UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): May 3, 2005
STEVEN MADDEN, LTD.
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(Exact name of registrant as specified in its charter)
Delaware 0-23702 13-3588231
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
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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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 (see General Instruction A.2. below):
[ ] 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.
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On May 3, 2005, Steven Madden, Ltd. issued a press release announcing its
financial results for the first quarter of 2005. A copy of the press release is
furnished as Exhibit 99.1 to this report and is incorporated herein by
reference.
The information in this report, including the exhibit attached hereto, is being
furnished and shall not be deemed "filed" for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities of that Section. The information in this report shall
not be incorporated by reference into any filing under the Securities Act of
1933, or the Exchange Act, except as otherwise expressly stated in such filing.
Item 9.01(c) Financial Statements and Exhibits.
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99.1 Press Release of Steven Madden, Ltd., dated May 3, 2005,
reporting financial results for the first quarter of
2005.
-2-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STEVEN MADDEN, LTD.
By: /s/ JAMIESON KARSON
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Name: Jamieson Karson
Title: Chairman and Chief Executive
Officer
Date: May 3, 2005
-3-
Exhibit 99.1
Company Contact: Richard Olicker
President & Chief Operating Officer
Steven Madden, Ltd.
(718) 446-1800
Investor Relations: Cara O'Brien/Lila Sharifian
Press: Melissa Merrill
Financial Dynamics
(212) 850-5600
FOR IMMEDIATE RELEASE
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STEVEN MADDEN, LTD. ANNOUNCES FISCAL 2005 FIRST QUARTER RESULTS
~ Total Retail Sales Rise 12% and Same Store Sales Increase 6% ~
~ Company Reaffirms 2005 Outlook ~
~ Company Founder Resumes Position of Creative and Design Chief ~
LONG ISLAND CITY, N.Y. - May 3, 2005 - Steven Madden, Ltd. (NASDAQ:
SHOO), a leading designer, wholesaler and marketer of fashion footwear for
women, men and children, today announced financial results for the first quarter
ended March 31, 2005.
Net sales increased 5.8% to $83.3 million from $78.8 million in the
first quarter of 2004. Gross margin was 34.0% versus 39.7% in the same period
last year. The margin decrease reflects liquidation of obsolete inventory in
both the wholesale and retail operations, increased promotional activity at
retail, and a demanding markdown environment at wholesale that had a
particularly significant impact on the Candie's and l.e.i. divisions. Operating
expenses were $29.0 million compared to $26.1 million in the year-ago period.
This increase is primarily due to higher professional costs associated mainly
with Sarbanes Oxley compliance as well as increased salaries and occupancy
expenses related to an expanding store base. Net income was $1.0 million, or
$0.07 per diluted share, compared to $4.1 million, or $0.29 per diluted share,
in the first quarter of last year.
Revenues from the wholesale business, comprised of the Company's seven
brands, Steve Madden Womens, Steve Madden Mens, Stevies, l.e.i., Steven,
UNIONBAY, and Candie's, increased 3.3% to $56.9 million from $55.1 million in
the comparable period of 2004, reflecting strong sales in Steve Madden Womens
and Steve Madden Mens as well as growth in Candie's and UNIONBAY.
Retail revenues for the quarter increased 11.7% to $26.5 million from
$23.7 million in last year's first quarter. Same store sales increased 5.5% on
top of an increase of 8.0% in the prior year period due to the early release and
strong reception to select sandals, the continued strength of dress shoes, and a
significantly greater contribution from sales of Steve Madden Mens in our retail
locations. During the quarter, the Company opened three Steve Madden stores and
closed two underperforming Shoe Biz outlet stores to increase the Company's
total number of stores to 92, including the Internet store, versus 83 locations
in the same period last year.
Richard Olicker, President and Chief Operating Officer, stated, "During
the quarter, we diligently worked to make progress in key areas of our
operations. As expected at the end of fiscal 2004, we experienced continued
gross margin pressure and higher operating expenses related to professional fees
and costs to support the growing business. Despite these challenges, we posted
increases in same store sales and total sales, led by a 68% increase in Steve
Madden Mens sales and growth in Steve Madden Womens, Candie's and UNIONBAY. We
also continued our strategy to exit select doors within our l.e.i. and Stevies
divisions, which will improve the long term profitability of our wholesale
business. In addition, we further strengthened our retail business by expanding
our store base and closing underperforming locations. We intend to continue to
improve these areas of our business while better managing both inventory and our
cost structure to mitigate pressures on our bottom line."
Page 2 - Steven Madden, Ltd. Announces First Quarter Results
"We have maintained the excellent condition of our balance sheet, and
with $78.1 million in cash, cash equivalents, and investment securities, no
debt, and total stockholders' equity of $162.2 million, we are well positioned
as we move forward," added Arvind Dharia, Chief Financial Officer.
The Company also announced the official return of Steve Madden to the
Company. Mr. Madden, who founded the Company in 1990, has resumed the role of
Creative and Design Chief and will be responsible for creative and design
functions of the Company.
Company Outlook
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Based on current business and economic conditions, the Company
anticipates that 2005 net sales will be flat to slightly higher than sales in
2004. The Company also reiterates its expectation of diluted earnings per share
in the range of $0.65 to $0.68.
Jamieson Karson, Chairman and Chief Executive Officer, said, "Given the
fact that we experienced pockets of strength in our business despite challenging
conditions, we are pleased with our overall first quarter performance. We
continued to drive a turnaround in certain wholesale divisions, re-evaluated
certain wholesale doors and Company-owned stores to focus on the most profitable
locations, and expanded our retail operations in line with the intent to open 12
to 15 stores this year. In addition, we delivered positive bottom line results,
which keeps us on target to achieve our previously announced expectations for
the year. Finally, as part of our plan to productively use cash, we repurchased
309,000 shares for an aggregate of $5.5 million. All of these initiatives will
help us to not only meet our objectives for fiscal 2005 but also make strides
towards long term growth and profitability and enhanced shareholder value."
"Additionally, Steve's return is a very significant event in our
Company's continued evolution. His creative energy inspires all of our Company's
employees and his exceptional vision and talent are highly regarded throughout
the fashion industry. We are thrilled to be able to once again leverage his
creative and design expertise and look forward to working together with him to
sustain and further enhance our position as one of the indisputable leaders in
the footwear market," Mr. Karson concluded.
Conference Call
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Interested shareholders are invited to listen to the first quarter
earnings conference call scheduled for today, Tuesday, May 3, 2005, 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 17, 2005. Additionally, a replay of the call can be
accessed by dialing (877) 519-4471, passcode 5994495, and will be available
until May 5, 2005.
Steven Madden, Ltd. designs and markets fashion-forward footwear for women, men
and children. The shoes are sold through Steve Madden 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 and
Stevies brands, including eyewear, hosiery, and belts, owns and operates one
retail store under its Steven brand, and is 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 3 - Steven Madden, Ltd. Announces First Quarter Results
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Three Months Ended
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Mar 31, Mar 31,
2005 2004
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Net Sales 83,336 78,768
Cost of Sales 55,018 47,496
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Gross Profit 28,318 31,272
Commission and licensing fee income 1,947 1,416
Operating Expenses 29,044 26,108
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Income from Operations 1,221 6,580
Interest and other Income, Net 438 534
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Income Before provision for Income Taxes 1,659 7,114
Provision for Income Tax 697 2,988
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Net Income 962 4,126
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Basic income per share 0.07 0.31
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Diluted income per share 0.07 0.29
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Weighted average common shares
outstanding - Basic 13,235 13,254
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Weighted average common shares
outstanding - Diluted 13,804 14,374
-more-
Page 4 - Steven Madden, Ltd. Announces First Quarter Results
BALANCE SHEET HIGHLIGHTS
BALANCE SHEET HIGHLIGHTS
(in thousands)
Mar 31, 2005 Dec 31,2004 Mar 31, 2004
Consolidated Consolidated Consolidated
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(Unaudited) (Unaudited)
Cash and cash equivalents 30,186 30,853 22,302
Investment Securities 47,936 49,124 50,296
Total Current Assets 122,968 121,094 111,339
Total Assets 185,634 186,430 181,013
Total Current Liabilities 21,336 19,677 15,143
Total Stockholder Equity 162,180 164,665 163,953
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