Trans World Entertainment Reports Earnings For The Second uarter
ALBANY, N.Y.--(BUSINESS WIRE)--Aug. 11, 1999--
Net Income Increases 58%
Trans World Entertainment Corporation (Nasdaq National Market: TWMC) today announced
results for its second quarter and 26-week period ended July 31, 1999.
Net income for the second quarter was $5.7 million, or $0.11 per diluted share,
compared to net income of $3.6 million, or $0.07 per diluted share, in the second quarter
of 1998.
Total sales for the second quarter increased 6% to $277.3 million from $262.6 million
in the second quarter of 1998. Comparable store sales were flat for the quarter.
Comparable store sales included results from recently acquired Camelot Music stores,
which were down 5% from the second quarter a year ago. Excluding Camelot stores,
comparable store sales increased 5%.
Robert J. Higgins, Chairman, President and Chief Executive Officer of Trans World
Entertainment, said, "In the second quarter, we began the process of integrating the
Camelot stores into the Trans World store portfolio. Similar to the successful approach
of integrating Strawberries in 1997, we are improving in-store inventory positions with a
mix of product that are successful throughout our core retail stores. We believe the
Company will begin to realize stronger sales from the Camelot stores in the third
quarter."
Gross profit, as a percentage of sales, improved to 37.0% in the second quarter of
1999 from 36.5% in 1998. For the quarter,rther progress in providing our Internet
customers with enhanced entertainment content on our Internet site, www.twec.com."
Significant actions taken in the second quarter in reg selling, general and
administrative expenses, as a percentage of sales, decreased to 30.0% from 31.1% a year
ago.
Mr. Higgins, continued, "In the second quarter, we also made fuard to the Company's
Internet strategy, include:
-- Secured a position as the charter music retailer of
RealNetworks' shopping section of RealGuide
-- Purchased approximately 20% of Woodstock Broadcasting
Network Corp., a privately-held company offering a streaming
RealAudio Internet radio station that can be listened to
free of charge, 24 hours a day on www.twec.com
-- Gained international distribution through a partnership with
GlobalFulfillment.com
-- Added new exclusive "live chat" programs with top artists
Mr. Higgins, concluded, "In the second half of 1999, Trans World will pioneer digital
downloading in retail stores by rolling out our program with Digital-On-Demand in select
New York and Los Angeles store locations. We believe that this program combined with our
marketing plans for the Internet and for our retail stores will position us well for the
upcoming holiday selling season."
For the 26-week period ended July 31, 1999, the Company reported a net loss of $(2.9)
million, or $(0.06) per diluted share, compared to net income of $5.7 million, or $0.11
per share in the comparable period of 1998. Results in 1999 reflect a pre-tax charge of
$25.7 million related to the Camelot merger.
Total sales increased 10% to $564.3 million in 1999 compared to $513.9 million in
1998. Comparable store sales for the 26-week period increased 2%. Comparable store sales
included results from Camelot Music stores, which were down 3% from last year. Excluding
Camelot stores, comparable store sales increased 5%.
Trans World Entertainment is a leading specialty retailer of music and video products.
The Company operates retail stores in 44 states, the District of Columbia, the U.S.
Virgin Islands, Puerto Rico and an e-commerce site, www.twec.com. Mall locations include
Record Town, Camelot, The Wall, Saturday Matinee and F.Y.E. Freestanding locations
include Coconuts Music and Movies, Strawberries Music, Spec's and Planet Music.
Certain statements in this report 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
INCOME STATEMENTS:
(in millions, except earnings per share)
Thirteen Weeks Ended
July 31, % to Aug 1, % to
1999 Sales 1998 Sales
--------- --------- ---------- --------
Sales $277.3 100.0% $262.6 100.0%
Cost of sales 174.7 63.0% 166.8 63.5%
--------- --------- ---------- --------
Gross profit 102.6 37.0% 95.8 36.5%
Selling, general and
administrative expenses 83.3 30.0% 81.6 31.1%
Costs related to the
Camelot merger -- -- -- --
Depreciation and
amortization 9.0 3.2% 7.8 3.0%
--------- --------- ---------- --------
Income (loss) from
operations 10.3 3.8% 6.4 2.4%
Interest expense 0.5 0.2% 0.4 0.1%
--------- --------- ---------- --------
Income (loss) before
income taxes 9.8 3.6% 6.0 2.3%
Income tax expense (benefit) 4.1 1.5% 2.4 0.9%
--------- --------- ---------- --------
NET INCOME (LOSS) $ 5.7 2.1% $ 3.6 1.4%
========= ========= ========== ========
Basic earnings (loss) per
common share:
Earnings (loss) per share $0.11 $0.07
========= ==========
Weighted average number of
Common shares outstanding 52.2 51.7
========= ==========
Diluted earnings (loss) per common
share:
Earnings (loss) per share $0.11 $0.07
========= ==========
Weighted average number of
Common shares outstanding 53.6 54.5
========= ==========
Twenty-Six Weeks Ended
July 31 % to Aug 1, % to
1999 Sales 1998 Sales
--------- ---------- --------- ---------
Sales $564.3 100.0% $513.9 100.0%
Cost of sales 356.8 63.2% 327.7 63.8%
--------- ---------- --------- ---------
Gross profit 207.5 36.8% 186.2 36.2%
Selling, general and
administrative expenes 168.5 29.8% 160.0 31.1%
Costs related to the
Camelot merger 25.7 4.6% -- --
Depreciation and
amortization 17.5 3.1% 14.5 2.8%
--------- ---------- --------- ---------
Income (loss) from
operations (4.2) -0.7% 11.7 2.3%
Interest expense 0.9 0.2% 0.8 0.2%
--------- ---------- --------- ---------
Income (loss) before
income taxes (5.1) -0.9% 10.9 2.1%
Income tax expense (benefit) (2.2) -0.4% 5.2 1.0%
--------- ---------- --------- ---------
NET INCOME (LOSS) $ (2.9) -0.5% $ 5.7 1.1%
========= ========== ========= =========
Basic earnings (loss) per
common share:
Earnings (loss) per share $(0.06) $0.11
========= =========
Weighted average number of
Common shares outstanding 52.1 50.3
========= =========
Diluted earnings (loss) per
common share:
Earnings (loss)per share $(0.06) $0.11
========= =========
Weighted average number of
Common shares outstanding 52.1 53.0
========= =========
SELECTED BALANCE SHEET CAPTIONS:
(in millions, except store data)
Cash and cash equivalents $83.8 $32.5
Merchandise inventory 398.7 374.2
Fixed assets (net) 136.7 135.2
Accounts payable 206.2 177.3
Long-term debt, less current portion 19.4 37.1
Shareholders' equity 436.2 368.0
Stores in operation 969 980
CONTACT: John Sullivan
Chief Financial Officer
(518) 452-1242 ext. 7400
or
THE MWW GROUP
Media Relations:
Matt Rose (mrose@mww.com)
Investor Relations:
Robert Ferris (rferris@mww.com)
Tel. (201) 507-9500
16:06 EDT AUGUST 11, 1999 |
