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| SHOO > SEC Filings for SHOO > Form 10-Q on 8-May-2009 | All Recent SEC Filings |
8-May-2009
Quarterly Report
The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited Financial Statements and Notes thereto appearing elsewhere in this document.
This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our 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. We caution you that these statements 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 our control, that may influence the accuracy of the statements and the projections upon which the statements are based. Factors that may affect our results include, but are not limited to, the risks and uncertainties discussed in our Annual Report on Form 10-K for the year ended December 31, 2008. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.
Overview:
($ in thousands, except retail sales data per square foot and earnings per share
and per share data)
Steven Madden, Ltd. and its subsidiaries designs, sources, markets and retails fashion-forward footwear for women, men and children. In addition, we design, source, market and retail name brand and private label fashion accessories, such as handbags and belts, through our Daniel M. Friedman Division. We distribute products through department and specialty stores, our retail stores, our e-commerce website throughout the United States and through special distribution arrangements in Canada, Europe, Central and South America, Australia and Asia. Our product line includes a broad range of updated styles which are designed to establish or capitalize on market trends, complemented by core products. We have established a reputation for our creative designs, popular styles and quality products at accessible price points.
Prior to 2009, our International business operated under the "first cost" model and thus the revenues were included in Commissions and Licensing Fees on the Condensed Consolidated Statements of Income. In order to improve operating efficiencies, and to give our international partners better visibility in the process, as of January of 2009, we have changed the operating model for our International business to the "wholesale" model. Under the "wholesale" model, we will be able to manage inventory levels, improve delivery times, and increase our ability to receive payments on a timely basis. As a result of this change, as of the first quarter of 2009, International revenues are now included in the Net Sales line on the Condensed Consolidated Statements of Income. For the quarter ended March 31, 2009, our International business contributed net sales of $5,184.
Net sales for the first quarter of 2009 also reflect shifts related to our Candies businesses. Candies has been transitioned from a wholesale model to a "first cost" model, and therefore revenues for the first quarter of 2009 are included in Commissions and Licensing Fees on the Condensed Consolidated Statements of Income. As a result of this change, net sales for the first quarter of 2009 does not reflect Candies revenue while net sales in the first quarter of 2008 reflected revenue of $4,852 for the Candies business.
Despite the challenging retail environment, we posted a net sales increase of 7% for the quarter ended March 31, 2009 when compared to the same period of the prior year. Consolidated net sales for the first quarter of 2009 were $107,429 as compared to $100,539 in the first quarter of 2008. Our gross margin increased in the first quarter of 2009 to 40.5%, 50 basis points greater than the 40% achieved in the first quarter of last year. During the quarter ended March 31, 2009, net income increased to $6,577 compared to $2,052 in the same period of last year. The 2008 net income includes a charge of $4,921 ($3,002 net of taxes) related to the resignation of our former Chief Executive Officer and Chairman of the Board ("CEO") in March of 2008. Diluted EPS for the first quarter of 2009 was $0.37 per share on 17,972,000 diluted weighted average shares outstanding compared to $0.10 per share on 20,264,000 diluted weighted average shares outstanding in the first quarter of last year. The charges related to the resignation of our former CEO reduced EPS in the first quarter of last year by $0.15.
As of March 31, 2009, our total inventory increased to $28,071 from $26,407 as of March 31, 2008 and the inventory turn (calculated on a trailing twelve month average) increased to 8.1 times compared to 7.9 times last year. Our accounts receivable average collection days improved to 54 days in the first quarter of 2009 compared to 57 days during the same period of last year. As of March 31, 2009, we had $92,630 in cash, cash equivalents and marketable securities, no short or long-term debt, and total stockholders equity of $214,100. Working capital increased to $133,020 as of March 31, 2009, compared to $91,138 on March 31, 2008 primarily due to the accumulated net income earned during the twelve month period ended March 31, 2009.
The following tables set forth information on operations for the periods indicated:
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