Exhibit 99.1
Company Contact: Richard Olicker
President & Chief Operating Officer
Steven Madden, Ltd.
(718) 446-1800
Investor Relations: Cara O'Brien/Lila Sharifian
Press: Melissa Merrill
Financial Dynamics
(212) 850-5600
FOR IMMEDIATE RELEASE
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STEVEN MADDEN, LTD. ANNOUNCES FOURTH QUARTER AND FULL YEAR RESULTS
~ Fourth Quarter Sales Increase 18.9% ~
~ Fourth Quarter Same Store Sales Increase 9.5% ~
~ Company Anticipates Founder's Return in Spring of 2005 ~
LONG ISLAND CITY, N.Y. - March 1, 2005 - 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 fiscal year ended December 31, 2004.
Fourth quarter sales increased 18.9% to $84.5 million from $71.1
million in the comparable period last year. Gross margin was 32.2% versus 38.2%
in the year-ago period primarily due to two factors. First, the Company
experienced pressures in its wholesale business, including soft boot sales that
led to high markdown levels and weakness in the l.e.i. division which continued
to face a larger than expected sales decline coupled with a demanding markdown
environment. Second, the Company recorded higher than anticipated cost of goods
sold primarily related to freight costs and sourcing from certain countries. Net
income was $0.4 million, or $0.03 per share, versus $2.6 million, or $0.18 per
share, in last year's 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,
UNIONBAY, and Candie's, increased 20.1% to $50.6 million from $42.2 million in
the comparable period of 2004, driven mainly by strength in Steve Madden Womens.
Retail revenues for the quarter increased 17.2% to $33.9 million from
$28.9 million in the same period of 2003. Same-store sales increased 9.5% versus
a decrease of 3.3% in the prior year period due primarily to positive sales of
dress shoes, a larger contribution from sales of mens footwear, the early
release and strong reception to Spring sandals, and the success of casual
footwear. During the quarter, the Company opened one Steve Madden store and
converted one Shoe Biz outlet store to a Steve Madden store.
Richard Olicker, President and Chief Operating Officer, commented,
"During the quarter our strong sales growth was offset by greater than planned
price pressure in most divisions of our wholesale business as well as higher
cost of goods sold, and these factors negatively impacted overall gross margin.
While we continue with initiatives to reduce certain expenses across select
wholesale divisions, we are also excited to announce the promotion of Amelia
Newton to the position of Executive Vice President of Wholesale Sales. Amelia
has been with Steven Madden, Ltd. since 1996 in a variety of sales and
management positions, and in her new role she will be responsible for managing
the Company's wholesale customer base and running the key accounts for improved
profitability.
Page 2 - Steven Madden, Ltd. Announces Fourth Quarter and Full Year Results
"At the retail level, we achieved solid revenue and same-store sales
increases in the quarter and continued an emphasis on not only expanding our
store base but also closing underperforming locations. Retail continues to be an
important segment of our business that allows us to quickly test our products
and showcase the power of our brand," stated Mr. Olicker.
Full year sales increased 4.3% to $338.1 million from $324.2 million
last year. Net income was $12.3 million, or $0.86 per diluted share, versus
$20.5 million, or $1.45 per diluted share, in 2003. The Company opened 10 stores
and closed 2 during the year, ending 2004 with 91 company-owned retail
locations, including the Internet store.
"In 2004, we repurchased a total of 545,100 shares for an aggregate of
$9.7 million and ended the year with $80.0 million in cash, cash equivalents,
and investment securities, no debt, and total stockholders' equity of $164.7
million. This position reflects our sound balance sheet and the financial
stability of our Company," added Arvind Dharia, Chief Financial Officer.
Company Outlook
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With respect to the outlook for 2005, the Company is cautious given its
expectation that certain challenges will remain. The Company expects continued
significant margin pressure in the wholesale business as well as higher cost of
goods sold. Specifically, due to weak boot sales in the fourth quarter of 2004,
the Company has planned for later purchases of boots by wholesale customers in
the second half of 2005, which in turn results in higher operating expenses
related to freight costs and sourcing necessary for timely delivery. In
addition, the Company anticipates higher operating expenses associated with not
only increasing occupancy expenses but also an expanding store base. Taking
these factors into consideration, the Company currently anticipates that 2005
net sales will be flat with sales in 2004 and diluted earnings per share will be
in the range of $0.65 to $0.68. In addition, the Company plans to open 12 to 15
retail locations during 2005.
Jamieson Karson, Chairman and Chief Executive Officer, said, "Fiscal
2004 marked a year of changes and challenges for Steven Madden, Ltd. on many
fronts. On the one hand, we undertook a variety of measures to improve the long
term viability of our business by implementing a transition into new categories,
investing in advertising and key personnel, and integrating newer brands into
our portfolio. On the other hand, we experienced significant price pressure
across most of our wholesale divisions, which had a greater than anticipated
impact on our overall business. Nonetheless, we met our previously announced
annual expectations for top line improvement and bottom line results.
"As we look to 2005, we are very focused on growing the business and
improving profitability of various divisions. In addition, we continue to
evaluate various opportunities to further leverage the Steve Madden brand
through expansion into other brand building categories as well as to consider
strategic and accretive acquisitions and/or organic growth. We remain committed
to our share repurchase program and continue to consider additional avenues to
maximize shareholder value for the long-term. Finally, we are extremely pleased
to announce the anticipated return of Steve Madden to the Company in Spring of
2005. As the founder and emotional inspiration behind the Steve Madden brand, he
adds an invaluable dimension to the Company. His return is very positive news
from every perspective for Steven Madden, Ltd. and we look forward to again
having the benefit of his unique vision, talent, and expertise," concluded Mr.
Karson.
Conference Call
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Interested shareholders are invited to listen to the third quarter
earnings conference call scheduled for today, Tuesday, March 1, 2005, at 10 a.m.
Eastern Time. The call will be broadcast live over the Internet and can be
accessed by logging onto http://www.stevemadden.com. An online archive of the
broadcast will be available within one hour of the conclusion of the call and
will be accessible until March 15, 2005. Additionally, a replay of the call can
be accessed by dialing (888) 276-5318 and will be available until March 4, 2005.
Page 3 - Steven Madden, Ltd. Announces Fourth Quarter and Full Year Results
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 and
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)
Page 4 - Steven Madden, Ltd. Announces Fourth Quarter and Full Year Results
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Three Months Year
Ended Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Net Sales $ 84,532 $ 71,099 $ 338,144 $ 324,204
Cost of Sales 57,297 43,949 215,475 198,185
---------- ---------- ---------- ----------
Gross Profit 27,235 27,150 122,669 126,019
Commission and Licensing Fee Income 1,877 1,854 6,806 7,894
Operating Expenses 28,956 24,963 110,296 100,287
---------- ---------- ---------- ----------
Income from Operations 156 4,041 19,179 33,626
Interest and Other Income - Net 278 475 1,775 1,693
---------- ---------- ---------- ----------
Income Before Provision for Income Taxes 434 4,516 20,954 35,319
Provision for Income Taxes 61 1,964 8,679 14,865
---------- ---------- ---------- ----------
Net Income 373 $ 2,552 $ 12,275 $ 20,454
========== ========== ========== ==========
Basic Income Per Share $ 0.03 $ 0.19 $ 0.93 $ 1.58
========== ========== ========== ==========
Diluted Income Per Share $ 0.03 $ 0.18 $ 0.86 $ 1.45
========== ========== ========== ==========
Weighted Average Common Shares Outstanding:
Basic 12,869 13,148 13,149 12,985
========== ========== ========== ==========
Diluted 13,910 14,370 14,223 14,139
========== ========== ========== ==========
~ more ~
Page 5 - Steven Madden, Ltd. Announces Fourth Quarter and Full Year Results
BALANCE SHEET HIGHLIGHTS
(in thousands)
December 31, December 31,
2004 2003
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Consolidated Consolidated
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Cash and Cash Equivalents $ 30,853 $ 53,073
Investment Securities 49,124 32,659
Total Current Assets 121,094 121,995
Total Assets 186,430 177,870
Total Current Liabilities 19,677 16,855
Total Stockholders' Equity 164,665 159,187
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