Trans World Entertainment Announces Fourth Quarter and Fiscal 2009 Results

ALBANY, N.Y., March 4 /PRNewswire-FirstCall/ — Trans World Entertainment Corporation ( TWMC) today reported financial results for its fourth quarter and fiscal year ended January 30, 2010.  For the fourth quarter, total sales decreased 14% to $295.4 million compared to $344.7 million in 2008.  Comparable store sales for the quarter decreased 7%.  During the quarter, the Company operated an average of 655 stores compared to 763 stores last year, a 14% decline.


For the fourth quarter of 2009, the Company recorded net income of $11.4 million, or $0.36 per share.  This year’s fourth quarter results included a non-cash impairment charge to write down certain long-lived assets totaling $3.6 million or $0.12 per share for the quarter, as well as an income tax benefit of $12.6 million or $0.40 per share for the quarter.  The benefit was primarily attributable to revised tax carryback legislation that resulted in the Company receiving a cash refund of $10.3 million during the quarter.  For the fourth quarter of 2008 the net loss was $9.4 million or $0.30 per share.   Last year’s fourth quarter results included a non-cash impairment charge to write down certain long-lived assets totaling $15.2 million or $0.48 per share for the quarter.  


For fiscal year 2009, total sales decreased 18% to $814.0 million compared to $987.6 million in 2008.  Comparable store sales for fiscal year 2009 decreased 10%.  During the year, the Company operated an average of 688 stores compared to 786 stores last year, a 12% decline.


Net loss for fiscal 2009 was $42.4 million, or $1.35 per share.  For fiscal year 2008, the net loss was $69.0 million, or $2.21 per share.    


Trans World will host a teleconference call today, Thursday, March 4, 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.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.

    
    
                      TRANS WORLD ENTERTAINMENT CORPORATION                 
                                Financial Results                           
                                                                            
    STATEMENTS OF OPERATION:                                                
                                     
    (in millions, except per         ---------------------------------------
     share data)                              Thirteen Weeks Ended          
                                     ---------------------------------------
                                     January 30,   % to  January 31,   % to 
                                        2010      Sales     2009      Sales 
                                     -----------  -----  -----------  ----- 
    Net sales                             $295.4              $344.7        
                                                                            
    Cost of sales                          212.9   72.1%       238.0   69.1%
                                           -----   ----        -----   ---- 
    Gross profit                            82.5   27.9%       106.7   30.9%
                                                                            
    Selling, general and                                                    
     administrative expenses                75.6   25.6%        94.2   27.3%
                                                                            
    Impairment charges                       3.6    1.2%        15.2    4.4%
                                                                            
    Depreciation and amortization            3.9    1.3%         5.4    1.6%
                                             ---    ---          ---    --- 
    Loss from operations                    (0.6)  -0.2%        (8.1)  -2.4%
                                                                            
    Interest expense, net                    0.6    0.2%         0.9    0.3%
                                             ---    ---          ---    --- 
    Loss before income taxes                (1.2)  -0.4%        (9.0)  -2.7%
                                                                            
    Income tax expense (benefit)           (12.6)  -4.3%         0.4    0.1%
                                           -----   ----          ---    --- 
    Net income (loss)                      $11.4    3.9%       $(9.4)  -2.8%
                                           =====    ===        =====   ==== 
                                                                            
    Basic income (loss) per common share:                                   
    Basic income (loss) per                                                 
     common share                          $0.36              $(0.30)       
                                           =====              ======        
    Weighted average number of                                              
       common shares outstanding - basic    31.4                31.3        
                                            ====                ====        
    Diluted income (loss) per common share:                                 
    Diluted income (loss) per                                               
     common share                          $0.36              $(0.30)       
                                           =====              ======        
    Weighted average number of                                              
      common shares - diluted               31.5                31.3        
                                            ====                ====        
     
                                                                            
                                                                            
    (in millions, except per         ---------------------------------------
     share data)                                Fiscal Year Ended           
                                     ---------------------------------------
                                     January 30,   % to  January 31,   % to 
                                        2010      Sales     2009      Sales 
                                     -----------  -----  -----------  ----- 
    Net sales                             $814.0              $987.6        
                                                                            
    Cost of sales                          552.3   67.9%       656.7   66.5%
                                           -----   ----        -----   ---- 
    Gross profit                           261.7   32.1%       330.9   33.5%
                                                                            
    Selling, general and                                                    
     administrative expenses               295.6   36.3%       358.7   36.3%
                                                                            
    Impairment charges                       3.6    0.4%        15.2    1.5%
                                                                            
    Depreciation and amortization           15.2    1.9%        22.1    2.3%
                                            ----    ---         ----    --- 
    Loss from operations                   (52.7)  -6.5%       (65.1)  -6.6%
                                                                            
    Interest expense, net                    2.7    0.3%         3.9    0.4%
                                             ---    ---          ---    --- 
    Loss before income taxes               (55.4)  -6.8%       (69.0)  -7.0%
                                                                            
    Income tax expense (benefit)           (13.0)  -1.6%           -    0.0%
                                           -----   ----          ---    --- 
                                                                            
    Net income (loss)                     $(42.4)  -5.2%      $(69.0)  -7.0%
                                          ======   ====       ======   ==== 
                                                                            
    Basic income (loss) per common share:                                   
    Basic income (loss) per                                                 
     common share                         $(1.35)             $(2.21)       
                                          ======              ======        
    Weighted average number of                                              
       common shares outstanding - basic    31.4                31.2        
                                            ====                ====        
    Diluted income (loss) per common share:                                 
    Diluted income (loss) per                                               
     common share                         $(1.35)             $(2.21)       
                                          ======              ======        
    Weighted average number of                                              
      common shares - diluted               31.4                31.2        
                                            ====                ====        
                                                                            
                                                                            
                                                                            
                                                                            
                                     
    SELECTED BALANCE SHEET           January 30,         January 31,        
     CAPTIONS:                          2010                2009        
                                     -----------         -----------        
    (in millions, except store data)                                        
    Cash and cash equivalents              $71.5               $30.1        
    Merchandise inventory                  266.6               378.2        
    Fixed assets (net)                      33.9                50.4        
    Accounts payable                       130.5               170.3        
    Long-term debt and capital lease                                        
     obligations, less current  portion      6.9                 8.8        
                                                                            
    Stores in operation                      557                 712        
    
    

SOURCE Trans World Entertainment Corporation