Company Contact: Richard Olicker
President, Chief Operating Officer
Arvind Dharia
Chief Financial Officer
Steven Madden, Ltd.
(718) 446-1800
Investor Relations/Press: Cara O'Brien/Lila Sharifian
Financial Dynamics
(212) 850-5600
FOR IMMEDIATE RELEASE
- ---------------------
STEVEN MADDEN, LTD. ANNOUNCES FOURTH QUARTER AND 2003 YEAR END RESULTS
LONG ISLAND CITY, N.Y. - February 26, 2004 - Steven Madden, Ltd. (NASDAQ: SHOO),
a leading designer, wholesaler and marketer of fashion footwear for women, men
and children, today announced financial results for the fourth quarter and year
ended December 31, 2003.
In line with previously announced expectations, annual net sales were $324.2
million compared with $326.1 million in 2002. Net income increased 3.1% to $20.5
million, or $1.45 per diluted share, on 14,139,000 diluted weighted average
shares outstanding. In fiscal 2002, net income was $19.8 million, or $1.45 per
diluted share, on 13,710,000 diluted weighted average shares outstanding.
Jamieson Karson, Chief Executive Officer, commented, "Although 2003 was a
challenging year given the competitive retail environment and shifting industry
trends, we are pleased with our overall performance, particularly as it follows
a record breaking 2002. Importantly, we made significant progress in our efforts
to position Steven Madden, Ltd. as a global lifestyle branded company.
Specifically, during the year we diversified and expanded the business by adding
the Candie's and UNIONBAY brands and took steps to broaden our international
reach by extending distribution to Europe. Moreover, we accomplished all this
while protecting the core elements of our business - significant brand equity, a
flexible business model, and a healthy balance sheet."
Fourth quarter net sales were $71.1 million compared with $78.4 million in the
comparable period of 2002. Net income was $2.6 million, or $0.18 per diluted
share, versus $4.2 million, or $0.31 per diluted share, in the fourth quarter
last year.
"Throughout 2003 we carefully controlled costs even while investing in
infrastructure to support the growth in our operations, and this enabled us to
maintain stable SG&A and gross margins for the full year," added Arvind Dharia,
Chief Financial Officer. "Additionally, our financial position remains strong
with $85.7 million in cash, cash equivalents, and investment securities, no
debt, and total stockholders' equity of $159.2 million."
Retail revenues for the fourth quarter increased slightly to $28.9 million from
$28.5 million in the year ago period and same-store sales decreased 3.3%. For
the full year, retail revenues increased 4.0% to $95.5 million from $91.9
million in 2002 and same-store sales declined 3.9%. During 2003 six new
locations were opened, bringing the total number of company-owned retail stores,
including the Internet store, to 83 as of December 31, 2003.
During the fourth quarter, revenues from the wholesale business, comprised of
the Company's seven brands, Steve Madden Womens, Steve Madden Mens, Stevies,
l.e.i., Steven, Candie's, and UNIONBAY, were $42.2 million versus $49.9 million
in the fourth quarter of 2002. For the full year, wholesale revenues were $228.7
million versus $234.3 million last year. As previously announced, the lower than
anticipated sales in the wholesale division resulted from a highly promotional
environment and increasing price competition as well as a sluggish fall selling
season. In response, the Company acted aggressively to liquidate slower moving
inventory and support the initiatives of its wholesale customers to clear
products through the retail channel.
Commenting on the Company's fourth quarter and full year results, Richard
Olicker, President and Chief Operating Officer, stated, "The end of the year
proved to be challenging, particularly at the wholesale level. Not only did
competition in the market intensify but trends in the footwear industry shifted.
Specifically, our core customer changed the focus of her fashion direction from
a traditional casual base into broader categories including dress, tailored and
more at-once trend items. That said, we are proud of the fact that given our
nimble operating model and our commitment to interpreting trends, we were able
to evolve as well - and this enabled us to post stable sales.
"There were also key pockets of strength in the business throughout 2003. For
example, our retail division continued to contribute in multiple ways: as a
highly profitable operating segment, a strong brand building medium, and a very
useful testing venue for new and innovative products. Additionally, we benefited
from increasing success on the licensing front, recording a 19.6% increase in
our other income line, and this bodes well for our plan to enhance efforts to
leverage the Steve Madden brand name going forward."
Outlook for 2004
- ----------------
Following the close of 2003, and taking into account lessons from the fourth
quarter, the Company carefully reevaluated internal projections. With respect to
the full 2004 year, the Company is cautious about its prospects as it continues
to integrate new divisions and transitions into new categories in the fashion
footwear landscape. As part of this evolution, there are a number of factors
that will have an important impact on the current outlook, including greater
pricing pressure and a demanding markdown environment at wholesale, increased
advertising to support our brands, and additional personnel to support existing
and new divisions. Taking all of this into account, the Company anticipates that
2004 net sales will increase in the low-single digits over 2003 and diluted
earnings per share will be in the range of $1.35 to $1.40.
Mr. Karson concluded, "Fiscal 2004 will be the continuation of a positive and
exciting transition for Steven Madden, Ltd. and there are important steps we
need to take to build the business responsibly and profitably. While we are
therefore admittedly somewhat cautious in our near-term outlook, we remain
firmly focused on our task to expand the business through diversifying both our
product offering and distribution channels. Above all else, we are determined to
deliver enhanced shareholder value over the long-term."
Interested shareholders are invited to listen to the fourth quarter and full
year earnings conference call scheduled for today, Thursday, February 26, 2004,
at 10:00 a.m. Eastern Time. The call will be broadcast live over the Internet
and can be accessed by logging on to
http://www.firstcallevents.com/service/ajwz400689366gf12.html. An online archive
will be available shortly after the call and will be accessible until March 11,
2004. Additionally, a replay of the call can be accessed by dialing (888)
274-8337 and will be available through March 1, 2004.
Steven Madden, Ltd. designs and markets fashion-forward footwear for women, men
and children. The shoes are sold through Steve Madden Retail Stores, Department
Stores, Apparel and Footwear Specialty Stores, and on-line at
www.stevemadden.com. The Company has several licenses for the Steve Madden &
Stevies brands -- including eyewear, hosiery, and belts -- owns and operates one
retail store under its Steven brand and is the licensee for l.e.i. Footwear,
Candie's Footwear, and UNIONBAY Men's Footwear.
Statements in this press release that are not statements of historical or
current fact constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other unknown
factors that could cause the actual results of the Company to be materially
different from the historical results or from any future results expressed or
implied by such forward-looking statements. In addition to statements which
explicitly describe such risks and uncertainties readers are urged to consider
statements labeled with the terms "believes", "belief", "expects", "intends",
"anticipates" or "plans" to be uncertain and forward-looking. The forward
looking statements contained herein are also subject generally to other risks
and uncertainties that are described from time to time in the Company's reports
and registration statements filed with the Securities and Exchange Commission.
(Tables Follow)
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Three Months Fiscal Year
Ended Ended
December 31, December 31,
------------------------ ------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net Sales $ 71,099 $ 78,396 $ 324,204 $ 326,136
Cost of Sales 43,949 47,493 198,185 199,453
---------- ---------- ---------- ----------
Gross Profit 27,150 30,903 126,019 126,683
Commission and Licensing Fee Income 1,854 1,966 7,894 6,603
Operating Expenses (24,963) (25,968) (100,287) (100,074)
---------- ---------- ---------- ----------
Income from Operations 4,041 6,901 33,626 33,212
Interest and Other Income - Net 475 446 1,693 1,216
---------- ---------- ---------- ----------
Income Before Provision for Income Taxes 4,516 7,347 35,319 34,428
Provision for Income Taxes 1,964 3,129 14,865 14,587
---------- ---------- ---------- ----------
Net Income $ 2,552 $ 4,218 $ 20,454 $ 19,841
========== ========== ========== ==========
Basic Income Per Share $ 0.19 $ 0.33 $ 1.58 $ 1.58
========== ========== ========== ==========
Diluted Income Per Share $ 0.18 $ 0.31 $ 1.45 $ 1.45
========== ========== ========== ==========
Weighted Average Common Shares Outstanding:
Basic 13,148 12,747 12,985 12,595
========== ========== ========== ==========
Diluted 14,370 13,810 14,139 13,710
========== ========== ========== ==========
~ more ~
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(in thousands)
December 31, December 31,
------------ ------------
2003 2002
---- ----
Consolidated Consolidated
------------ ------------
Cash and Cash Equivalents $ 53,073 $ 56,713
Marketable Securities 32,659 22,510
Total Current Assets 121,995 105,354
Total Assets 177,870 150,500
Total Current Liabilities 16,855 18,893
Total Stockholders' Equity 159,187 130,075
###