Bob Higgins – Chief Executive Officer Mike Honeyman – President and COO John Sullivan – Chief Financial Officer

William Myers – Miller Asset Management Mark Kaufman – Rafferty Capital Market

Good day, ladies and gentlemen. And welcome to Trans World Entertainment Second Quarter 2011 Results Conference Call. At this time, all lines 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 is being recorded. I would now like to turn the conference over to your host today, Mr. Bob Higgins, Chief Executive Officer. Please begin.

Thank you, Sean. Good morning, everyone. On the call with me today is Mike Honeyman, our President and Chief Operating Officer; and John Sullivan, our Chief Financial Officer. Thank you for joining us as we discuss our second quarter and first half results. I’m pleased to announce that our trend of improving results has continued. Our net loss for the second quarter improved $8.5 million to $7.3 million, a 54% improvement over last year. This followed an $8.9 million year-over-year improvement in net loss for the first quarter. Year-to-date, we’ve improved our net loss by $17.4 million or 64%. Total sales in the second quarter decreased 20% to $108 million as we operated 18% fewer stores. Comp store sales decreased 6%. Now, let me touch on our performance by category. Video comparable sales decreased 8%, comp sales in our top 50 in video decreased 20% during the quarter. Video represented 41% of our business during the quarter versus 42% last year. Music comparable store sales declined 9%, comp sales in our top 50 decreased 27% during the quarter. The music category represented 37% of our business for the quarter, compared to 38% last year. Negative comps in our two largest category, video and music have been largely driven by weak new releases. New releases in the back half of the year are expected to be stronger then they were in the first half of the year. In addition, we’ve been able to offset the negative comps with improved gross margins. Electronic comp store sales increased 10%. Electronics sales represent 9% of our total business, compared to 8% last year. In our trend category, comp store sales increased 6%. Trend sales represented 8% of our total business in the quarter, compared to 7% last year. Video games comp store sales were down 14% for the quarter and games represent 5% of our business, the same way it is last year. We have games in 121 stores, which represent 28% of the chain. John will now take you through the financial highlights for the quarter. John?

Thank you, Bob. Good morning. As Bob mentioned, our net loss for the quarter improved $8.5 million to $7.3 million or $0.23 per share, which is a 54% improvement over last year’s net loss of $15.8 million or $0.34 per share. Our EBITDA loss improved $7.2 million for the quarter to $4.8 million, that is 60% improvement over last year’s EBITDA loss of $12 million. Our gross margin rates for the quarter increased 330 basis points to 37.0% of sales from 33.7% last year. The increase in gross profit as a percentage of sales was due to higher margin rates across all our product categories and the leveraging of our distribution of freight costs due to the closing of a distribution facility in Carson, California last year. SG&A expenses were $44.8 million, a reduction of 22% and a total sales decline of 20%, resulting in a decrease as a percentage of sales to 41.5% this year from 42.5% last year. The decrease in SG&A was driven by the closing of underperforming stores and continued focus on a factor of expense management. Net interest expense was $793,000 in the quarter versus $815,000 last year. The company has not required any borrowings under its line of credit during this year’s first half and therefore we ended the quarter without any borrowings outstanding under the line of credit. In addition, the company more than doubled its cash balance from the prior year. We ended the quarter with cash of $22.5 million, compared to $10.5 million last year. Year-over-year, we have lowered our inventory by $32 million. Our quarter end inventory position was $205 million versus last year’s $237 million. On a per square foot basis, this was $70 a foot versus $67 last year. During the quarter, we closed four stores and we didn’t have any openings. We ended the quarter with 444 – 440 stores and operation in 2.9 million square feet versus last years 534 stores and 3.6 million square feet. Now, I’d like to turn it over to Bob.

Thank you. John. We are encouraged by our first half results. Year-to-date we’ve improved our net loss over last year by $17.4 million, a 64% improvement, our best first half performance since 2005. Our electronics and trend categories which combined represent a 16% of our business had 10% comp increase in the first half. We continued to strength our assortment in these categories. The improvement in our operating results has been driven by a higher gross margin rate and reductions in operating expenses. The improvement in gross margin as a percentage of sales reflect improved margins rates across all categories. We’ve been able to reduce operating expenses by challenging each and every component of our business to improve and become more efficient, whilst at the same time, we are investing in people, technology and merchandise to support our future. We continue to streamline operations, improve practices and reduce expenses as demonstrated by the continued leveraging of our SG&A expenses during the first half. As John mentioned, we ended the quarter with cash of $22.5 million and without any borrowings on our line of credit. In fact, I’d like to stress that we have not had any borrowings outstanding on our line of credit for the entire first half of the year. While working to improve our results we continue to focus on the management of inventory and cash. We have made significant progress in the first half and our results reflect our accomplishments, but we still have a lot more to accomplish this year. As we head into the second half of the year and the all important fourth quarter, our strategy is to focus on improving our performance across the Board by capitalizing on the foundation we had built to deliver better value to our customers, improving performance in each of our product categories, controlling expenses and driving additional bottom line contribution. We are moving in the right direction and look forward to the remainder of 2011. Now, I would like to open up the call for questions. Sean?

Thank you. (Operator Instructions) Our first question comes from William Myers with Miller Asset Management. William Myers – Miller Asset Management: Hi. Congratulations.

How are you doing? William Myers – Miller Asset Management: Good. Could you talk -- I think said you electronics were up 10%, could you talk about -- was there anything noticeable in the electronics in terms of -- kinds of electronics that led to that increase or was it [across the Board] increase?

Yeah. We, it’s an area that we are doing very well and we prefer not to explain the mix of products that’s driving that only because we think it’s, we don’t want to let our competitors know what we are doing so well. And so I hope you appreciate that. But we expect that to even be better in the second half of the year. William Myers – Miller Asset Management: Okay. But would you say then that you do believe it’s because of your improved mix as part of the reason that it went up?

Yeah. It’s definitely the improved mix of what we’re focusing on in that department. William Myers – Miller Asset Management: Okay. And I read in a news article that you have some self-service video kiosks in at least some stores, is that right and how is that going?

Yeah. We only have that in two stores and it’s just a test for us to see how we go on it. It’s too early. It’s only been about four weeks now. So it’s too early to say how it’s going and like I said, it’s a very early test. William Myers – Miller Asset Management: Okay. So just the two stores. All right. Well, that’s all for me, again good quarter. William Myers – Miller Asset Management: Okay. Thank you very much.

Our next question comes from Mark Kaufman with Rafferty Capital Markets. Please go ahead. Mark Kaufman – Rafferty Capital Market: Good morning.

Good morning. Mark Kaufman – Rafferty Capital Market: Where do you see yourself with your store base right now, specifically how close do you feel you’re at to the point where you have got the store base that you’d like to have going forward?

Well, I would just stay that, I don’t know if we ever are going to be pleased with the store base that we have because we are always looking to improve it, but not to avoid your question Mark, we have improved our store base significantly, but what we do is we’ve -- the majority of our leases, they are expiring issue which they did last year also. And we just make sure that conditions haven’t changed in these stores, we are operating and so we go back and discuss renewing the deals that makes sense for us to renew, and if something can make sense from a financial point of view, we don’t renew that deal. So, I would say, we are always going to look for improvement in our real estate mix and but its gets better every single year. Mark Kaufman – Rafferty Capital Market: And maybe a follow-on to that, do you see at some point any opportunities where you reach bottom on what you have and so thinking about there might be opportunities to open stores again?

Yeah. I think we’re getting close to that. I think you’ll see some of that in 2012 and probably more of it in 2013, however. But there is plenty of opportunity out there. Mark Kaufman – Rafferty Capital Market: Thanks very much.

Thank you.

(Operator Instructions) I’m not showing any questions, sir.

Okay. I just like to take this opportunity to thank everyone for their dedication to our company, all the Trans World associates, the customers, the vendors and of course, our shareholders. And, we look forward to talking to you about our third quarter results which will be a call on November 17th. So thank you very much for your participation today and thank you Sean for your help.

Thank you very much, sir. Ladies and gentlemen, thanks for your participation in today’s conference. This does conclude the conference. You may now disconnect. Everyone have a wonderful day. Thank you.