Radio Shack 2010 Annual Report Download - page 16

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well as our proxy statements, as soon as reasonably
practicable after we electronically file this material with, or
furnish it to, the SEC. You may review these documents,
under the heading “Investor Relations,” by accessing our
corporate website:
http://www.radioshackcorporation.com
For information regarding the net sales and operating
revenues and operating income for each of our business
segments for fiscal years ended December 31, 2010, 2009
and 2008, please see Note 16 – “Segment Reporting” in the
Notes to Consolidated Financial Statements.
ITEM 1A. RISK FACTORS.
One should carefully consider the risks and uncertainties
described below, as well as other information set forth in
this Annual Report on Form 10-K. There may be additional
risks that are not presently material or known, and the
following list should not be construed as an exhaustive list
of all factors that could cause actual results to differ
materially from those expressed in forward-looking
statements made by us. If any of the events described
below occur, our business, results of operations, financial
condition, liquidity or access to the capital markets could be
materially adversely affected.
We may be unable to successfully execute our strategy
to provide cost-effective solutions to meet the routine
consumer electronics needs and distinct consumer
electronics wants of our customers.
To achieve our strategy, we have undertaken a variety of
strategic initiatives. Our failure to successfully execute our
strategy or the occurrence of certain events, including the
following, could materially adversely affect our ability to
maintain or grow our comparable store sales and our
business generally:
• Our inability to keep our extensive store distribution
system updated and conveniently located near our
target customers
• Our employees’ inability to provide solutions,
answers, and information related to increasingly
complex consumer electronics products
• Our inability to recognize evolving consumer
electronics trends and offer products that customers
need or want
Adverse changes in national and world-wide economic
conditions could negatively affect our business.
The continued uncertainty in the economy could have a
significant negative effect on U.S. consumer spending,
particularly discretionary spending for consumer electronics
products, which, in turn, could directly affect our sales.
Consumer confidence, recessionary and inflationary trends,
equity market levels, consumer credit availability, interest
rates, consumers’ disposable income and spending levels,
energy prices, job growth, income tax rates and
unemployment rates may affect the volume of customer
traffic and level of sales in our locations. Continued
negative trends of any of these economic conditions,
whether national or regional in nature, could materially
adversely affect our results of operations and financial
condition.
In addition, potential disruptions in the capital and credit
markets could have a significant effect on our ability to
access the U.S. and global capital and credit markets, if
needed. These potential disruptions in the capital and credit
market conditions could materially adversely affect our
ability to borrow under our credit facility, or materially
adversely affect the banks that underwrote our credit
facility. The availability of financing will depend on a variety
of factors, such as economic and market conditions, the
availability of credit, and our credit ratings. If needed, we
may not be able to successfully obtain any necessary
additional financing on favorable terms, or at all.
Our inability to increase or maintain profitability of our
operations could materially adversely affect our results
of operations and financial condition.
A critical component of our business strategy is to improve
our overall profitability. Our ability to increase profitable
sales in existing stores may be affected by:
• Our success in attracting customers into our stores
• Our ability to choose the correct mix of products to
sell
• Our ability to keep stores stocked with merchandise
customers will purchase
• Our ability to maintain fully-staffed stores with
appropriately trained employees
• Our ability to remain relevant to the consumer
• Our ability to sustain existing retail channels such as
our kiosks
Any reductions or changes in the growth rate of the
wireless industry or other changes in the dynamics of
the industry could materially adversely affect our
results of operations and financial condition.
Sales of wireless handsets and the related commissions
and residual income constitute a significant portion of our
total revenue. Consequently, changes in the wireless
industry, such as those discussed below, could materially
adversely affect our results of operations and financial
condition.
Lack of growth in the wireless industry tends to have a
corresponding effect on our wireless sales. Because growth
in the wireless industry is often driven by the adoption rate