RadioShack reported disappointing earningsearlier today.
After another disappointing quarter, it seems more likely the company could choose to file for bankruptcy protection.
A major problem for the company is closing stores, which it hasn’t been able do as quickly or as broadly as it would like.
On May 8, RadioShack disclosed in a regulatory filing that its lenders blocked plans, announced in March, to close 1,100 stores. According to its latest quarterly filing with the SEC, RadioShack currently operates 4,250 retail stores in the U.S.
On its conference call today, the company said under its revised store closure plan, it would instead close 200 stores per year over the next three years.
A May 13 report from Bloomberg highlighted that in rejecting RadioShack’s store closure plans, the company’s lenders and vendors have forced the company to burn through cash, potentially forcing it into seeking bankruptcy protection.
Today’s earnings report revealed the extent of the burn rate: cash and equivalents holdings totaled $US61.8 million as of May 3, compared with $US109.6 million on February 1 and $US179.8 million at the start of the year.
On its earnings conference call, the company said lenders have been supportive of its turnaround efforts, “regardless of what is written in the press.”
With shares of the company down nearly 8% following the report, it seems unlikely today’s report made investors feel any better about RadioShack’s prospects.
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