Trans World Entertainment Announces First Quarter Results

Trans World Entertainment Announces First Quarter Results

ALBANY, N.Y., May 20 /PRNewswire-FirstCall/ -- Trans World Entertainment Corporation (NASDAQ:TWMC) today reported financial results for its first quarter ended May 1, 2010. For the first fiscal quarter of 2010, the Company recorded a net loss of $11.4 million, or $0.36 per share compared to a net loss of $13.7 million or $0.44 per share for the same period last year.

For the first fiscal quarter, total sales decreased 18% to $156.5 million compared to $191.4 million for the same period in 2009. Comparable store sales for the quarter decreased 3%. During the quarter, the Company operated an average of 548 stores compared to 709 stores last year, a 23% decline.

Gross profit for the quarter was $51.5 million or 32.9% of sales as compared to $65.8 million or 34.3% of sales for the same period last year. The reduction in gross profit as a percentage of sales was due to lower vendor allowances this year versus last year.

Selling, general and administrative expenses for the quarter were $59.3 million, a 22% reduction from $75.7 million in the comparable period last year. SG&A expenses were 37.9% of sales versus 39.5% of sales for the same period last year.

The Company had no borrowings outstanding on its credit facility at the end of the quarter as compared to $29.0 million outstanding at the end of the first fiscal quarter of 2009. Cash on hand at the end of the quarter was $21.3 million as compared to $8.2 million at the end of the quarter last year. Inventory was $251.3 million, or $69 per square foot, at the end of the quarter versus $332.7 million or $74 per square foot at the end of the first fiscal quarter of last year.

Trans World will host a teleconference call today, Thursday, May 20, 2010, at 10:00 AM ET to discuss its financial results. Interested parties can listen to the simultaneous webcast on the Company's corporate website, www.twec.com.

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.

TRANS WORLD ENTERTAINMENT CORPORATION
Financial Results

STATEMENTS OF OPERATIONS:
(in thousands, except per share
data)
Thirteen Weeks Thirteen Weeks
Ended Ended
--------------- ---------------
May 1, % to May 2, % to
2010 Sales 2009 Sales
---- ----- ---- -----

Net sales $156,539 $191,433

Cost of sales 105,014 67.1% 125,681 65.7%
------- ---- ------- ----
Gross profit 51,525 32.9% 65,752 34.3%

Selling, general and
administrative expenses 59,315 37.9% 75,699 39.5%

Depreciation and amortization 2,863 1.8% 3,660 1.9%
----- --- ----- ---
Loss from operations (10,653) -6.8% (13,607) -7.2%

Interest expense, net 688 0.4% 703 0.3%
--- --- --- ---

Loss before income taxes (11,341) -7.2% (14,310) -7.5%
Income tax (benefit) expense 74 0.0% (574) -0.3%
--- --- ---- ----

NET LOSS $(11,415) -7.3% $(13,736) -7.2%
======== ==== ======== ====

Basic and diluted loss per
share:

Basic and diluted loss per
share $(0.36) $(0.44)
====== ======

Weighted average number of
common shares outstanding -
basic and diluted 31,395 31,296
====== ======

SELECTED BALANCE SHEET
CAPTIONS:
(in thousands, except store
data)
May 2,
May 1, 2010 2009
----------- -------

Cash and cash equivalents $21,275 $8,221
Merchandise inventory 251,279 332,695
Fixed assets (net) 31,398 47,552
Accounts payable 74,746 89,304
Borrowings under line of credit - 28,981
Long-term debt, less current
portion 6,545 7,980

Stores in operation 544 704

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, mmeek@frbir.com

Web Site: http://www.twec.com/

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