Trans World Entertainment Announces First Quarter Results

ALBANY, N.Y., May 21 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation
(Nasdaq: TWMC) today reported financial results for its first
quarter ended May 2, 2009. For the first quarter of 2009, the Company
recorded a net loss of $13.7 million, or $0.44 per share compared to a net
loss of $11.8 million or $0.38 per share for the same period last year. Last
year’s results include a $3.1 million gain from the sale of the Company’s
distribution center facility in Canton, Ohio.

For the first quarter, total sales decreased 18% to $191.4 million
compared to $232.6 million in 2008. Comparable store sales for the quarter
decreased 9%. During the quarter, the Company operated an average of 709
stores compared to 806 stores last year, a 12% decline.

Gross profit for the quarter was $65.8 million or 34.3% of sales as
compared to $83.0 million or 35.7% 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 $75.7
million
, a 14.3% reduction from $88.3 million in the comparable period last
year. SG&A expenses were 39.5% of sales versus 39.3% of sales for the same
period last year, excluding the gain on the sale of the distribution facility.
The gain on the sale of the distribution facility last year had a favorable
impact on SG&A as a percentage of sales of 130 basis points.

The Company had $29.0 million in borrowings outstanding on its credit
facility at the end of the quarter as compared to $22.7 million last year.
Inventory was $332.7 million, or $74 per square foot, at the end of the
quarter versus $417.0 million or $83 per square foot at the end of last year.

Trans World will host a teleconference call today, Thursday, May 21, 2009,
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.com, www.samgoody.com and www.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.

    - table to follow --



                       TRANS WORLD ENTERTAINMENT CORPORATION
                               Financial Results

    STATEMENTS OF OPERATIONS:
    (in millions, except per share data)

                                    Thirteen Weeks Ended  Thirteen Weeks Ended
                                    --------------------  --------------------
                                         May 2,     % to     May 3,    % to
                                          2009     Sales      2008    Sales
                                          ----     -----      ----    -----

    Net sales                           $191.4              $232.6

    Cost of sales                        125.6      65.7%    149.6    64.3%
                                         -----      ----     -----    ----
    Gross profit                          65.8      34.3%     83.0    35.7%

    Selling, general and
     administrative expenses              75.7      39.5%     88.3    38.0%

    Depreciation and amortization          3.7       1.9%      5.5     2.4%
                                           ---       ---       ---     ---
    Loss from operations                 (13.6)     -7.1%    (10.8)   -4.7%

    Interest expense, net                  0.7       0.4%      0.9     0.3%
                                           ---       ---       ---     ---


    Loss before income taxes             (14.3)     -7.5%    (11.7)   -5.0%
    Income tax (benefit) expense          (0.6)     -0.3%      0.1     0.1%
                                          ----      ----       ---     ---

    NET LOSS                            $(13.7)     -7.2%   $(11.8)   -5.1%
                                         ======     ====     ======   ====

    Basic and diluted loss per share:

    Basic and diluted loss per share    $(0.44)             $(0.38)
                                        ======              ======

    Weighted average number of
     common shares outstanding - basic
     and diluted                          31.3                31.2
                                          ====                ====


    SELECTED BALANCE SHEET CAPTIONS:
    (in millions, except store data)

                                         May 2, 2009   May 3, 2008
                                         -----------   -----------

    Cash and cash equivalents                   $8.2         $13.1
    Merchandise inventory                      332.7         417.0
    Fixed assets (net)                          47.6          75.3
    Accounts payable                            89.3         128.1
    Borrowings under line of credit             29.0          22.7
    Long-term debt, less current portion         7.9          11.7

    Stores in operation                          704           799

SOURCE  Trans World Entertainment Corporation

    -0-                           05/21/2009
    /CONTACT:  John J. Sullivan, EVP, Chief Financial Officer, Trans World
Entertainment, +1-518-452-1242; Marilynn Meek, Financial Relations Board,
+1-212-827-3773, /
    /Web Site:  http://www.twec.com /
    (TWMC)

CO:  Trans World Entertainment Corporation

ST:  New York
IN:  REA MUS GAM CPR ENT
SU:  ERN CCA

PR
-- NY20723 --
0723 05/21/2009 07:00 EDT http://www.prnewswire.com