UNITED STATES
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):
MAY 1, 2005
CACHE, INC.
--------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 0 -10345 59 -1588181
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(STATE OR OTHER (COMMISSION FILE NUMBER) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION
INCORPORATION) NUMBER)
1440 BROADWAY, NEW YORK, NEW YORK 10018
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER: (212) 575-3200
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 4, 2005 Cache, Inc. (the "Company") issued a press release
regarding its financial results for the thirteen weeks ended April 2, 2005. The
Company's press release regarding its financial results is attached as Exhibit
99.1 to this Current Report on Form 8-K.
The information in Item 2.02 of this Current Report on Form 8-K and
Exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of Section
18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise
subject to the liabilities of that section, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933 or the Exchange Act,
regardless of any general incorporation language in such filing.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS
The Company has appointed Margaret (Maggie) Feeney as its new Executive
Vice President and Chief Financial Officer, effective as of May 1, 2005. Prior
to her appointment as Chief Financial Officer, Ms. Feeney was the Company's Vice
President of Finance, having served in a variety of financial and operational
capacities with the Company since 1992. Prior to joining the Company, Ms. Feeney
served as Manager of Financial Analysis and Budgeting for Toys "R" Us and in
various financial positions at Brooks Fashion Stores, a junior specialty chain.
Ms. Feeney has over 20 years of retail experience.
There are no family relationships among Ms. Feeney and any other
directors or officers of the Company.
There were no transactions since the beginning of the Company's last
fiscal year, and there are no currently proposed transactions, to which the
Company was or is to be a party, in which Ms. Feeney had or is to have a direct
or indirect material interest.
The Company does not have an employment agreement with Ms. Feeney.
The Company's press release regarding Ms. Feeney's appointment is
attached as Exhibit 99.2 to this Current Report on Form 8-K.
ITEM 9.01 EXHIBITS
99.1 Press release regarding financial results for the thirteen week period
ending April 2, 2005.
99.2 Press release regarding the appointment of Margaret (Maggie) Feeney as
Chief Financial Officer and Executive Vice President of the Company.
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 HEREUNTO DULY AUTHORIZED.
DATED: MAY 4, 2005 CACHE, INC.
BY: /S/ BRIAN WOOLF
---------------------------------
BRIAN WOOLF
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
MAY 4, 2005
FOR IMMEDIATE RELEASE
CACHE, INC.
NASDAQ COMMON STOCK SYMBOL CACH.
CACHE REPORTS FIRST QUARTER 2005 RESULTS
Net Sales Increased 9.8%
Diluted Earnings per Share Totals $0.11
Revises Second Quarter and Fiscal 2005 Guidance
Announces April 2005 Comparable Store Sales Decreased 3%
New York, New York - May 4, 2005 - Cache Inc., (NASDAQ: CACH), a specialty
chain of women's apparel stores with 295 stores currently open, reported results
for the thirteen week period ended April 2, 2005.
For the thirteen week period ended April 2, 2005:
o Net sales increased 9.8% to $62.8 million compared to $57.2 million in
the first quarter of 2004 and comparable store sales gained 1%;
o Operating income declined to $2.8 million, or 4.4% of net sales, as
compared to $5.2 million, or 9.0% of net sales in the first quarter of
2004;
o Diluted earnings per share totaled $0.11 compared to $0.20 in the
first quarter of 2004.
Mr. Brian Woolf, Cache's Chairman commented: "Our first quarter results,
while at the high end of our revised outlook were below our original
expectations due to a more significant fashion shift favoring casual lifestyle
apparel versus our emphasis on classification styles. While we quickly worked to
re-balance our assortments, earnings for the quarter were negatively impacted by
lower-than-expected sales and margins. On a positive note, our inventory is now
positioned to capitalize on current fashion trends, which should enable us to
report comparable store sales increases in May."
Additionally, during the first quarter, the Company:
o Opened 5 Cache stores and at quarter-end operated 294 stores in 43
states;
o Remodeled 3 stores with 50% of its Cache store base in the new store
format at quarter-end.
Following quarter end:
o Engaged Deloitte and Touche LLP as its new independent auditor
Gross profit in the first quarter rose by 5.4% to $27.1 million, or 43.2%
of net sales, compared to $25.7 million, or 44.9% of net sales, in the first
quarter of 2004. The decrease in gross profit margin reflected the March sales
shortfall coupled with increased promotional activity to maintain appropriate
inventory levels and a sales mix shift favoring lower margin dress sales. In
total, operating expenses were $24.4 million, or 38.8% of net sales compared to
$20.5 million, or 35.9% of net sales in the first quarter of 2004. The increase
in operating expenses as a percentage of net sales resulted from a higher
percentage of new stores and lower than expected comparable store sales, which
caused negative leverage in store operating expenses. This was partially offset
by prudent control of general and administrative expenses.
At April 2, 2005, cash and marketable securities totaled $42.6 million,
rising $1.9 million from $40.7 million at March 27, 2004. Inventory was current
at $34.4 million, as compared to $29.8 million at March 27, 2004. Working
capital increased by $6.8 million to $55.1 million from $48.3 million at March
27, 2004.
1
A table summarizing financial results follows:
THIRTEEN WEEKS ENDED
--------------------
Apr. 2, Mar. 27,
2005 2004
---- ----
($ Thousands, except for per share data)
Sales $ 62,793 $ 57,194
Operating income $ 2,751 $ 5,151
Net income $ 1,757 $ 3,249
Basic earnings per share $ 0.11 $ 0.21
Diluted earnings per share $ 0.11 $ 0.20
Basic weighted average
shares outstanding 15,686,000 15,438,000
Diluted weighted average
shares outstanding 16,002,000 15,957,000
GUIDANCE
The Company is revising its guidance for fiscal 2005 net sales and diluted
earnings per share. For fiscal 2005, the Company currently estimates net sales
in the range of $268 million to $272 million compared to its previous guidance
range of $270 million to $275 million and versus actual net sales of $247.3
million in fiscal 2004. In addition, the Company currently estimates fiscal 2005
diluted earnings per share in the range of $0.75 to $0.78 compared to its
previous guidance range of $0.79 to $0.82 and versus actual fiscal 2004 diluted
earnings per share of $0.83. For the second quarter, the Company currently
estimates net sales in the range of $64 million to $66 million, as compared to
its previous estimate range of $65 million to $67 million and versus actual net
sales of $62.1 million in the second quarter of fiscal 2004. In addition, the
Company currently estimates second quarter diluted earnings per share in the
range of $0.16 to $0.18, as compared to its previous guidance range of $0.20 to
$0.22 and versus actual diluted earnings per share of $0.27 in the second
quarter of fiscal 2004.
STORE OPENING PLANS
The Company continues to plan approximately 20 Cache and 10 Lillie Rubin
store openings for a total of 30 new stores in Fiscal 2005. During the first
quarter, the Company opened 5 new Cache stores. Following quarter end, the
Company opened 2 new Cache stores and has scheduled a total of 2 additional
store openings for the second quarter. At fiscal year-end, the Company continues
to expect to operate approximately 320 stores, expanding square footage by
approximately 10% to 650,000 square feet.
COMPARABLE STORE SALES
Separately, the Company announced April Comparable store sales results.
Comparable store sales (sales for stores open at least one year or more)
declined 3% during the four week April 2005 period, as compared to the same
period in 2004. Total sales for the four-week period ended April 30, 2005
increased $0.8 million, or 3.9%, to $24.0 million. Comparable store sales were
flat during the 17 week year-to-date period ended April 30, 2005, as compared to
the same period in 2004. Total sales for the 17 week year-to-date period
increased $6.1 million, or 7.6%, to $86.8 million.
2
"Our April comparable store sales decline of 3% was below our expectations
of flat sales, with results impacted due to our efforts to rebalance assortments
toward stronger selling styles," Mr. Woolf stated. "This coupled with additional
markdowns has caused us to revise our second quarter guidance. On a positive
note, comparable store sales in the last week of April and early May have
increased and we expect this trend to continue, especially since we are facing
easier comparisons going forward."
Mr. Woolf continued: "As we look ahead, we remain excited by the key
strategic initiatives we are implementing this year in the areas of
merchandising, marketing and store expansion. To this point, our current
merchandise assortments are resonating well with consumers and we see continued
momentum from our efforts to broaden our customer base with a wider assortment
of price points. In regards to marketing, our lifestyle mailers continue to
drive traffic to our stores, and we believe we are poised to increase customer
loyalty further as we roll out our new point of sale ("POS") system this July.
Lastly, we are scheduled to open approximately 30 stores this year, expanding
square footage by approximately 10%. We remain confident that our strategic
initiatives position us to achieve our long term growth goals supported by a
strong balance sheet, including $2.72 in marketable securities and cash per
share."
Interested stockholders and other persons are invited to listen to the
first quarter earnings conference call scheduled for today, Wednesday, May 4,
2005 at 9:00 a.m. Eastern Time. To participate in Cache's conference call dial
1-800-811-8824 approximately five minutes prior to the 9:00am Eastern start
time. The call will also be broadcast live over the Internet at
HTTP://WWW.CACHE.COM. An online archive will be available immediately following
the call and will be accessible until May 11, 2005.
Certain matters discussed within this press release may constitute
forward-looking statements within the meaning of the federal securities law.
Although Cache, Inc. believes the statements are based on reasonable
assumptions, there can be no assurance that these expectations will be attained.
Actual results and timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due to a number
of factors, including, without limitation, industry trends, merchandise and
fashion trends, competition, changes in general economic conditions and consumer
spending patterns, vendor procurement issues and the ability to obtain
financing, as well as other risks outlined from time to time in the filings of
Cache, Inc., with the Securities and Exchange Commission.
Financial Tables Follow:
For further information contact Thomas E. Reinckens, President, Chief
Operating Officer, Cache, Inc., 1440 Broadway, New York, New York 10018, (212)
575-3246.
3
CACHE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
April 2, January 1, March 27,
ASSETS 2005 2004 2004
---------------- ---------------- ----------------
(Restated)
Current assets:
Cash and equivalents $ 18,646,000 $ 16,848,000 $ 26,585,000
Marketable securities 24,000,000 25,874,000 14,153,000
Receivables, net 5,992,000 6,545,000 3,865,000
Inventories 34,393,000 32,296,000 29,824,000
Deferred income taxes 616,000 567,000 930,000
Prepaid expenses and other current assets 1,600,000 1,948,000 1,000,000
---------------- ---------------- ----------------
Total current assets 85,247,000 84,078,000 76,357,000
Equipment and leasehold improvements, net 48,287,000 47,118,000 35,307,000
Other assets 850,000 832,000 832,000
---------------- ---------------- ----------------
Total assets $ 134,384,000 $ 132,028,000 $ 112,496,000
================ ================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,957,000 $ 17,055,000 $ 16,259,000
Income taxes payable 502,000 --- 224,000
Accrued compensation 2,563,000 1,927,000 1,719,000
Accrued liabilities 10,164,000 11,627,000 9,822,000
---------------- ---------------- ----------------
Total current liabilities 30,186,000 30,609,000 28,024,000
Other liabilities 14,496,000 13,556,000 9,452,000
Deferred income taxes, net 2,978,000 3,023,000 701,000
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock 157,000 157,000 104,000
Additional paid-in capital 34,832,000 34,705,000 34,285,000
Retained earnings 51,735,000 49,978,000 39,930,000
---------------- ---------------- ----------------
Total stockholders' equity 86,724,000 84,840,000 74,319,000
---------------- ---------------- ----------------
Total liabilities and stockholders' equity $ 134,384,000 $ 132,028,000 $ 112,496,000
CACHE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRTEEN WEEKS ENDED
(Unaudited)
April 2, March 27,
2005 2004
---------------- --------------
Net sales $ 62,793,000 $ 57,194,000
Cost of sales, including occupancy and buying costs 35,660,000 31,506,000
---------------- --------------
Gross profit 27,133,000 25,688,000
---------------- --------------
Expenses
Store operating expenses 20,593,000 16,889,000
General and administrative expenses 3,789,000 3,648,000
---------------- --------------
Total expenses 24,382,000 20,537,000
---------------- --------------
Operating income 2,751,000 5,151,000
Other income:
Interest income 157,000 95,000
---------------- --------------
Income before income taxes 2,908,000 5,246,000
Income tax provision 1,151,000 1,997,000
---------------- --------------
Net income $ 1,757,000 $ 3,249,000
================ ==============
Basic earnings per share $0.11 $0.21
=============== ==============
Diluted earnings per share $0.11 $0.20
=============== ==============
Basic weighted average shares outstanding 15,686,000 15,438,000
=============== ==============
Diluted weighted average shares outstanding 16,002,000 15,957,000
=============== ==============
NUMBER OF STORES OPEN AT END OF PERIOD 294 258
=============== ==============
Exhibit 99.2
[GRAPHIC OMITTED]
Company Contact: Tom Reinckens
Cache Inc.
(212) 575-3246
Investor Relations: Allison Malkin/David Griffith
Integrated Corporate Relations
(203) 682-8200
CACHE NAMES MARGARET FEENEY AS CHIEF FINANCIAL OFFICER
New York, NY - May 4, 2005 - Cache Inc. (NASDAQ: CACH) today announced that
the Company has promoted Margaret ("Maggie") Feeney, currently its Vice
President of Finance, to Executive Vice President and Chief Financial Officer.
Ms. Feeney will be responsible for Cache's financial operations, including
accounting, external reporting, tax and treasury and human resources effective
May 1, 2005.
Ms. Feeney has over 20 years of retail experience. Most recently, she
served as Vice President of Finance, having held a variety of financial and
operational capacities since joining Cache in 1992. Prior to this, she was
Manager of Financial Analysis and Budgeting for Toys "R" Us and also held
several financial positions at Brooks Fashion Stores, a junior specialty chain.
Brian Woolf, Cache Chairman stated: "We are very pleased to announce the
promotion of Maggie Feeney to EVP and CFO. Since coming to Cache, Maggie has
made numerous contributions in the finance area. The qualities she possesses,
including strong financial management skills and substantial retail experience
make her an ideal fit for the CFO position. We are confident that her leadership
and capabilities will enable us to deliver on our financial and operational
goals."
Certain matters discussed within this press release may constitute
forward-looking statements within the meaning of the federal securities law.
Although Cache, Inc. believes the statements are based on reasonable
assumptions, there can be no assurance that these expectations will be attained.
Actual results and timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due to a number
of factors,
including, without limitation, industry trends, merchandise and
fashion trends, competition, changes in general economic conditions and consumer
spending patterns, vendor procurement issues and the ability to obtain
financing, as well as other risks outlined from time to time in the filings of
Cache, Inc., with the Securities and Exchange Commission.
Cache is a nationwide, mall-based specialty retailer of sophisticated,
social occasion sportswear and dresses targeting style-conscious women. We own
and operate two separate store concepts, Cache and Lillie Rubin, each of which
carries its own distinctive branded merchandise. Cache targets women between the
ages of 25 and 45 who have a youthful attitude, are self-confident and
fashion-conscious, and require a missy fit. Lillie Rubin stores offer a more
sophisticated line of social occasion apparel targeting women between the ages
of 35 and 55. We operate 258 Cache and 37 Lillie Rubin stores primarily situated
in central locations in high traffic, upscale malls in 43 states and Puerto
Rico.