Press Release: RadioShack Corporation Announces Net Income of $0.34 Per Share for the Second Quarter of 2007

RadioShack Corporation Announces Net Income of $0.34 Per Share for the Second Quarter of 2007, compared with a Net Loss of $0.02 for Second Quarter of 2006

FORT WORTH, Texas, July 30 -– RadioShack Corporation today announced net income of $47 million (or $0.34 per diluted share) for the second quarter of 2007. In the second quarter of 2006 the company reported a net loss of $3 million or $0.02 per diluted share. Compared with the prior year period, the company reported an improved gross margin rate, a reduced SG&A expense rate and a significant increase in cash balances. In addition to the improved gross margin rate and reduced SG&A expense, the results for the second quarter were also favorably impacted by a $10 million reversal of an income tax contingency reserve.

Cash balances increased to $630 million at the end of the second quarter of 2007, an increase of $460 million versus second quarter of 2006. The increase was mainly driven by the growth in net income, as well as improvements in working capital management.

Second quarter 2007 comparable store sales declined by 8.9%, while total sales declined 15%. The post-paid wireless business continued to negatively impact both the comparable store and total sales results. In addition, total sales were impacted by the closure of 481 stores during 2006.

Gross margin rate for the second quarter increased 330 basis points over last year, from 47.2% to 50.5%. The increased gross margin rate was a result of improved inventory management and a more profitable product mix.

"We are increasing our focus on opportunities to offer our customers solutions to their needs, whether those needs can be met with a simple 'one product' solution, or whether a more complex solution requiring our expertise in connectivity is needed," said Julian C. Day, Chairman and Chief Executive Officer. "Our improved gross margin rate this quarter reflects some success in increasing the role of the 'value-added' products in our mix, as well as our commitment to continue to 'freshen' the merchandise we offer our customers."

SG&A expenses declined by $106 million or 22% for the second quarter of 2007. This decrease reflects a continuing effort to improve our return on expense dollars, most notably on payroll, professional fees and advertising.

The company generated $132 million of free cash flow(1) for the six months ended June 30, 2007, compared with a use of cash of $138 million for the same period last year. This increase reflects improvements in working capital management, more prudent allocation of capital expenditures, and increased levels of net income.

"Against the background of a smaller, but more profitable, sales base our financial performance this quarter marked a continuation in trend. Our continued disciplined management of expenses and working capital allowed us to drive improved profit and produce increased levels of cash on the balance sheet," said Jim Gooch, Chief Financial Officer. "We continue to look for opportunities to improve our company's performance as we head into the second half of the year."

RadioShack Corporation filed today with the SEC its Form 10-Q for the quarter ended June 30, 2007.

Forward-Looking Statements

This press release contains or may contain forward-looking statements, as referenced in the Private Securities Litigation Reform Act of 1995 ("the Act"). These forward-looking statements reflect management's current views and projections regarding economic conditions, retail industry environments and company performance. Factors that could significantly change results include, but are not limited to, sales performance, economic conditions, product demand, expense levels, competitive activity, interest rates, changes in the company's financial condition, availability of products, the regulatory environment and factors affecting the retail category in general. Additional information regarding these and other factors is described in the company's filings with the SEC, including its most recent annual report on Form 10-K and quarterly report on Form 10-Q.

About RadioShack Corporation

RadioShack Corporation (NYSE: RSH) is one of the nation's most experienced and trusted consumer electronics specialty retailers. The company has a presence through almost 6,000 company-operated stores and dealer outlets in the United States, over 100 RadioShack locations in Mexico and nearly 800 wireless phone kiosks. RadioShack's dedicated force of knowledgeable and helpful sales associates has been consistently recognized by several independent groups as providing the best customer service in the consumer electronics and wireless industries. Operating from convenient and comfortable neighborhood and mall locations, RadioShack stores deliver personalized product and service solutions within a few short minutes of where most Americans either live or work. For more information on RadioShack Corporation, or to purchase items online, visit www.radioshack.com.

(1)Free cash flow, a non-GAAP financial measure, is defined as cash flows from operating activities minus additions to property, plant, and equipment minus dividends paid. See reconciliation of net cash from operating activities to free cash flow on page 6.

Management believes free cash flow, a non-GAAP financial measure, to be a relevant indicator of RadioShack's ability to repay maturing debt, change dividend payments or fund other uses of capital. Free cash flow should not be used by investors or others as the sole basis for formulating decisions or as a substitute for measures prepared in accordance with GAAP as it excludes a number of important items. Management also compensates for limitations in free cash flow by using GAAP financial measures in managing RadioShack.

(Excerpt)

Contact:
For further information contact:
Martin O. Moad
Vice President and Treasurer
(817) 415-2383
investor.relations@radioshack.com