Cache Reports Third Quarter Fiscal 2013 Results

  Cache Reports Third Quarter Fiscal 2013 Results

                     Comparable Store Sales Increase 6.0%

            Gross Profit Margin Expands 150 basis points to 33.5%

Business Wire

NEW YORK -- November 12, 2013

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 28, 2013.

For the 13-week period ended September 28, 2013:

  *Net sales increased 3.1% to $47.2 million from $45.8 million in the third
    quarter of fiscal 2012. Comparable store sales increased 6.0%, as compared
    to a decrease of 2.9% in the third quarter of fiscal 2012;
  *Gross profit increased 7.9% to $15.8 million, or 33.5% of net sales,
    compared to $14.7 million, or 32.0% of net sales, in the third quarter of
    fiscal 2012, due to the improvement in sales and a decrease in markdowns;
  *Operating loss totaled $8.0 million, as compared to an operating loss of
    $8.1 million in the third quarter of fiscal 2012;
  *Net loss totaled $8.0 million or $0.38 per share, as compared to net loss
    of $6.4 million or $0.49 per share, in the prior year period; and
  *Adjusted net loss totaled $7.4 million, or $0.35 per share, as compared to
    adjusted net loss of $4.9 million or $0.38 per share in the third quarter
    of fiscal 2012. (See reconciliation of adjusted net loss to net loss.)

Jay Margolis, Chairman and Chief Executive Officer, commented: “Our third
quarter results included solid progress on our key merchandising, store and
e-commerce initiatives that we identified at the start of the year and are
expected to position Cache for profitability and sustained long term growth.
Specifically, we generated increased net sales, positive comparable store
sales and an expansion in gross profit margin, as compared to a year ago.
During the quarter, we saw a favorable consumer response to our initial
efforts to differentiate Cache from peers with unique event dresses, tops,
sportswear and accessories. This positive performance was partially offset by
our actions to clear product that was not consistent with our go-forward
strategy. We also continued to significantly reduce promotional activity in
our e-commerce channel to enhance our profitability and importantly create
brand integrity as we present a clear pricing message to our customers.”

“I am confident in our outlook as we enter the all important holiday season,
Mr. Margolis continued. “We have exciting plans in place to capitalize on the
gift giving season and our merchandise is positioned to take advantage of our
customers’ needs during the festivities of the season. Our overarching goal
remains to maximize our white space opportunity, which we have defined as “the
events in a woman’s life,” and we believe we have the right talent,
merchandise, store base and marketing to achieve this objective.”

For the 39-week period ended September 28, 2013:

  *Net sales decreased 1.6% to $160.8 million from $163.4 million in the
    first nine months of fiscal 2012. Comparable store sales increased 1.4%,
    as compared to an increase of 4.0% in the first nine months of fiscal
    2012;
  *Gross profit decreased 16.1% to $53.1 million, or 33.0% of net sales
    compared to $63.2 million, or 38.7% of net sales, in the first nine months
    of fiscal 2012;
  *Operating loss totaled $19.4 million, as compared to an operating loss of
    $8.5 million, in the first nine months of fiscal 2012;
  *Net loss was $29.7 million or $1.70 per share, as compared to net loss of
    $6.6 million or $0.51 per share, in the first nine months of fiscal 2012;
    and
  *Adjusted net loss totaled $16.4 million, or $0.94 per share, as compared
    to adjusted net loss of $4.8 million, or $0.38 per share in the first nine
    months of fiscal 2012. (See reconciliation of net loss to adjusted net
    loss.)

Gross profit for the third quarter of fiscal 2013 was $15.8 million, or 33.5%
of net sales, compared to $14.7 million, or 32.0% of net sales, in the third
quarter of fiscal 2012. For the first nine months of fiscal 2013, gross profit
was $53.1 million, or 33.0% of net sales, compared to $63.2 million, or 38.7%
of net sales, in the first nine months of fiscal 2012. The increase in gross
margin in the third quarter of fiscal 2013 was primarily due to lower design,
production and sourcing costs, as well as a decrease in markdowns and higher
sales, as compared to last year.

In total, operating expenses for the third quarter of fiscal 2013 were $23.8
million, 50.3% of net sales, as compared to $22.8 million, or 49.7% of net
sales in the third quarter of fiscal 2012. For the first nine months of fiscal
2013, total operating expenses were $72.5 million, or 45.0% of net sales,
compared to $71.7 million, or 43.8% of net sales, in the first nine months of
fiscal 2012. The increase in total operating expenses for the first nine
months of fiscal 2013 primarily reflected increased general and administrative
costs and employee separation charges of $2.5 million, which were partially
offset by a decrease store operating expense, as compared to the same period
in fiscal 2012.

At September 28, 2013, cash and marketable securities totaled $6.1 million,
compared to $16.4 million in cash and marketable securities at September 29,
2012. Total inventory at cost decreased 9.3% at September 28, 2013, as
compared to the prior year period.

A table summarizing financial results follows:

              Thirty-Nine Weeks Ended               Thirteen Weeks Ended
                Sept. 28,         Sept. 29,          Sept. 28,        Sept. 29,
                2013                2012             2013              2012
                ($ thousands, except for per share data, share numbers and store count)
                                                                           
Net sales       $ 160,853            $ 163,417          $ 47,221             $ 45,789
Operating         (19,390    )         (8,455     )       (7,957     )         (8,109     )
loss
Net loss        $ (29,660    )       $ (6,553     )     $ (7,997     )       $ (6,376     )
                                                                             
Diluted
loss per        $ (1.70      )       $ (0.51      )     $ (0.38      )       $ (0.49      )
share
Adjusted
loss per        $ (0.94      )       $ (0.38      )     $ (0.35      )       $ (0.38      )
share
                                                                             
Basic
weighted
average           17,450,000           12,882,000         21,090,000           12,892,000
shares
outstanding
                                                                             
Diluted
weighted
average           17,450,000           12,882,000         21,090,000           12,892,000
shares
outstanding
                                                                             
Number of
stores
open, at          250                  262                250                  262
end of
period
                                                                               

Store Count Information

During the third quarter, there was no change in the number of stores open, as
the Company ended the period with 250 stores in operation. During the balance
of fiscal 2013, the Company expects to open no new stores and close one
additional store, ending the year with 249 stores and approximately 500,000
square feet in operation.

Conference Call information

The Company announced that it will conduct a conference call to discuss its
third quarter fiscal 2013 results today, November 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 at 12:00 p.m. Eastern
Time on November 12, 2013 until 11:59 p.m. Eastern Time on November 19, 2013
and can be accessed by dialing (877) 870-5176 and entering PIN number
13572556.

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 250 stores, primarily situated in central locations in high traffic,
upscale malls in 41 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, our ability to
successfully implement our business strategy and to integrate new members of
management, industry trends, merchandise and fashion trends, competition,
seasonality, changes in general economic conditions and consumer spending
patterns, factors specific to our Company and merchandise, such as demand for
our merchandise and markdowns, 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 28,       December 29,        September 29,
ASSETS                  2013              2012              2012        
                                                                 
Current assets:
Cash and               $ 4,363,000         $ 12,360,000        $ 10,374,000
equivalents
Marketable               -                   3,013,000           3,009,000
securities
Certificate of
deposits -               1,750,000           3,000,000           3,000,000
restricted
Receivables, net         2,610,000           2,200,000           2,294,000
Income tax               49,000              184,000             245,000
receivable
Inventories, net         21,588,000          21,246,000          23,806,000
Prepaid expenses
and other current       1,354,000         2,224,000         2,068,000   
assets
Total current            31,714,000          44,227,000          44,796,000
assets
                                                                 
                                                                 
Equipment and
leasehold                19,814,000          20,177,000          20,522,000
improvements, net
Intangible assets,       102,000             102,000             102,000
net
Other assets            1,449,000         10,119,000        10,708,000  
                                                                 
Total assets           $ 53,079,000       $ 74,625,000       $ 76,128,000  
                                                                 
                                                                 
LIABILITIES AND
STOCKHOLDERS'
EQUITY
                                                                 
Current
liabilities:
Accounts payable       $ 8,981,000         $ 12,397,000        $ 10,974,000
Accrued                  3,223,000           2,615,000           1,420,000
compensation
Accrued                 10,374,000        11,795,000        9,609,000   
liabilities
Total current            22,578,000          26,807,000          22,003,000
liabilities
                                                                 
                                                                 
Other liabilities        9,285,000           8,777,000           9,628,000
                                                                 
                                                                 
Commitments and
contingencies
                                                                 
                                                                 
STOCKHOLDERS'
EQUITY
                                                                 
                                                                 
Common stock             252,000             171,000             171,000
Additional paid-in       60,489,000          48,735,000          48,666,000
capital
Retained earnings        270,000             29,930,000          35,455,000
Treasury stock, at      (39,795,000 )      (39,795,000 )      (39,795,000 )
cost
Total
stockholders'           21,216,000        39,041,000        44,497,000  
equity
                                                                 
Total liabilities
and stockholders'      $ 53,079,000       $ 74,625,000       $ 76,128,000  
equity
                                                                             

                                                          
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                             
                                                                             
                                           39 Weeks Ended      39 Weeks Ended
                                           September 28,       September 29,
                                            2013              2012        
                                                                             
Net sales                                  $ 160,853,000       $ 163,417,000
                                                                             
Cost of sales, including buying and         107,770,000       100,176,000 
occupancy
                                                                             
Gross profit                                53,083,000        63,241,000  
                                                                             
Expenses
Store operating expenses                     54,729,000          57,727,000
General and administrative expenses          14,652,000          13,466,000
Employee separation charges                 3,092,000         503,000     
Total expenses                              72,473,000        71,696,000  
                                                                             
Operating loss                              (19,390,000 )      (8,455,000  )
                                                                             
                                                                             
Other expense (income):
Amortization of deferred financing           37,000              -
cost
Interest income                             (22,000     )      (62,000     )
Total other expense (income), net           15,000            (62,000     )
                                                                             
Loss before income taxes                     (19,405,000 )       (8,393,000  )
                                                                             
Income tax provision (benefit)              10,255,000        (1,840,000  )
                                                                             
                                                                             
Net loss                                   $ (29,660,000 )     $ (6,553,000  )
                                                                             
                                                                             
                                                                             
Basic loss per share                       $ (1.70       )     $ (0.51       )
                                                                             
Diluted loss per share                     $ (1.70       )     $ (0.51       )
                                                                             
                                                                             
Basic weighted average shares               17,450,000        12,882,000  
outstanding
                                                                             
Diluted weighted average shares             17,450,000        12,882,000  
outstanding
                                                                             

                                                         
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                
                                                                
                                           13 Weeks Ended       13 Weeks Ended
                                           September 28,        September 29,
                                          2013               2012        
                                                                
Net sales                                $ 47,221,000         $ 45,789,000
                                                                
Cost of sales, including buying and       31,409,000         31,128,000  
occupancy
                                                                
Gross profit                              15,812,000         14,661,000  
                                                                
Expenses
Store operating expenses                   17,894,000           18,268,000
General and administrative expenses        5,237,000            4,275,000
Employee separation charges               638,000            227,000     
Total expenses                            23,769,000         22,770,000  
                                                                
Operating loss                            (7,957,000  )       (8,109,000  )
                                                                
                                                                
Other expense (income):
Amortization of deferred financing         37,000               -
cost
Interest income                           (5,000      )       (20,000     )
Total other expense (income), net         32,000             (20,000     )
                                                                
Loss before income taxes                   (7,989,000  )        (8,089,000  )
                                                                
Income tax provision (benefit)            8,000              (1,713,000  )
                                                                
                                                                
Net loss                                 $ (7,997,000  )      $ (6,376,000  )
                                                                
                                                                
                                                                
Basic loss per share                     $ (0.38       )      $ (0.49       )
                                                                
Diluted loss per share                   $ (0.38       )      $ (0.49       )
                                                                
                                                                
                                                                
Basic weighted average shares             21,090,000         12,892,000  
outstanding
                                                                
Diluted weighted average shares           21,090,000         12,892,000  
outstanding
                                                                

Non-GAAP Financial Measures

In this press release, the Company’s financial results are provided both in
accordance with accounting principles generally accepted in the United States
of America (GAAP) and using certain non-GAAP financial measures. In
particular, the Company provides adjusted net loss, adjusted net loss per
share, historic loss and loss per diluted share, each adjusted to exclude
certain costs and accounting adjustments, which are non-GAAP financial
measures. These results are included as a complement to results provided in
accordance with GAAP because management believes these non-GAAP financial
measures help identify underlying trends in the Company’s business and provide
useful information to both management and investors by excluding certain items
that may not be indicative of the Company’s core operating results. These
measures should not be considered a substitute for, or superior to, GAAP
results.

                                                           
CACHE, INC. AND SUBSIDIARIES
Reconciliation of Net Loss to Adjusted Net Loss
(dollars in thousands, except per share data)
                                                                    
                     39 Weeks         39 Weeks       13 Weeks       13 Weeks
                     Ended            Ended          Ended          Ended
                     September        September      September      September
                     28,              29,            28,            29,
                       2013          2012         2013         2012   
Net loss             $  (29,660 )     $ (6,553 )     $ (7,997 )     $ (6,376 )
                                                                    
Income tax
valuation               10,201          1,327          -              1,327
allowance^(1)
Employee
separation             3,092         393          638          179    
charges^(2)
Adjusted net         $  (16,367 )     $ (4,833 )     $ (7,359 )     $ (4,870 )
loss
                                                                    
                                                                    
Diluted loss per     $  (1.70   )     $ (0.51  )     $ (0.38  )     $ (0.49  )
share
                                                                    
Income tax
valuation               0.58            0.10           -              0.10
allowance^(1)
Employee
separation             0.18          0.03         0.03         0.01   
charges^(2)
Adjusted loss        $  (0.94   )     $ (0.38  )     $ (0.35  )     $ (0.38  )
per share
                                                                             

(1)  Represents an increase in the tax valuation allowance against net
      deferred tax assets.
      Represents employee separation charges in connection with the separation
(2)   agreement with the Company's former Chief Executive Officer and Chief
      Financial Officer, as well as severance for other corporate employees.
      Costs include severance and benefits along with related taxes.

Contact:

Cache, Inc.
Anthony DiPippa, 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