On April 30, electronics retailer RadioShack
- Net sales fell 14.5% as same-store sales struggled, falling 9.2% due to "the highly promotional nature of our business in the first quarter last year."
- Profitability jumped as new management focused on cost-cutting and better inventory management to stem the sales slide.
- Because of increased financial discipline, RadioShack was also able to increase cash on hand, reduce debt, buy back shares, and improve cash flow.
- RadioShack is still unloved in Motley Fool's CAPS community, as it carries a lowly one-star rating. Electronics rival Circuit City
(NYSE:CC) is equally shunned at one star, while Best Buy(NYSE:BBY) carries a more favorable three-star rating. Texas-based Conn's(NASDAQ:CONN) has a five-star rating, the highest possible.
(Figures in millions, except per-share data)
Income Statement Highlights
Q1 2007 |
Q1 2006 |
Change |
|
---|---|---|---|
Sales |
$992.3 |
$1,160.0 |
(14.5%) |
Net Profit |
$42.5 |
$8.4 |
406.0% |
EPS |
$0.31 |
$0.06 |
416.7% |
Diluted Shares |
137.1 |
135.8 |
1.0% |
Get back to basics with a look at the income statement.
Margin Checkup
Q1 2007 |
Q1 2006 |
Change* |
|
---|---|---|---|
Gross Margin |
52.0% |
48.3% |
3.7 |
Operating Margin |
7.5% |
2.1% |
5.4 |
Net Margin |
4.3% |
0.7% |
3.6 |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
Q1 2007 |
Q1 2006 |
Change |
---|---|---|---|
Cash + ST Invest. |
$463 |
$45 |
920.3% |
Accounts Rec. |
$169 |
$265 |
(36.4%) |
Inventory |
$651 |
$960 |
(32.2%) |
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
---|---|---|---|
Accounts Payable |
$182 |
$212 |
(14.0%) |
Long-Term Debt |
$342 |
$492 |
(30.5%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
Q1 2007 |
Q1 2006 |
Change |
|
---|---|---|---|
Cash From Ops. |
$48 |
($283) |
(116.9%) |
Capital Expenditures |
$9 |
$26 |
(64.4%) |
Free Cash Flow |
$38 |
($309) |
(112.4%) |
Find out why free cash flow is a Fool's best friend.
Related Foolishness:
- Warren Buffett's Priceless Investment Advice
- Game Over in Electronics Retailing
- RadioShack Remodeled
- 70 Times Better Than the Next Microsoft
Best Buy is a Stock Advisor recommendation and Microsoft is an Inside Value recommendation. All of our newsletters are available for a free 30-day trial.
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.