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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Trans World Entertainment | NASDAQ:TWMC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8.35 | 7.55 | 8.83 | 0 | 01:00:00 |
“For the fye segment, comparable store sales increased 2.8% with an improvement in gross margin. This marked the second consecutive quarter of positive comp sales. Our customers continue to respond positively to the changes in our merchandise assortment and presentation that were made to counter declining mall traffic and the ongoing declines in physical media,” commented Mike Feurer, Company CEO. “For etailz, in response to the decline in operating results, we’ve engaged outside support and initiated certain strategic changes to create operational efficiencies directed towards improving the etailz segment’s performance and cash flow. We remain confident in the underlying opportunity afforded by etailz as a top marketplace retailer and service provider,” concluded Mr. Feurer.
During the Fourth Quarter, etailz initiated cost savings steps to support operating model changes and a leaner organization that is better aligned with our future business focus. As part of such initiatives, an approximately 30% reduction in force was implemented during the Fourth Quarter, in addition to changes in senior management. Additional reductions included expenses related to technology and employee benefits. The annualized impact of these cost savings initiatives is expected to be approximately $4.5 million.
In addition, the Company has reduced its vendor portfolio in an effort to improve profitability, including rationalizing unprofitable vendors and renegotiating vendor terms to enhance gross margins and supply chain efficiencies.
As a result of the decline in operating results, the Company recorded a non-cash impairment charge on certain fixed assets, intangible assets, and goodwill of $59.7 million, including $57.7 million related to etailz.
Fourth Quarter Overview - Consolidated
Fiscal 2018 Overview - Consolidated
Segment Highlights
Thirteen and FourteenWeeks Ended (1) | Fiscal Year Ended (2) | ||||||||||||
(amounts in thousands) | February 2, 2019 | February 3, 2018 | February 2, 2019 | February 3, 2018 | |||||||||
Total Revenue | |||||||||||||
fye | $ | 78,817 | $ | 92,391 | $ | 231,290 | $ | 268,397 | |||||
etailz | 48,612 | 53,018 | 186,900 | 174,459 | |||||||||
Total Company | $ | 127,429 | $ | 145,409 | $ | 418,190 | $ | 442,856 | |||||
Gross Profit | |||||||||||||
fye | $ | 28,077 | $ | 30,912 | $ | 89,259 | $ | 104,254 | |||||
etailz | 9,209 | 9,875 | 39,275 | 39,589 | |||||||||
Total Company | $ | 37,286 | $ | 40,787 | $ | 128,534 | $ | 143,843 | |||||
SG&A | |||||||||||||
fye | $ | 27,929 | $ | 30,873 | $ | 107,141 | $ | 114,982 | |||||
etailz | 11,608 | 11,498 | 45,144 | 38,462 | |||||||||
Total Company | $ | 39,537 | $ | 42,371 | $ | 152,285 | $ | 153,444 | |||||
Loss From Operations | |||||||||||||
fye | $ | (2,961 | ) | $ | (31,551 | ) | $ | (24,455 | ) | $ | (49,261 | ) | |
etailz | (62,085 | ) | (1,174 | ) | (71,891 | ) | (2,140 | ) | |||||
Total Company | $ | (65,046 | ) | $ | (32,725 | ) | $ | (96,346 | ) | $ | (51,401 | ) | |
Reconciliation of fye Loss From Operations to fye Adjusted Loss From Operations | |||||||||||||
fye Loss From Operations | $ | (2,961 | ) | $ | (31,551 | ) | $ | (24,455 | ) | $ | (49,261 | ) | |
Asset impairment charges | 1,946 | 29,107 | 1,946 | 29,107 | |||||||||
fye Adjusted Loss From Operations | $ | (1,015 | ) | $ | (2,444 | ) | $ | (22,509 | ) | $ | (20,154 | ) | |
Reconciliation of etailz Loss From Operations to etailz Adjusted Loss From Operations | |||||||||||||
etailz Loss From Operations | $ | (62,085 | ) | $ | (1,174 | ) | $ | (71,891 | ) | $ | (2,140 | ) | |
Acquisition related amortization expense | 974 | 966 | 3,890 | 3,871 | |||||||||
Acquisition related compensation expense, net of contingency benefit | 831 | (726 | ) | 3,821 | 982 | ||||||||
Asset impairment charges | 57,712 | - | 57,712 | - | |||||||||
etailz Adjusted (Loss) Income From Operations | $ | (2,568 | ) | $ | (934 | ) | $ | (6,468 | ) | $ | 2,713 | ||
(1) The fourth fiscal quarter ended February 2, 2019 contains 13 weeks. | |||||||||||||
The fourth fiscal quarter ended February 3, 2018 contains 14 weeks. | |||||||||||||
(2) The fiscal year ended February 2, 2019 contains 52 weeks. | |||||||||||||
The fiscal year ended February 3, 2018 contains 53 weeks. |
Fourth Quarter Overview - etailz
Fiscal 2018 Overview – etailz
Fourth Quarter Overview – fye
Fiscal 2018 Overview – fye
Trans World will host a teleconference call today, Thursday, March 28, 2019, 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 CORPORATION | ||||||||||||||||||||||
Financial Results | ||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS: | ||||||||||||||||||||||
(in thousands, except per share data) | Thirteen and Fourteen Weeks Ended (1) | |||||||||||||||||||||
Fiscal Year Ended (2) | ||||||||||||||||||||||
February 2, | % to | February 3, | % to | February 2, | % to | February 3, | % to | |||||||||||||||
2019 | Revenue | 2018 | Revenue | 2019 | Revenue | 2018 | Revenue | |||||||||||||||
Net sales | $ | 125,849 | $ | 143,690 | $ | 412,997 | $ | 437,173 | ||||||||||||||
Other revenue | 1,580 | 1,719 | 5,193 | 5,683 | ||||||||||||||||||
Total revenue | $ | 127,429 | $ | 145,409 | $ | 418,190 | $ | 442,856 | ||||||||||||||
Cost of sales | 90,143 | 70.7 | % | 104,622 | 72.0 | % | 289,656 | 69.3 | % | 299,013 | 67.5 | % | ||||||||||
Gross profit | 37,286 | 29.3 | % | 40,787 | 28.0 | % | 128,534 | 30.7 | % | 143,843 | 32.5 | % | ||||||||||
Selling, general and | ||||||||||||||||||||||
administrative expenses | 39,537 | 31.0 | % | 42,371 | 29.1 | % | 152,285 | 36.4 | % | 153,446 | 34.6 | % | ||||||||||
Income from joint venture | - | 0.0 | % | (749 | ) | -0.5 | % | - | 0.0 | % | (1,787 | ) | -0.4 | % | ||||||||
Acquisition related compensation expense (benefit), net of contingency benefit | 831 | 0.7 | % | (726 | ) | -0.5 | % | 3,821 | 0.9 | % | 982 | 0.2 | % | |||||||||
Asset impairment charges | 59,658 | 46.8 | % | 29,107 | 20.0 | % | 59,658 | 14.3 | % | 29,107 | 6.6 | % | ||||||||||
Depreciation and amortization expenses | 2,306 | 1.8 | % | 3,509 | 2.4 | % | 9,116 | 2.2 | % | 13,496 | 3.0 | % | ||||||||||
Loss from operations | (65,046 | ) | -51.0 | % | (32,725 | ) | -22.5 | % | (96,346 | ) | -23.0 | % | (51,401 | ) | -11.6 | % | ||||||
Interest expense | 279 | 0.2 | % | 132 | 0.1 | % | 723 | 0.2 | % | 332 | 0.1 | % | ||||||||||
Gain on insurance proceeds | - | - | 0.0 | % | - | 0.0 | % | (8,733 | ) | -2.0 | % | |||||||||||
Other income | (56 | ) | 0.0 | % | (57 | ) | 0.0 | % | (227 | ) | -0.1 | % | (148 | ) | 0.0 | % | ||||||
Loss before income taxes | (65,269 | ) | -51.2 | % | (32,800 | ) | -22.6 | % | (96,842 | ) | -23.2 | % | (42,852 | ) | -9.7 | % | ||||||
Income tax expense (benefit) | (56 | ) | 0.0 | % | (332 | ) | -0.2 | % | 80 | 0.0 | % | (299 | ) | -0.1 | % | |||||||
Net loss | $ | (65,213 | ) | -51.2 | % | $ | (32,468 | ) | -22.3 | % | $ | (96,922 | ) | -23.2 | % | $ | (42,553 | ) | -9.6 | % | ||
Basic and diluted loss per common share: | ||||||||||||||||||||||
Basic and diluted loss per share | $ | (1.80 | ) | $ | (0.90 | ) | $ | (2.67 | ) | $ | (1.18 | ) | ||||||||||
Weighted average number of | ||||||||||||||||||||||
common shares outstanding - basic and diluted | 36,322 | 36,212 | 36,286 | 36,191 | ||||||||||||||||||
SELECTED BALANCE SHEET CAPTIONS: | February 2, | February 3, | ||||||||||||||||||||
(in thousands, except store data) | 2019 | 2018 | ||||||||||||||||||||
Cash and cash equivalents | $ | 4,355 | $ | 31,326 | ||||||||||||||||||
Merchandise inventory | 95,302 | 109,377 | ||||||||||||||||||||
Fixed assets (net) | 6,684 | 13,546 | ||||||||||||||||||||
Accounts payable | 35,420 | 41,780 | ||||||||||||||||||||
Borrowings under line of credit | - | - | ||||||||||||||||||||
Stores in operation, end of period | 210 | 260 | ||||||||||||||||||||
(1) The fourth fiscal quarter ended February 2, 2019 contains 13 weeks. | ||||||||||||||||||||||
The fourth fiscal quarter ended February 3, 2018 contains 14 weeks. | ||||||||||||||||||||||
(2) The fiscal year ended February 2, 2019 contains 52 weeks. | ||||||||||||||||||||||
The fiscal year ended February 3, 2018 contains 53 weeks. |
Notes:
1. Reconciliation of net loss to adjusted EBITDA:
Adjusted EBITDA is defined as net loss, adjusted to exclude: (i) income tax expense (benefit); (ii) other income, including gain from insurance proceeds; (iii) interest expense; (iv) depreciation expense; (v) asset impairment charges; (vi) acquisition related amortization expenses; (vii) and acquisition related compensation expense (benefit), which includes retention bonuses, restricted stock, and contingency adjustment. Our method of calculating adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. We use adjusted EBITDA to evaluate our own operating performance and as an integral part of our planning process. We present adjusted EBITDA as a supplemental measure because we believe such measure is useful to investors as a reasonable indicator of operating performance. We believe this measure is a financial metric used by many investors to compare companies. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings (losses), net earnings (loss) from continuing operations or cash flows from operating activities, as determined in accordance with GAAP.
(amounts in thousands) | ||||||||||||||
Thirteen and FourteenWeeks Ended (1) | Fiscal Year Ended (2) | |||||||||||||
February 2, | February 3, | February 2, | February 3, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
Net loss | $ | (65,213 | ) | $ | (32,468 | ) | $ | (96,922 | ) | $ | (42,553 | ) | ||
Income tax expense (benefit) | (56 | ) | (332 | ) | 80 | (299 | ) | |||||||
Other income | (56 | ) | (57 | ) | (227 | ) | (8,881 | ) | ||||||
Interest expense | 279 | 132 | 723 | 332 | ||||||||||
Loss from Operations | (65,046 | ) | (32,725 | ) | (96,346 | ) | (51,401 | ) | ||||||
Depreciation expense | 1,332 | 2,543 | 5,226 | 9,627 | ||||||||||
Asset impairment charges | 59,658 | 29,107 | 59,658 | 29,107 | ||||||||||
Acquisition related amortization expenses | 974 | 966 | 3,890 | 3,871 | ||||||||||
Acquisition related compensation expense (benefit), net of contingency adjustment | 831 | (726 | ) | 3,821 | 982 | |||||||||
Adjusted EBITDA | $ | (2,251 | ) | $ | (835 | ) | $ | (23,751 | ) | $ | (7,814 | ) | ||
(1) The fourth fiscal quarter ended February 2, 2019 contains 13 weeks. | ||||||||||||||
The fourth fiscal quarter ended February 3, 2018 contains 14 weeks. | ||||||||||||||
(2) The fiscal year ended February 2, 2019 contains 52 weeks. | ||||||||||||||
The fiscal year ended February 3, 2018 contains 53 weeks. |
The Company believes that fye adjusted loss from operations and etailz adjusted loss from operations, per the segment disclosure, when considered together with its GAAP financial results, provides management and investors with a more complete understanding of its business operating results, including underlying trends, by excluding the effects of certain charges. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings (losses), net earnings (loss) from continuing operations or cash flows from operating activities, as determined in accordance with GAAP.
Trans World Entertainment is a leading multi-channel retailer, blending a 40-year history of entertainment retail experience with digital marketplace expertise. Our brands seamlessly connect customers with the most comprehensive selection of music, movies, and pop culture products on the channel of their choice. For over 40 years, the Company has operated as a leading specialty retailer of entertainment and pop culture merchandise with stores in the United States and Puerto Rico, primarily under the name fye, for your entertainment, and on the web at www.fye.com and www.secondspin.com. In October 2016, the Company acquired etailz, Inc., a leading digital marketplace expert retailer, operating both domestically and internationally. etailz uses a data driven approach to digital marketplace retailing utilizing proprietary software and ecommerce insight coupled with a direct customer relationship engagement to identify new distributors and wholesalers, isolate emerging product trends, and optimize price positioning and inventory purchase decisions. Trans World Entertainment, which established itself as a public company in 1986, is traded on the Nasdaq National Market under the symbol “TWMC”.
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.
Contact: | Contact: | |
Trans World Entertainment | Financial Relations Board | |
Edwin Sapienza | Marilynn Meek | |
Chief Financial Officer | (mmeek@frbir.com) | |
(518) 452-1242 | (212) 827-3773 |
1 Year Trans World Entertainment Chart |
1 Month Trans World Entertainment Chart |
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