Cache Reports Third Quarter Fiscal 2012 Results

  Cache Reports Third Quarter Fiscal 2012 Results

                   Company Updates Fourth Quarter Guidance

Business Wire

NEW YORK -- November 06, 2012

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 29, 2012.

For the 13-week period ended September 29, 2012:

  *Net sales decreased 5.9% to $45.8 million from $48.7 million in the third
    quarter of fiscal 2011. Comparable store sales declined 2.9%, following a
    5.7% increase in comparable store sales in the third quarter of fiscal
    2011;
  *Gross profit decreased 25.8% to $14.7 million, or 32.0% of net sales,
    compared to $19.8 million, or 40.6% of net sales, in the third quarter of
    fiscal 2011;
  *Operating loss totaled $8.1 million, as compared to an operating loss of
    $3.0 million in the third quarter of fiscal 2011; and
  *Net loss totaled $6.4 million or ($0.49) per share, which included a $1.3
    million charge or $0.10 per share for an increase in the tax valuation
    allowance against net deferred tax assets. This compares to a net loss of
    $1.8 million or ($0.14) per share last year

Thomas Reinckens, Chairman and Chief Executive Officer, commented: “Our third
quarter results were at the better end of our revised expectations, prior to
an increase in the tax valuation allowance. Third quarter results were
negatively affected by an unfavorable response to our summer and fall
sportswear assortments, as well as an increase in the valuation allowance of
$1.3 million against net deferred tax assets. We have identified the actions
that we believe are necessary to bring about a positive change in our
business. We are working expeditiously to intensify our offerings of
sophisticated fashions which our customers look for in our brand. At the same
time, we continue to maximize strong selling categories such as dresses and
generate solid increases in our e-commerce sales. Our search to identify a new
President is well underway and we believe that we are on track to achieve our
targeted savings of $3 million in fiscal 2013. While we remain cautious as we
enter the final quarter of the year, we are confident in our strategies, which
we expect to enable us to improve our sales and margin trends as we enter
2013.”

For the 39-week period ended September 29, 2012:

  *Net sales increased 1.5% to $163.4 million from $161.0 million in the
    first nine months of fiscal 2011. Comparable store sales increased 4.0%,
    as compared to an increase of 6.4% in the first nine months of fiscal
    2011;
  *Gross profit decreased 8.6% to $63.2 million, or 38.7% of net sales
    compared to $69.2 million, or 43.0% of net sales, in the first nine months
    of fiscal 2011;
  *Operating loss totaled $8.5 million, as compared to an operating loss of
    $143,000 million in the first nine months of fiscal 2011; and
  *Net loss was $6.6 million or ($0.51) per share, which included a $1.3
    million charge or $0.10 per share for an increase in the tax valuation
    allowance against net deferred tax assets, compared to net income of
    $205,000 or $0.02 per diluted share in the first nine months of fiscal
    2011.

Gross profit for the third quarter of fiscal 2012 was $14.7 million, or 32.0%
of net sales, compared to $19.8 million, or 40.6% of net sales, in the third
quarter of fiscal 2011. For the first nine months of fiscal 2012, gross profit
was $63.2 million, or 38.7% of net sales, compared to $69.2 million, or 43.0%
of net sales, in the first nine months of fiscal 2011. The decrease in gross
margin in the third quarter and first nine months of fiscal 2012 was primarily
driven by increased markdowns, as compared to the same periods in fiscal 2011.

In total, operating expenses for the third quarter of fiscal 2012 were $22.8
million, unchanged from the prior year quarter. As a percentage of net sales
operating expenses increased to 49.7% compared to 46.9% of net sales, in the
third quarter of fiscal 2011. For the first nine months of fiscal 2012, total
operating expenses were $71.7 million, or 43.9% of net sales, compared to
$69.3 million, or 43.1% of net sales, in the first nine months of fiscal 2011.
The increase in total operating expenses for the first nine months of fiscal
2012 primarily reflected increased marketing expenses and e-commerce related
costs, which were partially offset by lower depreciation expense, as compared
to the same period in fiscal 2011.

At September 29, 2012, cash and marketable securities totaled $16.4 million,
compared to $24.4 million in cash and marketable securities at October 1,
2011. Total inventory at cost increased 7.1% at September 29, 2012, as
compared to the prior year period.

A table summarizing financial results follows:

              Thirty-Nine Weeks Ended             Thirteen Weeks Ended
                Sept. 29,        Oct. 1,            Sept. 29,        Oct. 1,
                2012               2011               2012               2011
                ($ thousands, except for per share data, share numbers and store count)
                
Net sales       $ 163,417          $ 161,024          $ 45,789           $ 48,659
Operating         (8,455     )       (143       )       (8,109     )       (3,042     )
loss
Net income      $ (6,553     )     $ 205              $ (6,376     )     $ (1,822     )
(loss)
                
Basic
earnings        $ (0.51      )     $ 0.02             $ (0.49      )     $ (0.14      )
(loss) per
share
Diluted
earnings        $ (0.51      )     $ 0.02             $ (0.49      )     $ (0.14      )
(loss) per
share
                
Per share –
Tax             $ (0.10      )     $ --               $ (0.10      )     $ --
valuation
allowance
                
Diluted
earnings
(loss) per
share
Excluding –
Tax             $ (0.41      )     $ 0.02             $ (0.39      )     $ (0.14      )
valuation
allowance
                
                
Basic
weighted
average
shares
outstanding       12,882,000         12,831,000         12,892,000         12,849,000
                
Diluted
weighted
average
shares
outstanding       12,882,000         12,859,000         12,892,000         12,849,000
                
Number of
stores
open, at          262                279                262                279
end of
period
                                                                                      

Store Information

During the third quarter, the Company closed two locations, ending the period
with 262 stores in operation. For fiscal 2012, the Company expects to open no
new additional stores and since September 29, 2012 the Company has closed one
additional location. Accordingly, the Company expects to end fiscal 2012 with
approximately 261 locations and 525,000 square feet in operation.

2012 Outlook

For the fourth quarter of fiscal 2012, the Company currently expects
comparable store sales to be flat or to increase in the low-to-mid
single-digit range. This follows a 12.4% increase in comparable store sales in
the fourth quarter of fiscal 2011. The Company currently expects fourth
quarter fiscal 2012 net earnings per diluted share in the range of $0.01 to
$0.03, exclusive of any potential asset impairment costs and potential tax
valuation allowance. In the fourth quarter of fiscal 2011, the Company
reported net income of $0.15 per diluted share, or $0.12 per diluted share
excluding tax valuation allowance reversal, store impairment charges and gain
on note payable settlement.

Conference call information

The Company announced that it will conduct a conference call to discuss its
third quarter fiscal 2012 results today, November 6, 2012 at 4:30 p.m. Eastern
Time. Investors and analysts interested in participating in the call are
invited to dial (877) 705-6003 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 at 7:30 p.m. Eastern Time on November 6,
2012 until 11:59 p.m. Eastern Time on November 13, 2012 and can be accessed by
dialing (877) 870-5176 and entering PIN number 402811.

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. The Company currently
operates 261 stores, primarily situated in central locations in high traffic,
upscale malls in 42 states, the Virgin Islands and Puerto Rico.

Forward-Looking Statements

Certain matters discussed within this press release may constitute
forward-looking statements within the meaning of the federal securities laws.
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, seasonality and changes in
general economic conditions and consumer spending patterns, the ability to
successfully recruit a new President, reliance on foreign manufacturers,
dependence on management, dependence on vendors and distributors, material
weakness in our internal controls, as well as other risks outlined from time
to time in the filings of Cache, Inc. with the Securities and Exchange
Commission.

                                                        
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                                                 
                                                                 
                       September 29,       December 31,        October 1,
ASSETS                 2012                2011                2011
                                                                 
Current assets:
Cash and               $ 10,374,000        $ 22,509,000        $ 13,816,000
equivalents
Marketable               3,009,000           4,008,000           7,563,000
securities
Certificate of
deposits -               3,000,000           3,000,000           3,000,000
restricted
Receivables, net         2,294,000           3,403,000           2,304,000
Income tax               245,000             162,000             -
receivable
Inventories, net         23,806,000          22,075,000          22,232,000
Prepaid expenses
and other current       2,068,000         1,572,000         5,323,000   
assets
Total current            44,796,000          56,729,000          54,238,000
assets
                                                                 
                                                                 
Equipment and
leasehold                20,522,000          18,937,000          20,651,000
improvements, net
Intangible assets,       102,000             102,000             102,000
net
Other assets            10,708,000        8,877,000         9,380,000   
                                                                 
Total assets           $ 76,128,000       $ 84,645,000       $ 84,371,000  
                                                                 
                                                                 
LIABILITIES AND
STOCKHOLDERS'
EQUITY
                                                                 
Current
liabilities:
Accounts payable       $ 10,974,000        $ 9,565,000         $ 11,777,000
Note payable             -                   -                   1,463,000
Accrued                  1,420,000           2,579,000           1,306,000
compensation
Accrued                 9,609,000         10,217,000        8,697,000   
liabilities
Total current            22,003,000          22,361,000          23,243,000
liabilities
                                                                 
                                                                 
Other liabilities        9,628,000           11,487,000          12,280,000
                                                                 
                                                                 
Commitments and
contingencies
                                                                 
                                                                 
STOCKHOLDERS'
EQUITY
                                                                 
                                                                 
Common stock             166,000             165,000             165,000
Additional paid-in       48,671,000          48,419,000          48,346,000
capital
Retained earnings        35,455,000          42,008,000          40,132,000
Treasury stock, at      (39,795,000 )      (39,795,000 )      (39,795,000 )
cost
Total
stockholders'           44,497,000        50,797,000        48,848,000  
equity
                                                                 
Total liabilities
and stockholders'      $ 76,128,000       $ 84,645,000       $ 84,371,000  
equity
                                                                             

                                                            
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
                                        
                                                                 
                                           39 Weeks Ended      39 Weeks Ended
                                           September 29,       October 1,
                                           2012                2011
                                                                 
Net sales                                  $ 163,417,000       $ 161,024,000
                                                                 
Cost of sales, including buying and         100,176,000       91,829,000  
occupancy
                                                                 
Gross profit                                63,241,000        69,195,000  
                                                                 
Expenses
Store operating expenses                     57,727,000          55,996,000
General and administrative expenses         13,969,000        13,342,000  
Total expenses                              71,696,000        69,338,000  
                                                                 
Operating loss                              (8,455,000  )      (143,000    )
                                                                 
                                                                 
Other income (expense):
Interest expense                             -                   (38,000     )
Interest income                             62,000            68,000      
                                                                 
Loss before income taxes                     (8,393,000  )       (113,000    )
                                                                 
Income tax benefit                          (1,840,000  )      (318,000    )
                                                                 
                                                                 
Net income (loss)                          $ (6,553,000  )     $ 205,000     
                                                                 
                                                                 
                                                                 
Basic earnings (loss) per share            $ (0.51       )     $ 0.02        
                                                                 
Diluted earnings (loss) per share          $ (0.51       )     $ 0.02        
                                                                 
                                                                 
                                                                 
Basic weighted average shares               12,882,000        12,831,000  
outstanding
                                                                 
Diluted weighted average shares             12,882,000        12,859,000  
outstanding
                                                                             

                                                         
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                
                                                                
                                           13 Weeks Ended       13 Weeks Ended
                                           September 29,        October 1,
                                         2012                 2011
                                                                
Net sales                                $ 45,789,000         $ 48,659,000
                                                                
Cost of sales, including buying and       31,128,000         28,899,000  
occupancy
                                                                
Gross profit                              14,661,000         19,760,000  
                                                                
Expenses
Store operating expenses                   18,268,000           18,463,000
General and administrative expenses       4,502,000          4,339,000   
Total expenses                            22,770,000         22,802,000  
                                                                
Operating loss                            (8,109,000  )       (3,042,000  )
                                                                
                                                                
Other income (expense):
Interest expense                           -                    (7,000      )
Interest income                           20,000             24,000      
                                                                
Loss before income taxes                   (8,089,000  )        (3,025,000  )
                                                                
Income tax benefit                        (1,713,000  )       (1,203,000  )
                                                                
                                                                
Net loss                                 $ (6,376,000  )      $ (1,822,000  )
                                                                
                                                                
                                                                
Basic loss per share                     $ (0.49       )      $ (0.14       )
                                                                
Diluted loss per share                   $ (0.49       )      $ (0.14       )
                                                                
                                                                
                                                                
Basic weighted average shares             12,892,000         12,849,000  
outstanding
                                                                
Diluted weighted average shares           12,892,000         12,849,000  
outstanding

Contact:

Cache, Inc.
Maggie Feeney, 212-575-3206
Executive Vice President and
Chief Financial Officer
or
Investor Relations:
ICR, Inc.
Allison Malkin/Rachel Schacter
203-682-8225 / 646-277-1243