Thursday, July 31, 2014

Comments on Radio Shack Receivables From Skullcandy Earnings Call $RSH

Q: Other question I had was exposure to RadioShack receivables and if you are adding to accruals because of their situation?

A: Sure. Let me get that one first, it's Hoby, and then I know Jason has a lot of contact with that team and he can add on to it. And I think the first part is RadioShack is an important partner for us. I think Joe [Magnacca, RSH CEO] definitely has work that he had to do around RadioShack. But we want to make sure that we're a good partner to them. Whatever happens to them financially I think they will come out of it at some point. We're going to make sure that we've done the right things around them. I think at the same time, we're going to make sure that we protect ourselves, and we don't have our head in the sand around potential future outlook. But you know, we talk to Joe, we talked to their CFO very frequently. I think we have a pretty good pulse of what's going on and have acted accordingly. So Jay can tell you a little bit more about where we sit on that and what we've done.

A: Yes, in terms of managing our credit exposure, it's kind of in a day-to-day thing. John their CFO is been terrific about constant communication. And their buyer team has been on top of the payment cycle. So we're very comfortable with where we sit right now from a net credit perspective. It's decreased significantly overtime recently. And there's nothing public to announce in terms of the relationship but we are working carefully on planning for the future as well.

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