RadioShack Says Balance Sheet Strong

Retail Reuters

RadioShack Corp said on Friday that its balance sheet continues to be strong, with total liquidity of $820 million at the end of the first quarter, a day after a trade publication reported that the electronics retailer was considering hiring a financial adviser.

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On Thursday, Debtwire, citing unnamed sources, said RadioShack would entertain pitches from financial advisers in the coming weeks as it faces looming debt maturities, escalating cash burn and bloated inventories.

"Like many companies, we have discussions with investment banks from time to time to help us evaluate ways to further strengthen our balance sheet and manage it efficiently. That has been the sole focus of these discussions," the company said, repeating comments its spokesman gave on Thursday.

RadioShack has been working on a turnaround plan under Chief Executive Joe Magnacca, who joined the company in February. Analysts say RadioShack has not done enough to rebrand itself as a destination for mobile phones or to cater to younger customers, who would rather buy online from the likes of Amazon.com Inc or at stores run by phone companies.

RadioShack's 6.75 percent unsecured notes maturing in 2019 rose 0.15 cent to 73.15 cents on the dollar Friday morning, yielding 13.56 percent, according to bond pricing service Trace.

RadioShack shares rose to $2.67 in premarket trading, 4 cents above Thursday's closing price. The shares fell as low as $2.19 on Thursday after the Debtwire report.

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As of March 31, RadioShack had $434.9 million of cash and cash equivalents, and $26.5 million of restricted cash, according to its quarterly report filed with U.S. regulators in April. The company also said it was able to access $384.9 million under a credit facility.

RadioShack has a 2.5 percent convertible senior note issue coming due on Aug. 1, and $216.4 million of the notes were outstanding as of March 31, according to the filing.