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): March 4, 2010

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.)

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On March 4, 2010, Trans World Entertainment Corporation issued a press release announcing its financial results for its fiscal fourth quarter ended January 30, 2010. 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 7.01. REGULATION FD DISCLOSURE

Attached hereto as Exhibit 99.2 is the transcript for the earnings conference call of Trans World Entertainment Corporation held on March 4, 2010. The information in this Current Report on Form 8-K, including the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, such information, including the exhibit attached hereto, shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Certain information contained in this Current Report on Form 8-K, including information in Exhibit 99.2 hereto, is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning results of operations and Trans World Entertainment Corporation’s strategies. Trans World Entertainment Corporation cautions that there are factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Trans World Entertainment Corporation; accordingly, there can be no assurance that such suggested results will be realized. For a list of Trans World Entertainment Corporation’s risk factors, see the Company’s Annual Filing on Form 10-K with the Securities and Exchange Commission for the year ended January 31,2009.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

          (c) EXHIBITS. The following are furnished as Exhibits to this Report:

Exhibit No.	Description
99.1	Trans World Entertainment Corporation Press Release dated March 4, 2010.
99.2	Trans World Entertainment Corporation Transcript for Earnings Call held on March 4, 2010.

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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
Date: March 5, 2010	/s/ John J. Sullivan
	John J. Sullivan
	Executive Vice President-Finance, Chief
	Financial Officer and Secretary

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Trans World Entertainment Corporation Press Release dated March 4, 2010.
99.2	Trans World Entertainment Corporation Transcript of Earnings Call held on March 4, 2010.

EX-99.1

Exhibit 99.1

	Contact: Trans World Entertainment John J. Sullivan EVP, Chief Financial Officer (518) 452-1242		Contact: Financial Relations Board Marilynn Meek (mmeek@frbir.com) (212) 827-3773
38 Corporate Circle
Albany, NY 12203 www.twec.com		NEWS RELEASE

TRANS WORLD ENTERTAINMENT ANNOUNCES FOURTH QUARTER AND
FISCAL 2009 RESULTS

          Albany, NY, March 4, 2010 — Trans World Entertainment Corporation (Nasdaq: TWMC) today reported financial results for its fourth quarter and fiscal year ended January 30, 2010. For the fourth quarter, total sales decreased 14% to $295.4 million compared to $344.7 million in 2008. Comparable store sales for the quarter decreased 7%. During the quarter, the Company operated an average of 655 stores compared to 763 stores last year, a 14% decline.

          For the fourth quarter of 2009, the Company recorded net income of $11.4 million, or $0.36 per share. This year’s fourth quarter results included a non-cash impairment charge to write down certain long-lived assets totaling $3.6 million or $0.12 per share for the quarter, as well as an income tax benefit of $12.6 million or $0.40 per share for the quarter. The benefit was primarily attributable to revised tax carryback legislation that resulted in the Company receiving a cash refund of $10.3 million during the quarter. For the fourth quarter of 2008 the net loss was $9.4 million or $0.30 per share. Last year’s fourth quarter results included a non-cash impairment charge to write down certain long-lived assets totaling $15.2 million or $0.48 per share for the quarter.

          For fiscal year 2009, total sales decreased 18% to $814.0 million compared to $987.6 million in 2008. Comparable store sales for fiscal year 2009 decreased 10%. During the year, the Company operated an average of 688 stores compared to 786 stores last year, a 12% decline.

          Net loss for fiscal 2009 was $42.4 million, or $1.35 per share. For fiscal year 2008, the net loss was $69.0 million, or $2.21 per share.

          Trans World will host a teleconference call today, Thursday, March 4, 2010, 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 is a leading specialty retailer of entertainment software, including music, video and video games and related products. The Company operates retail stores in the United States, the District of Columbia, the U.S. Virgin Islands, and Puerto Rico, primarily under the names f.y.e. for your entertainment and Suncoast and on the web at www.fye.com, www.wherehouse.com, www.secondspin.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

STATEMENTS OF OPERATION:
(in millions, except per share data)

	Thirteen Weeks Ended												Fiscal Year Ended
	January 30, 2010			% to Sales			January 31, 2009			% to Sales			January 30, 2010			% to Sales			January 31, 2009			% to Sales
Net sales	$	295.4					$	344.7					$	814.0					$	987.6
Cost of sales		212.9			72.1	%		238.0			69.1	%		552.3			67.9	%		656.7			66.5	%
Gross profit		82.5			27.9	%		106.7			30.9	%		261.7			32.1	%		330.9			33.5	%
Selling, general and administrative expenses		75.6			25.6	%		94.2			27.3	%		295.6			36.3	%		358.7			36.3	%
Impairment charges		3.6			1.2	%		15.2			4.4	%		3.6			0.4	%		15.2			1.5	%
Depreciation and amortization		3.9			1.3	%		5.4			1.6	%		15.2			1.9	%		22.1			2.3	%
Loss from operations		(0.6	)		-0.2	%		(8.1	)		-2.4	%		(52.7	)		-6.5	%		(65.1	)		-6.6	%
Interest expense, net		0.6			0.2	%		0.9			0.3	%		2.7			0.3	%		3.9			0.4	%
Loss before income taxes		(1.2	)		-0.4	%		(9.0	)		-2.7	%		(55.4	)		-6.8	%		(69.0	)		-7.0	%
Income tax expense (benefit)		(12.6	)		-4.3	%		0.4			0.1	%		(13.0	)		-1.6	%		—			0.0	%
Net income (loss)	$	11.4			3.9	%	$	(9.4	)		-2.8	%	$	(42.4	)		-5.2	%	$	(69.0	)		-7.0	%
Basic income (loss) per common share:
Basic income (loss) per common share	$	0.36					$	(0.30	)				$	(1.35	)				$	(2.21	)
Weighted average number of common shares outstanding - basic		31.4						31.3						31.4						31.2
Diluted income (loss) per common share:
Diluted income (loss) per common share	$	0.36					$	(0.30	)				$	(1.35	)				$	(2.21	)
Weighted average number of common shares - diluted		31.5						31.3						31.4						31.2
SELECTED BALANCE SHEET CAPTIONS: (in millions, except store data)
													January 30, 2010						January 31, 2009
Cash and cash equivalents													$	71.5					$	30.1
Merchandise inventory														266.6						378.2
Fixed assets (net)														33.9						50.4
Accounts payable														130.5						170.3
Long-term debt and capital lease obligations, less current portion														6.9						8.8
Stores in operation														557						712

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EX-99.2

Exhibit 99.2

TWMC - Q4 2009 Trans World Entertainment Corp.
Earnings Conference Call

CORPORATE PARTICIPANTS

Bob Higgins
Trans World Entertainment Corp. - Chairman & CEO

John Sullivan
Trans World Entertainment Corp. - EVP, CFO & Secretary

PRESENTATION

Operator

Good day, ladies and gentlemen, and welcome to the Trans World Entertainment fourth-quarter 2009 earnings conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder this conference call is being recorded.
I would now like to introduce your host for today’s conference, Mr. Bob Higgins, Chairman and CEO of Trans World Entertainment. Sir, you may begin.
Bob Higgins - Trans World Entertainment Corp. - Chairman & CEO
Thank you, Devin. Good morning. On the call with me today is John Sullivan, our Chief Financial Officer.
Thank you for joining us today as we discuss our 2009 results. Our January business had little impact on the comp sales results we reported on our holiday sales call. The fourth-quarter comp store sales finished down 7%. By category our fourth-quarter comp sales were down 8% in video and 5% in music. The video game category decreased 17%. This reflected a decrease of 45% in game hardware and an 8% decline in software. During the month of January we took steps to eliminate the game category in over 100 stores. As of year-end 124 of our stores carried games compared to 346 a year ago. Our other categories of electronics, accessories, and trend were flat for the quarter.

For the fiscal year of 2009 comp store sales decreased 10%. Total sales for 2009 decreased 18% to $814 million. For the year our comp sales in the video category were down 8% and represented 42% of our business, the same percentage as 2008. Comp sales in music were down 11% and represented 35% of our business, the same as 2008. Comp sales in video games were down 16%. This reflected a decrease of 45% in game hardware and 9% in software. Games represented 9% of our business, the same as last year. The other categories of electronics, accessories, and trend comped down 9% for the year and represented 14% of our business.

Now John will review our fourth-quarter and annual results in detail and I will follow it up with an update on our business plan. John?

John Sullivan - Trans World Entertainment Corp. - EVP, CFO & Secretary
Thank you, Bob. Good morning. I will first address our quarterly results and then turn to the annual results.
For the fourth quarter of 2009 the Company recorded net income of $11.4 million or $0.36 per share. This compares to a net loss of $9.4 million or $0.30 per share in the fourth quarter of 2008. Included in the results this year is a non-cash charge of $3.6 million, which is the result of recording an impairment charge against certain long-lived assets. Included in last year’s results is an impairment charge of $15.2 million. Our earnings in the quarter before the impairment charge and depreciation, amortization, interest, and taxes was $7.0 million. We also recorded a tax benefit of $12.6 million during the quarter versus an expense of $355,000 last year. The benefit was primarily the result of a federal tax refund received in the quarter due to a change in the tax loss carryback period.

Turning our attention to operational matters, our gross margin rate for the quarter was 27.9% compared to 30.9% last year, a decline of 300 basis points. The primary driver of the decline in gross margin was the impact of liquidation sales in 133 stores that were closed during the quarter. The SG&A rate for the quarter was 25.6% compared to 27.3% last year, a decrease of 170 basis points, as we were able to reduce expenses against the decline in sales.

Interest expense was $600,000 in the quarter compared to $900,000 last year. For the full fiscal year 2009 our net loss was $42.4 million or $1.35 per share compared to a net loss of $69 million or $2.21 per share in 2008. Annual gross margin was 32.1% compared to last year’s 33.5%.

SG&A dollars were $295.6 million, that was 36.3% of sales, compared to $358.7 million, also 36.3% of sales last year. Interest expense was $2.7 million compared to $3.9 million last year due to both lower average borrowings and lower interest rates during the year.

Looking at our year-end 2009 balance sheet we finished the year with a cash balance of $71.5 million compared to $30 million last year. After the seasonal paydown of holiday receipts we finished February with $9 million in operating cash versus borrowings of $34 million in the previous year. Our year-end inventory position was $266 million, that is down from last year’s $378 million. On a square-foot basis inventory was $70 a foot compared to last year’s $83 a foot. During the fourth quarter we closed 133 stores, ending the year with 557 stores occupying 3.4 million square feet. This compares to 712 stores and 4.8 million square feet at the end of 2008.

As sales and earnings in stores have declined steadily over the past few years we have been able to generate cash from inventory through closing stores. Our current ratio has improved to 2.1 from 2.0 in 2008. Our inventory decreased by $112 million, which was the main driver in generating almost $50 million in cash flow from operations.

Now let me turn it back to Bob to discuss our business plan.

Bob Higgins - Trans World Entertainment Corp. - Chairman & CEO
Thank you, John. 2009 was another challenging year in terms of comp sales and operating results. However, our financial position is stronger now than it was at the end of last year. Through prudent inventory management, a sound real estate strategy, and focus on cash flow we ended 2009 with $71 million in cash versus $30 million at the end of 2008. Our inventory leverage improved to 49% from 45% at the end of 2008. Our real estate strategy has allowed us to either reduce rents to help a store achieve an acceptable profit or to close it and generate cash from the liquidation of the inventory. With a core group of stores and a strong balance sheet we are positioned to turn around our operating results. To turn around our operating results we will focus on four key initiatives for 2010. We will drive sales and strengthen the FYE brand through offering better value in our core music and video categories. We will leverage expenses against sales.

We will continue to increase inventory turns and accounts payable leverage to generate cash and decrease working capital needs. We will capitalize on the real estate environment to maximize our footprint of productive locations. 2010 is a key year for us to improve our sales on a per store basis through capitalizing on the foundation we have built to deliver better value and driving additional bottom-line contribution through controlling expenses. While we work to improve our results, we continue to focus on the management of inventory and cash to provide the needed capital as we need to work through our transition.

I will close by saying we are confident that along with our efforts to shed unprofitable stores and lower expenses, we will improve our results.
Now I would like to open up the call to any questions anyone has.

QUESTIONS AND ANSWERS

Operator(Operator Instructions) I am showing no questions at this time, sir.Bob Higgins - Trans World Entertainment Corp. - Chairman & CEOOkay. I would like to thank everybody for their time this morning and I look forward to discussing our earnings results with you at the end of the next quarter. Thank you very much.Thank you, Devin, for your time this morning.Operator
Thank you, sir. Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may all disconnect. Thank you and have a nice day.