ALBANY, N.Y., Aug. 21 /PRNewswire-FirstCall/ -- Trans World Entertainment
Corporation (Nasdaq: TWMC) today announced total sales for the second quarter
ended August 2, 2008 decreased 19% to $215.2 million, compared to $267.3
million in the second quarter of 2007. Average stores in operation during the
quarter were 794 compared to 967 last year, an 18% decline. Comparable store
sales in the second quarter of 2008 decreased 7%. For the second quarter of
2008, the loss before income taxes was $19.6 million compared to a loss before
income taxes of $18.6 million for the same period last year. For the second
quarter of 2008, the net loss was $19.2 million, or $0.62 per share compared
to a net loss of $10.1 million, or $0.32 per share for the same period last
year. The Company recorded an income tax benefit of $0.4 million during the
second quarter of 2008, compared to an income tax benefit of $8.5 million last
year.
"Comp sales increases in DVD and our other category, which includes
electronics, trend and accessories, did not offset a decline in music.
Despite the lower sales, we were able to reduce the borrowings on our line of
credit by $26 million on a year over year basis through management of
inventory and expenses. Our balance sheet remains strong and we are in
position to improve our sales trends during the second half of the year," said
Robert J. Higgins, Chairman and Chief Executive Officer of Trans World
Entertainment.
Gross profit as a percentage of sales for the second quarter of 2008 was
35.3% compared to 36.6% in the second quarter of 2007. The decline in gross
profit as a percentage of sales is due to lower vendor allowances this year.
Despite a 16% reduction in expenses, SG&A as a percentage of sales increased
to 41.4%, compared to 39.5% last year, against the 19% decline in sales.
Sales for the twenty-six week period ended August 2, 2008 decreased 19% to
$447.8 million, compared to $553.6 million in 2007. Comparable store sales for
the twenty-six week period ended August 2, 2008 decreased 7%. For the twenty-
six week period ended August 2, 2008, the loss before income taxes was $31.4
million compared to a loss before income taxes of $34.4 million for the same
period last year. Net loss for the twenty-six week period was $31.1 million
or $1.00 per share versus $19.1 million or $0.59 per share last year.
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
August 2, % to August 4, % to
2008 Sales 2007 Sales
Sales $215.2 $267.3
Cost of sales 139.4 64.7% 169.3 63.4%
Gross profit 75.9 35.3% 98.0 36.6%
Selling, general and
administrative expenses 89.1 41.4% 105.7 39.5%
Depreciation and amortization 5.5 2.6% 9.2 3.5%
Loss from operations (18.7) -8.7% (16.9) -6.4%
Interest expense, net 0.9 0.4% 1.7 0.6%
Loss before income taxes (19.6) -9.1% (18.6) -7.0%
Income tax benefit (0.4) -0.2% (8.5) -3.2%
NET LOSS $(19.2) -8.9% $(10.1) -3.8%
Basic and diluted loss
per common share:
Basic and diluted loss per share $(0.62) $(0.32)
Weighted average number of
common shares outstanding
- basic and diluted 31.2 31.1
STATEMENT OF OPERATIONS:
(in millions, except per share data)
Twenty-six Weeks Ended
August 2, % to August 4, % to
2008 Sales 2007 Sales
Sales $447.8 $553.6
Cost of sales 288.9 64.5% 351.3 63.5%
Gross profit 158.9 35.5% 202.3 36.5%
Selling, general and
administrative expenses 177.4 39.5% 215.2 38.9%
Depreciation and amortization 11.0 2.5% 18.4 3.3%
Loss from operations (29.5) -6.5% (31.3) -5.7%
Interest expense, net 1.9 0.4% 3.1 0.6%
Loss before income taxes (31.4) -6.9% (34.4) -6.3%
Income tax benefit (0.3) 0.0% (15.3) -2.8%
NET LOSS $(31.1) -6.9% $(19.1) -3.5%
Basic and diluted loss per common share:
Basic and diluted loss per share $(1.00) $(0.62)
Weighted average number of
common shares outstanding
- basic and diluted 31.2 31.0
SELECTED BALANCE SHEET CAPTIONS: August 2, August 4,
(in millions, except store data) 2008 2007
Cash and cash equivalents $10.4 $13.3
Merchandise inventory 399.2 474.8
Fixed assets (net) 71.8 125.8
Accounts payable 115.1 166.5
Borrowings under line of credit 35.5 61.8
Long-term debt, less current portion 10.7 14.4
Stores in operation 789 963
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