- Net sales increased 13.7% to $356.9 million.
- Retail comparable store sales increased 8.6%.
- Gross margin improved to 36.8% compared to 34.9% in the third quarter of 2011.
- The effective tax rate was 35.4% compared to 39.0% in the prior year’s third quarter due to the reinvestment, indefinitely, of a portion of earnings from the Company’s foreign operations in such foreign operations.
- Net income was $37.9 million, or $0.86 per diluted share. Net income included a $5.1 million impairment charge and a $0.9 million charge for bad debt, both related to the bankruptcy of Bakers Footwear Group. On an after-tax basis, these charges negatively impacted net income by $3.7 million, or $0.08 per diluted share. Net income in the third quarter of 2011 was $31.9 million, or $0.74 per diluted share.
Gross margin expanded 190 basis points to 36.8% in the third quarter of 2012 compared to 34.9% in the same period last year. Gross margin in the wholesale business was 33.3% compared to 31.9% in the prior year's third quarter, with improvements in both the wholesale footwear and wholesale accessories businesses. Retail gross margin increased to 60.7% in the third quarter of 2012 compared to 58.4% in the third quarter of 2011, due primarily to the impact from the higher-margin SM Canada retail business as well as reduced promotional activity.Operating expenses as a percentage of sales remained flat to the prior year’s third quarter at 20.6% as a result of leverage on higher sales in both wholesale and retail, offset by an increased mix of retail, which has higher operating expenses as a percentage of sales than the wholesale business. Operating income for the third quarter was $56.4 million, or 15.8% of net sales. Excluding the aforementioned charges for impairment and bad debt related to the bankruptcy of Bakers Footwear Group, operating income for the third quarter was $62.4 million, or 17.5% of net sales, compared to operating income of $50.5 million, or 16.1% of net sales, in the same period of 2011. Third quarter net income was $37.9 million, or $0.86 per diluted share. Net income included a $5.1 million impairment charge and a $0.9 million charge for bad debt, both related to the bankruptcy of Bakers Footwear Group. On an after-tax basis, these charge negatively impacted net income by $3.7 million, or $0.08 per diluted share. Net income in the third quarter of 2011 was $31.9 million, or $0.74 per diluted share. The Company opened three Steve Madden full-price stores in the third quarter and ended the quarter with 99 company-operated retail locations, including eight outlets and two Internet stores.
For the First Nine Months of 2012:
- For the first nine months of 2012, net sales increased 32.3% to $911.5 million from $688.8 million in the comparable period last year.
- Net income was $86.7 million, or $1.97 per diluted share, for the first nine months of 2012. Net income for the first nine months of 2011 was $73.5 million, or $1.70 per diluted share.
Safe HarborThis 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|
|Sep. 30, 2012||Sep. 30, 2011||Sep. 30, 2012||Sep 30, 2011|
|Cost of sales||225,668||204,434||579,983||426,114|
|Commission and licensing fee income, net||3,875||5,649||12,600||14,648|
|Impairment charges and provision for litigation||5,144||-||9,454|
|Income from operations||56,373||50,508||129,226||115,151|
|Interest and other income, net||2,138||1,732||4,271||4,905|
|Income before provision for income taxes||58,511||52,240||133,497||120,056|
|Provision for income taxes||20,698||20,372||46,869||46,641|
|Net income (loss) attributable to noncontrolling interest||(83||)||(43||)||(35||)||(132||)|
|Net income attributable to Steven Madden, Ltd||$||37,896||$||31,911||$||86,663||$||73,547|
|Basic income per share||$||0.88||$||0.75||$||2.02||$||1.74|
|Diluted income per share||$||0.86||$||0.74||$||1.97||$||1.70|
|Basic weighted average common shares outstanding||43,131||42,430||42,936||42,180|
|Diluted weighted average common shares outstanding||44,237||43,407||44,021||43,153|
|STEVEN MADDEN, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET DATA (In thousands)|
|Sep. 30, 2012||Dec. 31, 2011||Sep. 30, 2011|
|Cash and cash equivalents||$||64,927||$||102,830||$||35,141|
|Marketable securities (current & non current)||89,428||77,663||76,659|
|Accounts receivables, net||245,072||153,424||219,155|
|Other current assets||30,871||25,000||23,880|
|Property and equipment, net||43,497||31,587||30,400|
|Goodwill and intangibles, net||228,059||174,462||170,756|
|Contingent payment liability (current & non current)||57,751||37,921||40,023|
|Other current liabilities||44,701||51,208||71,143|
|Other long term liabilities||9,777||6,152||5,953|
|Total Steven Madden, Ltd stockholders' equity||586,507||474,876||447,133|
|Total liabilities and stockholders' equity||$||795,308||$||639,786||$||651,014|
|STEVEN MADDEN, LTD AND SUBSIDIARIES|
|CONSOLIDATED CASH FLOW DATA|
|Nine Months Ended|
|Sep. 30, 2012||Sep. 30, 2011|
|Net cash provided by operating activities||$||14,758||$||7,385|
|Purchase of property and equipment||(15,617||)||(12,246||)|
|Purchases / sales of marketable securities, net||(8,805||)||50,902|
|Purchase of note receivable||(3,085||)||-|
|Payment of contingent liability||(7,076||)||-|
|Acquisition, net of cash acquired||(29,367||)||(85,234||)|
|Net cash used in investing activities||(63,950||)||(46,578||)|
|Net cash provided by financing activities||11,289||8,183|
|Net decrease in cash and cash equivalents||(37,903||)||(31,010||)|
|Cash and cash equivalents - beginning of period||102,830||66,151|
|Cash and cash equivalents - end of year period||$||64,927||$||35,141|