ALBANY, N.Y.–(BUSINESS WIRE)–Nov. 8, 2000–Trans World
Entertainment Corporation (Nasdaq National Market:TWMC) today
announced total sales of $265.6 million for its third quarter ended
October 28, 2000, compared to $276.0 million for the same period last
year.
The net loss before one-time charges was $3.1 million or ($0.06)
per share, compared to net income of $3.8 million or $0.07 per share,
in the comparable 1999 quarter. The one-time charges which totaled
$13.1 million, resulted from an $11.0 million reserve for IRS claims
and a $2.1 million write-off of an investment in an internet business.
The IRS claims result from a court decision disallowing the deduction
of interest expenses related to corporate owned life insurance
policies (COLI) taken by Camelot Music prior to Trans World’s
acquisition of Camelot. After these charges, net loss for the quarter
was $15.6 million, or ($0.32) per share.
Comparable store sales in the third quarter of 2000 decreased 4%.
Gross profit as a percentage of sales decreased to 34.5% of sales
compared to 35.1% in the third quarter of 1999. Selling, general &
administrative expenses, including the $2.1 million charge, increased
to 34.0% of sales from 29.4% in the third quarter of 1999.
“We are disappointed with the sales for the third quarter, which
were impacted by the weakness of the new release schedule,” commented
Robert J. Higgins, Trans World’s Chairman and Chief Executive Officer.
“We are seeing positive trends in the fourth quarter, and our stores
are prepared for a strong holiday season. We continue to have
confidence in our ability to deliver strong sales and earnings in the
fourth quarter.”
Sales for the thirty-nine week period ended October 28, 2000 were
$861.2 million, compared to $840.3 million for the same period last
year. Net income before one-time charges for the thirty-nine week
period was $12.4 million, or $0.25 per share, compared to $0.8
million, or $0.02 per share, in the comparable 1999 period. Results
for last year’s thirty-nine week period include a $25.7 million
one-time pre-tax charge for costs related to the Camelot merger.
Trans World Entertainment is a leading specialty retailer of music
and video products. The Company operates retail stores in 46 states,
the District of Columbia, the U.S. Virgin Islands, Puerto Rico and an
e-commerce site, www.twec.com. Mall locations include Camelot, Record
Town, The Wall, Disc Jockey and Saturday Matinee and F.Y.E.
Freestanding locations include Coconuts Music and Movies, Strawberries
Music, Spec’s and Planet Music.
Certain statements in this report 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 -------------------------------------------- October 28, % to October 30, % to 2000 Sales 1999 Sales -------------------------------------------- Sales $265.6 $276.0 Cost of sales 173.9 65.5% 179.0 64.9% -------------------------------------------- Gross profit 91.7 34.5% 97.0 35.1% Selling, general and administrative expenses 90.2 34.0% 81.3 29.4% Camelot merger costs 0.0% Depreciation and amortization 9.1 3.4% 9.3 3.4% -------------------------------------------- Income (loss) from operations (7.6) -2.9% 6.4 2.3% Interest expense (income) (0.5) -0.2% (0.1) 0.0% -------------------------------------------- Income (loss) before income taxes (7.1) -2.7% 6.5 2.4% Income tax expense (benefit) 8.5 3.2% 2.7 1.0% -------------------------------------------- NET INCOME (LOSS) ($15.6) -5.9% $3.8 1.4% ============================================ Basic earnings per common share: Earnings (loss) per share ($0.32) $0.07 ============= ============= Weighted average number of common shares outstanding 48.4 52.8 ============= ============= Diluted earnings per common share: Earnings (loss) per share ($0.32) $0.07 ============= ============= Weighted average number of common shares outstanding 48.4 54.0 ============= ============= SELECTED BALANCE SHEET CAPTIONS: (in millions, except store data) Cash and cash equivalents Merchandise inventory Fixed assets (net) Accounts payable Long-term debt and capital lease obligations, less current portion Stores in operation Thirty Nine Weeks Ended ----------------------------------------------- October 28, % to October 30, % to 2000 Sales 1999 Sales ----------------------------------------------- Sales $861.2 $840.3 Cost of sales 554.7 64.4% 535.8 63.8% -------------------------------------------- Gross profit 306.5 35.6% 304.5 36.2% Selling, general and administrative expenses 264.7 30.7% 249.9 29.7% Camelot merger costs 0.0% 25.7 3.0% Depreciation and amortization 26.3 3.1% 26.7 3.2% -------------------------------------------- Income (loss) from operations 15.5 1.8% 2.2 0.3% Interest expense (income) (2.5) -0.3% 0.8 0.1% -------------------------------------------- Income (loss) before income taxes 18.0 2.1% 1.4 0.2% Income tax expense (benefit) 17.9 2.1% 0.6 0.1% -------------------------------------------- NET INCOME (LOSS) $0.1 0.0% $0.8 0.1% ============================================ Basic earnings per common share: Earnings (loss) per share $0.00 $0.02 ============= ============= Weighted average number of common shares outstanding 48.8 52.3 ============= ============= Diluted earnings per common share: Earnings (loss) per share $0.00 $0.02 ============= ============= Weighted average number of common shares outstanding 49.7 53.2 ============= ============= SELECTED BALANCE SHEET CAPTIONS: (in millions, except store data) Cash and cash equivalents $72.7 $86.7 Merchandise inventory 471.8 495.7 Fixed assets (net) 139.1 141.8 Accounts payable 259.9 313.5 Long-term debt and capital lease obligations, less current portion 15.2 19.7 Stores in operation 935 980
CONTACT: | Trans World Entertainment Corporation |
---|---|
John Sullivan | |
Chief Financial Officer | |
518/452-1242 ext. 7400 | |
or | |
The MWW Group | |
Investor Relations | |
Michael Lendener | |
212/704-9727 | |