Trans World Entertainment Announces First Quarter Results

ALBANY, N.Y., May 20, 2010 /PRNewswire via COMTEX/ –Trans World Entertainment Corporation (Nasdaq: TWMC) today reported financial results for its first quarter ended May 1, 2010. For the first fiscal quarter of 2010, the Company recorded a net loss of $11.4 million, or $0.36 per share compared to a net loss of $13.7 million or $0.44 per share for the same period last year.

For the first fiscal quarter, total sales decreased 18% to $156.5 million compared to $191.4 million for the same period in 2009. Comparable store sales for the quarter decreased 3%. During the quarter, the Company operated an average of 548 stores compared to 709 stores last year, a 23% decline.

Gross profit for the quarter was $51.5 million or 32.9% of sales as compared to $65.8 million or 34.3% of sales for the same period last year. The reduction in gross profit as a percentage of sales was due to lower vendor allowances this year versus last year.

Selling, general and administrative expenses for the quarter were $59.3 million, a 22% reduction from $75.7 million in the comparable period last year. SG&A expenses were 37.9% of sales versus 39.5% of sales for the same period last year.

The Company had no borrowings outstanding on its credit facility at the end of the quarter as compared to $29.0 million outstanding at the end of the first fiscal quarter of 2009. Cash on hand at the end of the quarter was $21.3 million as compared to $8.2 million at the end of the quarter last year. Inventory was $251.3 million, or $69 per square foot, at the end of the quarter versus $332.7 million or $74 per square foot at the end of the first fiscal quarter of last year.

Trans World will host a teleconference call today, Thursday, May 20, 2010, at 10:00 AM ET to discuss its financial results. Interested parties can listen to the simultaneous webcast on the Company’s corporate website,www.twec.com.

Trans World Entertainment is a leading specialty retailer of entertainment software, including music, video and video games and related products. The Company operates retail stores in the United States, the District of Columbia, the U.S. Virgin Islands, and Puerto Rico, primarily under the names f.y.e.for your entertainment and Suncoast and on the web at www.fye.com, www.wherehouse.com, www.secondspin.comandwww.suncoast.com.

Certain statements in this release set forth management’s intentions, plans, beliefs, expectations or predictions of the future based on current facts and analyses. Actual results may differ materially from those indicated in such statements. Additional information on factors that may affect the business and financial results of the Company can be found in filings of the Company with the Securities and Exchange Commission.


                    TRANS WORLD ENTERTAINMENT CORPORATION
                              Financial Results



    STATEMENTS OF OPERATIONS:
    (in thousands, except per share
     data)
                                        Thirteen Weeks       Thirteen Weeks
                                             Ended               Ended
                                       ---------------      ---------------
                                       May 1,     % to   May 2,     % to
                                           2010  Sales       2009  Sales
                                           ----  -----       ----  -----

    Net sales                          $156,539          $191,433

    Cost of sales                       105,014    67.1%  125,681    65.7%
                                        -------    ----   -------    ----
    Gross profit                         51,525    32.9%   65,752    34.3%

    Selling, general and
       administrative expenses           59,315    37.9%   75,699    39.5%

    Depreciation and amortization         2,863     1.8%    3,660     1.9%
                                          -----     ---     -----     ---
    Loss from operations                (10,653)   -6.8%  (13,607)   -7.2%

    Interest expense, net                   688     0.4%      703     0.3%
                                            ---     ---       ---     ---


    Loss before income taxes            (11,341)   -7.2%  (14,310)   -7.5%
    Income tax (benefit) expense             74     0.0%     (574)   -0.3%
                                            ---     ---      ----    ----

    NET LOSS                           $(11,415)   -7.3% $(13,736)   -7.2%
                                       ========    ====  ========    ====

    Basic and diluted loss per
     share:

    Basic and diluted loss per
     share                               $(0.36)           $(0.44)
                                         ======            ======

    Weighted average number of
       common shares outstanding -
        basic and diluted                31,395            31,296
                                         ======            ======


    SELECTED BALANCE SHEET
     CAPTIONS:
    (in thousands, except store
     data)
                                                          May 2,
                                    May 1, 2010            2009
                                    -----------          -------

    Cash and cash equivalents           $21,275            $8,221
    Merchandise inventory               251,279           332,695
    Fixed assets (net)                   31,398            47,552
    Accounts payable                     74,746            89,304
    Borrowings under line of credit           -            28,981
    Long-term debt, less current
     portion                              6,545             7,980

    Stores in operation                     544               704



SOURCE Trans World Entertainment Corporation