Trans World Entertainment Announces Second Quarter 2010 Results
ALBANY, N.Y., Aug. 19 /PRNewswire-FirstCall/ -- Trans World Entertainment Corporation (Nasdaq: TWMC) today announced total net sales for the second quarter ended July 31, 2010 decreased 18% to $135.8 million, compared to $165.7 million in the second quarter of 2009. Average stores in operation during the quarter were 543 compared to 705 last year, a 23% decline. Comparable store sales in the second quarter of 2010 decreased 2%. For the second quarter of 2010, the net loss was $15.8 million, or $0.50 per share compared to a net loss of $17.8 million, or $0.57 per share for the same period last year.
Gross profit as a percentage of sales for the second quarter of 2010 was 33.7% compared to 35.5% in the second quarter of 2009. The decrease in gross profit as a percentage of sales was due to lower vendor allowances and higher clearance markdowns. Selling, general and administrative expenses for the quarter were $57.8 million, a 20% reduction from $72.1 million in the comparable period last year. SG&A expenses were 42.5% of sales versus 43.5% of sales for the same period last year.
Total net sales for the twenty-six week period ended July 31, 2010 decreased 18% to $292.3 million, compared to $357.2 million in 2009. Comparable store sales for the twenty-six week period ended July 31, 2010 decreased 2%. Net loss for the twenty-six week period was $27.2 million or $0.87 per share versus $31.5 million or $1.00 per share last year.
The Company had a cash balance of $10.5 million and no borrowings outstanding on its credit facility at the end of the quarter as compared to a cash balance of $7.1 million and outstanding borrowings of $28.3 million last year. Inventory was $237.1 million, or $67 per square foot, at the end of the quarter versus $320.4 million or $72 per square foot for the same period 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 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. www.twec.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 |
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STATEMENTS OF OPERATIONS: |
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(in thousands, except per share data) |
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Thirteen Weeks Ended |
Twenty-six Weeks Ended |
|||||||||
July 31, |
% to |
August 1, |
% to |
July 31, |
% to |
August 1, |
% to |
|||
2010 |
Sales |
2009 |
Sales |
2010 |
Sales |
2009 |
Sales |
|||
Net sales |
$ 135,804 |
$ 165,746 |
$ 292,342 |
$ 357,179 |
||||||
Cost of sales |
90,075 |
66.3% |
106,976 |
64.5% |
195,089 |
66.7% |
232,658 |
65.1% |
||
Gross profit |
45,729 |
33.7% |
58,770 |
35.5% |
97,253 |
33.3% |
124,521 |
34.9% |
||
Selling, general and |
||||||||||
administrative expenses |
57,766 |
42.5% |
72,114 |
43.5% |
117,081 |
40.0% |
147,812 |
41.3% |
||
Depreciation and amortization |
2,788 |
2.1% |
3,653 |
2.3% |
5,651 |
2.0% |
7,314 |
2.0% |
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Loss from operations |
(14,825) |
-10.9% |
(16,997) |
-10.3% |
(25,479) |
-8.7% |
(30,605) |
-8.5% |
||
Interest expense, net |
815 |
0.6% |
684 |
0.4% |
1,504 |
0.5% |
1,387 |
0.4% |
||
Loss before income taxes |
(15,640) |
-11.5% |
(17,681) |
-10.7% |
(26,983) |
-9.2% |
(31,992) |
-8.9% |
||
Income tax expense (benefit) |
141 |
0.1% |
74 |
0.0% |
215 |
0.1% |
(499) |
0.0% |
||
Net loss |
$ (15,781) |
-11.6% |
$ (17,755) |
-10.7% |
$ (27,198) |
-9.3% |
$ (31,493) |
-8.9% |
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Basic and diluted loss per common share: |
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Basic and diluted loss per share |
$ (0.50) |
$ (0.57) |
$ (0.87) |
$ (1.00) |
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Weighted average number of |
||||||||||
common shares outstanding - basic and diluted |
31,424 |
31,394 |
31,409 |
31,345 |
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SELECTED BALANCE SHEET CAPTIONS: |
July 31, |
August 1, |
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(in thousands, except store data) |
2010 |
2009 |
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Cash and cash equivalents |
$ 10,505 |
$ 7,138 |
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Merchandise inventory |
237,141 |
320,413 |
||||||||
Fixed assets (net) |
29,074 |
44,458 |
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Accounts payable |
69,233 |
94,675 |
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Borrowings under line of credit |
- |
28,328 |
||||||||
Long-term debt, less current portion |
6,208 |
7,506 |
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Stores in operation |
534 |
697 |
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SOURCE Trans World Entertainment
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