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 20, 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 July 20, 2009, Cache, Inc. (the "Company") issued a press release
(the "Press Release") announcing its results for the thirteen- and twenty-six
week periods ended June 27, 2009, introducing new guidance for the third fiscal
quarter of 2009 and continuing its planned store openings and closings for the
remainder of the fiscal year. The Press Release is attached as Exhibit 99.1 to
this Current Report on Form 8-K.
ITEM 9.01 EXHIBITS
99.1 Press release regarding results for the thirteen week period ended June 27,
2009, guidance for the third quarter of 2009 and continuing plans for
store openings and closings.
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: July 21, 2009 CACHE, INC.
By: /s/ Margaret Feeney
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Margaret Feeney
Executive Vice President and
Chief Financial Officer
Exhibit 99.1
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[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
ICR, Inc.
(203) 682-8225/(646) 277-1223
CACHE REPORTS SECOND QUARTER FISCAL 2009 RESULTS
SECOND QUARTER EARNINGS PER SHARE OF $0.07
CASH AND MARKETABLE SECURITIES TOTALS $34.8 MILLION AT QUARTER END
INTRODUCES THIRD QUARTER FISCAL 2009 GUIDANCE
New York, New York - July 20, 2009 - Cache Inc., (NASDAQ: CACH), a
specialty chain of women's apparel stores, reported results for the thirteen
("second quarter") and twenty-six week periods ("first six months") ended June
27, 2009.
FOR THE 13-WEEK PERIOD ENDED JUNE 27, 2009:
o Net sales decreased 23.1% to $56.9 million from $74.0 million in the
second quarter of fiscal 2008. Comparable store sales decreased
23.0%, as compared to an increase of 3.0% in the second quarter of
fiscal 2008;
o Net income totaled $845,000 or $0.07 per diluted share, as compared
to net income of $2.1 million or $0.16 per diluted share in the second
quarter of fiscal 2008.
Thomas Reinckens, Chairman and Chief Executive Officer, commented:
"During the second quarter, we maintained a strong balance sheet, achieved
earnings per share at the high end of our expectations and positive cash flow.
At quarter end, cash and marketable securities totaled $34.8 million, and
inventory declined 36% from the prior year. In addition, we generated $7 million
in expense savings and are currently on track to achieve $23 million in cost
reductions this year."
"While the weak consumer spending environment pressured our sales
performance during the quarter, we are encouraged by the favorable response to
our merchandise categories where we offer compelling value and differentiation
in fashion, with particular strength in day dresses, value-priced accessories
and tops," Mr. Reinckens continued. "We expect to expand upon the success of
these areas this fall, as we emphasize affordability in our offerings and
introduce new denim, casual and activewear assortments, which are in high demand
by our customers."
"As we look ahead, we are confident that our fall assortments, which are
delivered to our stores late August, will resonate with consumers and enable us
to improve our comparable store sales performance as compared to the first half
of the year," Mr. Reinckens stated. "While the third quarter typically
represents a loss for our Company given our calendar year, we are confident that
our strategies of offering enhanced value, differentiation and expanded
assortments appropriate for day to allow us to garner increased market share.
Our focus for the
balance of the year will be to continue to strengthen our balance sheet and
achieve positive cash flow, while maximizing opportunities to build sales and
reduce product costs, as we move to increased overseas sourcing. We believe this
strategy will enable us to become a stronger Company with increased sales and
profit potential and lead to increased long term value for all Cache
stakeholders."
FOR THE 26-WEEK PERIOD ENDED JUNE 27, 2009:
o Net sales decreased 22.5% to $109.9 million from $141.7 million in
the first six months of fiscal 2008. Comparable store sales decreased
21.9% following a 3.1% gain in the first six months of fiscal 2008;
o Net loss was $751,000 or ($0.06) per share, as compared to net income
of $52,000 or breakeven on a per share basis in the first six months
of fiscal 2008. Results in the first six months of fiscal 2008
included charges, net of taxes, of: $1.5 million or $0.11 per diluted
share related to store closures and $388,000 or $0.03 per diluted
share related to the management change in January 2008; and
o Adjusted net income for the first six months of fiscal 2008 was $1.9
million or $0.14 per diluted share and excludes store closure and
management change costs.
Gross profit for the second quarter of fiscal 2009 was $25.2 million, or
44.4% of net sales, compared to $34.2 million, or 46.2% of net sales, in the
second quarter of fiscal 2008. For the first six months of fiscal 2009, gross
profit was $47.0 million, or 42.8% of net sales, compared to $62.6 million, or
44.2% of net sales, in the first six months of fiscal 2008. The decline in gross
profit margin for the second quarter and first six months of fiscal 2009 was
primarily driven by deleverage in occupancy costs resulting from lower sales.
This was partially offset by higher initial markup due to improved sourcing and
reduced freight costs, as compared to the prior year.
In total, operating expenses were $23.9 million, or 42.0% of net sales,
as compared to $31.0 million, or 41.9% of net sales, in the second quarter of
fiscal 2008. For the first six months of fiscal 2009, total operating expenses
were $48.2 million, or 43.9% of net sales, compared to $62.9 million, or 44.4%
of net sales, in the first six months of fiscal 2008. Operating expenses for the
first six months of fiscal 2008 included $2.9 million of charges, primarily
related to store closures. The decrease in operating expenses for the quarter
and first six 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 six months of fiscal 2008.
At June 27, 2009, cash and marketable securities totaled $34.8 million
and compares to $27.4 million in cash and marketable securities at June 28,
2008. Total inventory at cost decreased 36% at quarter end from the prior-year
period. Working capital decreased by $2.2 million to $45.7 million from $47.9
million at June 28, 2008, primarily due to reduced profitability.
A table summarizing financial results follows:
TWENTY-SIX WEEKS ENDED THIRTEEN WEEKS ENDED
June 27, June 28, June 27, June 28,
2009 2008 2009 2008
--------- --------- --------- ---------
($ thousands, except for per share data, share numbers and store count)
Net sales $ 109,872 $ 141,681 $ 56,866 $ 73,973
Operating income (loss) (1,212) (273) 1,318 3,207
Store closure and other one-time costs - 2,924 - -
Operating income (loss) before
one-time costs (1,212) 2,651 1,318 3,207
Net income (loss) (751) 52 845 2,105
Net income (loss) before one-time costs (751) 1,894 845 2,105
Basic earnings (loss) per share $ (0.06) $ 0.00 $ 0.07 $ 0.16
Diluted earnings (loss) per share $ (0.06) $ 0.00 $ 0.07 $ 0.16
Per share - Store closure and other
one-time costs $ - $ 0.14 $ - $ -
Diluted earnings (loss) per share -
excluding one-time costs $ (0.06) $ 0.14 $ 0.07 $ 0.16
Basic weighted average shares
outstanding 12,841,000 13,443,000 12,728,000 13,320,000
Diluted weighted average shares
outstanding 12,841,000 13,462,000 12,728,000 13,357,000
Number of stores open at end of period 291 297 291 297
THIRD QUARTER FISCAL 2009 GUIDANCE
The Company is introducing guidance for the third quarter of fiscal
2009. The Company estimates net sales in the range of $48 million to $50
million, which compares to actual net sales of $58.1 million in fiscal 2008.
This guidance assumes comparable stores sales in the third quarter of fiscal
2009 will decrease in the mid-to-high teen percentage range and compares to a
comparable store sales decrease of 4% in the third quarter of fiscal 2008.
Loss per share for the third quarter of fiscal 2009 is estimated in the
range of ($0.22) to ($0.17), which compares to actual third quarter fiscal 2008
loss per share on a GAAP basis of ($0.12), which included charges of $0.02 per
diluted share for store closures. Actual adjusted net loss for the third quarter
of fiscal 2008 was ($0.10) per share and excluded store closure costs.
STORE OPENING PLANS
During the second quarter, the Company opened no new stores and closed
three locations, ending the period with 291 stores in operation. For the
remainder of fiscal 2009, the Company plans to open one or two additional new
stores and close approximately two or three locations, ending the year with
approximately 289 stores and approximately 585,000 square feet in operation.
CONFERENCE CALL INFORMATION
The Company announced that it will conduct a conference call to discuss
its second quarter fiscal 2009 results today, July 20, 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 July 27, 2009 and can be accessed by dialing
(877) 660-6853 and entering account number 3055 and conference code 327375.
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 290 stores,
primarily situated in central locations in high traffic, upscale malls in 43
states, the Virgin Islands and Puerto Rico.
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 27, December 27, June 28,
ASSETS 2009 2008 2008
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Current assets:
Cash and equivalents $ 4,315,000 $ 4,835,000 $ 1,045,000
Marketable securities 30,513,000 25,153,000 26,319,000
Receivables, net 2,653,000 3,898,000 4,565,000
Income tax receivable 534,000 5,883,000 0
Inventories, net 22,420,000 22,321,000 35,042,000
Prepaid expenses and other current assets 2,109,000 1,795,000 4,465,000
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Total current assets 62,544,000 63,885,000 71,436,000
Equipment and leasehold improvements, net 38,415,000 43,320,000 46,764,000
Goodwill 9,092,000 9,092,000 10,089,000
Intangible assets, net 1,245,000 1,304,000 1,364,000
Other assets 2,399,000 1,924,000 382,000
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Total assets $ 113,695,000 $ 119,525,000 $ 130,035,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,559,000 $ 6,375,000 $ 10,567,000
Note payable 1,282,000 1,259,000 1,362,000
Accrued compensation 1,316,000 1,713,000 1,949,000
Accrued liabilities 8,647,000 11,077,000 9,663,000
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Total current liabilities 16,804,000 20,424,000 23,541,000
Note payable 2,518,000 3,143,000 3,753,000
Other liabilities 16,430,000 16,795,000 16,373,000
Deferred income taxes, net 0 0 99,000
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, par value $.01; authorized, 20,000,000
shares; issued 16,410,036, 16,410,036 and 164,000 164,000 164,000
16,392,936
Additional paid-in capital 47,272,000 47,155,000 46,784,000
Retained earnings 70,302,000 71,053,000 78,227,000
Treasury stock, 3,682,199, 3,372,000 and 3,167,000
shares, at cost (39,795,000) (39,209,000) (38,906,000)
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Total stockholders' equity 77,943,000 79,163,000 86,269,000
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Total liabilities and
stockholders' equity $ 113,695,000 $ 119,525,000 $ 130,035,000
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CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE TWENTY-SIX WEEKS ENDED
June 27, June 28,
2009 2008
----------------- -----------------
Net sales $ 109,872,000 $ 141,681,000
Cost of sales, including buying and occupancy 62,848,000 79,074,000
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Gross profit 47,024,000 62,607,000
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Expenses
Store operating expenses 39,251,000 48,701,000
General and administrative expenses 8,985,000 11,871,000
Store exit costs 0 2,308,000
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Total expenses 48,236,000 62,880,000
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Operating loss (1,212,000) (273,000)
Other income (expense):
Interest expense (98,000) (131,000)
Interest income 127,000 487,000
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Income (loss) before income taxes (1,183,000) 83,000
Income tax provision (benefit) (432,000) 31,000
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Net income (loss) $ (751,000) $ 52,000
================= =================
Basic earnings (loss) per share $ (0.06) $ 0.00
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Diluted earnings (loss) per share $ (0.06) $ 0.00
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Basic weighted average shares outstanding 12,841,000 13,443,000
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Diluted weighted average shares outstanding 12,841,000 13,462,000
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CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEKS ENDED
June 27, June 28,
2009 2008
----------------- -----------------
Net sales $ 56,866,000 $ 73,973,000
Cost of sales, including occupancy and
buying costs 31,636,000 39,781,000
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Gross profit 25,230,000 34,192,000
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Costs and expenses
Store operating expenses 19,663,000 24,783,000
General and administrative expenses 4,249,000 6,202,000
Store exit costs 0 0
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Total expenses 23,912,000 30,985,000
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Operating income 1,318,000 3,207,000
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Other income (expense):
Interest expense (47,000) (63,000)
Interest income 60,000 197,000
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Income before income taxes 1,331,000 3,341,000
Income tax provision 486,000 1,236,000
----------------- -----------------
Net income $ 845,000 $ 2,105,000
================= =================
Basic earnings per share $ 0.07 $ 0.16
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Diluted earnings per share $ 0.07 $ 0.16
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Basic weighted average shares outstanding 12,728,000 13,320,000
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Diluted weighted average shares outstanding 12,728,000 13,357,000
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