Exhibit 99.1

 

    Contact:
Trans World Entertainment
John Anderson  
Chief Financial Officer
(518) 452-1242
  Contact:
Financial Relations Board
Marilynn Meek  
(mmeek@frbir.com)
(212) 827-3773
         
38 Corporate Circle        
Albany, NY 12203         
www.twec.com        NEWS RELEASE  

 

 

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

 

Albany, NY, March 6, 2014 -- 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     —

2

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,
2014
   % to
Sales
  February 2,
2013
   % to
Sales
  February 1,
2014
   % to
Sales
  February 2,
2013
   % to
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:
(in thousands, except store data)
  February 1,
2014
   February 2,
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.

3

The following information was filed by Trans World Entertainment Corp (TWMC) on Friday, March 7, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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