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): March 2, 2006
STEVEN MADDEN, LTD.
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(Exact name of registrant as specified in its charter)
Delaware 000-23702 13-3588231
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(State or other jurisdiction (Registration (IRS Employer
of incorporation) Number) 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 March 2, 2006, Steven Madden, Ltd. (the "Company") issued a press release
announcing its financial results as of and for the quarter and fiscal year ended
December 31, 2005. 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.
Also on March 2, 2006, the Company held a conference call to discuss its
financial results for the quarter and fiscal year ended December 31, 2005. The
Company's script for that conference call is attached hereto as Exhibit 99.2.
The information included in this Current Report on Form 8-K (including Exhibits
99.1 and 99.2 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 March 2, 2006 regarding the Company's
announcement of its financial results as of and for the
quarter and year ended December 31, 2005.
99.2 Script for a Conference Call held by the Company on March 2,
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
-------------------------------------
Name: Jamieson A. Karson
Title: Chief Executive Officer
Date: March 2, 2006
EXHIBIT INDEX
DOC. NO. DOCUMENT DESCRIPTION
Exhibit 99.1 Press Release dated March 2, 2006 regarding the Company's
announcement of its financial results as of and for the
quarter and year ended December 31, 2005.
Exhibit 99.2 Script for a Conference Call held by the Company on March 2,
2006.
EXHIBIT 99.1
Company Contact: Ed Rosenfeld
Vice President, Strategic
Planning and Finance
Steven Madden, Ltd.
(718) 446-1800
Investor Relations: Cara O'Brien/Lauren Puffer
Press: Melissa Merrill
Financial Dynamics
(212) 850-5600
FOR IMMEDIATE RELEASE
- ---------------------
STEVEN MADDEN, LTD. ANNOUNCES FOURTH QUARTER AND FULL YEAR RESULTS
~ Fourth Quarter Sales Increase 8.2% to $91.4 million ~
~ Fourth Quarter Net Income Increases to $7.4 million,
or $0.51 Per Diluted Share ~
~ Company Provides Outlook for 2006 ~
LONG ISLAND CITY, N.Y. - March 2, 2006 - Steven Madden, Ltd. (NASDAQ:
SHOO), a leading designer, wholesaler and marketer of fashion footwear and
accessories for women, men and children, today announced financial results for
the fourth quarter and fiscal year ended December 31, 2005.
In line with recently updated expectations, fourth quarter sales
increased 8.2% to $91.4 million from $84.5 million reported in the comparable
period last year. Gross margin increased significantly to 43.1% from 32.2%
reflecting margin expansion in all of the wholesale segments as well as the
retail division. Operating expenses as a percent of sales decreased to 31.3%
versus 33.6% in the same period last year due to leverage on sales as the
Company controlled costs while building the business. Taken together, this
resulted in a substantial increase in operating income to $12.7 million, or
13.9% of sales, compared with a loss of $42 thousand in the same period last
year. Net income increased to $7.4 million, or $0.51 per diluted share, versus
$373 thousand, or $0.03 per diluted share, in last year's fourth quarter.
Revenues from the wholesale business, comprised of the Company's seven
brands, Steve Madden Women's, Steve Madden Men's, Steven by Steve Madden,
Stevie's, SM New York, Candie's, and l.e.i., increased 14.7% to $58.1 million
from $50.6 million in the fourth quarter of last year. This increase was driven
by strong sales in many wholesale divisions, including Steve Madden Women's,
Steve Madden Men's, Steven by Steve Madden, and Candie's, as well as the
Company's new division, SM New York, which was introduced during the quarter.
Retail revenues were $33.4 million in the fourth quarter compared with
$33.9 million in the same period last year. Same store sales decreased 6.3%
versus a 9.5% increase in the fourth quarter 2004. This was primarily due to the
planned phase out of certain items in preparation for the 2006 re-launch of
accessories, including handbags and belts by the recently acquired Daniel M
Friedman & Associates, as well as a reduction in promotional sales. During the
fourth quarter, the Company opened two new Steve Madden retail stores and closed
two stores.
"The fourth quarter marked a positive conclusion to an exciting and
impressive year for our Company," commented Jamieson Karson, Chairman and Chief
Executive Officer. "Most importantly, there was broad based strength in the
business and this enabled us to achieve solid top line growth. Specifically, we
drove sales increases in nearly every wholesale segment and successfully
introduced a new line, SM New York. Additionally, we achieved a higher gross
margin at retail compared to the comparable quarter last year. These factors,
coupled with our efforts throughout the year to improve operating efficiencies
and inventory management, allowed us to make significant gains in overall
margins and the bottom line versus last year."
Page 2 - Steven Madden, Ltd. Announces Fourth Quarter and Full Year Results
Net sales for the full year increased 11.1% to $375.8 million from
$338.1 million last year. Net income increased 56.4% to $19.2 million, or $1.38
per diluted share, from $12.3 million, or $0.86 per diluted share, reported for
2004. The Company opened 12 stores and closed five stores during the year,
ending with 98 retail locations, including the Internet store.
"We concluded the year with $109.1 million in cash, cash equivalents,
and marketable securities, no debt, and a total stockholders' equity of $182.1
million, which represents a very strong foundation for our business," commented
Arvind Dharia, Chief Financial Officer. "Also, even while maintaining one of the
strongest balance sheets in our industry and growing the business, we were able
to return significant capital to shareholders. Specifically, we repurchased a
total of 444,000 shares for an aggregate of $7.7 million and also issued a
special one-time cash dividend of $1.00 per outstanding share of common stock."
Mr. Karson continued, "2005 was an outstanding year for the Company and
this is due to several factors, notably the return of our founder, Steve Madden,
to the Company. Steve's creative talents have re-energized the Company and the
brand and our annual results clearly reflect his ability to inspire the team to
consistently deliver fresh and trend-right product to our customers. During the
year we also added breadth and depth to our management team, made enormous
progress in strengthening our operations, further extended our international
reach, diversified our business model to include new brands and categories, and
posted very strong financial results. In total, we achieved great success and
are pleased with how this positions Steven Madden, Ltd. for the future."
Company Outlook
- ---------------
With respect to the outlook for 2006, the Company is optimistic about
its prospects for the year. The Company intends to further improve gross margin
by continuing the strategies put in place in 2005, including a sharper focus on
inventory management. The Company expects to open 8-10 retail locations during
the year.
The Company currently anticipates that annual net sales will increase
in the low double digits on a percentage basis over 2005. As previously
disclosed, Daniel M. Friedman & Associates was acquired by the Company in
February 2006 and annual results will reflect these operations from the date of
acquisition. Annual earnings per diluted share is expected to range between
$1.69 and $1.73, excluding amortization of intangibles associated with the
recent acquisition. Including amortization, 2006 earnings per diluted share is
expected to range between $1.62 and $1.68.
Additionally, reflecting the strength of operations and the fact that
management is focused on delivering immediate value to shareholders, over the
next 12 months the Company will return approximately $12 million to shareholders
in the form of share repurchases or dividends.
"We are optimistic as we move forward and believe we are better
positioned than ever before," concluded Mr. Karson. "We are benefiting from the
creative leadership of Steve Madden, our brand is stronger than ever, and we
have a solid financial foundation. Moreover, we are successfully expanding and
diversifying our proven business model as evidenced by the acquisition of Daniel
M. Friedman & Associates, our former handbag and belt licensee, which will
enhance our offering and be immediately accretive to the bottom line. All of
this puts us on strong footing to become a global branded lifestyle company that
delivers consistently strong value to our shareholders."
Conference Call Information
- ---------------------------
Interested shareholders are invited to listen to the fourth quarter
earnings conference call scheduled for today, Thursday, March 2, 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 March 16, 2006. Additionally, a replay of the call can
be accessed by dialing (877) 519-4471, passcode 7038792 and will be available
until March 4, 2006.
Page 3 - Steven Madden, Ltd. Announces Fourth Quarter and Full Year Results
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 on-line at www.stevemadden.com. The Company has several licenses for
the Steve Madden brand, including eyewear and hosiery and owns and operates 99
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 follow)
Page 4 - Steven Madden, Ltd. Announces Fourth Quarter and Full Year Results
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Year Ended
--------------------------- ---------------------------
Consolidated: 31-Dec-05 31-Dec-04 31-Dec-05 31-Dec-04
- ------------ ------------ ------------ ------------ ------------
Net Sales $ 91,425 $ 84,532 $ 375,786 $ 338,144
Cost of Sales 51,984 57,297 233,286 215,475
------------ ------------ ------------ ------------
Gross Profit 39,441 27,235 142,500 122,669
Commission and licensing fee income 1,878 1,364 7,119 4,588
Operating Expenses 28,628 28,641 117,530 108,276
Impairment of cost in Excess of
Fair Value of net assets acquired 0 0 519 0
------------ ------------ ------------ ------------
Income (loss) from Operations 12,691 (42) 31,570 18,981
Interest and other Income, Net 492 476 1,890 1,973
------------ ------------ ------------ ------------
Income Before provision for Income
Taxes 13,183 434 33,460 20,954
Provision for Income Tax 5,744 61 14,260 8,679
------------ ------------ ------------ ------------
Net Income $ 7,439 $ 373 $ 19,200 $ 12,275
============ ============ ============ ============
Basic income per share $ 0.54 $ 0.03 $ 1.43 $ 0.93
============ ============ ============ ============
Diluted income per share $ 0.51 $ 0.03 $ 1.38 $ 0.86
============ ============ ============ ============
Weighted average common shares
outstanding - Basic 13,811 12,869 13,408 13,149
============ ============ ============ ============
Weighted average common shares
outstanding - Diluted 14,449 13,910 13,945 14,223
============ ============ ============ ============
~ more ~
Page 5 - Steven Madden, Ltd. Announces Fourth Quarter and Full Year Results
BALANCE SHEET HIGHLIGHTS
(in thousands)
Dec 31,2005 Dec 31,2004
Consolidated Consolidated
------------ ------------
Cash and cash equivalents $ 52,842 $ 30,853
Marketable Securities 56,249 49,124
Total Current Assets 140,972 121,094
Total Assets 211,728 186,430
Total Current Liabilities 26,906 19,677
Total Stockholder Equity 182,065 164,665
###
Exhibit 99.2
