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):
FEBRUARY 24, 2009
CACHE, INC.
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(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, INCLUDING AREA CODE: (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 March 3, 2009, Cache, Inc. (the "Company") issued a press release (the
"Press Release") announcing its financial results for the thirteen and fifty-two
week periods ended December 27, 2008 and introducing new guidance for the first
quarter of fiscal 2009. The Press Release 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(E) DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS
On February 24, 2009, the Company entered into a new three-year
employment agreement with Thomas E. Reinckens, the Company's Chief Executive
Officer. Under the agreement, Mr. Reinckens' annual salary during 2009 is
$600,000. This annual salary will be reviewed on an annual basis and can be
adjusted based on Mr. Reinckens' performance, the operating results of the
Company, the competitive compensation landscape and other factors determined to
be relevant by the Company's Board of Directors. Mr. Reinckens is also eligible
to participate in the Company's bonus and stock option programs and is entitled
to such performance-based bonuses as the Board of Directors of the Company may
from time to time determine in its discretion.
Pursuant to the terms of the employment agreement, if the Company
terminates Mr. Reinckens' employment during the term and prior to a change in
control of the Company, except in certain limited circumstances, then until Mr.
Reinckens accepts other employment the Company is required to continue to pay
him the full balance of his compensation through the term of the agreement,
mitigated by future employment. In the event that Mr. Reinckens is terminated
following a change in control of the Company, or he resigns during the period
beginning 90 and ending 180 days after the effective date of the change in
control, he is generally entitled to receive a one-time payment equal to 24
months of his salary then in effect. The agreement contains covenants by Mr.
Reinckens not to solicit employees of the Company for two years following
termination of his employment, and covenants by Mr. Reinckens not to compete
with the Company for one year following termination of employment without
compensation or during the period he is entitled to be paid as described above.
ITEM 9.01 EXHIBITS
99.1 Press release announcing financial results for the thirteen and fifty-two
week periods ended December 27, 2008 and introducing new guidance for the
first fiscal quarter of 2009.
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: March 4, 2009 CACHE, INC.
By: /s/ Margaret Feeney
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Margaret Feeney
Executive Vice President and Chief
Financial Officer
EXHIBIT 99.1
[GRAPHIC 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
Integrated Corporate Relations
(203) 682-8225/(646) 277-1223
CACHE REPORTS FOURTH QUARTER AND FISCAL 2008 RESULTS
FOURTH QUARTER LOSS PER SHARE OF $0.42, INCLUDING $0.10 PER SHARE IN NON-CASH
IMPAIRMENT CHARGES
EXCEEDS REVISED GUIDANCE OF LOSS PER SHARE OF $0.36 TO $0.38 EXCLUDING
IMPAIRMENT CHARGES
INTRODUCES FIRST QUARTER FISCAL 2009 GUIDANCE OF LOSS PER SHARE OF $0.12 TO
$0.16
New York, New York - March 3, 2009 - Cache Inc., (NASDAQ: CACH), a
specialty chain of women's apparel stores, reported results for the thirteen
("fourth quarter") and fifty-two week ("fiscal 2008") periods ended December 27,
2008.
FOR THE 13-WEEK PERIOD ENDED DECEMBER 27, 2008:
o Net sales decreased 16% to $65.9 million from $78.5 million in the
fourth quarter of 2007. Comparable store sales decreased 17% as
compared to a 7% decline in the fourth quarter of fiscal 2007;
o Net loss totaled $5.5 million or ($0.42) per share, including
costs, net of taxes, of $1.3 million or $0.10 per diluted share
related to non-cash impairment charges, as compared to net income
of $4.9 million or $0.32 per diluted share in the fourth quarter
of fiscal 2007; and
o Adjusted net loss for the 13-week period in fiscal 2008 was $4.2
million or ($0.32) per share and excludes impairment charges.
Thomas Reinckens, Chairman and Chief Executive Officer, commented:
"Fiscal 2008 marked a challenging period for our Company, as the weak economy
affected our sales and profitability during the period. Our results for the
quarter included $2.1 million of non-cash impairment charges, which was
approximately $1.4 million higher than our original estimate for impairment
charges in the updated guidance that we provided on January 8, 2009. Excluding
this impact, our results were in-line with our updated guidance. On a positive
note, we believe we have taken the necessary steps to preserve our strong
balance sheet during this difficult economic period, which is expected to
continue throughout fiscal 2009. Specific actions we have taken include;
successfully lowering our inventory levels to better reflect current consumer
demands, with average inventory per store down 34% at year end. In addition, we
have aggressively reduced operating costs across all areas of the Company,
identifying more than $15 million in pre-tax savings, or $0.72 per diluted
share, that we expect to generate in fiscal 2009. We have also reduced our
capital expenditures and expect to open a modest number of stores, during the
year. As a result of these efforts, we believe we are positioned to maintain
positive cash flow from operations throughout fiscal 2009. This includes an
expectation that sales will trend similarly to the results we experienced in the
fourth quarter of fiscal 2008."
"During 2009, we will also continue to offer great fashion for our core
Cache customer, while expanding our daytime offerings to include a greater
penetration of casual sportswear," Mr. Reinckens continued. "While we expect
2009 to remain challenging, we are confident that our strategies position us to
achieve our dual goal of growing the appeal of our Cache brand and at the same
time delivering positive cash flow, in an effort to increase value for our
shareholders."
FOR THE 52-WEEK PERIOD ENDED DECEMBER 27, 2008:
o Net sales decreased 3% to $265.7 million from $274.5 million in
fiscal 2007. Comparable store sales decreased 4%, as compared to a
1% decline in fiscal 2007;
o Net loss was $7.1 million or ($0.53) per share and included
charges, net of taxes, of: $1.7 million or $0.13 per diluted share
related to store closures, $1.3 million or $0.10 per diluted share
related to non-cash impairment charges and $386,000 or $0.03 per
diluted share related to the management change announced in
January 2008. This compares to net income of $6.5 million or $0.40
per diluted share, including charges, net of taxes, of $658,000 or
$0.04 per diluted share in legal settlement costs and $51,000 or
$0.00 per diluted share reversal of Lillie Rubin exit costs in
fiscal 2007; and
o Adjusted net loss for fiscal 2008 was $3.7 million or ($0.28) per
share and excludes store closure, impairment and management change
costs. This compares to adjusted net income for fiscal 2007 of
$7.1 million or $0.44 per diluted share, which excludes costs
related to a legal settlement.
FOURTH QUARTER AND FULL YEAR OPERATING RESULTS
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Gross profit in the fourth quarter of fiscal 2008 was $21.5 million, or
32.6% of net sales, compared to $36.4 million, or 46.4% of net sales, in the
fourth quarter of fiscal 2007. For fiscal 2008, gross profit was $109.7 million,
or 41.3% of net sales, compared to $127.0 million, or 46.3% of net sales, in
fiscal 2007. The decline in gross profit margin for the fourth quarter was
driven by lower sales, higher markdowns and the resulting deleverage in buying
and occupancy, additional costs associated with the new in-house design team,
the effect of the new pricing strategy and higher freight costs. For fiscal
2008, the decline in gross profit margin was due to lower sales, higher
markdowns, additional costs associated with the new in-house design team, the
effect of the new pricing strategy and increased freight costs.
In total, operating expenses for the fourth quarter of fiscal 2008 were
$30.4 million, or 46.1% of net sales, as compared to $29.6 million, or 37.8% of
net sales, in the fourth quarter of fiscal 2007. For fiscal 2008, total
operating expenses were $121.5 million, or 45.7% of net sales, compared to
$119.7 million, or 43.6% of net sales, in fiscal 2007. Operating expenses for
the 13-week fiscal 2008 period included $2.1 million of non-cash impairment
charges. Operating expenses for 52-week fiscal 2008 period included $2.8 million
in store closure costs, $2.1 million of non-cash impairment charges and $616,000
of costs related to the management change announced in January 2008. Operating
expenses for fiscal 2007 included $2.2 million for legal fees and settlement
costs.
At December 27, 2008, cash and marketable securities totaled $30.0
million, after utilizing $15 million to fund the repurchase of 1.7 million
shares, since fourth quarter end last year. This compares to $50.1 million in
cash and marketable securities at December 29, 2007. Average inventory per store
decreased 34% at quarter end from the prior-year period.
A table summarizing financial results follows:
FIFTY-TWO WEEKS ENDED THIRTEEN WEEKS ENDED
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Dec. 27, Dec. 29, Dec. 27, Dec. 29,
2008 2007 2008 2007
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($ thousands, except for per share data, share numbers and store count)
Net sales $265,728 $274,458 $65,908 $78,504
Operating income (loss) (11,837) 7,314 (8,884) 6,745
Store exit & management change costs 3,373 (78) - -
Legal settlement costs - 1,015 - -
Impairment charges 2,137 - 2,137 -
Operating income (loss) before
one-time costs (6,327) 8,251 (6,747) 6,745
Net income (loss) (7,122) 6,521 (5,528) 4,931
Net income (loss) before one-time costs (3,671) 7,138 (4,192) 4,931
Basic earnings (loss) per share $ (0.53) $ 0.41 $ (0.42) $ 0.32
Diluted earnings (loss) per share $ (0.53) $ 0.40 $ (0.42) $ 0.32
Per share - Store exit and management
change costs $ 0.16 $ - $ - $ -
Per share - Legal settlement costs $ - $ 0.04 $ - $ -
Per share - Impairment charges $ 0.10 $ - $ 0.10 $ -
Diluted earnings (loss) per share -
excluding one-time costs $ (0.28) $ 0.44 $ (0.32) $ 0.32
Basic weighted average
shares outstanding 13,329,000 15,966,000 13,200,000 15,297,000
Diluted weighted average
shares outstanding 13,329,000 16,200,000 13,200,000 15,436,000
Number of stores open at end of period 296 297 296 297
GUIDANCE
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The Company is introducing guidance for the first quarter of fiscal 2009.
The Company estimates net sales in the range of $53 million to $55 million,
which compares to actual net sales of $67.7 million in fiscal 2008. This
guidance assumes comparable stores sales in the first quarter of fiscal 2009
will trend similarly to the sales trend we experienced in the fourth quarter of
fiscal 2008. This compares to an increase of 3% in the first quarter of fiscal
2008.
Loss per share for the first quarter of fiscal 2009 is estimated in the
range of ($0.12) to ($0.16), which compares to actual first quarter fiscal 2008
loss per share on a GAAP basis of ($0.15), which includes charges of $1.5
million or $0.11 per diluted share for store closures, $388,000 or $0.03 per
diluted share related to the management change announced in January 2008 and
$355,000 or $0.03 per diluted share related to operating losses associated with
stores slated for closure. Actual adjusted diluted earnings per share for the
first quarter of fiscal 2008 were $0.01 and excludes store closures, management
change costs, and losses related to the operations of the stores expected to
close.
STORE OPENING PLANS
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During the fourth quarter, the Company opened two new stores and closed
one store. In early 2009, the Company opened one store and closed three
additional stores and currently operates 294 locations. The Company expects to
open approximately three to five new stores and close five to seven locations
during fiscal 2009, ending the year with approximately 295 locations and
approximately 600,000 square feet in operation.
CONFERENCE CALL INFORMATION
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The Company announced that it will conduct a conference call to discuss
its fourth quarter and fiscal 2008 results today, March 3, 2009 at 4:30 p.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 March 10, 2009 and can be accessed
by dialing (877) 660-6853 and entering account number 3055 and conference code
315466.
ABOUT CACHE, INC.
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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 operate 293 stores, primarily
situated in central locations in high traffic, upscale malls in 43 states, the
Virgin Islands and Puerto Rico.