[David Edmondson ha dato le dimissioni da Ceo e presidente il 20 febbraio]
Under Fire, RadioShack Offers a Plan to Revamp
By FLOYD NORRIS - New York Times
David J. Edmondson, the embattled chief executive of RadioShack, offered two apologies to investors yesterday, one for the performance of the company and the other for having lied about his educational background. The company's stock fell to a three-year low. He announced a turnaround plan that includes the closing of 400 to 700 of the company's 7,000 stores, and dropping slow-moving items from its inventory. "RadioShack failed to achieve its financial objectives in 2005," Mr. Edmondson said in announcing that earnings were well below Wall Street expectations. "We believe that the company's strategy is sound. But we must move at a much faster pace with a greater sense of urgency." He said the turnaround plan would cost as much as $100 million. He began a conference call with investors by saying, "I would like to apologize to our investors and to our board and to people in our company for any embarrassments" that the disclosures of his misrepresentations "may have caused."
Asked in a later telephone news conference whether the company had fired other employees for submitting false résumés, he replied, "I would not want to comment on that." He also refused to comment on whether his conduct violated the company's ethics policy or to explain why he lied to reporters for The Fort Worth Star-Telegram a week ago. In that interview, he insisted that he had not misrepresented his educational background, although he conceded the company had been wrong in saying he had two degrees from an unaccredited Bible college. He said he had one degree, but that it had been burned in a garage fire. The company's board initially supported Mr. Edmondson after the newspaper published its report on Tuesday, quoting the college's registrar as saying Mr. Edmondson had attended the school but had not graduated.
But on Wednesday night the company said that Mr. Edmondson had admitted to falsifying his past and that the board would hire a law firm to investigate the issue.
RadioShack shares fell $1.67, to $19.08, hitting a three-year low of $18.80. That brought the fall in the stock price this week to 12 percent. Since Mr. Edmondson became president of the retailer in 2000, the shares are down 62 percent. Since he took over as chief executive last spring, the shares are down 27 percent. Some of the Wall Street reaction was scathing. The results "point to a company in a virtual state of collapse," said Gary Balter, an analyst for Credit Suisse. But he did not change his neutral view on the stock.
Analysts generally focused on the financial results, not on Mr. Edmondson's conduct. Donald Trott of Jeffries & Company said that neither the lying nor the fact Mr. Edmondson was facing a trial for drunk driving was "germane to an evaluation of this company." He maintained a neutral rating on the stock. The company reported that fourth-quarter profit in 2005 fell to $49.5 million, or 36 cents a share, from $130.9 million, or 81 cents a share, in the period in 2004, although sales rose to $1.67 billion, from $1.59 billion.For the full year, profit fell to $265.3 million, or $1.78 a share, from $337.2 million, or $2.08 a share, although sales rose to $5.08 billion, from $4.84 billion.
RadioShack, which failed to meet even its own reduced expectations, said it would no longer offer profit forecasts. It hired Accenture, a management consulting firm, to help it find ways to reduce overhead expenses.The company said it had suspended its share repurchase program, which was greatly increased in 2005, when it spent $625.8 million on repurchases at an average price of about $25 a share, up from $251.1 million at a price of more than $36 a share the year before. Over those two years, it spent $268 million more than the shares are now worth.
David G. Barnes, the chief financial officer, said the repurchases would not resume until it was clear the company was meeting its cash flow targets for the year. He added that the company was determined to preserve its investment grade bond rating and said the decision to suspend repurchases did not reflect management's opinion of the stock's value. The company said part of the shortfall in profit came from a write-down of $62 million in its inventory as part of the revamping plan. It also cited higher-than-expected costs of switching to offering Cingular rather than Verizon mobile telephones.
Tags: radioascolto, radiofonia, radio, dxing.