all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions)
I will now like to turn the call over to Molly Salky. Please proceed.
Thank you, operator and good afternoon everyone and welcome to the RadioShack Third Quarter 2011 Investor Conference Call and webcast. We're pleased to provide an update on our results and outlook today. With me is Jim Gooch, President and Chief Executive Officer and Dorvin Lively, Executive Vice President, Chief Financial Officer and Chief Administrative Officer.
Before I pass the call to Jim, I'd like to take care of a few housekeeping items. We issued two announcements this afternoon, first was our release announcing a new capital allocation action taken by our Board of Directors that includes an increase in the annual dividend and a new $200 million authorization for share repurchases. The second was our earnings release for the third quarter. We also filed our 10-Q with the SEC. These announcements and the 10-Q filing, along with a replay of this webcast, are available on our IR site.
One note regarding one-time charges in the quarter, as we discussed last quarter we took a 23.4 million or 14.5 million after tax, $0.15 per share charge awaited to our wireless carrier transition during the quarter. The charge was recognized in SG&A. We also recognized two smaller one-time first cost of 800,000 related to our manufacturing plant closure and a 400,000 inventory valuation adjustment related T-Mobile inventory. A detailed reconciliation of one-time items in the third quarter and year-to-date period is included in our earnings release.
Now I want to remind everyone that we may make forward-looking statements on the call today either in our prepared remarks or in the associated question and answer session. These statements are based on our belief and expectation and are subject to certain risk and uncertainties that may cause actual results to differ materially. These risks are detailed in our various filings with the SEC and such as our most recent Form 10-K and 10-Q as well as our news releases and other communications. The company does not undertake to update or revise any forward-looking statements, which speak only as of the time they are made.
Following our prepared remarks today, we've allowed ample time to address any questions that you may have. Please limit yourself to one question and one follow-up, so that we can get to everyone's question during this call. Do feel free to re-queue to ask additional questions.
With that, let me turn the call over to Jim Gooch.
Thank you, Molly, and good afternoon, everybody, thanks for joining our call today. I think before we begin discussing what happened in the quarter, as I’d like to take a second and tell you how pleased I am to have Dorvin on the team. Dorvin joins us as our new CFO and CAO. He joined the company in mid-August. He is overseeing all the finance, supply chain, dealer franchise and real estate. He brings with him about 30 years of experience in retail and consumer products, most recently CFO at Ace Hardware, before that at Maidenform Brands. He is going to be taking active role in the Investor Relations programs. So, I expect everyone is going to have an opportunity to speak more with him very soon.
Now, with that I’ll take a look at the quarter. I think as you can see from our earnings release today, the third quarter continued to be a challenging, continued to be a transitional period for us particularly in the mobility platform which included our carrier transition, shifts in the product launch timing and changes in the carrier plan and policy. So, well, we saw the mobility platform sales improved from the third quarter -- from the second quarter to third quarter, we didn’t see the strong growth trend that we saw in last year’s third quarter results.
I describe our shift to a broader more compelling wireless portfolio. It’s definitely still a work in progress I think both because of the carrier transitional issues as well as a continued difficult trend out in the economy. But without question the addition of Verizon to our assortment and it puts us today in a much stronger spot with our wireless business and probably we’ve ever have been in the past and today we’re ideally positioned to capitalize in our opportunity in the mobility business one with all the top carriers with the top handsets and with the best prices in the industry.
Equally important, we now have a strategy for navigating through our challenges, the strategy that over the next year or so will migrate as to better balance wireless portfolio across leading three carriers. The Mobility platform it continues to be our growth platform one that supported by our convenience small story high touch, high service model. And we are focusing significant attention on maximizing that opportunity in order to smooth out in order to balance our overall portfolio performance.