SHOO
Third Quarter Meeting
October 28, 2003
9:00 am CT
Conference Coordinator: Good morning ladies and gentlemen.
Welcome to the Steve Madden Conference Call sponsored
by Financial Dynamics.
At this time all participants are in a listen-only
mode. Later we will conduct a question and answer
session and instructions will follow at that time.
To register for a question, the participant should
press 1; to withdraw the question, a participant
should press pound.
Any reproduction of this call in whole or in part is
not permitted without prior expressed written
authorization of the company.
And as a reminder, ladies and gentlemen, the
conference is being recorded.
I would now like to introduce your host for today's
Conference, Ms. (Cara O'Brien) of Financial Dynamics.
Please go ahead.
(Cara O'Brien): Thank you operator.
Good morning everyone and thank you for joining this
discussion of Steven Madden Limited's Third Quarter
Results.
By now you should've received a copy of the press
release that went out this morning. If you have not,
please call our offices at (212) 850-5600 and we will
get one out to you immediately.
Before we begin I would like to remind you that
statements in this conference call that are not
statements of historical or current fact constitute
forward-looking statements in the meeting of the
Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and
unknown risk, uncertainties, and other unknown
factors that could cause the actual results of the
company to be materially different with the
historical results or from any future results
expressed or implied by such forward-looking
statements. The statements contained herein are also
subject generally to other risk and uncertainties
that are described from time to time in the company's
reports and registration statements filed with the
SEC.
Also, please refer to the earnings release for more
information on risk factors that could cause actual
results to differ.
Finally, please note that any forward-looking looking
statements used in this call should not be relied
upon as current after today's date.
And now I'd like to turn the call over to Jamie
Karson, Chief Executive Officer of Steven Madden
Limited.
Jamie, go ahead please.
Jamie Karson: Thanks (Cara).
Good morning everyone and thank you for joining us
today to review Steven Madden Limited's operating
results for the third quarter ended September 30th,
2003.
With me to review our business, are Richard Olicker,
our President and Chief Operating Officer, and Arvind
Dharia, our Chief Financial Officer.
Let me begin by saying that we are pleased with our
third quarter performance. Despite sustained economic
weakness and one of the most challenging spring and
early fall selling seasons in memory, the continued
execution of our business strategy enabled us to
successfully increase profitability and meet analyst
expectations.
Although our top line came under pressure given
certain external conditions, most notably the ongoing
competitive and promotional environment, we are proud
that we successfully maintained the substantial
distribution expansion and market share gains that we
worked hard to establish last year. Moreover, it is
noteworthy that in terms of comparison purposes, we
were up against a record performance in the third
quarter of 2002 when the same team generated an
extraordinary 32.4% increase in total net sales.
In addition to supporting previous market share
expansion, there are a couple of noteworthy
accomplishments realized in this third quarter.
First, we achieved strong increases in our other
income line, which grew 21.2%. The overall increase
is attributable to expanded licensing royalty
revenues and increased commission revenues from our
Adesso-Madden private label business.
Our success on the licensing and private label fronts
was coupled with our ability to effectively improve
margins. Not only did we improve gross margin by 110
basis points, we were also able to leverage our
operating expenses, improving the SG&A margin by 20
basis points as we held the line on costs even while
sustaining the business and nurturing our newest
brands. This is even further reflected in the 190
basis point improvement in operating margin we
recorded for the quarter.
Taken together all of these achievements helped drive
a 13% increase in net income to 7.1 million versus
6.3 million last year and diluted earnings per share
of 50 cents in the quarter versus 46 cents last year.
Again, we are quite pleased with these results given
the environment in which we are operating.
Finally, we remain in excellent financial health. At
quarter-end we had approximately 78.6 million in
cash, cash equivalents and investment securities on
the balance sheet, no long or short-term debt and
total stockholder's equity of 153 million, providing
flexibility and a strong foundation from which to
build the future growth and diversification of our
company.
Now, I'd like to turn the call over to Richard
Olicker, our President and Chief Operating Officer,
to review the quarter's operating results in more
detail.
Richard Olicker: Thanks Jamie.
Good morning everyone.
Let me begin with an overview of our overall
financial performance.
Total sales were 88.7 million versus 93 million in
the third quarter of 2002. Part of our plan for 2003
has been to sustain the substantial market share
gains achieved in `02. That said, our sales decline
of 4.7% in this quarter deserves to be considered in
conjunction with last year's considerable sales
growth of 32% over 2001.
Net income increased 13% to 7.1 million versus 6.3
million in the same period last year. Earnings per
share increased 9% to 50 cents per share on 14
million, 267 thousand weighted average diluted shares
outstanding, compared with 46 cents pre share on 13
million, 763 thousand weighted average diluted shares
outstanding in the same period in 2002.
As Jamie summarized, our strong bottom line results
were achieved through a combination of very positive
factors including other income growth, margin gains
and operating expense leverage as we held the line on
costs.
Gross margin increased to 40.1% versus 39% last year.
The improvement is attributable to better sourcing
and inventory management as well as less dilution
this year from wholesale returns and allowances.
Also, our retail division, which generates higher
gross margins than wholesale, represented a larger
percentage of our overall business in this third
quarter than in the year ago period. Retail
represented 26% of the total versus 24% in the third
quarter last year.
During the quarter, the company was able to manage
its expense structure in keeping with its top line
performance, effectively leveraging its
infrastructure, all while continuing to sustain our
business and nurture our newest brands, UNIONBAY for
young men, Candie's for women and children and the
conversion of the David Aaron business into Steven
for women. This is reflected by the 20 basis point
decrease in our operating expenses as a percent of
sales to 29.4% - and we view this as a substantial
accomplishment.
Let me now review what happened in each division
during the quarter.
The company's wholesale division is comprised of six
contributing brands: Steve Madden Womens, Steve
Madden Mens, l.e.i., Stevies, David Aaron and
UNIONBAY, which commenced shipping this quarter.
Wholesale revenues for the quarter were 65.6 million
versus 70.7 million in the third quarter last year.
It is worth noting that this decline, which I will
review further as we go through the wholesale
division details, came on top of a 41% increase in
wholesale revenues in the comparable period last
year.
Third quarter revenues in our Steve Madden Women's
brand decreased 3.3% to 32.2 million, but note that
this was on top of a 19% increase achieved in the
third quarter `02. The slight decline was a result of
disappointing early sell-throughs, particularly in
the euro-casual classification. We also worked to
bring down the inventory levels of our wholesale
customers to be in-line with our retail performance
in the quarter.
Furthermore this back-to-school, the overwhelmingly
favored footwear category was sneakers of the
non-technical and retro-sport variety. These
offerings were available at out the door retails of
49.99 and below, pressuring the higher priced casual
closed shoe category.
The strength of this category in the third quarter
took market share from more traditional brown shoe
categories including ours. However, successes for the
quarter included our early identification of strong
selling dress shoes, which are being maximized into
fourth quarter.
Revenues for Steve Madden Mens were 8.2 million
versus 14.8 million last year, a period in which Mens
increased an extraordinary 360%. Mens was adversely
impacted by three primary factors. First, the
dramatic downturn in sell-through at retail in the
young men's fashion casual and sport casual business
created substantial inventory and margin challenges
to our wholesale shipments. Also, the men's
fashion marketplace favored dress and dress casual
styling, which represented less than 20% of our
shipments for the quarter.
We are well positioned to exploit this transition
going forward, but we were unable to maximize this
rapid classification shift, focusing instead on
clearing obsolete inventory in an attempt to position
us strongly for the upcoming selling seasons.
Finally, average-selling prices within men's casuals
came under extreme pressure at retail as the market
became over saturated with casual looks causing price
compression in the entire fashion casual and sport
casual category in men. We anticipate the
continuation of these trends into the fourth quarter
and that sales challenges will persist.
However, we are very pleased to report that we have
liquidated our slow turning casual inventory and are
working through stock levels with our major wholesale
accounts. Furthermore, we are extremely encouraged by
the performance at retail of newly delivered Madden
Men's dress collections along with strong sales of
our existing dress offerings. The dress category will
represent our single biggest classification increase
in the fourth quarter and into spring `04.
l.e.i was one of the standouts in the quarter with
revenues increasing 14.4% to $17-1/2 million versus
$15.3 million last year. Growth in the division is
primarily attributable to increases at Kohl's and
Saks Group. Classifications that drove sales included
lower profile closed casuals. Tailored looks are also
trending above last year and dress shoes are selling
well and are an at once opportunity for fourth
quarter.
Revenues in our Stevies children's division decreased
to 2.9 million versus 3.9 million during the third
quarter last year. The children's back-to-school
season began later than in past years, diminishing
reorder demand which we enjoyed in the year ago
period.
The children's boot classification did not perform
early this year. Additionally, there were a series of
customer specific issues throughout the third
quarter. Footstar continued to experience temporary
credit issues, which led to shipping delays and some
cancellations. Also this year, Kids R Us concentrated
greater open to buy on its private label offerings
than in 2002.
As communicated on our second quarter call, the
weakness in Stevies is also partially a result of the
weak economy. As unemployment rates have increased
and family budgets are squeezed, the children's
fashion footwear dollar is most vulnerable to
competition from the discount mass merchants that
dominate market share in children's footwear. As a
result we have seen a higher incidence of
cancellations from our independent store base and a
general reluctance among buyers to commit.
In response to these challenges in our children's
business, in August we introduced children's shoes
under the Steve Madden brand. More directional in
styling, aspirational to our Steve Madden women's
looks, but age appropriate, this gives us a new
higher priced strategy, which we believe will assist
in turning around our children's business.
Our strategy to reposition the David Aaron business
into the Steven brand for fall '03 was completed in
the third quarter with excellent initial acceptance.
Revenues for this new brand increased 29.4% to 4.4
million versus 3.4 million last year under its David
Aaron name. We are particularly excited that several
new retailers including Dillards and Macy's West, who
are equipped to showcase and service the new Steven
collection, have been added as customers. We also
added additional Nordstrom regions to our customer
roster in the third quarter.
Steven can now be found in over 150 department store
doors and over 200 better independent shoe stores
across the country. We are very pleased with the
early sell throughs and the strong reception that
Steven Shoes by Steve Madden has enjoyed, and we look
forward to having Steven become a growth and profit
contributor in the fourth quarter and in the seasons
ahead.
Rounding out our wholesale revenues, UNIONBAY young
men's, our new license from the apparel company,
contributed sales of 300 thousand in its first
quarter of shipping. The product placed consists
primarily of test quantities from which a more
meaningful assortment is anticipated in 2004.
Moving to our retail division, as of September 30th,
2003, there were 82 stores in operation including our
Internet store. Retail sales in the quarter increased
3.6% to 23.1 million versus 22.3 million last year.
Same store sales decreased 4.9%.
This decline was caused by a variety of factors. The
overriding explanation is that, this back-to-school,
the overwhelmingly favored category was sneakers of
the non-technical and retro-sport variety. As I
previously mentioned, these offerings were available
at out the door retails of 49.99 and below,
pressuring the higher priced brown shoe casual closed
up category.
Importantly, continuing a trend we saw in our second
quarter, unit sales remained ahead of last year for
the same period but at average selling prices of over
three dollars less per pair.
This evidences the continuing robust demand for our
product but also acknowledges price compression in a
challenging and competitive retail environment. It is
encouraging that store productivity still remains
strong. Our stores generated an average of $653 per
square foot for the 12 months, ended September 30th,
2003.
With respect to new store openings, we opened one
store on Lincoln Road in South Beach, Miami, Florida
in August. Also during the quarter, the company
closed one David Aaron store. In November, we plan to
open a store in Emeryville, California. This will
leave us ending the year having opened seven stores
and will bring us to a total of 83 for the chain,
including the Internet store.
The Internet store remains the largest store with
revenues for the third quarter exceeding 1.3 million.
Last month we partnered with Amazon.com in a revenue
share arrangement in an attempt to broaden the Steve
Madden.com customer base and increase online sales.
Amazon attracts one of the largest commercial
audiences on the web and now, Steve Madden is a
featured store under their shoe directory. We look
forward to having this association help drive our
online sales.
Moving to other income, as Jamie highlighted, this
again showed particular strength during the quarter
with commission and licensing fee income increasing
21% to 2.2 million. For our private label division,
Adesso-Madden, revenues increased 15.5% contributing
1 million, 432 thousand to the other income line. The
division continued its growth with mass-market
discount retailers. Licensing income rose 33.4% to
774 thousand as a result of the growing royalty
revenue generated by the increased shipment of
licensed product.
We continue to diligently work toward concluding new
license arrangements but are proceeding on a
methodical basis in pursuit of the strongest brand
building opportunities.
Turning for a moment to marketing, this continues to
be integral to driving our business within our
stores. In addition to an extensive Mall poster
campaign, in the third quarter we sponsored MTV's
Video Music Awards and ran VMA ticket giveaway
promotions in our stores.
We also sponsored events with (Hot 92) in (3rd Street
Promenade) and with (Z 100) in 34th Street to promote
our Rock `N Sole band search featuring Loon at
Webster Hall. Rock `N Sole events were also presented
in LA's El Rey Theater in conjunction with Kiss 104.7
and closed out with the announcement and performance
of our contest winner at the Rock `N Roll Hall of
Fame during the Rock Style Event.
We also had a back-to-school promotion with 106.7 and
Simple Plan, where we gave a lucky winner a trip to
Orlando to attend the Simple Plan concert and meet
the band.
In addition to our retail advertising, the company
had a very active marketing calendar during the
quarter. We continued our consumer magazine presence
in books that included Seventeen, Teen People, Cosmo,
YM and Latina.
Our Men's print ad appeared in Time Out and Vibe and
we helped launch Steven to consumers with a great
print ad that ran in In Style, Lucky and New York
Magazine. For those of you in New York, check out
today's Steven ad in The Post.
The campaign also included outdoor media, including
subway posters, bus shelters and metro lights as well
as continuing on our signature billboard locations in
Soho and on 34th Street.
The brand continues to be very active with its
grassroots efforts that included attending college
fairs during this back-to-school at colleges across
the country. This was complimented by extensive
fashion editorial coverage for our brands as editors
and producers in a wide variety of consumer magazines
and televisions featured our back-to-school and fall
products.
With respect to our overall financial condition, we
have maintained a pristine balance sheet, which
speaks volumes to the health and viability of our
company.
As of September 30th 2003, our cash, cash equivalents
and investment securities were 78.6 million.
Inventories were at 23 million versus 24.8 million
last year. Our inventory turn was 9.7 times in the 12
months ending September 30th 2003 versus an
eight-time turn for the same period last year.
Accounts receivable was 39 million versus 36.8
million last year. Working capital was at 94.1
million; total equity was 153 million. Diluted
weighted average shares outstanding are 14.3 million.
Now, let me turn the call back over to Jamie, who
will provide some closing remarks.
Jamie Karson: Okay. Thanks Rich.
In conclusion, during the third quarter we again
successfully navigated through a difficult
environment. Despite the high promotional activity
and continued retail and economic weakness, we
controlled costs, improved margin performance and
achieved moderate success on the licensing front. And
as a result, we generated solid earnings growth under
very challenging operating conditions.
Looking forward, we remain committed and optimistic
regarding our prospects. We continue to explore
further avenues for top line expansion, including
widening the reach of our core Steve Madden brand
through additional licensing opportunities as well as
leveraging our industry and operating expertise
through exclusive agreements like those recently
signed with UNIONBAY and Candie's.
By focusing on continuing to grow our core brands
while nurturing our newest brand additions and
expanding our distribution both domestically and
internationally, Steven Madden Limited will continue
to benefit from a diversified and flexible approach
to the market.
With respect to our specific financial outlook,
despite challenging external market conditions, a
highly promotional environment and increasing price
competition as the holiday season approaches, Steven
Madden Limited remains confident in its business
fundamentals and is cautiously optimistic about the
final quarter of 2003.
The company believes it remains positioned to meet
the current analyst estimate of $1.60 for the full
year. With respect to next year, in light of current
trends, the company is cautious in its outlook and is
currently working through its planning process.
Based on the current level of visibility, preliminary
expectations for 2004 are for mid single-digit sales
growth and high single-digit increases in diluted
earnings per share.
In short, we are proud of our performance to date and
the teamwork that has made this possible and we look
forward to continued success.
I hope this call has been informative. Thank you for
your time and your interest.
And now I'll turn the call back to the operator for
your business questions.
Operator.
Conference Coordinator: Thank you.
At this time, ladies and gentlemen, if you have a
question, you will need to press the star and 1 on
your touchtone phone. Your questions will be taken in
the order they are received.
If your question has already been answered -- excuse
me -- you may remove yourself from the queue pressing
the pound key.
Also, if you're using a speakerphone, please pick up
the handset before pressing the button.
One moment please, before our first question.
Our first question comes from (Scot Krasik) of CL
King. Please go ahead.
(Scot Krasik): Yeah. Hi guys.
On the gross margin, do you expect, you know, to stay
at this level and are there opportunities, you know,
for, you know, continued improvements in sourcing and
some of those things you talked about?
Richard Olicker: (Scot), the - we've stated our goal at 40%, we were
able to achieve it this quarter. It was result of a
confluence of things. We are always working towards
margin improvements and...
Arvind Dharia: We are optimistic for 40% in margin and next year
2004, (unintelligible) we are optimistic 40% goal.
(Scot Krasik): What really made up the source aiming? Did you
switch, you know, sourcing and, you know, people in
China or where was the improvement made?
Richard Olicker: It's really a series of about five factors.
Focusing on sourcing, China represent a greater
proportion to the total. And we saw gains from lower
costing but in addition to that, issues involving or
surrounding inventory management where we were buying
upfront more conservatively and doing more work in
terms of the flow was an additional advantage for us.
From the business standpoint, we had fewer chase kind
of items - fewer reorder items that generally are
placed in higher cost countries and also require
airfreight expense. It was also lower dilution this
quarter as compared to last year. And also retail was
a higher percentage of the total. So, the confluence
of those factors really gave us our margins benefit.
(Scot Krasik): Okay.
And then, I guess for the rest of the year, you know,
by keeping your EPS estimate, is that driven again by
you know, the margins or do you think that, you know,
within wholesale that, you know, customers are
starting to order more and, you know, they view
Christmas as being pretty good, you know, what's
really driving that, maintaining your full year
estimates?
Richard Olicker: I think it's the continuation of some of the factors
you see working for us this quarter.
(Scot Krasik): Okay.
And then just, I guess just last, can you give any
details, you know, on some of the new license or
potential license products, what's in the pipeline?
Richard Olicker: Well, what's really going on are conversations about
available categories and I wouldn't say there's
anything specific in the pipeline but there are
conversations and discussions that are ongoing.
(Scot Krasik): Okay. Thanks.
Conference Coordinator: Thank you.
Our next question comes from (Michael Ryan), please -
of Sidoti and Company. Please go ahead.
(Michael Ryan): Hi. Good morning guys. And good job on managing the
business this quarter.
Jamie Karson: Thanks (Mike).
Richard Olicker: Thank you (Michael).
(Michael Ryan): I just - Richard, you mentioned that earlier in the
quarter, your Steve Madden brand sell throughs were
slow, how did you guys react to that and did you see
an improvement as the quarter went on and how did
that work out?
Richard Olicker: Well, we have a policy really of addressing markdowns
early.
(Michael Ryan): Right.
Richard Olicker: And that is our first and foremost responsibility and
that's what we've done. The traditional approach has
been to move forward with better producing products
and we've done to the extent we have it, we've done
that as well.
And that is a formula that has proven itself to work
in an environment where the consumer is less
receptive to, you know, traditional brown shoe,
closed up shoes. It's more challenging but it's still
a formula we believe in and we work with.
(Michael Ryan): Okay.
How were boot sales during the quarter and how does
your inventory stand on?
Richard Olicker: Our inventory is fresh not obsolete and inline with
our fourth quarter sales expectations. As far as boot
sales are concerned, it's been a little choppy -- the
very, very fashionable boot, some of the more
athletic-inspired type of boots have sold well; the
stretch boot, not too directional, have sold well;
the more pointy toe single sole have sold okay. I
think there's a lot of competition in the market
place.
(Michael Ryan): Have you seen a lot of pricing pressure there?
Richard Olicker: Yes
(Michael Ryan): Okay.
And just, I missed earlier when you were going over
the inventory for the men's wear, where does that
stand now?
Richard Olicker: We don't disclose inventory by division but here
again we were working hard over the last two quarters
really to bring our inventory in men's down
(Michael Ryan): Okay. All right. Great. Thanks guys,
Conference Coordinator: Thank you.
Our next question comes from the side of (Nancy
Kukacka) Avalon Global globe. Please go ahead
(Nancy Kukacka): Good morning.
Richie, you went through some of the balance sheet
and the cash flow stuff really fast. Can you repeat
your working capital numbers again and then give us a
sense of what the cash balance will look like at the
end of the year, base on the heavy seasonal flows now
and in the fourth quarter?
Richard Olicker: Okay.
The working capital number was 94.1 million. The cash
component of what I gave you was cash, cash
equivalents and investment securities, the cash
component of that is 34.2 million and the securities'
component is 44.4 million.
(Nancy Kukacka): Ok
Richard Olicker: We lump them together because they're not in the
nature of long-term securities.
(Nancy Kukacka): Okay.
So that 79 million total in cash and securities, that
will peak out at what level?
Richard Olicker: About 100.
Arvind Dharia: Close to 100 million, end of the year - December
31st.
(Nancy Kukacka): Ok, so almost $7 a share.
Richard Olicker: Yes.
(Nancy Kukacka): Okay.
Any plans for that?
Jamie Karson: Yeah, I mean, we are looking at a several different
options. Our board is considering certain
alternatives for that and I think as we get into the
quarter - into this quarter, you know, we'd be in a
better position to report back as to what we have
planned for the cash. We're looking at several
things.
(Nancy Kukacka): Great. Thanks.
In terms of inventory levels at your own stores,
guys, inventory per square foot is planned what for
the next season - it'll come out of the holiday
season where to you goal and what will that look like
for the next - for the spring season?
Richard Olicker: Inventories at retail today are up a little bit more
than we would like them to be up in terms of
inventory levels versus sales levels. And we are
working to monitor those and bring them into line
with our anticipated fourth quarter sales.
(Nancy Kukacka): Okay.
Richard Olicker: At the same time we don't want to miss the hot trend.
(Nancy Kukacka): Exactly. Okay.
And then, you know, for next year are you planning,
you know, flat inventory per square foot or would you
see that building? And I don't know if it'll be
different in terms of dollars or units based on what
the mix is going to look like?
Richard Olicker: Nancy, the plan would be to plan it flat and then
chase it.
(Nancy Kukacka): Okay. All right.
So consistent with what you've been doing to maximize
the margin?
Richard Olicker: Yes.
Jamie Karson: That's right.
(Nancy Kukacka): Okay. Thanks guys.
Conference Coordinator: Once again if you have a question please press this
star and 1 on your touchtone phone.
We'll take our next question from (Sam Poser) of
Mosaic Research. Please go ahead
(Sam Poser): Good morning.
Just a question of about UNIONBAY, Cadies and the
Men's business, what do you see going forward - I
didn't hear you talk about Candie's very much on, you
know, in your prepared remark. What can we expect of
that you know into next year?
Jamie Karson: Well, you know, we were reporting on the third
quarter and Candie's is an integral part of the
business plan going forward. And we are planning to
have a great success with it in 2004. As we get into
the business a little more and we can do our
planning, we'll be able to report back with more
detail as to what that means. But it's a great brand
and we're very excited to have it and we expect great
things from it.
Same thing for UNIONBAY. UNIONBAY is a great name in
apparel and we have an opportunity in the men's and
boy's market to utilize that brand name and we plan
to do good things with that as well.
(Sam Poser): Did the initial test results live up to your
expectations there?
Jamie Karson: For UNIONBAY?
(Sam Poser): Yeah, for UNIONBAY.
Jamie Karson: Yeah, overall I'd say it's been moderately
successful.
(Sam Poser): And then what is - the Men's business though, you do
have, you know, you had a great - what level do to
you see the men's business at going forward? I mean
you'd, you know, you had huge increases last year and
it fell back this year, are we going to expect to see
it fall back again next quarter and what can be done
to correct it?
Richard Olicker: The answer is yes. I think you can expect to see it
fall back but I think what we're trying to build is
take two steps back for a three steps forward
opportunity, which will be a much better rounded
assortment.
What we are really dealing with now is the reversal
of the casual Euro success of 2002 of which we were
at the forefront. So, as we liquidate our inventories
and dispose of inventories existing at retail, we
will reintroduce the brand with a broader assortment
including dress looks and we're working on sportive
looks as well. And I think that's just a healthier,
less risk-averse program for the future.
(Sam Poser): Richard, yeah, I mean, one consistent thing that I
heard across the board was that you spoke of dress,
both the success of Steven and you talked about the
dress shoes selling in the Women Steve Madden and
Men's success, is that going to change the - is that
going to just become proportionally much more
important to the business going forward, do you
think?
Richard Olicker: Well it's certainly the trend of the moment and we
plan on being there and we are there aggressively. I
think that having not had strength in dress - a
dramatic strength in dress in the past provides an
opportunity for a stronger foundation for the overall
brand in the future. And so I see it really as an
opportunity.
(Sam Poser): Thank you very much.
Richard Olicker: Thanks (Sam).
(Sam Poser): All right. Bye-bye.
Conference Coordinator: Once again if you have a question please press the
star and 1 on our touchtone phone at this time.
Our next question comes from (Bret Hendrickson) of
(Bonanza Capital. Please go ahead.
(Bret Hendrickson): Hey good morning guys. How you doing?
Jamie Karson: Great. Thanks.
(Bret Hendrickson): I missed a couple of things. You guys gave out
accounts receivable, right? Can you repeat that?
Jamie Karson: Yeah, 39 million versus 36.8 last year.
(Bret Hendrickson): Okay.
And a couple of questions ago - I think she was
talking about use of cash, did you guys mention a
dividend as a possibility there?
Jamie Karson: Well I didn't specifically mention a dividend. What I
said was that the board is looking into various
alternatives for the cash. We recognize that we have
cash and we are constantly looking at ways to
increase shareholder values. So we're looking at
various alternatives.
(Bret Hendrickson): Okay.
I'm just digesting these accounts receivable numbers
here, so, it was actually up year over year at 39
versus 36.8?
Arvind Dharia: Yeah, it increased 2.2 million.
(Bret Hendrickson): Okay.
Arvind Dharia: It increased due to the sluggish economy, our
accounts receivable collection days are increased
from 60 to 66 days.
(Bret Hendrickson): Okay.
Is that a conscious effort on your part to, I guess,
invest some of the excess cash into your costumers
and use that as a marketing tool or is it just that
some people your pulling teeth and you still can't
get them to pay, because I'm calculating the
wholesale numbers were actually down 7.2%?
Richard Olicker: Much the latter.
Jamie Karson: Much the latter.
(Bret Hendrickson): Well, you're pulling the teeth as hard as you can?
Jamie Karson: Uh-hum.
Richard Olicker: Yes.
(Bret Hendrickson): Okay. All right. Well, thanks guys.
Conference Coordinator: Once again if you have a question please press the
star and 1 on your touchtone phone.
There are no further questions. Please continue with
any closing comments.
Jamie Karson: Well, thank you for participating in the call and we
look forward to speaking with you on the next call.
Conference Coordinator: Ladies and gentlemen that does conclude our
conference call for today. You may all disconnect and
thank you for participating.
END