RadioShack 3rd Quarter loss widens; announces new financing agreement

FORT WORTH, Texas (AP) — RadioShack’s net loss widened in the third quarter as the struggling electronics retailer works on a turnaround plan. Results missed expectations and shares fell 6 percent in premarket trading on Tuesday. The company also said it received $835 million in financing led by GE Capital. RadioShack has been cutting costs, shuffling management and updating stores and product selection to battle back against tough competition from online retailers and discount stores that have expanded their electronics offerings. But the turnaround plan has not yet been able to stymie slumping sales. “As we have said, we expect our work to take several quarters and during that time our results will vary quarter to quarter as we make strategic changes to improve our long-term financial performance,” said CEO Joseph Magnacca. The Fort Worth-based company’s loss widened to $112.4 million, or $1.11 per share, for the three months ended Sept. 30. That compares with a loss of $47.1 million, or 47 cents per share, in the prior-year quarter. Analysts expected a smaller loss of 37 cents per share, according to FactSet. Revenue fell 10 percent to $805.4 million from $898 million last year. Analysts expected $893.2 million. Revenue in stores open at least one year, a key retail metric, fell 8.4 percent.

Shares fell 22 cents, or 6.5 percent, to $3.30 in premarket trading. The stock has fallen almost 60 percent so far this year. The company’s $835 million financing plan involves commitments from a consortium of lenders led by GE Capital, Corporate Finance; CIT Corporate Finance; RBS Citizens, N.A.; and Salus Capital Planners. The commitments include a $585 million senior secured ABL credit facility and a $250 million secured term loan. The new debt facilities will be used to refinance previous credit facilities totaling $625 million and will also provide an infusion of cash to facilitate the turnaround plan. The company expects the new debt facilities to close in the fourth quarter. In personnel moves related to its turnaround strategy, RadioShack named Paul Rutenis as senior vice president, chief merchandising officer and Janet Fox as senior vice president of global sourcing. Rutenis joins RadioShack from J. C. Penney Co. Inc., where he served as senior vice president, general merchandising manager for the Home division. He previously served in senior positions at Dick’s Sporting Goods, and Foley’s Department Stores in a career spanning 22 years in merchandising. Rutenis will be responsible for leading all RadioShack retail categories, including well-known global brands and private branded products.

Fox has almost 30 years in retail sourcing, most recently serving as senior vice president- sourcing, quality, materials and technical design at athletic wear maker Under Armour Inc. Before joining Under Armour, she served as senior vice president, director of sourcing for J.C. Penney. Fox will oversee RadioShack’s global supplier partnerships and will focus on improving operational efficiencies in sourcing. The company also announced that Martin Moad, vice president-controller, will retire after 34 years with RadioShack, effective Dec.27. RadioShack’s William R. Russum has been named vice president and corporate controller and will serve as the company’ principal accounting officer. r 6.5 percent, to $3.30 in premarket trading. The stock has fallen almost 60 percent so far this year. – Additional reporting by Betty Dillard