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UNITED STATES
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 September 25, 2004
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 its Charter)

Florida 59-1588181
------------------------------- --------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)

1440 Broadway, New York, New York 10018
--------------------------------- -----
(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 June 26, 2004, 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 $182 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 of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock, $.01 par value 15,641,000
---------------------------- --------------------------------
Class of Stock Outstanding Outstanding at November 8, 2004




CACHE, INC. AND SUBSIDIARIES

INDEX



PAGE

CONSOLIDATED FINANCIAL STATEMENTS

BALANCE SHEETS,
SEPTEMBER 25, 2004, DECEMBER 27, 2003
AND SEPTEMBER 27, 2003 3

STATEMENTS OF OPERATIONS
THIRTY-NINE WEEKS ENDED SEPTEMBER 25, 2004
AND SEPTEMBER 27, 2003 4

STATEMENTS OF OPERATIONS
THIRTEEN WEEKS ENDED SEPTEMBER 25, 2004
AND SEPTEMBER 27, 2003 5

STATEMENTS OF CASH FLOWS
THIRTY-NINE WEEKS ENDED SEPTEMBER 25, 2004
AND SEPTEMBER 27, 2003 6

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7-9

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10-12

QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 12

CONTROLS AND PROCEDURES 13

OTHER INFORMATION:
EXHIBIT INDEX AND REPORTS ON FORM 8-K 13-15

CERTIFICATIONS 16-18













2





CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)




September 25, December 27, September 27,
ASSETS 2004 2003 2003
------------- ------------- ------------

Current Assets:
Cash and equivalents $ 12,830,000 $ 16,887,000 $ 22,737,000
Marketable securities 24,094,000 19,746,000 5,393,000
Receivables, net 5,308,000 4,614,000 3,716,000
Inventories, net 31,067,000 26,724,000 27,250,000
Deferred income taxes, net 468,000 936,000 666,000
Prepaid expenses and other current assets 1,954,000 1,239,000 3,374,000
------------- ------------- ------------
Total current assets 75,721,000 70,146,000 63,136,000


Equipment and leasehold improvements, net 32,466,000 25,010,000 23,099,000

Other assets 830,000 873,000 872,000
Deferred income taxes, net --- --- 31,000
------------- ------------- -------------

Total assets $ 109,017,000 $ 96,029,000 $ 87,138,000
============= ============= =============


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 17,333,000 $ 14,362,000 $ 16,234,000
Accrued compensation 1,192,000 4,675,000 2,250,000
Accrued liabilities 9,602,000 10,075,000 7,908,000
------------- ------------- -------------
Total current liabilities 28,127,000 29,112,000 26,392,000
------------- ------------- -------------

Other liabilities 1,230,000 1,088,000 1,077,000
Deferred income taxes, net 1,427,000 687,000 ---

Commitments and contingencies


STOCKHOLDERS' EQUITY

Common stock, par value $.01; authorized, 20,000,000 shares;
issued and outstanding 15,634,100 shares 156,000 100,000 99,000
Additional paid-in capital 34,307,000 28,361,000 28,182,000
Retained earnings 43,770,000 36,681,000 31,388,000
------------- ------------- -------------
Total Stockholders' Equity 78,233,000 65,142,000 59,669,000
------------- ------------- -------------

Total Liabilities and Stockholders' Equity $ 109,017,000 $ 96,029,000 $ 87,138,000
============= ============= =============




The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets.





3





CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTY-NINE WEEKS ENDED
(Unaudited)



September 25, September 27,
2004 2003
--------------- ---------------

Net sales $ 168,711,000 $ 151,634,000

Cost of sales, including occupancy and buying costs 94,278,000 86,461,000
--------------- ---------------

Gross profit 74,433,000 65,173,000
--------------- ---------------

Expenses
Store operating expenses 53,624,000 46,076,000
General and administrative expenses 9,517,000 9,913,000
--------------- ---------------
Total expenses 63,141,000 55,989,000
--------------- ---------------

Operating income 11,292,000 9,184,000

Other income :
Interest income 309,000 192,000
Other income, net 20,000 14,000
--------------- ---------------

Income before income taxes 11,621,000 9,390,000

Income tax provision 4,532,000 3,594,000
--------------- ---------------


Net income $ 7,089,000 $ 5,796,000
=============== ===============



Basic earnings per share $0.46 $0.41
=============== ===============

Diluted earnings per share $0.44 $0.40
=============== ===============



Basic weighted average shares outstanding 15,569,000 14,022,000
=============== ===============

Diluted weighted average shares outstanding 15,967,000 14,449,000
=============== ===============



The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.





4



CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEKS ENDED
(Unaudited)


September 25, September 27,
2004 2003
-------------- -------------

Net sales $ 49,430,000 $ 47,343,000

Cost of sales, including occupancy and buying costs 29,834,000 27,120,000
-------------- -------------


Gross profit 19,596,000 20,223,000
-------------- -------------

Expenses
Store operating expenses 18,287,000 15,576,000
General and administrative expenses 2,270,000 3,711,000
-------------- -------------
Total expenses 20,557,000 19,287,000
-------------- -------------

Operating income (loss) (961,000) 936,000

Other income:
Interest income 107,000 62,000
-------------- -------------

Income (loss) before income taxes (854,000) 998,000

Income tax provision (benefit) (333,000) 384,000
-------------- -------------


Net income (loss) $ (521,000) $ 614,000
============== =============



Basic earnings (loss) per share ($0.03) $0.04
============== =============

Diluted earnings (loss) per share ($0.03) $0.04
============== =============



Basic weighted average shares outstanding 15,634,000 14,691,000
============== =============

Diluted weighted average shares outstanding 15,634,000 15,120,000
============== =============



The accompanying Notes to Consolidated Financial Statements are an integral part








5





CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED
(Unaudited)


September 25, September 27,
2004 2003
-------------- --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------

Net income $ 7,089,000 $ 5,796,000
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 4,838,000 4,046,000
Tax benefit from stock options exercised 1,345,000 2,713,000
Decrease (increase) in deferred income tax assets 1,208,000 (77,000)
Accrual (reversal) of future rent escalations 86,000 (22,000)

Change in assets and liabilities:
- ---------------------------------
Increase in receivables (694,000) (1,039,000)
Decrease in notes receivable from related parties --- 321,000
Increase in inventories (4,343,000) (5,185,000)
Increase in prepaid expenses (715,000) (2,354,000)
Increase in accounts payable 2,971,000 4,246,000
Decrease in accrued liabilities and accrued compensation (4,850,000) (2,348,000)
-------------- --------------

Net cash provided by operating activities 6,935,000 6,097,000
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------

(Purchase) maturities of marketable securities, net (4,348,000) 8,999,000
Additions to equipment and leasehold improvements (11,344,000) (8,459,000)
-------------- --------------

Net cash provided by (used in) investing activities (15,692,000) 540,000
-------------- --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------

Proceeds from the issuance of common stock 4,657,000 5,868,000
Other, net 43,000 (55,000)
-------------- --------------

Net cash provided by financing activities 4,700,000 5,813,000
-------------- --------------

Net increase (decrease) in cash and cash equivalents (4,057,000) 12,450,000
Cash and equivalents, at beginning of period 16,887,000 10,287,000
-------------- --------------
Cash and equivalents, at end of period $ 12,830,000 $ 22,737,000
============== ==============



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 September
25, 2004 (fiscal 2004), September 27, 2003 (fiscal 2003), and December 27, 2003
(fiscal 2003), and the results of operations for the thirty-nine and thirteen
week periods ended September 25, 2004 and September 27, 2003 and consolidated
cash flows for the thirty-nine 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 27, 2003.

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 2003 or fiscal
2004 results.

Certain items previously reported in specific captions in the accompanying
financial statements and notes have been reclassified to conform with the
current year's classification.

2. BASIC AND DILUTED EARNINGS

Basic earnings per share (EPS) is computed as net earnings divided by the
weighted average number of shares of common stock outstanding for the
thirty-nine and thirteen week periods ended September 25, 2004 and September
27, 2003. Diluted EPS reflects the potential dilution that could occur from
common shares issued through the exercise of outstanding dilutive stock
options.

On June 18, 2004, the Company completed a three-for-two stock split for holders
of record on May 21, 2004. All share amounts have been restated to reflect the
stock split.

The approximate number of shares used in the computations of diluted earnings
per share were 15,967,000 and 14,449,000, respectively, for the 39 week
comparable period and 15,634,000 and 15,120,000 respectively, for the 13 week
comparable period ended September 25, 2004 and September 27, 2003.

The approximate number of shares used in the computations of basic earnings per
share were 15,569,000 and 14,022,000, respectively, for the 39 week comparable
period, and 15,634,000 and 14,691,000, respectively, for the 13 week comparable
period ended September 25, 2004 and September 27, 2003.

The Company accounts for options granted under the 1994, 2000 and 2003 Stock
Option Plans in accordance with the intrinsic value method allowed under SFAS
No. 123, "Accounting for Stock-Based Compensation", under which no compensation
cost has been recognized for stock option awards granted at fair market value.
Had compensation expense for the Plans been determined based on the fair value
at the grant dates for awards under the Plans, the Company's net earnings, basic
EPS and diluted EPS would have been reduced to the pro forma amounts listed
below:





7




39 Weeks Ended 13 Weeks Ended
------------------------------ ------------------------------
September 25, September 27, September 25, September 27,
2004 2003 2004 2003
------------ ------------ ------------ ------------


Net Income (Loss) -as reported $7,089,000 $5,796,000 ($521,000) $614,000
-pro-forma $6,759,000 $5,497,000 ($631,000) $514,000

Basic EPS -as reported $0.46 $0.41 ($0.03) $0.04
-pro-forma $0.43 $0.39 ($0.04) $0.03

Diluted EPS -as reported $0.44 $0.40 ($0.03) $0.04
-pro-forma $0.42 $0.38 ($0.04) $0.03




3. RECENTLY ISSUED EXPOSURE DRAFT


On March 31, 2004, the Financial Accounting Standards Board (FASB) issued a
proposed Statement, "Share-Based Payment." This proposed Statement addresses
the accounting for share-based awards to employees, including employee-stock
purchase-plans (ESPPs). The FASB formally proposed to require companies to
recognize the fair value of stock options and other stock-based compensation
to employees. The proposed Statement would eliminate the ability to account
for share based compensation transactions using the inherent method and
generally would require instead, that such transactions, be accounted for
using a fair-value-based method. The proposed requirements in the exposure
draft would be effective for public companies as of the beginning of the first
fiscal year beginning after December 15, 2004. The Company is currently
assessing the impact on the Company's financial statements of the adoption of
this proposed Statement, if issued in final form by the FASB.


4. EQUIPMENT AND LEASEHOLD IMPROVEMENTS

September 25, December 27, September 27,
2004 2003 2003
------------ ----------- ------------
Lease improvements $28,965,000 $24,020,000 $25,210,000
Furniture, fixtures and equipment 43,520,000 36,644,000 34,365,000
------------ ----------- ------------
72,485,000 60,664,000 59,575,000
Less: accumulated depreciation
and amortization 40,019,000 35,654,000 36,476,000
------------ ----------- ------------
$32,466,000 $25,010,000 $23,099,000
------------ ----------- ------------


5. ACCRUED LIABILITIES

September 25, December 27, September 27,
2004 2003 2003
------------ ----------- ------------
Operating expenses $2,747,000 $2,631,000 $2,273,000
Taxes, other than income taxes 1,436,000 2,426,000 1,566,000
Group insurance 477,000 696,000 646,000
Sales return reserve 642,000 812,000 542,000
Leasehold additions 1,329,000 379,000 432,000
Other customer deposits 2,971,000 3,131,000 2,449,000
------------ ----------- ------------
$9,602,000 $10,075,000 $7,908,000
------------ ----------- ------------



8


6. BANK DEBT

During May 2004, the Company reached an agreement with its bank to increase the
amount available under the Amended Revolving Credit Facility to $17,500,000.
Pursuant to the newly Amended Revolving Credit Facility, $17,500,000 is
available until expiration at November 30, 2005. The amounts outstanding
thereunder bear interest at a maximum per annum rate equal 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 has, at all times, been in compliance with
all loan covenants.

There have been no borrowings against the line of credit during fiscal 2004 and
fiscal 2003. There were outstanding letters of credit of $2,160,000, $2,116,000
and $1,984,000, pursuant to the Revolving Credit Facility, at September 25,
2004, December 27, 2003 and September 27, 2003, respectively.


7. INCOME TAXES

The estimated annual effective tax rate for fiscal 2004 and fiscal 2003 were
39.0% and 38.2%, respectively, including state and local income taxes.


8. CONTINGENCIES

The Company is exposed to a number of asserted and unasserted potential claims.
Management does not believe it is reasonably possible that resolution of these
matters will result in a material loss.




9




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.


RESULTS OF OPERATIONS
- ---------------------

The following table sets forth our results of operations for the 13 and 39 week
periods ended September 25, 2004 and September 27, 2003, expressed as a
percentage of net sales.



39 Weeks Ended 13 Weeks Ended
-------------- --------------
September 25, September 27, September 25, September 27,
2004 2003 2004 2003
------------ ------------ ------------ ------------


Sales 100.0% 100.0% 100.0 % 100.0%
Cost of sales 55.9% 57.0% 60.4 % 57.3%
Gross profit 44.1% 43.0% 39.6 % 42.7%
Store operating expenses 31.8% 30.4% 37.0 % 32.9%
General and administrative expenses 5.6% 6.5% 4.6 % 7.8%
Operating income 6.7% 6.1% (1.9)% 2.0%
Other income (loss) 0.2% 0.1% 0.2 % 0.1%
Income (loss) before taxes 6.9% 6.2% (1.7)% 2.1%
Income tax provision (benefits) 2.7% 2.4% (0.7)% 0.8%
Net income (loss) 4.2% 3.8% (1.1)% 1.3%




Net sales
- ---------

Net sales increased to $168.7 million from $151.6 million, an increase of $17.1
million, or 11.3%, over the same 39 week period last year. This reflects $6.4
million of additional net sales as a result of a 4% increase in comparable store
sales. Net sales increased $10.7 million as a result of additional net sales
from non-comparable stores.

Net sales increased to $49.4 million from $47.3 million, an increase of $2.1
million, or 4.4%, over the same 13 week period last year. Net sales decreased
$1.0 million as a result of a 2% decrease in comparable store sales. Net sales
increased $3.1 million as a result of additional net sales from non-comparable
stores.

Gross profit
- ------------

Gross profit increased to $74.4 million from $65.2 million, an increase of $9.2
million or 14.2%, over the same 39 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 44.1% from 43.0%. This
increase in percentage of net sales was primarily due to higher initial markups
on inventory purchases and was partially offset by higher occupancy expenses and
markdowns, as a percent of sales. We expect the improvement created by higher
initial markups to continue to benefit results in the remainder of fiscal 2004.





10


Gross profit decreased to $19.6 million from $20.2 million, a decrease of
$627,000, or 3.1%, below the same 13 week period last year. This decrease
was primarily due to higher markdowns and occupancy costs, as well as a
comparable store sales decrease of 2%. As a percentage of net sales, gross
profit decreased to 39.6% from 42.7%.

Store operating expenses
- ------------------------

Store operating expenses increased to $53.6 million from $46.1 million, an
increase of $7.5 million or 16.4%, over the same 39 week period last year.
This increase was primarily attributable to the increase in the number of
stores opened during the past 12 months. As a percentage of net sales, store
operating expenses increased to 31.8% from 30.4%, primarily due to a higher
percentage of payroll expense and depreciation incurred by the new stores
opened in the last year. In addition, advertising expense for the 39 week
period was $903,000 higher than last year, due to increased marketing efforts.

Store operating expenses increased to $18.3 million from $15.6 million, an
increase of $2.7 million, or 17.4%, over the same period last year. This
increase was primarily attributable to the increase in the number of stores
opened during the past 12 months. As a percentage of net sales, store
operating expenses increased from 32.9% to 37.0%, primarily due to a higher
percentage of payroll expense and depreciation incurred by the new stores opened
in the last year. Advertising expense for the 13 week period was $532,000
higher than last year, due to increased marketing efforts.

General and administrative expenses
- -----------------------------------

General and administrative expenses decreased to $9.5 million from $9.9 million,
a decrease of $396,000 or 4.0%, below the same 39 week period last year. As a
percentage of net sales, general and administrative expenses decreased to 5.6%
from 6.5%, primarily due to reduced bonus accruals of $1.1 million, which were
partially offset by higher payroll, rent and depreciation expenses.

General and administrative expenses decreased to $2.3 million from $3.7 million,
a decrease of $1.4 million or 38.8%, below the same 13 week period last year.
As a percentage of net sales, general and administrative expenses decreased to
4.6% from 7.8%, for the 13 week period. The reduction in general and
administrative expenses was primarily due to a reduction of $1.7 million for
bonus accruals, which included a reversal of $780,000 during the quarter
partially offset by higher payroll, rent and depreciation expenses.

Interest income
- ---------------

Interest income increased to $309,000 from $192,000 in the same 39 week period
last year, primarily attributable to higher average cash balances and higher
interest rates in 2004.

Interest income increased to $107,000 from $62,000 in the same 13 week period
last year.

Income taxes
- ------------

Income taxes increased to $4.5 million from $3.6 million, an increase of
$938,000 over the same 39 week period last year. The increase was primarily
attributable to higher taxable income in fiscal 2004. Our effective tax rates
for fiscal 2004 and 2003 were 39.0% and 38.3% respectively, including state
and local income taxes.

An income tax benefit of $333,000 was recorded for the 13 week period, as
compared to an income tax provision of $384,000 recorded in fiscal 2003.

Net income
- ----------

As a result of the factors discussed above, net income increased to $7.1
million from $5.8 million, an increase of $1.3 million over the same 39 week
period last year. A net loss of $521,000 was reported for the 13 week period,
as compared to net income of $614,000 in fiscal 2003.



11


LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

Our cash requirements are primarily for the construction of new stores and
inventory 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 September 25, 2004, we had working capital of $47.6
million, which included cash and marketable securities totaling $36.9 million.

During the thirty-nine weeks ended September 25, 2004, net cash provided by
operations was $6.9 million, generated by net income, depreciation of $4.8
million, an income tax benefit from stock option exercises of $1.3 million and
an increase in accounts payable of $3.0 million, offset in part by an increase
in inventories of $4.3 million and a decrease in accrued expenses of $4.9
million.

Cash used in investing activities was $15.7 million for the 39 week period ended
September 25, 2004. Purchases of investments totaled $4.4 million. Funds used
for equipment and leasehold improvements in new and remodeled stores totaled
$11.3 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 2004 to fund new store
openings and remodeling are approximately $15 to 16 million.

We plan to open approximately 40 new stores during fiscal 2004. We opened 4 new
stores in the first quarter, we opened 13 new stores in the second quarter, as
well as opening 7 new stores in the third quarter. We anticipate opening the
remaining new stores before Thanksgiving. After deducting construction
allowances paid to the Company by its landlords, we spent $11.3 million through
September 25, 2004 and expect to spend an additional $4 to $5 million dollars
in 2004, 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 $17.5 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.

The Company does not have any off-balance sheet arrangements or transactions
with unconsolidated, limited purpose entities. In the normal course of its
business, the Company enters into operating leases for its store locations and
utilizes letters of credit principally for the importation of merchandise. The
Company does not have any undisclosed material transactions or commitments
involving related persons or entities.


Seasonality
- -----------

The Company experiences seasonal and quarterly fluctuations in net sales and
operating income. Quarterly results of operations may fluctuate significantly
as a result of a variety of factors, including the timing of new store
openings, fashion trends and shifts in timing of certain holidays. The
Company's business is subject to seasonal influences, characterized by highest
sales during the fourth quarter (October, November and December) and lowest
sales during the third quarter (July, August and September).


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to the following types of market risk-fluctuations in
the purchase price of merchandise, as well as other goods and services: the
value of foreign currencies in relation to the U.S. dollar, and changes in
interest rates. Due to the Company's inventory turn rate and its historical
ability to pass through the impact of any generalized changes in its cost of
goods sold to its customers through pricing adjustments, commodity and other
product risks are not expected to be material. The Company purchases
substantially all its merchandise in U.S. dollars.

The Company's exposure to market risk for changes in interest rates relates to
its cash, cash equivalents and marketable securities. As of September 25, 2004,
the Company's cash, cash equivalents and marketable securities consisted
primarily of funds invested in money market accounts, which bear interest at a
variable rate, U.S. treasury instruments and tax exempt municipal bonds rated
AA or better, which bear interest at a fixed rate. Due






12


to the average maturity and the conservative nature of the Company's investment
portfolio, we believe a sudden change in interest rates would not have a
material effect on the value of our investment portfolio. As the interest rates
on a material portion of our cash, cash equivalents and marketable securities
are variable, a change in interest rates earned on our investment portfolio
would impact interest income along with cash flows, but would not materially
impact the fair market value of the related underlying instruments.



ITEM 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures designed to ensure that
information required to be disclosed by the Company in its Exchange Act reports
is recorded, processed, summarized and reported on a timely basis and that such
information is accumulated and communicated to the Company's management,
including the Chief Executive Officer and the Acting Chief Financial Officer, as
appropriate, to allow timely decisions regarding the required disclosure. As
of the end of the period covered by this Form 10-Q, an evaluation was performed
under the supervision and with the participation of the Company's management,
including the Chief Executive Officer and the Acting Chief Financial Officer, of
the effectiveness of the design and operation of these disclosure controls and
procedures. Based on that evaluation, the Chief Executive Officer and the
Acting Chief Financial Officer, concluded that the Company's disclosure controls
and procedures were effective. There have been no changes in the internal
controls over financial reporting during the period ended September 25, 2004
that have materially affected, or are reasonably likely to materially affect,
the Company's internal controls over financial reporting.



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

(a) Exhibits.

11.1 Calculation of Basic and Diluted Earnings per Common Share.
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.


(b) Reports on Form 8-K

1. Form 8-K, filed September 14, 2004 - reporting pursuant to Item 5 of
such Form, departures and appointments to the Board of Directors.








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)




November 8, 2004 BY: /s/ Brian Woolf
-----------------------------
Brian Woolf
Chairman and Chief
Executive Officer
(Principal Executive
Officer)





November 8, 2004 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 COMMON SHARE




39 WEEKS ENDED 13 WEEKS ENDED
----------------------------- -----------------------------
September 25, September 27, September 25, September 27,
2004 2003 2004 2003
----------------------------- -----------------------------


EARNINGS (LOSS) PER SHARE
- -------------------------
Net Income (Loss) Applicable to
Common Stockholders $7,089,000 $5,796,000 (521,000) $614,000
============================= =============================


BASIC EARNINGS (LOSS) PER SHARE
- -------------------------------
Weighted Average Number of
Common Shares Outstanding 15,569,000 14,022,000 15,634,000 14,691,000
============================= =============================

Basic Earnings (loss) Per Share $0.46 $0.41 ($0.03) $0.04
============================= =============================


DILUTED EARNINGS (LOSS) PER SHARE
- ---------------------------------
Weighted Average Number of
Common Shares Outstanding 15,569,000 14,022,000 15,634,000 14,691,000

Assuming Conversion of
Outstanding Stock Options 1,765,000 885,000 --- 885,000

Less Assumed Repurchase
of Common Stock Pursuant
to the Treasury Stock Method (1,367,000) (458,000) --- (456,000)
----------------------------- -----------------------------

Weighted Average Number of
Common Shares Outstanding
As Adjusted 15,967,000 14,449,000 15,634,000 15,120,000
============================= =============================

Diluted Earnings (Loss) Per Share $0.44 $0.40 ($0.03) $0.04
============================= =============================




15


EXHIBIT 31.1
CERTIFICATION
-------------

I, Brian Woolf, certify that:

1. I have reviewed 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-15(e) and 15d-15(e) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 in which
this quarterly report is being prepared;

b) evaluated the effectiveness of Cache's disclosure controls and
procedures and presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this quarterly report based
on such evaluation: and

c) disclosed in this report any changes in Cache's internal control
over financial reporting that occurred during Cache's third quarter
that has materially affected, or is reasonably likely to materially
affect, Cache's internal control over financial reporting;

5. Cache's other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to Cache's
auditors and the audit committee of Cache's Board of Directors:

a) all significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting which are
reasonably likely to adversely affect Cache's ability to record,
process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in Cache's internal
control over financial reporting.


November 8, 2004 BY: /s/ Brian Woolf
---------------------------
Brian Woolf
Chairman and Chief
Executive Officer
(Principal Executive
Officer)




16



EXHIBIT 31.2
CERTIFICATION
-------------

I, Thomas E. Reinckens, certify that:

1. I have reviewed 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-15(e) and 15d-15(e) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 in which
this quarterly report is being prepared;

b) evaluated the effectiveness of Cache's disclosure controls and
procedures and presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this quarterly report based on
such evaluation; and

c) disclosed in this report any changes in Cache's internal control over
financial reporting that occurred during Cache's third quarter that
has materially affected, or is reasonably likely to materially
affect, Cache's internal control over financial reporting;

5. Cache's other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to Cache's
auditors and the audit committee of Cache's Board of Directors:

a) all significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting which are
reasonably likely to adversely affect Cache's ability to record,
process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in Cache's internal
control over financial reporting.


November 8, 2004 BY: /s/ Thomas E. Reinckens
----------------------------
Thomas E. Reinckens
President and Chief
Operating Officer
(Principal Financial and
Accounting Officer)





17




EXHIBIT 32.1
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 September 25, 2004 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.




November 8, 2004 BY: /s/ Brian Woolf
-----------------------------
Brian Woolf
Chairman and Chief
Executive Officer
(Principal Executive
Officer)





November 8, 2004 BY: /s/ Thomas E. Reinckens
----------------------------
Thomas E. Reinckens
President and Chief
Operating Officer
(Principal Financial
and Accounting
Officer)







18