ALBANY, N.Y., Aug. 23 /PRNewswire-FirstCall/ -- Trans World Entertainment
Corporation (Nasdaq: TWMC) today announced total sales decreased 10% to $267.3
million for the second quarter ended August 4, 2007, compared to $298.3
million in the second quarter of 2006. The Company operated, on average, 12%
fewer stores during the second quarter of 2007, as compared to the same period
last year. Comparable store sales in the second quarter of 2007 decreased 6%.
For the second quarter of 2007, the net loss was $10.1 million, or $0.32 per
share. Loss before the extraordinary gain for the second quarter of 2006 was
$10.2 million, or $0.33 per share. Net loss for the second quarter of 2006
was $7.7 million or $0.25 per share.
"We improved our business in the second quarter, highlighted by a
continued strong gross margin and lower expenses," said Robert J. Higgins,
Chairman and Chief Executive Officer of Trans World Entertainment. "In
addition, our comparable store sales results in every major category of
business improved over the first quarter."
Gross profit as a percentage of sales for the second quarter of 2007 was
36.6% versus 35.6% in the second quarter of 2006. SG&A as a percentage of
sales was 39.5% compared to 40.2% last year.
Sales for the twenty-six week period ended August 4, 2007 decreased 6% to
$553.6 million, compared to $586.8 million in 2006. Net loss for the twenty-
six week period was $19.1 million or $0.62 per share. Loss before
extraordinary gain in 2006 was $18.2 million or $0.59 per share. Net loss was
$14.8 million, or $0.48 per share, in 2006.
"During the second quarter, we completed the re-branding of our stores to
the f.y.e. format, with the exception of 113 Suncoast video only stores, and
feel that we are gaining more traction toward becoming the total entertainment
retailer of choice," Mr. Higgins continued. "Given the soft retailing
environment, we remain cautious and continue to expect slightly positive
earnings for fiscal 2007."
Trans World Entertainment is a leading specialty retailer of entertainment
software, including music, home video and video games and related products.
The Company operates over 950 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
INCOME STATEMENTS:
(in millions, except per share data)
Thirteen Weeks Ended
August 4, % to July 29, % to
2007 Sales 2006 Sales
Sales $267.3 $298.3
Cost of sales 169.3 63.4% 192.1 64.4%
Gross profit 98.0 36.6% 106.2 35.6%
Selling, general and
administrative expenses 105.7 39.5% 119.8 40.2%
Depreciation and amortization 9.2 3.5% 9.1 3.0%
Loss from operations (16.9) -6.4% (22.7) -7.6%
Other income (0.1) -0.1% (3.6) -1.2%
Interest expense 1.8 0.7% 1.5 0.5%
Loss before income taxes and
extraordinary gain - unallocated
negative goodwill (18.6) -7.0% (20.6) -6.9%
Income tax benefit (8.5) -3.2% (10.4) -3.5%
Loss before extraordinary gain -
unallocated negative goodwill (10.1) -3.8% (10.2) -3.4%
Extraordinary gain - unallocated
negative goodwill, net
of income taxes - 0.0% 2.5 0.8%
NET LOSS $(10.1) -3.8% $(7.7) -2.6%
Basic and diluted loss per common
share:
Loss per share before extraordinary
gain - unallocated negative goodwill $(0.32) $(0.33)
Extraordinary gain - unallocated
negative goodwill, net of
income taxes - 0.08
Basic and diluted loss per share $(0.32) $(0.25)
Weighted average number of
common shares outstanding - basic
and diluted 31.1 30.8
SELECTED BALANCE SHEET CAPTIONS:
(in millions, except store data)
Cash and cash equivalents
Merchandise inventory
Fixed assets (net)
Accounts payable
Borrowings under line of credit
Long-term debt, less current portion
Stores in operation
Twenty-six Weeks Ended
August 4, % to July 29, % to
2007 Sales 2006 Sales
Sales $553.6 $586.8
Cost of sales 351.3 63.5% 380.1 64.8%
Gross profit 202.3 36.5% 206.7 35.2%
Selling, general and
administrative expenses 215.2 38.8% 225.3 38.4%
Depreciation and amortization 18.4 3.3% 17.7 3.0%
Loss from operations (31.3) -5.6% (36.3) -6.2%
Other income (0.1) 0.0% (4.0) -0.7%
Interest expense 3.2 0.6% 2.4 0.4%
Loss before income taxes and
extraordinary gain - unallocated
negative goodwill (34.4) -6.2% (34.7) -5.9%
Income tax benefit (15.3) -2.7% (16.5) -2.8%
Loss before extraordinary gain -
unallocated negative goodwill (19.1) -3.5% (18.2) -3.1%
Extraordinary gain - unallocated
negative goodwill, net of
income taxes - 0.0% 3.4 0.6%
NET LOSS $(19.1) -3.5% $(14.8) -2.5%
Basic and diluted loss per common
share:
Loss per share before extraordinary
gain - unallocated negative goodwill $(0.62) $(0.59)
Extraordinary gain - unallocated
negative goodwill, net of
income taxes - 0.11
Basic and diluted loss per share $(0.62) $(0.48)
Weighted average number of
common shares outstanding -
basic and diluted 31.0 30.7
SELECTED BALANCE SHEET CAPTIONS: August 4, July 29,
(in millions, except store data) 2007 2006
Cash and cash equivalents $13.3 $18.2
Merchandise inventory 474.8 505.5
Fixed assets (net) 125.8 135.7
Accounts payable 166.5 191.3
Borrowings under line of credit 61.8 40.7
Long-term debt, less current portion 14.4 17.7
Stores in operation 963 1,091
SOURCE:
Trans World Entertainment Corporation
CONTACT:
John J. Sullivan
EVP
Chief Financial Officer of Trans World
Entertainment
+1-518-452-1242
Peter Gau of MWW Group
+1-201-964-2377
pgau@mww.com
