Our gross margin rate for the quarter increased 200 basis points to 35 .8% of net sales from 33.8% last year. The increase in gross profit as a percentage of sales was due to the higher margin rates across all product categories.

SG&A expenses were $50.5 million a reduction of 16% on total sales decline of 17%. SG&A as a percentage of sales was 26.2% compared to a 26.1% last year. The decrease in SG&A expenses was driven by the closing of under performing stores and continued focus on effective expense management. Net interest expense was $790,000 for the quarter versus $915,000 last year.

Now I will comment on our full year results. Total sales for the year decreased 17% to $543 million from $652 million last year. As our average number of stores in operation also declined 17%. Our comp store sales for the full year were down 2% compared to last year, and our net income for the year improved by over $33 million to $2.2 million or $0.07 per diluted share versus last years net loss of $31 million or $0.99 per share.

EBITDA improved $25.8 million for the year to $11.5 million as compared to last year’s EBITDA loss of $14.3 million. Our gross margin rate for the year increased 290 basis points to 36.5% of sales from 33.6% last year. The increase of gross profit as percentage of sales was due to higher margin rates across all of our products.

SG&A expenses were $186.6 million a reduction of 20% on a total sales decline of 17%. Resulting in a 140 basis decrease as a percentage of sales to 34.4% this year from 35.8% last year.

Net interest expense was $3.2 million for the year versus $3.3 million last year. The Company did not require any borrowing under its line of credit at any point during the entire year. We ended the year with cash of $89 million compared to $75 million last year. And year-over-year we have lowered our inventory by $43 million, and finished the year with $191 million in inventory 18% below last year’s $234 million. On a per-square-foot basis this is $75 versus $74 last year.

We also ended the year with 390 stores and 2.6 million square feet in operation versus last years 460 stores and 3.1 million square feet.

Now I will turn it back to Bob

Bob Higgins - Trans World Entertainment Corp - CEO
Thanks, Tom. After several years of disappointing results, 2011 marked the return to profitability for our Company. We have made significant progress and our results reflect that.

Our comp sales performance demonstrates our ability to offset declines in video and music with strong comp increases in our emerging categories of electronics and trend. In fact for the fourth quarter these 2 categories combined represented 21% of our business and had a 25% 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 have been able to reduce operating expenses by challenging each and every component of the 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 our continued leveraging of our SG&A expenses.

As Tom mentioned we ended the year with cash of $89 million and without any borrowings on our line of credit. In fact, we did not have any borrowings outstanding on our line of credit at any point in the year. While improving our operating results we continue to focus on the management of inventory and cash.

As we head into 2012 our strategy is to focus on continuing to challenge every aspect of our business and to improve and to deliver better value and exceptional shopping experience to our customers. In addition, we will continue to invest in our growth categories and aggressively seize opportunities to drive our sales and operating profits. We are moving in the right direction, and we look forward to 2012.

Now, Shawn, I would like to open up the call for any questions anyone has.

QUESTIONS AND ANSWERS
Operator
Thank you. (Operator Instructions). I have a question from Will Myers with Miller Asset Management. Please go ahead.