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 full year
ended December 31, 2018, and provided initial fiscal year 2019
sales and EPS guidance.
Amounts referred to as “Adjusted”
exclude the items that are described under the heading “Non-GAAP
Adjustments.”
For the Fourth Quarter 2018:
- Net sales increased 12.6% to $410.4
million compared to $364.4 million in the same period of 2017.
- Gross margin was 37.1%. Gross
margin in the fourth quarter of 2017 was 38.4%. Adjusted
gross margin in the fourth quarter of 2017 was 38.1%.
- Operating expenses as a percentage
of net sales were 29.7% compared to 30.3% of net sales, in the same
period of 2017. Adjusted operating expenses as a percentage
of net sales were 28.6% compared to 29.0% of net sales, in the same
period of 2017.
- Income from operations totaled
$25.0 million, or 6.1% of net sales, compared to $31.7 million, or
8.7% of net sales, in the same period of 2017. Adjusted
income from operations was $37.9 million, or 9.2% of net sales,
compared to Adjusted income from operations of $36.3 million, or
10.0% of net sales, in the same period of 2017.
- Net income attributable to Steven
Madden, Ltd. was $12.5 million, or $0.15 per diluted share,
compared to $24.6 million, or $0.28 per diluted share, in the prior
year's fourth quarter. Adjusted net income attributable to
Steven Madden, Ltd. was $35.7 million, or $0.42 per diluted share,
compared to $27.5 million, or $0.32 per diluted share, in the prior
year's fourth quarter.
Edward Rosenfeld, Chairman and Chief Executive
Officer, commented, “We are pleased to have delivered a strong
fourth quarter, with net sales growing 13% and Adjusted diluted EPS
increasing 31% compared to the prior year period. The
trend-right product assortments created by Steve and his design
team drove robust gains in our flagship Steve Madden brand in both
footwear and handbags. We also saw outstanding growth in
Blondo and in our private label accessories business. As we
look ahead, we are encouraged by the strong momentum in our core
business and the progress we are making on our key strategic
initiatives. While we face a near-term headwind due to the
bankruptcy of Payless ShoeSource, a significant private label
customer for the Company, we are confident that our diversified
business model positions us for long-term growth and value creation
going forward.”
Fourth Quarter 2018 Segment
Results
Net sales for the wholesale business increased
14.1% to $317.4 million in the fourth quarter of 2018, driven by
strong growth in both wholesale footwear and wholesale accessories.
Gross margin in the wholesale business decreased to 30.1%
compared to 31.0% in last year’s fourth quarter due to a decline in
wholesale accessories driven by sales mix, as well as the impact of
the 10% tariff on handbags and certain other accessory categories
implemented on September 24, 2018 and increased ocean freight
costs.
Retail net sales in the fourth quarter rose 7.9%
to $93.0 million compared to $86.2 million in the fourth quarter of
the prior year. Same store sales increased 4.0% in the
quarter driven by strong performance in the Company’s e-commerce
business. Retail gross margin rose to 61.0% in the fourth
quarter of 2018, up 20 basis points compared to 60.8% in the fourth
quarter of the prior year due to improved gross margin in the
Company’s e-commerce business.
The Company ended the quarter with 229
company-operated retail locations, including seven Internet stores,
as well as 42 company-operated concessions in international
markets.
The Company’s effective tax rate for the fourth
quarter of 2018 was 52.7% compared to 23.2% in the fourth quarter
of 2017 driven by $11.1 million in tax expense resulting from the
Tax Cuts and Jobs Act transition tax and prepaid tax adjustments
related to prior years. On an Adjusted basis, the effective
tax rate was 9.2% compared to 24.9% in the fourth quarter of the
prior year due primarily to the impact of the Tax Cuts and Jobs
Act.
Full Year Ended December 31,
2018
For the full year ended December 31, 2018, net
sales increased 7.0% to $1.65 billion from $1.55 billion in the
prior year.
Net income was $129.1 million, or $1.50 per
diluted share, for the year ended December 31, 2018 compared to net
income of $117.9 million, or $1.36 per diluted share, for the year
ended December 31, 2017. On an Adjusted basis, net income was
$157.7 million, or $1.83 per diluted share, for the year ended
December 31, 2018 compared to net income of $129.3 million, or
$1.49 per diluted share, for the year ended December 31, 2017.
Balance Sheet and Cash Flow
During the fourth quarter of 2018, the Company
repurchased 1.8 million shares of the Company’s common stock for
approximately $55.0 million, which includes shares acquired through
the net settlement of employee stock awards. For the full
year ended December 31, 2018, the Company repurchased 3.4 million
shares of the Company’s common stock for approximately $105.9
million, which includes shares acquired through the net settlement
of employee stock awards.
As of December 31, 2018, cash, cash equivalents,
and current marketable securities totaled $267.0 million.
Quarterly Dividend
The Company’s Board of Directors approved a
quarterly cash dividend of $0.14 per share. The dividend will
be paid on March 29, 2019, to stockholders of record at the close
of business on March 19, 2019.
Fiscal Year 2019 Outlook
For fiscal year 2019, the Company expects net
sales will increase 4% to 6% over net sales in 2018. The
Company expects diluted EPS for fiscal year 2019 will be in the
range of $1.70 to $1.78. The Company expects Adjusted diluted
EPS for fiscal year 2019 will be in the range of $1.75 to $1.83.
Compared to the prior year, the Adjusted diluted EPS range reflects
an adverse impact of approximately $0.16 from the Payless
ShoeSource bankruptcy as well as an adverse impact of approximately
$0.05 from a higher forecasted tax rate.
Non-GAAP Adjustments
Amounts referred to as “Adjusted” exclude the
items below.
For the fourth quarter 2018:
- $8.5 million pre-tax ($7.9 million
after-tax) in bad debt expense and write-off of an unamortized
buying agency agreement support payment associated with the Payless
ShoeSource bankruptcy, included in licensing and commission income,
net and $3.6 million pre-tax ($3.6 million after-tax) in bad debt
expense associated with the Payless ShoeSource bankruptcy, included
in operating expenses.
- $0.5 million pre-tax ($0.3 million
after-tax) expense in connection with a provision for early lease
termination charges, included in operating expenses.
- $0.3 million pre-tax ($0.2 million
after-tax) expense in connection with the integration of the
Schwartz & Benjamin acquisition and the related restructuring,
included in operating expenses.
- $11.1 million tax expense resulting
from the Tax Cuts and Jobs Act transition tax and prepaid tax
adjustments related to prior years.
For the fourth quarter 2017:
- $1.1 million pre-tax ($0.7 million
after-tax) non-cash benefit associated with the purchase accounting
fair value adjustment of inventory acquired in the Schwartz &
Benjamin acquisition, included in cost of sales.
- $11.8 million pre-tax ($7.5 million
after-tax) expense in connection with a provision for legal and
early lease termination charges, included in operating
expenses.
- $10.2 million pre-tax ($6.4 million
after-tax) benefit in connection with a post-closing amendment to
the equity purchase agreement relating to the Schwartz &
Benjamin acquisition, included in operating expenses.
- $2.4 million pre-tax ($1.5 million
after-tax) expense in connection with the integration of the
Schwartz & Benjamin acquisition and the related restructuring,
included in operating expenses.
- $2.7 million pre-tax ($1.7 million
after-tax) non-cash expense associated with the impairment of the
preferred interest investment in Brian Atwood Italia Holding LLC,
included in operating expenses.
- $2.0 million pre-tax ($1.7 million
after-tax) benefit related to an adjustment to estimated bad debt
expense associated with the Payless ShoeSource bankruptcy, included
in operating expenses.
- $1.0 million pre-tax ($0.6 million
after-tax) non-cash expense associated with the impairment of the
Wild Pair trademark.
- $0.5 million tax expense resulting
from the Tax Cuts and Jobs Act transition tax and taxing
authorities audit adjustments.
For the fiscal year 2018:
- $8.5 million pre-tax ($7.9 million
after-tax) in bad debt expense and write-off of an unamortized
buying agency agreement support payment associated with the Payless
ShoeSource bankruptcy, included in licensing and commission income,
net and $3.6 million pre-tax ($3.6 million after-tax) in bad debt
expense associated with the Payless ShoeSource bankruptcy, included
in operating expenses.
- $3.3 million pre-tax ($2.5 million
after-tax) expense in connection with a provision for legal charges
and early lease termination charges, included in operating
expenses.
- $2.1 million pre-tax ($1.5 million
after-tax) expense in connection with the integration of the
Schwartz & Benjamin acquisition and the related restructuring,
included in operating expenses.
- $1.2 million pre-tax ($0.9 million
after-tax) expense in connection with a warehouse consolidation,
included in operating expenses.
- $1.0 million tax expense in
connection with the impairment of the preferred interest investment
in Brian Atwood Italia Holding, LLC recorded in fourth quarter
2017.
- $11.1 million tax expense resulting
from the Tax Cuts and Jobs Act transition tax and prepaid tax
adjustments related to prior years.
For the fiscal year 2017:
- $0.6 million pre-tax ($0.4 million
after-tax) non-cash expense associated with the purchase accounting
fair value adjustment of inventory acquired in the Schwartz &
Benjamin acquisition, included in cost of sales.
- $11.8 million pre-tax ($7.5 million
after-tax) expense in connection with a provision for legal and
early lease termination charges, included in operating
expenses.
- $10.2 million pre-tax ($6.4 million
after-tax) benefit in connection with a post-closing amendment to
the equity purchase agreement relating to the Schwartz &
Benjamin acquisition, included in operating expenses.
- $3.6 million pre-tax ($2.3 million
after-tax) expense in connection with the integration of the
Schwartz & Benjamin acquisition and the related restructuring,
included in operating expenses.
- $2.7 million pre-tax ($1.7 million
after-tax) non-cash expense associated with the impairment of the
preferred interest investment in Brian Atwood Italia Holding LLC,
included in operating expenses.
- $5.5 million pre-tax ($4.8 million
after-tax) bad debt expense associated with the Payless ShoeSource
bankruptcy, included in operating expenses.
- $1.0 million pre-tax ($0.6 million
after-tax) non-cash expense associated with the impairment of the
Wild Pair trademark.
- $0.5 million tax expense resulting
from the Tax Cuts and Jobs Act transition tax and taxing
authorities audit adjustments.
For the fiscal year 2019:
- $2.1 million pre-tax ($1.9 million
after-tax) in estimated bad debt expense associated with the
Payless ShoeSource bankruptcy.
- $2.0 million pre-tax ($1.5 million
after-tax) in expense expected to be incurred in connection with
early lease termination charges.
- $0.6 million pre-tax ($0.4 million
after-tax) in expense expected to be incurred in connection with an
office consolidation.
Reconciliations of amounts on a GAAP basis to
Adjusted amounts are presented in the Non-GAAP Reconciliation
tables at the end of this release and identify and quantify all
excluded items.
Conference Call Information
Interested stockholders are invited to listen to
the fourth quarter earnings conference call scheduled for today,
February 27, 2019, 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.gcs-web.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.
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 own
brands including Steve Madden®, Dolce Vita®, Betsey Johnson®,
Blondo®, Report®, Brian Atwood®, Cejon®, Mad Love® and Big Buddha®,
Steve Madden is a licensee of various brands, including Kate
Spade®, Superga®, Anne Klein® and DKNY®. Steve Madden also designs
and sources products under private label brand names for various
retailers. Steve Madden's wholesale distribution includes
department stores, specialty stores, luxury retailers, national
chains and mass merchants. Steve Madden also operates 229 retail
stores (including Steve Madden's seven Internet stores).
Steve Madden licenses certain of its brands to third parties
for the marketing and sale of certain products, including
ready-to-wear, outerwear, eyewear, hosiery, jewelry, fragrance,
luggage and bedding and bath products. For local store
information and the latest Steve Madden booties, pumps, men’s and
women’s boots, fashion sneakers, dress shoes, sandals and more,
visit http://www.stevemadden.com.
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.
|
|
|
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|
|
|
|
|
|
|
|
STEVEN MADDEN, LTD. AND
SUBSIDIARIES |
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS DATA |
|
|
|
|
|
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
|
December 31, 2018 |
|
December 31, 2017 |
|
December 31, 2018 |
|
December 31, 2017 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
410,360 |
|
|
$ |
364,370 |
|
$ |
1,653,609 |
|
$ |
1,546,098 |
|
|
|
Cost of
sales |
|
258,046 |
|
|
|
224,634 |
|
|
1,037,571 |
|
|
968,357 |
|
|
|
Gross
profit |
|
152,314 |
|
|
|
139,736 |
|
|
616,038 |
|
|
577,741 |
|
|
|
Commission and licensing fee (loss)/income, net |
|
(5,480 |
) |
|
|
3,421 |
|
|
5,417 |
|
|
14,259 |
|
|
|
Operating expenses |
|
121,797 |
|
|
|
110,490 |
|
|
448,073 |
|
|
421,216 |
|
|
|
Impairment charge |
|
- |
|
|
|
1,000 |
|
|
- |
|
|
1,000 |
|
|
|
Income
from operations |
|
25,037 |
|
|
|
31,667 |
|
|
173,382 |
|
|
169,784 |
|
|
|
Interest
and other income, net |
|
1,456 |
|
|
|
587 |
|
|
3,958 |
|
|
2,543 |
|
|
|
Income
before provision for income taxes |
|
26,493 |
|
|
|
32,254 |
|
|
177,340 |
|
|
172,327 |
|
|
|
Provision for income taxes |
|
13,956 |
|
|
|
7,486 |
|
|
46,841 |
|
|
53,189 |
|
|
|
Net
income |
|
12,537 |
|
|
|
24,768 |
|
|
130,499 |
|
|
119,138 |
|
|
|
Less: Net
income attributable to noncontrolling interest |
|
47 |
|
|
|
171 |
|
|
1,363 |
|
|
1,190 |
|
|
|
Net
income attributable to Steven Madden, Ltd. |
$ |
12,490 |
|
|
$ |
24,597 |
|
$ |
129,136 |
|
$ |
117,948 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
income per share |
$ |
0.15 |
|
|
$ |
0.30 |
|
$ |
1.58 |
|
$ |
1.43 |
|
|
|
Diluted
income per share |
$ |
0.15 |
|
|
$ |
0.28 |
|
$ |
1.50 |
|
$ |
1.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
weighted average common shares |
|
|
|
|
|
|
|
|
|
|
outstanding |
|
81,151 |
|
|
|
82,139 |
|
|
81,664 |
|
|
82,736 |
|
|
|
Diluted
weighted average common shares |
|
|
|
|
|
|
|
|
|
|
outstanding |
|
85,376 |
|
|
|
86,462 |
|
|
86,097 |
|
|
86,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STEVEN MADDEN, LTD. AND
SUBSIDIARIES |
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEET
DATA |
|
|
|
(In thousands) |
|
|
|
|
As of |
|
|
|
|
|
|
December 31, 2018 |
|
December 31, 2017 |
|
|
|
|
(Unaudited) |
|
|
|
|
|
Cash and cash
equivalents |
$ |
200,031 |
|
$ |
181,214 |
|
|
|
Marketable
securities |
|
66,968 |
|
|
93,550 |
|
|
|
Accounts receivable,
net |
|
266,452 |
|
|
240,909 |
|
|
|
Inventories |
|
137,247 |
|
|
110,324 |
|
|
|
Other current
assets |
|
32,427 |
|
|
49,044 |
|
|
|
Property and equipment,
net |
|
64,807 |
|
|
71,498 |
|
|
|
Goodwill and
intangibles, net |
|
291,423 |
|
|
299,842 |
|
|
|
Other assets |
|
13,215 |
|
|
10,780 |
|
|
|
Total assets |
$ |
1,072,570 |
|
$ |
1,057,161 |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
79,802 |
|
$ |
66,955 |
|
|
|
Contingent payment
liability (current & non current) |
|
3,000 |
|
|
10,000 |
|
|
|
Other current
liabilities |
|
141,887 |
|
|
132,657 |
|
|
|
Other long term
liabilities |
|
33,199 |
|
|
38,617 |
|
|
|
Total Steven Madden,
Ltd. stockholders' equity |
|
805,814 |
|
|
802,821 |
|
|
|
Noncontrolling
interest |
|
8,868 |
|
|
6,111 |
|
|
|
Total liabilities and
stockholders' equity |
$ |
1,072,570 |
|
$ |
1,057,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STEVEN MADDEN, LTD. AND
SUBSIDIARIES |
|
|
|
CONDENSED CONSOLIDATED CASH FLOW
DATA |
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
|
|
|
December 31, 2018 |
|
December 31, 2017 |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities |
|
|
$ |
154,376 |
|
|
$ |
157,935 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities |
|
|
|
|
|
|
|
|
Purchases of property
and equipment |
|
|
|
(12,450 |
) |
|
|
(14,775 |
) |
|
|
|
Sales of marketable
securities, net |
|
|
|
23,515 |
|
|
|
17,932 |
|
|
|
|
Proceeds from notes
receivable |
|
|
|
- |
|
|
|
221 |
|
|
|
|
Acquisition, net of
cash acquired |
|
|
|
- |
|
|
|
(16,795 |
) |
|
|
|
Net cash provided
by/(used in) investing activities |
|
|
|
11,065 |
|
|
|
(13,417 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities |
|
|
|
|
|
|
|
|
Common stock purchased
for treasury |
|
|
|
(105,924 |
) |
|
|
(99,412 |
) |
|
|
|
Investment of
noncontrolling interest |
|
|
|
2,577 |
|
|
|
- |
|
|
|
|
Distribution of
noncontrolling interests earnings |
|
|
|
(1,183 |
) |
|
|
- |
|
|
|
|
Payment of contingent
liability |
|
|
|
(7,000 |
) |
|
|
(7,359 |
) |
|
|
|
Proceeds from exercise
of stock options |
|
|
|
13,036 |
|
|
|
16,433 |
|
|
|
|
Cash dividends
paid |
|
|
|
(47,316 |
) |
|
|
- |
|
|
|
|
Net cash (used in)
financing activities |
|
|
|
(145,810 |
) |
|
|
(90,338 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
|
(814 |
) |
|
|
919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents |
|
|
|
18,817 |
|
|
|
55,099 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents - beginning of year |
|
|
|
181,214 |
|
|
|
126,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents - end of year |
|
|
$ |
200,031 |
|
|
$ |
181,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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STEVEN MADDEN, LTD. AND
SUBSIDIARIES |
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NON-GAAP RECONCILIATION |
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(In thousands, except per share amounts) |
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(Unaudited) |
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The Company uses non-GAAP financial information to evaluate
its operating performance and in order to represent the manner in
which the Company conducts and views its business.
Additionally, the Company believes the information assists
investors in comparing the Company 's performance across reporting
periods on a consistent basis by excluding items that are not
indicative of its core business. The non-GAAP financial
information is provided in addition to, and not as an alternative
to, the Company’s reported results prepared in accordance with
GAAP. |
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Table 1 - Reconciliation of GAAP gross profit to
Adjusted gross profit |
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Three Months Ended |
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Twelve Months Ended |
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December 31, 2017 |
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December 31, 2017 |
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Consolidated |
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GAAP gross profit |
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$ |
139,736 |
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$ |
577,741 |
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Non-cash (benefit)/expense associated with the purchase
accounting fair value |
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adjustment of inventory acquired in the Schwartz &
Benjamin acquisition |
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(1,060 |
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591 |
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Adjusted gross profit |
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$ |
138,676 |
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$ |
578,332 |
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Wholesale |
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GAAP gross profit |
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$ |
87,379 |
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$ |
413,096 |
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Non-cash (benefit)/expense associated with the purchase
accounting fair value |
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adjustment of inventory acquired in the Schwartz &
Benjamin acquisition |
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(1,060 |
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591 |
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Adjusted gross profit |
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$ |
86,319 |
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$ |
413,687 |
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Table 2 - Reconciliation of GAAP licensing and
commission income, net to Adjusted licensing and commission income,
net |
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Three Months Ended |
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Twelve Months Ended |
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December 31, 2018 |
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December 31, 2018 |
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Consolidated |
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GAAP licensing and commission (loss)/income, net |
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$ |
(5,480 |
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$ |
5,417 |
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Bad debt expense and write-off of an unamortized buying
agency agreement support |
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payment associated with the Payless ShoeSource
bankruptcy |
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8,507 |
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8,507 |
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Adjusted licensing and commission income, net |
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$ |
3,026 |
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$ |
13,924 |
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Table 3 - Reconciliation of GAAP operating expenses to
Adjusted operating expenses |
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Three Months Ended |
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Three Months Ended |
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Twelve Months Ended |
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Twelve Months Ended |
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December 31, 2018 |
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December 31, 2017 |
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December 31, 2018 |
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December 31, 2017 |
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GAAP operating expenses |
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$ |
121,797 |
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$ |
110,490 |
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$ |
448,073 |
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$ |
421,216 |
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Expense in connection with provision for legal and
early lease |
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termination charges |
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(452 |
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(11,836 |
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(3,289 |
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(11,836 |
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Benefit in connection with post-closing amendment to
the equity purchase |
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agreement relating to the Schwartz & Benjamin acquisition |
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- |
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10,215 |
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- |
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10,215 |
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Expense in connection with the integration of the
Schwartz & Benjamin |
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acquisition and the related restructuring |
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(278 |
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(2,384 |
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(2,065 |
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(3,639 |
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Expense in connection with a warehouse consolidation |
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- |
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- |
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(1,241 |
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- |
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Impairment of preferred interest investment in Brian
Atwood Italia Holding LLC |
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- |
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(2,700 |
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- |
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(2,700 |
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Bad debt expense/(benefit) associated with the Payless
ShoeSource bankruptcies |
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$ |
(3,616 |
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$ |
2,030 |
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$ |
(3,616 |
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$ |
(5,470 |
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Adjusted operating expenses |
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$ |
117,451 |
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$ |
105,815 |
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$ |
437,862 |
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$ |
407,786 |
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Table 4 - Reconciliation of GAAP income from operations
to Adjusted income from operations |
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Three Months Ended |
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Three Months Ended |
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Twelve Months Ended |
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Twelve Months Ended |
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December 31, 2018 |
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December 31, 2017 |
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December 31, 2018 |
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December 31, 2017 |
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GAAP Income from operations |
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$ |
25,037 |
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$ |
31,667 |
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$ |
173,382 |
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$ |
169,784 |
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Non-cash (benefit) expense associated with the purchase
accounting fair value |
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adjustment of inventory acquired in the Schwartz &
Benjamin acquisition |
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- |
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(1,060 |
) |
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- |
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|
591 |
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Expense in connection with provision for legal and
early lease |
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termination charges |
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452 |
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11,836 |
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3,289 |
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11,836 |
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Benefit in connection with post-closing amendment to
the equity purchase |
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agreement relating to the Schwartz & Benjamin acquisition |
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- |
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(10,215 |
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- |
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(10,215 |
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Expense in connection with the integration of the
Schwartz & Benjamin |
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acquisition and the related restructuring |
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278 |
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2,384 |
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2,065 |
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3,639 |
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Expense in connection with a warehouse consolidation |
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- |
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- |
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1,241 |
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- |
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Impairment of preferred interest investment in Brian
Atwood Italia Holding LLC |
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- |
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2,700 |
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- |
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2,700 |
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Bad debt expense/(benefit) and write-off of an
unamortized buying agency agreement |
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support payment associated with the Payless ShoeSource
bankruptcies |
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12,123 |
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(2,030 |
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12,123 |
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5,470 |
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Impairment of Wild Pair trademark |
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$ |
- |
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$ |
1,000 |
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$ |
- |
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$ |
1,000 |
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Adjusted Income from operations |
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$ |
37,890 |
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$ |
36,282 |
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$ |
192,100 |
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$ |
184,805 |
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Table 5 - Reconciliation of GAAP provision for income
taxes to Adjusted provision for income taxes |
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Three Months Ended |
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Three Months Ended |
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Twelve Months Ended |
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Twelve Months Ended |
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December 31, 2018 |
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December 31, 2017 |
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December 31, 2018 |
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December 31, 2017 |
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GAAP provision for income taxes |
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$ |
13,956 |
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$ |
7,486 |
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$ |
46,841 |
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$ |
53,189 |
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Tax effect of non-cash (benefit)/expense associated
with the purchase |
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accounting fair value adjustment of inventory acquired
in the Schwartz & |
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Benjamin acquisition |
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- |
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(390 |
) |
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- |
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|
189 |
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Tax effect of expense in connection with provision for
legal and early lease |
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termination charges |
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|
109 |
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4,379 |
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|
811 |
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4,379 |
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Tax effect of expense in connection with post-closing
amendment to the equity |
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purchase agreement relating to the Schwartz &
Benjamin acquisition |
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- |
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(3,780 |
) |
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- |
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(3,780 |
) |
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Tax effect of expense in connection with the
integration of the Schwartz & |
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Benjamin acquisition and the related restructuring |
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|
67 |
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|
882 |
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|
529 |
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|
1,346 |
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Tax effect of expense in connection with a warehouse
consolidation |
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|
- |
|
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|
- |
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|
327 |
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- |
|
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Tax expense/(benefit) in connection with the impairment
of the preferred interest |
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investment in Brian Atwood Italia Holding, LLC |
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|
- |
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|
999 |
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(1,028 |
) |
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|
999 |
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|
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|
Tax effect of bad debt expense/(benefit) and write-off
of an unamortized buying agency |
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|
|
|
|
|
|
|
|
|
|
agreement support payment associated with the Payless
ShoeSource bankruptcies |
|
|
642 |
|
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|
(293 |
) |
|
|
642 |
|
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|
671 |
|
|
|
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|
|
|
|
|
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|
Tax effect of impairment of Wild Pair trademark |
|
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|
- |
|
|
|
370 |
|
|
|
- |
|
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|
370 |
|
|
|
|
|
|
|
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Tax expense resulting from the Tax Cuts and Jobs Act
transition tax and taxing authorities |
|
|
|
|
|
|
|
|
|
|
|
audit and prepaid tax adjustments related to prior years |
|
|
$ |
(11,136 |
) |
|
$ |
(463 |
) |
|
$ |
(11,136 |
) |
|
$ |
(463 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Adjusted provision for income taxes |
|
|
$ |
3,637 |
|
|
$ |
9,191 |
|
|
$ |
36,985 |
|
|
$ |
56,901 |
|
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Table 6 - Reconciliation of GAAP net income to Adjusted
net income |
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|
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|
|
|
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|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Twelve Months Ended |
|
Twelve Months Ended |
|
|
|
|
|
|
|
|
December 31, 2018 |
|
December 31, 2017 |
|
December 31, 2018 |
|
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable to Steven Madden, Ltd. |
|
|
$ |
12,490 |
|
|
$ |
24,597 |
|
|
$ |
129,136 |
|
|
$ |
117,948 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
After-tax impact of non-cash (benefit)/expense
associated with the purchase |
|
|
|
|
|
|
|
|
|
|
|
|
|
accounting fair value adjustment of inventory acquired
in the Schwartz & |
|
|
|
|
|
|
|
|
|
|
|
|
|
Benjamin acquisition |
|
|
- |
|
|
|
(670 |
) |
|
|
- |
|
|
|
402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax impact of expense in connection with
provision for legal and early lease |
|
|
|
|
|
|
|
|
|
|
|
|
|
termination charges |
|
|
|
343 |
|
|
|
7,457 |
|
|
|
2,478 |
|
|
|
7,457 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax impact of benefit in connection with
post-closing amendment to the equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
purchase agreement relating to the Schwartz &
Benjamin acquisition |
|
|
- |
|
|
|
(6,435 |
) |
|
|
- |
|
|
|
(6,435 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax impact of expense in connection with the
integration of the Schwartz & |
|
|
|
|
|
|
|
|
|
|
|
|
|
Benjamin acquisition and the related restructuring |
|
|
|
211 |
|
|
|
1,502 |
|
|
|
1,536 |
|
|
|
2,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax impact of expense in connection with a
warehouse consolidation |
|
|
- |
|
|
|
- |
|
|
|
914 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax impact of impairment preferred interest in
Brian Atwood |
|
|
|
|
|
|
|
|
|
|
|
|
|
Italia Holding, LLC |
|
|
|
- |
|
|
|
1,701 |
|
|
|
1,028 |
|
|
|
1,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax impact of bad debt expense/(benefit) and
write-off of an unamortized buying |
|
|
|
|
|
|
|
|
|
|
|
|
agency support payment agreement associated with the
Payless ShoeSource |
|
|
|
|
|
|
|
|
|
|
|
|
|
bankruptcies |
|
|
11,481 |
|
|
|
(1,737 |
) |
|
|
11,481 |
|
|
|
4,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax impact of impairment of Wild Pair trademark |
|
|
|
- |
|
|
|
630 |
|
|
|
- |
|
|
|
630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax expense resulting from the Tax Cuts and Jobs Act
transition tax and taxing authorities |
|
|
|
|
|
|
|
|
|
|
|
audit and prepaid tax adjustments related to prior years |
|
|
$ |
11,136 |
|
|
$ |
463 |
|
|
$ |
11,136 |
|
|
$ |
463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income attributable to Steven Madden, Ltd. |
|
|
$ |
35,661 |
|
|
$ |
27,507 |
|
|
$ |
157,710 |
|
|
$ |
129,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income per share |
|
|
$ |
0.15 |
|
|
$ |
0.28 |
|
|
$ |
1.50 |
|
|
$ |
1.36 |
|
|
|
|
|
|
Adjusted diluted income per share |
|
|
$ |
0.42 |
|
|
$ |
0.32 |
|
|
$ |
1.83 |
|
|
$ |
1.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact
Steven Madden, Ltd.Director of Corporate Development &
Investor RelationsDanielle
McCoy718-308-2611InvestorRelations@stevemadden.com
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