Trans World Entertainment Announces Second Quarter 2009 Results

ALBANY, N.Y., Aug. 20 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation
(Nasdaq: TWMC) today announced total sales for the second quarter
ended August 1, 2009 decreased 23% to $165.7 million, compared to $215.2
million
in the second quarter of 2008. Average stores in operation during the
quarter were 705 compared to 794 last year, an 11% decline. Comparable store
sales in the second quarter of 2009 decreased 15%. For the second quarter of
2009, the Company’s net loss was $17.8 million, or $0.57 per share compared to
a net loss of $19.2 million, or $0.62 per share for the same period last year.

Gross profit as a percentage of sales for the second quarter of 2009 was
35.5% compared to 35.3% in the second quarter of 2008. Selling, general and
administrative expenses for the quarter were $72.1 million, a 19% reduction
from $89.1 million in the comparable period last year. SG&A expenses were
43.5% of sales versus 41.4% of sales for the same period last year.

Sales for the twenty-six week period ended August 1, 2009 decreased 20% to
$357.2 million, compared to $447.8 million in 2008. Comparable store sales for
the twenty-six week period ended August 1, 2009 decreased 12%. Net loss for
the twenty-six week period was $31.5 million or $1.00 per share versus $31.1
million
or $1.00 per share last year.

The Company had $28.3 million in borrowings outstanding on its credit
facility at the end of the quarter as compared to $35.5 million last year.
Inventory was $320.4 million, or $72 per square foot, at the end of the
quarter versus $399.2 million or $81 per square foot for the same period last
year.

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.

    www.twec.com




                                - table to follow -



                       TRANS WORLD ENTERTAINMENT CORPORATION
                                 Financial Results


    STATEMENTS OF OPERATIONS:
    (in millions, except per share data)
                                                    Thirteen Weeks Ended
                                           ----------------------------------
                                           August 1,  % to    August 2,  % to
                                               2009  Sales        2008  Sales
                                               ----  -----        ----  -----

    Net Sales                                $165.7             $215.2

    Cost of sales                             106.9   64.5%      139.4   64.7%
                                              -----   ----       -----   ----
    Gross profit                               58.8   35.5%       75.9   35.3%

    Selling, general and
     administrative expenses                   72.1   43.5%       89.1   41.4%

    Depreciation and amortization               3.7    2.3%        5.5    2.6%
                                                ---    ---         ---    ---
    Loss from operations                      (17.0) -10.3%      (18.7)  -8.7%

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

    Loss before income taxes                  (17.7) -10.7%      (19.6)  -9.1%
    Income tax expense (benefit)                0.1    0.0%       (0.4)  -0.2%
                                                ---    ---        ----   ----


    NET LOSS                                 $(17.8) -10.7%     $(19.2)  -8.9%
                                             ======  =====      ======   ====

    Basic and diluted loss per
     common share:                             ----               ----
    Basic and diluted loss per share         $(0.57)            $(0.62)
                                             ======             ======

    Weighted average number of
     common shares outstanding -
     basic and diluted                         31.4               31.2
                                               ====               ====



                                                 Twenty-six Weeks Ended
                                           ----------------------------------
                                           August 1,  % to    August 2,  % to
                                               2009  Sales        2008  Sales
                                               ----  -----        ----  -----

    Net Sales                                $357.2             $447.8

    Cost of sales                             232.7   65.1%      288.9   64.5%
                                              -----   ----       -----   ----
    Gross profit                              124.5   34.9%      158.9   35.5%

    Selling, general and
     administrative expenses                  147.8   41.4%      177.4   39.5%

    Depreciation and amortization               7.3    2.1%       11.0    2.5%
                                                ---    ---        ----    ---
    Loss from operations                      (30.6)  -8.6%      (29.5)  -6.5%

    Interest expense, net                       1.4    0.4%        1.9    0.4%
                                                ---    ---         ---    ---

    Loss before income taxes                  (32.0)  -9.0%      (31.4)  -6.9%
    Income tax expense (benefit)               (0.5)  -0.1%       (0.3)   0.0%
                                               ----   ----        ----    ---


    NET LOSS                                 $(31.5)  -8.9%     $(31.1)  -6.9%
                                             ======   ====      ======   ====

    Basic and diluted loss per
     common share:                             ----               ----
    Basic and diluted loss per share         $(1.00)            $(1.00)
                                             ======             ======

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




    SELECTED BALANCE SHEET CAPTIONS:
    (in millions, except store data)       August 1,  August 2,
                                               2009       2008
                                               ----       ----

    Cash and cash equivalents                  $7.1      $10.4
    Merchandise inventory                     320.4      399.2
    Fixed assets (net)                         44.5       71.8
    Accounts payable                           94.7      115.1
    Borrowings under line of credit            28.3       35.5
    Long-term debt, less current portion        7.5       10.7

    Stores in operation                         697        789

SOURCE Trans World Entertainment Corporation

CONTACT: Trans World Entertainment John J. Sullivan, EVP, Chief
Financial Officer
+1-518-452-1242
or
Financial Relations Board Marilynn
Meek

+1-212-827-3773
/Web Site: http://www.twec.com