-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P2DySVhizf+I/ZFSsYsx5A6JHo//Ep25eig8UF3ef0aCY3KHQLL5NJ1ab2TUcKFS CvAepZ+LvF+wm5xwTZp15Q== 0000795212-97-000021.txt : 19971217 0000795212-97-000021.hdr.sgml : 19971217 ACCESSION NUMBER: 0000795212-97-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971101 FILED AS OF DATE: 19971216 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANS WORLD ENTERTAINMENT CORP CENTRAL INDEX KEY: 0000795212 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL- COMPUTER & PRERECORDED TAPE STORES [5735] IRS NUMBER: 141541629 STATE OF INCORPORATION: NY FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14818 FILM NUMBER: 97738818 BUSINESS ADDRESS: STREET 1: 38 CORPORATE CIRCLE CITY: ALBANY STATE: NY ZIP: 12203 BUSINESS PHONE: 5184521242 MAIL ADDRESS: STREET 1: 38 CORPORATE CIRCLE CITY: ALBANY STATE: NY ZIP: 12203 FORMER COMPANY: FORMER CONFORMED NAME: TRANS WORLD MUSIC CORP DATE OF NAME CHANGE: 19920703 10-Q 1 THIRD QUARTER FILING ON FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q _X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED NOVEMBER 1, 1997 OR ___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT FOR THE TRANSITION PERIOD FROM ____ TO ____ COMMISSION FILE NUMBER: 0-14818 TRANS WORLD ENTERTAINMENT CORPORATION (Exact name of registrant as specified in its charter) NEW YORK 14-1541629 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 38 Corporate Circle Albany, New York 12203 (Address of principal executive offices, including zip code) (518) 452-1242 (Registrant's telephone number, including area code) Indicate by a check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the Registrant was required to file such reports, and (2) has been subject to such filing requirements for the past 90 days. YES _X_ NO ___ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $01 par value, 19,718,666 shares outstanding as of December 15, 1997 TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES QUARTERLY REPORT ON FORM 10-Q INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Form 10-Q Page No. PART 1. FINANCIAL INFORMATION Item 1 - Financial Statements (unaudited) Condensed Consolidated Balance Sheets - November 1, 1997, February 1, 1997 and November 2, 1996 3 Condensed Consolidated Statements of Income - Thirteen Weeks Ended and Thirty-Nine Weeks Ended November 1, 1997 and November 2, 1996 5 Condensed Consolidated Statements of Cash Flows - Thirty-Nine Weeks Ended November 1, 1997 and November 2, 1996 6 Notes to Condensed Consolidated Financial Statements 7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II. OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders 15 Item 6 - Exhibits and Reports on Form 8-K 16 Signatures 16 TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)
November 1, February 1, November 2, 1997 1997 1996 ----------- ----------- ----------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 4,590 $ 54,771 $ 8,324 Merchandise inventory 216,659 163,509 214,084 Other current assets 9,844 14,654 25,671 ----------- ----------- ---------- Total current assets 231,093 232,934 248,079 ----------- ----------- ---------- VIDEOCASSETTE RENTAL INVENTORY, net 4,060 4,784 5,926 DEFERRED TAX ASSET 3,926 3,098 430 FIXED ASSETS: Property, plant and equipment 176,738 169,292 170,288 Less: Fixed asset write-off reserve 5,924 7,571 9,781 Allowances for depreciation and amortization 101,070 96,747 96,106 ----------- ----------- ---------- 69,744 64,974 64,401 ----------- ----------- ---------- OTHER ASSETS 4,111 4,263 3,558 ----------- ----------- ---------- TOTAL ASSETS $ 312,934 $ 310,053 $ 322,394 =========== =========== ==========
See Notes to Consolidated Financial Statements. TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) (unaudited)
November 1, February 1, November 2, 1997 1997 1996 ----------- ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 135,454 $ 118,980 $ 116,936 Notes payable 10,707 --- 32,806 Accrued expenses and other 7,632 9,403 4,418 Store closing reserve 9,874 13,747 15,262 Current portion of long-term debt and capital lease obligations 96 9,557 8,603 ----------- ----------- ----------- Total current liabilities 163,763 151,687 178,025 ----------- ----------- ----------- LONG-TERM DEBT, less current portion 35,000 43,983 44,912 CAPITAL LEASE OBLIGATIONS, less current portion 6,435 6,507 6,531 OTHER LIABILITIES 6,554 6,514 6,296 ----------- ----------- ----------- TOTAL LIABILITIES 211,752 208,691 235,764 ----------- ----------- ----------- SHAREHOLDERS' EQUITY: Preferred stock ($.01 par value; 5,000,000 shares authorized; none issued) --- --- --- Common stock ($.01 par value; 20,000,000 shares authorized; 9,898,478 9,809,594 and 9,783,594 shares issued, respectively) 99 98 98 Additional paid-in capital 25,010 24,540 24,417 Treasury stock, at cost (40,394 41,394 and 41,394 shares, respectively) (394) (407) (407) Unearned compensation - restricted stock (193) (245) (144) Retained earnings 76,660 77,376 62,666 ----------- ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 101,182 101,362 86,630 ----------- ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 312,934 $ 310,053 $ 322,394 =========== =========== ===========
See Notes to Consolidated Financial Statements. TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (unaudited)
Thirteen Weeks Ended Thirty-Nine Weeks Ended -------------------------- -------------------------- November 1, November 2, November 1, November 2, 1997 1996 1997 1996 ----------- ----------- ----------- ----------- Sales $ 114,737 $ 97,583 $ 329,273 $ 300,922 Cost of sales 71,075 61,366 206,821 192,920 ----------- ----------- ----------- ----------- Gross profit 43,662 36,217 122,452 108,002 Selling, general and administrative expenses 37,193 33,899 108,249 100,262 Depreciation and amortization 3,807 3,475 11,035 10,655 ----------- ----------- ----------- ----------- Income (loss) from operations 2,662 (1,157) 3,168 (2,915) Interest expense 1,069 2,657 4,354 8,800 ----------- ----------- ----------- ----------- Income (loss) before income taxes 1,593 (3,814) (1,186) (11,715) Income tax expense (benefit) 614 (1,337) (470) (4,107) ----------- ----------- ----------- ----------- NET INCOME (LOSS) $ 979 $ (2,477) $ (716) $ (7,608) =========== =========== =========== =========== Earnings (loss) per share $ 0.10 $ (0.25) $ (0.07) $ (0.78) =========== =========== =========== =========== Weighted average number of common shares outstanding 9,852 9,741 9,809 9,738 =========== =========== =========== ===========
See Notes to Consolidated Financial Statements. TRANS WORLD ENTERTAINMENT AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
Thirty-Nine Weeks Ended -------------------------- November 1, November 2, 1997 1996 ----------- ----------- ----------- ----------- NET CASH USED BY OPERATING ACTIVITIES: $ (27,016) $ (37,680) ----------- ----------- INVESTING ACTIVITIES: Acquisition of property and equipment (16,616) (5,672) Disposal of videocassette rental inventory, net 724 796 ----------- ----------- Net cash used by investing activities (15,892) (4,876) ----------- ----------- FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 35,000 --- Payments of long-term debt and capital lease obligations (53,516) (3,738) Net increase (decrease) in revolving line of credit 10,707 (32,454) Proceeds from issuance of common stock 1 1 Increase in additional paid-in capital 470 181 Decrease in treasury stock due to reissuance of shares 13 96 Decrease (increase) in unearned compensation from issuance of shares of restricted stock 52 (144) ----------- ----------- Net cash used by financing activities (7,273) (36,058) ----------- ----------- Net decrease in cash and cash equivalents (50,181) (78,614) Cash and cash equivalents, beginning of period 54,771 86,938 ----------- ----------- Cash and cash equivalents, end of period $ 4,590 $ 8,324 =========== ===========
See Notes to Consolidated Financial Statements. TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1. Basis of Presentation The accompanying unaudited financial statements consist of Trans World Entertainment Corporation and its subsidiaries, (the "Company"), all of which are wholly owned. All significant intercompany accounts and transactions have been eliminated. Joint venture investments, none of which are material, are accounted for using the equity method. These interim condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished in these condensed consolidated financial statements reflect all normal, recurring adjustments which, in the opinion of management, are necessary for a fair presentation of such financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to rules and regulations applicable to interim financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 1997. Note 2. Restructuring Charge In order to streamline operations and close unprofitable store locations, the Company recorded pre-tax restructuring charges of $35 million in 1995 and $21 million 1994. The restructuring charges include the write-down of assets, estimated cash payments to landlords for early termination of operating leases and the cost for returning product to the Company's distribution center and vendors. The charge also includes estimated legal, lender and consulting fees, including those that the Company was obligated to pay on behalf of its lenders while working to renegotiate its credit agreements. TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 2. Restructuring Charge (cont'd) In determining the components of the reserves, management analyzed all of the aspects of closing stores and the costs that are incurred. An analysis of the amounts comprising the restructuring reserve and the charges against the reserve for the period from February 1, 1997 through November 1, 1997 are outlined below (in thousands):
Balance /-----Charges-----\ Balance as of Y-T-D as of 02/01/97 2nd Qtr 3rd Qtr 11/01/97 -------- -------- -------- -------- Non-cash write-offs $ 7,671 $ 1,300 $ 570 $ 5,801 Cash outflows 13,647 2,969 681 9,997 -------- -------- -------- -------- Total $ 21,318 $ 4,269 $ 1,251 $ 15,798 ======== ======== ======== ========
Note 3. Seasonality The Company's business is seasonal in nature, with the highest sales and earnings occurring in the fourth fiscal quarter. Note 4. Earnings (Loss) Per Share Earnings (loss) per share is based on the weighted average number of common shares outstanding during each fiscal period. Common stock equivalents, related to stock options, which would have a dilutive effect based on current market prices, did not have a material effect on earnings (loss) per share in the periods presented. (See exhibit 11: Statement re computation of per share earnings) TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 5. Recently Issued Accounting Standards Financial Accounting Standards Board Statement No. 128, "Earnings per Share" ("Statement No. 128"), issued in February 1997 and effective for financial statements for both interim ending after December 15, 1997, establishes and simplifies standards for computing and presenting earnings per share ("EPS"). Implementation of Statement No. 128 will not have a material impact on the Company's computation or presentation of EPS, as the Company's common stock equivalents either have had no material effect on EPS amounts or have been anti-dilutive with respect to losses. Financial Accounting Standards Board Statement No. 130, "Reporting Comprehensive Income" ("Statement No. 130"), issued in June 1997 and effective for fiscal years beginning after December 15, 1997, establishes standards for reporting and display of the total of net income and the components of all other nonowner changes in equity, or comprehensive income, either below net income(loss) in the statement of operations, in a separate statement of comprehensive income(loss) or within the statement of changes of stockholders' equity. The Company has had no significant items of other comprehensive income. TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES PART 1. FINANCIAL INFORMATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations The following is an analysis of the Company's results of operations, liquidity and capital resources. To the extent that such analysis contains statements which are not of a historical nature, such statements are forward-looking statements, which involve risks and uncertainties. These risks include, but are not limited to, changes in the competitive environment for the Company's products, including the entry or exit of non-traditional retailers of the Company's products to or from its markets; the release by the music industry of an increased or decreased number of "hit releases", general economic factors in markets where the Company's products are sold, and other factors discussed in the Company's filings with the Securities and Exchange Commission. RESULTS OF OPERATIONS Thirteen Weeks Ended November 1, 1997 Compared to the Thirteen Weeks Ended November 2, 1996 Sales. Total sales increased 18% to $114.7 million for the thirteen weeks ended November 1, 1997, compared to $97.6 million for the same period last year. The increase in total sales is due to a combination of higher customer traffic (which is the result of enhanced merchandising and marketing strategies and a stronger new release schedule) and the acquisition of Strawberries on October 8, 1997, which added $4.0 million to sales for the quarter (90 stores and approximately 346,000 square feet of retail selling space). Comparable store sales increased 11.6%, which is measured against last year's 4.3% increase and is the Company's seventh consecutive quarter of comparable store sales growth. The Company operated 551 stores and 2.4 million square feet of retail selling space at the end of the quarter compared to 497 stores and 2.0 million square feet in 1996. Gross Profit. Gross profit as a percentage of sales increased to 38.1% in the third quarter ended November 1, 1997, from 37.1% in the third quarter of 1996. The increase is the result of a higher initial markon due primarily to a favorable product mix of higher margin catalog sales. Selling, General and Administrative Expenses. Selling, general and administrative expenses ("S,G&A"), expressed as a percentage of sales, decreased to 32.4% in the thirteen week period ended November 1, 1997, compared to 34.7% in the same period of 1996, as the Company continues to leverage its operating expenses against sales. TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Interest Expense. Net interest expense was reduced to $1.1 million for the quarter compared to $2.7 million in the third quarter of 1996. The decrease is the result of lower average outstanding balances under the revolving line of credit, lower outstanding long-term debt and lower interest rates, due to the refinancing completed in the second quarter. Total debt at the end of the quarter was approximately $52.2 million compared to last years $92.9 million. Net Income (Loss). The Company recorded net income of $1.0 million for the thirteen weeks ended November 1, 1997 compared to a net loss of $2.5 million for the same period in 1996. The improved performance can be attributed to the comparable store sales increase, improved gross margin rates, leverage of SG&A expenses and lower interest expense. Thirty-Nine Weeks Ended November 1, 1997 Compared to the Thirty-Nine Weeks Ended November 2, 1996 Sales. The Company's total sales increased $28.4 million, or 9%, to $329.3 million for the thirty-nine weeks ended November 1, 1997, compared to $300.9 million for the same period last year. The increase in sales is due to enhanced merchandising and marketing initiatives combined with an overall improvement in the music and video specialty retail industry. Additionally, the acquisition of Strawberries on October 8, 1997, accounted for approximately $4.0 million of the increase in total sales. Comparable store sales increased by 8.4% which is measured against last year's 4.6% increase. Gross Profit. Gross profit as a percentage of sales improved to 37.2% in the first nine months of 1997, compared 35.9% in 1996. The increase is due to a higher initial markon and higher purchase discounts combined with a greater percentage of higher margin catalog sales. Selling, General and Administrative Expenses. Selling, general and administrative expenses ("S,G&A"), as a percentage of sales, decreased to 32.9% in the first nine months of 1997 from 33.3% in the first nine months of 1996. The 1996 percentage reflects the receipt of $2.5 million upon the termination of a business development agreement which was recorded as a reduction of S,G&A. Excluding the receipt of $2.5 million, S,G&A as a percentage of sales improved in 1997 from 34.1% in 1996 as the Company continues to leverage its operating expenses against sales. TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Interest Expense. Net interest expense decreased to $4.4 million in the thirty-nine week period ended November 1, 1997, from $8.8 million in the same period of 1996. The decrease is the result of lower average outstanding balances under the revolving line of credit, lower outstanding long-term debt and lower interest rates (which are the result of the refinancing completed in the second quarter). Net Loss. The Company reduced its net loss to $0.7 million in the thirty-nine weeks ended November 1, 1997 from a net loss of $7.6 million during the same period last year. The 1996 loss reflects the receipt of $2.5 million upon the termination of a business development agreement. Excluding the receipt of $2.5 million the Company's net loss in 1996 would have been $9.2 million. The improved performance can be attributed to the comparable store sales increase, improved gross margin rates, leverage of S,G&A expenses and lower interest expense. TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) LIQUIDITY AND CAPITAL RESOURCES Liquidity and Sources of Capital. Cash generated from earnings continued to be the Company's primary source of liquidity during the first nine months of the fiscal year. The Company had unused lines of credit aggregating approximately $54.3 million at November 1, 1997. The Company's working capital at November 1, 1997 was $67.3 million and its ratio of current assets to current liabilities was 1.4 to 1. During the first nine months of 1997, the Company's net cash used by operations was $27.0 million, compared to $37.7 million used in the first nine months of 1996. The most significant uses of cash during the period were $53.2 million for inventory purchases (substantially all of which occurred in the third quarter in anticipation of holiday season inventory requirements) including $16.0 million related to the acquisition of existing inventory at 90 Strawberries locations, offset by an increase in accounts payable of $16.5 million, as the Company continues to leverage its vendor payables against inventory. Also during the period, the Company has spent $16.6 million on the acquisition of property and equipment, $7.8 million to reduce total debt and $5.6 million relating to the reduction of accrued expenses and store closing reserves. On July 9, 1997, the Company finalized a new Loan and Security Agreement with Congress Financial Corporation. The new agreement replaced the Company's existing debt by making $100 million available to the Company under a new revolving credit facility, at favorable financing terms. At a special meeting of shareholders held on November 14, 1997, shareholders approved an amendment to the Company's Certificate of Incorporation authorizing up to 50 million shares of common stock. Previously the Company was authorized to issue up to 20 million shares. Also on November 14, 1997, the Company's Board of Director's approved a two-for-one split of the Company's common stock, in the form of a 100% stock dividend. The stock dividend is payable on December 15, 1997, to shareholders of record at the close of business on December 1, 1997. Total shares outstanding increased to 19,718,666 on December 15, 1997. The Board's decision to split the stock was based on the Company's continued strong performance and positive outlook for the future. The stock split will bring the price of the Company's stock to a level that the Company believes is more desirable to a wider range of investors, thus broadening the stockholder base and increasing investor liquidity and marketability. TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) CAPITAL EXPENDITURES During the thirty-nine weeks ended November 1, 1997, the Company had capital expenditures of $16.6 million. The Company has opened or relocated 33 new stores and closed 51 stores during the period. Additionally, on October 8, 1997, the Company announced it had closed on the purchase of substantially all of the assets of Strawberries, Inc., a privately-held retailer of pre-recorded music and video, based in Milford, MA. The purchase added 90 stores and approximately 346,000 square feet of retail selling space. PROVISION FOR BUSINESS RESTRUCTURING The Company is experiencing the earnings and cash flow benefits which are the result of a comprehensive business restructuring plan that began in the 4th quarter of 1994. Through the first nine months of 1997, the Company has closed or relocated a total of 315 stores that were performing below financial expectations. The Company continues to monitor the financial performance of its stores and continues to close underperforming stores. The restructuring is expected to be completed during fiscal 1998. The Company will also open new stores that meet its standards for projected sales and profitability. PART II. OTHER INFORMATION TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES Item 4 - Submission of Matters to a Vote of Security Holders A) An Annual Meeting of Shareholders of Trans World Entertainment Corporation was held on Thursday, June 5, 1997. B) In the case of each individual nominee named below, authority to vote was withheld with respect to the number of shares shown opposite their name in Column 1, and each nominee received the number of votes set opposite their name in Column 2 for election as director of the Corporation. ------------------------- Column 1 Column 2 Name of Nominee Withheld Votes for -------------------- ------------------------- Robert J. Higgins 2,726 9,296,750 Dean S. Adler 3,526 9,295,950 George W. Dougan 4,246 9,295,230 Charlotte G. Fischer 4,726 9,294,750 Isaac Kaufman 5,246 9,294,230 Matthew H. Mataraso 3,226 9,296,250 Dr. Joseph G. Morone 3,526 9,295,950 C) A Special Meeting of Shareholders of Trans World Entertainment Corporation was held on Friday, November 14, 1997. D) A proposal to amend Trans World Entertainment Corporation's Certificate of Incorporation to increase the number of authorized shares of Common Stock to 50,000,000 shares, was approved as follows: FOR - 7,551,676 AGAINST - 1,081,165 ABSTAIN - 17,076 PART II. OTHER INFORMATION TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES (continued) Item 6 - Exhibits and Reports on Form 8-K (A) Exhibits Exhibit No. Description Page No. ----------- -------------------------------------- -------- 11 Statement re computation of per share earnings 17 27 Financial Data Schedule N/A (electronic filing only) (B) Reports on Form 8-K The Company filed a report on form 8-K announcing its acquisition of the majority of the assets of Strawberries, a privately-held specialty retailer of pre-recorded music and video. Omitted from this part II are items which are not applicable or to which the answer is negative to the periods covered. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TRANS WORLD ENTERTAINMENT CORPORATION December 16, 1997 By: /s/ ROBERT J. HIGGINS -------------------------- Robert J. Higgins Chairman, President and Chief Executive Officer (Principal Executive Officer) December 16, 1997 By: /s/ JOHN J. SULLIVAN ------------------------- John J. Sullivan Senior Vice President-Finance and Chief Financial Officer (Principal Financial and Chief Accounting Officer) EX-11 2 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES Exhibit 11: Statement re computation of per share earnings
Thirteen Weeks Ended Thirty-Nine Weeks Ended -------------------------- -------------------------- November 1, November 2, November 1, November 2, 1997 1996 1997 1996 ----------- ----------- ----------- ----------- (In thousands except per share data.) Primary: - -------- Weighted average shares outstanding 9,852 9,741 9,809 9,738 Net effect of dilutive stock options based on the treasury stock method using the average market price 276 N/A N/A N/A ----------- ----------- ----------- ----------- 10,128 9,741 9,809 9,738 =========== =========== =========== =========== Net income (loss) $979 ($2,477) ($716) ($7,608) =========== =========== =========== =========== Per share amount $0.10 ($0.25) ($0.07) ($0.78) =========== =========== =========== =========== Fully Diluted: - -------------- Weighted average shares outstanding 9,852 9,741 9,809 9,738 Net effect of dilutive stock options based on the Treasury Stock method using the period end price if higher than the average market price 284 N/A N/A N/A ----------- ----------- ----------- ---------- Total 10,136 9,741 9,809 9,738 =========== =========== =========== ========== Net income (loss) $979 ($2,477) ($716) ($7,608) =========== =========== =========== =========== Per share amount $0.10 ($0.25) ($0.07) ($0.78) =========== =========== =========== ===========
N/A = Not applicable as options would have an anti-dilutive effect. (1) = Fully diluted per share amounts have been excluded from the condensed consolidated financial statements, for each period predented, as the difference between primary and fully diluted per share amounts is immaterial (less than three percent of earnings per weighted average common share outstanding). EX-27 3 ARTICLE 5 FDS FOR QUARTERLY REPORT ON FORM 10-Q
5 THIS SCHEDULE CONTAINS DATA EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEETS AND THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000795212 TRANS WORLD ENTERTAINMENT CORPORATION 1,000
AMOUNT ITEM DESCRIPTION (IN THOUSANDS, EXCEPT PER SHARE DATA) - ---------------- ------------------------------------- Jan-31-1998 Feb-02-1997 Nov-01-1997 9-MOS 4,590 0 0 0 216,659 231,093 176,738 101,070 312,934 163,763 41,435 0 0 99 101,083 312,934 329,273 329,273 206,821 206,821 119,284 0 4,354 (1,186) (470) 0 0 0 0 (716) (0.07) (0.07)
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