Radio Shack 2008 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 2008 Radio Shack annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

Dealer Outlets: At December 31, 2008, we had a network of 1,394 RadioShack dealer outlets, including 36
located outside of North America. Our North American outlets provide name brand and private brand
products and services, typically to smaller communities. These independent dealers are often engaged in
other retail operations and augment their businesses with our products and service offerings. Our dealer
sales derived outside of the United States are not material.
RadioShack.com: Products and information are available through our commercial Web site
www.radioshack.com. Online customers can purchase, return or exchange various products available
through this Web site. Additionally, certain products ordered online may be picked up, exchanged or
returned at RadioShack stores.
RadioShack Service Centers: We maintain a service and support network to service the consumer
electronics and personal computer retail industry in the U.S. We are a vendor-authorized service provider for
many top tier manufacturers, such as Hewlett-Packard, LG Electronics, Motorola, Nokia and Sony, among
others. In addition, we perform repairs for third-party extended service plan providers. At December 31, 2008,
we had eight RadioShack service centers in the U.S. and one in Puerto Rico that repair certain name brand
and private brand products sold through our various sales channels.
International Operations: As of December 31, 2008, there were 200 company-operated stores under the
RadioShack brand, 14 dealers, and one distribution center in Mexico. Prior to December 2008, these
operations were overseen by a joint venture in which we were a slightly less than 50% minority owner with
Grupo Gigante, S.A.B. de C.V. In December 2008, we acquired 100% ownership of this joint venture. All of
our 23 locations in Canada were closed by January 31, 2007.
Support Operations:
Our retail stores, along with our kiosks and dealer outlets, are supported by an established infrastructure.
Below are the major components of this support structure.
Distribution Centers - At December 31, 2008, we had four distribution centers shipping over 900
thousand cartons each month, on average, to our U.S. retail stores and dealer outlets. One of these
distribution centers also serves as a fulfillment center for our online customers. Additionally, we have a
distribution center that ships fixtures to our U.S. company-operated stores. During the first half of 2008,
we closed our distribution center in Columbus, Ohio.
RadioShack Technology Services (“RSTS”) - Our management information system architecture is
composed of a distributed, online network of computers that links all stores, customer channels,
delivery locations, service centers, credit providers, distribution facilities and our home office into a
fully integrated system. Each store has its own server to support the point-of-sale (“POS”) system.
The majority of our U.S. company-operated stores communicate through a broadband network, which
provides efficient access to customer support data. This design also allows store management to
track sales and inventory at the product or sales associate level. RSTS provides the majority of our
programming and systems analysis needs.
RadioShack Global Sourcing (“RSGS”) - RSGS serves our wide-ranging international import/export,
sourcing, evaluation, logistics and quality control needs. RSGS’s activities support our name brand and
private brand businesses.
Consumer Electronics Manufacturing - We operate two manufacturing facilities in the United States
and one overseas manufacturing operation in China. These three manufacturing facilities employed
approximately 1,900 employees as of December 31, 2008. We manufacture a variety of products,
primarily sold through our retail outlets, including telephone, antennas, wire and cable products, and a
variety of “hard-to-find” parts and accessories for consumer electronics products.
SEASONALITY
As with most other specialty retailers, our net sales and operating revenues, operating income and cash
flows are greater during the winter holiday season than during other periods of the year. There is a
corresponding pre-seasonal inventory build-up, which requires working capital related to the anticipated
increased sales volume. This is described in “Cash Flow and Liquidity” under MD&A. Also, refer to Note 17 –
5