SHOO Steven Madden Ltd

- First Quarter Net Income $2.1 Million, or $0.10 Per Diluted Share, Including One-Time Charge of $3.0 Million, or $0.15 Per Diluted Share - LONG ISLAND CITY, N.Y., May 1 /PRNewswire-FirstCall/ -- 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 first quarter ended March 31, 2008. First quarter net sales were $100.5 million compared to $106.7 million in the first quarter of 2007. Gross margin increased to 40.0% compared to 39.6% in the first quarter of the prior year due to a margin increase in the wholesale division, partially offset by a margin decline in the retail division. Operating expenses as a percent of sales were 40.5% versus 30.0% in the same period of 2007, due largely to a one-time pre-tax charge of $4.9 million resulting from the resignation of the Company's former Chief Executive Officer as well as reduced leverage on lower sales versus the prior year period. Operating income including the aforementioned one-time charge was $2.8 million, or 2.8% of sales, compared with operating income of $15.7 million, or 14.7% of sales, in the first quarter of 2007. Net income was $2.1 million, or $0.10 per diluted share, compared to $9.5 million, or $0.43 per diluted share, in the prior year's first quarter. Net income includes a one-time after-tax charge of $3.0 million, or $0.15 per diluted share, resulting from the aforementioned resignation of the Company's former Chief Executive Officer. Excluding the one-time charge, first quarter 2008 adjusted net income was $5.1 million, or $0.25 per diluted share. Revenues from the wholesale business were $75.6 million compared to $82.3 million in the first quarter of 2007 due primarily to revenue declines in Candie's and Stevies. Gross margin in the wholesale business increased to 37.4% from 36.2% in last year's first quarter, primarily as a result of margin improvement in the Daniel M. Friedman division. Retail revenues increased 2.6% to $25.0 million compared to $24.4 million in the first quarter of the prior year, due to sales from new stores. Same store sales decreased 3.7%. Retail gross margin decreased to 47.8% from 50.9% in the comparable period of the prior year, due to increased promotional activity. During the first quarter of 2008, the Company opened one new Steve Madden retail store and closed two Steve Madden stores. "While our results in the first quarter continued to reflect an overall challenging macroeconomic environment, we experienced an improvement in certain areas of our business compared to the latter half of 2007," stated Edward Rosenfeld, Interim Chief Executive Officer. "We were pleased with the sales increases we were able to achieve in Madden Girl, Steven and our newest line, Steve Madden's Fix. Further, we improved our wholesale gross margin as a result of strong branded product performance in our Daniel M. Friedman accessories division. Given the weak consumer spending trends, we were pleased with the sell-through of our merchandise. Overall, we have continued to focus on strengthening the business and our brands, and we believe the Company is well positioned in the current environment." Arvind Dharia, Chief Financial Officer, commented, "We ended the quarter with $55.8 million in cash, cash equivalents, and marketable securities, no debt, and total stockholders' equity of $175.2 million. We were pleased to have completed a Dutch Auction share repurchase at the end of the quarter which allowed us to return $44.2 million to our shareholders. Moreover, we were able to complete this share repurchase while also maintaining our very strong financial position during a difficult macroeconomic environment. We continue to position our business for future growth and remain confident in the long-term potential of the Company." Company Outlook Based on trends to date this year and current visibility, the Company is maintaining its guidance for the full fiscal year. The Company continues to expect 2008 net sales will be flat to an increase of 2% compared to fiscal 2007 and earnings per diluted share will range between $1.55 and $1.65, excluding the impact of the one-time charge recognized in first quarter. Including the impact of the one-time charge, earnings per diluted share are expected to range between $1.39 and $1.49. All earnings per share estimates reflect the benefit from the Company's recently completed share repurchase through a Dutch Auction tender offer. Mr. Rosenfeld concluded, "We have been encouraged by the more positive consumer response to our merchandise that we have begun to see this year as well as the current strength of our brands in the market. Given the persisting weak consumer trends, we plan to maintain a conservative approach to managing our business. However, we are seeing some initial improvement in footwear trends that we believe may benefit us as we move into the latter half of 2008. Overall, we continue to be confident in the strength of our diversified business model and the Company's ability to generate long-term growth." Conference Call Information Interested shareholders are invited to listen to the first quarter earnings conference call scheduled for today, Thursday, May 1, 2008, at 10 a.m. Eastern Time. The call will be broadcast live over the Internet and can be accessed by logging on to 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 15, 2008. Additionally, a replay of the call can be accessed by dialing 800-642-1687, passcode 45688067, and will be available until May 8, 2008. 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 online at http://www.stevemadden.com/. The Company has several licensees for its brands, including for outerwear, cold weather accessories, eyewear, and hosiery and owns and operates 100 retail stores, including its online store. Through its wholly-owned subsidiary, Daniel M. Friedman & Associates, the Company is the licensee for Betsey Johnson handbags and belts and Tracy Reese handbags and belts. 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 CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data) - Unaudited Three Months Ended Consolidated: Mar 31, 2008 Mar 31, 2007 Net Sales 100,539 106,654 Cost of Sales 60,324 64,460 Gross Profit 40,215 42,194 Commission and licensing fee income - net 3,356 5,446 Operating Expenses 40,734 31,971 Income from Operations 2,837 15,669 Interest and other Income, Net 526 910 Income Before provision for Income Taxes 3,363 16,579 Provision for Income Tax 1,311 7,046 Net Income 2,052 9,533 Basic income per share 0.10 0.45 Diluted income per share 0.10 0.43 Weighted average common shares outstanding - Basic 20,045 20,960 Weighted average common shares outstanding - Diluted 20,264 21,963 BALANCE SHEET HIGHLIGHTS Mar 31, 2008 Dec 31, 2007 Mar 31, 2007 Consolidated Consolidated Consolidated (Unaudited) (Unaudited) Cash and cash equivalents 22,951 $29,446 11,467 Investment Securities 32,890 80,411 78,582 Total Current Assets 137,433 168,855 173,198 Total Assets 226,081 266,521 234,654 Total Current Liabilities 46,385 47,717 29,788 Total Stockholder Equity 175,247 215,334 201,633 DATASOURCE: Steven Madden, Ltd. CONTACT: Investors, Cara O'Brien, or, Leigh Parrish, Media, Diane Zappas, all of FD, +1-212-850-5600 Web site: http://www.stevemadden.com/

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