Exhibit 99.1

 

  Contact:
Trans World Entertainment
John Anderson
Chief Financial Officer
  Contact:
Financial Relations Board
Marilynn Meek
(mmeek@frbir.com)
    (518) 452-1242   (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 $11.7 million for the Fourth Quarter

 

Albany, NY, March 5, 2015 -- Trans World Entertainment Corporation (Nasdaq: TWMC) today reported financial results for its fourth quarter and fiscal year ended January 31, 2015. For the thirteen weeks ended January 31, 2015 (“Fourth Quarter”), the Company reported net income of $11.7 million, or $0.37 per diluted share as compared to a net income of $12.5 million, or $0.39 per diluted share, for the same period last year. Comparable store sales for the Fourth Quarter were flat compared to the same quarter last year.

 

“There were several highlights for the quarter,” commented Mike Feurer, Company CEO. “Our flat comp sales were driven by the combined trend and electronics categories, which delivered a comparable store increase of over 21% and represented over 30% of the total sales volume. While there is much work to be done, the flat comp represents our best fourth quarter comp performance in a number of years. In addition to the sales performance, we improved our gross margin 120 basis points and reduced our year-end inventory investment by $23.8 million or 15.8% from the prior year,” Mr. Feurer added.

 

Total sales for the Fourth Quarter decreased 8.8% to $126.9 million compared to $139.2 million in 2013. At the end of the quarter, the Company operated 310 stores compared to 339 stores last year, a decline of 8.6%.

 

Gross profit for the Fourth Quarter was $46.6 million, or 36.7% of sales, as compared to $49.4 million, or 35.5%, of sales for the fourth quarter last year. The increase in gross profit as a percentage of sales was primarily due to increased margin rate in the majority of our categories.

 

Selling, general and administrative expenses (“SG&A expenses”) decreased 6.3% for the Fourth Quarter to $33.1 million compared to $35.3 million for the same period last year. As a percentage of sales, SG&A expenses were 26.0% in the Fourth Quarter compared to 25.4% for the fourth quarter last year.

 

For the 52 weeks ended January 31, 2015 (“Fiscal 2014”), the Company reported net income of $1.8 million, or $0.06 per diluted share, as compared to net income of $8.3 million, or $0.25 per diluted share for the 52 weeks ended February 1, 2014 (“Fiscal 2013”).

 

For Fiscal 2014, comparable store sales were down 1.0% as compared to Fiscal 2013. Total sales for Fiscal 2014 decreased 8.9% to $358.5 million, compared to $393.7 million for Fiscal 2013. During Fiscal 2014, the Company operated an average of 329 stores compared to 354 stores in Fiscal 2013, a reduction of 7.1%.

 

Gross profit for Fiscal 2014 was $135.9 million, or 37.9% of sales, compared to $147.9 million, or 37.6%, of sales for Fiscal 2013. For Fiscal 2014, SG&A expenses decreased 4.2% to $128.2 million compared to $133.8 million in Fiscal 2013. As a percentage of sales, SG&A expenses were 35.8% in fiscal 2014 compared to 34.0% in Fiscal 2013.

 

Inventory was $126.4 million, or $70 per square foot, at the end of Fiscal 2014, versus $150.2 million, or $74 per square foot, at the end of Fiscal 2013. Cash on hand at the end of Fiscal 2014 was $118.5 million, compared to $131.0 million at the end of Fiscal 2013.

 

“Our focus on inventory management continues to help drive our cash flow from operations.” Mr. Feurer added. “We have returned approximately $20 million to our shareholders over the last 12 months through the payment of a special dividend and the repurchase of Company shares.”

 

During the Fourth Quarter, the Company repurchased 297,349 shares of common stock at an average price of $3.33 per share. Since the inception of the program, the Company has repurchased 1,573,818 shares of common stock at an average price of $3.86 per share. The Company has approximately $16.0 million available for purchase under its repurchase program.

 

Trans World will host a teleconference call today, Thursday, March 5, 2015, 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   Fiscal Year Ended 
   January 31,   % to   February 1,   % to   January 31,   % to   February 1,   % to 
   2015   Sales   2014   Sales   2015   Sales   2014   Sales 
                                         
Net sales  $126,910        $139,186        $358,490        $393,659      
                                         
Cost of sales   80,350    63.3%   89,825    64.5%   222,572    62.1%   245,755    62.4%
Gross profit   46,560    36.7%   49,361    35.5%   135,918    37.9%   147,904    37.6%
                                         
Selling, general and administrative expenses   33,058    26.0%   35,284    25.4%   128,237    35.8%   133,801    34.0%
                                         
Depreciation and amortization   1,313    1.0%   1,015    0.7%   3,906    1.0%   3,728    1.0%
Income from operations   12,189    9.7%   13,062    9.4%   3,775    1.1%   10,375    2.6%
                                         
Interest expense, net   452    0.4%   480    0.4%   1,881    0.5%   1,930    0.5%
                                         
Income before income taxes   11,737    9.2%   12,582    9.0%   1,894    0.5%   8,445    2.1%
Income tax expense       0.1%   49    0.0%   116    0.0%   168    0.0%
                                         
Net income  $11,737    9.2%  $12,533    9.0%  $1,778    0.5%  $8,277    2.1%
                                         
Basic income per common share:                                        
                                         
Basic income per share  $0.37        $0.39        $0.06        $0.25      
                                         
Weighted average number of common shares outstanding - basic   31,431         32,314         31,744         32,584      
                                         
Diluted income per common share:                                        
                                         
Diluted income per share  $0.37        $0.39        $0.06        $0.25      
                                         
Weighted average number of common shares outstanding - diluted   31,542         32,541         31,897         32,862      

 

SELECTED BALANCE SHEET CAPTIONS:             January 31,        February 1,      
(in thousands, except store data)             2015        2014      
                                         
Cash and cash equivalents                      $118,537        $131,002      
Merchandise inventory                       126,378         150,167      
Fixed assets (net)                       15,769         11,592      
Accounts payable                       63,527         77,625      
Borrowings under line of credit                              
Long-term capital lease obligations, less current portion              938      
                                         
Stores in operation, end of period          310         339      
Stores in operation, average during the period          329         354      
3

The following information was filed by Trans World Entertainment Corp (TWMC) on Friday, March 6, 2015 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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