UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section
13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
October 30, 2014
(Date of earliest event reported)
STEVEN
MADDEN, LTD.
(Exact Name of Registrant as Specified in Charter)
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Delaware |
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000-23702 |
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13-3588231 |
(State or Other Jurisdiction
of Incorporation) |
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(Commission File Number) |
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(IRS Employer
Identification No.) |
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
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:
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Written communications pursuant to Rule
425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02. |
Results of Operations and Financial
Condition. |
On October 30, 2014,
Steven Madden, Ltd. (the “Company”) issued a press release, furnished as Exhibit 99.1 and incorporated in this Item
2.02 by reference, announcing the Company’s financial results for the quarter ended September 30, 2014.
The information contained
in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished, and shall not be deemed filed for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18. Furthermore,
the information contained in this Current Report on Form 8-K, including Exhibit 99.1, shall not be incorporated by reference into
any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein
as being incorporated therein by reference. The furnishing of the information in this Report is not intended to, and does not,
constitute a determination or admission by the Company that the information in this Report is material or complete, or that investors
should consider this information before making an investment decision with respect to any security of the Company.
Item 9.01. |
Financial Statements and
Exhibits. |
Exhibit |
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Description |
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99.1 |
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Press Release, dated October 30, 2014,
issued by Steven Madden, Ltd. |
SIGNATURES
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.
Dated: October 30, 2014
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STEVEN MADDEN, LTD. |
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By: |
/s/ Edward
R. Rosenfeld |
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Edward R. Rosenfeld |
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Chief Executive Officer |
Exhibit 99.1
Steve Madden
Announces Third Quarter 2014 Results
LONG
ISLAND CITY, N.Y., October 30, 2014 – Steve Madden (Nasdaq: SHOO), a leading designer and marketer of fashion footwear and
accessories for women, men and children, today announced financial results for the third quarter ended September 30, 2014.
For
the Third Quarter 2014:
| · | Net
sales were $392.0 million compared to $394.8 million in the same period of 2013. |
| · | Gross
margin was 34.7% as compared to 35.4% in the same period last year. |
| · | Operating
expenses as a percentage of sales were 20.9% compared to 19.4% of sales in the same period
of 2013. |
| · | Operating
income totaled $59.3 million, or 15.1% of net sales, compared with operating income of
$68.1 million, or 17.2% of net sales, in the same period of 2013. |
| · | Net
income was $39.2 million, or $0.62 per diluted share, compared to $44.0 million, or $0.66
per diluted share in the prior year’s third quarter. |
Edward
Rosenfeld, Chairman and Chief Executive Officer, commented, “As previously reported, business during the third quarter was
softer than we anticipated, particularly in our retail segment, as we continue to be impacted by a lack of significant fashion
footwear trends on which to capitalize. While near-term business trends are challenging, we are excited about the steps we took
in the quarter to position the Company for long-term growth. In August, we added a powerful contemporary footwear brand to our
portfolio with the acquisition of Dolce Vita, and in September, we signed a definitive agreement to acquire our Mexican licensee,
an important move in our continued international expansion.”
Third
Quarter 2014 Segment Results
Net
sales from the wholesale business were $343.3 million in the third quarter compared to $345.9 million in the third quarter of
2013. Excluding the results of Dolce Vita, wholesale net sales decreased 4.9% compared to the prior year period. Gross margin
in the wholesale business decreased to 31.3% compared to 31.9% in last year’s third quarter, due to the impact from Dolce
Vita as well as increased markdown allowances.
Retail
net sales were $48.7 million compared to $48.9 million in the third quarter of the prior year. The decrease in net sales was due
to a same store sales decrease of 7.4%, offset by an increase in net sales resulting from the net opening of 11 new stores since
the end of the third quarter last year. Increased promotional activity resulted in retail gross margin of 58.9% in the third quarter
of 2014 compared to 60.2% in the third quarter of 2013.
During
the third quarter, the Company opened four outlet stores and acquired the Dolce Vita Internet store. The Company also acquired,
through a 50.1% interest in its South African joint venture, four Steve Madden stores in South Africa. Including the stores in
South Africa, the Company ended the quarter with 133 company-operated retail locations, including 28 outlets and four Internet
stores.
The
effective tax rate for the quarter of 35.0% compares to 36.5% in the third quarter of the prior year.
Balance Sheet
and Cash Flow
During
the quarter, the Company repurchased approximately 1.1 million shares of the Company’s common stock for $36.1 million.
As of
September 30, 2014, cash, cash equivalents, and current and non-current marketable securities totaled $189.5 million.
Company
Outlook
As previously
announced, factoring in the recent acquisition of Dolce Vita and current expectations for the remainder of the year, for fiscal
year 2014, the Company expects that net sales will increase 1% to 2% over net sales in 2013. Diluted EPS for fiscal year 2014
is expected to be in the range of $1.81 to $1.86.
Conference
Call Information
As previously
announced, interested stockholders are invited to listen to the third quarter earnings conference call scheduled for today, Thursday,
October 30, 2014, at 8:30 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 for a period of 30 days following the call. Additionally, a replay of the call can be accessed by
dialing 1-877-870-5176 (U.S.) and 1-858-384-5517 (international), passcode 1215219, and will be available until November 30, 2014.
About
Steve Madden
Steve Madden
designs, sources and markets fashion-forward footwear and accessories for women, men and children. In addition to marketing products
under its owned brands including Steve Madden®, Steven by Steve Madden®, Madden Girl®, Freebird by Steven®, Stevies®,
Betsey Johnson®, Dolce Vita®, DV by Dolce Vita®, Brian Atwood®, B Brian Atwood®, Report Signature®, Report®,
Big Buddha®, Wild Pair®, Cejon® and Mad Love®, the Company is the licensee of various brands, including Olsenboye®
for footwear, handbags and belts and Superga® and l.e.i.® for footwear. The Company also designs and sources products
under private label brand names for various retailers. The Company’s wholesale distribution includes department stores, specialty
stores, luxury retailers, national chains and mass merchants. The Company also operates 133 retail stores (including the Company’s
four Internet stores). The Company licenses certain of its brands to third parties for the marketing and sale of certain products,
including for ready-to-wear, outerwear, intimate apparel, eyewear, hosiery, jewelry, fragrance, luggage and bedding and bath products.
Safe Harbor
This press release
and oral statements made from time to time by representatives of the Company contain certain “forward looking statements”
as that term is defined in the federal securities laws. The events described in forward looking statements may not occur. Generally
these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of the Company’s
plans or strategies, projected or anticipated benefits from acquisitions to be made by the Company, or projections involving anticipated
revenues, earnings or other aspects of the Company’s operating results. The words “may,” “will,” “expect,”
“believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,”
and “continue,” and their opposites and similar expressions are intended to identify forward looking statements. The
Company cautions you that these statements concern current expectations about the Company’s future results and condition
and are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences,
many of which are beyond the Company’s control, that may influence the accuracy of the statements and the projections upon which
the statements are based. Factors which may affect the Company’s results include, but are not limited to, the risks and uncertainties
discussed in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with
the Securities and Exchange Commission. Any one or more of these uncertainties, risks and other influences could materially affect
the Company’s results of operations and financial condition and whether forward looking statements made by the Company ultimately
prove to be accurate and, as such, the Company’s actual results, performance and achievements could differ materially from those
expressed or implied in these forward looking statements. The Company undertakes no obligation to publicly update or revise any
forward looking statements, whether as a result of new information, future events or otherwise.
STEVEN MADDEN,
LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS DATA
(In thousands,
except per share amounts)
(Unaudited)
| |
Three Months Ended | | |
Nine Months Ended | |
| |
September 30, 2014 | | |
September 30, 2013 | | |
September 30, 2014 | | |
September 30, 2013 | |
| |
| | |
| | |
| | |
| |
Net sales | |
$ | 391,992 | | |
$ | 394,791 | | |
$ | 992,331 | | |
$ | 971,341 | |
Cost of sales | |
| 255,895 | | |
| 255,088 | | |
| 640,826 | | |
| 618,463 | |
Gross profit | |
| 136,097 | | |
| 139,703 | | |
| 351,505 | | |
| 352,878 | |
Commission and licensing fee income, net | |
| 5,103 | | |
| 4,937 | | |
| 11,461 | | |
| 13,002 | |
Operating expenses | |
| 81,867 | | |
| 76,543 | | |
| 227,328 | | |
| 215,734 | |
Income from operations | |
| 59,333 | | |
| 68,097 | | |
| 135,638 | | |
| 150,146 | |
Interest and other income, net | |
| 1,132 | | |
| 1,308 | | |
| 3,218 | | |
| 3,213 | |
Income before provision for income taxes | |
| 60,465 | | |
| 69,405 | | |
| 138,856 | | |
| 153,359 | |
Provision for income taxes | |
| 21,163 | | |
| 25,323 | | |
| 47,385 | | |
| 56,242 | |
Net income | |
| 39,302 | | |
| 44,082 | | |
| 91,471 | | |
| 97,117 | |
Net income (loss) attributable to noncontrolling interest | |
| 54 | | |
| 90 | | |
| 584 | | |
| 769 | |
Net income attributable to Steven Madden, Ltd. | |
$ | 39,248 | | |
$ | 43,992 | | |
$ | 90,887 | | |
$ | 96,348 | |
| |
| | | |
| | | |
| | | |
| | |
Basic income per share | |
$ | 0.64 | | |
$ | 0.68 | | |
$ | 1.47 | | |
$ | 1.48 | |
Diluted income per share | |
$ | 0.62 | | |
$ | 0.66 | | |
$ | 1.42 | | |
$ | 1.44 | |
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| | | |
| | | |
| | | |
| | |
Basic weighted average common shares outstanding | |
| 61,019 | | |
| 64,450 | | |
| 61,936 | | |
| 64,926 | |
Diluted weighted average common shares outstanding | |
| 63,215 | | |
| 66,860 | | |
| 64,184 | | |
| 67,062 | |
STEVEN
MADDEN, LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(In thousands)
| |
As of | |
| |
September 30, 2014 | | |
December 31, 2013 | | |
September 30, 2013 | |
| |
(Unaudited) | | |
| | |
(Unaudited) | |
Cash and cash equivalents | |
$ | 169,911 | | |
$ | 180,275 | | |
$ | 122,426 | |
Marketable securities (current & non current) | |
| 19,562 | | |
| 111,858 | | |
| 112,279 | |
Accounts receivables, net | |
| 260,433 | | |
| 185,423 | | |
| 249,706 | |
Inventories | |
| 103,151 | | |
| 73,696 | | |
| 99,668 | |
Other current assets | |
| 31,051 | | |
| 36,660 | | |
| 31,981 | |
Property and equipment, net | |
| 63,092 | | |
| 56,606 | | |
| 54,197 | |
Goodwill and intangibles, net | |
| 274,848 | | |
| 225,695 | | |
| 228,337 | |
Other assets | |
| 12,484 | | |
| 10,028 | | |
| 8,547 | |
Total assets | |
$ | 934,532 | | |
$ | 880,241 | | |
$ | 907,141 | |
| |
| | | |
| | | |
| | |
Accounts payable | |
$ | 118,817 | | |
$ | 99,126 | | |
$ | 127,800 | |
Contingent payment liability (current & non current) | |
| 29,558 | | |
| 34,795 | | |
| 39,699 | |
Other current liabilities | |
| 73,724 | | |
| 44,682 | | |
| 55,056 | |
Other long term liabilities | |
| 26,754 | | |
| 22,798 | | |
| 12,031 | |
Total Steven Madden, Ltd. stockholders’ equity | |
| 685,390 | | |
| 678,517 | | |
| 672,434 | |
Noncontrolling interest | |
| 289 | | |
| 323 | | |
| 121 | |
Total liabilities and stockholders’ equity | |
$ | 934,532 | | |
$ | 880,241 | | |
$ | 907,141 | |
STEVEN
MADDEN, LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED CASH FLOW DATA
(In thousands)
(Unaudited)
| |
Nine Months Ended | |
| |
September 30, 2014 | | |
September 30, 2013 | |
| |
| | |
| |
Net cash provided by operating activities | |
$ | 75,699 | | |
$ | 58,089 | |
| |
| | | |
| | |
Investing Activities | |
| | | |
| | |
Purchases of property and equipment | |
| (12,605 | ) | |
| (16,366 | ) |
Purchases / sales of marketable securities, net | |
| 94,873 | | |
| (20,402 | ) |
Acquisition, net of cash acquired | |
| (62,676 | ) | |
| — | |
Net cash provided by/(used in) investing activities | |
| 19,592 | | |
| (36,768 | ) |
| |
| | | |
| | |
Financing Activities | |
| | | |
| | |
Common stock share repurchases for treasury | |
| (101,751 | ) | |
| (69,465 | ) |
Payment of contingent liability | |
| (8,475 | ) | |
| (7,420 | ) |
Proceeds from exercise of stock options | |
| 2,940 | | |
| 4,935 | |
Tax benefit from the exercise of stock options | |
| 1,631 | | |
| 4,278 | |
Net cash used by financing activities | |
| (105,655 | ) | |
| (67,672 | ) |
| |
| | | |
| | |
Net decrease in cash and cash equivalents | |
| (10,364 | ) | |
| (46,351 | ) |
| |
| | | |
| | |
Cash and cash equivalents - beginning of period | |
| 180,275 | | |
| 168,777 | |
| |
| | | |
| | |
Cash and cash equivalents - end of period | |
$ | 169,911 | | |
$ | 122,426 | |
Contact
ICR, Inc.
Investor Relations
Jean Fontana/Megan Crudele
203-682-8200
www.icrinc.com
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