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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended June 28, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from......to......
Commission File Number: 0-10345
CACHE, INC.
-----------------------------------------------------
(Exact name of registrant as specified in is Charter)
Florida 59-1588181
------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1460 Broadway, New York, New York 10036
---------------------------------------- ----------
(Address of principal executive offices) (zip code)
212-575-3200
----------------------------------------------------
(Registrant's telephone number, including area code)
---------------------------------------------------------------------------
(Former name, address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceeding 12 months (or for such shorter period than the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
As of December 31, 2002, the aggregate market value of the voting stock held by
non-affiliated of the registrant (based on the closing price in NASDAQ National
Market) was approximately $41.2 million.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act 12b-2).
YES [ ] NO [X]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each issuer's classes of common
stock, as of the latest practicable date.
Common Stock, $.01 9,928,650
-------------------------- -----------------------------
Class of Stock Outstanding Outstanding at July 31 , 2003
CACHE, INC. AND SUBSIDIARIES
INDEX
PAGE
CONSOLIDATED FINANCIAL STATEMENTS
BALANCE SHEETS,
JUNE 28, 2003, DECEMBER 28, 2002 AND JUNE 29, 2002 3
INCOME STATEMENTS
TWENTY-SIX WEEKS ENDED JUNE 28, 2003
AND JUNE 29, 2002 4
THIRTEEN WEEKS ENDED JUNE 28, 2003
AND JUNE 29, 2002 5
STATEMENTS OF CASH FLOWS
TWENTY-SIX WEEKS ENDED JUNE 28, 2003
AND JUNE 29, 2002 6
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7-9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9-12
OTHER INFORMATION:
EXHIBIT INDEX AND REPORTS ON FORM 8-K 13-15
CERTIFICATIONS 16-18
2
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 28, December 28, June 29,
ASSETS 2003 2002 2002
-------------- -------------- --------------
(Unaudited) (Unaudited)
Current assets:
Cash and equivalents $ 16,015,000 $ 10,287,000 $ 20,169,000
Marketable securities 4,878,000 14,392,000 ---
Receivables, net 2,675,000 2,677,000 1,210,000
Notes receivable from related parties 321,000 321,000 321,000
Inventories 24,724,000 22,065,000 22,103,000
Prepaid income taxes and other tax assets 791,000 271,000 325,000
Prepaid expenses 721,000 1,020,000 651,000
-------------- -------------- --------------
Total current assets 50,125,000 51,033,000 44,779,000
Equipment and leasehold improvements, net 20,922,000 18,553,000 15,690,000
Other assets 827,000 817,000 829,000
Deferred income taxes, net 249,000 349,000 572,000
-------------- -------------- --------------
Total assets $ 72,123,000 $ 70,752,000 $ 61,870,000
============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,038,000 $ 11,988,000 $ 9,614,000
Income taxes payable 442,000 --- 1,238,000
Accrued compensation 2,180,000 3,629,000 2,421,000
Accrued liabilities 7,685,000 8,762,000 6,315,000
-------------- -------------- --------------
Total current liabilities 20,345,000 24,379,000 19,588,000
Other liabilities 1,074,000 1,081,000 1,115,000
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, par value $.01; authorized, 20,000,000 shares;
issued and outstanding 9,100,150 shares at December 28, 2002
and June 29, 2002 and 9,129,900 shares at June 28, 2003 91,000 91,000 91,000
Additional paid-in capital 19,839,000 19,609,000 19,609,000
Retained earnings 30,774,000 25,592,000 21,467,000
-------------- -------------- --------------
Total stockholders' equity 50,704,000 45,292,000 41,167,000
-------------- -------------- --------------
Total liabilities and stockholders' equity $ 72,123,000 $ 70,752,000 $ 61,870,000
============== ============== ==============
The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets.
3
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE TWENTY-SIX WEEKS ENDED
(Unaudited)
June 28, June 29,
2003 2002
-------------- --------------
Net sales $ 103,842,000 $ 98,937,000
Cost of sales, including occupancy and buying costs 59,027,000 57,458,000
-------------- --------------
Gross profit 44,815,000 41,479,000
-------------- --------------
Expenses
Store operating expenses 30,365,000 27,426,000
General and administrative expenses 6,202,000 6,595,000
-------------- --------------
Total expenses 36,567,000 34,021,000
Operating income 8,248,000 7,458,000
Other income:
Interest income 144,000 127,000
-------------- --------------
Income before income taxes 8,392,000 7,585,000
Income tax provision 3,210,000 2,769,000
-------------- --------------
Net income $ 5,182,000 $ 4,816,000
============== ==============
Basic earnings per share $0.57 $0.53
============== ==============
Diluted earnings per share $0.54 $0.50
============== ==============
Basic weighted average shares outstanding 9,125,000 9,100,000
============== ==============
Diluted weighted average shares outstanding 9,628,000 9,660,000
============== ==============
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
4
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRTEEN WEEKS ENDED
(Unaudited)
June 28, June 29,
2003 2002
-------------- --------------
Net sales $ 55,958,000 $ 51,294,000
Cost of sales, including occupancy and buying costs 31,081,000 29,392,000
-------------- --------------
Gross profit 24,877,000 21,902,000
-------------- --------------
Expenses
Store operating expenses 15,860,000 13,963,000
General and administrative expenses 3,352,000 3,353,000
-------------- --------------
Total expenses 19,212,000 17,316,000
-------------- --------------
Operating income 5,665,000 4,586,000
Other income:
Interest income 70,000 76,000
-------------- --------------
Income before income taxes 5,735,000 4,662,000
Income tax provision 2,194,000 1,702,000
-------------- --------------
Net income $ 3,541,000 $ 2,960,000
============== ==============
Basic earnings per share $0.39 $0.33
============== ==============
Diluted earnings per share $0.37 $0.31
============== ==============
Basic weighted average shares outstanding 9,131,000 9,100,000
============== ==============
Diluted weighted average shares outstanding 9,633,000 9,660,000
============== ==============
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
5
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED
(Unaudited)
June 28, June 29,
2003 2002
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------
Net income $ 5,182,000 $ 4,816,000
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,535,000 2,272,000
Reversal of future rent escalations (20,000) (58,000)
Change in assets and liabilities:
Decrease in receivables 2,000 3,108,000
Decrease in notes receivable from related parties --- 50,000
(Increase) decrease in prepaid income taxes and other tax assets (420,000) 244,000
Increase in inventories (2,659,000) (342,000)
Decrease in prepaid expenses 299,000 61,000
Decrease in accounts payable (1,950,000) (1,475,000)
Increase in income taxes payable 442,000 1,238,000
(Decrease) increase in accrued liabilities and compensation (2,446,000) 138,000
-------------- --------------
Net cash provided by operating activities 965,000 10,052,000
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------
Maturities of marketable securities 9,514,000 ---
Additions to equipment and leasehold improvements (4,971,000) (2,025,000)
-------------- --------------
Net cash provided by (used in) investing activities 4,543,000 (2,025,000)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------
Proceeds from issuance of common stock 230,000 45,000
Other, net (10,000) (4,000)
-------------- --------------
Net cash provided by financing activities 220,000 41,000
-------------- --------------
Net increase in cash and equivalents 5,728,000 8,068,000
Cash and equivalents, at beginning of period 10,287,000 12,101,000
-------------- --------------
Cash and equivalents, at end of period $ 16,015,000 $ 20,169,000
============== ==============
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
6
CACHE, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
In the opinion of the Company, the accompanying consolidated financial
statements include all adjustments necessary, which are considered normal
and recurring, to present fairly the financial position of the Company at
June 28, 2003 (Fiscal 2003), June 29, 2002 (Fiscal 2002) and December 28,
2002 (Fiscal 2002), and the results of operations for the 26 and 13 week
periods ended June 28, 2003 and June 29, 2002 and consolidated statements
of cash flows for the 26 weeks then ended.
Certain financial information, which is normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America, but which is not required for
interim reporting purposes, has been condensed or omitted. The
accompanying consolidated financial statements should be read in
conjunction with the financial statements and notes thereto included in
the Company's latest annual report on Form 10-K for the fiscal year ended
December 28, 2002.
Net income includes all sources of comprehensive income. There were no
adjustments for foreign currency translation, unrealized gains (losses)
on investments or deferred compensation expense incurred in fiscal 2002
or fiscal 2003 results.
2. BASIC AND DILUTED EARNINGS
Basic and diluted earnings per share has been computed based on the
weighted average number of shares of common stock outstanding for the 26
and 13 week periods ended June 28, 2003 and June 29, 2002.
The approximate number of shares used in the computations of diluted
earnings per share were 9,628,000 and 9,660,000, respectively, for the 26
week period and 9,633,000 and 9,660,000, respectively, for the 13 week
comparable period ended June 28, 2003 and June 29, 2002.
The approximate number of shares used in the computations of basic earnings
per share were 9,125,000 and 9,100,000, respectively, for the 26 week
comparable periods, and 9,130,000 and 9,100,000, respectively, for the 13
week comparable periods ended June 28, 2003 and June 29, 2002.
The Company accounts for options granted under the 2000 Stock Option Plan
and 1994 Stock Option Plan in accordance with APB Opinion No. 25,
"Accounting for Stock Issued to Employees" under which no compensation
cost has been recognized for stock option awards granted at fair market
value. Had compensation expense for the Plan been determined based on the
fair value at the grant dates for awards under the Plan, consistent with
the method of SFAS No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure", the Company's net earnings, basic EPS and
diluted EPS would have been reduced to the pro forma amounts listed below:
7
26 Weeks Ended 13 Weeks Ended
----------------------------- -----------------------------
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net income - as reported $ 5,182,000 $ 4,816,000 $ 3,541,000 $ 2,960,000
- pro-forma $ 4,683,000 $ 4,408,000 $ 3,292,000 $ 2,756,000
Basic EPS - as reported $ 0.57 $ 0.53 $ 0.39 $ 0.33
- pro-forma $ 0.51 $ 0.48 $ 0.36 $ 0.30
Diluted EPS - as reported $ 0.54 $ 0.50 $ 0.37 $ 0.31
- pro-forma $ 0.49 $ 0.46 $ 0.34 $ 0.29
3. EQUIPMENT AND LEASEHOLD IMPROVEMENTS
June 28, December 28,
2003 2002
----------- -----------
Leasehold improvements $23,810,000 $21,803,000
Furniture, fixtures and equipment 32,077,000 29,463,000
----------- -----------
55,887,000 51,266,000
Less: accumulated depreciation
and amortization 34,965,000 32,713,000
----------- -----------
$20,922,000 $18,553,000
=========== ===========
4. ACCRUED LIABILITIES
June 28, December 28,
2003 2002
----------- -----------
Operating expenses $ 2,448,000 $ 2,092,000
Taxes, other than income taxes 1,270,000 2,074,000
Group insurance 748,000 841,000
Sales return reserve 542,000 746,000
Leasehold additions 232,000 299,000
Other customer deposits 2,445,000 2,710,000
----------- -----------
$ 7,685,000 $ 8,762,000
=========== ===========
5. BANK DEBT
During November 2002, the Company reached an agreement with its bank to extend
the maturity of the Amended Revolving Credit Facility until November 30, 2005.
Pursuant to the newly Amended Revolving Credit Facility, $15,000,000 is
available until expiration at November 30, 2005. The amounts outstanding
thereunder bear interest at a maximum per annum rate up to the bank's prime
rate. The agreement contains selected financial and other covenants. Effective
upon the occurrence of an Event of Default under the Revolving Credit Facility,
the Company grants to the bank a security interest in the Company's inventory
and certain receivables. The Company is in compliance with all loan covenants.
8
There have been no borrowings against the line of credit during fiscal 2002 and
2003. There were outstanding letters of credit of $612,000 and $1,159,000,
pursuant to the Revolving Credit Facility at June 28, 2003 and June 29, 2002,
respectively.
6. INCOME TAXES
The effective tax rates for fiscal 2003 and fiscal 2002 were 38.3% and 36.5%,
respectively. The major components of the Company's net deferred taxes assets
(liabilities) at June 28, 2003 and December 28, 2002 were as follows:
June 28, December 28,
2003 2002
---------- -----------
Net operating loss carryforwards ("NOL'S") $ 91,000 $ 91,000
Deferred rent 522,000 526,000
Group insurance 286,000 319,000
Sales return reserve 207,000 283,000
Other (principally depreciation expense) ( 66,000) ( 53,000)
---------- ----------
$1,040,000 $1,166,000
========== ==========
7. CONTINGENCIES
The Company is exposed to a number of asserted and unasserted potential claims.
In the opinion of management, the resolution of these matters is not presently
expected to have a material adverse effect upon our financial position and
results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Except for the historical information and current statements contained in this
Form 10-Q, certain matters discussed herein, including, without limitation,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" are forward looking statements that involve risks and uncertainties,
including, without limitation, the effect of economic and market conditions
and competition, the ability to open new stores and expand into new markets,
and risks relating to foreign importing operations, which would cause actual
results to differ materially.
9
RESULTS OF OPERATIONS
- ---------------------
The following table sets forth our results of operations for the 26 and 13 week
periods ended June 28, 2003 and June 29, 2002, expressed as a percentage of
net sales.
26 Weeks Ended 13 Weeks Ended
------------------ ------------------
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
-------- -------- -------- --------
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 56.8% 58.1% 55.5% 57.3%
Gross profit 43.2% 41.9% 44.5% 42.7%
Store operating expenses 29.2% 27.7% 28.3% 27.2%
General and administrative expenses 6.0% 6.7% 6.0% 6.5%
Operating income 7.9% 7.5% 10.1% 8.9%
Other income 0.1% 0.1% 0.1% 0.1%
Income before income taxes 8.1% 7.7% 10.2% 9.1%
Income tax provision 3.1% 2.8% 3.9% 3.3%
Net income 5.0% 4.9% 6.3% 5.8%
Net sales
- ---------
Net sales increased to $103.8 million from $98.9 million, an increase of $4.9
million, or 5.0%, over the same 26 week period last year. This reflects $622,000
of additional net sales as a result of a 1% increase in comparable store sales.
Net sales increased $4.3 million as a result of additional net sales from non-
comparable stores.
Net sales increased to $56.0 million from $51.3 million, an increase of $4.7
million, or 9.1%, over the same 13 week period last year. This increase reflects
$2.1 million of additional net sales as a result of a 4% increase in comparable
store sales. Net sales increased $2.6 million as a result of additional net
sales from non-comparable stores.
Gross profit
- ------------
Gross profit increased to $44.8 million from $41.5 million, an increase of $3.3
million, or 8.0%, over the same 26 week period last year. This increase was
the combined result of higher net sales and increased gross profit margins. As
a percentage of net sales, gross profit increased to 43.2% from 41.9%. This
increase as a percentage of net sales was primarily due to higher initial
markups on inventory purchases resulting from a reduction in the number of our
vendors and the number of stock keeping units. These reductions enabled us to
commit to bulk fabric purchases and increased our ability to receive favorable
pricing from vendors. We expect the improvement created by higher initial
markups to continue to benefit results in the remainder of fiscal 2003.
Gross profit increased to $24.9 million from $21.9 million, an increase of $3.0
million, or 13.6%, over the same 13 week period last year. This increase was
the combined result of higher net sales and increased gross margins. As a
percentage of net sales, gross profit, increased to 44.5% from 42.7%. The
improvement in gross profit for the 13 week period reflects the same positive
conditions as stated above for the 26 week period.
10
Store operating expenses
- ------------------------
Store operating expenses increased to $30.4 million from $27.4 million, an
increase of $2.9 million or 10.7%, over the same 26 week period last year. This
increase was attributable to an increase of $1.2 million in marketing and
advertising expenses, as well as an increase in the total number of stores. As
a percentage of net sales, store operating expenses increased to 29.2% from
27.7%, primarily due to higher marketing and advertising expenses and an
increase in the number of new stores opened in the last year.
Store operating expenses increased to $15.9 million from $14.0 million, an
increase of $1.9 million, or 13.6%, over the same 13 week period last year.
This increase was attributable to an increase in total stores open, and an
increase of $786,000 in advertising and marketing and was partially offset by
reductions in several expense categories. As a percentage of net sales, store
operating expenses increased to 28.3% from 27.2%, primarily due to higher
marketing and advertising expenses and an increase in the number of new stores
opened in the last year.
General and administrative expenses
- -----------------------------------
General and administrative expenses decreased to $6.2 million from $6.6 million,
a decrease of $393,000, or 6.0% below the same 26 week period last year. As a
percentage of net sales, general and administrative expenses decreased to 6.0%
from 6.7%, primarily due to lower corporate-level payroll and employee-related
costs.
General and administrative expenses remained unchanged at $3.4 million, as
compared to the same 13 week period last year. As a percentage of net sales,
general and administrative expenses decreased to 6.0% from 6.5%, for the 13
week period.
Other income
- ------------
Other income increased to $144,000 from $127,000 in the same 26 week period
last year, primarily attributable to higher average cash balances, partially
offset by lower interest rates.
Other income decreased to $70,000 from $76,000 in the same 13 week period last
year, due to a reduction in interest rates in 2003.
Income taxes
- ------------
Income taxes increased to $3.2 million from $2.8 million, an increase of
$441,000 over the same 26 week period last year. This increase was primarily
attributable to higher taxable income, as well as an increase in our effective
tax rate from 36.5% in fiscal 2002 to 38.3% in fiscal 2003. This increase in
our effective tax rate is primarily due to a change in the mix of income
subject to tax in the various states in which we do business.
Income taxes increased to $2.2 million from $1.7 million, an increase of
$492,000 over the same 13 week period last year.
Net income
- ----------
As a result of the foregoing, net income increased to $5.2 million from $4.8
million, an increase of $366,000 over the same 26 week period last year. Net
income increased to $3.5 million from $3.0 million, an increase of $581,000
over the same 13 week period last year.
11
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Our cash requirements are primarily for the construction of new stores and
inventory purchases for these stores, as well as the remodeling of existing
stores. We have historically satisfied our cash requirements principally
through cash flow from operations. As of June 28, 2003, the Company had
working capital of $29.8 million, which included cash and marketable securities
of $20.9 million.
During the 26 weeks ended June 28, 2003, net cash provided by operations was
$1.0 million, generated by net income, depreciation of $2.5 million, a decrease
in prepaid expenses of $299,000, an increase in income taxes payable of $442,000
offset in part by a decrease in accounts payable of $2.0 million, an increase
in inventories of $2.7 million and a decrease in accrued expenses of $2.4
million.
Cash provided by investing activities was $4.5 million for the 26 week period
ended June 28, 2003. Matured investments generated $9.5 million of cash flows.
Funds used for equipment and leasehold improvements in new and remodeled stores
totaled $5.0 million. Our capital requirements depend primarily on the number
of new stores we open, the number of stores we remodel and the timing of these
expenditures. Projected capital expenditures for fiscal 2003 to fund new store
openings and remodeling are approximately $9 - 10 million.
Based on our experience with new store openings, we estimate that the average
net investment to open new stores is approximately $175,000 to $225,000, which
includes new store opening expenses and initial inventory, net of landlord
contributions and payables.
We plan to open approximately 25 new stores during fiscal 2003. Three new stores
were opened in March 2003 and two new stores opened in April and three new
stores opened in June. We anticipate opening the remaining new stores during
the summer and fall of 2003. We renovated eight existing stores through the
end of the second quarter. After deducting construction allowances paid to
the Company by its landlords, we spent $5.0 million through June 28, 2003 and
expect to spend an additional four to five million dollars in 2003, for both
new store and existing store construction and remodeling.
We believe that cash flows from operations, our current available cash and funds
available under our $15.0 million revolving credit facility, will be sufficient
to meet our working capital needs and contemplated new store expansion for at
least the next 12 months. If our cash flow from operations should decline
significantly or if we should accelerate our store expansion or remodeling
program, it may be necessary for us to seek additional sources of capital.
12
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(c) Exhibits.
11.1 Calculation of Basic and Diluted Earnings per Common Share.
99.1 Certification Pursuant to 18 U.S.C. Section 1350
(d) Reports on Form 8-K
1.3 Form 8-K, filed June 30, 2003 - reporting pursuant to Item 5 of such Form,
the monthly, quarterly and year to date sales for the periods ended June 28,
2003.
1.4 Form 8-K, filed July 7, 2003 - reporting pursuant to Item 5 of such Form,
the operating results for the twenty-six and thirteen week periods ended June
28, 2003.
13
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
CACHE, INC.
(Registrant)
August 12, 2003 BY: /s/ Brian Woolf
-------------------------------
Brian Woolf
Chairman and Chief
Executive Officer
(Principal Executive
Officer)
August 12, 2003 BY: /s/ Thomas E. Reinckens
-------------------------------
Thomas E. Reinckens
President and Chief
Operating Officer
(Principal Financial
and Accounting Officer)
14
EXHIBIT 11.1
CALCULATION OF BASIC AND DILUTED EARNINGS PER SHARE
(In thousands except per share data)
26 WEEKS ENDED 13 WEEKS ENDED
--------------------------- --------------------------
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
----------- ----------- ----------- -----------
EARNINGS PER SHARE
Net Income Applicable
to Common Stockholders $ 5,182,000 $ 4,816,000 $ 3,541,000 $ 2,960,000
=========== =========== =========== ===========
BASIC EARNINGS PER SHARE
Weighted Average Number of
Common Shares Outstanding 9,125,000 9,100,000 9,130,000 9,100,000
========== =========== =========== ===========
Basic Earnings Per Share $0.57 $0.53 $0.39 $0.33
========== =========== =========== ===========
DILUTED EARNINGS PER SHARE
Weighted Average Number of
Common Shares Outstanding 9,125,000 9,100,000 9,130,000 9,100,000
Assuming Conversion of
Outstanding Stock Options 1,107,000 1,140,000 1,107,000 1,140,000
Less Assumed Repurchase
of Common Stock Pursuant
to the Treasury Stock Method (604,000) (580,000) (604,000) (580,000)
---------- ----------- ----------- -----------
Weighted Average Number of
Common Shares Outstanding
As Adjusted 9,628,000 9,660,000 9,633,000 9,660,000
========== =========== =========== ===========
Diluted Earnings Per Share $0.54 $0.50 $0.37 $0.31
========== =========== =========== ===========
15
EXHIBIT 99.1
CERTIFICATION
-------------
I, Brian Woolf, certify that:
1. I have received this quarterly report on Form 10-Q of Cache, Inc.
(Cache)
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of Cache as of, and for, the periods presented in this
quarterly report;
4. Cache's other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a. designed such disclosure controls and procedures to ensure that
material information relating to Cache, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period which this quarterly report is being
prepared;
b. evaluated the effectiveness of Cache's disclosure controls and
procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. Cache's other certifying officer and I have disclosed, based on our
most recent evaluation, to Cache's auditors and the audit committee of
Cache's Board of Directors;
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect Cache's ability to record,
process, summarize and report financial data and have identified for
Cache's auditors any material weakness in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in Cache's internal
controls; and
6. Cache's other certifying officer and I have indicated in this quarterly
report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
August 12, 2003 By: /s/ Brian Woolf
-----------------------------
Brian Woolf
Chairman and Chief
Executive Officer
(Principal Executive
Officer)
16
EXHIBIT 99.2
CERTIFICATION
-------------
I, Thomas E. Reinckens, certify that:
1. I have received this quarterly report on Form 10-Q of Cache, Inc.
(Cache)
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of Cache as of, and for, the periods presented in this
quarterly report;
4. Cache's other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a. designed such disclosure controls and procedures to ensure that
material information relating to Cache, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period which this quarterly report is being
prepared;
b. evaluated the effectiveness of Cache's disclosure controls and
procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. Cache's other certifying officer and I have disclosed, based on our
most recent evaluation, to Cache's auditors and the audit committee of
Cache's Board of Directors;
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect Cache's ability to record,
process, summarize and report financial data and have identified for
Cache's auditors any material weakness in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in Cache's internal
controls; and
6. Cache's other certifying officer and I have indicated in this quarterly
report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
August 12, 2003 By: /s/ Thomas E. Reinckens
------------------------------
Thomas E. Reinckens
President and Chief
Operating Officer
(Principal Financial and
Accounting Officer)
17
EXHIBIT 99.3
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to and solely for the purposes of, 18 U.S.C. Section 1350 (Section
906 of the Sarbanes-Oxley Act of 2002, each of the undersigned hereby certifies
in the capacity and on the date indicated below that:
1. The Quarterly Report of Cache, Inc. on Form 10-Q for the period ending
June 28, 2003 as filed with the Securities and Exchange Commission on
the date hereof (the "Report") fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of Cache, Inc.
August 12, 2003 BY: /s/ Brian Woolf
------------------------
Brian Woolf
Chairman and Chief
Executive Officer
(Principal Executive
Officer)
August 12, 2003 BY: /s/ Thomas E. Reinckens
------------------------
Thomas E. Reinckens
President and Chief
Operating Officer
(Principal Financial
and Accounting
Officer)
18