EXHIBIT 99.1
Company Contact: Ed Rosenfeld
Senior Vice President, Strategic Planning
& Finance
Steven Madden, Ltd.
(718) 446-1800
Investor Relations: Cara O'Brien/Melissa Myron
Financial Dynamics
(212) 850-5600
FOR IMMEDIATE RELEASE
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STEVEN MADDEN, LTD. ANNOUNCES FISCAL 2006 THIRD QUARTER RESULTS
~ Third Quarter Net Sales Increase 23.2% ~
~ Third Quarter Operating Margin Improves 870 Basis Points ~
~ Third Quarter Diluted EPS is $0.57 versus $0.26 Last Year ~
LONG ISLAND CITY, N.Y. - November 1, 2006 - Steven Madden, Ltd.
(NASDAQ: SHOO), a leading designer and marketer of fashion footwear and
accessories for women, men and children, today announced financial results for
the third quarter and nine months ended September 30, 2006.
Net sales for the third quarter increased 23.2% to $123.2 million from
$100.1 million last year. Gross margin increased significantly to 41.4% from
35.2% in the comparable period last year, reflecting margin improvement in both
the wholesale and retail divisions. Operating expenses were 26.8% of sales
compared to 28.5% of sales last year due to the Company's ability to leverage
costs against the increased sales base.
Third quarter operating income grew to $21.9 million, or 17.7% of
sales, compared to $9.0 million, or 9.0% of sales, last year. Net income
increased to $12.6 million, or $0.57 per diluted share, versus $5.5 million, or
$0.26 per diluted share, in the third quarter of fiscal 2005.
Revenues from the wholesale business were up 29.2% to $91.8 million
from $71.0 million last year. The Company recorded particular strength in the
Steve Madden Women's and Steven by Steve Madden divisions, and also benefited
from sales contributions from the recently acquired Daniel M. Friedman &
Associates and the recently launched SM New York division. Strong consumer
demand for the Company's products helped drive a 790 basis point improvement in
wholesale gross margin, which increased to 37.9% from 30.0% last year.
Retail revenues rose 8.4% to $31.5 million compared to $29.1 million
last year. The Company generated a 10.5% same store sales increase, on top of a
12.3% increase last year. Retail gross margin increased to 51.7% from 48.1% last
year, a 360 basis point improvement. During the third quarter, the Company
opened one and closed one retail store, ending the quarter with 95 locations.
For the first nine months of fiscal 2006, net sales increased 27.0% to
$361.1 million from $284.4 million last year. Net income grew to $36.2 million,
or $1.64 per diluted share, compared to $11.8 million, or $0.57 per diluted
share, in the first nine months of fiscal 2005.
"Our design team, led by Steve, continued to deliver compelling,
trend-right product that fueled consumer demand and solidified the strength of
our brands in the marketplace. As a result, we delivered strong sales growth in
our wholesale and retail businesses as well as substantial margin improvement,
which resulted in record bottom-line results in the third quarter," stated
Jamieson Karson, Chairman and Chief Executive Officer. "We also continued to
diversify our business and build a platform for future growth. Specifically, we
signed a license agreement for a collection of Steve Madden and Steven by Steve
Madden dresses, and our subsidiary, Daniel M. Friedman & Associates, entered
into a licensing agreement to manufacture and distribute handbags and belts
under the Tracy Reese brand. We also continued to work on developing and growing
new wholesale divisions such as SM New York and Natural Comfort."
Arvind Dharia, Chief Financial Officer, commented, "We continue to
maintain a pristine balance sheet, ending the quarter with $112.5 million in
cash, cash equivalents, and marketable securities, no debt, and $221.3 million
in stockholders' equity."
Company Outlook
- ---------------
Based upon results to-date, the Company is increasing its outlook for
the year and now anticipates fiscal 2006 net sales will increase approximately
25% to 26% over fiscal 2005. With respect to the bottom line, the Company
currently expects that earnings per diluted share will range between $2.05 and
$2.10.
Based on current visibility, the Company is estimating 2007 net sales
will increase in the mid-single digits on a percentage basis over 2006 and
earnings per diluted share will range between $2.20 and $2.30.
Mr. Karson stated, "As we announced in a separate press release today,
our Board of Directors has approved a special one-time dividend of $1.00 per
share. We are very pleased with our ability to return value directly to our
shareholders while at the same time delivering record operating results and
investing in future growth."
"We remain focused on executing the fundamentals that have driven our
business thus far," Mr. Karson concluded. "We will continue our evolution into a
global lifestyle branded company by developing our existing license agreements
as well as seeking strategic new opportunities to leverage our strong brands.
Most importantly, we will remain focused on delivering the trend-right footwear
that is the core of our success."
Conference Call Information
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Interested shareholders are invited to listen to the third quarter
earnings conference call scheduled for today, Wednesday, November 1, 2006, 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 November 15, 2006. Additionally, a replay of the call
can be accessed by dialing 877-519-4471, passcode 8040947. A replay will be
available one hour after the completion of the call until November 8, 2006.
Steven Madden, Ltd. designs and markets fashion-forward footwear and
accessories for women, men and children. The shoes and accessories are sold
through company-owned retail stores, department stores, apparel and footwear
specialty stores, and online at www.stevemadden.com. The Company has several
licenses for its brands, including dresses, watches, outerwear, eyewear, girls
apparel, and hosiery and owns and operates 96 retail stores, including its
online store. The Company is also the licensee for Candie's Footwear and
UNIONBAY Men's Footwear, and through its wholly-owned subsidiary, Daniel M.
Friedman & Associates, is the licensee for Betsey Johnson handbags and belts,
Ellen Tracy belts, and Tracy Reese handbags and belts.
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 to follow)
STEVEN MADDEN LTD
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CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data) - Unaudited
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
Consolidated: Sep 30, 2006 Sep 30, 2005 Sep 30, 2006 Sep 30, 2005
- ------------ ------------ ------------ ------------ ------------
Net Sales $ 123,240 $ 100,067 $ 361,055 $ 284,361
Cost of Sales 72,217 64,805 209,194 184,137
------------ ------------ ------------ ------------
Gross Profit 51,023 35,262 151,861 100,224
Commission and licensing fee income 3,850 2,217 10,437 5,241
Operating Expenses 32,999 28,478 100,654 86,067
Impairment of cost in Excess of Fair Value of net
assets acquired 0 0 519
------------ ------------ ------------ ------------
Income from Operations 21,874 9,001 61,644 18,879
Interest and other Income, Net 715 504 1,628 1,398
------------ ------------ ------------ ------------
Income Before provision for Income Taxes 22,589 9,505 63,272 20,277
Provision for Income Tax 9,942 3,992 27,069 8,516
------------ ------------ ------------ ------------
Net Income $ 12,647 $ 5,513 $ 36,203 $ 11,761
============ ============ ============ ============
Basic income per share $ 0.61 $ 0.27 $ 1.74 $ 0.59
============ ============ ============ ============
Diluted income per share $ 0.57 $ 0.26 $ 1.64 $ 0.57
============ ============ ============ ============
Weighted average common shares
outstanding - Basic 20,880 20,255 20,850 19,908
============ ============ ============ ============
Weighted average common shares
outstanding - Diluted 22,136 21,068 22,028 20,664
============ ============ ============ ============
BALANCE SHEET HIGHLIGHTS
------------------------
Sep 30, 2006 Dec 2005 Sep 30, 2005
Consolidated Consolidated Consolidated
------------ ------------ ------------
(Unaudited) (Unaudited)
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Cash and cash equivalents $ 43,356 $ 42,842 $ 55,081
Investment Securities 69,100 66,249 43,919
Total Current Assets 202,561 140,972 146,558
Total Assets 264,779 211,728 203,868
Total Current Liabilities 39,984 26,906 21,204
Total Stockholder Equity 221,260 182,065 180,291
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