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): April 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 May 2, 2006, Steven Madden, Ltd. (the "Company") issued a press release
announcing its financial results for the quarter ended March 31, 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.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.
(d) On April 27, 2006, the Board of Directors of the Company (the "Board"),
following a recommendation from the Company's Nominating/Corporate Governance
Committee, elected Richard P. Randall as a director. Additionally, Mr. Randall
will serve on the Company's Audit Committee and has been designated as the
Company's "audit committee financial expert". The text of the Company's press
release announcing the foregoing is furnished as Exhibit 99.1 to this report.
ITEM 8.01 OTHER EVENTS.
On April 27, 2006, the Board approved and declared a 3-for-2 stock split, to be
effected in the form of a stock dividend on its issued and outstanding common
stock, par value $0.0001 (the "Common Stock"). As a result of the stock split,
stockholders of record as of the close of business on May 11, 2006 (the "Record
Date") will receive one additional share of Common Stock for every two shares
held. Stockholders will receive cash in lieu of any fractional share of Common
Stock they otherwise would have received in connection with the dividend. The
price paid for the fractional shares will be based on the closing price of the
Common Stock on the Record Date, as reported by the Nasdaq National Market
System. The dividend will be payable on or about May 25, 2006 to stockholders of
record as of the Record Date. The text of the Company's press release announcing
the foregoing is furnished as Exhibit 99.1 to this report.
The information included in this Current Report on Form 8-K (including Exhibit
99.1 hereto) 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 May 2, 2006 regarding the Company's
announcement of (i) its financial results for the quarter
ended March 31, 2006, (ii) the election of Richard P. Randall
as a director, and (iii) the approval and declaration of a
3-for-2 stock split.
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: May 1, 2006
EXHIBIT INDEX
DOC. NO. DOCUMENT DESCRIPTION
Exhibit 99.1 Press Release dated May 2, 2006 regarding the Company's
announcement of (i) its financial results for the quarter
ended March 31, 2006, (ii) the election of Richard P. Randall
as a director, and (iii) the approval and declaration of a
3-for-2 stock split.
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 FIRST QUARTER RESULTS
~ Net Sales Increase 30% and Gross Margin Improves 990 Basis Points ~
~ Diluted EPS Is $0.74 versus $0.07 Last Year ~
~ Board Approves 3-for-2 Stock Split ~
~ Names Additional Independent Director to Board ~
LONG ISLAND CITY, N.Y. - May 2, 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 first quarter ended
March 31, 2006.
In line with recently updated expectations, net sales increased 30.0%
to $108.3 million from $83.3 million last year. Net sales included an $8.3
million contribution from Daniel M. Friedman & Associates, which was acquired on
February 7, 2006. Gross margin increased significantly to 42.7% from 32.8% in
the comparable period last year and improved across all divisions. Strong
product offerings, better inventory management, reduced markdown allowances and
compliance chargebacks, and other operating efficiencies drove the margin
improvement during the quarter.
Operating expenses as a percentage of sales reduced to 29.2% compared
to 32.8% last year due to the Company's ability to leverage the increased sales
base while also continuing to invest in the business. Commission and licensing
fee income increased to $3.8 million resulting from the Company's stronger
private label business. These factors taken together resulted in a substantial
increase in operating income to $18.5 million, or 17.0% of sales, compared to
$1.2 million, or 1.5% of sales, last year. Net income improved to $10.9 million,
or $0.74 per diluted share, compared to net income of $1.0 million, or $0.07 per
diluted share, last year.
Revenues from the wholesale business, comprised of the Company's eight
divisions, Steve Madden Women's, Steve Madden Men's, Steven by Steve Madden, SM
New York, Stevie's, Candie's, l.e.i., and Daniel M. Friedman, were up 46% to
$83.1 million. The increase was primarily driven by strong performance from the
Company's existing brands and better than planned results from the Company's
recently launched wholesale division, SM New York, and the recently acquired
Daniel M. Friedman & Associates.
Retail revenues were $25.3 million compared to $26.5 million in the
first quarter of last year. Same store sales declined 8.4% versus a 5.5%
increase last year. The year-over-year decline in the retail business is
primarily due to planned reductions in the accessories and men's categories as
well as a reduced level of promotional sales. During the first quarter, the
Company opened one new Steve Madden retail store and ended the quarter with 99
stores in operation, including the Company's Internet store.
Jamieson Karson, Chairman and Chief Executive Officer, stated, "The
first quarter of 2006 marked a very strong start to the year and reflects strong
momentum in many areas of our business. Steve and the design team once again
delivered an exceptional performance, which led to strong demand for our
existing brands. At the same time, our most recent efforts to expand and
diversify our business - launching the new SM New York brand and acquiring a
leading accessories business - proved very successful during the beginning of
the year. Particularly impressive in the quarter was our continued margin
improvement which reflects a strong focus on executing our previously stated
initiatives."
"In addition to growing our top and bottom lines, we also continue to
maintain one of the strongest balance sheets in our industry," commented Arvind
Dharia, Chief Financial Officer. "At the end of the quarter, we had $79.0
million of cash, cash equivalents, and investment securities, no short- or
long-term debt, and $189.9 million in stockholders' equity. In addition, we
continued our commitment to return capital to our shareholders by repurchasing
147,400 shares for an aggregate of $4.8 million during the quarter."
Company Outlook
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Based upon results to-date, sales and margin trends for the second
quarter are encouraging. That said, the Company remains somewhat cautious with
regard to the second half of the year given the lower level of visibility
regarding consumer demand for key fashion trends. Taking all of this into
account, the Company now anticipates fiscal 2006 net sales will increase
approximately 15% to 18% over fiscal 2005. With respect to the bottom line, the
Company currently expects that earnings per diluted share will range between
$2.40 and $2.50.
"We are very pleased with our progress thus far in 2006 and will strive
to leverage this momentum throughout the year. Our main focus remains on
expanding and diversifying our business and making further progress towards
becoming a global lifestyle branded company, and we believe this will enable us
to enhance shareholder value over the long-term," Mr. Karson concluded.
Other Corporate Matters
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The Company's Board of Directors approved a 3-for-2 stock split of its
outstanding shares of common stock. Stockholders of record at the close of
business on May 11, 2006 will receive one additional share of Steven Madden Ltd.
common stock for every two shares of common stock owned on this date. The
additional shares are expected to be distributed on or about May 25, 2006. As a
result of the stock split, the number of outstanding shares of common stock will
increase to approximately 20.8 million from approximately 13.9 million.
In addition, Richard P. Randall has been appointed to the Company's
Board of Directors. The addition of Mr. Randall expands the Company's Board to
nine members.
Mr. Randall was the Executive Vice President and Chief Financial
Officer of Direct Holdings Worldwide, LLC, parent company of Lillian Vernon
Corporation and TimeLife, from 2002 until his retirement in June 2005.
Previously, Mr. Randall served as Senior Vice President and Chief Financial
Officer of Coach, Inc. and the Chief Operating Officer and Chief Financial
Officer of Lillian Vernon Corporation from 2000 to 2001 and 1998 to 2000,
respectively. Currently, Mr. Randall serves as a Director of The Burke
Rehabilitation Hospital.
Mr. Karson commented, "We welcome Richard to our Board and are
confident that his financial knowledge, leadership experience, and independent
perspective will be valuable assets to Steven Madden Ltd. We look forward to his
contributions as we continue to grow and diversify our Company. In addition, we
are pleased to announce the 3-for-2 stock split, which we believe will help make
our shares more accessible to investors and increase our market liquidity."
Conference Call Information
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Interested shareholders are invited to listen to the first quarter
earnings conference call scheduled for today, Tuesday, May 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 May 16, 2006. Additionally, a replay of the call can be
accessed by dialing (877) 519-4471, passcode 7309576. A replay will be available
one hour after the completion of the call until May 4, 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 on-line at www.stevemadden.com. The Company has several
licenses for the Steve Madden brand, including outerwear, 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 to follow)
STEVE MADDEN LTD
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CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data) - Unaudited
Three Months Ended
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Consolidated: Mar 31, 2006 Mar 31, 2005
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Net Sales 108,315 83,336
Cost of Sales 62,032 55,984
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Gross Profit 46,283 27,352
Commission and licensing fee income - net 3,762 1,225
Operating Expenses 31,590 27,356
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Income from Operations 18,455 1,221
Interest and other Income, Net 271 438
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Income Before provision for Income Taxes 18,726 1,659
Provision for Income Tax 7,866 697
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Net Income 10,860 962
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Basic income per share 0.78 0.07
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Diluted income per share 0.74 0.07
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Weighted average common shares
outstanding - Basic 13,917 13,235
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Weighted average common shares
outstanding - Diluted 14,612 13,804
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BALANCE SHEET HIGHLIGHTS
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Mar 31, 2006 Dec 31,2005 Mar 31, 2005
Consolidated Consolidated Consolidated
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(Unaudited) (Unaudited)
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Cash and cash equivalents 27,121 52,842 30,186
Investment Securities 51,908 56,249 47,936
Total Current Assets 147,003 140,972 122,968
Total Assets 229,495 211,728 185,634
Total Current Liabilities 36,163 26,906 21,336
Total Stockholder Equity 189,941 182,065 162,180
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