Short Circuit

20 February 2006



RadioShack’s Troubles Grow as CEO Admits Resume Lie

RadioShack is a temple for electronics fans, the kind who would build their own stereo out of solder, circuit-boards and copper wire instead of buying an assembled system at the store like everyone else. The company is facing tough times, illustrated by a 62% drop in quarterly profits as announced on Friday. However, it is made worse by the recent admission by president and COO David Edmondson that his resume isn’t quite accurate. A fish rots from the head.

The company’s low-margin sales were OK, but the high margin goods weren’t moving, according to the press release put out on Friday. It said, “The poor fourth quarter performance caused us to take a much deeper look at the state of our business and resulted in the launch of a turnaround plan including the significant fourth quarter inventory write-down.” That turnaround plan calls for “key changes including executive management, advertising, store operations, merchandise assortment, long-term wireless agreements, and more.”

One key management change that the board must consider is Mr. Edmondson. As Reuters explained, “Earlier this week, Edmondson admitted that he ‘clearly’ misstated his academic record and that his resume was wrong. While he originally said he received a Bachelor of Science degree, he now says he believes he received a ThG diploma, awarded for completing a three-year degree in theology, but adds that he cannot document that.” One would think that the type of degree one receives after three years of study might be the kind of thing one remembers. His inability to document his revised claim is troublesome.

Moreover, Mr. Edmondson seems to have a legal problem in Tarrant County, Texas. He’s facing a DWI charge in April, and if convicted, that would be his third in 17 years. Texas can be a tough place for a defendant, even one with money and connections. Jail time is not out of the question, if he is found guilty. If Mr. Edmondson can’t bring himself to resign (and he hasn’t), then the board may need to act.

The good news for RadioShack is the company remains profitable. “For fiscal year 2005, RadioShack reported net income of $265.3 million or $1.78 per diluted share versus net income of $337.2 million or $2.08 per diluted share in fiscal year 2004. This represents a fiscal year 2005 decline of 21% in net income and 14% in diluted earnings per share,” said the company’s press release on Friday. It isn’t too late to stop the decline, but Mr. Edmondson may not be the man to lead the way back.

The Danish flag appears here as a protest against the violence being done to the free press of that country and elsewhere by those offended by some cartoons of the Prophet Muhammed, peace be unto him. A perceived insult is not an excuse for intimidation and violence, even in the name of the Creator. One cannot insult God, only small-minded men who falsely claim to speak for Him.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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