ALBANY, N.Y., May 19, 2016 (GLOBE NEWSWIRE) -- Trans World Entertainment Corporation (Nasdaq:TWMC) today reported financial results for its first quarter ended April 30, 2016.
“The quarter was highlighted by the continued positive response by our customers to changes in our merchandise assortment and presentation,” commented Mike Feurer, Company CEO. “We delivered a flat comp for the fourth consecutive quarter despite the continued significant disruption in our media categories. In addition, we generated historically high gross margins through better price management and the shift in sales contribution to our higher margin trend category. While there is still work to be done, our progress validates we are successfully leveraging our heritage, industry relationships and hard earned credibility with our customers to achieve our vision,” Mr. Feurer added.
First Quarter Overview
- For the first quarter of 2016, the Company reported net income of $27 thousand, or $0.00 per diluted share, compared to a net income of $194 thousand, or $0.01 per diluted share, for the same period last year.
- Comparable store sales for the first quarter were flat compared to the same quarter last year. Total revenue for the quarter decreased 4.3% to $75.7 million compared to $79.2 million for the same period last year. At the end of the quarter, the Company operated 290 stores compared to 310 stores last year, a 6.5% decline.
- Gross profit for the quarter was $30.8 million, or 40.7% of revenue, compared to $32.0 million, or 40.4%, of revenue for the same period last year. The increase in gross profit as a percentage of revenue was due to the increased revenue contribution from the higher margin trend category and increases across all of our merchandise categories.
- Selling, general and administrative (“SG&A”) expenses decreased $0.3 million for the quarter to $30.1 million, or 39.7% of sales, compared to $30.4 million, or 38.4% of sales, for the same period last year. The increase in SG&A as a percentage of sales is primarily due to a 90 basis point increase in health care costs.
- Other income primarily consisted of a one-time gain of $0.8 million from the sale of an investment.
- Included in operating results is the impact of a new lease for the Company’s distribution facility and corporate offices. The new lease reduces annual payments by $1 million. The new lease is accounted for as an operating lease with the distribution facility portion increasing cost of sales by $0.2 million, or 30 basis points, and corporate office portion increasing SG&A expenses by $0.1 million or 10 basis points. The previous lease was accounted for as a capital lease with the payment recorded as interest expense and a reduction of short-term debt.
- Inventory was $116.6 million, or $70 per square foot, at the end of the quarter, versus $121.6 million, or $68 per square foot, at the end of the first quarter last year. The increase in inventory per square foot is in-line with our strategy of shifting our mix to higher margin categories.
- Cash on hand at the end of the quarter was $91 million, compared to $103 million at the end of the first quarter last year. The decline was due to the repurchase of shares and investments in new and remodeled stores, the chain wide rollout of new marketplace fixtures to support the shift in our merchandise assortment and technology enhancements.
- During the first quarter, the Company repurchased 676,000 shares of common stock at an average price of $3.85 per share. Since the inception of the program, the Company has repurchased approximately 2.5 million shares of common stock at an average price of $3.82 per share. The Company has approximately $12.2 million dollars available for purchase under its repurchase program.
Trans World will host a teleconference call today, Thursday, May 19, 2016, at 10:00 AM ET to discuss its financial results. Interested parties can listen to the simultaneous webcast on the Company's corporate website, www.twec.com.
Trans World Entertainment is a leading specialty retailer of entertainment products, including video, music, trend, electronics, video games and related products. The Company operates retail stores in the United States and Puerto Rico, primarily under the names f.y.e. for your entertainment and Suncoast and on the web at www.fye.com and www.secondspin.com.
Certain statements in this release set forth management's intentions, plans, beliefs, expectations or predictions of the future based on current facts and analyses. Actual results may differ materially from those indicated in such statements. Additional information on factors that may affect the business and financial results of the Company can be found in filings of the Company with the Securities and Exchange Commission.
|TRANS WORLD ENTERTAINMENT CORPORATION|
|STATEMENTS OF OPERATIONS:|
|(in thousands, except per share data)|
|Fiscal Quarter Ended|
|April 30,||% to||May 2,||% to|
|Cost of sales||44,904||59.3||%||47,161||59.6||%|
|Selling, general and|
|Depreciation and amortization||1,463||1.9||%||964||1.2||%|
|Income from operations||(685||)||-0.9||%||676||0.9||%|
|Income before income taxes||74||0.1||%||238||0.3||%|
|Income tax expense||47||0.1||%||44||0.1||%|
|Basic Income per common share:|
|Basic Income per share||$||0.00||$||0.01|
|Weighted average number of|
|common shares outstanding - basic||30,761||31,208|
|Diluted Income per common share:|
|Diluted Income per share||$||0.00||$||0.01|
|Weighted average number of|
|common shares outstanding - diluted||30,930||31,371|
|SELECTED BALANCE SHEET CAPTIONS:||April 30,||May 2,|
|(in thousands, except store data)||2016||2015|
|Cash and cash equivalents||$||90,856||$||102,539|
|Fixed assets, net||33,198||18,026|
|Borrowings under line of credit||-||-|
|Stores in operation, end of period||290||310|
|Average stores in operation, end of period||295||311|
Contact: Trans World Entertainment John Anderson Chief Financial Officer (518) 452-1242 Financial Relations Board Marilynn Meek (firstname.lastname@example.org) (212) 827-3773
Source:Trans World Entertainment Corp