ALBANY, N.Y., April 13 /PRNewswire-FirstCall/ — Trans World Entertainment
Corporation (Nasdaq: TWMC) today updated financial results for its fourth
quarter and full fiscal year 2005. These results replace those previously
issued by the Company in its release dated March 9, 2006.
Subsequent to its March 9, 2006 release, the Company identified and
evaluated the realization of an additional deferred income tax asset that
resulted in a recorded tax benefit of $2.0 million. After giving effect to the
recognition of the associated tax asset, income before cumulative effect of a
change in accounting principle for the fourth quarter of 2005 was
$22.3 million or $0.71 per diluted share and net income was $20.0 million or
$0.64 per diluted share. For the full fiscal year 2005, income before
cumulative effect of a change in accounting principle was $2.9 million or
$0.09 per diluted share and net income was $0.6 million, or $0.02 per diluted
share.
Trans World Entertainment is a leading specialty retailer of music, video
and video game products. The Company operates over 1,100 retail stores in the
United States, the District of Columbia, the U.S. Virgin Islands, Puerto Rico.
The Company operates mall stores under the f.y.e., Sam Goody and Suncoast
brands and freestanding locations under the names Coconuts Music and Movies,
Strawberries Music, Wherehouse, Sam Goody, Spec’s and Second Spin. The Company
also operates on the web at http://www.fye.com, http://www.coconuts.com,
http://www.wherehouse.com, http://www.secondspin.com, http://www.samgoody.com
and http://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
INCOME STATEMENTS:
(in millions,
except per
share data)
As adjusted As Reported
Thirteen Weeks Ended Thirteen Weeks Ended
January 28, % to January 28, % to January 29, % to
2006 Sales 2006 Sales 2005 Sales
Sales $458.6 $458.6 $513.5
Cost of sales 307.4 67.0% 307.4 67.0% 334.7 65.2%
Gross profit 151.2 33.0% 151.2 33.0% 178.8 34.8%
Selling, general and
administrative
expenses 106.7 23.3% 106.7 23.3% 113.1 22.0%
Depreciation
and amortization 8.8 1.9% 8.8 1.9% 9.6 1.9%
Income from operations 35.7 7.8% 35.7 7.8% 56.1 10.9%
Other income (0.6) -0.1% (0.6) -0.1% (0.5) -0.1%
Interest expense 1.0 0.1% 1.0 0.1% 0.6 0.1%
Income before income taxes,
extraordinary gain
- unallocated goodwill
and cumulative effect
of change in
accounting principle 35.3 7.8% 35.3 7.8% 55.9 10.9%
Income tax expense 13.0 2.9% 15.0 3.4% 21.3 4.1%
Income before extraordinary
gain - unallocated
goodwill and cumulative
effect of change in
accounting principle $22.3 4.9% $20.3 4.4% $34.7 6.8%
Extraordinary gain
- unallocated negative
goodwill, net of income
taxes of $0 and
$2.0 million for fiscal
2005 and 2004,
respectively -- 0.0% -- 0.0% -- 0.0%
Cumulative effect of
change in accounting
principle, net of income
taxes of $1.5 million
and $0 for fiscal 2005
and 2004, respectively (2.3) -0.5% (2.3) -0.5% -- 0.0%
Net income (loss) $20.0 4.4% $18.0 3.9% $34.7 6.8%
Basic earnings (loss) per
common share:
Earnings per share before
extraordinary gain
- unallocated negative
goodwill and cumulative
effect of change in
accounting principle,
net of income taxes $0.72 $0.65 $1.04
Extraordinary gain
- unallocated negative
goodwill, net of income
taxes of $0 and
$2.0 million for
fiscal 2005 and
2004 respectively $-- $-- $--
Cumulative effect of
change in accounting
principle, net of
income taxes of
$1.5 million and $0
for fiscal 2005 and
2004 respectively $(0.07) $(0.07) $--
Basic earnings (loss)
per common share $0.65 $0.58 $1.04
Weighted average number
of common shares
outstanding 30.8 30.8 33.2
Diluted earnings (loss)
per common share:
Earnings per share before
extraordinary gain
- unallocated negative
goodwill and cumulative
effect of change in
accounting principle,
net of income taxes $0.71 $0.64 $0.98
Extraordinary gain
- unallocated negative
goodwill, net of
income taxes of
$0 and $2.0 million
for fiscal 2005
and 2004 respectively $-- $-- $--
Cumulative effect of
change in accounting
principle, net of
income taxes of
$1.5 million and $0
for fiscal 2005 and
2004 respectively $(0.07) $(0.07) $--
Diluted earnings (loss)
per common share $0.64 $0.57 $0.98
Weighted average number
of common shares
outstanding 31.5 31.4 35.2
(in millions,
except per
share data)
As adjusted As Reported
Fiscal Year Ended Fiscal Year Ended
January 28, % to January 28, % to January 29, % to
2006 Sales 2006 Sales 2005 Sales
Sales $1,238.5 $1,238.5 $1,365.1
Cost of sales 806.9 65.1% 806.9 65.1% 870.0 63.7%
Gross profit 431.6 34.9% 431.6 34.9% 495.1 36.3%
Selling, general and
administrative
expenses 392.8 31.7% 392.8 31.7% 415.7 30.5%
Depreciation and
amortization 34.0 2.8% 34.0 2.8% 34.5 2.5%
Income from operations 4.8 0.4% 4.8 0.4% 44.9 3.3%
Other income (2.2) -0.1% (2.2) -0.1% (1.0) -0.1%
Interest expense 3.0 0.2% 3.0 0.2% 2.4 0.2%
Income before income
taxes, extraordinary
gain - unallocated
goodwill and cumulative
effect of change in
accounting principle 4.0 0.3% 4.0 0.3% 43.5 3.2%
Income tax expense 1.1 0.1% 3.1 0.2% 4.9 0.4%
Income before
extraordinary gain
- unallocated goodwill
and cumulative effect
of change in
accounting principle $2.9 0.2% $0.9 0.1% $38.6 2.8%
Extraordinary gain
- unallocated negative
goodwill, net of income
taxes of $0 and
$2.0 million for
fiscal 2005 and 2004,
respectively -- 0.0% -- 0.0% 3.2 0.3%
Cumulative effect of
change in accounting
principle, net of
income taxes of
$1.5 million and $0
for fiscal 2005 and
2004, respectively (2.3) -0.2% (2.3) -0.2% -- 0.0%
Net income (loss) $0.6 0.0% $(1.4) -0.1% $41.8 3.1%
Basic earnings (loss)
per common share:
Earnings per share
before extraordinary
gain - unallocated
negative goodwill and
cumulative effect of
change in accounting
principle, net of
income taxes $0.09 $0.03 $1.12
Extraordinary gain
- unallocated negative
goodwill, net of income
taxes of $0 and
$2.0 million for
fiscal 2005 and 2004
respectively $-- $-- $0.09
Cumulative effect of
change in accounting
principle, net of income
taxes of $1.5 million
and $0 for fiscal 2005
and 2004 respectively $(0.07) $(0.07) $--
Basic earnings (loss)
per common share $0.02 $(0.04) $1.21
Weighted average number
of common shares
outstanding 32.0 32.0 34.5
Diluted earnings
(loss) per
common share:
Earnings per share
before extraordinary
gain - unallocated
negative goodwill and
cumulative effect of
change in accounting
principle, net of
income taxes $0.09 $0.03 $1.06
Extraordinary gain
- unallocated negative
goodwill, net of
income taxes of $0 and
$2.0 million for
fiscal 2005 and
2004 respectively $-- $-- $0.09
Cumulative effect of
change in accounting
principle, net of
income taxes of
$1.5 million and $0
for fiscal 2005 and
2004 respectively $(0.07) $(0.07) $--
Diluted earnings (loss)
per common share $0.02 $(0.04) $1.15
Weighted average number
of common shares
outstanding 32.1 32.0 36.3
SELECTED BALANCE SHEET
CAPTIONS:
(in millions, except
store data)
Cash and cash equivalents $197.2 $229.8
Merchandise inventory 402.7 431.2
Fixed assets (net) 132.5 130.2
Accounts payable 322.8 358.4
Long-term debt and capital
lease obligations,
less current portion 19.5 12.0
Stores in operation 782 810
SOURCE Trans World Entertainment Corporation
CONTACT:
John J. Sullivan, EVP,
Chief Financial Officer of Trans World
Entertainment,
+1-518-452-1242; or
Rich Tauberman of MWW Group,
+1-201-507-9500,