ALBANY, N.Y., Nov. 20 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation (Nasdaq: TWMC) today announced total sales for the third quarter
ended November 1, 2008 decreased 25% to $195.2 million, compared to $260.6
million in the third quarter of 2007. Average number of stores in operation
during the quarter were 786 compared to 962 last year, an 18% decline.
Comparable store sales in the third quarter of 2008 decreased 14%. For the
third quarter of 2008, the loss before income taxes was $28.5 million compared
to a loss before income taxes of $25.8 million for the same period last year.
The Company recorded an income tax benefit of $0.1 million during the third
quarter of 2008, compared to an income tax benefit of $11.5 million last year.
For the third quarter of 2008, the net loss was $28.4 million, or $0.91 per
share compared to a net loss of $14.3 million, or $0.46 per share for the same
period last year.
Gross profit as a percentage of sales for the third quarter of 2008 was
33.5% compared to 35.1% in the third quarter of 2007. The decline in gross
profit as a percentage of sales is due to lower vendor allowances and higher
distribution and freight costs as a percentage of sales. Despite an 18%
reduction in expenses, SG&A as a percentage of sales increased to 44.7%,
compared to 40.8% last year, against the 25% decline in sales.
Sales for the thirty-nine week period ended November 1, 2008 decreased 21%
to $643.0 million, compared to $814.2 million in 2007. Comparable store sales
for the thirty-nine week period ended November 1, 2008 decreased 9%. For the
thirty-nine week period ended November 1, 2008, the loss before income taxes
was $59.9 million compared to a loss before income taxes of $60.2 million for
the same period last year. Net loss for the thirty-nine week period was $59.5
million or $1.91 per share versus $33.4 million or $1.08 per share last year.
“Our operating results were negatively impacted by the current economic
situation. We expect our results in the fourth quarter to continue to be
impacted by the weak retail environment. To reflect our lower expectations,
we are forecasting an annual EBITDA loss of $10 million to $15 million on an
annual comparable store sales decline of 8% to 10%,” said Robert J. Higgins,
Chairman and Chief Executive Officer of Trans World Entertainment. The
Company’s previous guidance was EBITDA of $5 million to $10 million on an
annual mid single digit comp sales decline.
Trans World Entertainment is a leading specialty retailer of entertainment
software, including music, video and video games and related products. The
Company operates nearly 800 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.
TRANS WORLD ENTERTAINMENT CORPORATION Financial Results STATEMENT OF OPERATIONS: (in millions, except per share data) Thirteen Weeks Ended November 1, % to November 3, % to 2008 Sales 2007 Sales Sales $195.2 $260.6 Cost of sales 129.8 66.5% 169.3 65.0% Gross profit 65.4 33.5% 91.3 35.1% Selling, general and administrative expenses 87.2 44.7% 106.3 40.8% Depreciation and amortization 5.6 2.8% 8.9 3.5% Loss from operations (27.4) -14.0% (23.9) -9.2% Interest expense, net 1.1 0.6% 1.9 0.7% Loss before income taxes (28.5) -14.6% (25.8) -9.9% Income tax benefit (0.1) 0.0% (11.5) -4.4% NET LOSS $(28.4) -14.6% $(14.3) -5.5% Basic and diluted loss per common share: Basic and diluted loss per share $(0.91) $(0.46) Weighted average number of common shares outstanding - basic and diluted 31.3 31.1 STATEMENT OF OPERATIONS: (in millions, except per share data) Thirty-nine Weeks Ended November 1, % to November 3, % to 2008 Sales 2007 Sales Sales $643.0 $814.2 Cost of sales 418.7 65.1% 520.5 63.9% Gross profit 224.3 34.9% 293.7 36.1% Selling, general and administrative expenses 264.6 41.0% 321.5 39.5% Depreciation and amortization 16.6 2.6% 27.3 3.4% Loss from operations (56.9) -8.7% (55.1) -6.8% Interest expense, net 3.0 0.5% 5.1 0.6% Loss before income taxes (59.9) -9.2% (60.2) -7.4% Income tax benefit (0.4) 0.0% (26.8) -3.3% NET LOSS $(59.5) -9.2% $(33.4) -4.1% Basic and diluted loss per common share: Basic and diluted loss per share $(1.91) $(1.08) Weighted average number of common shares outstanding - basic and diluted 31.2 31.0 SELECTED BALANCE SHEET CAPTIONS: November 1, November 3, (in millions, except store data) 2008 2007 Cash and cash equivalents $9.1 $15.5 Merchandise inventory 468.8 569.1 Fixed assets (net) 68.5 119.9 Accounts payable 193.3 264.6 Borrowings under line of credit 62.1 81.8 Long-term debt, less current portion 9.8 13.5 Stores in operation 786 962
SOURCE Trans World Entertainment Corporation
CONTACT:
John J. Sullivan, EVP, Chief Financial Officer of Trans World
Entertainment
+1-518-452-1242
or
Marilynn Meek of Financial Relations Board
+1-212-827-3773
for Trans World Entertainment