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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
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 0-23702 
STEVEN MADDEN, LTD.
(Exact name of registrant as specified in its charter) 
Delaware 13-3588231
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)  

52-16 Barnett Avenue, Long Island City, New York 11104
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (718) 446-1800

Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $.0001 per shareSHOOThe NASDAQ Stock Market LLC

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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes     No 
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes     No 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. 
Large accelerated filerAccelerated filerEmerging growth company
Non-accelerated filerSmaller reporting company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes     No  

As of July 30, 2020, there were 83,151,403 shares of the registrant’s common stock, $0.0001 par value, outstanding.



STEVEN MADDEN, LTD.
TABLE OF CONTENTS TO QUARTERLY REPORT ON FORM 10-Q
June 30, 2020


 
 
  
 
   
 
   
 
   
 
 
   
 
  
   
   
  
 
  
   
 






PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
STEVEN MADDEN, LTD. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
June 30,
2020
December 31,
2019
June 30,
2019
 (unaudited) (unaudited)
ASSETS   
Current assets:   
Cash and cash equivalents$318,101  $264,101  $212,664  
Accounts receivable, net of allowances of $9,937, $11,066 and $12,57020,183  38,166  21,409  
Factor accounts receivable123,496  216,471  285,227  
Inventories103,282  136,896  146,120  
Marketable securities – available for sale38,837  40,521  36,096  
Prepaid expenses and other current assets18,444  22,066  31,275  
Prepaid taxes13,578  658  8,012  
Total current assets635,921  718,879  740,803  
Note receivable – related party1,369  1,558  1,743  
Property and equipment, net49,594  65,504  61,654  
Operating lease right-of-use asset120,489  155,700  179,320  
Deposits and other2,917  2,948  2,592  
Deferred taxes6,360    9,319  
Goodwill – net166,333  171,349  148,566  
Intangibles – net149,409  162,709  137,563  
Total Assets$1,132,392  $1,278,647  $1,281,560  
LIABILITIES   
Current liabilities:   
Accounts payable$42,474  $61,706  $107,436  
Accrued expenses113,744  169,895  129,810  
Operating leases - current portion36,890  38,624  38,652  
Advances from factor42,662      
Accrued incentive compensation2,122  11,046  6,321  
Total current liabilities237,892  281,271  282,219  
Contingent payment liability1,829  9,124    
Operating leases - long-term portion114,630  133,172  154,643  
Deferred taxes3,128  5,877  4,041  
Other liabilities7,793  7,979  13,101  
Total Liabilities365,272  437,423  454,004  
Commitments, contingencies and other (Note Q)
STOCKHOLDERS’ EQUITY   
Preferred stock – $.0001 par value, 5,000 shares authorized; none issued; Series A Junior Participating preferred stock – $.0001 par value, 60 shares authorized; none issued      
Common stock – $.0001 par value, 245,000 shares authorized, 133,173, 132,754 and 132,681 shares issued, 83,035, 83,520 and 84,821 shares outstanding6  6  6  
Additional paid-in capital466,384  454,217  438,242  
Retained earnings1,263,910  1,310,406  1,264,631  
Accumulated other comprehensive loss(39,850) (30,440) (29,449) 
Treasury stock – 50,138, 49,234 and 47,860 shares at cost(935,366) (905,688) (855,076) 
Total Steven Madden, Ltd. stockholders’ equity755,084  828,501  818,354  
Noncontrolling interest12,036  12,723  9,202  
Total stockholders’ equity767,120  841,224  827,556  
Total Liabilities and Stockholders’ Equity$1,132,392  $1,278,647  $1,281,560  

See accompanying notes to condensed consolidated financial statements - unaudited.
1




STEVEN MADDEN, LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of (Loss)/Income
(unaudited)
(in thousands, except per share data)
 
Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Net sales$141,363  $444,974  $497,047  $855,914  
Commission and licensing fee income1,449  4,655  4,933  9,503  
Total revenue142,812  449,629  501,980  865,417  
Cost of sales86,924  279,629  312,628  533,572  
Gross profit55,888  170,000  189,352  331,845  
Operating expenses79,590  121,317  229,784  238,502  
Impairment of intangibles  4,050  9,518  4,050  
(Loss)/income from operations(23,702) 44,633  (49,950) 89,293  
Interest and other income – net357  1,262  1,403  2,454  
(Loss)/income before provision for income taxes(23,345) 45,895  (48,547) 91,747  
(Benefit)/provision for income taxes (Note M)(6,201) 9,784  (13,602) 20,371  
Net (loss)/income(17,144) 36,111  (34,945) 71,376  
Less: net (loss)/income attributable to noncontrolling interest(558) (461) (908) 279  
Net (loss)/income attributable to Steven Madden, Ltd.$(16,586) $36,572  $(34,037) $71,097  
Basic net (loss)/income per share$(0.21) $0.46  $(0.43) $0.89  
Diluted net (loss)/income per share$(0.21) $0.44  $(0.43) $0.85  
Basic weighted average common shares outstanding78,517  79,951  78,696  80,241  
Effect of dilutive securities – options/restricted stock  3,918    3,823  
Diluted weighted average common shares outstanding78,517  83,869  78,696  84,064  
Cash dividends declared per common share$  $0.14  $0.15  $0.28  

See accompanying notes to condensed consolidated financial statements - unaudited.
2




STEVEN MADDEN, LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive (Loss)/Income
(unaudited)
(in thousands)
 
Three Months Ended June 30, 2020Six Months Ended June 30, 2020
 Pre-tax amountsTax benefitAfter-tax amountsPre-tax amountsTax (expense)After-tax amounts
Net (loss)$(17,144) $(34,945) 
Other comprehensive income/(loss):  
      Foreign currency translation adjustment$5,770  $  5,770  $(9,880) $  (9,880) 
      (Loss)/gain on cash flow hedging derivatives(797) 240  (557) 879  (249) 630  
Total other comprehensive income/(loss)$4,973  $240  5,213  $(9,001) $(249) (9,250) 
Comprehensive (loss)(11,931) (44,195) 
Less: comprehensive (loss) attributable to noncontrolling interests(740) (748) 
Comprehensive (loss) attributable to Steven Madden, Ltd.$(11,191) $(43,447) 
Three Months Ended June 30, 2019Six Months Ended June 30, 2019
Pre-tax amountsTax benefit/(expense)After-tax amountsPre-tax amountsTax benefit/(expense)After-tax amounts
Net income$36,111  $71,376  
Other comprehensive income:
      Foreign currency translation adjustment$1,362  $  1,362  $3,617  $  3,617  
      (Loss) on cash flow hedging derivatives(567) 136  (431) (816) 196  (620) 
      Unrealized gain on marketable securities18  (4) 14  88  (21) 67  
Total other comprehensive income$813  $132  945  $2,889  $175  3,064  
Comprehensive income37,056  74,440  
Less: comprehensive (loss)/income attributable to noncontrolling interests(536) 164  
Comprehensive income attributable to Steven Madden, Ltd.$37,592  $74,276  

See accompanying notes to condensed consolidated financial statements - unaudited.
3



STEVEN MADDEN, LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders' Equity
(unaudited)
(in thousands)

Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive (Loss)Treasury StockNon-Controlling InterestTotal Stockholders' Equity
SharesAmountSharesAmount
Balance - March 31, 202083,046  $6  $460,777  $1,280,496  $(45,245) 50,113  $(934,827) $12,417  $773,624  
Share repurchases(25) —  —  —  —  25  (539) —  (539) 
Exercise of stock options4  —  86  —  —  —  —  —  86  
Issuance of restricted stock, net of forfeitures10  —  —  —  —  —  —  —  —  
Stock-based compensation—  —  5,521  —  —  —  —  —  5,521  
Foreign currency translation adjustment—  —  —  —  5,952  —  —  (182) 5,770  
Cash flow hedge (net of tax benefit of $240)—  —  —  —  (557) —  —  —  (557) 
Investment of noncontrolling interest—  —  —  —  —  —  —  359  359  
Net (loss)—  —  —  (16,586) —  —  —  (558) (17,144) 
Balance - June 30, 202083,035  $6  $466,384  $1,263,910  $(39,850) 50,138  $(935,366) $12,036  $767,120  
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive (Loss)Treasury StockNon-Controlling InterestTotal Stockholders' Equity
SharesAmountSharesAmount
Balance - December 31, 201983,520  6  454,217  1,310,406  (30,440) 49,234  (905,688) 12,723  841,224  
Share repurchases(904) —  —  —  —  904  (29,678) —  (29,678) 
Exercise of stock options52  —  960  —  —  —  —  —  960  
Issuance of restricted stock, net of forfeitures367  —  —  —  —  —  —  —  —  
Stock-based compensation—  —  11,207  —  —  —  —  —  11,207  
Foreign currency translation adjustment—  —  —  —  (10,040) —  —  160  (9,880) 
Cash flow hedge (net of tax expense of $249)—  —  —  —  630  —  —  —  630  
Dividends on common stock ($0.15 per share)—  —  —  (12,459) —  —  —  —  (12,459) 
Investment of noncontrolling interest—  —  —  —  —  —  —  359  359  
Acquisition adjustment of noncontrolling interest—  —  —  —  —  —  —  (298) (298) 
Net (loss)—  —  —  (34,037) —  —  —  (908) (34,945) 
Balance - June 30, 202083,035  $6  $466,384  $1,263,910  $(39,850) 50,138  $(935,366) $12,036  $767,120  







4




STEVEN MADDEN, LTD. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders' Equity
(unaudited)
(in thousands)

Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive (Loss)Treasury StockNon-Controlling InterestTotal Stockholders' Equity
SharesAmountSharesAmount
Balance - March 31, 201985,729  $6  $431,228  $1,240,004  $(30,469) 46,801  $(821,074) $10,851  $830,546  
Share repurchases(1,059) —  —  —  —  1,059  (34,002) —  (34,002) 
Exercise of stock options48  —  1,077  —  —  —  —  —  1,077  
Issuance of restricted stock, net of forfeitures103  —  —  —  —  —  —  —  —  
Stock-based compensation—  —  5,937  —  —  —  —  —  5,937  
Foreign currency translation adjustment—  —  —  —  1,437  —  —  (75) 1,362  
Unrealized holding gain on securities (net of tax expense of $4)—  —  —  —  14  —  —  —  14  
Cash flow hedge (net of tax benefit of $136)—  —  —  —  (431) —  —  —  (431) 
Dividends on common stock ($0.14 per share)—  —  —  (11,945) —  —  —  —  (11,945) 
Distributions to non-controlling interests, net—  —  —  —  —  —  —  (1,113) (1,113) 
Net income/(loss)—  —  —  36,572  —  —  —  (461) 36,111  
Balance - June 30, 201984,821  $6  $438,242  $1,264,631  $(29,449) 47,860  $(855,076) $9,202  $827,556  
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive (Loss)Treasury StockNon-Controlling InterestTotal Stockholders' Equity
SharesAmountSharesAmount
Balance - December 31, 201885,715  6  424,835  1,217,521  (32,628) 46,276  (803,920) 8,868  814,682  
Share repurchases(1,584) —  —  —  —  1,584