FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended September 28, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from............... to ...............
Commission File Number: 0-10345
CACHE, INC.
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(Exact name of registrant as specified in its Charter)
Florida 59-1588181
-------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1460 Broadway, New York, New York 10036
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(Address of principal executive offices) (zip code)
212-575-3200
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(Registrant's telephone number, including area code)
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(Former name, address and former Fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.01 9,100,150
-------------------------- -------------------------------
Class of Stock Outstanding Outstanding at November 7, 2002
CACHE, INC. AND SUBSIDIARIES
INDEX
PAGE
CONSOLIDATED FINANCIAL STATEMENTS
BALANCE SHEETS, SEPTEMBER 28, 2002
DECEMBER 29, 2001 AND
SEPTEMBER 29, 2001 3
STATEMENTS OF OPERATIONS
THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 2002
AND SEPTEMBER 29, 2001 4
THIRTEEN WEEKS ENDED SEPTEMBER 28, 2002
AND SEPTEMBER 29, 2001 5
STATEMENTS OF CASH FLOWS
THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 2002
AND SEPTEMBER 29, 2001 6
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7-9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9-13
OTHER INFORMATION:
EXHIBITS AND REPORTS ON FORM 8-K 13
CERTIFICATIONS 16-18
2
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 28, December 29, September 29,
2002 2001 2001
ASSETS -------------- -------------- --------------
(Unaudited) (Unaudited)
Current Assets:
Cash and equivalents $ 17,184,000 $ 12,101,000 $ 6,126,000
Receivables, net 2,857,000 4,318,000 3,467,000
Notes receivable from related parties 321,000 371,000 371,000
Inventories, net 24,653,000 21,761,000 27,149,000
Prepaid income taxes and other tax assets 593,000 599,000 1,307,000
Prepaid expenses 510,000 712,000 949,000
-------------- -------------- --------------
Total current assets 46,118,000 39,862,000 39,369,000
Equipment and leasehold improvements, net 18,630,000 15,906,000 15,801,000
Other assets 819,000 825,000 862,000
Deferred income taxes, net 525,000 542,000 745,000
-------------- -------------- --------------
Total assets $ 66,092,000 $ 57,135,000 $ 56,777,000
============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 12,989,000 $ 11,089,000 $ 15,077,000
Accrued compensation 1,707,000 2,135,000 976,000
Accrued liabilities 9,050,000 6,441,000 5,603,000
-------------- -------------- --------------
Total current liabilities 23,746,000 19,665,000 21,656,000
-------------- -------------- --------------
Other liabilities 1,076,000 1,164,000 1,295,000
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, par value $.01; authorized, 20,000,000
shares; issued and outstanding 9,100,150 shares 91,000 91,000 91,000
Additional paid-in capital 19,609,000 19,564,000 19,564,000
Retained earnings 21,570,000 16,651,000 14,171,000
-------------- -------------- --------------
Total Stockholders' Equity 41,270,000 36,306,000 33,826,000
-------------- -------------- --------------
Total Liabilities and Stockholders' Equity $ 66,092,000 $ 57,135,000 $ 56,777,000
============== ============== ==============
The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets.
3
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTY-NINE WEEKS ENDED
(Unaudited)
September 28, September 29,
2002 2001
-------------- --------------
Net sales $ 140,926,000 $ 127,663,000
Cost of sales, including occupancy and buying costs 82,660,000 83,485,000
-------------- --------------
Gross profit 58,266,000 44,178,000
-------------- --------------
Expenses
Store operating expenses 41,469,000 37,700,000
General and administrative expenses 9,245,000 6,973,000
-------------- --------------
Total expenses 50,714,000 44,673,000
-------------- --------------
Operating income (loss) 7,552,000 (495,000)
Other income :
Interest income (net) 195,000 212,000
Miscellaneous income (net) --- 51,000
Litigation settlement (net) --- 1,518,000
-------------- --------------
Income before income taxes 7,747,000 1,286,000
Income tax provision 2,828,000 468,000
-------------- --------------
Net income $ 4,919,000 $ 818,000
============== ==============
Basic earnings per share $0.54 $0.09
============== ==============
Diluted earnings per share $0.51 $0.09
============== ==============
Basic weighted average shares outstanding 9,100,000 9,091,000
============== ==============
Diluted weighted average shares outstanding 9,623,000 9,236,000
============== ==============
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
4
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEKS ENDED
(Unaudited)
September 28, September 29,
2002 2001
-------------- --------------
Net sales $ 41,989,000 $ 37,859,000
Cost of sales, including occupancy and buying costs 25,202,000 25,000,000
-------------- --------------
Gross profit 16,787,000 12,859,000
-------------- --------------
Expenses
Store operating expenses 14,043,000 12,174,000
General and administrative expenses 2,650,000 2,323,000
-------------- --------------
Total expenses 16,693,000 14,497,000
-------------- --------------
Operating income (loss) 94,000 (1,638,000)
Other income:
Interest income (net) 68,000 55,000
Miscellaneous income (net) --- (7,000)
-------------- --------------
Income (loss) before income taxes 162,000 (1,590,000)
Income tax provision (benefit) 59,000 (581,000)
-------------- --------------
Net income (loss) $ 103,000 $ (1,009,000)
============== ==============
Basic earnings (loss) per share $0.01 ($0.11)
============== ==============
Diluted earnings (loss) per share $0.01 ($0.11)
============== ==============
Basic weighted average shares outstanding 9,100,000 9,091,000
============== ==============
Diluted weighted average shares outstanding 9,623,000 9,091,000
============== ==============
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
5
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED
(Unaudited)
September 28, September 29,
2002 2001
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------
Net income $ 4,919,000 $ 818,000
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 3,556,000 3,572,000
Reversal of future rent escalations (95,000) (151,000)
Gain on litigation settlement --- (1,518,000)
Change in assets and liabilities:
---------------------------------
Decrease in receivables 1,461,000 1,891,000
Decrease in notes receivable from related parties 50,000 350,000
Increase in inventories (2,892,000) (3,026,000)
Decrease (increase) in prepaid income taxes and other tax assets 23,000 (223,000)
Decrease (increase) in prepaid expenses 202,000 (43,000)
Increase in accounts payable 1,900,000 2,761,000
Increase (decrease) in accrued liabilities and accrued compensation 788,000 (2,387,000)
-------------- --------------
Total changes in assets and liabilities 1,532,000 (677,000)
-------------- --------------
Net cash provided by operating activities 9,912,000 2,044,000
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------
Proceeds from property and equipment disposals --- 83,000
Payments for equipment and leasehold improvements (4,880,000) (2,739,000)
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Net cash used in investing activities (4,880,000) (2,656,000)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------
Proceeds from the issuance of common stock 45,000 ---
Other, net 6,000 (10,000)
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Net cash provided by (used in) financing activities 51,000 (10,000)
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Net increase (decrease) in cash and cash equivalents 5,083,000 (622,000)
Cash and equivalents, at beginning of period 12,101,000 6,748,000
-------------- --------------
Cash and equivalents, at end of period $ 17,184,000 $ 6,126,000
============== ==============
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
6
CACHE, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
---------------------
In the opinion of the Company, the accompanying consolidated financial
statements include all adjustments necessary, which are considered normal and
recurring to present fairly the financial position of the Company at September
28, 2002 (Fiscal 2002), September 29, 2001 (Fiscal 2001) and December 29, 2001
(Fiscal 2001), and the results of operations for the thirty-nine and thirteen
week periods ended September 28, 2002 and September 29, 2001 and the
consolidated statements of cash flows for the thirty-nine weeks then ended.
Certain financial information which is normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America, but which is not required for interim reporting
purposes, has been condensed or omitted. The accompanying consolidated financial
statements should be read in conjunction with the Financial Statements and notes
thereto included in the Company's latest annual report on Form 10-K for the
Fiscal year ended December 29, 2001.
Net income includes all sources of comprehensive income. There were no
adjustments for foreign currency translation, unrealized gains(losses) on
investments or deferred compensation expense incurred in Fiscal 2002 or
Fiscal 2001 results.
2. BASIC AND DILUTED EARNINGS
--------------------------
Basic earnings per share (EPS) is computed as net earnings divided by
the weighted average number of shares of common stock outstanding for the
period. Diluted EPS reflects the potential dilution that could occur from
common shares issued through the exercise of outstanding dilutive stock options.
The approximate number of shares used in the computations of diluted
earnings per share were 9,623,000 and 9,236,000, respectively for the
thirty-nine and thirteen week periods ended September 28, 2002 and September
29, 2001. The approximate number of shares used in the computations of basic
earnings per share were 9,100,000 and 9,091,000, respectively, for the
thirty-nine and thirteen week periods ended September 28, 2002 and September
29, 2001.
7
3. NEW ACCOUNTING PRONOUNCEMENTS
-----------------------------
In July 2002, Statement of Financial Accounting Standard No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities"
("SFAS 146"), which nullifies Emerging Issues Task Force Issue No. 94- 3
("EITF 94 - 3") was released. SFAS 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized when the liability
is incurred, whereas under EITF 94 - 3, the liability was recognized at the
commitment date to an exit plan. The Company is required to adopt the provisions
of SFAS 146 effective for exit or disposal activities initiated after December
31, 2002. The Company is currently evaluating the impact of adoption of this
statement.
4. EQUIPMENT AND LEASEHOLD IMPROVEMENTS
------------------------------------
September 28, December 29,
2002 2001
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Leasehold improvements $22,939,000 $19,954,000
Furniture, fixtures and
equipment 28,816,000 25,521,000
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51,755,000 45,475,000
Less: accumulated depreciation
and amortization 33,125,000 29,569,000
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$18,630,000 $15,906,000
============= ============
5. ACCRUED LIABILITIES
------------------- September 28, December 29,
2002 2001
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Operating Expenses $4,169,000 $2,465,000
Taxes, other than income taxes 1,333,000 1,719,000
Leasehold additions 1,431,000 31,000
Other customer deposits 2,117,000 2,226,000
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$9,050,000 $6,441,000
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6. BANK DEBT
---------
During August 1999, the Company reached an agreement with its bank to
extend the maturity of the Amended Revolving Credit Facility until January 31,
2003. Pursuant to the Amended Revolving Credit Facility, $15,000,000 is
available until expiration at January 31, 2003. The amounts outstanding
thereunder bear interest at a maximum per annum rate up to the bank's prime
rate. The agreement contains selected financial and other covenants including
covenants to maintain a minimum current ratio, a maximum debt to equity ratio,
a maximum capital expenditure covenant and a minimum fixed charge coverage
ratio. Effective upon the occurrence of an Event of Default under the Revolving
Credit Facility, the Company grants to the bank a security interest in the
Company's inventory and certain receivables. We are currently negotiating the
terms for an extension of the line of credit for an additional three years.
8
There was no outstanding balance on the line of credit at September 28,
2002 and December 29, 2001. There were no borrowings against the line of credit
during Fiscal 2001 and 2002. There were outstanding letters of credit of
$446,000 and $1,214,000, pursuant to the Revolving Credit Facility at December
29, 2001 and September 28, 2002, respectively.
7. INCOME TAXES
------------
The effective tax rate for Fiscal 2002 and 2001 is 36.5%. At September 28,
2002 and December 29, 2001, the Company's deferred tax assets were $1,157,000
and $934,000, respectively, and there was no deferred tax liability. The major
components of the Company's deferred taxes at September 28, 2002 and December
29, 2001 were as follows:
September 28, December 29,
2002 2001
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Net operating loss carryforwards ("NOL'S").. $ 91,000 $ 183,000
Deferred rent............................... 512,000 547,000
Insurance................................... 298,000 --
Other....................................... 256,000 204,000
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$ 1,157,000 $ 934,000
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8. CONTINGENCIES
-------------
The Company is exposed to a number of asserted and unasserted potential
claims. In the opinion of management, the resolution of these matters is not
presently expected to have a material adverse effect upon the Company's
financial position and results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
STATEMENT REGARDING FORWARD LOOKING STATEMENTS
----------------------------------------------
Except for the historical information and current statements contained
in this Form 10-Q, certain matters discussed herein, including, without
limitation, "Management's Discussion and Analysis of Financial Condition and
Results of Operations" are forward looking statements that involve risks and
uncertainties, including, without limitation, the effect of economic and
market conditions and competition, the ability to open new stores and expand
into new markets, and risks relating to foreign importing operations, which
would cause actual results to differ materially.
9
Controls and Procedures
-----------------------
We maintain a system of controls and procedures designed to provide
reasonable assurance as to the reliability of the financial statements and
other disclosures included in this report, as well as to safeguard assets
from unauthorized use or disposition. We evaluated the effectiveness of the
design and operation of our disclosure controls and procedures under the
supervision and with the participation of management, including our Chief
Executive Officer and Principal Financial and Accounting Officer, within 90
days prior to the filing date of this report. Based upon the evaluation, our
Chief Executive Officer and Principal Financial and Accounting Officer concluded
that our disclosure controls and procedures are effective in timely alerting
them to material information required to be included in our periodic Securities
and Exchange Commission filings. No significant changes were made to our
internal controls or other factors that could significantly affect these
controls subsequent to the date of their evaluation.
RESULTS OF OPERATIONS
---------------------
The following table sets forth our operating results, expressed as a
percentage of net sales:
39 Weeks Ended 13 Weeks Ended
------------------- -------------------
Sept.28, Sept.29, Sept.28, Sept.29,
2002 2001 2002 2001
-------- --------- -------- --------
Net Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales, including
occupancy and buying expenses 58.7% 65.4% 60.0% 66.0%
Gross profit 41.3% 34.6% 40.0% 34.0%
Store operating expenses 29.4% 29.5% 33.4% 32.2%
General and administrative expenses 6.6% 5.5% 6.3% 6.1%
Operating income (loss) 5.4% (0.4%) 0.2% (4.3%)
Other income 0.1% 1.4% 0.2% 0.1%
Income (loss) before taxes 5.5% 1.0% 0.4% (4.2%)
Income tax provision (benefit) 2.0% 0.4% 0.1% (1.5%)
Net income (loss) 3.5% 0.6% 0.2% (2.7%)
Net sales
---------
Net sales increased to $140.9 million from $127.7 million, an increase of
$13.2 million, or 10.4%, over the same 39 week period last year. This reflects
$8.2 million of additional net sales as a result of a 7% increase in comparable
store sales. The remainder of this increase was the result of additional net
sales from non-comparable stores.
Net sales increased to $42.0 million from $37.9 million, an increase of
$4.1 million, or 10.9%, over the same 13 week period last year. This increase
reflects $2.4 million of additional net sales as a result of a 7% increase in
comparable store sales. The remainder of this increase was the result of
additional net sales from non-comparable stores.
10
Gross profit
------------
Gross profit increased to $58.3 million from $44.2 million, an increase of
$14.1, or 31.9%, over the same 39 week period last year. This increase was the
combined result of higher net sales and increased gross profit margins. As a
percentage of net sales, gross profit increased to 41.3% from 34.6%. This
increase as a percentage of net sales was primarily due to higher initial
markups on inventory purchases resulting from a reduction in the number of our
vendors and the number of stock keeping units. These reductions enabled us to
commit to bulk fabric purchases and increased our ability to receive favorable
pricing from vendors. We expect the improvement created by higher initial
markups to continue to benefit results in the remainder of Fiscal 2002.
Gross profit increased to $16.8 million from $12.9 million, an increase
of $3.9 million, or 30.5%, over the same 13 week period last year. This increase
was the combined result of higher net sales and increased gross margins. As a
percentage of net sales, gross profit, increased to 40.0% from 34.0%. The
improvement in gross profit for the 13 week reflects the same positive
conditions as stated above for the 39 week period.
Store operating expenses
------------------------
Store operating expenses increased to $41.5 million from $37.7 million, an
increase of $3.8 million, or 10.0%, over the same 39 week period last year. This
increase was attributable to an increase of $1.8 million in marketing and
advertising expenses, as well as an increase in the total number of stores. We
expect our marketing and advertising expenses to continue to increase in the
fourth quarter. As a percentage of net sales, store operating expenses decreased
to 29.4% from 29.5%.
Store operating expenses increased to $14.0 million from $12.2 million, an
increase of $1.9 million, or 15.4%, over the same 13 week period last year. This
increase was attributable to an increase in total stores open, as well as an
increase of $1.2 million in advertising and marketing. As a percentage of net
sales, store operating expenses increased to 33.4% from 32.2%, primarily due to
the impact of additional advertising and marketing expenses.
General and administrative expenses
-----------------------------------
General and administrative expenses increased to $9.2 million from $7.0
million, an increase of $2.3 million, or $32.6%, over the same 39 week period
last year. As a percentage of net sales, general and administrative expenses
increased to 6.6% from 5.5%, primarily due to higher corporate-level payroll
and employee-related costs.
General and administrative expenses increased to $2.7 million from $2.3
million, an increase of $327,000, or 14.1%, over the same 13 week period last
year. This increase was primarily attributable to higher corporate-level payroll
and employee-related costs. As a percentage of net sales, general and
administrative expenses increased to 6.3% from 6.1% for the 13 week period.
11
Other income
------------
Other income decreased to $195,000 from $1.8 million in the same 39 week
period last year, primarily attributable to the $1.5 million of other income in
last year's period from the settlement of a trademark litigation claim
undertaken against a third party, net of professional fees related to the
lawsuit. Other income for the current 39 week period is principally interest
income.
Other income, which primarily consisted of interest income, increased to
$68,000 from $48,000 in the same 13 week period last year, due to higher average
cash balances in Fiscal 2002.
Income taxes
------------
Income taxes increased to $2.8 million from $468,000, an increase of $2.4
million over the same 39 week period last year. This increase was attributable
to higher taxable income in the current 39 week period, as compared to last
year.
Income taxes increased to $59,000, as compared to a $581,000 benefit
recorded last year. This increase was attributable to higher taxable income
in the current 13 week period, as compared to a loss for the prior year period.
Net income
----------
As a result of the foregoing, net income increased to $4.9 million from
$818,000, an increase of $4.1 million over the same 39 week period last year.
Net income increased to $103,000, as compared to a $1.0 million net loss
recorded last year, for the 13 week period.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Company's requirements are primarily for the construction of new stores
and inventory for new stores as well as the remodeling of existing stores. We
have historically satisfied our cash requirements principally through cash flow
from operations. As of September 28, 2002, the Company had working capital of
$22.4 million, which included cash and equivalents of $17.2 million.
For the 39 weeks ended September 28, 2002, net cash provided by operations
was $9.9 million, generated by net income of $4.9 million, depreciation of $3.6
million, a decrease in accounts receivable of $1.5 million and an increase in
accounts payable of $1.9 million, offset in part by an increase in inventories
of $2.9 million.
Cash used in investing activities was $4.9 million for the 39 week period
ended September 28, 2002. These funds were used for equipment and leasehold
improvements in new and remodeled stores. Our capital requirements depend
primarily on the number of new stores we open, the number of stores we remodel
and the timing of these expenditures. Projected capital expenditures for Fiscal
2002 to fund new store openings and remodeling are approximately $7.0 million.
12
Based on our experience with new store openings, we estimate that the
average net investment to open new stores is approximately $150,000 to $200,000,
which includes new store opening expenses and initial inventory, net of landlord
contributions and payables.
The Company has a line of credit with Fleet Bank, N.A., permitting us to
borrow up to $15 million on a revolving basis. At September 28, 2002, there was
no outstanding balance under this credit facility. Amounts outstanding under the
credit facility bear interest at a maximum annual rate equal to the bank's
prime rate, currently 4.75%. The agreement relating to this facility contains
restrictions on our ability to make capital expenditures, incur indebtedness or
create or incur liens on our assets. While this facility is unsecured, if a
default occurs under the facility, we are required to grant the lender a
security interest in our inventory and certain receivables. This facility
currently expires in January 2003. We are currently negotiating the terms for
an extension of the line of credit for an additional three years.
We believe that cash flows from operations, our current available cash and
the funds available under our revolving credit facility will be sufficient to
meet our working capital needs and contemplated new store opening expenses for
at least the next 12 months. If our cash flow from operations should decline
significantly or if we should accelerate our store expansion or remodeling
program, it may be necessary for us to seek additional sources of capital.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
11.1 Calculation of Basic and Diluted Earnings per Common Share.
99.1 Certification of the Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
99.2 Certification of the Principal Financial and Accounting
Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
99.3 Certification of the Chief Executive and Principal
Financial and Accounting Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
NONE
13
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CACHE, INC.
(Registrant)
November 7, 2002 BY: /s/ Brian Woolf
------------------------
Brian Woolf
Chairman and Chief
Executive Officer
(Principal Executive
Officer)
November 7, 2002 BY: /s/ Thomas E. Reinckens
------------------------
Thomas E. Reinckens
President and Chief
Operating Officer
(Principal Financial
and Accounting
Officer)
14
EXHIBIT 11.1
CALCULATION OF BASIC AND DILUTED EARNINGS PER COMMON SHARE
THIRTY- NINE THIRTEEN
WEEKS ENDED WEEKS ENDED
----------------------------- -----------------------------
September 28, September 29, September 28, September 29,
2002 2001 2002 2001
----------------------------- -----------------------------
EARNINGS
--------
Net Income (Loss) Applicable
to Common Stockholders $ 4,919,000 $ 818,000 $ 103,000 $ (1,009,000)
============================= =============================
BASIC EARNINGS PER SHARE
------------------------
Weighted Average Number of
Common Shares Outstanding 9,100,000 9,091,000 9,100,000 9,091,000
============================= =============================
Basic Earnings (Loss) Per Share $0.54 $0.09 $0.01 ($0.11)
============================= =============================
DILUTED EARNINGS PER SHARE
--------------------------
Weighted Average Number of
Common Shares Outstanding 9,100,000 9,091,000 9,100,000 9,091,000
Assuming Conversion of
Outstanding Stock Options 1,140,000 900,000 1,140,000 ---
Less Assumed Repurchase
of Common Stock Pursuant
to the Treasury Stock Method (617,000) (755,000) (617,000) ---
----------------------------- -----------------------------
Weighted Average Number of
Common Shares Outstanding
As Adjusted 9,623,000 9,236,000 9,623,000 9,091,000
============================= =============================
Diluted Earnings (Loss) Per Share $0.51 $0.09 $0.01 ($0.11)
============================= =============================
15
EXHIBIT 99.1
CERTIFICATION
-------------
I, Brian Woolf, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Cache Inc. (Cache),
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of Cache
as of, and for, the periods presented in this quarterly report;
4. Cache's other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to Cache, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this quarterly report is being prepared;
b) evaluated the effectiveness of Cache's disclosure controls and procedures as
of a date within 90 days prior to the filing date of this quarterly report
(the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. Cache's other certifying officer and I have disclosed, based on our most
recent evaluation, to Cache's auditors and the audit committee of Cache's
Board of Directors;
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect Cache's ability to record, process, summarize and
report financial data and have identified for Cache's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in Cache's internal controls; and
6. Cache's other certifying officer and I have indicated in this quarterly
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
November 7, 2002 BY: /s/ Brian Woolf
---------------------------
Brian Woolf
Chairman and Chief
Executive Officer
16
EXHIBIT 99.2
CERTIFICATION
-------------
I, Thomas E. Reinckens, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Cache Inc. (Cache),
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of Cache
as of, and for, the periods presented in this quarterly report;
4. Cache's other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to Cache, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of Cache's disclosure controls and procedures
as of a date within 90 days prior to the filing date of this quarterly report
(the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. Cache's other certifying officer and I have disclosed, based on our most
recent evaluation, to Cache's auditors and the audit committee of Cache's
Board of Directors;
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect Cache's ability to record, process, summarize and
report financial data and have identified for Cache's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in Cache's internal controls; and
6. Cache's other certifying officer and I have indicated in this quarterly
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
November 7, 2002 BY: /s/ Thomas E. Reinkens
-------------------------------
Thomas E. Reinckens
President and Chief
Operating Officer
(Principal Financial
and Accounting Officer)
17
EXHIBIT 99.3
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to and solely for purposes of, 18 U.S.C. Section 1350 (Section 906 of
the Sarbanes-Oxley Act of 2002), each of the undersigned hereby certifies in
the capacity and on the date indicated below that:
1. The Quarterly Report of Cache, Inc. on Form 10-Q for the period ending
September 28, 2002 as filed with the Securities and Exchange Commission on the
date hereof (the "Report") fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Cache, Inc.
/s/ Brian Woolf November 7, 2002
------------------------
Brian Woolf
Chairman and Chief Executive Officer
/s/ Thomas E. Reinckens November 7, 2002
------------------------
Thomas E. Reinckens
President and Chief Operating Officer
(Principal Financial and
Accounting Officer)
18