[LOGO OMITTED]
Company Contact: Maggie Feeney
Executive Vice President and
Chief Financial Officer
Cache Inc.
(212) 575-3206
FINAL: FOR RELEASE
Investor Relations: Allison Malkin/Jane Thorn Leeson
ICR, Inc.
(203) 682-8225/(646) 277-1223
CACHE REPORTS THIRD QUARTER FISCAL 2009 RESULTS
THIRD QUARTER LOSS PER SHARE OF $0.53, INCLUDES $0.10 PER SHARE CHARGE
CASH AND MARKETABLE SECURITIES OF $34.2 MILLION
INTRODUCES FOURTH QUARTER FISCAL 2009 DILUTED EPS GUIDANCE OF $0.12 TO $0.15
New York, New York - October 23, 2009 - Cache Inc., (NASDAQ: CACH), a
specialty chain of women's apparel stores, reported results for the thirteen
("third quarter") and thirty-nine week periods ("first nine months") ended
September 26, 2009.
FOR THE 13-WEEK PERIOD ENDED SEPTEMBER 26, 2009:
o Net sales decreased 22.7% to $44.9 million from $58.1 million in the
third quarter of fiscal 2008. Comparable store sales decreased 21.7%,
as compared to a decrease of 3.9% in the third quarter of fiscal 2008;
o Net loss totaled $6.8 million or ($0.53) per share, including $0.10
per share in separation agreement costs. This compares to a net loss
of $1.6 million or ($0.12) per share, including $0.02 per share in
store closure costs, in the third quarter of fiscal 2008;
o Adjusted net loss for the 13-week period in fiscal 2009 was $5.5
million or ($0.43) per share, excluding separation agreement costs,
compared to an adjusted net loss of $1.4 million or ($0.10) per share,
excluding store closure costs, for the 13-week period in fiscal 2008.
Thomas Reinckens, Chairman and Chief Executive Officer, commented: "We were
disappointed with our third quarter results, which reflected lower than expected
sales and our decision to accelerate markdowns in anticipation of our new fall
and holiday assortments. On a positive note, we maintained a strong balance
sheet and generated significant cost savings, while implementing merchandise
strategies to position Cache for improved sales and profitability during the
fourth quarter. In November, we expect to launch a new expanded assortment to
meet more of our existing customers lifestyle needs, as well as to attract new
customers."
"We are pleased with the progress we made to reposition our Company,"
continued Mr Reinckens. "During the quarter, we intensified our value pricing
initiative, which is allowing us to broaden our customer reach and continued to
maintain a strong balance sheet and stringent financial discipline. At quarter
end, cash and marketable securities totaled $34.2 million, up 33.6% from the
prior year and inventory at cost declined by 39.5% from the prior year. We also
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generated $5 million in expense savings during the quarter and remain on track
to deliver $23 million in cost reductions this year."
"As we look ahead, we are encouraged about our opportunities in the fourth
quarter given our current and upcoming assortments that include compelling
fashion, increased value and broader appeal," Mr. Reinckens stated. "Increasing
our confidence in our ability to generate better results in the fourth quarter
is the improvement in our sales trend thus far in October. We also expect to
strengthen our gross profit margin given the acceleration in markdowns to the
third quarter, which has allowed us to increase the newness on our selling
floor. Finally, we have planned our holiday promotions to be more impactful and
maximize the natural increase in mall traffic during the season. Combined, we
believe our efforts position Cache to return to profitability in the fourth
quarter."
FOR THE 39-WEEK PERIOD ENDED SEPTEMBER 26, 2009:
o Net sales decreased 22.5% to $154.8 million from $199.8 million in the
first nine months of fiscal 2008. Comparable store sales decreased
21.8% following a 1% gain in the first nine months of fiscal 2008;
o Net loss was $7.5 million or ($0.59) per share, including $1.3 million
or $0.10 per diluted share in separation agreement costs, net of
taxes. This compares to a net loss of $1.6 million or ($0.12) per
share, including charges, net of taxes, of: $1.7 million or $0.13 per
diluted share related to store closures and $388,000 or $0.03 per
diluted share related to the management change during the first nine
months of fiscal 2008; and
o Adjusted net loss for the first nine months of fiscal 2009 was $6.2
million or ($0.48) per share, excluding separation agreement costs, as
compared to net income of $531,000 or $0.04 per diluted share,
excluding store closure and management change costs, in the first nine
months of fiscal 2008.
Gross profit for the third quarter of fiscal 2009 was $14.2 million, or
31.6% of net sales, compared to $25.6 million, or 44.1% of net sales, in the
third quarter of fiscal 2008. For the first nine months of fiscal 2009, gross
profit was $61.2 million, or 39.6% of net sales, compared to $88.2 million, or
44.2% of net sales, in the first nine months of fiscal 2008. The decline in
gross profit margin for the third quarter and first nine months of fiscal 2009
was primarily driven by increased markdowns and lower sales which did not offset
fixed occupancy costs.
In total, operating expenses were $25.1 million, or 55.8% of net sales, as
compared to $28.3 million, or 48.7% of net sales, in the third quarter of fiscal
2008. For the first nine months of fiscal 2009, total operating expenses were
$73.3 million, or 47.3% of net sales, compared to $91.2 million, or 45.6% of net
sales, in the first nine months of fiscal 2008. Operating expenses for the
13-week period and first nine months of fiscal 2009 included $2.1 million in
separation agreement costs. Operating expenses for the 13-week period in fiscal
2008 included $449,000 in store closure costs. Operating expenses for the first
nine months of fiscal 2008 included $3.4 million of charges, primarily related
to store closures. The decrease in operating expenses for the quarter and first
nine months of fiscal 2009 was primarily driven by a reduction in store payroll,
depreciation and advertising costs, lower general and administrative costs and
the effect of the above-mentioned one-time charges incurred during the first
nine months of fiscal 2008, partially offset by costs associated with the
separation agreement taken in the third quarter of fiscal 2009.
At September 26, 2009, cash and marketable securities totaled $34.2 million
and compares to $25.6 million in cash and marketable securities at September 27,
2008. Total inventory at cost
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decreased 39.5% at quarter end, from the prior-year period. Working capital
decreased by $6.0 million to $40.6 million from $46.6 million at September 27,
2008.
A table summarizing financial results follows:
Thirty-Nine Weeks Ended Thirteen Weeks Ended
----------------------- --------------------
Sept. 26, Sept. 27, Sept. 26, Sept. 27,
2009 2008 2009 2008
---- ---- ---- ----
($ thousands, except for per share data, share numbers and store count)
Net sales $ 154,813 $ 199,820 $ 44,941 $ 58,139
Operating income (loss) (12,063) (2,953) (10,854) (2,680)
Store closure and other one-time costs - 3,373 - 449
Separation agreement costs 2,121 - 2,121 -
Operating income (loss) before
Separation, store closure and (9,942) 420 (8,733) (2,231)
other one-time costs
Net income (loss) (7,533) (1,594) (6,783) (1,646)
Net income (loss) before separation, store (6,205) 531 (5,457) (1,363)
closure and other one-time costs
Basic earnings (loss) per share $ (0.59) $ (0.12) $ (0.53) $ (0.12)
Diluted earnings (loss) per share $ (0.59) $ (0.12) $ (0.53) $ (0.12)
Per share - Store closure and other
one-time costs $ - $ 0.16 $ - $ 0.02
Per share - Separation agreement costs $ 0.10 $ - $ 0.10 $ -
Diluted earnings (loss) per share -
excluding separation, store closure $ (0.48) $ 0.04 $ (0.43) $ (0.10)
and other one-time costs
Basic weighted average shares
outstanding 12,810,000 13,372,000 12,748,000 13,229,000
Diluted weighted average shares
outstanding 12,810,000 13,372,000 12,748,000 13,229,000
Number of stores open at end of period 289 295 289 295
FOURTH QUARTER FISCAL 2009 GUIDANCE
The Company is introducing guidance for the fourth quarter of fiscal 2009.
The Company estimates net sales in the range of $62 million to $64 million,
which compares to actual net sales of $65.9 million in fiscal 2008. This
guidance assumes comparable stores sales in the fourth quarter of fiscal 2009
will decrease in the low double-digit range and compares to a comparable store
sales decrease of 17% in the fourth quarter of fiscal 2008.
Diluted earnings per share for the fourth quarter of fiscal 2009 is
estimated in the range of $0.12 to $0.15, which compares to actual fourth
quarter fiscal 2008 loss per share on a GAAP basis of ($0.42), which included
costs of $0.10 per diluted share related to non-cash impairment
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charges. Actual adjusted net loss for the fourth quarter of fiscal 2008 was
($0.32) per share and excluded impairment charges.
STORE OPENING PLANS
During the third quarter, the Company opened one new store and closed three
locations, ending the period with 289 stores in operation. For the remainder of
fiscal 2009, the Company plans to open one additional new store and close
approximately five locations, ending the year with approximately 285 stores and
approximately 575,000 square feet in operation.
CONFERENCE CALL INFORMATION
The Company announced that it will conduct a conference call to discuss its
third quarter fiscal 2009 results today, October 23, 2009 at 9:00 a.m. Eastern
Time. Investors and analysts interested in participating in the call are invited
to dial (877) 407-9039 approximately ten minutes prior to the start of the call.
The conference call will also be web-cast live at www.cache.com. A replay of
this call will be available until October 30, 2009 and can be accessed by
dialing (877) 660-6853 and entering account number 3055 and conference code
335196.
ABOUT CACHE, INC.
Cache is a nationwide, mall-based specialty retailer of sophisticated
sportswear and social occasion dresses targeting style-conscious women who have
a youthful attitude and are self-confident. We currently operate 289 stores,
primarily situated in central locations in high traffic, upscale malls in 43
states, the Virgin Islands and Puerto Rico.
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CACHE, INC. AND SUBSIDIARIES 23-Oct-09
CONSOLIDATED BALANCE SHEETS
ASSETS September 26, 2009 December 27, 2008 September 27, 2008
------------------- ------------------ -------------------
Current assets:
Cash and equivalents $ 5,329,000 $ 4,835,000 $ 2,023,000
Marketable securities 27,376,000 25,153,000 23,570,000
Certificate of deposits - restricted 1,500,000 0 0
Receivables, net 2,713,000 3,898,000 4,848,000
Income tax receivable 2,225,000 5,883,000 0
Inventories, net 20,434,000 22,321,000 33,802,000
Prepaid expenses and other current assets 1,117,000 1,795,000 5,611,000
------------------ ------------------ -------------------
Total current assets 60,694,000 63,885,000 69,854,000
Equipment and leasehold improvements, net 35,724,000 43,320,000 46,393,000
Goodwill 9,092,000 9,092,000 10,089,000
Intangible assets, net 1,012,000 1,304,000 1,334,000
Other assets 4,274,000 1,924,000 389,000
------------------ ------------------ -------------------
Total assets $ 110,796,000 $ 119,525,000 $ 128,059,000
================== ================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,676,000 $ 6,375,000 $ 8,931,000
Note payable 1,294,000 1,259,000 1,248,000
Accrued compensation 2,862,000 1,713,000 2,682,000
Accrued liabilities 8,246,000 11,077,000 10,366,000
------------------ ------------------ -------------------
Total current liabilities 20,078,000 20,424,000 23,227,000
Note payable 2,199,000 3,143,000 3,450,000
Other liabilities 17,202,000 16,795,000 16,335,000
Deferred income taxes, net 0 0 133,000
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock 164,000 164,000 164,000
Additional paid-in capital 47,428,000 47,155,000 47,075,000
Retained earnings 63,520,000 71,053,000 76,581,000
Treasury stock (39,795,000) (39,209,000) (38,906,000)
------------------ ------------------ -------------------
Total stockholders' equity 71,317,000 79,163,000 84,914,000
------------------ ------------------ -------------------
Total liabilities and stockholders' equity $ 110,796,000 $ 119,525,000 $ 128,059,000
================== ================== ===================
CACHE, INC. AND SUBSIDIARIES 23-Oct-09
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTY-NINE WEEKS ENDED
September 26, September 27,
2009 2008
-------------------- --------------------
Net sales $ 154,813,000 $ 199,820,000
Cost of sales, including buying and occupancy 93,574,000 111,599,000
-------------------- --------------------
Gross profit 61,239,000 88,221,000
-------------------- --------------------
Expenses
Store operating expenses 57,840,000 71,741,000
General and administrative expenses 13,341,000 16,676,000
Store exit costs 0 2,757,000
Employee separation charge 2,121,000 0
-------------------- --------------------
Total expenses 73,302,000 91,174,000
-------------------- --------------------
Operating loss (12,063,000) (2,953,000)
Other income (expense):
Interest expense (146,000) (189,000)
Interest income 178,000 612,000
-------------------- --------------------
Loss before income taxes (12,031,000) (2,530,000)
Income tax benefit (4,498,000) (936,000)
-------------------- --------------------
Net loss $ (7,533,000) $ (1,594,000)
===================== ====================
Basic loss per share ($0.59) ($0.12)
===================== ====================
Diluted loss per share ($0.59) ($0.12)
===================== ====================
Basic weighted average shares outstanding 12,810,000 13,372,000
===================== ====================
Diluted weighted average shares outstanding 12,810,000 13,372,000
===================== ====================
CACHE, INC. AND SUBSIDIARIES 23-Oct-09
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEKS ENDED
September 26, September 27,
2009 2008
--------------- ---------------
Net sales $ 44,941,000 $ 58,139,000
Cost of sales, including occupancy and buying costs 30,727,000 32,525,000
--------------- ---------------
Gross profit 14,214,000 25,614,000
--------------- ---------------
Costs and expenses
Store operating expenses 18,590,000 23,040,000
General and administrative expenses 4,357,000 4,805,000
Store exit costs 0 449,000
Employee separation charge 2,121,000 0
--------------- ---------------
Total expenses 25,068,000 28,294,000
--------------- ---------------
Operating loss (10,854,000) (2,680,000)
--------------- ---------------
Other income (expense):
Interest expense (48,000) (58,000)
Interest income 52,000 125,000
--------------- ---------------
Loss before income taxes (10,850,000) (2,613,000)
Income tax benefit (4,067,000) (967,000)
--------------- ---------------
Net loss $ (6,783,000) $ (1,646,000)
=============== ===============
Basic loss per share ($0.53) ($0.12)
=============== ===============
Diluted loss per share ($0.53) ($0.12)
=============== ===============
Basic weighted average shares outstanding 12,748,000 13,229,000
=============== ===============
Diluted weighted average shares outstanding 12,748,000 13,229,000
=============== ===============