8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 13, 2006

TRANS WORLD ENTERTAINMENT CORPORATION

(Exact name of registrant as specified in its charter)

New York	0-14818	14-1541629
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	identification No.)
38 Corporate Circle, Albany, New York		12203
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (518) 452-1242

None

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On April 13, 2006, Trans World Entertainment Corporation issued a press release announcing updated financial results for the quarter and year ended January 28, 2006.  Subsequent to its March 9, 2006 earnings release, the Company identified and evaluated the realization of an additional deferred income tax asset that resulted in a recorded tax benefit of $2.0 million. A copy of Trans World Entertainment Corporation’s press release is furnished with this report as Exhibit 99.1, and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K is being furnished under Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

(c) EXHIBITS. The following is furnished as an Exhibit to this Report:

Exhibit
No.	Description
99.1	Trans World Entertainment Company Press Release dated April 13, 2006.

2

SIGNATURES

Pursuant to the requirements of the Securities 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
	s/ John Sullivan
Date:  April 13, 2006	John J. Sullivan
	Executive Vice President-Finance, Chief
	Financial Officer and Secretary

3

EXHIBIT INDEX

Exhibit
No.	Description
99.1	Trans World Entertainment Company Press Release dated April 13, 2006.

4

EX-99.1

Exhibit 99.1

	Contact:		Contact:
	Trans World Entertainment		MWW Group
	John J. Sullivan		Rich Tauberman
	EVP, Chief Financial Officer		(rtauberman@mww.com)
	(518) 452-1242		(201) 507-9500
38 Corporate Circle
Albany, NY 12203
www.twec.com		NEWS  RELEASE

TRANS WORLD ENTERTAINMENT UPDATES FISCAL YEAR 2005 RESULTS

Albany, NY, April 13, 2006 — Trans World Entertainment Corporation (Nasdaq: TWMC) today updated financial results for its fourth quarter and full fiscal year 2005. These results replace those previously issued by the Company in its release dated March 9, 2006.

Subsequent to its March 9, 2006 release, the Company identified and evaluated the realization of an additional deferred income tax asset that resulted in a recorded tax benefit of $2.0 million. After giving effect to the recognition of the associated tax asset, income before cumulative effect of a change in accounting principle for the fourth quarter of 2005 was $22.3 million or $0.71 per diluted share and net income was $20.0 million or $0.64 per diluted share. For the full fiscal year 2005, income before cumulative effect of a change in accounting principle was $2.9 million or $0.09 per diluted share and net income was $0.6 million, or $0.02 per diluted share.

Trans World Entertainment is a leading specialty retailer of music, video and video game products. The Company operates over 1,100 retail stores in the United States, the District of Columbia, the U.S. Virgin Islands, Puerto Rico. The Company operates mall stores under the f.y.e., Sam Goody and Suncoast brands and freestanding locations under the names Coconuts Music and Movies, Strawberries Music, Wherehouse, Sam Goody, Spec’s and Second Spin. The Company also operates on the web at www.fye.com, www.coconuts.com, www.wherehouse.com, www.secondspin.com, www.samgoody.com and www.suncoast.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 —

TRANS WORLD ENTERTAINMENT CORPORATION

Financial Results

	As adjusted					As Reported										As adjusted					As Reported
	Thirteen Weeks Ended					Thirteen Weeks Ended										Fiscal Year Ended					Fiscal Year Ended
INCOME STATEMENTS:	January 28,			% to		January 29,			% to		January 28,			% to		January 28,			% to		January 28,			% to		January 29,			% to
(in millions, except per share data)	2006			Sales		2006			Sales		2005			Sales		2006			Sales		2006			Sales		2005			Sales
Sales	$	458.6				$	458.6				$	513.5				$	1,238.5				$	1,238.5				$	1,365.1
Cost of sales	307.4			67.0	%	307.4			67.0	%	334.7			65.2	%	806.9			65.1	%	806.9			65.1	%	870.0			63.7	%
Gross profit	151.2			33.0	%	151.2			33.0	%	178.8			34.8	%	431.6			34.9	%	431.6			34.9	%	495.1			36.3	%
Selling, general and administrative expenses	106.7			23.3	%	106.7			23.3	%	113.1			22.0	%	392.8			31.7	%	392.8			31.7	%	415.7			30.5	%
Depreciation and amortization	8.8			1.9	%	8.8			1.9	%	9.6			1.9	%	34.0			2.8	%	34.0			2.8	%	34.5			2.5	%
Income from operations	35.7			7.8	%	35.7			7.8	%	56.1			10.9	%	4.8			0.4	%	4.8			0.4	%	44.9			3.3	%
Other income	(0.6		)	-0.1	%	(0.6		)	-0.1	%	(0.5		)	-0.1	%	(2.2		)	-0.1	%	(2.2		)	-0.1	%	(1.0		)	-0.1	%
Interest expense	1.0			0.1	%	1.0			0.1	%	0.6			0.1	%	3.0			0.2	%	3.0			0.2	%	2.4			0.2	%
Income before income taxes, extraordinary gain - unallocated goodwill and cumulative effect of change in accounting principle	35.3			7.8	%	35.3			7.8	%	55.9			10.9	%	4.0			0.3	%	4.0			0.3	%	43.5			3.2	%
Income tax expense	13.0			2.9	%	15.0			3.4	%	21.3			4.1	%	1.1			0.1	%	3.1			0.2	%	4.9			0.4	%
Income before extraordinary gain - unallocated goodwill and cumulative effect of change in accounting principle	$	22.3		4.9	%	$	20.3		4.4	%	$	34.7		6.8	%	$	2.9		0.2	%	$	0.9		0.1	%	$	38.6		2.8	%
Extraordinary gain - unallocated negative goodwill, net of income taxes of $0 and $2.0 million for fiscal 2005 and 2004, respectively	—			0.0	%	—			0.0	%	—			0.0	%	—			0.0	%	—			0.0	%	3.2			0.3	%
Cumulative effect of change in accounting principle, net of income taxes of $1.5 million and $0 for fiscal 2005 and 2004, respectively	(2.3		)	-0.5	%	(2.3		)	-0.5	%	—			0.0	%	(2.3		)	-0.2	%	(2.3		)	-0.2	%	—			0.0	%
Net income (loss)	$	20.0		4.4	%	$	18.0		3.9	%	$	34.7		6.8	%	$	0.6		0.0	%	$	(1.4	)	-0.1	%	$	41.8		3.1	%
Basic earnings (loss) per common share:
Earnings per share before extraordinary gain - unallocated negative goodwill and cumulative effect of change in accounting principle, net of income taxes	$	0.72				$	0.65				$	1.04				$	0.09				$	0.03				$	1.12
Extraordinary gain - unallocated negative goodwill, net of income taxes of $0 and $2.0 million for fiscal 2005 and 2004 respectively	$	—				$	—				$	—				$	—				$	—				$	0.09
Cumulative effect of change in accounting principle, net of income taxes of $1.5 million and $0 for fiscal 2005 and 2004 respectively	$	(0.07	)			$	(0.07	)			$	—				$	(0.07	)			$	(0.07	)			$	—
Basic earnings (loss) per common share	$	0.65				$	0.58				$	1.04				$	0.02				$	(0.04	)			$	1.21
Weighted average number of common shares outstanding	30.8					30.8					33.2					32.0					32.0					34.5
Diluted earnings (loss) per common share:
Earnings per share before extraordinary gain - unallocated negative goodwill and cumulative effect of change in accounting principle, net of income taxes	$	0.71				$	0.64				$	0.98				$	0.09				$	0.03				$	1.06
Extraordinary gain - unallocated negative goodwill, net of income taxes of $0 and $2.0 million for fiscal 2005 and 2004 respectively	$	—				$	—				$	—				$	—				$	—				$	0.09
Cumulative effect of change in accounting principle, net of income taxes of $1.5 million and $0 for fiscal 2005 and 2004 respectively	$	(0.07	)			$	(0.07	)			$	—				$	(0.07	)			$	(0.07	)			$	—
Diluted earnings (loss) per common share	$	0.64				$	0.57				$	0.98				$	0.02				$	(0.04	)			$	1.15
Weighted average number of common shares outstanding	31.5					31.4					35.2					32.1					32.0					36.3
SELECTED BALANCE SHEET CAPTIONS:
(in millions, except store data)
Cash and cash equivalents																					$	197.2				$	229.8
Merchandise inventory																					402.7					431.2
Fixed assets (net)																					132.5					130.2
Accounts payable																					322.8					358.4
Long-term debt and capital lease obligations, less current portion																					19.5					12.0
Stores in operation																					782					810