UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 27, 2006
STEVEN MADDEN, LTD.
(Exact name of registrant as specified in its charter)
Delaware 000-23702 13-3588231
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(State or other jurisdiction (Registration Number) (IRS Employer
of incorporation) Identification No.)
52-16 Barnett Avenue, Long Island City, New York 11104
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (718) 446-1800
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 27, 2006, Steven Madden, Ltd. (the "Company") issued a press release
announcing its financial results for the quarter ended June 30, 2006. A copy of
the Company's press release announcing these financial results is attached as
Exhibit 99.1 hereto, and is incorporated by reference into this report.
The information included in this Current Report on Form 8-K (including Exhibit
99.1 hereto) that is furnished pursuant to this Item 2.02 shall not be deemed to
be "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of that Section or
Sections 11 and 12(a) (2) of the Securities Act of 1933, as amended. The
information contained herein and in the accompanying exhibit shall not be
incorporated by reference into any filing of the Company, whether made before or
after the date hereof, regardless of any general incorporation language in such
filing, unless expressly incorporated by specific reference into such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 Press Release, dated July 27, 2006, regarding the Company's
announcement of its financial results for the quarter ended
June 30, 2006.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Steven Madden, Ltd. has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
STEVEN MADDEN, LTD.
By: /s/ JAMIESON A. KARSON
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Name: Jamieson A. Karson
Title: Chief Executive Officer
Date: July 27, 2006
EXHIBIT INDEX
DOC. NO. DOCUMENT DESCRIPTION
Exhibit 99.1 Press Release, dated July 27, 2006, regarding the Company's
announcement of its financial results for the quarter ended
June 30, 2006.
Exhibit 99.1
Company Contact: Ed Rosenfeld
Senior Vice President, Strategic
Planning & Finance
Steven Madden, Ltd.
(718) 446-1800
Investor Relations: Cara O'Brien/Melissa Myron
Press: Melissa Merrill
Financial Dynamics
(212) 850-5600
FOR IMMEDIATE RELEASE
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STEVEN MADDEN, LTD. ANNOUNCES FISCAL 2006 SECOND QUARTER RESULTS
~ Second Quarter Net Sales Increase 28.3% ~
~ Second Quarter Operating Margin Improves 790 Basis Points ~
~ Second Quarter Diluted EPS is $0.58 versus $0.26 Last Year ~
LONG ISLAND CITY, N.Y. - July 27, 2006 - Steven Madden, Ltd. (NASDAQ: SHOO), a
leading designer and marketer of fashion footwear and accessories for women, men
and children, today announced financial results for the second quarter and six
months ended June 30, 2006.
Net sales for the second quarter increased 28.3% to $129.5 million from
$101.0 million last year. Net sales included a $17.3 million contribution from
Daniel M. Friedman & Associates, which was acquired on February 7, 2006. Gross
margin increased significantly to 42.1% from 37.3% in the comparable period last
year, reflecting margin improvement in both the wholesale and retail divisions.
Operating expenses as a percentage of sales decreased to 27.8% compared to 29.9%
last year due to the Company's ability to leverage the increased sales base
while continuing to invest in the business.
Second quarter operating income grew to $21.3 million, or 16.5% of
sales, compared to $8.7 million, or 8.6% of sales, last year. Net income rose
140% to $12.7 million versus $5.3 million in the second quarter of fiscal 2005.
Reflecting the 3-for-2 stock split that took place on May 25, 2006, diluted
earnings per share were $0.58, based on 22.0 million diluted shares outstanding,
over $0.26, based on 20.2 million diluted shares outstanding, last year.
Revenues from the wholesale business were up 40.8% to $96.2 million
driven by strong performance from the Company's existing brands as well as solid
contributions from recently acquired Daniel M. Friedman & Associates and the
recently launched SM New York segment. Excluding the Daniel M. Friedman &
Associates business, wholesale revenues increased approximately 15.5%. Wholesale
gross margin increased 680 basis points to 38.0%.
Retail revenues rose to $33.3 million compared to $32.6 million last
year. The Company generated a 3.0% same store sales increase, versus a 13.6%
increase last year. Retail gross margin increased 420 basis points to 54.0%.
During the second quarter, the Company opened one and closed five retail stores,
ending the quarter with 95 locations, including the Company's Internet store.
For the first six months of fiscal 2006, net sales increased 29.0% to
$237.8 million from $184.3 million last year. Net income grew to $23.6 million,
or $1.07 per diluted share, compared to $6.2 million, or $0.31 per diluted
share, in the first half of fiscal 2005.
"Our team delivered a record second quarter, which was driven by
exceptional, trend-right product created by Steve and his team. We are
particularly pleased to have achieved both sales and margin improvements in both
the wholesale and retail divisions, highlighting the broad-based strength of our
business," stated Jamieson Karson, Chairman and Chief Executive Officer. "Also
during the quarter, we furthered our evolution into a global branded lifestyle
company by signing license agreements for watches and Stevies girls apparel.
Complementing our core footwear category with a growing portfolio of brand
extensions enables us to expand our reach and maximize our future growth
opportunities."
"We continue to maintain a solid financial foundation upon which to
grow our business over the long-term," commented Arvind Dharia, Chief Financial
Officer. "At the end of the quarter, we had $90.6 million of cash and investment
securities, no short- or long-term debt, and $200.8 million in stockholders'
equity. In addition, we continued our commitment to return capital to our
shareholders by repurchasing 127,900 shares for an aggregate of $3.5 million
during the quarter."
Company Outlook
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Based upon results to-date, the Company is increasing its outlook for
the year and now anticipates fiscal 2006 net sales will increase approximately
21% to 24% over fiscal 2005. With respect to the bottom line, the Company
currently expects that earnings per diluted share will range between $1.90 and
$2.00. In May 2006 the Company effected a 3-for-2 stock split of its outstanding
shares of common stock.
"We are very pleased with our performance during the first half of
fiscal 2006," Mr. Karson concluded. "Looking ahead, we continue to focus on
maintaining solid execution of our stated strategies. Specifically, we look to
support Steve and our outstanding creative team, whose consistently fresh
designs resonate with our customers and provide the catalyst for our success. We
are also dedicated to sustaining and building upon the operational improvements
we have achieved to date. These efforts, combined with an eye towards further
diversification of our business, position Steven Madden, Ltd. for a solid
future."
Conference Call Information
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Interested shareholders are invited to listen to the second quarter
earnings conference call scheduled for today, Thursday, July 27, 2006, at 10
a.m. Eastern Time. The call will be broadcast live over the Internet and can be
accessed by logging onto http://www.stevemadden.com. An online archive of the
broadcast will be available within one hour of the conclusion of the call and
will be accessible until August 10, 2006. Additionally, a replay of the call can
be accessed by dialing (888) 394-8095, passcode 7617153. A replay will be
available one hour after the completion of the call until August 1, 2006.
Steven Madden, Ltd. designs and markets fashion-forward footwear and
accessories for women, men and children. The shoes and accessories are sold
through company-owned retail stores, department stores, apparel and footwear
specialty stores, and online at www.stevemadden.com. The Company has several
licenses for its brands, including watches, outerwear, eyewear, girls apparel,
and hosiery and owns and operates 95 retail stores, including its online store.
The Company is also the licensee for l.e.i. Footwear, Candie's Footwear and
UNIONBAY Men's Footwear.
Statements in this press release that are not statements of historical or
current fact constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other unknown
factors that could cause the actual results of the Company to be materially
different from the historical results or from any future results expressed or
implied by such forward-looking statements. In addition to statements which
explicitly describe such risks and uncertainties readers are urged to consider
statements labeled with the terms "believes", "belief", "expects", "intends",
"anticipates" or "plans" to be uncertain and forward-looking. The forward
looking statements contained herein are also subject generally to other risks
and uncertainties that are described from time to time in the Company's reports
and registration statements filed with the Securities and Exchange Commission.
(Tables to follow)
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STEVEN MADDEN LTD
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data) - Unaudited
Three Months Ended Six Months Ended
Consolidated: Jun 30, 2006 Jun 30, 2005 Jun 30, 2006 Jun 30, 2005
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Net Sales $ 129,500 $ 100,958 $ 237,815 $ 184,294
Cost of Sales 74,945 63,348 136,977 119,332
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Gross Profit 54,555 37,610 100,838 64,962
Commission and licensing fee income 2,825 1,799 6,587 3,024
Operating Expenses 36,065 30,233 67,655 57,589
Impairment of cost in Excess of Fair Value of net
assets acquired 0 519 519
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Income from Operations 21,315 8,657 39,770 9,878
Interest and other Income, Net 642 456 913 894
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Income Before provision for Income Taxes 21,957 9,113 40,683 10,772
Provision for Income Tax 9,261 3,827 17,127 4,524
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Net Income $ 12,696 $ 5,286 $ 23,556 $ 6,248
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Basic income per share $ 0.61 $ 0.27 $ 1.13 $ 0.32
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Diluted income per share 0.58 0.26 1.07 0.31
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Weighted average common shares
outstanding - Basic 20,794 19,613 20,835 19,731
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Weighted average common shares
outstanding - Diluted 22,030 20,214 21,974 20,460
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BALANCE SHEET HIGHLIGHTS
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Jun 30, 2006 Dec 2005 Jun 30, 2005
Consolidated Consolidated Consolidated
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(Unaudited) (Unaudited)
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Cash and cash equivalents $ 34,463 $ 42,842 $ 38,072
Investment Securities 56,166 66,249 45,730
Total Current Assets 182,957 140,972 135,654
Total Assets 249,323 211,728 197,430
Total Current Liabilities 45,071 26,906 28,613
Total Stockholder Equity 200,814 182,065 166,396
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