Cache Reports Second Quarter Results; Diluted Earnings Per Share Totals $0.19; Raises 2005 Earnings Guidance to $0.78 to $0.81 Per Diluted Share.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Cache Inc., (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CACH CACH Canyon de Chelly National Monument (US National Park Service) CACH Carolina Chickadee CACH Canadian Adult Congenital Heart Network CACH Chicago Area Consolidation Hub (United Parcel Service) ), a specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. chain of women's apparel stores with 298 stores currently open, reported results for the 13 and 26 week periods ended July July: see month. 2, 2005. For the 13 week period ended July 2, 2005: --Net sales increased 7.9% to $67.0 million compared to $62.1 million in the second quarter of 2004 and comparable store sales gained 5%; --Operating income totaled $4.7 million, or 7.0% of net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight , as compared to $7.1 million, or 11.4% of net sales in the second quarter of 2004; --Net income totaled $3.0 million, or $0.19 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, as compared to $0.27 per diluted share last year. For the 26 week period ended July 2, 2005: --Net sales increased 8.8% to $129.8 million compared to $119.3 million in the first half of 2004 and comparable store sales gained 3%; --Operating income totaled $7.5 million, or 5.8% of net sales, as compared to $12.3 million, or 10.3% of net sales in the first half of 2004; --Net income totaled $4.8 million, or $0.30 per diluted share, as compared to $0.48 per diluted share last year. Mr. Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. Woolf Woolf , (Adeline) Virginia (Stephen) 1882-1941. British writer whose works include fiction written in an experimental stream-of-consciousness style, such as Mrs. , Cache's Chairman commented: "The second quarter marked a pivotal period for Cache. We reported earnings that were ahead of our revised expectations, as our efforts to increase our fashion assortments met with improved results. We also successfully reduced our basic classification styles and currently are in the position to fully capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the excitement that is developing for us in sportswear and casual apparel. We are delighted to begin the second half of the year with our Cache stores positioned for growth." Additionally, during the second quarter, the Company: --Opened 4 new stores and at quarter-end operated 297 stores in 43 states; --Remodeled 7 stores with 53% of its Cache store base in the new store format at quarter-end. Gross profit in the second quarter increased by 4.2% to $30.4 million, or 45.3% of net sales, compared to $29.1 million, or 46.9% of net sales, in the second quarter of 2003. For the first half of fiscal 2005, gross profit rose by 4.9% to $57.5 million, or 44.3% of net sales, compared to $54.8 million, or 46.0% of net sales, in the prior year period. The decline in gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for the second quarter and first half of fiscal 2005 reflected greater promotional activity and increased occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal related to our store expansion program and was partially offset by higher initial markup (text) markup - In computerised document preparation, a method of adding information to the text indicating the logical components of a document, or instructions for layout of the text on the page or other information which can be interpreted by some automatic system. . In total, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the second quarter were $25.6 million, or 38.3% of net sales compared to $22.0 million, or 35.5% of net sales in the second quarter of fiscal 2004. For the first half of fiscal 2005, total operating expenses were $50.0 million, or 38.6% of net sales compared to $42.6 million, or 35.7% of net sales in the prior year period. The rise in total operating expenses, as a percent of sales, for the second quarter and first half of fiscal 2005, was primarily due to the increase in the number of stores opened since the same period last year, as well as due to higher payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. , depreciation, insurance, advertising costs and professional fees and was partially offset by lower incentive bonus accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. , as compared to last year. At July 2, 2005, cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has totaled $43.1 million, rising $2.5 million from $40.6 million at June June: see month. 26, 2004. Inventory was $30.2 million, as compared to $27.5 million at June 26, 2004, an increase of 9.7%. Average inventory on a per store basis was down slightly from the second quarter last year. Working capital increased by $5.5 million to $56.3 million from $50.8 million at June 26, 2004. Mr. Woolf continued: "We remain excited and confident about our prospects in the short and long term. Cache has certainly become a preferred shopping destination with its unique assortments, boutique Boutique A small investment firm specializing in offering specific, but limited services to a select number of individuals. Notes: These investment firms are the alternatives to large financial supermarkets. They provide a highly personalized environment for investing. setting and attentive at·ten·tive adj. 1. Giving care or attention; watchful: attentive to detail. 2. Marked by or offering devoted and assiduous attention to the pleasure or comfort of others. service. Our new merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain initiatives and enhanced marketing efforts, strong balance sheet and solid infrastructure provide us with a great platform to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution our expansion plans and importantly increase shareholder value."
A table summarizing financial results follows:
Twenty-six Weeks Ended Thirteen Weeks Ended
------------------------- -------------------------
July 2, June 26, July 2, June 26,
2005 2004 2005 2004
------------ ------------ ------------ ------------
($ Thousands, except for per share data)
Net Sales $ 129,763 $ 119,281 $ 66,970 $ 62,087
Operating income $ 7,468 $ 12,253 $ 4,717 $ 7,102
Net income $ 4,757 $ 7,610 $ 3,000 $ 4,361
Basic earnings per
share $ 0.30 $ 0.49 $ 0.19 $ 0.28
Diluted earnings
per share $ 0.30 $ 0.48 $ 0.19 $ 0.27
Basic weighted
average shares
outstanding 15,700,000 15,536,000 15,712,000 15,634,000
Diluted weighted
average shares
outstanding 15,830,000 15,986,000 15,950,000 16,100,000
Number of stores
open at end of
period 297 269 297 269
Guidance Based on better than expected second quarter results, the Company is increasing its guidance for fiscal 2005 net sales and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . For fiscal 2005, the Company currently estimates net sales in the range of $271 million to $275 million, compared to its previous guidance range of $268 million to $272 million and versus actual net sales of $247.3 million in fiscal 2004. In addition, the Company currently estimates fiscal 2005 diluted earnings per share in the range of $0.78 to $0.81, compared to its previous guidance range of $0.75 to $0.78 and versus actual fiscal 2004 diluted earnings per share of $0.83. For the third quarter, the Company estimates net sales in the range of $57 million to $59 million, compared to actual sales of $49.4 million in the third quarter of fiscal 2004. The Company estimates third quarter diluted earnings per share in the range of $0.02 to $0.04, as compared to an actual net loss per share of $0.03 in the third quarter of fiscal 2004. Store opening plans The Company expects to open approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 25 new stores in Fiscal 2005. During the second quarter, the Company opened four new stores and has opened a total of 9 new stores during the first half of 2005. Following quarter end, the Company opened one new store. At fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. , the Company expects to operate approximately 315 stores, expanding square footage by approximately 8% to 630,000 square feet. Conference Call Interested stockholders and other persons are invited to listen to the second quarter earnings conference call scheduled for today, Wednesday Wednesday: see week. , July 27, 2005 at 9:00 a.m. Eastern Time. To participate in Cache's conference call dial 1-800-289-0572 approximately five minutes prior to the 9:00am Eastern start time. The call will also be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.cache.com and http://www.viavid.com. An online archive (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. will be available immediately following the call and will be accessible until August 3, 2005. Certain matters discussed within this press release may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities law. Although Cache, Inc. believes the statements are based on reasonable assumptions, there can be no assurance that these expectations will be attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. . Actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation, industry trends, merchandise and fashion trends, competition, changes in general economic conditions and consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. patterns, vendor procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. issues and the ability to obtain financing, as well as other risks outlined from time to time in the filings of Cache, Inc., with the Securities and Exchange Commission. For further information contact Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs E. Reinckens, President, Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , Cache, Inc., 1440 Broadway Broadway, famous thoroughfare in New York City. It extends from Bowling Green near the foot of Manhattan island N to 262d St. in the Bronx. Throughout its length Broadway is chiefly a commercial street. , New York, New York 10018, (212) 575-3246.
CACHE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
July 2, January 1, June 26,
ASSETS 2005 2005 2004
-------------- -------------- --------------
(Restated)
Current assets:
Cash and equivalents $ 17,166,000 $ 16,848,000 $ 16,673,000
Marketable securities 25,964,000 25,874,000 23,960,000
Receivables, net 3,511,000 6,545,000 4,895,000
Inventories 30,165,000 32,296,000 27,491,000
Deferred income taxes 662,000 567,000 750,000
Prepaid expenses and
other current assets 1,141,000 1,948,000 776,000
-------------- -------------- --------------
Total current assets 78,609,000 84,078,000 74,545,000
Equipment and leasehold
improvements, net 49,502,000 47,118,000 39,589,000
Other assets 856,000 832,000 832,000
-------------- -------------- --------------
Total assets $ 128,967,000 $ 132,028,000 $ 114,966,000
============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,370,000 $ 17,055,000 $ 11,588,000
Income taxes payable --- --- 199,000
Accrued compensation 1,427,000 1,927,000 2,865,000
Accrued liabilities 9,487,000 11,627,000 9,073,000
-------------- -------------- --------------
Total current
liabilities 22,284,000 30,609,000 23,725,000
Other liabilities 14,557,000 13,556,000 11,442,000
Deferred income taxes,
net 2,246,000 3,023,000 973,000
Commitments and
contingencies
STOCKHOLDERS' EQUITY
Common stock 157,000 157,000 156,000
Additional paid-in
capital 34,988,000 34,705,000 34,379,000
Retained earnings 54,735,000 49,978,000 44,291,000
-------------- -------------- --------------
Total stockholders'
equity 89,880,000 84,840,000 78,826,000
-------------- -------------- --------------
Total liabilities and
stockholders' equity $ 128,967,000 $ 132,028,000 $ 114,966,000
============== ============== ==============
CACHE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
FOR THE TWENTY-SIX WEEKS ENDED
(Unaudited)
July 2, June 26,
2005 2004
-------------- --------------
Net sales $ 129,763,000 $ 119,281,000
Cost of sales, including occupancy and
buying costs 72,264,000 64,444,000
-------------- --------------
Gross profit 57,499,000 54,837,000
-------------- --------------
Expenses
Store operating expenses 41,871,000 35,337,000
General and administrative expenses 8,160,000 7,247,000
-------------- --------------
Total expenses 50,031,000 42,584,000
-------------- --------------
Operating income 7,468,000 12,253,000
Other income:
Interest income 400,000 202,000
Other income, net --- 20,000
-------------- --------------
Income before income taxes 7,868,000 12,475,000
Income tax provision 3,111,000 4,865,000
-------------- --------------
Net income $ 4,757,000 $ 7,610,000
============== ==============
Basic earnings per share $ 0.30 $ 0.49
============== ==============
Diluted earnings per share $ 0.30 $ 0.48
============== ==============
Basic weighted average shares
outstanding 15,700,000 15,536,000
============== ==============
Diluted weighted average shares
outstanding 15,830,000 15,986,000
============== ==============
NUMBER OF STORES OPEN AT END OF PERIOD 297 269
============== ==============
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
FOR THE THIRTEEN WEEKS ENDED
(Unaudited)
July 2, June 26,
2005 2004
-------------- --------------
Net sales $ 66,970,000 $ 62,087,000
Cost of sales, including occupancy and
buying costs 36,604,000 32,938,000
-------------- --------------
Gross profit 30,366,000 29,149,000
-------------- --------------
Expenses
Store operating expenses 21,278,000 18,448,000
General and administrative expenses 4,371,000 3,599,000
-------------- --------------
Total expenses 25,649,000 22,047,000
-------------- --------------
Operating income 4,717,000 7,102,000
Other income:
Interest income 243,000 107,000
Other income, net --- 20,000
-------------- --------------
Income before income taxes 4,960,000 7,229,000
Income tax provision 1,960,000 2,868,000
-------------- --------------
Net income $ 3,000,000 $ 4,361,000
============== ==============
Basic earnings per share $ 0.19 $ 0.28
============== ==============
Diluted earnings per share $ 0.19 $ 0.27
============== ==============
Basic weighted average shares outstanding 15,712,000 15,634,000
============== ==============
Diluted weighted average shares
outstanding 15,950,000 16,100,000
============== ==============
NUMBER OF STORES OPEN AT END OF PERIOD 297 269
============== ==============
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