Second Quarter Filing on Form 10-Q
<PAGE>
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 JULY 29, 2000
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,
48,504,817 shares outstanding as of September 1, 2000
<PAGE>
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
Condensed Consolidated Balance Sheets at
July 29, 2000 (unaudited), January 29, 2000
and July 31, 1999 (unaudited) 3
Condensed Consolidated Statements of Income - Thirteen Weeks and Twenty-six
Weeks Ended July 29, 2000 (unaudited) and July 31, 1999 (unaudited) 4
Condensed Consolidated Statements of Cash Flows - Twenty-six Weeks Ended
July 29, 2000 (unaudited) and July 31, 1999 (unaudited) 5
Notes to Condensed Consolidated Financial Statements (unaudited) 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders 13
Item 6 - Exhibits and Reports on Form 8-K 14
Signatures 14
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
Item 1 - Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
<TABLE>
<CAPTION>
July 29, January 29, July 31,
2000 2000 1999
------------ ------------ ----------
(unaudited) (unaudited)
<S> <C> <C> <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $106,044 $280,026 $ 83,797
Merchandise inventory 408,936 437,363 398,726
Current deferred tax asset --- --- 4,664
Other current assets 11,004 11,176 15,061
-------- -------- --------
Total current assets 525,984 728,565 502,248
-------- -------- --------
DEFERRED TAX ASSET 34,899 34,431 31,841
NET FIXED ASSETS 134,821 144,694 136,669
OTHER ASSETS 49,385 48,720 46,028
-------- ------- -------
TOTAL ASSETS $745,089 $956,410 $716,786
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $199,999 $353,294 $206,229
Income taxes payable 845 21,908 ---
Accrued expenses and other 20,386 32,021 31,556
Current deferred taxes 12,507 12,469 ---
Current portion of long-term debt
and capital lease obligations 5,350 5,311 4,497
-------- -------- --------
Total current liabilities 239,087 425,003 242,282
LONG-TERM DEBT, less current portion --- --- ---
CAPITAL LEASE OBLIGATIONS, less
current portion 16,781 19,461 19,394
OTHER LIABILITIES 17,992 17,773 18,941
-------- -------- --------
TOTAL LIABILITIES 273,860 462,237 280,617
-------- -------- --------
SHAREHOLDERS' EQUITY:
Preferred stock ($.01 par value;
5,000,000 shares authorized;
none issued) --- --- ---
Common stock ($.01 par value;
200,000,000 shares authorized;
53,603,249, 53,425,867 and
52,875,437 shares issued,
respectively) 536 534 529
Additional paid-in capital 284,709 283,932 278,519
Treasury stock, at cost (5,104,432,
1,177,432 and 104,432 shares,
respectively) (51,277) (11,855) (386)
Unearned compensation -
restricted stock (298) (348) (57)
Retained earnings 237,559 221,910 157,564
-------- -------- --------
TOTAL SHAREHOLDERS' EQUITY 471,229 494,173 436,169
-------- -------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $745,089 $956,410 $716,786
======== ======== ========
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
<TABLE>
Thirteen Weeks Ended Twenty-Six Weeks Ended
---------------------- ------------------------
July 29, July 31, July 29, July 31,
2000 1999 2000 1999
---------------------- ------------------------
<S> <C> <C> <C> <C>
Sales $285,510 $277,275 $595,626 $564,294
Cost of sales 181,513 174,705 380,785 356,780
--------- --------- ---------- --------
Gross profit 103,997 102,570 214,841 207,514
Selling, general and
administrative expenses 94,052 92,293 191,755 185,993
Costs related to the
Camelot merger --- --- --- 25,721
--------- --------- ---------- --------
Income (loss)
from operations 9,945 10,277 23,086 (4,200)
Interest expense
(income) (721) 465 (1,952) 892
--------- --------- ---------- --------
Income (loss) before
income taxes 10,666 9,812 25,038 (5,092)
Income tax expense
(benefit) 3,999 4,121 9,389 (2,139)
--------- --------- ---------- --------
NET INCOME (LOSS) $ 6,667 $ 5,691 $ 15,649 $( 2,953)
========= ========= ========== ========
BASIC EARNINGS (LOSS)
PER SHARE $ 0.14 $ 0.11 $ 0.32 $ (0.06)
========= ========= ========== ========
Weighted average number
of common shares
outstanding - basic 48,373 52,191 49,047 52,080
========= ========= ========== ========
DILUTED EARNINGS (LOSS)
PER SHARE $ 0.14 $ 0.11 $ 0.31 $ (0.06)
========= ========= ========== ========
Weighted average number
of common shares
outstanding - diluted 49,261 53,646 49,973 52,080
========== ========= ========= ========
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Twenty-Six Weeks Ended
------------------------
July 29, July 31,
2000 1999
------------------------
<S> <C> <C>
NET CASH USED BY OPERATING ACTIVITIES $(124,584) $(23,079)
------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (8,057) (22,346)
(Acquisition)/disposal of
videocassette rental inventory, net (51) 162
------------------------
Net cash used by investing activities (8,108) (22,184)
------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury shares (39,421) ---
Proceeds from capital leases --- 6,407
Exercise of stock options 772 6,625
Payments of long term debt &
lease obligations (2,641) (23,383)
------------------------
Net cash used by financing activities (41,290) (10,351)
------------------------
Decrease in cash and cash equivalents (173,982) (55,614)
Cash and cash equivalents, beginning balance 280,026 139,411
------------------------
Cash and cash equivalents, ending balance $106,044 $ 83,797
========================
Supplemental disclosure of non-cash investing
and financing activities:
Income tax benefit resulting from exercise
of stock options $ 445 $ 858
Issuance of treasury stock under incentive
stock programs 7 13
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 29, 2000 and July 31, 1999 (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 inter-company accounts and transactions have
been eliminated.
The interim condensed consolidated 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 the fair presentation of such financial statements. Certain
information and footnote disclosures normally included in the 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 January 29, 2000.
Note 2. Seasonality
The Company's business is seasonal in nature, with the highest sales and
earnings occurring in the fourth fiscal quarter.
Note 3. Depreciation and Amortization
Depreciation and amortization of videocassette rental inventory included in cost
of sales totaled $184,000 and $263,000 for the thirteen weeks ended July 29,
2000 and July 31, 1999, respectively. Depreciation and amortization of
videocassette rental inventory included in cost of sales totaled $415,000 and
$499,000 for the twenty-six weeks ended July 29, 2000 and July 31, 1999,
respectively.
Depreciation and amortization of fixed assets for the Company's distribution
centers included in cost of sales totaled $412,000 and $390,000 for the thirteen
weeks ended July 29, 2000 and July 31, 1999, respectively. For the twenty-six
week periods ended July 29, 2000 and July 31, 1999, depreciation and
amortization of fixed assets for the Company's distribution centers included in
cost of sales totaled $819,000 and $793,000, respectively. Depreciation and
amortization for the remaining fixed assets included in Selling, General &
Administrative ("SG&A") expenses totaled $8.1 million and $9.0 million in the
thirteen weeks ended July 29, 2000 and July 31, 1999, respectively. The
depreciation and amortization included in SG&A was $16.3 and $17.4 million for
the twenty-six week periods ended July 29, 2000 and July 31, 1999, respectively.
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
July 29, 2000 and July 31, 1999 (unaudited)
(continued)
Note 4. Earnings Per Share
Weighted average shares are calculated as follows :
<TABLE>
<caption)
Thirteen Weeks ended Twenty-six Weeks ended
-------------------- ----------------------
July 29, July 31, July 29, July 31,
2000 1999 2000 1999
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Weighted average common
shares outstanding - basic 48,373 52,191 49,047 52,080
Dilutive effect of employee
stock options 888 1,455 926 ---
---------- --------- ---------- ----------
Weighted average common shares
outstanding - diluted 49,261 53,646 49,973 52,080
========== ========= ========== ==========
Anti dilutive stock options 2,628 1,437 2,752 5,394
========== ========= ========== ==========
</TABLE>
Antidilutive stock options outstanding had an exercise price greater than the
average market price during the period.
Note 5. Recently Issued Accounting Standards
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which established accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. Statement
No. 133 has subsequently been amended by Financial Accounting Standards Board
Statement No. 137 which delays the effective date for implementation of
Statement No. 133 until fiscal quarters of fiscal years beginning after June 15,
2000. Management is currently evaluating the impact of SFAS No. 133 on the
Company's consolidated financial statements.
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 29, 2000 and July 31, 1999 (unaudited)
(continued)
Note 6. Legal Proceedings
The Company is party to various claims, legal actions, and complaints arising in
the ordinary course of its business, including pre-petition assessments by the
Internal Revenue Service ("IRS") aggregating approximately $7.9 million and
relating to Camelot's corporate-owned life insurance program. No judgment has
been rendered regarding these IRS assessments as of September 12, 2000. A
trial to decide the matter was concluded on May 5, 2000 in the Federal District
Court for the District of Delaware. A decision is expected to be rendered in
the third or fourth quarter of fiscal 2000. In the event that a judgment is
rendered against the Company in the full amount of the proposed assessment, the
Company's results of operations would be materially adversely affected with a
charge to earnings of approximately $7.9 million plus interest since January
1998. It is management's belief that the lawsuit is without merit and the
Company will ultimately prevail in this regard.
On August 8, 2000, twenty eight states filed an antitrust action in the United
States District Court for the Southern District of New York, against the five
major music distributors (EMI Music Distribution, Bertelsmann Music Group, Inc.,
Warner-Elektra-Atlantic Corporation, Sony Music Entertainment, Inc., Universal
Music and Video Distribution Corp.), the Company, Musicland Stores Corporation
and MTS Inc. (Tower Records). The states are seeking unspecified damages for
alleged illegal price-fixing agreements related to the five major music
distributors' minimum advertised pricing ("MAP") policies. The states allege
that the policy increased compact disc prices in violation of state and federal
antitrust law, kept compact disc prices artificially high and penalized
retailers that did not participate. It is management's belief that the lawsuit
is without merit and the Company will ultimately prevail in this regard.
The Company is subject to other legal proceedings and claims that have arisen in
the ordinary course of business and have not been finally adjudicated. Although
there can be no assurance as to the ultimate disposition of these matters, it is
management's opinion, based upon the information available at this time, that
the expected outcome of these matters, individually or in the aggregate, will
not have a material adverse effect on the results of operations and financial
condition of the Company.
Note 7. Pending Acquisition
On September 9, 2000, the Company signed a Definitive Purchase Agreement with
Wax Works, Inc. to acquire substantially all of the assets of its Disc Jockey
Music stores. The Disc Jockey chain has 113 stores in 34 states. The
acquisition is expected to close by October 31, 2000.
<PAGE>
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 July 29, 2000
Compared to the Thirteen Weeks Ended July 31, 1999
Sales. The Company's total sales increased 3% to $285.5 million for the
thirteen weeks ended July 29, 2000 compared to $277.3 million for the thirteen
weeks ended July 31, 1999. The increase was attributable to a comparable store
sales increase of 2%.
For the thirteen weeks ended July 29, 2000, comparable store sales increased 3%
for mall stores and 2% for free standing stores. By merchandise category,
comparable store sales were flat in music, and increased 25% in video and 16% in
accessories.
Gross Profit. Gross profit, as a percentage of sales, decreased to 36.4% in the
thirteen weeks ended July 29, 2000 from 37.0% in the thirteen weeks ended July
31, 1999. This decrease relates to a more competitive pricing structure
implemented at the Camelot stores acquired during the first quarter last year,
as well as a shift in sales to lower margin categories.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses ("SG&A"), as a percentage of sales, decreased to 32.9%
in the thirteen weeks ended July 29, 2000 from 33.3% in the thirteen weeks ended
July 31, 1999. The improvement primarily relates to the leveraging of
operating expenses and the elimination of Camelot's administrative expenses
during the period.
Interest Expense (Income). Net interest income was $0.7 million in the thirteen
weeks ended July 29, 2000 compared to an expense of $0.5 million for the
thirteen weeks ended July 31, 1999. The improvement in net interest relates to
increased investment income from higher average cash balances.
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
(continued)
Income Tax Expense (Benefit). The Company's effective tax rate decreased to
37.5% for the thirteen weeks ended July 29, 2000 from 42.0% for the thirteen
weeks ended July 31, 1999. During 1999, the Company's effective tax rate was
impacted by certain non-deductible expenses related to the Camelot merger.
Net Income. The Company's net income increased to $6.7 million for the thirteen
weeks ended July 29, 2000, compared to $5.7 million for the same period last
year. The increase in net income is attributable to increased sales, reduced
SG&A, improved interest and a lower income tax rate.
Twenty-six Weeks Ended July 29, 2000
Compared to the Twenty-six Weeks Ended July 31, 1999
Sales. The Company's total sales increased 6% to $595.6 million for the
twenty-six weeks ended July 29, 2000 compared to $564.3 million for the
twenty-six weeks ended July 31, 1999. Comparable store sales increased 5% for
the period.
For the twenty-six weeks ended July 29, 2000, comparable store sales increased
5% for mall stores and 6% for free standing stores. By merchandise category,
comparable store sales increased 2% in music, 26% in video and 19% in
accessories.
Gross Profit. Gross profit, as a percentage of sales, decreased to 36.1% in the
twenty-six weeks ended July 29, 2000 from 36.8% in the twenty-six weeks ended
July 31, 1999. The decrease relates to a more competitive pricing structure
implemented at the Camelot stores acquired during the first quarter last year,
as well as a shift in sales to lower margin categories.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses ("SG&A"), as a percentage of sales, decreased to 32.2%
in the twenty-six weeks ended July 29, 2000 from 33.0% in the twenty-six weeks
ended July 31, 1999. The improvement primarily relates to the leveraging of
operating expenses and the elimination of Camelot's administrative expenses
during the period.
Interest Expense (Income). Net interest income was $2.0 million in the
twenty-six weeks ended July 29, 2000 compared to an expense of $0.9 million for
the twenty-six weeks ended July 31, 1999. The improvement in net interest is
due to the repayment of long-term debt related to Camelot's acquisition of
Spec's Music and increased investment income from higher average cash balances.
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
(continued)
Costs Related to the Camelot Merger. A one-time pre-tax charge of $25.7 million
for costs related to the merger with Camelot was taken in the twenty-six weeks
ended July 31, 1999. The charge includes a write-off of redundant assets
between the two companies of $8.0 million, investment banking fees and other
professional costs of $10.0 million, printing and mailing costs for the joint
proxy/prospectus filed on March 29, 1999 of $2.0 million, system and integration
costs of $2.0 million and severance costs of $4.0 million.
Income Tax Expense (Benefit). The Company's effective tax rate decreased to
37.5% for the twenty-six weeks ended July 29, 2000 from 42.0% for the twenty-six
weeks ended July 31, 1999. During 1999, the Company's effective tax rate was
impacted by certain non-deductible expenses related to the Camelot merger.
Net Income. The Company's net income increased to $15.6 million for the
twenty-six weeks ended July 29, 2000, compared to a net loss of $3.0 million for
the same period last year. Excluding the one-time Camelot merger-related costs,
1999 net income was $12.0 million. The increase in net income is attributable
to increased sales, reduced SG&A and improved interest, net.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity. The Company's primary sources of working capital are cash flows from
operations and borrowings under its revolving credit facility. The Company had
cash balances of approximately $106.0 million at July 29, 2000, compared to
$280.0 million at the end of fiscal 1999.
Cash used by operating activities was $124.6 million for the twenty-six weeks
ended July 29, 2000. The primary uses of cash were a $153.3 million seasonal
reduction of accounts payable and a $21.1 million net reduction in income taxes
payable. These were partially offset by a $28.4 million reduction in inventory.
Cash used in financing activities was $41.3 million for the twenty-six weeks
ended July 29, 2000. The primary use of cash was $39.4 million for the purchase
of 3.9 million shares of common stock under a program authorized by the Board of
Directors on January 7, 2000. As of July 29, 2000, the Company had completed
the purchase of the 5.0 million shares authorized by the Board.
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
Item 2 - Management's Discussion and Analysis of Financial Condition and
Liquidity and Capital Resources (continued)
The Company has a three-year $100 million secured revolving credit facility with
Congress Financial Corporation that expires in July 2003 and automatically
renews on a year-to-year basis thereafter with the consent of both parties. The
Revolving Credit Facility contains certain restrictive provisions, including
provisions governing cash dividends and acquisitions, is collateralized by
merchandise inventory and contains a minimum net worth covenant. On July 29,
2000, the Company had no outstanding borrowings under the Revolving Credit
Facility, and $100 million was available for borrowing.
On August 11, 2000, the Company acquired a majority interest in SecondSpin.com
for $5.0 million. In addition, SecondSpin.com can borrow up to $10.0 million
from the Company in the form of convertible debt. As of August 11, 2000,
SecondSpin.com had borrowed $2.5 million and had an addditional $7.5 million
available to borrow.
On September 9, 2000, the Company signed a Definitive Purchase Agreement with
Wax Works, Inc. to acquire substantially all of the assets of its Disc Jockey
Music stores. The Disc Jockey chain has 113 stores in 34 states. The
acquisition is expected to close by October 31, 2000. The Company expects to
fund the acquisition from current cash balances.
Capital Resources. On April 22, 1999, the Company acquired by merger Camelot
Music Holdings, Inc., ("Camelot") a Delaware corporation, by issuing 1.9 shares
of the Company's common stock in exchange for each share of Camelot's
outstanding common stock. Upon consummation of the merger, Camelot became a
wholly-owned subsidiary of the Company.
The merger was accounted for as a tax-free pooling-of-interests. All financial
and per share information for prior periods has been restated to reflect the
results of the combined company. During the first twenty-six weeks of 2000, the
Company had capital expenditures of $8.1 million.
The Company plans to spend $35.0 million, net of construction allowances, for
capital expenditures in fiscal 2000. During the first twenty-six weeks of 2000,
the Company opened or relocated 16 stores and closed 43 stores.
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
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 Friday, June 16, 2000.
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.
<TABLE>
<CAPTION>
Column 1 Column 2
Names of Nominees Withheld Votes for
------------------ ---------- -----------
<S> <C> <C>
Dean Adler 3,095,516 33,026,727
Michael Solow 504,048 35,618,195
</TABLE>
C) A proposal to amend Trans World Entertainment Corporation's 1990 Stock Option
Plan for Non-Employee Directors was approved as follows:
FOR- 29,892,284
AGAINST- 6,176,569
ABSTAIN- 53,390
<PAGE>
TRANS WORLD ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(A) Exhibits -
Exhibit No Description Page No.
---------- ---------------------------- ---------
4.2 Amendment Number 5 to the 15
Loan and Security Agreement
27 Financial Data Schedule N/A
(electronic filing only)
(B) Reports on Form 8-K -
On August 15, 2000, the Company filed a report on Form 8-K announcing that the
Board of Directors has adopted a shareholder rights plan, designed to protect
Company shareholders from coercive or unfair takeover techniques.
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
September 12, 2000 By: /s/ ROBERT J. HIGGINS
-----------------
Robert J. Higgins
Chairman and Chief Executive Officer
(Principal Executive Officer)
September 12, 2000 By: /s/ JOHN J. SULLIVAN
----------------
John J. Sullivan
Senior Vice President
and Chief Financial Officer
(Chief Financial and Accounting Officer)
<PAGE>
