Radio Shack 2011 Annual Report Download - page 4

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2 2011 ANNUAL REPORT
WHAT’S IN STORE: A social media ‘Groundswell’
RadioShack is harnessing social media to reach our
customers — mobility is our largest single platform, and nearly
half of social media users connect through mobile devices.
Our innovative approach to using social media enabled us
to win share of voice in the launch of exciting new handsets
while also earning praise in the Fifth Annual Forrester
Groundswell Awards in 2011. RadioShack will continue to
engage with our customers through Twitter, Foursquare and
other emerging platforms that are aligned with our brand
strategy and values.
LETTER TO SHAREHOLDERS (CONTINUED)
industry-wide revenue of more than $33 billion.
RadioShack is positioned to capture a strong
and growing share of this market. However, most
mobility products have margins that are lower than
our average gross margin, and as we increased our
mobility sales in 2011, these lower rates pressured
our consolidated gross margin and decreased
our gross-margin results for the year.
While we are disappointed with the impact
this had on our overall performance for 2011,
we remain confident in our core strengths and
our long-term competitive positioning in the
retail landscape.
During the year, we continued to strengthen our
balance sheet, increasing our cash balance to
$592 million at year-end 2011. We also generated
free cash flow of $86 million for the year. We
regularly evaluate the most prudent use for our
cash. In 2011, we opted to use our strong liquidity
position to reinvest in our business and return value
to shareholders through increased dividends. In
the fourth quarter, the Board doubled the annual
dividend from $0.25 to $0.50 per share and
converted to a quarterly payout schedule starting
in the first quarter of 2012.
BECOMING A MOBILITY LEADER
Mobility remains our primary growth platform,
and in 2011 our mobility revenues increased
19 percent. We believe our position in this
segment is stronger than ever. RadioShack
offers consumers easy access to the top three
postpaid wireless carriers and all of their rate
plans, as well as competitive prices on top-
selling devices — all in a convenient, small-store
model staffed by a team of knowledgeable
and friendly sales associates. Our addition of
#IfIHadSuperPowers#IfIHadSuperPowers#IfIHadSuperPowers
#KindofABigDeal
68.4 million
impressions via Twitter
Our Groundswell award-winning
initiative was the second-highest
promoted trend in Twitter history
at the time.