Trans World Entertainment Announces Third Quarter Results
Net Loss Reduced By 51%
ALBANY, N.Y., Nov. 15, 2012 /PRNewswire/ -- Trans World Entertainment Corporation (Nasdaq: TWMC) today reported financial results for its third quarter ended October 27, 2012. For the third quarter of 2012, the Company reported a $2.3 million decrease in its net loss to $2.2 million, or a loss of $0.07 per diluted share, compared to a net loss of $4.5 million, or a loss of $0.14 per diluted share, for the same period last year.
Comparable store sales for the quarter were down 2% compared to the same quarter last year. Total sales for the quarter decreased 17% to $91.8 million compared to $110.0 million in 2011. During the quarter, the Company operated an average of 378 stores compared to 440 stores last year, a 14% decline.
"The third quarter marked our 11th consecutive quarter of improved operating results," said Robert J. Higgins, Chairman and Chief Executive Officer of Trans World Entertainment. "We're moving in the right direction and look forward to the remainder of 2012 and beyond."
Gross profit for the quarter was $34.7 million, or 37.9% of sales, as compared to $40.7 million, or 37.0%, of sales for the same period last year. The 90 basis point increase in gross profit as a percentage of sales was due to higher margin rates across the majority of our product categories.
Selling, general and administrative expenses ("SG&A expenses") decreased 18% for the quarter to $35.4 million compared to $43.0 million for the comparable period last year. The reduction in SG&A expenses was due to the closing of underperforming stores and continued effective expense management. As a percentage of sales, SG&A expenses were 38.6% in the quarter compared to 39.1% for the same period last year.
For the thirty-nine weeks ended October 27, 2012, the Company reported a $13.1 million decrease in its net loss to $1.3 million, or a loss of $0.04 per diluted share, compared to a net loss of $14.3 million, or a loss of $0.46 per diluted share, for the same period last year. For the thirty-nine weeks ended October 27, 2012, comparable store sales were flat as compared to last year. Total sales for the thirty-nine weeks ended October 27, 2012 decreased 16% to $295.1 million, compared to $349.5 million for the same period in 2011.
Gross profit for the thirty-nine weeks ended October 27, 2012 was $112.4 million, or 38.1% of sales, compared to $128.9 million, or 36.9%, of sales for the same period last year. For the thirty-nine weeks ended October 27, 2012, SG&A expenses decreased 20% to $108.9 million compared to $136.1 million in the comparable period last year. As a percentage of sales, SG&A expenses improved by 200 basis points to 36.9% from 38.9% for the same period last year.
Cash on hand at the end of the quarter was $59.9 million, compared to $19.0 million at the end of the third quarter last year. The Company did not require any borrowings under its line of credit at any point during fiscal 2012 and fiscal 2011. Inventory was $178.3 million at the end of the quarter, versus $223.5 million at the end of the third quarter last year, a reduction of 20%.
Trans World will host a teleconference call today, Thursday, November 15, 2012, 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 products, including video, music, electronics, trend, 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, and www.secondspin.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.
— table to follow —
| TRANS WORLD ENTERTAINMENT CORPORATION |
|||||||||
| Financial Results |
|||||||||
| STATEMENTS OF OPERATIONS: |
|||||||||
| (in thousands, except per share data) |
|||||||||
| Thirteen Weeks Ended |
Thirty-nine Weeks Ended |
||||||||
| October 27, |
% to |
October 29, |
% to |
October 27, |
% to |
October 29, |
% to |
||
| 2012 |
Sales |
2011 |
Sales |
2012 |
Sales |
2011 |
Sales |
||
| Net sales |
$ 91,769 |
$ 109,996 |
$ 295,094 |
$ 349,483 |
|||||
| Cost of sales |
57,032 |
62.1% |
69,344 |
63.0% |
182,724 |
61.9% |
220,550 |
63.1% |
|
| Gross profit |
34,737 |
37.9% |
40,652 |
37.0% |
112,370 |
38.1% |
128,933 |
36.9% |
|
| Selling, general and |
|||||||||
| administrative expenses |
35,417 |
38.6% |
43,049 |
39.1% |
108,928 |
36.9% |
136,112 |
38.9% |
|
| Depreciation and amortization |
948 |
1.0% |
1,345 |
1.2% |
2,774 |
0.9% |
4,666 |
1.3% |
|
| Income (loss) from operations |
(1,628) |
-1.7% |
(3,742) |
-3.4% |
668 |
0.2% |
(11,845) |
-3.4% |
|
| Interest expense, net |
513 |
0.6% |
774 |
0.7% |
1,805 |
0.6% |
2,399 |
0.7% |
|
| Income (loss) before income taxes |
(2,141) |
-2.3% |
(4,516) |
-4.1% |
(1,137) |
-0.4% |
(14,244) |
-4.1% |
|
| Income tax expense (benefit) |
47 |
0.1% |
(5) |
0.0% |
141 |
0.0% |
90 |
0.0% |
|
| Net income (loss) |
$ (2,188) |
-2.4% |
$ (4,511) |
-4.1% |
$ (1,278) |
-0.4% |
$ (14,334) |
-4.1% |
|
| Basic income (loss) per common share: |
|||||||||
| Basic income (loss) per share |
$ (0.07) |
$ (0.14) |
$ (0.04) |
$ (0.46) |
|||||
| Weighted average number of |
|||||||||
| common shares outstanding - basic |
31,555 |
31,454 |
31,543 |
31,445 |
|||||
| Diluted income (loss) per common share: |
|||||||||
| Diluted income (loss) per share |
$ (0.07) |
$ (0.14) |
$ (0.04) |
$ (0.46) |
|||||
| Weighted average number of |
|||||||||
| common shares outstanding - diluted |
31,555 |
31,454 |
31,543 |
31,445 |
|||||
| SELECTED BALANCE SHEET CAPTIONS: |
October 27, |
October 29, |
|||||||
| (in thousands, except store data) |
2012 |
2011 |
|||||||
| Cash and cash equivalents |
$ 59,931 |
$ 19,017 |
|||||||
| Merchandise inventory |
178,332 |
223,528 |
|||||||
| Fixed assets (net) |
15,264 |
17,968 |
|||||||
| Accounts payable |
65,002 |
78,539 |
|||||||
| Borrowings under line of credit |
- |
- |
|||||||
| Long-term debt, less current portion |
2,250 |
4,399 |
|||||||
| Stores in operation, end of period |
376 |
440 |
|||||||
SOURCE Trans World Entertainment Corporation
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