Bob Higgins – Chairman and CEO Mike Honeyman – President and COO Tom Seaver – Chief Financial Officer

Harsha Gowda – Blue Shore Bill Meyers – Miller Asset Management

Good day, ladies and gentlemen. And welcome to the Trans World Entertainment First Quarter 2012 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, today’s conference call is being recorded. I would now like to turn the conference over to your host, Bob Higgins, Chairman and CEO. Please begin.

Thank you, Sean. Good morning. On the call with me today is Mike Honeyman, our President and Chief Operating Officer; and Tom Seaver, our Chief Financial Officer. Thank you for joining us as we discuss our first quarter results. I’m pleased to announce that for the first quarter, our comparable store sales increased 1%. The comp sales increase coupled with a continued improvement in our gross margin rate and reduced SG&A expenses help drive our ninth consecutive quarter of improved operating results. For the first quarter, our bottom line improved by $5.3 million to a net income of $2.8 million from a loss -- a net loss of $2.5 million in the first quarter of 2011. Total sales for the quarter decreased 15%, compared to last year’s first quarter to $112 million, as our average stores in operation also declined by 15%. Now, let me touch on our sales performance by category for the quarter. Video comp sales increased 6%. Video represented 43% of our business during the quarter versus 42% last year. The comp sales increased for the quarter was driven by the release of Breaking Dawn and strong performance in our catalog business. Music comp sales declined 9%. The music category represented 33% of our business for the quarter, compared to 37% last year. Electronics comps sales increased 19%, electronics sales represented 11% of our business for the quarter compared to 9% last year. Trend comp sales increased 15%. Trend sales represented 8% of our business for the quarter, compared to 7% last year. Video games, comps sales were down 10%, game sales represented 5% of our business for the quarter, the same level as last year. Now, Tom will take you through financial highlights for the quarter. Tom?

Thanks Bob. Good morning. As Bob mentioned, our net income for the quarter improved $5.3 million to $2.8 million, or $0.09 per diluted share, as compared to last year’s net loss of $2.5 million or a loss of $0.08 per share. EBITDA improved $4.6 million for the quarter to $4.6 million from last year’s EBITDA of $36,000. Our gross margin rate for the quarter increased 50 basis points to 37.2% of sales from 36.7% last year. The increase in gross profit as a percentage of sales was due to higher margin rates across all product categories. SG&A expenses were $37.3 million, a reduction of 23% and a total sales decline of 15%. SG&A as a percentage of sales was 33.2%, compared to 36.7% last year, a 350-basis point improvement. The decrease in SG&A expenses was driven by the closing of underperforming stores, and continued focus on effective expense management. Net interest expense was $770,000 in the quarter versus $832,000 last year. We ended the quarter with cash of $62.3 million, compared to $29.7 million last year and did not require any borrowings under our line of credit at any point during the quarter. Year-over-year, we have lowered our inventory by $42 million and finished the quarter with $176 million in inventory, 19% below last year’s $218 million. On a per-square-foot basis, this is $74, the same level as last year. We ended the quarter with 379 stores and 2.4 million square feet in operation, versus last year’s 444 stores and 3 million square feet. During the quarter, the company operated an average of 383 stores, compared to an average of 451 stores last year. As reported on May 7th in an 8-K filing, we amended our revolving credit agreement. We are pleased that Wells Fargo has expanded their role to be our new lead bank. The amended agreement provides for a five-year $75 million revolving credit facility. The amendment provides for longer term, lower interest rates, lower costs and other favorable terms suitable to our business, which will support our strategic initiatives and growth. The facility underscores our financial strength and provides a strong financial foundation for our company for the foreseeable future. In addition, during the first quarter, we eliminated our long-term debt by paying off the mortgage we held on our Florida property. This reduced our long-term debt by $1.7 million. Now, I will turn it back over to Bob.

Thanks, Tom. 2011 marked our return to profitability for the first quarter of 2012 demonstrates continued improvement in our financial results. We continue to make significant progress and our results reflect that. Our positive comp sales was driven by a strong performance in video and continued strength in our electronics and trend categories. For the first quarter, these two categories combined, represented 19% of our business versus 16% last year and has a 17% comp increase, as we continue to strengthen the product mix in these categories. The improvement in our operating results has been driven by continued higher gross margin rates in all of our merchandise categories and reductions in operating expenses. We’ve been able to reduce operating expenses by challenging each and every component of our business to improve and become more efficient, while at the same time, investing in people, technology and merchandise to support our future. We continue to streamline operations, improve processes and reduce expenses, as demonstrated by the continued leveraging of our SG&A expenses. As Tom mentioned, we ended the quarter with cash of $62 million without any borrowings on our line of credit. We are very pleased to have expanded our relationship with Wells Fargo on our amended credit facility. It underscores our financial strength and supports our ability to fund strategic initiatives and growth. Our strategy for the balance of 2012 is to focus on continuing to challenge every aspect of our business to improve and to deliver better value, and an exceptional shopping experience to our customers. In addition, we will continue to invest in our growth categories and to aggressively cease opportunities to drive our sales and operating profits. We’re moving in the right direction and look forward to the remainder of 2012. Now, I’d like to open up the call for any questions. Sean, could you do that for me, please?

Yeah. Thank you. (Operator Instructions) Our first question comes from Harsha Gowda with Blue Shore. Please go ahead with your question. Harsha Gowda – Blue Shore: Good morning, gentlemen.

Good morning. How are you, Harsha? Harsha Gowda – Blue Shore: I’m fine. Thanks. I have two questions to ask you. But before I start I just want to commend you on an incredible performance and the continued incredible performance. I think you are really proving the naysayers wrong with your incredible management of the business and I really want to commend you on that as a shareholder.

Thank you very much. Its right, the entire team and I think that’s what’s important. Harsha Gowda – Blue Shore: Definitely. And so the two questions I have is, number one, can you give me an idea, one of our basis theses as investors in Trans World is that, we saw -- we see you having incredible locations in the U.S. in some of the prime malls space and we see you having basically boxes where you can sell things. So, we like the fact that you're moving into other products, electronics and trend, as there is a decline in the -- a secular decline in video and music. So, is that going to continue, are you looking to add new products other than electronics and the trend category, or is it just this gradual growth going forward?

No. We’re definitely looking at new products and when any of you out there walk the malls today, you’ll see that there is a lot of products that aren’t offered anymore in the mall and we think there is many opportunities to expand our products aligned and we want to make sure we do that properly. So it take some time to do it, but definitely we are looking at additional lines. Harsha Gowda – Blue Shore: Okay. Great. And can you give me an idea what’s your average lease term now?

What we are doing, you will see that if you read our K that a lot of leases expired this year. But we’ve gone back and we've improved that, so we are getting time -- more time on the leases where we feel that we needed and if something is store that’s a C or D piece of real estate, we might keep that at only one year, because we know we can renew it. But we are definitely extending our lease term right now, because we’re down to a profitable group of stores. Harsha Gowda – Blue Shore: Okay. Great. And the second and final point in question I have is, you -- as I said done a great job with the company, but it seems that you are carrying at least about $1 per share in excess cash. You mentioned many times that you didn’t have to touch the credit line and now that you have also extended it. Sitting there, earning low interest, don’t you think it’s a better idea to return, that amount to shareholders, so that, we could do something with it outside of the Trans World. And you’re returning that cash would have no impact, no negative impact on the company’s future performance. So is that something you’re thinking about right now?

Well, I will tell you, the first thing, Harsha, I didn’t think we’ll be sitting with $62 million in cash at the end of the first quarter. So it’s something that’s got my attention and it something I will be discussing with the Board as we go forward. Harsha Gowda – Blue Shore: Great. Great. Thanks and once again amazing performance. Thank you.

Thank you.

Our next question comes from Bill Meyers of Miller Asset Management. Please go ahead with your question. Bill Meyers – Miller Asset Management: Hi. Also congratulations on the quarter.

Thank you, Bill. Bill Meyers – Miller Asset Management: Sure. Could you talk about music is down to, I think you said 33% of revenue, but that’s still a very major chunk of your revenue. Can you talk about how you see the music situation with CD, physical CD sales working out going forward?

Yeah. The -- it was interesting that we have a very weak new release schedule in the first quarter. The second and third quarter is a little better in music. But do not think that it’s going to continue to decrease a little bit. I’d have that blinders on. And so we feel that’s one of the reasons, we are shifting our merchandise mix. I’m watching it very carefully. But as people do a band in the category, there is still a certain group of people that want to buy CDs and as there is less and less competition, we would expect to capitalize on that. Bill Meyers – Miller Asset Management: Okay. And my other question is, I presume that as you’ve closed stores, you moved inventory into your remaining stores and if you are going to be closing less stores. How is that going to affect your model?

I think by closing less stores and opening some new stores it only enhances our model. And we will do that as we see fit and I -- we definitely we’ll be closing less stores and we will definitely be opening some new stores. And our requirements of the landlord is we need to have a good location within a mall and we need open a store that makes money right away. So there are two criteria’s which I think are pretty good. Bill Meyers – Miller Asset management: Okay. Thank you.

Thank you.

(Operator Instructions) I’m not showing any other questions in the queue at this time.

Okay. Thank you, Sean, and thank you everybody else for their time today. I’d like to take the opportunity to thank everyone for their dedication to our company, which includes our customers, our vendors and shareholders, and especially our Trans World associates. We look forward to talking to you about our second quarter results on August, 16th. So thank you very much everyone.

Thank you, ladies and gentlemen. Thanks for your participation in today’s conference. This does conclude the conference. You may now disconnect. Good day.