RadioShack reported quarterly earnings on Thursday and management had one simple message for investors: we need money.
In pre-market trade, shares of the electronics retailer were down more than 18% to $US0.76 per share.
In the company’s 10-Q filed with the SEC it said:
“We have experienced losses for the past two years that continued to accelerate into the second quarter of fiscal 2015, primarily attributed to a prolonged downturn in our business… Given our negative cash flows from operations and in order to meet our expected cash needs for the next twelve months and over the longer term, we will be required to obtain additional liquidity sources, consolidate our store base and possibly restructure our debt and other obligations.”
In the company’s earnings press release, CEO Joseph Magnacca, said, “For the past 18 months we have been working hard on our turnaround plan… As a result, we are actively exploring options for overhauling our balance sheet and are in advanced discussions with a number of parties… There is no pre-determined outcome to this work and, of course, we cannot be certain as to the outcome from the current discussions. Our highest priority is working on a solution to maximise the value to all of our stakeholders.”
In the second quarter, RadioShack reported a net loss of $US137.4 million.
Revenues totaled $US673.8 million, down from $US861.4 million in the same quarter last year, as comparable store sales were down 20%.
RadioShack’s report comes after at least one Wall Street analyst cut their price target on the shares to $US0. In a note to clients, Wedbush analyst Michael Pachter said, “Our price target reflects our expectation that creditors will force a reorganization and wipe out RadioShack’s equity.”