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, 2012. For the Fourth Quarter 2012:
- Net sales increased 12.8% to $315.5 million.
- Retail comparable store sales increased 5.9%.
- Gross margin improved to 39.3% compared to 35.5% in the fourth quarter of 2011.
- The effective tax rate was 35.0% compared to 38.6% in the prior year’s fourth quarter due to the reinvestment, indefinitely, of a portion of earnings from the Company’s foreign operations in such foreign operations.
- Net income was $33.0 million, or $0.74 per diluted share. Net income included a $1.0 million benefit related to a greater-than-anticipated recovery in the bankruptcy process of a note receivable from the Company’s former licensee for Betsey Johnson retail and apparel, a portion of which was charged to impairment expense in the second quarter of 2012. On an after-tax basis, the benefit positively impacted net income in the fourth quarter by $0.6 million, or $0.01 per diluted share. Net income in the fourth quarter of 2011 was $23.8 million, or $0.55 per diluted share.
Gross margin increased to 39.3% in the fourth quarter of 2012 compared to 35.5% in the same period last year. Gross margin in the wholesale business expanded to 32.6% compared to 28.9% in the prior year's fourth quarter, with improvements in both the wholesale footwear and wholesale accessories businesses. Retail gross margin increased to 63.7% in the fourth quarter of 2012 compared to 63.1% in the fourth quarter of 2011, driven by the benefit from the acquisition of the higher-margin SM Canada retail business.Operating expenses as a percent of sales increased to 24.8% for the fourth quarter compared to 23.1% in the same period of the prior year primarily as a result of an increased mix of retail and the re-classification of certain expenses from cost of goods sold and other expenses to operating expenses. The increase was also due to an increased bonus provision for the accessories business and increased expenses in the e-commerce business related to marketing and providing customers with free shipping. Operating income for the fourth quarter was $49.8 million, or 15.8% of net sales. Operating income included a $1.0 million benefit related to a greater-than-anticipated recovery in the bankruptcy process of a note receivable from the Company’s former licensee for Betsey Johnson retail and apparel, a portion of which was charged to impairment expense in the second quarter of 2012. Excluding this benefit, operating income for the fourth quarter was $48.7 million, or 15.4% of net sales, compared to operating income of $38.6 million, or 13.8% of net sales, in the same period of 2011. Fourth quarter net income was $33.0 million, or $0.74 per diluted share. Net income included the aforementioned benefit related to a greater-than-anticipated recovery in the bankruptcy process of a note receivable, which, on an after-tax basis, positively impacted net income by $0.6 million, or $0.01 per diluted share. Net income in the fourth quarter of 2011 was $23.8 million, or $0.55 per diluted share.
The Company opened six Steve Madden full-price stores, three Steve Madden outlet stores and one Betsey Johnson e-commerce store in the fourth quarter and ended the quarter with 109 company-operated retail locations, including 11 outlets and three Internet stores.For the Full Year Ended December 31, 2012:
- For the full year ended December 31, 2012, net sales increased 26.7% to $1.2 billion from $968.5 million in the comparable period last year.
- Net income was $119.6 million, or $2.71 per diluted share, for the year ended December 31, 2012. Net income included a $2.5 million charge for settlement of a class action lawsuit related to unauthorized text messaging and a $0.8 million net charge for impairment of a note receivable from the Company’s former licensee for Betsey Johnson retail and apparel, in addition to a $5.1 million impairment charge and a $0.9 million charge for bad debt, both related to the bankruptcy of Bakers Footwear Group. Taken together, on an after-tax basis, these items negatively impacted net income by $5.7 million, or $0.13 per diluted share. Additionally, net income included a $6.0 million, or $0.14 per diluted share, tax benefit related to the reinvestment, indefinitely, of a portion of earnings from the Company’s foreign operations in such foreign operations. Excluding all these items, net income for fiscal 2012 was $119.4 million, or $2.70 per diluted share. Net income for fiscal 2011 was $97.3 million, or $2.25 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)|
|Three Months Ended||Year Ended|
|Dec. 31, 2012||Dec. 31, 2011||Dec. 31, 2012||Dec. 31, 2011|
|Cost of sales||191,387||180,487||771,370||606,601|
|Commission and licensing fee income, net||2,795||4,067||15,395||18,715|
|Impairment charges and provision for litigation||(1,022||)||-||8,432||-|
|Income from operations||49,750||38,619||178,976||153,770|
|Interest and other income, net||940||117||5,211||5,022|
|Income before provision for income taxes||50,690||38,736||184,187||158,792|
|Provision for income taxes||17,754||14,950||64,623||61,591|
|Net income (loss) attributable to noncontrolling interest||(27||)||14||(62||)||(118||)|
|Net income attributable to Steven Madden, Ltd||$||32,963||$||23,772||$||119,626||$||97,319|
|Basic income per share||$||0.76||$||0.56||$||2.78||$||2.30|
|Diluted income per share||$||0.74||$||0.55||$||2.71||$||2.25|
|Basic weighted average common shares outstanding||43,265||42,516||43,019||42,264|
|Diluted weighted average common shares outstanding||44,616||43,492||44,170||43,239|
|STEVEN MADDEN, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET DATA (In thousands)|
|Dec. 31, 2012||Dec. 31, 2011|
|Cash and cash equivalents||$||168,777||$||102,830|
|Marketable securities (current & non current)||97,487||77,663|
|Accounts receivables, net||167,701||153,424|
|Other current assets||24,808||25,000|
|Property and equipment, net||45,285||31,587|
|Goodwill and intangibles, net||227,327||174,462|
|Contingent payment liability (current & non current)||41,960||37,921|
|Other current liabilities||39,500||51,208|
|Other long term liabilities||12,752||6,152|
|Total Steven Madden, Ltd stockholders' equity||626,580||474,876|
|Total liabilities and stockholders' equity||$||804,039||$||639,786|
|STEVEN MADDEN, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED CASH FLOW DATA (In thousands)|
|Dec. 31, 2012||Dec. 31, 2011|
|Net cash provided by operating activities||$||144,214||$||74,968|
|Purchases / sales of marketable securities, net||(17,375||)||49,917|
|Refundable cash acquired from seller||-||12,004|
|Purchase of notes receivable||(2,585||)||-|
|Payment of contingent liability||(22,867||)||(4,151||)|
|Net cash used in investing activities||(92,146||)||(47,437||)|
|Net cash provided by financing activities||13,879||9,148|
|Net decrease in cash and cash equivalents||65,947||36,679|
|Cash and cash equivalents - beginning of period||102,830||66,151|
|Cash and cash equivalents - end of period||$||168,777||$||102,830|