It's probably catalyst efficiency degradation. The catalyst doesn't necessarily need to be replaced now. Look at the following discussion on the effects of ignition timing on peak combustion temperature (a big factor in NOx generation) and EGT (a big factor in catalyst performance).

http://www.peachparts.com/shopforum/tech-help/117048-successful-ca-asm-emission-test-ke-fuel-system.html#post833484

Though the initial timing cannot be changed, the rate of ignition advance with engine revs can be changed (slowed) and the vacuum advance can be disabled.

It could also be a lazy O2 sensor. If it were me I would check the duty cycle and scope the O2 sensor waveform as I did prior to my last emissions test. This is also discussed in the above link.

Duke