Radioshack Corporation Reiterates Turnaround Plan At Annual Shareholders Meeting

Company cites positive financial benefits by year end

(Thursday, May 18, 2006) - At its annual shareholders meeting today, RadioShack Corporation (NYSE: RSH) reiterated its previously announced turnaround plan and reported progress against the milestones it laid out for investors at its annual investor conference in February. Specifically in 2006, the company aims to generate $50 million to $100 million of free cash flow,1 close at least 480 underperforming stores, liquidate underperforming inventory, lower its overhead costs and improve trends in its wireless business. The 18-to-36-month turnaround plan is designed to accelerate company progress, improving the health of the business and exploiting industry opportunities on behalf of the consumer and investor.

"Execution of the turnaround plan is job number one for everyone at RadioShack," said Claire Babrowski, president, chief operating officer and acting chief executive officer. "We don't expect the turnaround plan to produce miracles overnight, and we are not going to over promise and under deliver – turning around this company is a work in progress. That being said, we are making progress in the milestones we set forth for investors earlier this year."

Chief Financial Officer David Barnes reiterated the company's free cash flow guidance of $50 million to $100 million this year. The company has initiated inventory liquidation in 480 underperforming stores and reports that the transfer of sales from closed stores to nearby stores looks promising. End-of-life inventory is expected to be out of all RadioShack stores and replaced with new merchandise by fourth quarter. The company is also on track to lower its overhead costs and previously announced a reduction in its full-year advertising costs of $30 million to $40 million.

"From the beginning, the objectives of our turnaround plan have been to increase average unit volume, lower overhead costs and grow profitable square footage," said Babrowski. "We remain focused and accountable to our shareholders in achieving these imperatives."

The company has also initiated a wireless recovery plan to address lagging sales of wireless, which make up 35 percent of the company's annual revenue. Several components of this plan have been implemented, including a new overnight shipping program that increases delivery frequencies for high-velocity stores and a modified approach to advertising that positions RadioShack as the leader in selling wireless phones.

"Wireless remains a main factor in our disappointing performance this year," said Babrowski. "On top of this, we will experience significant costs related to our turnaround plan in the second and third quarters. Getting overall traction in our business performance is still a quarter or two ahead of us."

Board of Directors Elected

At today's shareholder meeting, the following individuals were re-elected to the Board:

Frank J. Belatti, managing partner, Equicorp Partners, LLC
Ronald E. Elmquist, president and CEO, QualServ Corporation
Robert S. Falcone, president and CEO, Catalyst Acquisition Group
Daniel R. Feehan, president and CEO, Cash America International, Inc.
Richard J. Hernandez, retired president, McKesson Corporate Solutions
H. Eugene Lockhart, partner, Diamond Castle Holdings
Jack L. Messman, chairman, president and CEO, Novell, Inc.
William G. Morton, Jr., director and advisor, Non-Profit Director and Trustee
Thomas G. Plaskett, chairman, Fox Run Capital Associates
Edwina D. Woodbury, president and CEO, The Chapel Hill Press, Inc.
Neither Robert Kamerschen nor Leonard Roberts stood for re-election to the board.

About RadioShack Corporation
Fort Worth, Texas-based RadioShack Corporation (NYSE: RSH) is one of the nation's most trusted consumer electronics specialty retailers and a growing provider of retail support services. The company operates a vast network of sales channels, including: nearly 7,000 company and dealer stores; over 100 RadioShack locations in Mexico and Canada; and more than 800 wireless kiosks. RadioShack's knowledgeable and helpful sales associates deliver convenient product and service solutions within minutes of where 94 percent of all Americans either live or work. For more information on RadioShack Corporation, visit www.RadioShackCorporation.com. To learn more about RadioShack products and services or to purchase items online, visit www.RadioShack.com.

1 Free cash flow, a non-GAAP measure, is defined as net cash from operating activities minus additions to property, plant and equipment (a.k.a. capital expenditures) minus dividends paid.

Contact:
Kay Jackson
Senior Director, Corporate Communications
(817) 415-3300

James Grant
Senior Director, Investor Relations
(817) 415-7833

View all RadioShack Press Releases

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