ALBANY, N.Y., Nov. 10 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation (Nasdaq: TWMC) today announced total sales of $241.4 million for
its third quarter ended October 29, 2005, compared to $270.0 million in the
third quarter of 2004. In the third quarter, the Company operated 800 stores,
6% fewer than last year. For the third quarter of 2005, net loss was $11.5
million, or $0.36 per share. Net loss for the third quarter of 2004 was $4.6
million or $0.14 per share including an extraordinary gain of $0.6 million or
$0.01 per share related to the acquisition of the Wherehouse Entertainment
Stores in 2003. Comparable store sales decreased 7%.
“Sales and earnings for the third quarter were in line with our previously
announced expectations and reflect a general weakness in music and DVD sales
and a lack of strong new releases,” commented Robert J. Higgins, Chairman and
Chief Executive Officer of Trans World Entertainment. “We made good progress
in the quarter toward initiatives that we believe will improve our operating
results. We completed the implementation of Backstage Pass, our customer
reward program, and are encouraged by early results. We are installing our
next generation listening and viewing stations, or LVS 3, and will have over
two hundred stores on-line in time for the holiday selling season. We are
also piloting an in-store Digital Zone in three stores, featuring music
downloads, CD burning and other customer-focused technologies,” Mr. Higgins
concluded.
Gross profit as a percentage of sales for the third quarter of 2005 was
34.4% versus 37.0% in the third quarter of 2004. SG&A as a percentage of
sales was 38.8% compared to 37.4% last year.
Sales for the thirty-nine week period ended October 29, 2005 were $779.9
million, compared to $851.7 million in 2004. Net loss for the thirty-nine
week period was $19.4 million, or $0.60 per share compared to net income of
$7.2 million or $0.20 per share last year. Net income for the thirty-nine
week period of 2004 includes an income tax benefit of $10.5 million or $0.28
per diluted share, the result of closing a federal income tax examination and
an extraordinary gain of $3.2 million or $0.09 per share related to the
Wherehouse acquisition.
Trans World Entertainment is a leading specialty retailer of music, video
and video game products. The Company operates 800 retail stores in 46 states,
the District of Columbia, the U.S. Virgin Islands, Puerto Rico and e-commerce
sites, http://www.fye.com, http://www.coconuts.com, http://www.wherehouse.com
and http://www.secondspin.com. In addition to its mall locations, operated
primarily under the f.y.e brand, the Company also operates freestanding
locations under the names Coconuts Music and Movies, Strawberries Music,
Wherehouse, CD World, Spec’s, Second Spin and Planet Music.
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 INCOME STATEMENTS: (in millions, except per share data) Thirteen Weeks Ended Thirty-nine Weeks Ended Oct 29, % to Oct 30, % to Oct 29, % to Oct 30, % to 2005 Sales 2004 Sales 2005 Sales 2004 Sales Sales $241.4 $270.0 $779.9 $851.7 Cost of sales 158.4 65.6% 170.0 63.0% 499.5 64.0% 535.4 62.9% Gross profit 83.0 34.4% 100.0 37.0% 280.4 36.0% 316.3 37.1% Selling, general and administrative expenses 93.8 38.8% 100.9 37.4% 286.2 36.7% 302.5 35.5% Depreciation and amortization 8.6 3.6% 7.9 2.9% 25.1 3.2% 24.9 2.9% Loss from operations (19.4) -8.0% (8.9) -3.3% (30.9) -3.9% (11.1) -1.3% Other income (0.2) -0.1% (0.1) -0.1% (1.6) -0.2% (0.5) 0.0% Interest expense 0.8 0.3% 0.7 0.3% 2.0 0.3% 1.8 0.2% Loss before income taxes and extraordinary gain (20.0) -8.3% (9.5) -3.5% (31.3) -4.0% (12.4) -1.5% Income tax benefit (8.5) -3.5% (4.3) -1.6% (11.9) -1.5% (16.4) -1.9% Income (loss) before extraordinary gain $(11.5) -4.8% $(5.2) -1.9% $(19.4) -2.5% $4.0 0.4% Extraordinary gain - unallocated negative goodwill, net of income taxes $- - $0.6 0.2% $- - $3.2 0.4% NET INCOME (LOSS) $(11.5) -4.8% $(4.6) -1.7% $(19.4) -2.5% $7.2 0.8% Basic income (loss) per common share: Income (loss) before extraordinary gain $(0.36) $(0.15) $(0.60) $0.11 Extraordinary gain - unallocated negative goodwill, net of income taxes $- $0.01 $- $0.09 Basic income (loss) per share $(0.36) $(0.14) $(0.60) $0.20 Weighted average number of common shares outstanding - basic 31.6 33.8 32.4 35.0 Diluted income (loss) per common share: Income (loss) before extraordinary gain $(0.36) $(0.15) $(0.60) $0.11 Extraordinary gain - unallocated negative goodwill, net of income taxes $- $0.01 $- $0.09 Diluted income (loss) per share $(0.36) $(0.14) $(0.60) $0.20 Weighted average number of common shares outstanding - diluted 31.6 33.8 32.4 36.7 SELECTED BALANCE SHEET CAPTIONS: (in millions, except store data) Cash and cash equivalents $16.8 $18.7 Merchandise inventory 477.7 459.2 Fixed assets (net) 129.9 121.1 Accounts payable 252.0 224.8 Long-term debt and capital lease obligations, less current portion 20.9 12.3 Stores in operation at the end of the period 800 852
SOURCE Trans World Entertainment Corporation
CONTACT:
Trans World Entertainment
John J. Sullivan, EVP, Chief Financial Officer
+1-518-452-1242
Richard Tauberman of MWW Group
+1-201-507-9500
for Trans World Entertainment
Web site: http://www.twec.com
http://www.fye.com
http://www.coconuts.com
http://www.wherehouse.com
http://www.secondspin.com
(TWMC)