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 fourth quarter and year ended
December 31, 2010.
- Fourth quarter net sales increased
15.4% to $161.0 million.
- Wholesale sales increased 17.7% while
retail sales rose 10.1%, with comparable store sales up 14.1% for
the fourth quarter.
- Operating margin was 17.0% of sales in
the fourth quarter of 2010, compared with operating margin of 15.0%
in the same period of 2009.
- Fourth quarter net income increased
30.0% to $17.6 million, or $0.62 per diluted share, compared to
$13.6 million, or $0.49 per diluted share, in the prior year's
fourth quarter.
Edward Rosenfeld, Chairman and Chief Executive Officer,
commented, "The fourth quarter marked a positive conclusion to an
exciting and impressive year for our Company. Steve and his design
team continued to deliver inspired, trend-right merchandise,
enabling us to record double-digit sales growth in both our
wholesale and retail divisions despite the tough comparisons from a
year ago. The strong sales growth, combined with increased
licensing royalty income and careful management of expenses, led to
a 30% increase in net income for the quarter. As we look ahead, we
will remain focused on maintaining momentum in our core business
while continuing to diversify our business by developing our newer
brands, expanding our international footprint and growing our
accessories and licensing businesses.”
Fourth Quarter 2010 Results
Fourth quarter net sales were $161.0 million compared to $139.5
million reported in the comparable period of 2009. Net sales from
the wholesale business were $115.8 million compared to $98.4
million in the fourth quarter of 2009, with particular strength in
our international business as well as Madden Girl. New businesses,
including Madden, Material Girl and Big Buddha, also contributed to
the growth, as did the transition of two of the Company's mass
merchant customers from a buying agency model to a wholesale model.
Retail net sales grew 10.2% to $45.3 million compared to $41.1
million in the fourth quarter of the prior year despite a smaller
store base. Same store sales for the fourth quarter of 2010
increased 14.1% following a 7.0% increase in last year’s fourth
quarter.
Gross margin was 43.2% in the fourth quarter of 2010, compared
to 44.1% in the same period last year. Gross margin in the
wholesale business was 35.7% as compared to 37.9% in the prior
year's fourth quarter, due primarily to (i) the inclusion of mass
merchant revenue in the net sales line; (ii) an increased mix of
international sales; and (iii) lower margin in the Steven division.
Retail gross margin increased to 62.5% from 58.7% in the comparable
period of the prior year, benefitting from increased full-price
selling and reduced discounting as compared to the fourth quarter
of 2009.
Operating expenses as a percent of sales for the fourth quarter
of 2010 were 29.1% versus 31.8% in the same period of the prior
year, due to leverage on increased sales.
Operating income for the fourth quarter of 2010 increased to
$27.3 million, or 17.0% of sales, compared with operating income of
$21.0 million, or 15.0% of sales, in the same period of 2009.
Net income for the fourth quarter of 2010 increased 30.0% to
$17.6 million, or $0.62 per diluted share, compared to $13.6
million, or $0.49 per diluted share, in the prior year's fourth
quarter.
During the fourth quarter of 2010, the Company opened one
full-price store and one outlet store.
Full Year 2010 Results
For the full year ended December 31, 2010, net sales increased
26.2% to $635.4 million compared to $503.6 million in fiscal
2009.
Net income totaled $75.7 million, or $2.68 per diluted share,
for the year ended December 31, 2010, compared to $50.1 million, or
$1.82 per diluted share, in fiscal 2009.
The Company opened 3 stores and closed 8 underperforming stores
during 2010, ending the year with 84 retail locations, including
the Internet store.
At the end of the year, cash, cash equivalents and marketable
securities totaled $193.8 million.
Arvind Dharia, Chief Financial Officer, commented, "We are
pleased to have ended 2010 with a healthy balance sheet which
provides us with a strong financial foundation to support our
future growth initiatives."
Company Outlook
For the year ending December 31, 2011, the Company expects net
sales to increase 20% - 22%. Excluding the transition of two
businesses – a mass merchant private label business and the
Olsenboye footwear business – from the commission income line to
the net sales line on the income statement, the Company expects net
sales to increase 10% - 12% during the year ending December 31,
2011. Diluted EPS is expected to be in the range of $3.00 to $3.10.
Capital expenditures are planned to be approximately $10 million in
2011 as compared to $3.4 million in 2010. The Company plans to open
6 to 8 stores and to close between 5 and 7 locations in 2011.
Conference Call Information
As previously announced, interested stockholders are invited to
listen to the fourth quarter earnings conference call scheduled for
today, Tuesday, February 22, 2011, 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 877-870-5176, passcode 6951979, and will be
available until March 22, 2011.
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, Betsey Johnson,
Betseyville and Big Buddha, the Company is the licensee of various
brands, including Olsenboye for footwear, handbags and belts,
Elizabeth and James, l.e.i. and GLO for footwear and Daisy Fuentes
for handbags. 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 81 retail stores (including the Company's
online store). 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, cold weather
accessories, eyewear, hosiery, jewelry, fragrance 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 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
CONSOLIDATED STATEMENTS OF OPERATIONS
DATA
(In thousands, except per share amounts)
Quarter Ended Year
Ended
Dec 31, 2010 Dec 31, 2009 Dec
31, 2010 Dec 31, 2009
(Unaudited)
(Unaudited)
(Unaudited)
Net sales $ 161,028 $ 139,511 $ 635,418 $ 503,550 Cost of
sales 91,468 78,048 359,564 287,361 Gross profit 69,560 61,463
275,854 216,189
Commission and licensing fee income,
net
4,629 3,935 22,629 19,928 Operating expenses 46,865 44,420 176,859
157,149 Income from operations 27,324 20,978 121,624 78,968
Interest and other income, net 1,306 569 4,233 1,821 Income before
provision for income taxes 28,630 21,547 125,857 80,789 Provision
for income taxes 11,005 7,992 50,132 30,682 Net income $ 17,625 $
13,555 $ 75,725 $ 50,107 Basic income per share $
0.63 $ 0.50 $ 2.74 $ 1.85 Diluted income per share $ 0.62 $ 0.49 $
2.68 $ 1.82 Weighted average common shares outstanding -
Basic 27,822 27,257 27,651 27,068 Weighted average common shares
outstanding - Diluted 28,468 27,858 28,295 27,485
STEVEN MADDEN,
LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET DATA
(In thousands)
As of
Dec 31, 2010 Dec 31, 2009
(Unaudited)
Cash and cash equivalents $ 66,151 $ 69,266
Marketable securities (current & non
current)
127,606 85,684 Receivables, net 70,948 58,605 Inventories 39,557
30,453 Other Current Assets 20,122 15,074 Property and equipment,
net 20,791 23,793 Goodwill and intangible, net 81,275 31,029 Other
assets 21,246 12,955 Total Assets $ 447,696 $ 326,859
Accounts payable $ 37,089 $ 24,544 Other current liabilities 34,342
27,818 Contingent payment liability 12,372 - Long term liabilities
6,595 6,710 Stockholders' equity 357,298 267,787 Total liabilities
and stockholders' equity $ 447,696 $ 326,859
STEVEN MADDEN,
LTD AND SUBSIDIARIES
CONSOLIDATED CASH FLOW DATA
(In thousands)
Year Ended
Dec 31, 2010 Dec 31,
2009
(Unaudited)
Net cash provided by operating activities $ 86,873 $ 64,342
Investing
Activities
Purchase of property and equipment (3,424 ) (3,399 )
Purchase / sales of marketable securities
(net)
(42,571 ) (49,722 ) Advance payment on contingent liability (1,628
)
-
Purchase of notes receivable (7,004 )
-
Acquisitions, net of cash acquired
(40,602
) (5,776 ) Net cash
used in investing activities (95,229 ) (58,897 )
Net cash provided (used) in financing
activities
5,241 (25,767 ) Net decrease in cash and cash equivalents
(3,115 ) (20,322 ) Cash and cash equivalents at the
beginning of the year 69,266 89,588 Cash and cash
equivalents at the end of the period $ 66,151 $ 69,266
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