Previous Statements by TWMC
» Trans World Entertainment's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Trans World Entertainment's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Trans World Entertainment's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Trans World Entertainment's CEO Discusses Q2 2011 Results - Earnings Call Transcript
For the first half our net income improved by $10.7 million to a profit of $910,000 from a net loss of $9.8 million during the same period in 2011. For the second quarter our comp store sales were down 1%. Total sales for the quarter decreased 16% compared to last year to $91 million as our average stores in operation declined by 14%.Now I will touch on our sales performance by category for the quarter. Video comp sales increased 7%. Video represented 43% of our business during the quarter versus 41% last year. The comp sales increased for the quarter was driven by a strong performance in our catalog business. Music comp sales declined 13%. The Music category represented 34% of our business for the quarter compared to 37% last year. Electronics comp sales increased 9%. Electronics represented 10% of our business for the quarter compared to 9% last year and Trend comp sales increased 13%. Trend sales represent a 9% of our business for the quarter, compared to 8% last year. Video games comps sales were down 12%, game sales represented 4% of our business for the quarter compared to 5% last year. Now John will take you through financial highlights for the quarter. John Anderson Thanks, Bob. Good morning. As Bob mentioned, our net income for the quarter improved $5.4 million to a loss of $1.9 million or $0.06 per diluted share as compared to last year’s net loss of $7.3 million or $0.23 per diluted share. For the first half our net income improved $10.7 million to a profit of $910,000 from a net loss of $9.8 million in the same period for 2011. EBITDA improved $4.4 million for the quarter to a loss of $400,000 from last year’s loss of $4.8 million. For the first half EBITDA improved $8.9 million to earnings of $4.1 million from last year’s loss of $4.8 million.
Our gross margin rate for the quarter increased 230 basis points to 39.3% of sales from 37% last year. The increase in gross profit as a percentage of sales was due to higher margin rates across the majority of our product categories.SG&A expenses were $36.3 million, a reduction of 19% from last year second quarter. SG&A expenses as a percentage of sales improved 170 basis points to 39.8%, as compared to 41.5% for the same period last year. The decrease in SG&A expenses was driven by the closing of underperforming stores and the continued focus on effective expense management. Net interest expense was $522,000 in the quarter versus $793,000 last year as we’re realizing the benefit of our amended credit facility. We ended the quarter with $58.3 million in cash compared to $22.5 million last year and did not require any borrowings under our line of credit at any point during the first half. Year-over-year, we have lowered our inventory by $43 million and finished the quarter with $162 million in inventory, 21% below last year’s $205 million. We ended the quarter with 379 stores and 2.4 million square feet in operation, versus last year’s 440 stores and 2.9 million square feet. During the quarter, the Company operated an average of 379 stores compared to 442 stores last year, a 14% decline. Now I will turn it back over to Bob. Robert J. Higgins Thanks, John. The first half of 2012 represents our best operating performances since fiscal 2000. This demonstrates the continued improvement in our operating performance. We continue to make significant progress and our result reflects that. Our comp sales were driven by strong performance in Video and continued strength in our Electronics and Trend categories. Read the rest of this transcript for free on seekingalpha.com