Trans World Entertainment Announces Fourth Quarter And Annual Results

Company reports net income of $8.3 million for fiscal 2013

Announces special cash dividend of $0.50 per share

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Trans World Entertainment Corporation

Mar 06, 2014, 07:30 ET

ALBANY, N.Y., March 6, 2014 /PRNewswire/ -- Trans World Entertainment Corporation (Nasdaq: TWMC) today reported financial results for its fourth quarter and fiscal year ended February 1, 2014.  For the thirteen weeks ended February 1, 2014 ("Fourth Quarter"), the Company reported net income of $12.5 million, or $0.39 per diluted share and for the 52 weeks ended February 1, 2014 ("Fiscal 2013"), the Company reported net income of $8.3 million, or $0.25 per diluted share.  For the fourteen weeks ended February 2, 2013, the Company reported net income of $35.0 million, or $1.09 per diluted share and for the 53 weeks ended February 2, 2013 ("Fiscal 2012"), the Company reported net income of $33.7 million, or $1.06 per diluted share.  Fiscal 2012 results included a one-time gain of $22.8 million from the sale of real property in Miami, Florida.  Excluding the gain, the Company recorded net income of $12.2 million, or $0.38 per diluted share for the fourth quarter, and $10.9 million, or $0.34 per diluted share for Fiscal 2012.    

Comparable store sales for the Fourth Quarter were down 5.3% compared to the same quarter last year.  Total sales for the Fourth Quarter decreased 14.8% to $139.2 million compared to $163.4 million in 2012.  The decrease in sales was due to one less week of business in Fiscal 2013 and a 5.1% decline in average stores in operation to 354 during the Fourth Quarter compared to 373 stores last year.

Gross profit for the Fourth Quarter was $49.4 million, or 35.5% of sales, as compared to $59.8 million, or 36.6%, of sales for the fourth quarter last year.    

Selling, general and administrative expenses ("SG&A expenses") decreased 23.1% for the Fourth Quarter to $35.3 million compared to $45.9 million for the Fourth Quarter last year.    As a percentage of sales, SG&A expenses were 25.4% in the Fourth Quarter compared to 28.1% for the fourth quarter last year.

For Fiscal 2013, comparable store sales were down 5.0% as compared to Fiscal 2012.  Total sales for Fiscal 2013 decreased 14.2% to $393.7 million, compared to $458.5 million for Fiscal 2012.  During Fiscal 2013, the Company operated an average of 354 stores compared to 378 stores in Fiscal 2012, a 6.3% decline.     

Gross profit for Fiscal 2013 was $147.9 million, or 37.6% of sales, compared to $172.1 million, or 37.5%, of sales for Fiscal 2012.  For Fiscal 2013, SG&A expenses decreased 13.6% to $133.8 million compared to $154.8 million in Fiscal 2012.  As a percentage of sales, SG&A expenses were 34.0% in fiscal 2013 compared to 33.8% in Fiscal 2012.

Inventory was $150.2 million at the end of Fiscal 2013, versus $155.4 million at the end of Fiscal 2012, a reduction of 3.4%.  Cash on hand at the end of Fiscal 2013 was $131.0 million, compared to $133.0 million at the end of Fiscal 2012.  During the Fourth Quarter, the Company repurchased approximately 286,000 shares of common stock at an average price of $4.29 per share, for an aggregate purchase price of approximately $1.2 million. In Fiscal 2013, including shares purchased as part of a tender offer, the Company repurchased approximately 1 million shares of common stock for an aggregate purchase price of $5.4 million. The Company has approximately $19.4 million available for purchase under its repurchase program. 

In addition, the Company announced a special cash dividend of $0.50 per common share, payable April 3, 2014, to shareholders of record at the close of business on March 20, 2014. The total special dividend payout is estimated to be $16 million to be paid from cash on hand.

"We are pleased to reward our shareholders with a special dividend. We continue to maintain strong financial flexibility and working capital to fund our growth initiatives," said Robert J. Higgins, Chairman and Chief Executive Officer.

Trans World will host a teleconference call today, Thursday, March 6, 2014, 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, trend, electronics, video games and related products.  The Company operates retail stores in the United States, the District of Columbia 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 and Fourteen Weeks Ended(1)

Fiscal Year Ended (2)

February 1,

% to

February 2,

% to

February 1,

% to

February 2,

% to

2014

Sales

2013

Sales

2014

Sales

2013

Sales








Net sales

$        139,186

$        163,449

$        393,659

$        458,544










Cost of sales

89,825

64.5%

103,699

63.4%

245,755

62.4%

286,422

62.5%

Gross profit

49,361

35.5%

59,750

36.6%

147,904

37.6%

172,122

37.5%








Selling, general and








   administrative expenses

35,284

25.4%

45,861

28.1%

133,801

34.0%

154,789

33.8%








Gain on sale of asset, net

-

0.0%

(22,750)

-13.9%

-

0.0%

(22,750)

-5.0%








Depreciation and amortization

1,015

0.7%

1,010

0.6%

3,728

1.0%

3,783

0.8%

Income from operations

13,062

9.4%

35,629

21.8%

10,375

2.6%

36,300

7.9%








Interest expense, net

480

0.4%

513

0.3%

1,930

0.5%

2,318

0.5%








Income before income taxes

12,582

9.0%

35,116

21.5%

8,445

2.1%

33,982

7.4%

Income tax expense

49

0.0%

107

0.1%

168

0.0%

248

0.1%


















Net income

$          12,533

9.0%

$          35,009

21.4%

$            8,277

2.1%

$          33,734

7.3%








Basic income per common share:


















Basic income per share

$              0.39

$              1.11

$              0.25

$              1.07










Weighted average number of








   common shares outstanding - basic

32,314

31,670

32,584

31,577










Diluted income per common share:


















Diluted income per share

$              0.39

$              1.09

$              0.25

$              1.06










Weighted average number of








   common shares outstanding - diluted

32,541

32,055

32,862

31,878




















SELECTED BALANCE SHEET CAPTIONS:




February 1,

February 2,

(in thousands, except store data)




2014

2013










Cash and cash equivalents




$        131,002

$        132,982

Merchandise inventory




150,167

155,429

Fixed assets (net)




12,419

9,057

Accounts payable




77,647

79,438

Borrowings under line of credit




-

-

Long-term capital lease obligations, less current portion



938

2,004










Stores in operation, end of period




339

358

Stores in operation, average during the period




354

378










(1) - The fourth fiscal quarter ended February 1, 2014 contains 13 weeks.






          The fourth fiscal quarter ended February 2, 2013 contains 14 weeks.
















(2) - The fiscal year ended February 1, 2014 contains 52 weeks.







(2) - The fiscal year ended February 2, 2013 contains 53 weeks.







SOURCE Trans World Entertainment Corporation