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):
July 21, 2004
CACHE INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 0-10345 59-1588181
----------------- ---------------------- ----------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
1440 Broadway, New York, NY 10018
----------------------------------------
(Address of principal executive offices)
Registrant's telephone number: (212) 575-3200
ITEM 5. OTHER EVENTS
See the attached press release, which is incorporated herein by reference,
regarding 2004 second quarter earnings, filed as Exhibit 99.1
ITEM 12. FINANCIAL STATEMENTS AND EXHIBITS
(1) Financial Statements of Businesses Acquired
None
(2) Pro Forma Financial Information
None
(3) Exhibits
99.1 Press release issued by Cache, Inc. on July 21, 2004
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.
Date: July 22, 2004 CACHE INC.
By: /s/ Brian Woolf
--------------------------------------------
Brian Woolf
On behalf of Cache, Inc. and his capacity as
Chairman and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Thomas E. Reinckens
--------------------------------------------
Thomas E. Reinckens
On behalf of Cache, Inc. and in his capacity
as President and Chief Operating Officer
(Principal Financial and Accounting Officer)
INDEX OF EXHIBITS
Exhibit Description Page
------- ---------------------------------- ----
99.1 Press Release issued by Cache Inc. 5
on July 21, 2004
JULY 21, 2004
FOR IMMEDIATE RELEASE
CACHE, INC.
NASDAQ COMMON STOCK SYMBOL CACH.
CACHE REPORTS RECORD SECOND QUARTER RESULTS
Diluted Earnings Per Share Increases to $0.27
Reiterates Comfort with 2004 Earnings Guidance
Completes 3 for 2 Stock Split
New York, New York - July 21, 2004 - Cache Inc., (NASDAQ: CACH), a
specialty chain of women's apparel stores with 270 stores currently open,
reported results for the 13 and 26 week periods ended June 26, 2004 with each
period reflective of the 3 for 2 stock split completed on June 18, 2004.
For the 13 week period ended June 26, 2004:
* Net sales increased 10.5% to $62.1 million compared to $56.2 million in
the second quarter of 2003 and comparable store sales gained 3%;
* Operating income rose 25.4% to $7.1 million, or 11.4% of net sales, as
compared to $5.7 million, or 10.1% of net sales in the second quarter of
2003;
* Net income increased 23.2% to $4.4 million, or 7.0% of net sales, as
compared to $3.5 million, or 6.3% of net sales in the second quarter of
2003; and
* Diluted earnings per share increased 8.0% to $0.27, on 16,100,000 shares
compared to $0.25, on 14,451,000 shares in the second quarter of 2003.
For the 26 week period ended June 26, 2004:
* Net sales increased 14.4% to $119.3 million compared to $104.3 million
in the first half of 2003 and comparable store sales gained 7%;
* Operating income rose 48.6% to $12.3 million, or 10.3% of net sales, as
compared to $8.2 million, or 7.9% of net sales in the first half of 2003;
* Net income increased 46.9% to $7.6 million, or 6.4% of net sales, as
compared to $5.2 million, or 5.0% of net sales in the first half of 2003;
and
* Diluted earnings per share increased 33.3% to $0.48 on 15,986,000 shares
compared to $0.36, on 14,442,000 shares in the first half of 2003.
Mr. Brian Woolf, Cache's Chairman commented: "Our second quarter
performance reflected robust sales gains early in the quarter along with a 262
basis point rise in gross profit margin. This more than offset the challenging
sales comparisons we faced in June, as compared to last year and increased
expenses from our accelerated store-opening plan. As a result, we reported
earnings at the high end of our revised guidance range. Importantly, we are
pleased with the direction of our current merchandise assortment, especially
our expanded offering of denim and sportswear, which have had a positive
reaction from consumers. We also continue to be excited by both the performance
of our new and remodeled Cache stores and the increasing strength and growing
loyalty to our Lillie Rubin chain."
Additionally, during the second quarter, the Company:
* Opened 12 Cache stores and its first new Lillie Rubin prototype store
and at quarter-end operated 269 stores in 42 states;
* Remodeled 5 stores with 39.0% of its Cache store base in the new store
format at quarter-end; and
* Completed a three for two stock split, increasing shares outstanding by
5.2 million shares.
Gross profit in the second quarter rose by 17.0% to $29.1 million, or
47.0% of net sales, compared to $24.9 million, or 44.3% of net sales, in the
second quarter of 2003. For the first half of fiscal 2004, gross profit rose
by 22.0% to $54.8 million, or 46.0% of net sales, compared to $45.0 million, or
1
43.1% of net sales, in the prior year period. The improvement in gross profit
margin for the second quarter and first half of fiscal 2004 reflected higher
initial merchandise markups versus the prior year periods.
In total, operating expenses for the second quarter were $22.0 million,
or 35.5% of net sales compared to $19.2 million, or 34.3% of net sales in the
second quarter of fiscal 2003. For the first half of fiscal 2004, Total
operating expenses were $42.6 million, or 35.7% of net sales compared to $36.7
million, or 35.2% of net sales in the prior year period. The rise in total
operating expenses for the second quarter and first half of fiscal 2004 was
due to the increase in the number of stores opened since the same period
last year.
At June 26, 2004, cash and marketable securities totaled $40.6 million,
rising $19.7 million from $20.9 million at June 28, 2003. Inventory was $27.5
million, as compared to $24.7 million at June 28, 2003. Working capital
increased by $21.0 million to $50.8 million from $29.8 million at June 28, 2003.
Mr. Woolf continued: "We remain excited and confident about our prospects
in the second half of 2004 and beyond. We believe that Cache has become a
preferred shopping destination for sportswear and dress apparel, which we expect
to build upon as we expand our casual assortment, during the third quarter.
We are also excited about our new street location campaign, which complements
our mall locations and plan to open several street locations in the near term.
We are equally enthusiastic about Lillie, which continues to gain momentum and
complements our Cache format. Additionally, we continue to believe our unique
ability to provide the missy customer with distinctive and stylish merchandise
will afford us with significant market opportunities as we grow. We believe
that these factors along with our strong balance sheet and solid infrastructure
provide us with a great platform to execute our store expansion plans."
A table summarizes financial results follows:
Twenty-six Weeks Ended Thirteen Weeks Ended
------------------------- -------------------------
June 26, June 28, June 26, June 28,
2004 2003 2004 2003
--------- --------- --------- ---------
($ Thousands, except for per share data)
Sales $ 119,281 $ 104,291 $ 62,087 $ 56,193
Operating income $ 12,253 $ 8,248 $ 7,102 $ 5,665
Net income $ 7,610 $ 5,182 $ 4,361 $ 3,541
Basic earnings per share $ 0.49 $ 0.38 $ 0.28 $ 0.26
Diluted earnings per share $ 0.48 $ 0.36 $ 0.27 $ 0.25
Basic weighted average
shares outstanding 15,536,000 13,688,000 15,634,000 13,697,000
Diluted weighted average
shares outstanding 15,986,000 14,442,000 16,100,000 14,451,000
Guidance
--------
The Company reiterates comfort with estimates for fiscal 2004, including
net sales in the range of $253 million to $260 million versus actual sales of
$216.3 million in fiscal 2003. The Company continues to estimate fiscal 2004
diluted earnings per share in the range of $0.89 - $0.92 compared to actual
fiscal 2003 diluted earnings per share of $0.75. This represents growth of
approximately 21% at the mid-point of the Company's current earnings guidance
range. For the third quarter, the Company estimates net sales to range between
$52 million and $54 million compared to actual sales of $47.3 million in the
third quarter of fiscal 2003. The Company estimates third quarter-diluted
2
earnings per share in the range of $0.03 to $0.05, as compared to actual diluted
earnings per share of $0.04 in the third quarter of fiscal 2003. The Company
also noted that its guidance is reflective of the 3 for 2 stock split completed
on June 18, 2004.
Store opening plans
-------------------
The Company continues to expect to open approximately 35 Cache and 10
Lillie Rubin stores for a total of approximately 45 new stores in fiscal 2004.
During the second quarter, the Company opened 12 new Cache stores, and its
first new Lillie Rubin prototype in the Twelve Oaks Mall in Novi, Michigan. For
the first half of fiscal 2004, the Company opened 16 new Cache and one new
Lillie Rubin store.
Following quarter end, the Company opened a new Cache street location store
in Lake Tahoe, Nevada and has scheduled a total of approximately 10 store
openings for the third quarter. At fiscal year-end, the Company continues to
expect to operate approximately 300 stores, expanding square footage by
approximately 18% to 600,000 square feet.
Conference Call
---------------
Interested stockholders and other persons are invited to listen to the
second quarter earnings conference call scheduled for today, Wednesday, July 21,
2004 at 9:00 a.m. Eastern Time. To participate in Cache's conference call dial
1-877-692-2592 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 August 28, 2004.
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
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 26, December 27, June 28,
A S S E T S 2004 2003 2003
--------------- --------------- ---------------
CURRENT ASSETS
Cash and equivalents $ 21,446,000 $ 16,887,000 $ 16,015,000
Marketable securities 19,187,000 19,746,000 4,878,000
Receivables, net 4,895,000 4,614,000 2,675,000
Notes receivable from related parties --- --- 321,000
Inventories 27,491,000 26,724,000 24,724,000
Deferred income taxes 750,000 936,000 791,000
Prepaid expenses and other current assets 776,000 1,239,000 721,000
--------------- --------------- ---------------
Total Current Assets 74,545,000 70,146,000 50,125,000
EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET 29,310,000 25,010,000 20,922,000
OTHER ASSETS 832,000 873,000 827,000
DEFERRED INCOME TAXES, NET --- --- 249,000
--------------- --------------- ---------------
TOTAL ASSETS $ 104,687,000 $ 96,029,000 $ 72,123,000
=============== =============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 11,588,000 $ 14,362,000 $ 10,038,000
Income taxes payable 199,000 --- 442,000
Accrued compensation 2,865,000 4,675,000 2,180,000
Accrued liabilities 9,073,000 10,075,000 7,685,000
--------------- --------------- ---------------
Total Current Liabilities 23,725,000 29,112,000 20,345,000
OTHER LIABILITIES 1,163,000 1,088,000 1,074,000
DEFERRED INCOME TAXES, NET 973,000 687,000 ---
STOCKHOLDERS' EQUITY
Common stock 156,000 100,000 91,000
Additional paid-in capital 34,379,000 28,361,000 19,839,000
Retained earnings 44,291,000 36,681,000 30,774,000
--------------- --------------- ---------------
Total Stockholders' Equity 78,826,000 65,142,000 50,704,000
--------------- --------------- ---------------
Total Liabilities and Stockholders' Equity $ 104,687,000 $ 96,029,000 $ 72,123,000
=============== =============== ===============
4
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
FOR THE TWENTY-SIX WEEKS ENDED
(UNAUDITED)
June 26, June 28,
2004 2003
--------------- ---------------
Net sales $ 119,281,000 $ 104,291,000
Cost of sales, including occupancy and buying costs 64,444,000 59,341,000
--------------- ---------------
Gross profit 54,837,000 44,950,000
--------------- ---------------
Store operating expenses 35,337,000 30,500,000
General and administrative expenses 7,247,000 6,202,000
--------------- ---------------
Total expenses 42,584,000 36,702,000
--------------- ---------------
Operating income 12,253,000 8,248,000
--------------- ---------------
Other income:
Interest income (net) 202,000 130,000
Other income (net) 20,000 14,000
--------------- ---------------
222,000 144,000
--------------- ---------------
Income before income taxes 12,475,000 8,392,000
Income tax provision 4,865,000 3,210,000
--------------- ---------------
Net income $ 7,610,000 $ 5,182,000
=============== ===============
Basic earnings per share $0.49 $0.38
=============== ===============
Diluted earnings per share $0.48 $0.36
=============== ===============
Basic weighted average shares outstanding 15,536,000 13,688,000
=============== ===============
Diluted weighted average shares outstanding 15,986,000 14,442,000
=============== ===============
NUMBER OF STORES OPEN AT END OF PERIOD 269 240
=============== ===============
5
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
FOR THE THIRTEEN WEEKS ENDED
(UNAUDITED)
June 26, June 28,
2004 2003
--------------- ---------------
Net sales $ 62,087,000 $ 56,193,000
Cost of sales, including occupancy and buying costs 32,938,000 31,280,000
--------------- ---------------
Gross profit 29,149,000 24,913,000
--------------- ---------------
Store operating expenses 18,448,000 15,896,000
General and administrative expenses 3,599,000 3,352,000
--------------- ---------------
Total expenses 22,047,000 19,248,000
--------------- ---------------
Operating income 7,102,000 5,665,000
--------------- ---------------
Other income:
Interest income (net) 107,000 56,000
Other income (net) 20,000 14,000
--------------- ---------------
127,000 70,000
--------------- ---------------
Income before income taxes 7,229,000 5,735,000
Income tax provision 2,868,000 2,194,000
--------------- ---------------
Net income $ 4,361,000 $ 3,541,000
=============== ===============
Basic earnings per share $0.28 $0.26
=============== ===============
Diluted earnings per share $0.27 $0.25
=============== ===============
Basic weighted average shares outstanding 15,634,000 13,697,000
=============== ===============
Diluted weighted average shares outstanding 16,100,000 14,451,000
=============== ===============
NUMBER OF STORES OPEN AT END OF PERIOD 269 240
=============== ===============
6