Radio Shack 2010 Annual Report Download - page 4

2 2010 ANNUAL REPORT
DEAR FELLOW SHAREHOLDERS:
The Shack is upwardly mobile
In the densely populated mobility marketplace, The Shack is a wireless authority where
consumers can find the devices, services and accessories that meet their needs, all at values
that are competitive with carrier stores and other retailers. We back our extensive product and
service line-up with friendly and knowledgeable sales associates who give our customers insightful
and objective advice, along with personalized attention. The Shack’s exceptional wireless value
proposition is easily accessible, extending across our 4,697 convenient stores and 1,267 wireless
kiosks in the United States and Mexico.
2 2010 ANNUAL REPORT
In 2010, RadioShack® continued to
demonstrate our commitment to
long-term growth by driving progress
in every facet of our business strategy:
To strengthen our financial position,
improve our operations and revitalize
our brand. Despite persistent market
challenges and the uncertain economy,
we maintained strict cost controls,
fueled profitable sales and reinforced
our balance sheet. We expanded
our mobility business by enriching
our product assortment and forging
an important relationship with Target
to manage and operate Target Mobile
wireless kiosks within their stores.
And we continued to contemporize
the iconic RadioShack brand, engaging
new and existing customers with the
more relevant positioning of The Shack.
The credit for these accomplishments
belongs to RadioShack’s more than
35,000 associates, who worked
tirelessly throughout the year to execute
our strategy. We are truly grateful to
these individuals for their contributions
to our progress. We also appreciate the
continued support of our shareholders,
and during the year, we funded a
significant share repurchase program
to return value to them.
FOCUSING ON FINANCIAL STRENGTH
Over the past several years, we have
made great strides in building our
financial strength, and in 2010 we
continued this initiative. On the opera-
tional side, we enhanced our mobility
and service offerings, expanded our
“signature” product platforms of
accessories, power, technical and
service, and fueled growth through the
rollout of our Target Mobile business.
These efforts drove total net sales
and operating revenues for 2010 to
$4.47 billion, an increase of 4.6 percent
compared with 2009. Net income
for the year was $206 million, or $1.68
per diluted share, up slightly from
$205 million, or $1.63 per share, in
2009. Revenues at U.S. company-
operated stores increased $157 million
in 2010, or 4.3 percent. Comparable
store sales improved 4.4 percent for
the year. We earned these results
despite a significant decline in our
T-Mobile business in the fourth quarter.
We also continued to emphasize strict
cost controls, promoting the culture
of financial discipline that has become
a core value for RadioShack. While
our cost-control protocols are well
established, we make incremental
progress through careful day-to-day
expense management and continuous
productivity improvement. These
measures give us the financial flexibility
to leverage new opportunities — a
fact evidenced by the strength of our
balance sheet, which included a cash
balance of $569 million at year-end
even after investing $399 million in
share repurchases during the year.
DELIVERING A UNIQUE
VALUE PROPOSITION
Today’s advanced mobile technology
gives consumers instant access to the
applications and information they want
with the touch of a button. RadioShack
reflects this same trend in the way we
WIRELESS SALES ( Wireless Platform Other Platforms )
1.4 million
BlackBerry handsets sold*
RadioShack sold its 1-millionth BlackBerry handset
last year, making The Shack a top retailer for this
pioneering device. (*cumulative, as of 2.28.2011)
57%
of postpaid wireless phones
sold at RadioShack in 2010
were smartphones.
DEAR FELLOW SHAREHOLDERS:
Net sales and
operating revenues
for U.S. company-
operated stores in 2006
35%
in 2010
47%