Cache Reports Fourth Quarter and Fiscal 2012 Results

  Cache Reports Fourth Quarter and Fiscal 2012 Results

 Fourth Quarter Net Sales and Pre-Tax Loss In Line with Previously Announced
                             Preliminary Results

Business Wire

NEW YORK -- March 12, 2013

Cache, Inc., (NASDAQ: CACH), the specialty chain of women’s apparel stores,
reported results for the thirteen (“fourth quarter”) and fifty-two week
(“fiscal 2012”) periods ended December 29, 2012.

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

  *Net sales decreased 3.3% to $60.8 million from $62.9 million in the fourth
    quarter of fiscal 2011. Comparable store sales decreased 0.7%, compared to
    an increase of 12.4% in the fourth quarter of fiscal 2011.
  *Operating loss totaled $5.0 million, inclusive of $1.1 million in non-cash
    asset impairment charges. This compares to operating income of $2.4
    million in the fourth quarter of 2011, inclusive of $719,000 in non-cash
    asset impairment charges partially offset by a $345,000 benefit from a
    gain on note payable settlement.
  *Net loss totaled $5.5 million, or $0.41 per diluted share, which included
    the following costs: (i) a $2.5 million or, $0.18 per diluted share, tax
    valuation allowance charge; and (ii) a $682,000, or $0.05 per diluted
    share, non-cash asset impairment charge. This compares to net income of
    $1.9 million, or $0.14 per diluted share, in the prior year period, which
    included the following benefits and costs: (i) a $562,000, or $0.04 per
    diluted share, benefit from the reversal of the tax valuation allowance
    against net deferred tax assets; (ii) a $396,000, or $0.03 per diluted
    share, non-cash store impairment charge; and (iii) a $190,000, or $0.02
    per diluted share, benefit from a gain on note payable settlement.
  *Adjusted net loss, which excludes the costs and benefits referenced above,
    was $2.4 million, or $0.18 per diluted share, as compared to adjusted net
    income of $1.5 million, or $0.11 per diluted share, in the fourth quarter
    of fiscal 2011. (See the table on page 3 for a reconciliation of net
    income (loss) to adjusted net income (loss).)

Jay Margolis, Chairman and Chief Executive Officer, commented: “Fiscal 2012
was a challenging year for Cache, yet we also saw progress in key areas that
we believe allow us to begin fiscal 2013 with a solid foundation. To this end,
we doubled our e-commerce sales in this high growth channel, optimized our
stores through the closing of underperforming locations to end the year with a
strong ongoing store base and continued to be a top destination for event
dresses. My priorities in my first year as Chairman and CEO are focused on
implementing the processes and strategies to allow our Company to deliver
consistent and cohesive apparel and accessories assortments, to enhance and
continue to grow our e-commerce business and capitalize more fully on our
event dressing opportunity. I am fortunate to have joined an organization that
possesses incredible talent and a passion for moving our business forward. I
am even more excited today about the opportunities that exist to position
Cache for long term profitable growth since joining the Company in February
and remain confident in our ability to achieve this goal.”

For the 52-week period ended December 29, 2012:

  *Net sales increased 0.1% to $224.2 million from $223.9 million in fiscal
    2011. Comparable store sales increased 2.7%, compared to an increase of
    8.1% in fiscal 2011.
  *Operating loss totaled $13.4 million, inclusive of $1.1 million in
    non-cash asset impairment charges. This compares to operating income of
    $2.2 million in the prior year period, inclusive of: (i) a $719,000
    non-cash asset impairment charge; (ii) a $450,000 legal expense
    reimbursement; and (iii) a $345,000 benefit from a gain on note payable
    settlement.
  *Net loss was $12.1 million, or $0.90 per diluted share, inclusive of the
    following costs: (i) a $3.8 million, or $0.28 per diluted share, tax
    valuation allowance charge; and (ii) a $693,000, or $0.05 per diluted
    share, non-cash asset impairment charge. This compares to net income of
    $2.1 million, or $0.16 per diluted share, in fiscal 2011, inclusive of the
    following benefits and costs: (i) a $833,000 benefit, or $0.06 per diluted
    share, from the reversal of the tax valuation allowance against net
    deferred tax assets; (ii) a $396,000, or $0.03 per diluted share, non-cash
    store impairment charge; (iii) a $248,000, or $0.02 per diluted share,
    legal expense reimbursement; and (iv) a $190,000, or $0.02 per diluted
    share, benefit from a gain on note payable settlement.
  *Adjusted net loss, which excludes the costs and benefits referenced above,
    was $7.6 million, or $0.57 per diluted share, compared to fiscal 2011
    adjusted net income of $1.2 million or $0.09 per diluted share. (See the
    table on page 3 for a reconciliation of net income (loss) to adjusted net
    income (loss).)

Fourth Quarter and Full Year Operating Results

Gross profit for the fourth quarter of fiscal 2012 was $20.7 million, or 34.0%
of net sales, compared to $27.2 million, or 43.3% of net sales, in the fourth
quarter of fiscal 2011. For fiscal 2012, gross profit was $83.9 million, or
37.4% of net sales, compared to $96.4 million, or 43.1% of net sales, in
fiscal 2011. The gross profit decrease in the fourth quarter and fiscal year
was primarily driven by increases in markdowns and an increase in e-commerce
related costs relating to significantly higher e-commerce sales.

In total, operating expenses for the fourth quarter of fiscal 2012 were $25.7
million, or 42.2% of net sales, as compared to $24.8 million, or 39.5% of net
sales, in the fourth quarter of fiscal 2011. For fiscal 2012, total operating
expenses were $97.3 million, or 43.4% of net sales, compared to $94.2 million,
or 42.1% of net sales, in fiscal 2011. The increase in operating expenses for
the fourth quarter and fiscal year 2012 was primarily driven by increases in
impairment charges, professional fees, marketing, as well as e-commerce costs
and were partially offset by savings in payroll and related expenses.

At December 29, 2012, cash and marketable securities totaled $18.4 million, as
compared to $29.5 million at December 31, 2011. Total inventory at cost
decreased 3.8% to $21.2 million at year-end from the prior-year period.

A table summarizing financial results follows:

                   Fifty-Two Weeks Ended        Thirteen Weeks Ended
                      Dec. 29,      Dec. 31,       Dec. 29,      Dec. 31,
                      2012           2011           2012           2011
                     ($ thousands, except for per share data, share numbers
                      and store count)
                                                    
                                                    
Pre-tax income
(loss), inclusive     ($13,363)      $2,265         ($4,970)       $2,378
of other charges
Other charges:
Impairment            1,118          719            1,118          719
charges
Other legal           -              (450)          -              -
reimbursement
Gain on note
payable               -             (345)         -             (345)
settlement
Pre-tax income
(loss),
excluding other       ($12,245)     $2,189        ($3,852)      $2,752
charges
                                                    
Net income
(loss), inclusive     ($12,078)      $2,081         ($5,525)       $1,876
of other charges
Other charges,
net of taxes:
Impairment            693            396            682            396
charges
Other legal           -              (248)          -              -
reimbursement
Gain on note
payable               -              (190)          -              (190)
settlement
Tax valuation
allowance and         3,791         (833)         2,491         (562)
reserves
Adjusted net
income (loss),
excluding other       ($7,594)      $1,206        ($2,352)      $1,520
charges
                                                    
Basic earnings
(loss) per share      ($0.90)        $0.16          ($0.41)        $0.14
(1)
Diluted earnings
(loss) per share      ($0.90)        $0.16          ($0.41)        $0.14
(1)
                                                    
Per share –
Impairment            $0.05          $0.03          $0.05          $0.03
charges
Per share – Legal     -              $(0.02)        -              -
reimbursement
Per share – Gain
on note payable       -              $(0.02)        -              $(0.02)
settlement
Per share – Tax
valuation             $0.28         $(0.06)       $0.18         $(0.04)
allowance and
reserves
Adjusted diluted
earnings (loss)
per share
excluding other       ($0.57)       $0.09         $(0.18)       $0.11
charges
                                                    
Basic weighted
average shares
outstanding (1)       13,418,000     13,157,000     13,412,000     13,244,000
                                                    
Diluted weighted
average shares
outstanding (1)       13,418,000     13,161,000     13,412,000     13,250,000
                                                    
Number of stores
open, at end of       260            279            260            279
period

    All basic and diluted share information in the table above reflects for
    all periods presented the issuance of all restricted stock awards, as if
    issued on the original grant date. In prior periods, the Company
    previously had been issuing restricted stock only when the awards vested.
    This change in reporting had no effect on the Company’s financial
(1) position, results of operations or cash flows during any of the periods
    presented and the only changes are in the number of shares outstanding in
    the fiscal 2011 period and net income per share for the 13-week period
    ended December 31, 2011. The weighted average number of shares
    attributable to restricted stock awards in fiscal 2012 and 2011 were
    approximately 531,000 and 319,000, respectively for the 52-week periods
    and 508,000 and 385,000, respectively, for the 13-week periods.

About the Company’s Non-GAAP Financial Measures

In addition to reporting net income (loss), this release contains adjusted net
income (loss), excluding other charges, and Diluted earnings (loss) per share,
excluding other charges, which are non-GAAP financial measures used by the
Company. In making these non-GAAP adjustments, the Company took into account
certain costs or benefits that are generally not expected to be on-going in
nature or that are unrelated to the Company’s core operations. Management
believes such non-GAAP financial information provides a useful basis for
evaluating underlying business performance, but should not be considered in
isolation and is not a substitute for GAAP financial information. The Company
believes that providing such adjusted results allows investors and other users
of the Company’s financial statements to better understand our comparative
operating performance for the periods presented.

Store Information

During fiscal 2012, the Company opened two stores and closed 21 stores, to end
the year with 260 locations and approximately 526,000 square feet in
operation. The Company does not currently plan to open any stores in fiscal
2013. To date, during fiscal 2013, we closed nine stores and expect to close
approximately five additional stores. The stores that we closed in fiscal 2012
and 2013 and the additional stores that we expect to close in fiscal 2013 had
negative profitability in fiscal 2012, so their closures are expected to have
a positive impact on fiscal 2013 earnings.

Conference Call Information

The Company will conduct a conference call to discuss its fourth quarter and
fiscal 2012 results today, March 12, 2013 at 9:00 a.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 until March 19, 2013 and can be accessed by dialing
(877) 870-5176 and entering PIN number 410026.

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 251 stores, primarily situated in central locations in high traffic,
upscale malls in 42 states, the Virgin Islands and Puerto Rico.

Forward-Looking Statements and Other Information

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, satisfaction of the
conditions relating to the rights offering, industry trends, merchandise and
fashion trends, competition, seasonality and changes in general economic
conditions and consumer spending patterns, 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.

This press release does not constitute an offer to sell or the solicitation of
an offer to buy nor will there be any sale of any securities referred to in
this press release in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of such state or jurisdiction. The rights offering
will be made only by means of a prospectus meeting the requirements of the
Securities Act of 1933, as amended.

                                                         
                                                               
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                                               
ASSETS                                     December 29,        December 31,
                                           2012                2011
                                                               
Current assets:
Cash and equivalents                       $ 12,360,000        $ 22,509,000
Marketable securities                        3,013,000           4,008,000
Certificate of deposits - restricted         3,000,000           3,000,000
Receivables, net                             2,200,000           3,403,000
Income tax receivable, net                   184,000             162,000
Inventories, net                             21,246,000          22,075,000
Prepaid expenses and other current          2,224,000         1,572,000   
assets
Total current assets                         44,227,000          56,729,000
                                                               
                                                               
Equipment and leasehold                      20,177,000          18,937,000
improvements, net
Intangible assets, net                       102,000             102,000
Other assets                                10,119,000        8,877,000   
                                                               
Total assets                               $ 74,625,000       $ 84,645,000  
                                                               
                                                               
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                           $ 12,397,000        $ 9,565,000
Accrued compensation                         2,615,000           2,579,000
Accrued liabilities                         11,795,000        10,217,000  
Total current liabilities                    26,807,000          22,361,000
                                                               
                                                               
Other liabilities                            8,777,000           11,487,000
                                                               
                                                               
Commitments and contingencies
                                                               
                                                               
STOCKHOLDERS' EQUITY
                                                               
Common stock                                 171,000             171,000
Additional paid-in capital                   48,735,000          48,413,000
Retained earnings                            29,930,000          42,008,000
Treasury stock, at cost                     (39,795,000 )      (39,795,000 )
Total stockholders' equity                  39,041,000        50,797,000  
                                                               
Total liabilities and stockholders'        $ 74,625,000       $ 84,645,000  
equity
                                                               
                                                               

CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                               
                                           52 Weeks Ended      52 Weeks Ended
                                           December 29,        December 31,
                                           2012                2011
                                                               
Net sales                                  $ 224,210,000       $ 223,880,000
                                                               
Cost of sales, including buying and         140,299,000       127,461,000 
occupancy
                                                               
Gross profit                                83,911,000        96,419,000  
                                                               
Expenses
Store operating expenses                     77,687,000          76,024,000
General and administrative expenses          18,542,000          17,428,000
Impairment charges                          1,118,000         719,000     
Total expenses                              97,347,000        94,171,000  
                                                               
Operating income (loss)                      (13,436,000 )       2,248,000
                                                               
Other income (expense):
Interest expense                             -                   (70,000     )
Interest income                             73,000            87,000      
                                                               
Income (loss) before income taxes            (13,363,000 )       2,265,000
                                                               
Income tax provision (benefit)              (1,285,000  )      184,000     
                                                               
Net income (loss)                          $ (12,078,000 )     $ 2,081,000   
                                                               
Basic earnings (loss) per share            $ (0.90       )     $ 0.16        
                                                               
Diluted earnings (loss) per share          $ (0.90       )     $ 0.16        
                                                               
Basic weighted average shares               13,418,000        13,157,000  
outstanding
                                                               
Diluted weighted average shares             13,418,000        13,161,000  
outstanding
                                                               
                                                               

CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                               
                                           13 Weeks Ended      13 Weeks Ended
                                           December 29,        December 31,
                                           2012                2011
                                                               
Net sales                                  $ 60,793,000        $ 62,856,000
                                                               
Cost of sales, including buying and         40,123,000        35,632,000  
occupancy
                                                               
Gross profit                                20,670,000        27,224,000  
                                                               
Expenses
Store operating expenses                     19,960,000          20,028,000
General and administrative expenses          4,573,000           4,086,000
Impairment charges                          1,118,000         719,000     
Total expenses                              25,651,000        24,833,000  
                                                               
Operating income (loss)                     (4,981,000  )      2,391,000   
                                                               
Other income (expense):
Interest expense                             -                   (32,000     )
Interest income                             11,000            19,000      
                                                               
Income (loss) before income taxes            (4,970,000  )       2,378,000
                                                               
Income tax provision (benefit)              555,000           502,000     
                                                               
Net income (loss)                          $ (5,525,000  )     $ 1,876,000   
                                                               
Basic earnings (loss) per share            $ (0.41       )     $ 0.142       
                                                               
Diluted earnings (loss) per share          $ (0.41       )     $ 0.142       
                                                               
Basic weighted average shares               13,412,000        13,244,000  
outstanding
                                                               
Diluted weighted average shares             13,412,000        13,250,000  
outstanding

Contact:

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